/raid1/www/Hosts/bankrupt/CAR_Public/030902.mbx
C L A S S A C T I O N R E P O R T E R
Tuesday, September 2, 2003, Vol. 5, No. 173
Headlines
ACCELERATED NETWORKS: CA Court Refuses To Dismiss Stock Lawsuit
ACCELERATED NETWORKS: Reaches Settlement For NY Securities Suit
ACCELERATED NETWORKS: Dropped as Defendant in FL Securities Suit
ALLSTATE CORPORATION: EEOC Alleges Violations of Age Bias Laws
ARTEMIS INTERNATIONAL: Agrees To Settle Securities Lawsuit in NY
ASIAINFO HOLDINGS: Agrees To Settle Consolidated Securities Suit
ASTRAZENECA PLC: Consumers Commence Injury Lawsuit Over Seroquel
CITIZENS INC.: Appeals Court Modifies TX Lawsuit Certification
CNF INC.: Pension Fund Members Commence CA Lawsuit Over Losses
DIAMOND TRIUMPH: Faces Unfair Trade Practices Suit in PA Court
DUKE ENERGY: 7 Lawsuits Over Energy Price Manipulation Dismissed
EFUNDS CORPORATION: FL Residents Sue Over Privacy Act Violations
FLAG TELECOM: Asks NY Court To Dismiss Securities Fraud Lawsuit
FLEET BANK: Court Says Interest Provisions Can Mislead Consumers
HUNA TOTEM: Alaska High Court Clears Directors Of Wrongdoing
INFORTE CORPORATION: Agrees To Settle NY Securities Fraud Suit
KEY BANK: 531 Cheated Investors Commence Suit Over Lost Funds
LOCKFORMER CO.: Files For Bankruptcy, Faces Huge Operation Costs
MAINE: Practice Of Disrobing Misdemeanor Detainees Questioned
MICROTUNE INC.: Agrees To Settle Consolidated NY Securities Suit
MICROTUNE INC.: Plaintiffs File Securities Fraud Suit in E.D. TX
NATIONAL PARTNERSHIP: Reaches Settlement For CA Securities Suit
NEW ORLEANS: Parents Seek Reimbursement From Poor School System
NUANCE COMMUNICATIONS: Reaches Settlement For CA Securities Suit
NUANCE COMMUNICATIONS: Agrees To Settle NY Securities Fraud Suit
NUI CORPORATION: Plaintiffs File Consolidated Securities Lawsuit
OHIO: Second Charge Added To Lawsuit Over Child Support Payments
ONVIA.COM: Reaches Agreement to Settle Securities Lawsuit in NY
ONVIA.COM: Dropped As Defendant in CSFB Securities Fraud Lawsuit
ORCHID BIOSCIENCES: Reaches Agreement To Settle Securities Suit
OREGON: Govt Prosecutors File Suit V. Sewer District Developer
PEC SOLUTIONS: Shareholders Launch Securities Suits in E.D. VA
PINNACOR INC.: Shareholders Launch Securities Fraud Suit in DE
PRINTCAFE SOFTWARE: Shareholders Launch Stock Fraud Suit in PA
SONIC INNOVATIONS: Discovery Starts in UT Securities Fraud Suit
SONUS NETWORKS: Reaches MOU To Settle Securities Suit in S.D. NY
SONUS NETWORKS: Asks MA Court To Dismiss Securities Fraud Suit
SUPPORTSOFT INC.: Reaches Settlement For NY Securities Lawsuit
VERIZON WIRELESS: MI Court Approves Improper Cell Phone Fee Pact
WASHINGTON: Judge Stays New Suit Over Burning Bluegrass Fields
New Securities Fraud Cases
ALSTOM SA: Cauley Geller Lodges Securities Fraud Suit in S.D. NY
ALSTOM, SA: Schiffrin & Barroway Launches Securities Suit in NY
BEARINGPOINT, INC.: Marc Henzel Commences Securities Suit in VA
BEARINGPOINT, INC.: Berger & Montague Files Stock Lawsuit in VA
CHECK POINT: Cauley Geller Commences Securities Suit in S.D. NY
CHECK POINT: Schiffrin & Barroway Lodges Securities Suit in NY
*********
ACCELERATED NETWORKS: CA Court Refuses To Dismiss Stock Lawsuit
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The United States District Court for the Central District of
California refused to dismiss the consolidated securities class
action filed against Accelerated Networks, Inc. and certain of
its current and former officers and directors.
The amended complaint generally alleges that the defendants made
materially false and/or misleading statements regarding the
Company's financial condition and prospects during the period of
June 22, 2000 through April 17, 2001 in violation of Sections
10(b) and 20(a) and Rule 10b-5 of the Securities Exchange Act of
1934.
The suit further alleges that the registration statement and
prospectus issued by defendants in connection with the Company's
June 23, 2000 initial public offering contained untrue
statements of material fact and omitted to state material facts
in violation of Sections 11, 12(a)(2) and 15 of the Securities
Act of 1933.
The Company previously filed two motions to dismiss the
plaintiffs' amended complaints. The plaintiffs opposed the
motions and a hearing on each motion took place. At both
hearings, the Court granted the motion as to the plaintiffs'
1934 Act claims, and denied the motion as to plaintiffs' 1933
Act claims. In each instance the plaintiffs were given 30 days
leave to amend their 1934 Act claims.
The plaintiffs filed their third amended complaint and the
Company filed a motion to dismiss the third amended complaint.
The plaintiffs opposed the motion and a hearing took place on
February 3, 2003. At that hearing, the court denied the motion
to dismiss the 1934 Act claims. The Company has filed an answer
and intends to defend the litigation vigorously.
ACCELERATED NETWORKS: Reaches Settlement For NY Securities Suit
---------------------------------------------------------------
Accelerated Networks, Inc agreed to settle the consolidated
securities class action filed against it, certain of its then
officers and directors and several investment banks that were
underwriters of the Company's initial public offering in the
United States District Court for the Southern District of New
York.
The suit, filed on behalf of investors who purchased the
Company's stock between June 22, 2000 and December 6, 2000,
alleges violations of Sections 11 and 15 of the 1933 Act and
Sections 10(b) and 20(a) and Rule 10b-5 of the 1934 Act against
one or both of the Company and the individual defendants.
The claims are based on allegations that the underwriter
defendants agreed to allocate stock in the Company's initial
public offering to certain investors in exchange for excessive
and undisclosed commissions and agreements by those investors to
make additional purchases in the aftermarket at pre-determined
prices. Plaintiffs allege that the prospectus for the Company's
initial public offering was false and misleading in violation of
the securities laws because it did not disclose these
arrangements.
These lawsuits are part of the massive "IPO allocation"
litigation involving the conduct of underwriters in allocating
shares of successful initial public offerings. The Company
believes that over three hundred other companies have been named
in more than one thousand similar lawsuits that have been filed
by some of the same plaintiffs' law firms.
In October 2002 the plaintiffs voluntarily dismissed the
individual defendants without prejudice. On February 19, 2003 a
motion to dismiss filed by the issuer defendants was heard and
the court dismissed the 10(b), 20(a) and Rule 10b-5 claims
against the Company. On July 31, 2003, the Company agreed,
together with over three hundred other companies similarly
situated, to settle with the Plaintiffs.
A Memorandum of Understanding (MOU), along with a separate
agreement and a performance bond issued by the insurers, for
these companies guarantees one billion dollars, allocated pro
rata amongst all issuer companies, to the plaintiffs as part of
an overall recovery against all defendants including the
underwriter defendants who are not a signatory to the MOU. The
Company has until October 1, 2003 to execute the MOU.
ACCELERATED NETWORKS: Dropped as Defendant in FL Securities Suit
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Plaintiffs dropped Accelerated Networks, Inc. and certain of its
officers and directors as defendants in the class action filed
in the United States District Court, Southern District of
Florida on behalf of investors who purchased the Company's stock
between June 22, 2000 and January 8, 2001.
The suit alleges violations of Section 12(a)(2) and Section 15
of the 1933 Act of Section 10(b) and Section 20(a) and Rule 10b-
5 of the 1934 Act and of the Florida Blue Sky Law. The claims
are based on allegations that the underwriter defendants,
notably Credit Suisse First Boston, and the Company effectuated
an IPO offering price that was inaccurate based on false
expectations about Accelerated Networks' prospective financial
performance, including expected revenues and earnings and make
selective inaccurate disclosures of same to the investing
public. Plaintiffs allege that these fraudulent disclosures are
in violation of the securities laws.
ALLSTATE CORPORATION: EEOC Alleges Violations of Age Bias Laws
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Allstate Corporation has lost on another front in the long-
running legal dispute that arose out of its efforts to convert
its career agents into independent contractors in order to cut
business costs, the Chicago Tribune reports. The latest
development involves a small portion of the 6,200 agents who
were told that they had to choose between becoming independent
contractors, without traditional benefits but with increased
sales commissions, and leaving the company.
About 2,200 left the company, and about 40 of them who are
lawyers applied for lower-paying jobs at Northbrook-based
Allstate in hopes of saving their benefits. However, Allstate,
according to the agents and company documents, refused to take
the agents on for at least a year, that being the point at which
their chance to extend the old benefits would have expired.
More than 90 percent of the agents applying for hire at
Northbrook were older than 40.
The Equal Employment Opportunity Commission (EEOC) has
determined that Allstate violated federal laws prohibiting age
discrimination by blocking the agents from preserving their
benefits and giving the jobs they sought at Northbrook to
younger recruits. The decision was disclosed to Allstate and
the agents in a letter from the EEOC.
In a letter, dated August 21, Lynn Bruner, a district director
for the EEOC said that Allstate's policy of refusing to rehire
the agents in lesser jobs "discriminated against persons age 40
and over."
Speaking for the agents, Michael J. Wilson, a lawyer with the
law firm of Zevnik Horton in Washington, said the latest
decision showed that the federal agency was "looking at every
aspect of this program and saying, 'Allstate, what you did is
illegal in multiple respects.' "
Allstate, the second-largest insurer of homes and autos behind
State Farm, was sued in the United States District Court in
Philadelphia by the EEOC and, separately, by the agents over
other accusations of age discrimination. The federal judge
tentatively agreed to certify the agents' lawsuit as a class
action, thereby raising the pressure on Allstate to consider
settling.
The dispute, in its earlier stages, began, as indicated above,
when Allstate gave the agents until the end of June 2000, to
accept an offer to become independent contractors without
traditional benefits or leave the company.
In order to stay on, however, in the new capacity, the agents
were required to sign a pledge not to sue the company for any
kind of discrimination. A few months later, acting on
complaints from agents, the EEOC declared that requiring an
employee to sign away rights to keep a job amounted to "unlawful
retaliation." The agency filed its lawsuit on this issue in
late June 2001.
ARTEMIS INTERNATIONAL: Agrees To Settle Securities Lawsuit in NY
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Artemis International Solutions Corporation (formerly known as
Opus360 Corporation) agreed to settle a consolidated securities
class action filed in the United States District Court for the
Southern District of New York, on behalf of all persons who
acquired securities of the Company between April 7, 2000 and
March 20, 2001.
Named as defendants in the amended complaint were the Company,
ten current and former officers and directors of the Company,
the underwriters of the Company's initial public offering (IPO)
and two shareholders who sold stock in a secondary offering
concurrent with the IPO.
The amended complaint alleged that, among other things, the
plaintiff and members of the proposed class were damaged when
they acquired securities of the Company because false and
misleading information and material omissions in the
registration statement relating to the IPO and the secondary
offering caused the prices of the Company's securities to be
inflated artificially. The suit asserted violations of Section
11, 12(a)(2), and 15 of the Securities Act of 1933, as amended.
Damages in unspecified amounts and certain rescission rights
were sought.
On June 18, 2003, the Company announced that it had signed an
agreement for the settlement and release of all claims against
Artemis and certain officers and directors and the underwriters
in the consolidated, amended complaint. The settlement is
subject to approval by the United States District Court for the
Southern District of New York.
The settlement is in no event construed or deemed to be evidence
of or an admission or concession on the part of the Company or
any individually named defendant officers and directors with
respect to any claim of any fault or liability or wrongdoing or
damage whatsoever.
ASIAINFO HOLDINGS: Agrees To Settle Consolidated Securities Suit
----------------------------------------------------------------
AsiaInfo Holdings, 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, certain
of its current officers and directors and the underwriters of
the Company's initial public offering, or IPO.
The lawsuit alleged violations of the federal securities laws.
The lawsuit specifically alleged, among other things, that the
underwriters of the Company's IPO improperly required their
customers to pay the underwriters excessive commissions and to
agree to buy additional shares of the Company's common stock in
the aftermarket as conditions to their purchasing shares in the
Company's IPO.
The lawsuit further claimed that these supposed practices of the
underwriters should have been disclosed in the Company's IPO
prospectus and registration statement. The suit seeks
rescission of the plaintiffs' alleged purchases of the Company's
common stock as well as unspecified damages.
In addition to the case against the Company, various other
plaintiffs have filed approximately 1,000 other, substantially
similar class action cases against approximately 300 other
publicly traded companies and their IPO underwriters in New York
City, which along with the case against the Company have all
been transferred to a single federal district judge for purposes
of case management.
On July 15, 2002, together with the other issuer defendants, the
Company filed a collective motion to dismiss the consolidated,
amended complaints against the issuers on various legal grounds
common to all or most of the issuer defendants. The
underwriters also filed separate motions to dismiss the claims
against them. On October 9, 2002, the Court dismissed without
prejudice all claims against the individual defendants in the
litigation. The dismissals were based on stipulations signed by
those defendants and the plaintiffs' representatives.
On February 19, 2003, the Court issued its ruling on the motions
to dismiss filed by the underwriter and issuer defendants. In
that ruling the Court granted in part and denied in part those
motions. As to the claims brought against the Company under the
anti-fraud provisions of the securities laws, the Court
dismissed all such claims without prejudice. As to the claims
brought under the registration provisions of the securities
laws, which do not require that intent to defraud be pleaded,
the Court denied the motion to dismiss such claims as to the
Company and as to substantially all of the other issuer
defendants. The Court also denied the underwriter defendants'
motion to dismiss in all respects.
In June 2003, based on a decision made by a special independent
committee of its board of directors, the Company elected to
participate in a proposed settlement agreement with the
plaintiffs in this litigation. If ultimately approved by the
Court, this proposed settlement would result in a dismissal,
with prejudice, of all claims in the litigation against the
Company and against any of the other issuer defendants who elect
to participate in the proposed settlement, together with the
current or former officers and directors of participating
issuers who were named as individual defendants.
The proposed settlement does not provide for the resolution of
any claims against the underwriter defendants, and the
litigation against those defendants is continuing. The proposed
settlement contemplates that any amounts necessary to fund the
settlement or settlement-related expenses would come from
participating issuers' directors and officers liability
insurance policy proceeds as opposed to funds of the
participating issuer defendants themselves.
A participating issuer defendant could be required to contribute
to the costs of the settlement if that issuer's insurance
coverage were insufficient to pay that issuer's allocable share
of the settlement costs. The Company expects that its insurance
proceeds will be sufficient for these purposes and that it will
not otherwise be required to contribute to the proposed
settlement.
Consummation of the proposed settlement is conditioned upon,
among other things, negotiating, executing, and filing with the
Court final settlement documents, and final approval by the
Court. If the proposed settlement described above is not
consummated, the Company intends to continue to defend the
litigation vigorously. Moreover, if the proposed settlement is
not consummated, the Company believes that the underwriters may
have an obligation to indemnify the Company for the legal fees
and other costs of defending this suit and that the Company's
directors' and officers' liability insurance policies would also
cover the defense and potential exposure in the suit.
ASTRAZENECA PLC: Consumers Commence Injury Lawsuit Over Seroquel
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AstraZeneca PLC faces a class action filed by its customers over
a recent study, which linked the use of its Seroquel drug to an
unacceptable rate of diabetes onset.
Data from this study showed that patients on Seroquel had a
significantly higher number of incidences of diabetes than those
on older drugs or other atypical anti-psychotics. The lawsuit
alleges that AstraZeneca was aware that Seroquel caused a high
occurrence of diabetes, but failed to adequately warn doctors or
patients in the United States. The Japanese label for Seroquel
provides a detailed warning about the risk of diabetes and
specifically informs medical professionals regarding the need
for medical monitoring of patients on Seroquel.
The Japanese Seroquel label warns specifically of the diabetes
risk, prominently in the beginning of the package label stating:
(1) Seroquel (Quetiapine) is contraindicated for use in
patients with diabetes or a history of diabetes;
(2) Seroquel (Quetiapine) should be used with caution in
patients with risk factors for diabetes, including
hyperglycemia, obesity or a family history of diabetes;
(3) Patients receiving Seroquel (Quetiapine) should be
carefully monitored for symptoms of hyperglycemia and
the drug should be discontinued if such symptoms occur.
The symptoms of severe hyperglycemia include weakness,
excessive eating, excessive thirst, and excessive
urination;
(4) Physicians should educate patients and their family
members about the risk of serious hyperglycemia
associated with Seroquel (Quetiapine) and how to
identify the symptoms of hyperglycemia;
AstraZeneca has not adopted this safer, more accurate and
comprehensive label for the US distribution of Seroquel.
"When studies show that a medication is linked so often to a
disease as serious as diabetes, it is unconscionable that a drug
company would not take the necessary steps to protect the
public," commented Jerry Parker, one of the founding partners of
Parker & Waichman, law firm for the plaintiffs. "What is
particularly upsetting is that a pharmaceutical company would
provide a greater warning of a serious side effect of a
pharmaceutical in one country but not provide the residents of
the United States the benefit of that same warning."
A plaintiff in the lawsuit, a resident of Washington, suffered
from rapid weight gain, increased thirst, frequent urinating,
and other symptoms commonly associated with diabetes after
taking Seroquel. Shortly thereafter, while taking Seroquel, the
plaintiff was diagnosed with diabetes which puts her at risk of
serious diabetic complications including: ketoacidosis,
pancreatitis, coma, seizures, blindness, heart disease and
death. The lawsuit seeks statutory, exemplary and punitive
damages from the defendants for the flagrant disregard of the
lives and health of the plaintiffs and class members.
Additionally, the lawsuit alleges that AstraZeneca aggressively
marketed and promoted Seroquel for off label use that was beyond
its FDA approved indications. AstraZeneca offered incentives to
doctors and other medical professionals to increase the number
of Seroquel prescriptions that were written.
Another plaintiff in the lawsuit, a minor in Florida, was
prescribed Seroquel after sales representatives encouraged off
label use in children. This plaintiff has since suffered from
rapid weight gain, increased thirst, frequent urinating, and
other symptoms commonly associated with the onset of diabetes.
Additionally, the lawsuit seeks to establish a medical
monitoring fund to pay for any person who has taken Seroquel to
be tested for diabetes and other blood sugar disorders.
Parker & Waichman and associated counsel currently represent
thousands of victims of prescription drug side effects including
Baycol, Fen Phen, Rezulin, Accutane, Paxil and Prempro.
For more details, contact David Krangle of Parker & Waichman,
LLP by Phone: 1-800-LAW-INFO (1-800-529-4636) by E-mail:
dkrangle@yourlawyer.com or visit the website:
http://www.seroquelclassaction.com
CITIZENS INC.: Appeals Court Modifies TX Lawsuit Certification
--------------------------------------------------------------
The Court of Appeals for the Third District of Texas affirmed in
part and modified in part, a July 31, 2002, class action
certification which was granted by a Travis County, Texas
district court judge to the plaintiffs in a lawsuit filed in
1999 against Citizens, Inc. and:
(1) Citizens Insurance Company of America,
(2) Negocios Savoy, S.A.,
(3) Harold E. Riley, and
(4) Mark A. Oliver
The suit alleges that life insurance policies offered to certain
non-U.S. residents by one of its insurance subsidiaries,
Citizens Insurance Company of America, are actually "securities"
that were offered or sold in Texas by unregistered dealers in
violation of the registration provisions of the Texas securities
laws. The suit seeks class action status naming as a class all
non-US residents who purchased insurance policies or made
premium payments since August 1996 and assigned policy dividends
to an overseas trust for the purchase of the Company's Class A
common stock. The remedy sought is rescission of the insurance
premium payments.
The Company intends to file a petition with the Texas Supreme
Court in the near future for review of the decision of the Court
of Appeals. Review by the Texas Supreme Court is discretionary.
The Company believes the plaintiff's claim under the Texas
securities laws is not valid and that the class defined is not
appropriate for class certification and does not meet the legal
requirements for class action treatment under Texas law.
Recent decisions from the Texas Supreme Court indicate a more
defense-oriented approach to class certification cases,
especially in class action cases encompassing claimants from
more than one state or jurisdiction, the Company revealed in a
disclosure to the Securities and Exchange Commission.
The Company expects the Texas Supreme Court will grant its
petition for review and will ultimately rule in its favor,
decertify the class and remand the matter to district court for
further action. It is the Company's intention to defend
vigorously against the request for class certification, as
well as to defend vigorously against the individual claims. In
July 2003, the Texas Supreme Court ordered plaintiffs to file a
brief in response to the Company's appeal. The Company has been
advised by counsel that a ruling from the court could take up to
a year.
CNF INC.: Pension Fund Members Commence CA Lawsuit Over Losses
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Trucking and air freight conglomerate CNF, Inc. faces a class
action, charging it and its actuarial firm, Towers, Perrin,
Forster & Crosby, Inc., with causing the Consolidated
Freightways Company, Inc., (CFC) Pension Plan to become under-
funded, costing retirees millions of dollars in lost pension
benefits. The suit was filed in the United States District
Court in San Jose, California.
In 1996, CNF spun off CFC Inc. to create a stand-alone,
unionized trucking company at a time when the industry was being
deregulated and non-unionized competitors were gaining market
share.
"The plaintiffs, all former employees of CNF, charge that CNF
and Towers Perrin used overly-aggressive and unrealistic
assumptions about (1) the expected rate of return on pension
plan assets and (2) when employees were likely to retire,"
stated Lieff Cabraser partner Steven M. Tindall. "The effect of
the alleged mismanagement is that CNF, which describes itself as
a $4.8 billion global enterprise, passed off its obligations to
these retirees to CFC, a company now in bankruptcy, at the cost
of having hundreds of its former employees see their pension
benefits severely reduced."
"Despite evidence of CFC's poor financial performance, CNF --
advised by defendant actuarial firm Towers, Perrin -- allegedly
transferred too little money to the new CFC pension plan to
cover the pension benefits that the employees had earned during
their years and decades of working for CNF," added Lewis &
Feinberg attorney Teresa Renaker. "This lawsuit seeks to affirm
the principle that when a company spins off one of its corporate
subsidiaries and the pension obligations for the employees of
that subsidiary, the parent corporation is obligated to ensure
that sufficient funds are transferred to meet the pension
obligations for those employees."
The complaint alleges that CNF, the CNF Service Company, Inc.,
and CFC's Pension Plan Committee breached the fiduciary duties
they owed to the CFC plan participants by failing to make sure
that sufficient assets were transferred to satisfy the pension
obligations of the newly-created CFC plan. The complaint
alleges that the fiduciary defendants failed to discharge their
duties solely in the interest of the participants of the CFC
plan and failed to act prudently when they failed to ensure that
the CFC plan was adequately funded.
The complaint alleges further that actuarial firm Towers Perrin
committed professional negligence when it certified that the
assets transferred to the CFC plan were adequate to fund the
transferred pension obligations because it used unreasonable
expected retirement age and interest rate assumptions.
Plaintiffs allege that as a consequence of Towers Perrin's
professional negligence, the CFC plan was inadequately funded
from the beginning, resulting in losses to the plaintiffs and to
hundreds of other CFC plan participants.
Through the lawsuit, plaintiffs seek to require the fiduciary
defendants and Towers, Perrin to make the plan whole by covering
the losses that Plaintiffs and the class members have suffered
as a result of their actions.
For more details, contact Monica Barsetti of Lieff Cabraser by
Phone: 415-956-1000 by E-mail: mbarsetti@lchb.com or visit the
firm's Website: http://www.lieffcabraser.com/cfcpensionsuit.htm
DIAMOND TRIUMPH: Faces Unfair Trade Practices Suit in PA Court
--------------------------------------------------------------
Diamond Triumph Auto Glass, Inc. faces a class action filed in
the Court of Common Pleas of Luzerne County, Pennsylvania
alleging, among other things, that the Company violated certain
sections of the Pennsylvania Unfair Trade Practices and Consumer
Protection Law and common law.
Plaintiffs assert that this alleged conduct has caused monetary
damages to them. Among other things, they are seeking damages
in an amount to be determined at trial. Diamond believes the
Company's allegations are without merit.
DUKE ENERGY: 7 Lawsuits Over Energy Price Manipulation Dismissed
----------------------------------------------------------------
Federal Judge Whaley has dismissed seven class actions that
claimed Duke Energy and other defendants manipulated energy
prices during California's power crisis, the Associated Press
Newswires reports.
Judge Whaley based his dismissal of the lawsuits upon the
principle that the Federal Energy Regulatory Commission (FERC)
has exclusive authority over the issues raised in the lawsuits,
and that federal law bars any challenges to utility rates that a
federal agency has reviewed and approved.
The seven lead plaintiffs in the class actions were small
businesses from around the state of California, that claimed
Duke artificially restricted the supply of electric power and
used other similar means to jack up prices in 2000. The
lawsuits were filed during the height of the state's power
crisis and were consolidated because of their similar claims.
FERC is conducting an investigation into the actions of power
companies that sold energy in California during the crisis.
EFUNDS CORPORATION: FL Residents Sue Over Privacy Act Violations
----------------------------------------------------------------
EFunds Corporation faces a class action filed in the United
States District Court, Middle District of Florida, Fort Meyers
Division alleging violations of the Federal Driver's Privacy
Protection Act.
The plaintiff alleges that the Company purchased motor vehicle
records from the State of Florida and used that data for
marketing and other purposes that are not permitted under the
Federal law. The plaintiff is seeking actual damages to be
determined or liquidated damages of not less than $2,500 for
each affected member of the purported class, plus costs and
attorney's fees. The plaintiff is also asking for injunctive
relief that would prohibit the Company from obtaining,
disclosing and using personal information of the plaintiff and
other members of the purported class in violation of the
statute.
FLAG TELECOM: Asks NY Court To Dismiss Securities Fraud Lawsuit
---------------------------------------------------------------
FLAG Telecom Holdings Ltd. asked the United States District
Court for the Southern District of New York to dismiss the
consolidated securities class action filed on behalf of
those who purchased Company stock between February 16, 2000 and
February 13, 2002. The suit names as defendants the Company,
certain of its past and present officers and directors, Salomon
Smith Barney, Inc. and Verizon Communications, Inc.
The consolidated amended complaint asserts claims under sections
11, 12(a)(2) and 15 of the Securities Act and sections 10(b) and
20(a) of the Exchange Act, as well as Rule 10b-5. More
specifically, the complaint alleges, among other things, that
the defendants:
(1) knew but failed to tell the market about the glut of
capacity and falling bandwidth prices that allegedly
existed at the time of the initial public offering of
the Company's and throughout the class period;
(2) engaged in, or caused the Company to engage in,
transactions with competitors whereby they would sell
each other cable that neither needed, for the sole
purpose of increasing revenue; and
(3) accounted for, or caused the Company to account for,
these transactions improperly and to overstate revenue.
A motion to dismiss was filed by the defendants, including FLAG
Telecom, on July 7, 2003.
FLEET BANK: Court Says Interest Provisions Can Mislead Consumers
----------------------------------------------------------------
Fleet Bank's offer of a MasterCard with a " 7.99 fixed percent
APR," but which also included language on the back of the
application that said "my agreement terms (including rates) are
subject to change," could have misled "a reasonable consumer," a
federal appeals court ruled, the Associated Press Newswires
reports.
This ruling, written by US Circuit Judge Julio M. Fuentes of the
Third US Circuit Court of Appeals, overturned a lower court's
decision, reinstated the credit-card disclosure case of
plaintiff Denise Roberts and further ruled that she could pursue
a class action against Fleet Credit Card Services.
Ms. Roberts received the mailing from Fleet in May 1999,
offering a Titanium MasterCard at a "7.99 fixed APR," on both
purchases and balance transfers. The application included a
"Schumer Box" - the table of basic information required under
the federal Truth in Lending Act - that set forth only two
reasons the rate could change: if the consumer failed to meet
repayment rules or closed the account.
However, the back of the application also listed terms of the
offer, including language that said, "my agreement terms
(including rates) are subject to change." Fleet, a year later,
in July 2000, notified Ms. Roberts of a rate hike and raised the
interest rate to 10.5 percent.
Judge Fuentes wrote, after referring to the language included in
the offer of the MasterCard sent Ms. Roberts, "We agree with Ms.
Roberts that Fleet's solicitation materials could cause a
reasonable consumer to be confused about the temporal quality of
the offer," thus overturning District Court Judge John P.
Fullam's dismissal of the Truth in Lending claim. Judge Fuentes
remanded the case to the court below, ruling that with
reinstatement of her claim Ms. Roberts could now pursue a class
action.
Ira Richards, an attorney from Philadelphia, declined to further
identify lead plaintiff Denise Roberts, other than to say she
lives in the Eastern District of Pennsylvania.
HUNA TOTEM: Alaska High Court Clears Directors Of Wrongdoing
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Alaska's Supreme Court issued a ruling that clears Huna Totem
Corporation's board of directors of wrongdoing in the setting up
and control of a $35 million trust, Associated Press Newswires
reports.
Some of the native village corporation's shareholders had filed
a class action alleging that Huna Totem had misled them in the
information it provided them in creating the trust.
Specifically, the shareholders accused the board of failing to
disclose that once the trust was established it could not be
ended or changed unless two-thirds of the trustees agreed.
In 1994, Huna Totem was left with more than $35 million in tax
settlement money from the Internal Revenue Service. The board
proposed that shareholders approve using the money for a
settlement trust. With that in mind, the board sent
shareholders an information packet describing the trust in
general terms, according to the court decision.
Shareholders were told information contained in the packet was
not complete. Shareholders also were told that once the trust
was established it could be modified or changed at the first
five-year mark, and once every 10 years thereafter by a two-
thirds vote of the beneficiaries.
Two months later, Huna Totem sent shareholders a formal proxy
solicitation with more details. Shareholders were told at that
time that the trust could be amended or ended by shareholders
only if the board recommended the action. Shareholders had
overwhelmingly approved the trust proposal in September 1994.
Several shareholders seeking an end to the trust, filed the
suit, alleging that Huna Totem misled them about the conditions
of terminating the trust. Shareholders said they were led to
believe that they could vote on the trust without approval of
the board. The shareholders said Huna Totem representatives in
meetings with shareholder perpetuated that understanding. Huna
Totem denies the allegation.
In a lower court decision, Superior Court Judge Patricia Collins
ruled in July 2001, that the information Huna Totem sent to
shareholders, if considered in its entirety, was not misleading.
The Supreme Court agreed, saying no matter how "sketchy" the
corporation's initial description of the proposed trust, Huna
Totem delivered on its promise of more complete information
later on. It found that a "reasonable shareholder" likely would
not have used oral communications from Huna Totem in deciding
how to vote.
Huna Totem has more than 1,000 shareholders and manages
investments. It owns income-producing properties in Alaska and
Nevada.
INFORTE CORPORATION: Agrees To Settle NY Securities Fraud Suit
--------------------------------------------------------------
Inforte Corporation 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:
(1) Philip S. Bligh,
(2) Stephen C.P. Mack,
(3) Nick Padgett,
(4) Goldman, Sachs & Co., and
(5) Salomon Smith Barney, Inc.
The suit is among more than 300 putative class actions against
certain issuers, their officers and directors, and underwriters
with respect to such issuers' initial public offerings,
coordinated as In re Initial Public Offering Securities
Litigation, 21 MC 92 (SAS).
The amended complaint alleges violations of federal securities
laws in connection with the Company's initial public offering
occurring in February 2000 and seeks certification of a class of
purchasers of Inforte stock, unspecified damages, interest,
attorneys' and expert witness fees and other costs.
The amended complaint does not allege any claims relating to any
alleged misrepresentations or omissions with respect to our
business. The individual defendants have been dismissed from the
case without prejudice pursuant a stipulated dismissal and a
tolling agreement.
The Company moved to dismiss the plaintiff's case. On February
19, 2003, the court granted this motion in part, denied it in
part and ordered that discovery in the case may commence. The
court dismissed with prejudice the plaintiff's purported claim
against Inforte under Section 10(b) of the Securities Exchange
Act of 1934, but left in place the plaintiff's claim under
Section 11 of the Securities Act of 1933.
The Company has entered into a Memorandum of Understanding
(MOU), along with (according to published reports) most of the
defendant issuers in the Multiple IPO Litigation, whereby such
issuers and their officers and directors (including the Company
and Mr. Bligh, Mr. Mack and Mr. Padgett) will be dismissed with
prejudice from the Multiple IPO Litigation, subject to the
satisfaction of certain conditions.
Under the terms of the MOU, neither Inforte nor any of its
formerly named individual defendants admit any basis for
liability with respect to the claims in the Case. The MOU
provides that insurers for Inforte and the other defendant
issuers participating in the settlement will pay approximately
$1 billion to settle the Multiple IPO Litigation, except that no
such payment will occur until claims against the underwriters
are resolved and such payment will be paid only if the recovery
against the underwriters for such claims is less than $1 billion
and then only to the extent of any shortfall.
Under the terms of the MOU, neither Inforte nor any of its named
directors will pay any amount of the settlement. The MOU
further provided that participating defendant issuers will
assign certain claims they may have against the defendant
underwriters in connection with the Multiple IPO Litigation.
The MOU is subject to the satisfaction of certain conditions,
including, among others, approvals of the court and the issuers'
insurers.
KEY BANK: 531 Cheated Investors Commence Suit Over Lost Funds
-------------------------------------------------------------
Investors bilked of their retirement savings by Eric Bartoli,
the missing Wayne county financial planner, have filed a second
class action, this time against a local bank, the Akron Beacon
Journal (Ohio) reports.
Florida lawyers for 531 Cyprus Funds investors filed a lawsuit
against KeyBank National Association and KeyCorp, headquartered
in Cleveland. An Ohio judge will have to certify the class of
investors before court action can go forward. The complaint
asks for unspecified damages.
The complaint alleges that employees at a Stark County KeyBank
branch opened more than 15 accounts through which more than $19
million in Cyprus investor funds were diverted. Additionally,
personnel at a Barberton KeyBank branch are accused of promoting
and attending "pitch meetings" on a Cyprus-designed system to
avoid taxes. Cyprus partner Douglas Shisler of Doylestown
opened the accounts and later purchased several hundred thousand
dollars in Japanese yen and Swiss francs.
"When Mr. Shisler advised KeyBank employees that he did not want
to have currency transaction reports filled out in connection
with the foreign currency purchases, KeyBank employees counseled
and assisted him in 'structuring' these purchases to avoid
currency transaction reporting requirements," the complaint
alleges. "Although these 'structured' foreign currency
purchases occurred on a number of occasions, KeyBank failed to
generate a single suspicious activity report about them."
Many Cyprus investors were Ohio retirees, who had lost an
estimated $34 million when the U.S. Securities and Exchange
Commission closed the fund in 1999.
SEC investigators determined that only about $4 million of the
$80 million raised by Cyprus Funds was invested. The rest was
diverted to accounts held by Cyprus insiders and family members
and was used to buy antiques, houses, state-of-the-art
agricultural equipment and 1,500 acres of Ohio farmland.
Florida attorney Tucker Ronzetti settled a similar case against
First Union National bank for $5 million. He said he expects to
aggressively pursue the Ohio case against KeyBank National
Association.
In 2000, a federal judge in Maiami found Mr. Bartoli liable for
civil fraud. Cyprus Funds partners Douglas Shisler, James L.
Binge and Peter J. Esposito signed consent decrees, the
equivalent of a no-contest plea, for their roles in the
fund's operations. Eric Bartoli's whereabouts are unknown,
although he is thought to be living in South America.
LOCKFORMER CO.: Files For Bankruptcy, Faces Huge Operation Costs
----------------------------------------------------------------
Lockformer Co. has filed for bankruptcy, as it faces millions of
dollars in cleanup and court settlement costs for a 1991
chemical leak from its metal fabricating plant in Lisle, the
Chicago Tribune reports.
Since the discovery in 2000 of groundwater trichloroethylene
pollution, the company has paid millions of dollars for soil
purification, legal fees and meeting the terms of settlements.
Lockformer and its parent firm, Met-Coil Systems Corp., face
trial in September in a class action about the pollution.
State officials said the bankruptcy filing should not affect the
cleanup.
MAINE: Practice Of Disrobing Misdemeanor Detainees Questioned
-------------------------------------------------------------
Whether the practice of requiring a detainee facing a first-time
misdemeanor charge to undress in front of a corrections officer,
amounts to a strip search and is therefore unconstitutional, is
the subject of a lawsuit, according to a report by Associated
Press Newswires.
A federal magistrate recently recommended the lawsuit for class
action. If US District Judge D. Brock Hornby accepts the
advisory opinion, any misdemeanor detainee admitted to the
Alfred, Maine jail, since October 1996, could join the lawsuit.
Plaintiffs' lawyers say the group includes hundreds of people.
Anyone entering the York County jail, even a detainee facing a
misdemeanor charge for the first time is required to disrobe in
front of a corrections officer. The York County, Maine, case
began in January 1999, when a North Andover, Massachusetts woman
was arrested in Ogunquit on a charge of driving with a suspended
license. She was taken to the Alfred jail and given a chance to
make bail, then she was escorted to a room where a female
corrections officer ordered her to remove all her clothes.
Although she objected and cried, she ultimately complied. The
officer visually inspected her entire nude body, her lawyers
maintain, before ordering her to take a shower.
Courts have held that when a person is charged with a minor
offense, jailers may conduct a strip search only if they have
reason to suspect the person is concealing a weapon or other
contraband. York County contends, however, that its searches
are not strip searches; that they are less intrusive than strip
searches in which officers inspect the body cavities of felony
detainees.
Peter Marchesi, a lawyer representing York County, said the
disrobing searches, without inspection of body cavities, are
meant to find any hidden weapons or other contraband, and are
necessary to ensure the safety of inmates and jail staff. He
said that if detainees disrobed in private, they could hide
weapons and drugs and thus defeat the purpose of the disrobing.
"The intent and purpose is only to look at the clothes and not
the person," added Mr. Marchesi.
Plaintiffs' lawyer David Webbert, who represents Ms. Milsen and
two other plaintiffs, countered, "I don't think any judge or
jury is going to buy that. It's a strip search, and it is
unconstitutional."
Mr. Webbert said York County's policy was found to be illegal in
a 1998 state Department of Corrections report. However, jail
officials disputed the state's preliminary report. The
corrections department subsequently ruled that if the jail's
explanation of the policy was correct, the procedure was in fact
legal, Mr. Marchesi countered, emphasizing the rationale for the
disrobing indicated above: that the search is intended to find
any hidden weapons or contraband to ensure safety of inmates and
staff; and if the disrobing were done in private, such
contraband could be hidden.
It is a case with implications far beyond southern Maine,
because York County's policy appears to be in line with
standards set by the Department of Corrections. Similar cases
are underway against the jails in Knox and Hancock counties.
MICROTUNE INC.: Agrees To Settle Consolidated NY Securities Suit
----------------------------------------------------------------
Microtune, Inc. reached an agreement to settle the consolidated
securities class action filed in the United States District
Court for the Southern District of New York on behalf of all
persons who purchased the Company's common stock from August 4,
2000 through December 6, 2000. The suit names as defendants the
Company and:
(1) Douglas J. Bartek, former Chairman and Chief Executive
Officer,
(2) Everett Rogers, former Chief Financial Officer and Vice
President of Finance and Administration, and
(3) several investment banking firms that served as
underwriters of its initial public offering
The amended complaint alleges liability under Sections 11 and 15
of the Securities Act of 1933 (1933 Act Claims) and 10(b) and
20(a) of the Securities Exchange Act of 1934 (1934 Act Claims),
on the grounds that the registration statement for our initial
public offering did not disclose that:
(i) the underwriters had agreed to allow certain of their
customers to purchase shares in the offering in
exchange for excess commissions paid to the
underwriters; and
(ii) the underwriters had arranged for certain of their
customers to purchase additional shares in the
aftermarket at pre-determined prices.
The amended complaint also alleges that false analyst reports
were issued. No specific amount of damages is claimed.
The Company is aware that similar allegations have been made in
other lawsuits filed in the Southern District of New York
challenging over 300 other initial public offerings and
secondary offerings conducted in 1998, 1999 and 2000. Those
cases have been consolidated for pretrial purposes before the
Honorable Shira A. Scheindlin.
On February 19, 2003, the court ruled on all defendants' motions
to dismiss. The court denied the motions to dismiss the 1933
Act claims. The court did not dismiss the 1934 Act claims
against it and other issuers and underwriters.
The Company decided to accept a settlement proposal presented to
all issuer defendants. In this settlement, plaintiffs will
dismiss and release all claims against the Microtune defendants,
in exchange for a contingent payment by the insurance companies
collectively responsible for insuring the issuers in all of the
IPO cases, and for the assignment or surrender of certain claims
Microtune may have against the underwriters.
The Microtune defendants will not be required to make any cash
payments in the settlement, unless the "pro rata" amount paid by
the insurers in the settlement exceeds the amount of the
insurance coverage, a circumstance which the Company does not
believe will occur. The settlement will require approval by the
Court, which cannot be assured, after class members are given
the opportunity to object to the settlement or opt out of the
settlement.
MICROTUNE INC.: Plaintiffs File Securities Fraud Suit in E.D. TX
----------------------------------------------------------------
Plaintiffs filed a consolidated securities class action in the
United States District Court in the Eastern District of Texas
against Microtune, Inc. and:
(1) Douglas J. Bartek, former Chairman of the Board and
Chief Executive Officer,
(2) Everett Rogers, former Chief Financial Officer and
Vice-President of Finance and Administration,
(3) William L. Housley, former President and Chief
Operating Officer, and
(4) Nancy A. Richardson, present Chief Financial Officer
and General Counsel.
The suit alleges violations of federal securities laws and
regulations. The suit specifically alleges that the defendants
violated Sections 10(b) and 20(a) of the Securities Exchange Act
of 1934, as well as SEC Rule 10b-5, resulting in damages to
persons who purchased, converted, exchanged, or otherwise
acquired the Company's common stock between April 23, 2001 and
February 20, 2003, inclusive.
The plaintiffs' specific allegations include that the defendants
misrepresented material facts and omitted to state material
facts necessary to make other statements made not misleading,
and that these misrepresentations or omissions had the effect of
artificially inflating the Company's stock price. At this time,
the alleged misrepresentations and omissions include allegations
that:
(i) Microtune materially overstated revenue by recognizing
certain sales immediately as revenue when deferred
revenue recognition would have been more appropriate;
(ii) Microtune failed to disclose that a material portion of
its revenue had not been paid for or had not been paid
in cash;
(iii) Microtune lacked adequate internal controls and was
therefore unable to ascertain its own true financial
condition;
(iv) Microtune's margins were being squeezed by a dramatic
decline in the price of low-technology products;
(v) Microtune's product advantages were grossly overstated
as Microtune was experiencing shortfalls due to the
successes of Broadcom and Conexant;
(vi) Microtune's customers agreed to take product only after
receiving generous credits and/or were unable to pay
for product;
(vii) the value of Microtune's acquisition of Transilica was
overstated by more than $50 million;
(viii) the financial statements in Microtune's SEC Form 10-Q
submissions did not present, in all material respects,
Microtune's true financial condition, and did not
reflect all adjustments that were necessary for a fair
statement of the periods presented;
(ix) Microtune's SEC Form 10-Q submissions were not
presented in conformity with GAAP or principles of fair
reporting;
(x) Microtune was shipping non-compliant product to
customers to make its quarterly earnings and assuring
the customers that it would replace non-compliant
product in the future; and
(xi) Microtune offered customers extended payment terms in
exchange for accepting product the customers did not
need or want.
The relief sought by the plaintiffs in the suit, both
individually and on behalf of shareholders, includes damages,
interest, costs, fees, and expenses. The defendants have not
yet filed a responsive pleading in any of the lawsuits.
Lead plaintiffs have been appointed. The Company intends to
vigorously defend these suits. It is unable at this time to
determine whether the outcome of the litigation will have a
material impact on its results of operations or financial
condition in any future period. Furthermore, there can be no
assurance regarding the outcome of the litigation or any related
claim for indemnification or contribution.
NATIONAL PARTNERSHIP: Reaches Settlement For CA Securities Suit
---------------------------------------------------------------
National Partnership Investments Co. (NAPICO) reached a
settlement for the class action filed in the United States
District Court for the Central District of California against
it, Real Estate Associates Limited III (Partnership), an
affiliated partnership in which NAPICO is the corporate general
partner, and several other defendants.
On August 27, 1998, two investors holding an aggregate of eight
units of limited partnership interests in Real Estate Associates
Limited III and two investors holding an aggregate of five units
of limited partnership interests in Real Estate Associates
Limited VI (another affiliated partnership in which NAPICO is
the corporate general partner) commenced the suit.
The complaint alleged that the defendants breached their
fiduciary duty to the limited partners of certain NAPICO managed
partnerships and violated securities laws by making materially
false and misleading statements in the consent solicitation
statements sent to the limited partners of such partnerships
relating to approval of the transfer of partnership interests in
limited partnerships, owning certain of the properties, to
affiliates of Casden Properties Inc., organized by an affiliate
of NAPICO. The plaintiffs sought equitable relief, as well as
compensatory damages and litigation related costs.
On August 4, 1999, one investor holding one unit of limited
partnership interest in Housing Programs Limited (another
affiliated partnership in which NAPICO is the corporate general
partner) commenced a virtually identical action in the same
court against the Partnership, NAPICO and certain other
entities. The second action was subsumed in the first action,
and was certified as a class action. On August 21, 2001,
plaintiffs filed a supplemental complaint, which added new
claims, including a rescission of the transfer of partnership
interests and an accounting.
In November 2002, the jury returned special verdicts against
NAPICO and certain other defendants in the amount of
approximately $25.2 million for violations of securities laws
and against NAPICO for approximately $67.3 million for breaches
of fiduciary duty. In addition, the jury awarded the plaintiffs
punitive damages against NAPICO of approximately $92.5 million.
On April 29, 2003, the court entered judgment against NAPICO and
certain other defendants in the amount of $25.2 million for
violations of securities laws and against NAPICO for $67.3
million for breaches of fiduciary duty, both amounts plus
interest of $25.6 million, and for punitive damages against
NAPICO in the amount of $2.6 million.
On May 30, 2003, NAPICO and certain other defendants entered
into a memorandum of understanding with the plaintiff class and
their counsel relating to the settlement of the litigation. On
August 11, 2003, NAPICO entered into a stipulation of settlement
with the plaintiff class and their counsel relating to the
settlement of the litigation. The Stipulation of Settlement
remains subject to the preliminary and final approval of the
court as well as the approval of the plaintiffs.
Pursuant to the stipulation of settlement, within two days after
receiving the court's preliminary approval of the proposed
settlement, Alan I. Casden, on behalf of himself, NAPICO and
other defendants in the litigation, is responsible for
depositing $29 million into an escrow account for the benefit of
the plaintiffs.
Upon final court approval, approval by the plaintiffs and the
lapse of any time to appeal the court approval of the
settlement, the following shall occur:
(1) Alan I. Casden, on behalf of himself, NAPICO and other
defendants in the litigation, will transfer to an agent
for the Plaintiffs shares of common stock of AIMCO
owned by certain affiliates of Alan I. Casden with an
aggregate market value of $19 million, subject to
certain transfer restrictions, or at Alan I. Casden's
option, $19 million in cash;
(2) NAPICO will issue an aggregate of $35 million in
promissory notes for the benefit of the plaintiffs. An
aggregate of $7 million of notes are to be repaid each
year. The notes will bear interest based on applicable
rates of US Treasury bills with similar maturities.
The notes will be guaranteed by AIMCO Properties, L.P.,
an affiliate of AIMCO;
(3) The parties to the Stipulation of Settlement will
release each other and related parties from any and all
claims associated with the litigation and the
Plaintiffs' investment in the Partnership and the other
affiliated partnerships;
(4) The $29 million in the escrow account established by
Alan I. Casden will be released to the Plaintiffs.
Pursuant to the Stipulation of Settlement, upon final approval
of the settlement by the court, the parties shall jointly
request that a new judgment be entered in the litigation that
will, among other things, expunge the judgment originally
entered against NAPICO and the other defendants on April 29,
2003.
On August 12, 2003, in connection with the proposed settlement
pursuant to the Stipulation of Settlement, NAPICO and AIMCO
executed a Settlement Agreement with the prior shareholders of
Casden Properties Inc. The principal terms of the Settlement
Agreement include:
(i) That NAPICO will voluntarily discontinue the action it
commenced on May 13, 2003 against the former
shareholders of Casden Properties Inc. and other
indemnitors in AIMCO's March 2002 acquisition of Casden
Properties Inc.;
(ii) That Alan I. Casden and certain related entities will
resolve certain pending claims for indemnification made
by NAPICO, AIMCO and their affiliates. These claims
include indemnification related to the litigation and
certain other matters in connection with the Casden
Merger;
(iii) AIMCO, or an affiliate, will deposit $25 million of the
$29 million that Alan I. Casden is responsible for
depositing into the escrow account for the benefit of
the Plaintiffs pursuant to the terms of the Stipulation
of Settlement. In connection with this deposit by
AIMCO, The Casden Company will transfer to AIMCO
531,915 shares of AIMCO Class A Common Stock owned by
The Casden Company, which shares are to be held in
escrow by AIMCO until final approval of the Stipulation
of Settlement by the court and the Plaintiffs. Upon
such approval, AIMCO will become the owner of the
531,915 shares. If final approval by the court and the
Plaintiffs is not obtained, the $25 million deposited
by AIMCO into the escrow account will be returned to
AIMCO and AIMCO will return to The Casden Company the
531,915 shares;
(4) The Casden Company will promise to pay an aggregate
amount of $35 million on a secured, nonrecourse basis
to NAPICO. The Casden Company will be obligated to
repay an aggregate of $7 million of the obligation each
year.
The obligation to repay the $35 million will bear the same
interest and mature on the same schedule as the promissory notes
issued by NAPICO to the plaintiffs pursuant to the Stipulation
of Settlement. Payment of these obligations will be secured by:
(i) a pledge of 744,681 shares of AIMCO Class A Common
Stock owned by Alan I. Casden or an affiliated entity,
plus up to 60,000 additional shares for accrued
interest, and
(ii) cash proceeds of recoveries or settlements that Alan I.
Casden or any of his affiliates, or any of the former
shareholders of Casden Properties Inc., receive in
connection with or related to the litigation
(collectively, "Recoveries").
The payment obligations to NAPICO will be required to be prepaid
with any Recoveries received. Payment may be made in cash or in
shares of AIMCO Class A Common Stock, except payments with
respect to Recoveries must be made in cash.
NEW ORLEANS: Parents Seek Reimbursement From Poor School System
---------------------------------------------------------------
Parents Maria and Gregory Guth, who may have no choice but to
send their child to private school because, they allege, the
public school system is so bad, have filed a suit on behalf of
themselves and their son Jacob, seeking reimbursement of private
school tuition, Associated Press Newswires reports. They have
asked the court to declare the lawsuit a class action that will
involve all Orleans Parish taxpayers who have had children in
private schools in the last 10 years.
"There are damages suffered by virtually all the parents in
Orleans Parish schools," because the school system has failed to
live up to state and federal legal mandates to "provide a free
and appropriate public education," said Mr. Guth.
At the moment their son, who has attention deficit disorder and
missed meeting the grade requirements of one of the city's few
well-regarded "magnet" schools in the city, Benjamin Franklin
High School, is temporarily attending Benjamin Franklin.
Jacob, the Guths' son, won a place at Benjamin Franklin after an
administrative hearing got him into the school, at least
temporarily. However, the Guths say the risk remains he will
have to leave if he can't meet the school's grade requirements.
Benjamin Franklin is among the city's few "citywide access"
schools, often called "magnet schools." They are among the
state's best, but the schools have a limited number of slots and
these slots are intensively sought by parents.
Most of the city's other schools are far inferior, judging from
the state's 2002 accountability rankings. Of 119 New Orleans
schools listed, 105 are ranked below the state average. Of
those, 50 are considered "academically unacceptable."
NUANCE COMMUNICATIONS: Reaches Settlement For CA Securities Suit
----------------------------------------------------------------
Nuance Communications agreed to settle the consolidated
securities class action filed in the United States District
Court for the Northern District of California against it and
certain of its present and former officers and directors.
The consolidated suit, filed on behalf of a purported class of
persons who purchased the Company's stock during the period
January 31, 2001 through March 15, 2001, alleges false and
misleading statements and insider trading in violation of the
federal securities laws, specifically Section 10(b), 20(a) and
20A of the Securities Exchange Act of 1934, and seek unspecified
damages.
In April 2003, the court granted in part and denied in part
defendants' most recent motion to dismiss. No trial date has
been set. The parties have reached an agreement to settle this
litigation which settlement will become final upon, among other
things, completion of formal settlement papers, and final
approval by the court.
NUANCE COMMUNICATIONS: Agrees To Settle NY Securities Fraud Suit
----------------------------------------------------------------
Nuance Communications agreed to settle the consolidated
securities class actions filed in the United States District
Court for the Southern District of New York against it, certain
of its present and former officers and directors and the
underwriters for the Company's initial public offering (IPO).
The complaint generally alleges that various investment bank
underwriters engaged in improper activities related to the
allocation of shares in the Company's IPO, that were not
disclosed in the registration statements for the Company's IPO
or secondary offerings.
The consolidated action is part of a larger coordinated
proceeding, In re Initial Public Offering Securities Litigation,
21 MC 92, involving more than 40 underwriters and 250 issuers.
In October 2002, the individual defendants were dismissed from
the action without prejudice pursuant to stipulation. In
February 2003, the court issued a ruling on an omnibus motion to
dismiss filed by defendants in the coordinated proceeding,
denying the motion as to the claims against the Company. No
trial date has been set.
A proposal has been made for the settlement and release of
claims against the issuer defendants in the case, including the
Company. The settlement is contingent upon a number of
conditions, including completion of formal settlement papers and
approval of the Court. In the event that settlement does not
occur, and litigation against the Company continues, the Company
believes it has meritorious defenses to these allegations.
NUI CORPORATION: Plaintiffs File Consolidated Securities Lawsuit
----------------------------------------------------------------
Plaintiffs filed an amended consolidated securities class action
against NUI Corporation and its president and chief executive
officer in the United States District Court for the District of
New Jersey.
The second amended complaint, brought on behalf of a putative
class of purchasers of the Company's common stock between
November 8, 2001 and October 17, 2002, asserts claims under
Section 10(b), including Rule 10b-5 promulgated thereunder, and
Section 20(a) of the Exchange Act against the company, its
president and chief executive officer, and its chief financial
officer.
Specifically, the second amended complaint alleges that the
defendants:
(1) failed to disclose material facts that would impair the
company's current and future earnings, including the
allegedly accurate amount and explanation of the
company's bad debts, a purportedly illegal practice by
the company in "re-terminating" intrastate calls,
alleged accounting improprieties in connection with
purportedly unearned revenue, and allegedly inaccurate
earnings per share information; and
(2) inflated the company's earnings materially by allegedly
making misleading statements concerning, and failing to
properly record bad debt costs, allegedly attributing
the company's rising costs to incorrect and immaterial
factors, and purportedly pursuing illegal
telecommunications billing practices.
The Company also faces another complaint filed in the Southern
District of New York on behalf of a putative class of purchasers
of the Company's common stock between November 8, 2001 and
October 17, 2002 alleging violations under Section 10(b),
including Rule 10b-5 promulgated thereunder, and Section 20(a)
of the Exchange Act.
Specifically, the announcement alleges that the company
knowingly or recklessly failed to properly record fixed cost
expenses, accrue necessary pension expenses and reserve adequate
amounts for its self-insured medical benefits in its quarterly
financial statements. At this time, the company has not been
served with the purported complaint.
Although the company intends to vigorously defend these
lawsuits, it is not possible at this time to determine a likely
outcome.
OHIO: Second Charge Added To Lawsuit Over Child Support Payments
----------------------------------------------------------------
Five women who claim the state of Ohio illegally withheld
overdue child support payments from them as reimbursement for
aid they received, have modified their class action to include a
second charge against Ohio's Department of Job and Family
Services.
The plaintiffs' modified complaint, recently filed in US
District Court, alleges the department also is improperly
forcing people to give back payments that were made in error,
the Associated Press Newswires reports.
The women plaintiffs have asked US District Judge Susan Dlott
for a restraining order against both the state and county Job
and Family Services departments. The women's lawyer, Robert
Newman, has argued on behalf of such a motion that the state is
sending "demand letters" and getting parents around the state to
sign payment recoup agreements without informing them that they
have the right to contest the disputed payment amount. The
state also is not telling the parents that they can keep the
payments if they demonstrate that it would be an economic
hardship to repay the money, Mr. Newman said.
The state disagrees with Mr. Newman's interpretation and will
fight it, said Jon Allen, a spokesman for the Ohio Department of
Job and Family Services. Declaring an economic hardship does
not entitle people to keep money they wrongly received, he said.
The women plaintiffs have asked Judge Dlott to certify their
amended lawsuit as a class action that would cover perhaps
hundreds of other Ohio child support recipients under similar
circumstances. Judge Dlott has not ruled on that request, and
no trial date has been set.
ONVIA.COM: Reaches Agreement to Settle Securities Lawsuit in NY
---------------------------------------------------------------
Onvia.com, Inc. agreed to settle the securities class action
filed in the United States District Court for the Southern
District of New York against it, former executive officers Glenn
S. Ballman and Mark T. Calvert, and its lead underwriter, Credit
Suisse First Boston (CSFB).
The suit, filed on behalf of all persons who acquired Onvia
securities of between March 1, 2000 and December 6, 2000,
charged defendants with violations of Sections 10(b) and 20(a)
of the Securities Exchange Act of 1934 (and Rule 10b-5
promulgated thereunder) and Sections 11 and 15 of the Securities
Act of 1933, for issuing a Registration Statement and Prospectus
that contained material misrepresentations and/or omissions.
The complaint alleged that the Registration Statement and
Prospectus were false and misleading because they failed to
disclose:
(1) the agreements between CSFB and certain investors to
provide them with significant amounts of restricted
Onvia shares in the initial public offering (IPO) in
exchange for excessive and undisclosed commissions; and
(2) the agreements between CSFB and certain customers under
which the underwriters would allocate shares in the IPO
to those customers in exchange for the customers'
agreement to purchase Onvia shares in the after-market
at predetermined prices.
The complaint sought an undisclosed amount of damages, as well
as attorney fees. On October 9, 2002, an order of dismissal
without prejudice was entered, dismissing former officers Glenn
S. Ballman and Mark T. Calvert.
In June 2003, Onvia, along with most of the companies named as
defendants in this litigation, accepted a settlement proposal
negotiated among plaintiffs, underwriters and issuers. The
major points of the settlement are:
(i) insurers will provide a $1 billion guaranty payable to
plaintiffs;
(ii) companies will assign excess compensation claims
against underwriters to plaintiffs;
(iii) companies will agree not to assert pricing claims or
claims for indemnification against the underwriters;
(iv) companies and their officers and directors will be
released from any further litigation relating to these
claims; and
(v) companies will agree to cooperate in any document
discovery.
The final settlement agreement must be negotiated and approved
by the court.
ONVIA.COM: Dropped As Defendant in CSFB Securities Fraud Lawsuit
----------------------------------------------------------------
Plaintiffs dismissed Onvia.com, Inc. as defendant in the
consolidated securities class action filed in the United States
District Court for the Southern District of Florida against
Credit Suisse First Boston (CSFB). The suit names as
defendants:
(1) approximately fifty companies, including the Company,
where CSFB was either the lead or the co-lead
underwriter of an IPO,
(2) Glenn S. Ballman,
(3) Mark T. Calvert,
(4) Frank Quattrone and other members of CSFB's Technology
Group
The complaint charged CSFB and CSFB Individuals for violations
of Section 12(a) of the Securities Act of 1933 and violations of
Section 10(b) and 20(a) of the Securities and Exchange Act of
1934. The complaint charged the Company for violations of
Sections 10(b) and 20(a) of the 1934 Act, and charged Mr.
Ballman and Mr. Calvert for violations of Section 15 of the 1933
Act and Section 10(b) of the 1934 Act.
The complaint also alleged claims against CSFB and the Company
under the common law theory of respondeat superior, which
provides that a principal is responsible for the actions of its
agent, and against all defendants based on common law theories
of fraud and negligent misrepresentation, and under Florida's
Blue Sky laws.
In essence, the complaint alleged that the defendants
disseminated false and misleading information to the public
which misrepresented the accuracy of the Company's IPO price,
its financial condition and future revenue prospects.
The complaint further alleged that the effect of the purported
fraud was to manipulate the Company's stock price so that the
defendants could profit from the manipulation. The complaint
seeks damages in an unspecified amount.
In June 2003, the plaintiffs filed and served an amended
complaint removing most of the companies and individual officers
and directors, including the Company, Mr. Ballman and Mr.
Calvert.
ORCHID BIOSCIENCES: Reaches Agreement To Settle Securities Suit
---------------------------------------------------------------
Orchid Biosciences, Inc. agreed to settle the consolidated
securities class action filed in the United States District
Court for the Southern District of New York on behalf of persons
purchasing the Company's stock between May 4, 2000 and December
6, 2000.
The suit alleges violations of Sections 11, 12(a)(2) and 15 of
the Securities Act of 1933, as amended, and Section 10(b) of the
Securities Exchange Act of 1934, as amended, and Rule 10b-5
promulgated thereunder. The complaint alleged that in
connection with the Company's May 5, 2000 initial public
offering, the defendants:
(1) failed to disclose additional and excessive commissions
purportedly solicited by and paid to the underwriter
defendants in exchange for allocating shares of the
Company's stock to preferred customers; and
(2) entered into agreements among the underwriter
defendants and preferred customers tying the allocation
of IPO shares to agreements to make additional
aftermarket purchases at pre-determined prices.
Plaintiffs claim that the failure to disclose these alleged
arrangements made the Company's registration statement on Form
S-1 filed with the SEC in May 2000 and the prospectus, a part of
the registration statement, materially false and misleading.
Plaintiffs seek unspecified damages.
On February 19, 2003, the Company received notice of the court's
decision to dismiss the Section 10(b) claims against the
Company. The claims against individuals officers named as
defendants were earlier dismissed without prejudice, subject to
a tolling agreement.
The plaintiffs and defendant issuers have agreed in principal on
a settlement, which, upon a one-time payment by defendant
issuers insurers, would release the defendant issuers from
claims and any future payments or out of pocket costs.
OREGON: Govt Prosecutors File Suit V. Sewer District Developer
--------------------------------------------------------------
A developer and his associates are accused of misusing some of
the $20 million in municipal bonds approved to finance an office
complex for a small sewer district on Whidbey Island, Oregon,
federal officials said, according to a report by Associated
Press Newswires.
Federal prosecutors and the Securities and Exchange Commission
(SEC) have filed criminal and civil charges against the
developer's controlling shareholder, Terry Martin of Mukilteo,
and many other people involved in the project.
This action follows on the heels of the class action filed in
Island County Superior Court, by investors over the sewer
district's development. The plaintiffs contend in their lawsuit
that they want their money back after the bond issue was
declared illegal by the state auditor's office because the site
of the complex was in Snohomish County, off the island and well
outside the Holmes Harbor Sewer District.
According to federal documents, the developer and others:
(1) lied to investors about how bond proceeds would be used
to acquire land;
(2) falsely claimed a prominent investment bank was
providing additional private financing;
(3) falsely claimed the project was fully leased to a
company with a "Triple A" credit rating; and
(4) failed to disclose kickbacks
The $20 million in bonds were sold in October 2000, purportedly
to pay for public-purpose portions of the public/private
complex. Federal officials say the bonds were sold based on
false information given the buyers in a written offering
document, including a claim that $6.2 million would be used to
acquire 15 acres of land for public parts of the project. In
fact, the developer used the money to buy nearly 40 acres for
both public and private portions, prosecutors say.
The document also claimed the completed project would be worth
$90 million. In fact, says the government in court documents,
the developer had an agreement with a small firm with six
employees, annual revenues of about $600,000 and no capacity to
meet the projected monthly lease payments for the six buildings
planned. The lessee also was free to cancel the arrangement at
any time.
Currently, the bonds are in default and no substantial work has
taken place, according to a news release from the office of US
Attorney John McKay. About half the bond money was used to buy
land and pay professional fees. The rest remains in escrow.
A federal grand jury has charged Mr. Martin; J.David Smith, the
developer's lawyer; as well as two persons who were involved in
arranging private financing; namely, John H. White and Edward L.
Tezak, with 20 counts of conspiracy, securities fraud and wire
fraud, said US Attorney McKay.
The SEC charged Terry Martin, the developer; two of his
corporate entities, Silver Legacy Corporation and Silver Sound
LLC, as well as a number of Mr. Martin's associates who worked
closely with him on the projected sewer district plan, with
fraud in the offer and sale of securities.
PEC SOLUTIONS: Shareholders Launch Securities Suits in E.D. VA
--------------------------------------------------------------
PEC Solutions, Inc. faces several securities class actions filed
in the United States District Court for the Eastern District of
Virginia. The suit also names as defendants certain of the
Company's officers and directors.
The complaints allege that between October 22, 2002 and March
14, 2003, the defendants made, or were aware of false and
misleading statements which had the effect of inflating the
market price of the Company's common stock, in violation of
Sections 10(b) and 20(a) of the Securities Exchange Act of 1934.
The complaints do not specify the amount of damages sought.
Management believes that the plaintiffs' claims are without
merit, and intends to defend the cases vigorously.
PINNACOR INC.: Shareholders Launch Securities Fraud Suit in DE
--------------------------------------------------------------
Pinnacor, Inc., certain of its current officers and directors
and MarketWatch.com faces a securities class action filed in the
Delaware Chancery Court, on behalf of holders of the Company's
common stock as of the date of the announcement of the proposed
acquisition of Pinnacor by MarketWatch.com.
The lawsuit alleges that the Pinnacor directors breached their
fiduciary duties in proceeding with the sale of Pinnacor to
MarketWatch.com by agreeing to an inadequate proposed purchase
price which fails adequately to compensate Pinnacor shareholders
for the loss of control of the company. The lawsuit seeks an
unspecified amount of damages and also prays for an injunction
against consummation of the proposed transaction.
PRINTCAFE SOFTWARE: Shareholders Launch Stock Fraud Suit in PA
--------------------------------------------------------------
Printcafe Software, Inc. faces a securities class action filed
in the United States District Court for the Western District of
Pennsylvania. The suit also names as defendants:
(1) Marc Olin, President and Chief Executive Officer, and
(2) Joseph Whang, Chief Financial Officer and Chief
Operating Officer
The complaint alleges that the defendants violated Sections 11,
12(a)(2) and 15 of the Securities Act of 1933 due to allegedly
false and misleading statements in connection with the Company's
initial public offering and subsequent press releases.
The Company believes that the lawsuit is completely without
merit. To date, the Company has not been required to file a
response to the complaint and has not done so. In light of the
early stage of this proceeding, the Company cannot predict with
certainty the likely outcome of the action or the likely value
of any of the related claims.
SONIC INNOVATIONS: Discovery Starts in UT Securities Fraud Suit
---------------------------------------------------------------
Discovery has commenced in a class action filed against Sonic
Innovations, Inc. and certain of its officers and directors in
the United States District Court in Utah, alleging that the
defendants violated federal securities laws by providing
materially false and misleading information or concealing
information about the Company's relationship with Starkey
Laboratories, Inc.
This lawsuit purports to be brought as a class action on behalf
of all purchasers of the Company's common stock from May 2, 2000
to October 24, 2000 and seeks damages in an unspecified amount.
The complaint alleges that as a result of false statements or
omissions, the Company was able to complete its IPO,
artificially inflate its financial projections and results and
have its stock trade at inflated levels.
The Company strongly denies these allegations and will defend
itself vigorously; however, litigation is inherently uncertain
and there can be no assurance that the Company will not be
materially affected. No class has been certified and no trial
date has been scheduled.
SONUS NETWORKS: Reaches MOU To Settle Securities Suit in S.D. NY
----------------------------------------------------------------
Sonus Networks, Inc. reached an agreement to settle the
consolidated 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 lead underwriters alleging
violations of the federal securities laws in connection with tbe
Company's initial public offering (IPO).
The purchaser seeks to represent a class of persons who
purchased the Company's common stock between the IPO on May 24,
2000 and December 6, 2000. The amended complaint alleges that
the Company's registration statement contained false or
misleading information or omitted to state material facts
concerning the alleged receipt of undisclosed compensation by
the underwriters and the existence of undisclosed arrangements
between underwriters and certain purchasers to make additional
purchases in the after market.
The claims against the Company are asserted under Section 10(b)
of the Securities Exchange Act of 1934 and Section 11 of the
Securities Act of 1933 and against the individual defendants
under Sections 11 and 15 of the Securities Act.
Other plaintiffs have filed substantially similar class action
cases against approximately 300 other publicly traded companies
and their IPO underwriters which, along with the actions against
Sonus, have been transferred to a single federal judge for
purposes of coordinated case management.
On July 15, 2002, Sonus, together with the other issuers named
as defendants in these coordinated proceedings, filed a
collective motion to dismiss the consolidated amended complaints
on various legal grounds common to all or most of the issuer
defendants. The plaintiffs voluntarily dismissed the claims
against the individual defendants, including those Sonus
officers named in the complaint.
On February 19, 2003, the court granted a portion of the motion
to dismiss by dismissing the Section 10(b) claims against
certain defendants including Sonus, but denied the remainder of
the motion as to the defendants. Accordingly, the case
proceeded against Sonus on the Section 11 claims.
In June 2003, a special committee of Sonus' Board of Directors
authorized the Company to enter into a proposed settlement with
the plaintiffs on terms substantially consistent with the terms
of a Memorandum of Understanding negotiated among
representatives of the plaintiffs, the issuer defendants and the
insurers for the issuer defendants. The settlement contemplated
by the Memorandum of Understanding is subject to a number of
conditions including approval by the court. It remains
uncertain whether and when the conditions will be met and the
settlement will become final.
SONUS NETWORKS: Asks MA Court To Dismiss Securities Fraud Suit
--------------------------------------------------------------
Sonus Networks, Inc. asked the United States District Court for
the District of Massachusetts to dismiss the consolidated
securities class action filed against it, certain of its
officers and directors and a former officer under Sections 10(b)
and 20(a) and Rule 10b-5 of the Securities Exchange Act of 1934.
The suit was filed on behalf of a class of persons who purchased
the Company's common stock between December 11, 2000 and January
16, 2002, and seek unspecified monetary damages. The suit
alleges that the Company made false and misleading statements
about its products and business.
The parties have requested oral argument on the motion, but a
date has not yet been set. The Company believes the claims in
the complaint are without merit and that it has substantial
legal and factual defenses, which it intends to pursue
vigorously.
SUPPORTSOFT INC.: Reaches Settlement For NY Securities Lawsuit
--------------------------------------------------------------
SupportSoft, Inc. reached a settlement for the consolidated
securities class action filed in the United States District
Court for the Southern District of New York against it and two
of its officers.
The complaint alleged, inter alia, that the Company's
registration statement and prospectus dated July 18, 2000 for
the issuance and initial public offering 4,250,000 shares of the
Company's common stock contained material misrepresentations
and/or omissions, related to the alleged inflated commissions
received by the underwriters of the offering.
Similar complaints have been filed against 55 underwriters and
more than 300 other companies and other individual officers and
directors of those companies. All of the complaints against the
underwriters, issuers and individuals have been consolidated for
pre-trial purposes before US District Court Judge Scheindlin of
the Southern District of New York.
On June 26, 2003, the Plaintiffs' Executive Committee announced
that a proposed settlement between the issuer defendants and
their directors and officers and the plaintiffs has been
structured and would guarantee up to $1 billion to investors who
are class members from the insurers of the issuers, depending on
recoveries plaintiffs may obtain from the underwriter
defendants.
The Company approved this proposed settlement, which will result
in the plaintiffs' dismissing the case against it and granting
releases that extend to all of its officers and directors.
VERIZON WIRELESS: MI Court Approves Improper Cell Phone Fee Pact
----------------------------------------------------------------
About two million Verizon Wireless customers will receive free
cellular phone time under the terms of a settlement approved in
court, Associated Press Newswires reports. Judge Kaye Tertzag
called the settlement "fair, reasonable and adequate in ending
the four-year-old class action, according to a recent report by
The Detroit News.
Cell phone customers in Michigan had claimed they were
improperly charged an 8.2-cents fee per call to a landline
telephone from a cellular phone. Verizon, on the other hand,
had contended that the fee was imposed in order to recoup
expenses of connecting calls to other networks and, therefore,
was not improper.
Under the terms of the settlement, Verizon estimated that more
than two million people could be eligible for free air time,
which could amount to between 30 million and 60 million minutes.
Further, under the settlement's terms, the company does not have
to eliminate the fee from plans of customers who signed up
before 2001, according to lawyer Robert Gasaway.
The settlement covers many Cellular One, AirTouch and Verizon
customers in Michigan.
WASHINGTON: Judge Stays New Suit Over Burning Bluegrass Fields
--------------------------------------------------------------
A Spokane judge has partially stayed a new lawsuit against area
farmers over the burning of bluegrass fields until the Idaho
Supreme Court makes a key ruling which will affect the region's
controversies over the burning of bluegrass fields by the area's
farmers, The Spokesman-Review reports.
Spokane Superior Court Judge Samuel Cozza declined recently to
order 100 farmers to cease burning fields in Idaho, because,
ruled Judge Cozza, an injunction would be premature. That is
because the Idaho Supreme Court has not yet ruled on the
disputed constitutionality of a new state law that shields Idaho
growers from lawsuits if they burn their fields legally.
The law in question, HB 391, was passed this past spring by the
Idaho Legislature. Its constitutionality was challenged by
Seattle, Oregon, attorney Steven Berman, who is bringing a class
action against the area farmers who burn the bluegrass fields,
characterized the law as illegal "special legislation"
benefiting a few growers. On June 4, 1st District Judge John
Mitchell of Coeur d'Alene, Idaho, ruled as unconstitutional the
law's "safe harbor" provision protecting the bluegrass farmers
from lawsuits.
The growers have challenged Judge Mitchell's ruling, and the
Idaho Supreme Court has agreed to hear the case within the next
18 months. Meanwhile, Judge Cozza, in Spokane, has ruled that
discovery in the new lawsuit can proceed in the Washington state
case filed recently by Mr. Berman on behalf of five Washington
residents with lung disease.
The class action names 100 area farms and farmers, including
growers from Idaho and Washington, who burn on the Coeur d'Alene
Reservation, as well as farmers on the Rathdrum Prairie. The
lawsuit seeks an injunction against field burning and monetary
damages for injuries.
Another class action filed last year by Mr. Berman, Moon v.
North Idaho Farmers Association, is stayed in Idaho until that
state's Supreme Court rules on the "farmer shield" law.
New Securities Fraud Cases
ALSTOM SA: Cauley Geller Lodges Securities Fraud Suit in S.D. NY
----------------------------------------------------------------
The Law Firm of Cauley Geller Bowman & Rudman, LLP initiated a
securities class action in the United States District Court for
the Southern District of New York on behalf of purchasers of
Alstom SA (NYSE: ALS) publicly traded securities during the
period between May 26, 1999 and June 29, 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. Throughout the Class Period, as alleged
in the complaint, defendants issued numerous positive statements
concerning the growth and financial performance of its
transportation subsidiary.
The complaint alleges that these statements were materially
false and misleading because they failed to disclose and/or
misrepresented the following adverse facts, among others:
(1) that the Company had failed to recognize costs incurred
in a rolling-stock supply railcar contract at its
transportation unit in anticipation of shifting the
costs to other contracts;
(2) that the Company lacked adequate internal controls and
was therefore unable to ascertain the true financial
condition of the Company; and
(3) as a result of the foregoing, the value of the
Company's losses was materially understated at all
relevant times and the value of the Company's margins
was materially overstated at all relevant times.
On June 30, 2003, before the U.S. market opened for trading,
Alstom announced that it is "conducting an internal review
assisted by external accountants and lawyers following receipt
of letters earlier this month alleging accounting improprieties
on a railcar contract being executed at the Hornell, New York
facility of ALSTOM Transportation Inc. (ATI), a US subsidiary of
the Company."
As part of the review, the Company "identified that losses have
been significantly understated in ATI's accounts, in substantial
part due to accounting improprieties by the understatement of
actual costs incurred, including by the non-recognition of costs
incurred in anticipation of shifting them to other contracts,
and by the understatement of forecast costs to completion."
As a result, the Company announced that it would record an
additional net after tax charge of 51 million euros ($58
million) for the year ended 31 March 2003.
For more details, contact Samuel H. Rudman, David A. Rosenfeld,
Jackie Addison or Heather Gann by Mail: P.O. Box 25438, Little
Rock, AR 72221-5438 by Phone: 1-888-551-9944 by
Fax: 1-501-312-8505 or by E-mail: info@cauleygeller.com
ALSTOM, SA: Schiffrin & Barroway Launches Securities Suit in NY
---------------------------------------------------------------
Schiffrin & Barroway, LLP initiated a securities class action in
the United States District Court for the Southern District of
New York on behalf of all purchasers of the common stock of
Alstom, SA (NYSE:ALS) from May 26, 1999 through June 29, 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. Throughout the class period, as alleged
in the complaint, defendants issued numerous positive statements
concerning the growth and financial performance of its
transportation subsidiary.
The complaint alleges that these statements were materially
false and misleading because they failed to disclose and/or
misrepresented the following adverse facts, among others:
(1) that the Company had failed to recognize costs incurred
in a rolling-stock supply railcar contract at its
transportation unit in anticipation of shifting the
costs to other contracts;
(2) that the Company lacked adequate internal controls and
was therefore unable to ascertain the true financial
condition of the Company; and
(3) as a result of the foregoing, the value of the
Company's losses was materially understated at all
relevant times and the value of the Company's margins
was materially overstated at all relevant times.
On June 30, 2003, before the U.S. market opened for trading,
Alstom announced that it is "conducting an internal review
assisted by external accountants and lawyers following receipt
of letters earlier this month alleging accounting improprieties
on a railcar contract being executed at the Hornell, New York
facility of ALSTOM Transportation Inc. (ATI), a US subsidiary of
the Company."
As part of the review, the Company "identified that losses have
been significantly understated in ATI's accounts, in substantial
part due to accounting improprieties by the understatement of
actual costs incurred, including by the non-recognition of costs
incurred in anticipation of shifting them to other contracts,
and by the understatement of forecast costs to completion."
As a result, the Company announced that it would record an
additional net after tax charge of 51 million euros ($58
million) for the year ended 31 March 2003.
For more details, contact Marc A. Topaz, or Stuart L. Berman by
Phone: 1-888-299-7706 or 1-610-667-7706, or by E-mail:
info@sbclasslaw.com.
BEARINGPOINT, INC.: Marc Henzel Commences Securities Suit in VA
---------------------------------------------------------------
The Law Offices of Marc S. Henzel initiated a securities class
on behalf of purchasers of the securities of BearingPoint, Inc.
(NYSE:BE) between October 30, 2002 and August 13, 2003,
inclusive, in the United States District Court for the Eastern
District of Virginia. The suit names as defendants the Company
and:
(1) Randolph C. Blazer,
(2) Michael J. Donahue,
(3) Robert C. Lamb, and
(4) Robert S. Falcone
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 30, 2002 and
August 13, 2003.
On August 14, 2003, before the market opened, defendants shocked
the public when they issued a press release and concurrently
filed a Form 8-K with the SEC announcing that BearingPoint's
financial results would be restated for the first three quarters
of fiscal 2003 due to acquisition and accounting relating
adjustments.
The market's reaction to the announcement was swift and drastic.
On August 14, 2003, the price per share of BearingPoint common
stock fell $2.41 or 23 percent from its previous day's trading
to close at $7.90, on unusually heavy trading volume.
For more details, contact Marc S. Henzel by Mail: 273 Montgomery
Ave, Suite 202 Bala Cynwyd, PA 19004-2808, by Phone:
(888) 643-6735 or (610) 660-8000, by Fax: (610) 660-8080, by E-
mail: Mhenzel182@aol.com or visit the firm's Website:
http://members.aol.com/mhenzel182.
BEARINGPOINT, INC.: Berger & Montague Files Stock Lawsuit in VA
---------------------------------------------------------------
Berger & Montague PC initiated a securities class action on
behalf of purchasers of the common stock of BearingPoint (NYSE:
BE) between October 30, 2002 and August 13, 2003, inclusive, to
pursue remedies under the Securities Exchange Act of 1934. This
case was filed in the United States District Court for the
Eastern District of Virginia.
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 30, 2002 and
August 13, 2003.
On August 14, 2003, before the market opened, defendants shocked
the public when they issued a press release and concurrently
filed a Form 8-K with the SEC announcing that BearingPoint's
financial results would be restated for the first three quarters
of fiscal 2003 due to acquisition and accounting relating
adjustments.
The market's reaction to the announcement was swift and drastic.
On August 14, 2003, the price per share of BearingPoint common
stock fell $2.41 or 23 percent from its previous day's trading
to close at $7.90, on unusually heavy trading volume.
For more details, contact Sherrie R. Savett, Glen L. Abramson or
Kimberly A. Walker by Mail: 1622 Locust Street, Philadelphia, PA
19103 by Phone: (215) 875-3000, (888) 891-2289 - toll free by
Fax: (215) 875-5715 by E-mail: Investorprotect@bm.net or visit
the firm's Website: http://www.bergermontgue.com
CHECK POINT: Cauley Geller Commences Securities Suit in S.D. NY
---------------------------------------------------------------
Cauley Geller Bowman & Rudman, LLP initiated a securities class
action in the United States District Court for the Southern
District of New York on behalf of purchasers of Check Point
Software Technologies Ltd. (Nasdaq: CHKP) publicly traded
securities during the period between July 10, 2001 and April 4,
2002, inclusive.
The complaint alleges that the defendants violated Sections
10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule
10b-5 promulgated thereunder. Throughout the Class Period, as
alleged in the complaint, defendants issued numerous statements
concerning Check Point's revenue growth, product and marketing
initiatives, and increasing revenues and profits while failing
to disclose that demand for the Company's products was
materially declining. When this information was belatedly
disclosed to the market on April 4, 2002, shares of Check Point
fell over 24% on extremely heavy trading volume.
For more details, contact Samuel H. Rudman, David A. Rosenfeld,
Jackie Addison or Heather Gann by Mail: P.O. Box 25438, Little
Rock, AR 72221-5438 by Phone: 1-888-551-9944 by
Fax: 1-501-312-8505 or by E-mail: info@cauleygeller.com
CHECK POINT: Schiffrin & Barroway Lodges Securities Suit in NY
--------------------------------------------------------------
Schiffrin & Barroway, LLP initiated a securities class action in
the United States District Court for the Southern District of
New York on behalf of all purchasers of the common stock of
Check Point Software Technologies Ltd. (Nasdaq: CHKP) from July
10, 2001 through April 4, 2002, 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. Throughout the Class Period, as alleged
in the complaint, defendants issued numerous statements
concerning Check Point's revenue growth, product and marketing
initiatives, and increasing revenues and profits while failing
to disclose that demand for the Company's products was
materially declining.
When this information was belatedly disclosed to the market on
April 4, 2002, shares of Check Point fell over 24% on extremely
heavy trading volume.
For more details, contact Marc A. Topaz or Stuart L. Berman by
Mail: Three Bala Plaza East, Suite 400, Bala Cynwyd, PA 19004 by
Phone: 1-888-299-7706 (toll free) or 1-610-667-7706 or by E-
mail: info@sbclasslaw.com
*********
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
publication in any form (including e-mail forwarding, electronic
re-mailing and photocopying) is strictly prohibited without
prior written permission of the publishers.
Information contained herein is obtained from sources believed
to be reliable, but is not guaranteed.
The CAR subscription rate is $575 for six months delivered via
e-mail. Additional e-mail subscriptions for members of the same
firm for the term of the initial subscription or balance thereof
are $25 each. For subscription information, contact Christopher
Beard at 240/629-3300.
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