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C L A S S A C T I O N R E P O R T E R
Wednesday, September 10, 2003, Vol. 5, No. 179
Headlines
ACCLAIM ENTERTAINMENT: Plaintiffs File Consolidated Suit in NY
AT&T WIRELESS: CO Court Certifies Class in Roaming Calls Lawsuit
CATHOLIC CHURCH: Sisters File Abuse Suit V. Los Angeles Diocese
CHICO'S FAS: Hearing for Wage Suit Settlement Set September 2003
CHICO'S FAS: Employees File Suit Over "Mandatory Uniform Policy"
CIENA CORPORATION: Agrees To Settle Securities Suit in S.D. NY
CYBERGUARD CORPORATION: Agrees To Settle FL Securities Lawsuit
DYNACQ INTERNATIONAL: TX Court Dismisses Securities Fraud Suit
EINSTEIN NOAH: Plaintiffs Agree To Dismiss, File Amended Lawsuit
ELECTRO SCIENTIFIC: OR Court Orders Stock Lawsuits Consolidated
EUNIVERSE INC.: Stockholders Launch Securities Suits in C.D. CA
FIRSTENERGY CORPORATION: Says August 15 Blackout Not Their Fault
GOODY'S FAMILY: GA Court Grants Approval To Race Bias Settlement
INTELLI-CHECK INC.: NJ Court Dismisses Securities Fraud Lawsuit
LUMENIS LTD.: NY Court Orders Consolidated Securities Lawsuits
MCDONALD'S CORPORATION: NY Court Throws Out New Obesity Lawsuit
MIRANT AMERICAS: Faces Antitrust Lawsuit Over CA's Energy Crisis
OFFICEMAX INC.: Shareholders Sue Over Boise Cascade Merger in OH
PARADIGM MEDICAL: Stockholders Launch UT Securities Fraud Suits
POLYMEDICA CORPORATION: Discovery Starts in MA Securities Suit
POLYMEDICA CORPORATION: Stockholders File Securities Suit in MA
QUINTILES TRANSNATIONAL: Court Orders Stock Suits Consolidated
SBARRO INC.: Parties in CA Overtime Wage Lawsuits Finish Trial
SBARRO INC.: Striving to Settle Overtime Wage Suit in CA Court
SIMON WORLDWIDE: Working on Settlement of McDonald's Fraud Suit
SYMANTEC CORPORATION: Faces Consumer Suit Over WinFax Pro in CA
SYMANTEC CORPORATION: Plaintiffs Amend Suit Over Refund Policies
SYMANTEC CORPORATION: Parties to Dismiss NY Lawsuit Over Rebates
TENGASCO INC.: Asks TN Court To Dismiss Securities Fraud Lawsuit
TERRORIST ATTACK: Program Unveils 9/11 Workers' Health Concerns
UICI: Consumers Launch Suit For Fraudulent Sales Practices in TX
UICI: Asks CA Court To Dismiss Suit For Business Law Violations
US TIMBERLANDS: Agrees To Settle Shareholders' Suit in DE Court
WARNACO GROUP: Appeals Court Reverses Securities Suit Dismissal
WARNACO GROUP: NY Court Removes Outside Director From Stock Suit
WEIDER NUTRITION: Plaintiffs Re-File Dietary Supplement Lawsuit
Meetings, Conferences & Seminars
* Scheduled Events for Class Action Professionals
* Online Teleconferences
New Securities Fraud Cases
FIRSTENERGY CORPORATION: Abbey Gardy Lodges Ohio Securities Suit
FLOWSERVE CORPORATION: Lasky & Rifkind Files Stock Suit in Texas
FLOWSERVE CORPORATION: Landskroner-Grieco Files Stock Suit in TX
IMPATH INC.: Marc Henzel Lodges Securities Fraud Suit in S.D. NY
IMPATH INC.: Wolf Haldenstein Lodges Securities Suit in S.D. NY
IMPATH INC.: Emerson Poynter Lodges Securities Suit in S.D. NY
MATRIA HEALTHCARE: Marc Henzel Lodges Securities Suit in N.D. GA
MATRIA HEALTHCARE: Lasky & Rifkind Lodges Securities Suit in GA
POLAROID CORPORATION: Goodkind Labaton Files NY Securities Suit
*********
ACCLAIM ENTERTAINMENT: Plaintiffs File Consolidated Suit in NY
--------------------------------------------------------------
Plaintiffs in the securities class actions filed against Acclaim
Entertainment, Inc. and certain of its officers and directors
intend to file a consolidated suit in the United States District
Court for the Eastern District of New York, Central Islip
Division. The officers and directors named in the suits are:
(1) Gregory Fischbach,
(2) Edmond Sanctis,
(3) James Scoroposki and
(4) Gerard Agoglia
Plaintiffs allege that during the various class periods the
Company reported positive earnings statements and gave favorable
earnings guidance, but failed to disclose material adverse facts
regarding its business, operations and management, thereby
causing plaintiffs and other members of the class to purchase
its securities at artificially inflated prices. Plaintiffs
claim violations under Sections 10(b) and 20(a) of the
Securities Exchange Act of 1934 and SEC Rule 10b-5.
On July 3, 2003, the court issued an order consolidating
all 14 class actions, appointing Penn Capital Management, Robert
L. Manard and Steve Russo as lead plaintiffs, and the law firms
of Cauley Geller Bowman Coates & Rudman, LLP, Schiffrin &
Barroway, LLP and Wolf Haldenstein Adler Freeman & Herz LLP as
lead counsel. An initial conference before the court has been
scheduled for October 20, 2003. Plaintiffs will serve a
consolidated complaint and defendants will move, answer or
otherwise reply to that consolidated complaint by October 2,
2003.
AT&T WIRELESS: CO Court Certifies Class in Roaming Calls Lawsuit
----------------------------------------------------------------
A nationwide class action has been certified in the lawsuit
filed in the District Court of the City and County of Denver,
Colorado alleging that AT&T Wireless Services, Inc.'s (NYSE:
AWE) practice of delayed billing for roaming calls violated its
contracts with certain Digital One Rate Customers. More than
600,000 AT&T Wireless subscribers are members of the class.
Under the Digital One Rate (DOR) Plan, AT&T Wireless (AWS)
subscribers are to receive a set number of included airtime
minutes per month, with no charges for roaming or long distance
calls. Under the delayed billing methodology adopted by AWS,
roaming calls made or received on another carrier's network were
accounted for in the month they were reported to AWS by the
other carriers rather than in the month the roaming calls were
made.
AWS' methodology caused subscribers to incur charges for roaming
calls that would not have been incurred if the calls were billed
in the month in which the subscriber actually placed the call or
if the calls had not been a roaming call. Plaintiffs claim that
this practice is a breach of AT&T Wireless Services' contracts
and seek to recover the additional airtime charges incurred by
subscribers as a result of AWS' delayed billing practices.
A trial is scheduled for April 19, 2004. For more details,
visit the litigation Website: http://www.DORPlanClassAction.com
or call toll free 1-866-540-4436.
CATHOLIC CHURCH: Sisters File Abuse Suit V. Los Angeles Diocese
---------------------------------------------------------------
The Roman Catholic Archdiocese of Los Angeles faces a lawsuit
filed by three sisters, alleging that a parish priest abused
them when they were children in the 1970s, the Associated Press
reports.
Sisters Jackie Dennis, Riva Kennedy and Wendy filed the suit in
civil court against Fr. George Neville Rucker, who allegedly
molested them at different times, sometimes at their own home
while their mother was cooking dinner for him. The sisters said
in a news conference they only learned recently that they were
all victims.
"Over a year ago, when I first discovered Rucker's face in the
newspaper, I was totally unaware these abuses had happened to my
sisters," Ms. Dennis, 42 said, according to an AP report. "I
kept my secret. I lived with my secret totally unaware of the
abuses on my sisters . It's like opening up old stab wounds."
Last year, Fr. Rucker, 83, was arrested and was charged with
molesting 12 girls over a 30-year period. However, the charges
against him were dismissed after the U.S. Supreme Court
overturned a state law lifting the statute of limitations in
criminal prosecution of old molestation cases. Fr. Rucker
returned home in a facility for retired priests.
CHICO'S FAS: Hearing for Wage Suit Settlement Set September 2003
----------------------------------------------------------------
Hearing for final approval of the settlement proposed by Chico's
FAS, Inc. for the class action filed in the Superior Court for
the State of California for the County of Orange against it is
set for September 16, 2003.
The suit, filed on behalf of all other Company assistant store
managers, sales associates and hourly employees in California
from September 21, 1997 to the present, alleges that the Company
failed to pay overtime wages and failed to provide rest breaks
and meal periods. The action sought class action status and
sought unspecified monetary damages.
Following preliminary settlement discussions, the parties
attended a mediation on October 14, 2002, at which the parties
reached a settlement on a class-wide basis. The settlement
provided for a common fund out of which settlement awards to
class members and the costs of the settlement would be paid.
At a hearing held on April 2, 2003, the court granted
preliminary approval to the parties' settlement agreement. The
settlement agreement states that the settlement is not an
admission of liability and that the Company continues to deny
liability for any of plaintiff's claims.
Pursuant to the court's preliminary approval order, notice was
given to class members of their right to file claim forms to
participate in the settlement or to file exclusion forms to opt
out of the settlement. The period for filing claim forms or
exclusion forms has now elapsed. No class members filed
objections to the settlement.
If the Court grants final approval to the settlement, the
Company will pay settlement awards to class members who have
filed valid claims and also will pay amounts owing for
attorneys' fees, costs, and other expenses of the settlement.
CHICO'S FAS: Employees File Suit Over "Mandatory Uniform Policy"
----------------------------------------------------------------
Chico's FAS, Inc. faces a class action filed in May 2003 in the
Superior Court for the State of California, County of San
Francisco, charging it with violating California law by putting
in place a mandatory uniform policy that requires its employees
to purchase and wear Chico's clothing and accessories as a
condition of employment.
In a disclosure to the Securities and Exchange Commission, The
Company denied the existence of such mandatory uniform policy,
stating that "Chico's encourages but does not require its
associates to wear Chico's clothing. Although many Chico's
associates choose to wear Chico's clothing, others do not."
This case is at the beginning stages, and no court proceedings
have occurred other than the filing of plaintiff's complaint and
Chico's answer. No rulings on class certification have been
made.
CIENA CORPORATION: Agrees To Settle Securities Suit in S.D. NY
--------------------------------------------------------------
CIENA Corporation agreed to settle a securities class action
filed in the United States District Court for the Southern
District of New York, relating to its merger with ONI. The suit
also names as defendants:
(1) ONI,
(2) Hugh C. Martin, ONI's former chairman, president and
chief executive officer,
(3) Chris A. Davis, ONI's former executive vice president,
chief financial officer and administrative officer; and
(4) certain underwriters of ONI's initial public offering
The amended complaint alleges, among other things, that the
underwriter defendants violated the securities laws by failing
to disclose alleged compensation arrangements (such as
undisclosed commissions or stock stabilization practices) in the
initial public offering's registration statement and by engaging
in manipulative practices to artificially inflate the price of
our common stock after the initial public offering.
The amended complaint also alleges that ONI and the named former
officers violated the securities laws on the basis of an alleged
failure to disclose the underwriters' alleged compensation
arrangements and manipulative practices. No specific amount of
damages has been claimed.
Similar complaints have been filed against more than 300 other
issuers that have had initial public offerings since 1998, and
all of these actions have been included in a single coordinated
proceeding. Mr. Martin and Ms. Davis have been dismissed from
the action without prejudice pursuant to a tolling agreement.
In July 2002, ONI and other issuers in the consolidated cases
filed motions to dismiss the amended complaint for failure to
state a claim, which was denied as to ONI on February 19, 2003.
CIENA has participated, together with the other issuer
defendants in these cases, in mediated settlement negotiations
that have led to a preliminary agreement among the plaintiffs,
the issuer defendants and their insurers. The settlement, which
is subject to court approval, would result in the dismissal of
the plaintiffs' cases against the issuers.
CIENA has agreed in principle to the terms of this settlement.
CIENA does not anticipate that it will be required to make any
payment as a result of the settlement.
CYBERGUARD CORPORATION: Agrees To Settle FL Securities Lawsuit
--------------------------------------------------------------
Cyberguard Corporation agreed to settle the consolidated
securities class action filed against it and certain of its
former officers and directors, in the United States District
Court, Southern District of Florida.
This action seeks damages purportedly on behalf of all persons
who purchased or otherwise acquired the Company's common stock
during various periods from November 7, 1996 through August 24,
1998. The complaint alleges, among other things, that as a
result of accounting irregularities relating to the Company's
revenue recognition policies, the Company's previously issued
financial statements were materially false and misleading and
that the defendants knowingly or recklessly published these
financial statements which caused the Company's common stock
prices to rise artificially.
The action alleges violations of Section 10(b) of the Securities
Exchange Act of 1934 and SEC Rule 10b-5 promulgated thereunder
and Section 20(a) of the Exchange Act. Subsequently, the
defendants, including the Company, filed their respective
motions to dismiss the consolidated amended suit. On July 31,
2000, the court issued a ruling denying the Company's and Robert
L. Carberry's (the Company's CEO from June 1996 through August
1998) motions to dismiss. The court granted the motions to
dismiss with prejudice for defendants:
(1) William D. Murray (the Company's CFO from November 1997
through August 1998),
(2) Patrick O. Wheeler (the Company's CFO from April 1996
through October 1997),
(3) C. Shelton James (the Company's former Audit Committee
Chairman), and
(4) KPMG Peat Marwick LLP
On August 14, 2000, the plaintiffs filed a motion for
reconsideration of that order. On March 20, 2001, the
Court ruled on the plaintiffs' motion for reconsideration that
the previously dismissed defendants William D. Murray, Patrick
O. Wheeler and C. Shelton James should not have been dismissed
from the action and shall be defendants in this action under the
control person liability claims under Section 20(a) of the
Exchange Act, and that the plaintiffs may amend the consolidated
suit to bring claims against C. Shelton James under Section
10(b) of the Exchange Act and Rule 10b-5 promulgated thereunder.
On April 5, 2001, the plaintiffs filed their Second amended suit
to include amended claims against C. Shelton James. On May 10,
2001, the Company filed an answer and affirmative defenses to
plaintiffs' second consolidated suit. On August 14, 2002, the
court granted the plaintiffs' Motion for Class Certification and
certified the class to include all investors who acquired the
Company's common stock between November 7, 1996 and August 24,
1998 and were damaged by the purchase of such stock. The trial
is scheduled for March 2004.
In July 2003, the Company entered into a Memorandum of
Understanding to settle this lawsuit. The settlement amount of
$10 million will require the Company to incur a one-time charge
of $3.9 million in the fourth quarter of its fiscal year ending
June 30, 2003 for the amount in excess of the insurance coverage
and related costs. The Company's portion of the settlement
amount will be payable by the Company in cash or in a
combination of cash and equity, at the Company's option.
The terms of the settlement are subject to approval by the
court, and there can be no assurance that the court will approve
this proposed settlement.
DYNACQ INTERNATIONAL: TX Court Dismisses Securities Fraud Suit
--------------------------------------------------------------
The US District Court for the Southern District of Texas has
issued a final judgment dismissing with prejudice the class
action filed against Dynacq International Inc. and certain of
its officers in early 2002 following an article by Herb
Greenberg of The Street.com, which was quoted in the lawsuit.
Several months after the class action was brought, in a
previously planned move, the Company retained the
internationally known firm of Ernst & Young as its independent
auditor. E&Y have now worked with Dynacq for five quarters and
audited the Company's financial statements for the fiscal year
ended August 31, 2002. E&Y will also audit the Company's
financials for the current fiscal year ending August 31, 2003.
For more details, contact James N. Baxter by Phone: 713-378-2000
or by E-mail: jimbaxter@dynacq.com
EINSTEIN NOAH: Plaintiffs Agree To Dismiss, File Amended Lawsuit
----------------------------------------------------------------
Plaintiffs agreed to dismiss the claims in a class action filed
against Einstein Noah Bagel Corporation in the Superior Court
for the State of California, County of San Francisco.
The plaintiffs allege that Noah's failed to pay overtime wages
to managers and assistant managers of its California stores,
whom it is alleged were improperly designated as exempt
employees in violation of California and Business Profession
Code Section 17200.
The plaintiffs filed a first amended complaint disclaiming back
wages for the period prior to June 19, 2001. However, the first
amended complaint added as defendants certain former directors
and officers of Einstein. The first amended complaint also
added a second cause of action seeking to invalidate releases
obtained from Noah's assistant managers pursuant to the
settlement of a Department of Labor investigation.
The Company filed a demurrer to the first amended complaint,
which the plaintiffs opposed. Subsequent to the filing of
that demurrer, the Company procured a dismissal without
prejudice of the claims brought against Paul Murphy, one of the
Company officers.
The plaintiffs subsequently stipulated to the severance of the
claims against the Company and those against the remaining
individual defendants. The stipulation provides that the
plaintiffs will file separate second amended complaints against
the Company and against the remaining individual defendants. As
a result, the Company's demurrer will be taken off calendar.
The Company will have thirty days from the date of the filing of
the second amended complaint to refile the Company's demurrer.
ELECTRO SCIENTIFIC: OR Court Orders Stock Lawsuits Consolidated
---------------------------------------------------------------
The United States District Court for the District of Oregon
ordered consolidated the securities class action filed against
Electro Scientific Industries, Inc. and its current and former
officers and directors:
(1) David F. Bolender,
(2) James T. Dooley, and
(3) Joseph L. Reinhart
The complaints were filed on behalf of a purported class of
persons who purchased Company's common stock between September
17, 2002 and at the latest April 15, 2003. The complaints
assert causes of action (and seek unspecified damages) for
alleged violations of Section 10(b) of the Securities Exchange
Act of 1934 and Rule 10b-5 promulgated thereunder, as well as
Section 20(a) of the Act.
In particular, the complaints allege that the defendants were
involved in making false and misleading statements during the
putative class period about the Company's business, prospects,
and operations, all of which resulted in artificially inflating
the Company's stock price.
The complaints have been consolidated under the name In
re Electro Scientific Industries, Inc. Securities Litigation,
Case No. CV 03-404-HA. Lead plaintiffs and lead counsel for
plaintiffs have been appointed. Plaintiffs' consolidated class
action complaint is due to be filed 45 days following the filing
of the Company's restated financial statements.
In March 2003, the Company's Audit Committee commenced an
investigation into certain accounting matters. As a result of
the investigation, which was completed on July 11, 2003, the
Company restated its financial statements for the fiscal year
ended June 1, 2002 and for the quarters ended August 31,
2002 and November 30, 2002.
The consolidated class action complaint had not been filed and
discovery had not yet commenced at the time of this report's
filing, and the Company is in the early stages of its assessment
of the possible outcomes of this litigation.
EUNIVERSE INC.: Stockholders Launch Securities Suits in C.D. CA
---------------------------------------------------------------
EUniverse, Inc. faces several substantially similar securities
class actions filed in the United States District Court for the
Central District of California. The suit also names as
defendants several current and former officers and/or employees
of the Company.
In addition, three purported shareholder derivative actions,
which are similar, have been filed against various current and
former directors, officers, and/or employees of the Company, one
of which was recently filed in the United States District Court
for the Central District of California, and two of which were
filed in the Superior Court of California for the County of Los
Angeles.
The Company expects that the purported securities class actions
filed in the United States District Court for the Central
District of California and any additional similar actions, will
be consolidated into one action, and that the purported
shareholder derivative actions filed in the Superior Court of
California for the County of Los Angeles and any additional
similar actions filed in that Court, will similarly be
coordinated before one judge.
All of the lawsuits, which arise out of the Company's previously
disclosed restatement, include varying allegations of, among
other things, false and misleading statements regarding the
Company's business prospects and financial condition and
performance, sales of Company stock by one officer and one
former employee of the Company, and breach of fiduciary duty.
FIRSTENERGY CORPORATION: Says August 15 Blackout Not Their Fault
----------------------------------------------------------------
Beleaguered FirstEnergy Corporation said that a combination of
factors contributed to the worst blackout in North American
history, rather than its own negligence, before a House Energy
and Commerce Committee panel, Reuters reports.
Investigators suspect that the August 14-15 blackout, which
affected eight states and Ontario, Canada, originated from the
energy firm's Ohio transmission lines.
FirstEnergy CEO Peter Burg told the House Panel, "Events on our
system, in and of themselves, could not account for the
widespread nature of the outage."
A telephone conversation transcript between FirstEnergy and the
Midwest power grid operator showed chaos and confusion in
FirstEnergy's control room in the hours before the blackout,
Reuters states.
"We have no clue. Our computer is giving us fits, too. We don't
even know the status of some of the stuff around us," an
operator at Akron-based FirstEnergy said in the transcript.
Rep. Billy Tauzin of Louisiana, the Republican who chairs the
committee, called the transcripts "disturbing" in an interview
with Reuters. "It doesn't yet tell us where the culprits are
and what went wrong," Rep. Tauzin said. "Perhaps if there had
been less confusion, we might have had a better resolution."
Democrat Edward Markey of Massachusetts said he was unsatisfied
with FirstEnergy's responses. "All of the evidence appears to
be focusing on FirstEnergy as the culprit in this blackout and
you appear to be trying to shift blame elsewhere," he told
Reuters.
GOODY'S FAMILY: GA Court Grants Approval To Race Bias Settlement
----------------------------------------------------------------
The United States District Court for the Middle District of
Georgia granted preliminary approval to the settlement of the
class action filed against Goody's Family Clothing, Inc. and
Robert M. Goodfriend, its Chairman of the Board and Chief
Executive Officer.
20 named plaintiffs filed the suit, generally alleging that the
Company discriminated against a class of African-American
employees at its retail stores through the use of discriminatory
selection and compensation procedures and by maintaining unequal
terms and conditions of employment. The plaintiffs further
alleged that the Company maintained a racially hostile working
environment.
On February 28, 2003, a proposed Consent Decree was filed with
the court for its preliminary approval. The proposed consent
decree sets forth the proposed settlement of the race
discrimination lawsuit. Ultimately, class action certification
was sought in the lawsuit only with respect to alleged
discrimination in promotion to management positions and the
proposed consent decree is limited to such claims.
Generally, the proposed settlement provides for a payment by the
Company in the aggregate amount of $3.2 million to the class
members (including the named plaintiffs) and their counsel, as
well as the Company's implementation of certain policies,
practices and procedures regarding, among other things, training
of employees. The Company's employer liability insurance
underwriter has funded $3.1 million of such payment to a third
party administrator. The proposed consent decree explicitly
provides that it is not an admission of liability by the Company
and the Company continues to deny all of the allegations.
On April 30, 2003, the court granted preliminary approval of the
proposed consent decree, and a hearing was held on June 30, 2003
regarding the adequacy and fairness of the proposed settlement.
At such hearing, the court requested that plaintiffs' counsel
take certain action. Plaintiffs' counsel has since notified the
court that such action has been taken and requested the court to
grant final approval of the consent decree. The parties are
still waiting for the court's response.
INTELLI-CHECK INC.: NJ Court Dismisses Securities Fraud Lawsuit
---------------------------------------------------------------
The United States District Court for New Jersey dismissed the
class action filed against Intelli-Check, Inc. on behalf of
short-sellers of the Company's stock, who allegedly suffered
losses because of the rise in the price of the Company's stock.
On July 26, 2002, the Company filed a motion to dismiss the
lawsuit. On July 30, 2003, the court granted the Company's
motion to dismiss the lawsuit. The plaintiff has 30 days in
which to file an amended complaint pertaining to certain of the
pleadings.
LUMENIS LTD.: NY Court Orders Consolidated Securities Lawsuits
--------------------------------------------------------------
The United States District Court for the Southern District of
New York ordered consolidated the securities class actions filed
against Lumenis Ltd. and:
(1) Prof. Jacob A. Frenkel (the Chairman of the Board of
Directors of the Company),
(2) Yacha Sutton,
(3) Sagi Genger and
(4) Asif Adil (the Company's former Executive Vice
President - Business Operations and acting Chief
Financial Officer)
During March, April and May 2002, eight purported class actions
were filed on behalf of purchasers of Lumenis securities between
January 7 and February 28, 2002. The complaints generally
allege that the defendants violated federal securities laws by
issuing materially false and misleading statements throughout
the class period that had the effect of artificially inflating
the market price of the Company's securities.
The complaints allege that throughout the class period,
defendants discounted and disputed marketplace rumors about the
Company's operations even as the Company knew it was being
investigated by the SEC and that its distributors had been
contacted by the SEC.
The Company has been served with a summons and complaint in some
but not all of these actions. By order dated June 18, 2003, the
court consolidated the actions, appointed a lead plaintiff and
approved selection of lead plaintiffs' counsel. The plaintiffs
are presently required to file their consolidated complaint by
August 29, 2003, and the Company has until October 31, 2003 to
move or answer with respect to the consolidated complaint.
Subject to review and evaluation of the consolidated complaint
that is filed, the Company currently intends to file a motion to
dismiss for failure to state a claim and failure to plead fraud
with particularity as required by the Private Securities
Litigation Reform Act of 1995 and Rule 9(b) of the Federal Rules
of Civil Procedure.
In May 2002, another purported class action was filed in the
United States District Court for the Southern District of New
York on behalf of purchasers of the Company's securities between
August 2, 2001 and May 7, 2002. The complaint alleges that the
defendants violated federal securities laws by making a series
of material misrepresentations to the market during the class
period regarding the Company's financial performance, successful
execution of its business plan and strong demand for the
Company's products, thereby artificially inflating the price of
Lumenis securities. The Company has not been served with a
summons and complaint in this action. This suit has been
consolidated with the other purported class action lawsuits
described above.
MCDONALD'S CORPORATION: NY Court Throws Out New Obesity Lawsuit
---------------------------------------------------------------
The United States District Court for the Southern District of
New York dismissed for the second time the class action filed
against McDonald's Corporation, blaming the fast food giant for
their patrons' health problems like obesity, heart problems and
diabetes, the Motley Fool reports.
Last year, New York Judge Robert Sweet dismissed the suit's
predecessor, saying the plaintiffs failed to show that the fast-
food chain's products "involve a danger that is not within the
common knowledge of consumers," an earlier Class Action Reporter
story states.
Judge Sweet said in his latest ruling that the plaintiffs failed
to show that the fast-food chain misled consumers into believing
its food was nutritious and part of a healthy diet. He rejected
a petition to file a new version of the suit, which claimed that
McDonald's violated New York's consumer protection laws and
engaged in deceptive advertising, the Associated Press reports.
In a press statement, Lisa Howard, McDonald's spokesperson,
said, "We at McDonald's are extremely pleased with this ruling.
It is a total victory for common sense. The court has closed
the books once and for all on this meritless case . As we've
said all along, our menu can absolutely be part of a healthy
balanced lifestyle."
In a statement, the National Restaurant Association said Judge
Sweet's decision demonstrated that "reason and common sense have
prevailed."
In his earlier ruling, Judge Sweet said consumers cannot blame
McDonald's if they choose to eat there, AP reports. "If a
person knows or should know that eating copious orders of
supersized McDonald's products is unhealthy and may result in
weight gain . it is not the place of the law to protect them
from their own excesses."
MIRANT AMERICAS: Faces Antitrust Lawsuit Over CA's Energy Crisis
----------------------------------------------------------------
Mirant Americas Generating LLC was named as a class action
defendant in the United States District Court for the Southern
District of California. The lawsuit was filed against various
owners of electric generation facilities in California and
marketers of electricity and natural gas, on behalf of all
persons who purchased electricity in Oregon, Washington, Utah,
Nevada, Idaho, New Mexico, Arizona and Montana from January 1,
1999.
The plaintiffs allege that the defendants engaged in unlawful,
unfair, and deceptive practices in the California and western
wholesale electricity markets, including:
(1) withholding energy from the market to create artificial
shortages,
(2) creating artificial congestion over transmission lines,
(3) selling electricity bought in California to out of
state affiliates to create artificial shortages and
then selling the electricity back into the state at
higher prices.
The plaintiffs contend that the defendants conspired among
themselves and with subsidiaries of Enron Corporation to
withhold electricity from the California Power Exchange
Corporation (PX) and the California Independent System Operator
(CAISO) markets and to manipulate the price of electricity sold
at wholesale in the California and western markets.
The defendants' unlawful manipulation of the wholesale energy
market, the plaintiffs allege, resulted in supply shortages and
skyrocketing energy prices in the western United States, which
in turn caused drastic rate increases for retail consumers.
The plaintiffs assert claims under California's antitrust
statute and its Unfair Competition Act. The plaintiffs contend
that the defendants' alleged wrongful conduct has caused damages
in excess of one billion dollars and seek treble damages,
injunctive relief, restitution, and an accounting of the
wholesale energy transactions entered into by the defendants
from 1998.
OFFICEMAX INC.: Shareholders Sue Over Boise Cascade Merger in OH
----------------------------------------------------------------
Officemax, Inc. and certain of its directors face a class action
filed in the Court of Common Pleas, Cuyahoga County, Ohio, on
behalf of the Company's shareholders.
The lawsuit alleges that the Company and its board of directors
breached their fiduciary duties by approving the terms of the
proposed merger with Boise Cascade Corporation. The lawsuit
seeks an order preventing the Company from proceeding with the
merger, along with other injunctive relief.
PARADIGM MEDICAL: Stockholders Launch UT Securities Fraud Suits
----------------------------------------------------------------
Paradigm Medical Industries, Inc. faces several securities class
actions filed in the United States District Court, District of
Utah. The suit also names as defendants:
(1) Thomas Motter,
(2) Mark Miehle and
(3) John Hemmer
The complaint also indicates that it is a "Class Action
Complaint for Violations of Federal Securities Law and
Plaintiffs Demand a Trial by Jury." The Company has been in
the process of reviewing the complaint, which appears to be
focused on alleged false and misleading statements pertaining to
the Blood Flow Analyzer(TM) and concerning a purchase order from
Valdespino Associates Enterprises and Westland Corporation.
It is likely all of these cases will be consolidated into a
single action.
POLYMEDICA CORPORATION: Discovery Starts in MA Securities Suit
--------------------------------------------------------------
Discovery is proceeding in the class action filed against
Polymedica Corporation and Steven J. Lee, its former Chief
Executive Officer and Chairman of the Board in the United States
District Court for the District of Massachusetts.
The seeks an unspecified amount of damages, attorneys' fees and
costs and claims violations of Sections 10(b), 10b-5, and 20(a)
of the Securities Exchange Act of 1934, alleging various
statements were misleading with respect to the Company's revenue
and earnings based on an alleged scheme to produce fictitious
sales.
The consolidated amended complaint extended the class period to
October 26, 1998 through August 21, 2001, and also named as
defendants:
(1) Eric G. Walters, former Executive Vice President and
Clerk of PolyMedica, and
(2) Keith Trowbridge, President of Liberty and a Senior
Vice President of PolyMedica.
Defendants moved to dismiss the consolidated amended complaint
on December 10, 2001. Plaintiffs filed their opposition to this
motion on February 11, 2002, and defendants filed a reply
memorandum on March 11, 2002. The court denied the motion
without a hearing on May 10, 2002.
POLYMEDICA CORPORATION: Stockholders File Securities Suit in MA
---------------------------------------------------------------
Polymedica Corporation faces two class actions filed in the
United States District Court for the District of Massachusetts
on behalf of purchasers of its common stock for a proposed class
period of July 23, 2001 to June 30, 2003. The suit also names
as defendants:
(1) Steven J. Lee, former Chief Executive Officer and
Chairman of the Board,
(2) Samuel L. Shanaman, Interim Chief Executive Officer and
Lead Director,
(3) Arthur A. Siciliano, President,
(4) John K.P. Stone III, Director, Vice Chairman, General
Counsel, and Senior Vice President,
(5) Stephen C. Farrell, Senior Vice President and Chief
Financial Officer,
(6) Eric Walters, formerly Executive Vice President
and Clerk, and
(7) Warren K. Trowbridge, Senior Vice President of
PolyMedica and President of Liberty
The lawsuit seeks an unspecified amount of damages, attorneys'
fees and costs and claims violations of Sections 10(b), 10b-5,
and 20(a) of the Securities Exchange Act of 1934, alleging
various statements were misleading with respect to revenue and
earnings based on PolyMedica's accounting treatment of direct-
response advertising.
QUINTILES TRANSNATIONAL: Court Orders Stock Suits Consolidated
--------------------------------------------------------------
The North Carolina Business Court required plaintiffs in the
class actions against Quintiles Transnational Corporation to
file an amended consolidated suit.
In October 2002, seven purported class action lawsuits were
filed in Superior Court, Durham County, North Carolina by
shareholders seeking to enjoin the consummation of a transaction
proposed by Pharma Services Company, a newly formed company
wholly owned by Dennis B. Gillings, Ph.D., to acquire all the
Company's outstanding shares for $11.25 per share in cash. All
of the lawsuits were subsequently transferred to the North
Carolina Business Court. The lawsuits name as defendants
Dr.Gillings, other members of the Company's Board of Directors,
the Company and, in some cases Pharma Services Company.
The complaints allege, among other things, that the directors
breached their fiduciary duties with respect to the proposal.
The complaints seek to enjoin the transaction proposed by Pharma
Services Company, and the plaintiffs seek to recover damages.
On November 11, 2002, a Special Committee of the Company's Board
of Directors announced its rejection of the proposal by Pharma
Services Company and its intention to investigate strategic
alternatives available to the Company for purposes of enhancing
shareholder value, including the possibility of a sale of the
Company and alternatives that would keep the Company independent
and publicly owned.
On January 6, 2003, the North Carolina Business Court entered a
Case Management Order consolidating all seven lawsuits for all
purposes and staying the lawsuits until March 29, 2003 or until
the Company provides notice of a change-of-control transaction
involving the Company.
On March 28, 2003, the court entered an Order Maintaining the
Status Quo, which continued its prior Case Management Order in
all respects until the earlier of a date selected by the court
or until the Company provides the notice contemplated by the
Case Management Order. On April 10, 2003, the Company's Board
of Directors approved a merger agreement with Pharma Services
Holding, Inc. for the Company's public shareholders to receive
$14.50 per share in cash.
The Company anticipates filing a proxy statement and holding a
special meeting later this year at which the shareholders will
vote on the transaction. Under the terms of the Case Management
Order, the Company is required to give plaintiff's counsel and
Court notice of a change-of-control transaction involving the
Company at least forty (40) days prior to the closing of such a
transaction. Plaintiffs are required to serve an amended
consolidated complaint within thirty (30) calendar days of the
notice.
SBARRO INC.: Parties in CA Overtime Wage Lawsuits Finish Trial
--------------------------------------------------------------
Trial was concluded in the class action filed against Sbarro,
Inc. by fourteen of its current and former general managers in
its California restaurants, in the Superior Court of California
for Orange County.
The complaint alleges that the plaintiffs were improperly
classified as exempt employees under the California wage and
hour law. The plaintiffs are seeking actual damages, punitive
damages and costs of the lawsuit, including reasonable
attorney's fees, each in unspecified amounts.
Plaintiffs filed a motion to certify the lawsuit as a class
action, but the court denied the motion. The trial was
concluded in April 2003, and the parties have submitted post-
trial briefs. The court has not yet issued a judgment.
SBARRO INC.: Striving to Settle Overtime Wage Suit in CA Court
--------------------------------------------------------------
Sbarro, Inc. is working to settle a class action filed by eight
current and former general managers of Sbarro restaurants in
California in the Superior Court of California for Orange
County, alleging that the plaintiffs were improperly classified
as exempt employees under California wage and hour law. The
plaintiffs are seeking actual damages, punitive damages and
costs of the lawsuit, including reasonable attorney's fees, each
in unspecified amounts.
The Company has separately settled with four of the plaintiffs
in this action for immaterial amounts. The parties to this case
have agreed that it will be settled upon the same terms and
conditions that the court orders in a similar suit pending
against it.
SIMON WORLDWIDE: Working on Settlement of McDonald's Fraud Suit
---------------------------------------------------------------
Simon Worldwide, Inc. is continuing to settle a consumer class
action and representative action lawsuits filed in Illinois, the
headquarters of McDonald's, and in multiple jurisdictions
nationwide and in Canada. Plaintiffs in these actions asserted
diverse causes of action, including:
(1) negligence,
(2) breach of contract,
(3) fraud,
(4) restitution,
(5) unjust enrichment,
(6) misrepresentation,
(7) false advertising,
(8) breach of warranty,
(9) unfair competition and
(10) violation of various state consumer fraud statutes
Complaints filed in federal court in New Jersey also alleged a
pattern of racketeering. Plaintiffs in many of these actions
alleged, among other things, that defendants, including the
Company, its subsidiary Simon Marketing, and McDonald's,
misrepresented that plaintiffs had a chance at winning certain
high-value prizes when in fact the prizes were stolen by Jerome
P. Jacobson, a Company employee.
Plaintiffs seek various forms of relief, including restitution
of monies paid for McDonald's food, disgorgement of profits,
recovery of the "stolen" game prizes, other compensatory
damages, attorney's fees, punitive damages and injunctive
relief.
The class and/or representative actions filed in Illinois state
court were consolidated in the Circuit Court of Cook County,
Illinois (the "Boland" case). Numerous class and representative
actions filed in California have been consolidated in California
Superior Court for the County of Orange (the "California
Court"). Numerous class and representative actions filed in
federal courts, nationwide, have been transferred by the
Judicial Panel on Multidistrict Litigation (the "JPMDL Panel")
to the federal district court in Chicago, Illinois. Numerous of
the class and representative actions filed in state courts other
than in Illinois and California were removed to federal court
and transferred by the JPMDL Panel to the MDL Proceedings.
On April 19, 2002, McDonald's entered into a Stipulation of
Settlement (the "Boland Settlement") with certain plaintiffs in
the Boland case pending in the Circuit Court of Cook County,
Illinois. The Boland Settlement purports to settle and release,
among other things, all claims related to the administration,
execution and operation of the McDonald's promotional games, or
to "the theft, conversion, misappropriation, seeding,
dissemination, redemption or non-redemption of a winning prize
or winning game piece in any McDonald's Promotional Game,"
including without limitation claims brought under the consumer
protection statutes or laws of any jurisdiction, that have been
or could or might have been alleged by any class member in any
forum in the United States of America, subject to a right of
class members to opt out on an individual basis, and includes a
full release of the Company and Simon Marketing, as well as
their officers, directors, employees, agents, and vendors.
Under the terms of the Boland Settlement, McDonald's agrees to
sponsor and run a "Prize Giveaway" in which a total of fifteen
(15) $1 million prizes, payable in twenty equal annual
installments with no interest, shall be randomly awarded to
persons in attendance at McDonald's restaurants. The Company
has been informed that McDonald's, in its capacity as an
additional insured, has tendered a claim to Simon Marketing's
Errors & Omissions insurance carriers to cover some or all of
the cost of the Boland Settlement, including the cost of running
the "Prize Giveaway," of the prizes themselves, and of
attorneys' fees to be paid to plaintiffs' counsel up to an
amount of $3 million.
On June 6, 2002, the Illinois Circuit Court issued a preliminary
order approving the Boland Settlement and authorizing notice to
the class. On August 28, 2002, the opt-out period pertaining
thereto expired. The Company has been informed that
approximately 250 persons in the United States and Canada
purport to have opted out of the Boland Settlement.
Furthermore, actions may move forward in Canada and in certain
of the cases asserting claims not involving the Jacobson
theft.
On January 3, 2003, the Illinois Circuit Court issued an order
approving the Boland Settlement and overruling objections
thereto and on April 8, 2003 a final order was issued approving
plaintiffs' attorneys' fees in the amount of $2.8 million. Even
if the Boland Settlement is approved and is enforceable to
bar claims of persons who have not opted out, individual claims
may be asserted by those persons who are determined to have
properly opted out of the Boland Settlement. Claims may also be
asserted in Canada and by individuals whose claims do not
involve the Jacobson theft if a court were to determine the
claim to be distinguishable from and not barred by the Boland
Settlement.
The remaining cases in the MDL Proceedings were dismissed on
April 29, 2003, other than a case originally filed in federal
district court in Kentucky, in which the plaintiff has opted out
of the Boland Settlement. The plaintiff in that case asserts
that McDonald's and Simon Marketing failed to redeem a purported
$1 million winning ticket. This case has been ordered to
arbitration.
In the California Court, certain of the California plaintiffs
purported to have opted out of the Boland Settlement
individually and also on behalf of all California consumers. In
its final order approving the Boland Settlement, the Illinois
court rejected the attempt by the California plaintiffs to opt
out on behalf of all California consumers. On June 2, 2003, the
California Court granted the motion of McDonald's and Simon
Marketing to dismiss all class and representative claims as
having been barred by the Boland Settlement. Even with the
Boland Settlement, individual claims may go forward as to those
plaintiffs who are determined to have properly opted out of the
Boland Settlement or who have asserted claims not involving the
Jacobson theft. The Company does not know which California and
non-California claims will go forward notwithstanding the Boland
Settlement.
On August 20, 2002, an action was filed against Simon Marketing
in Florida State Court alleging that McDonald's and Simon
Marketing deliberately diverted from seeding in Canada game
pieces with high-level winning prizes in certain McDonald's
promotional games. The plaintiffs are Canadian citizens and
seek restitution and damages on a class-wide basis in an
unspecified amount. Simon Marketing and McDonald's removed this
action to federal court on September 10, 2002 and the MDL Panel
has transferred the case to the MDL Proceedings in Illinois,
where it was dismissed on April 29, 2003. The plaintiffs in
this case did not opt out of the Boland Settlement.
On September 13, 2002, an action was filed against Simon
Marketing in Ontario Provincial Court in which the allegations
are similar to those made in the above Florida action. On
October 28, 2002, an action was filed against Simon Marketing in
Ontario Provincial Court containing similar allegations. The
plaintiffs in the aforesaid actions seek an aggregate of $110
million in damages and an accounting on a class-wide basis.
Simon Marketing has retained Canadian local counsel to represent
it in these actions. The Company believes that the plaintiffs
in these actions did not opt out of the Boland Settlement.
The Company and McDonald's have filed motions to dismiss or stay
these cases on the basis of the Boland Settlement. There has
been no ruling on this motion and the actions are in the
earliest stages.
SYMANTEC CORPORATION: Faces Consumer Suit Over WinFax Pro in CA
---------------------------------------------------------------
Symantec Corporation faces a class action filed on behalf of the
general public of the United States and Canada in the California
Superior Court, Santa Clara County, alleging violations of
California Business and Professions Code section 17200 and false
advertising in connection with the Company's WinFax Pro product.
The complaint seeks damages and injunctive and other equitable
relief, as well as costs and attorney fees. The Company denies
the allegations.
SYMANTEC CORPORATION: Plaintiffs Amend Suit Over Refund Policies
----------------------------------------------------------------
Plaintiffs filed an amended consumer class action against
Symantec Corporation, Microsoft Corporation and two retailers in
the California Superior Court, Marin County, on behalf of the
general public of California and of a class of certain
purchasers of software products. The amended complaint adds
Greg Johnson as plaintiff and Adobe Systems and another retailer
as defendants.
The complaint alleges that the Company's refund policies violate
consumer warranty and unfair business practice laws. The
lawsuit seeks damages, rescission and injunctive relief, as
well as costs and attorney fees.
SYMANTEC CORPORATION: Parties to Dismiss NY Lawsuit Over Rebates
----------------------------------------------------------------
Parties in the class action against Symantec Corporation and a
local retailer in the Supreme Court of New York, New York
County, stipulated to dismiss the suit.
The suit alleges breach of contract and deceptive business
practices in connection with rebates offered by the Company.
The complaint sought damages, costs and attorney fees.
TENGASCO INC.: Asks TN Court To Dismiss Securities Fraud Lawsuit
----------------------------------------------------------------
Tengasco, Inc. asked the United States District Court for the
Eastern District of Tennessee, Knoxville to dismiss the class
action filed on behalf of all persons who purchased shares of
the Company's common stock between August 1, 2001 and April 23,
2002.
The suit alleges violations of the federal securities laws,
specifically Rule 10b-5 issued under the Securities Exchange Act
of 1934 as to the Company and the Company's former chief
executive officer, Malcolm E. Ratliff, and Section 20(a) the
Securities Exchange Act of 1934 as to Mr. Ratliff.
The complaint alleges that documents and statements made to the
investing public by the Company and Mr. Ratliff misrepresented
material facts regarding the business and finances of the
Company. The Company has filed a motion to dismiss the action
based on the failure of the complaint to meet the requirements
of the Securities Litigation Reform Act of 1995. The Company
has begun discussions that may lead to a settlement of this
matter and these discussions are continuing.
TERRORIST ATTACK: Program Unveils 9/11 Workers' Health Concerns
---------------------------------------------------------------
A federal program created to monitor the health of workers at
Ground Zero after the September 11 tragedy revealed that
thousands suffered from asthma, pneumonia, bronchitis and
depression, the Associated Press reports.
About 7,500 workers have been examined under the $12 million
program created in July 2002. Doctors expect to examine 4,500
more workers out of the 30,000 who worked at Ground Zero by
March 2004. Preliminary findings reveal that 48 percent of
workers had ear, nose and throat problems such as nasal
congestion, hoarseness, headaches and throat irritation. Thirty
percent have pulmonary problems, including shortness of breath,
persistent cough and wheezing. About 19 percent of workers have
been diagnosed with post-traumatic stress disorder - at least
double the rate seen in the general population.
"A lot of us in the rescue business don't think about the long-
term effects of our work," Kettering Fire Chief Robert Zickler,
captain of Ohio Task Force One, a 72-member team dispatched to
the Trade Center wreckage for 10 days, told AP.
Doctors now say that airborne particles such as pulverized
concrete could burn the lungs when inhaled or inflame the
stomach lining when swallowed, causing heartburn.
"Some may never recover. They may be walking through a street
and get a sudden blast of exhaust and their chest will tighten,"
Dr. Stephen Levin, co-director of the federal screening program
for World Trade Center workers, which is being administered by
New York's Mount Sinai Medical Center, told AP. "We are seeing
people now in our screening program - two years later - who are
still suffering these symptoms."
A final report on the workers' health is expected next spring.
Meanwhile, the findings have spurred Congress to consider
creating federal screening for future disasters. Senators from
Ohio and New York are working to create a federal medical
screening program for emergency personnel and others who respond
to future disasters. The Federal Emergency Management Agency,
which funds the existing program, lacks authority to conduct
such long-term monitoring.
"If a horrific event occurs, those who risk their lives to
respond must know that their health needs will be met," Sen.
George Voinovich, R-Ohio, who chairs the Senate Environment and
Public Works subcommittee that oversees FEMA told AP.
UICI: Consumers Launch Suit For Fraudulent Sales Practices in TX
----------------------------------------------------------------
UICI and The MEGA Life and Health Insurance Company face a class
action filed in the United States District Court for the
Southern District of Texas, McAllen Division, asserting, among
other things, that MEGA, NASE Group Trust and NASE are under
common control and ownership and operate as a "unified business
arrangement" which is used solely for the purpose of generating
profits through association dues and avoiding state insurance
regulations.
Plaintiffs have alleged that defendants have used false and
deceptive advertising and sales practices in connection with the
sale of insurance in Texas in violation of the Texas Insurance
Code, and plaintiffs further allege conversion and breach of
contract, for which they have asked for a return of all
association dues and administrative fees collected by the
defendants.
MEGA, UICI, and NASE responded to initial written discovery
requests. Neither UICI nor MEGA has answered or otherwise
responded in the case.
UICI: Asks CA Court To Dismiss Suit For Business Law Violations
---------------------------------------------------------------
UICI asked the United States District Court for the Northern
District of California to dismiss the class action filed against
it, The MEGA Life and Health Insurance Company and Mid-West
National Life Insurance Company.
Plaintiff, purportedly on behalf of the "general public," has
alleged that all of the defendants are under common control and
operate as a unified business arrangement established for the
purpose of, among other things, generating profits through
association dues and bypassing and circumventing more stringent
state insurance regulations applicable to other California
insurance companies.
Plaintiff has further alleged that defendants have knowingly and
intentionally failed to disclose the common ownership and
control of the defendant group, the amount and character of
association dues administrative fees and other costs of
obtaining insurance from MEGA and Mid-West and that initial
premium rates are below the amount actuarially calculated for
the purpose of inducing purchases of MEGA and Mid-West policies.
Plaintiffs assert that defendants' actions constitute a
violation of California Business and Professions Code Section
17200, for which plaintiff is entitled to injunctive,
disgorgement, and monetary relief in an unspecified amount.
US TIMBERLANDS: Agrees To Settle Shareholders' Suit in DE Court
---------------------------------------------------------------
US Timberlands Services Company LLC and the board of directors
of its general partner, US Timberlands Klamath Falls LLC agreed
to settle the consolidated class action filed in the Court of
Chancery of the State of Delaware for the County of New Castle.
The suit alleges, among other things, breach of fiduciary duty
and self-dealing by the Company and the board in connection with
the going private transaction. The lawsuits sought to enjoin
the going private transaction, to rescind the going private
transaction if it is consummated, and to recover damages and
attorney's fees.
On October 17, 2002, the Company announced that it had reached a
tentative settlement of the purported class action lawsuits,
subject to court approval and other customary conditions. The
settlement provided, among other things, for an increase in the
consideration provided in the offer to purchase the common units
to $3.00 per unit. On December 12, 2002 the parties executed a
Stipulation of Settlement which the Court of Chancery approved
at a settlement hearing on January 30, 2003.
WARNACO GROUP: Appeals Court Reverses Securities Suit Dismissal
---------------------------------------------------------------
The United States Second Circuit Court of Appeals reversed the
dismissal of the consolidated securities class action filed
against the Warnaco Group, Inc. and certain of its officers and
directors in the United States District Court for the Southern
District of New York.
The suit, filed on behalf of a putative class of the Company's
shareholders who purchased the Old Common Stock between
September 17, 1997 and July 19, 2000, alleges, among other
things, that the defendants violated the Securities Exchange Act
of 1934, as amended by artificially inflating the price of the
Old Common Stock and failing to disclose certain information
during the Class Period.
On October 5, 2001, the defendants other than the Company filed
a motion to dismiss based upon, among other things, the statute
of limitations, failure to state a claim and failure to plead
fraud with the requisite particularity. On April 25, 2002, the
court granted the motion to dismiss this action based on the
statute of limitations. On May 10, 2002, the plaintiffs filed a
motion for reconsideration in the court. On May 24, 2002, the
plaintiffs filed a notice of appeal with respect to such
dismissal. On July 23, 2002, plaintiffs' motion for
reconsideration was denied. On July 30, 2002, the plaintiffs
voluntarily dismissed, without prejudice, their claims against
the Company. On October 2, 2002, the plaintiffs filed a notice
of appeal with respect to the district court's entry of a final
judgment in favor of the individual defendants.
WARNACO GROUP: NY Court Removes Outside Director From Stock Suit
----------------------------------------------------------------
The United States District Court for the Southern District of
New York granted one of The Warnaco Group, Inc.'s outside
directors' motion to be dismissed as defendant in the
consolidated securities class action against certain of the
Company's officers and directors.
The suit, filed on behalf of a putative class of 64 shareholders
who purchased the Old Common Stock between August 16, 2000 and
June 8, 2001, alleges, among other things, that defendants
violated the Exchange Act by artificially inflating the price of
the Old Common Stock and failing to disclose negative
information during the second class period.
On April 18, 2002, the court dismissed the amended complaint,
but granted plaintiffs leave to re-plead. On June 7, 2002, the
plaintiffs filed a second amended complaint, which again
expanded the second class period to encompass August 15, 2000 to
June 8, 2001. On June 24, 2002, the defendants filed motions to
dismiss the second amended complaint. On August 21, 2002, the
plaintiffs filed a third amended complaint adding the Company's
current independent auditors as a defendant.
On June 2, 2003, the court granted the outside directors' motion
to dismiss and dismissed the motion to dismiss of the other
individual defendants.
WEIDER NUTRITION: Plaintiffs Re-File Dietary Supplement Lawsuit
---------------------------------------------------------------
Plaintiffs re-filed their class action against Weider Nutrition
International, Inc. and numerous other dietary supplement in
Illinois state court. Plaintiffs allege that androstenedione
and other purportedly similar products were sold by defendants
in violation of certain statutes and utilizing false and
misleading claims and advertising.
The Company dispute the allegations and are opposing the
lawsuits. Discovery is proceeding.
Meetings, Conferences & Seminars
* Scheduled Events for Class Action Professionals
-------------------------------------------------
September 11-12, 2003
MASS TORT LITIGATION TOOLS FOR PARALEGALS
Mealey Publications
The Westin Hotel, Philadelphia
Contact: 1-800-MEALEYS; 610-768-7800;
mealeyseminars@lexisnexis.com
September 15-16, 2003
SECURITIES LITIGATION & ENFORCEMENT 2003
Practising Law Institute
PLI New York Center
Contact: 800-260-4PLI; info@pli.edu.
September 18-19, 2003
REINSURANCE SUMMIT
Mealey Publications
The Westin Hotel, Chicago
Contact: 1-800-MEALEYS; 610-768-7800;
mealeyseminars@lexisnexis.com
September 19-21, 2003
THE 20TH TOBACCO PRODUCTS LIABILITY PROJECT CONFERENCE
Northeastern University School of Law
Contact: scuri@tplp.org
September 22-23, 2003
BAD FAITH CONFERENCE
Mealey Publications
The Westin Hotel, Philadelphia
Contact: 1-800-MEALEYS; 610-768-7800;
mealeyseminars@lexisnexis.com
September 26, 2003
MANAGING ENVIRONMENTAL RISKS
Bridgeport Continuing Education
Los Angeles
Contact: 818-505-1490
September 29-30, 2003
PRACTICAL SKILLS SERIES: TOXIC TORT LITIGATION
Mealey Publications
The Ritz-Carlton Hotel, Philadelphia
Contact: 1-800-MEALEYS; 610-768-7800;
mealeyseminars@lexisnexis.com
September 29-30, 2003
CONSUMER FINANCE CLASS ACTIONS
American Conference Institute
New York City
Contact: 1-888-224-2480; http://www.americanconference.com
October 2-3, 2003
SECURITIES LITIGATION & ENFORCEMENT 2003
Practising Law Institute
PLI New York Center
Contact: 800-260-4PLI; info@pli.edu.
October 8-9, 2003
ASBESTOS LITIGATION
American Conference Institute
New York City
Contact: 1-888-224-2480; http://www.americanconference.com
October 13, 2003
MASS TORT LITIGATION TOOLS FOR PARALEGALS
Mealey Publications
The Ritz-Carlton Hotel, Atlanta
Contact: 1-800-MEALEYS; 610-768-7800;
mealeyseminars@lexisnexis.com
October 13-14, 2003
SILICA LITIGATION CONFERENCE
Mealey Publications
The Ritz-Carlton Hotel, Atlanta
Contact: 1-800-MEALEYS; 610-768-7800;
mealeyseminars@lexisnexis.com
October 15, 2003
LEXISNEXIS PRESENTS WALL STREET FORUM:
PHARMACEUTICAL & MEDICAL DEVICE INDUSTRY LITIGATION
Mealey Publications
The Ritz-Carlton New York, Battery Park
Contact: 1-800-MEALEYS; 610-768-7800;
mealeyseminars@lexisnexis.com
October 16-17, 2003
LEAD LITIGATION CONFERENCE
Mealey Publications
Westin Copley Plaza, Boston
Contact: 1-800-MEALEYS; 610-768-7800;
mealeyseminars@lexisnexis.com
October 20, 2003
FUNDAMENTALS OF INSURANCE COVERAGE LAW
Mealey Publications
The Westin Chicago River North
Contact: 1-800-MEALEYS; 610-768-7800;
mealeyseminars@lexisnexis.com
October 21, 2003
FUNDAMENTALS OF REINSURANCE AND INSOLVENCY
Mealey Publications
The Westin Chicago River North
Contact: 1-800-MEALEYS; 610-768-7800;
mealeyseminars@lexisnexis.com
October 23 - 24, 2003
THE SECOND INTERNATIONAL ADVANCED FORUM ON RUN-OFF AND
COMMUTATIONS
American Conference Institute
New York Marriott East Side
Contact: 1-888-224-2480; http://www.americanconference.com
October 24, 2003
7TH ANNUAL NATIONAL INSTITUTE ON CLASS ACTIONS
American Bar Association
San Francisco, CA
Contact: 800-285-2221; abacle@abanet.org
October 27-28, 2003
INSURANCE COVERAGE DISPUTES CONCERNING CONSTRUCTION DEFECTS
Mealey Publications
The Westin Chicago River North
Contact: 1-800-MEALEYS; 610-768-7800;
mealeyseminars@lexisnexis.com
November 6-7, 2003
SECURITIES, DRUGS & ENVIRONMENTAL LITIGATION
MassTortsMadePerfect.Com
Ritz Carlton, New Orleans, Louisiana
Contact: 1-800-320-2227; register@masstortsmadeperfect.com
November 7, 2003
7TH ANNUAL NATIONAL INSTITUTE ON CLASS ACTIONS
American Bar Association
Washington, DC
Contact: 800-285-2221; abacle@abanet.org
November 10-11, 2003
FEN-PHEN LITIGATION CONFERENCE
Mealey Publications
The Four Seasons Hotel, Houston
Contact: 1-800-MEALEYS; 610-768-7800;
mealeyseminars@lexisnexis.com
November 13-14, 2003
MASS TORT LITIGATION TOOLS FOR PARALEGALS
Mealey Publications
The Westin Bonaventure Hotel, Los Angeles
Contact: 1-800-MEALEYS; 610-768-7800;
mealeyseminars@lexisnexis.com
November 13-14, 2003
ASBESTOS LITIGATION IN THE 21ST CENTURY
ALI-ABA
New Orleans
Contact: 215-243-1614; 800-CLE-NEWS x1614
November 17, 2003
WATER CONTAMINATION LITIGATION CONFERENCE
Mealey Publications
Pasadena
Contact: 1-800-MEALEYS; 610-768-7800;
mealeyseminars@lexisnexis.com
November 17-18, 2003
INSURANCE ALLOCATION CONFERENCE
Mealey Publications
The Ritz-Carlton Golf Resort, Naples, FL
Contact: 1-800-MEALEYS; 610-768-7800;
mealeyseminars@lexisnexis.com
November 18, 2003
MEDICAL MONITORING CONFERENCE
Mealey Publications
The Ritz-Carlton Huntington Hotel & Spa, Pasadena
Contact: 1-800-MEALEYS; 610-768-7800;
mealeyseminars@lexisnexis.com
November 18, 2003
DAUBERT CONFERENCE
Mealey Publications
The Ritz-Carlton Huntington Hotel & Spa, Pasadena
Contact: 1-800-MEALEYS; 610-768-7800;
mealeyseminars@lexisnexis.com
December 8-9, 2003
ASBESTOS PREMISES LIABILITY CONFERENCE
Mealey Publications
The Fairmont Hotel, San Francisco
Contact: 1-800-MEALEYS; 610-768-7800;
mealeyseminars@lexisnexis.com
December 8-9, 2003
CALIFORNIA SECTION 17200 CONFERENCE
Mealey Publications
The Fairmont Hotel, San Francisco
Contact: 1-800-MEALEYS; 610-768-7800;
mealeyseminars@lexisnexis.com
December 11-13, 2003
CONSTRUCTION DEFECT AND MOLD LITIGATION CONFERENCE
Mealey Publications
The Ritz-Carlton, Lake Las Vegas, Las Vegas
Contact: 1-800-MEALEYS; 610-768-7800;
mealeyseminars@lexisnexis.com
December 11, 2003
MOLD LITIGATION 101 CONFERENCE
Mealey Publications
The Ritz-Carlton, Lake Las Vegas, Las Vegas
Contact: 1-800-MEALEYS; 610-768-7800;
mealeyseminars@lexisnexis.com
December 11-13, 2003
EMERGING SECURITIES LITIGATION CONFERENCE
Mealey Publications
The Westin Kierland Resort & Spa, Scottsdale
Contact: 1-800-MEALEYS; 610-768-7800;
mealeyseminars@lexisnexis.com
December 11-13, 2003
CONSTRUCTION DEFECT AND MOLD LITIGATION CONFERENCE
Mealey Publications
The Ritz-Carlton, Lake Las Vegas, Las Vegas
Contact: 1-800-MEALEYS; 610-768-7800;
mealeyseminars@lexisnexis.com
December 14-16, 2003
DRUG AND MEDICAL DEVICE LITIGATION
American Conference Institute
The Plaza Hotel, New York City
Contact: 1-888-224-2480; http://www.americanconference.com
January 22-23, 2004
ENVIRONMENTAL AND TOXIC TORT MATTERS: ADVANCED CIVIL LITIGATION
ALI-ABA
Orlando (Walt Disney World)
Contact: 215-243-1614; 800-CLE-NEWS x1614
March 18-19, 2004
SECURITIES, DRUGS & ENVIRONMENTAL LITIGATION
MassTortsMadePerfect.Com
The Fairmont, San Francisco, California
Contact: 1-800-320-2227; register@masstortsmadeperfect.com
April 14-17, 2004
INSURANCE INSOLVENCY AND REINSURANCE ROUNDTABLE
Mealey Publications
The Scottsdale Princess, Scottsdale, AZ
Contact: 1-800-MEALEYS; 610-768-7800;
mealeyseminars@lexisnexis.com
June 10 & 11, 2004
SECURITIES, DRUGS & ENVIRONMENTAL LITIGATION
MassTortsMadePerfect.Com
Atlantis, Paradise Island, Bahamas
Contact: 1-800-320-2227; register@masstortsmadeperfect.com
TBA
FAIR LABOR STANDARDS CONFERENCE
Mealey Publications
Contact: 1-800-MEALEYS; 610-768-7800;
mealeyseminars@lexisnexis.com
TBA
AIRLINE BANKRUPTCY LITIGATION CONFERENCE
Mealey Publications
Contact: 1-800-MEALEYS; 610-768-7800;
mealeyseminars@lexisnexis.com
TBA
FASTFOOD INDUSTRY LIABILITY CONFERENCE
Mealey Publications
Contact: 1-800-MEALEYS; 610-768-7800;
mealeyseminars@lexisnexis.com
* Online Teleconferences
------------------------
September 05-30, 2003
DAMAGES IN TEXAS INSURANCE LITIGATION:
EVALUATING, PLEADING, AND PROVING
CLEOnline.Com
Contact: 512-778-5665; info@cleonline.com
September 05-30, 2003
NBI PRESENTS "EMERGING ISSUES IN CALIFORNIA
INDOOR AIR QUALITY AND TOXIC MOLD LITIGATION
CLEOnline.Com
Contact: 512-778-5665; info@cleonline.com
September 05-30, 2003
NBI PRESENTS "LITIGATING THE CLASS ACTION LAWSUIT IN FLORIDA
CLEOnline.Com
Contact: 512-778-5665; info@cleonline.com
September 16, 2003
AORTIC ANEURYSM DEVICE LITIGATION
Mealey Publications
Contact: 1-800-MEALEYS; 610-768-7800;
mealeyseminars@lexisnexis.com
ADVERSARIAL PROCEEDINGS IN ASBESTOS BANKRUPTCIES
LawCommerce.Com/Mealey's
Online Streaming Video
Contact: customerservice@lawcommerce.com
ASBESTOS BANKRUPTCY - PANEL OF CREDITORS COMMITTEE MEMBERS
LawCommerce.Com/Mealey's
Online Streaming Video
Contact: customerservice@lawcommerce.com
EXPERT WITNESS ADMISSIBILITY IN MOLD CASES
LawCommerce.Com/Mealey's
Online Streaming Video
Contact: customerservice@lawcommerce.com
INTRODUCTION TO CLASS ACTIONS AND LARGE RECOVERIES
Big Class Action
Contact: seminars@bigclassaction.com
NON-TRADITIONAL DEFENDANTS IN ASBESTOS LITIGATION
Online Streaming Video
LawCommerce.Com/Mealey's
Contact: customerservice@lawcommerce.com
PAXIL LITIGATION
Online Streaming Video
LawCommerce.Com/Mealey's
Contact: customerservice@lawcommerce.com
RECENT DEVELOPMENTS INVOLVING BAYCOL
Online Streaming Video
LawCommerce.Com/Mealey's
Contact: customerservice@lawcommerce.com
RECOVERIES
Big Class Action
Contact: seminars@bigclassaction.com
SELECTION OF MOLD LITIGATION EXPERTS: WHO YOU NEED ON YOUR TEAM
Online Streaming Video
LawCommerce.Com/Mealey's
Contact: customerservice@lawcommerce.com
SHOULD I FILE A CLASS ACTION?
LawCommerce.Com / Law Education Institute
Contact: customerservice@lawcommerce.com
THE EFFECTS OF ASBESTOS ON THE PULMONARY SYSTEM
Online Streaming Video
LawCommerce.Com/Mealey's
Contact: customerservice@lawcommerce.com
THE STATE OF ASBESTOS LITIGATION: JUDICIAL PANEL DISCUSSION
Online Streaming Video
LawCommerce.Com/Mealey's
Contact: customerservice@lawcommerce.com
TRYING AN ASBESTOS CASE
LawCommerce.Com
Contact: customerservice@lawcommerce.com
THE IMPACT OF LORILLAR ON STATE AND LOCAL REGULATION OF TOBACCO
SALES
AND ADVERSTISING
American Bar Association
Contact: 800-285-2221; abacle@abanet.org
________________________________________________________________
The Meetings, Conferences and Seminars column appears in the
Class Action Reporter each Wednesday. Submissions via e-mail to
carconf@beard.com are encouraged.
New Securities Fraud Cases
FIRSTENERGY CORPORATION: Abbey Gardy Lodges Ohio Securities Suit
----------------------------------------------------------------
Abbey Gardy, LLP initiated a securities class action filed in
the United States District Court for the Northern District of
Ohio on behalf of all persons who purchased or acquired
securities of FirstEnergy Corporation (NYSE:FE) between April
24, 2002 and August 14, 2003 inclusive. The complaint names as
defendants the Company and:
(1) H. Peter Berg,
(2) Anthony J. Alexander,
(3) Richard H. Marsh,
(4) Harvey L. Wagner,
(5) Carol A. Cartwright,
(6) Robert B. Heisler, Jr.,
(7) Robert L. Loughhead,
(8) Russell W. Maier,
(9) John M. Pietruski,
(10) Robert N. Pokelwaldt,
(11) Paul J. Powers,
(12) Catherine A. Rein,
(13) Robert C. Savage,
(14) George M. Smart,
(15) Jesse T. Williams, Sr.,
(16) Dr. Patricia K. Woolf,
(17) Paul T. Addison,
(18) William T. Cottle,
(19) William F. Conway and
(20) Carlisle A. H. Trost
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 during the Class Period thereby
artificially inflating the price of FirstEnergy securities.
The complaint alleges that defendants issued a series of
materially false and misleading press releases and filings with
the Securities and Exchange Commission throughout the Class
Period concerning the Company's publicly reported revenues and
earnings. In particular, it is alleged that defendants had
improperly accounted for costs incurred in connection with the
deregulation of certain of its businesses by employing an
inappropriately long amortization schedule, thereby understating
costs and materially and artificially inflating earnings during
the Class Period.
On August 5, 2003, FirstEnergy issued a press release announcing
that it would have to restate its financial results for fiscal
year 2002 and the first quarter of 2003 due to its improper
accounting for its annual amortization expenses and for above-
market leases. Moreover, the Company stated that its financial
statements could not be relied upon.
On this news, FirstEnergy common stock fell 8.5% to close at
$31.33 on unusually high trading volume of 5.4 million shares.
For more details, contact Nancy Kaboolian or Susan Lee by Phone:
(212) 889-3700 or 800-889-3701, or by E-mail:
nkaboolian@abbeygardy.com or slee@abbeygardy.com.
FLOWSERVE CORPORATION: Lasky & Rifkind Files Stock Suit in Texas
----------------------------------------------------------------
Lasky & Rifkind, Ltd. initiated a securities class action filed
in the United States District Court for the Northern District of
Texas, on behalf of persons who purchased or otherwise acquired
publicly traded securities of Flowserve Corporation (NYSE:FLS)
between October 23, 2001 and September 27, 2002, inclusive. The
lawsuit was filed against the Company and certain officers of
the Company.
The complaint alleges that throughout the class period,
Flowserve violated Section 10(b) and 20(a) of the Securities
Exchange Act of 1934 by failing to disclose and/or
misrepresenting that the company's declining revenues and
earnings would lead to a violation of its loan covenants but for
its public stock offerings, that demand for its products had
declined materially for its after-market products and that the
company continued to face integration problems post the
Company's acquisition of Innovative Valve Technologies.
On September 27, 2002, the Company warned of a 21% earnings
shortfall for the quarter ended September 30, 2002 and cut its
full year 2002 earnings guidance by over 60% to $1.45 per share.
For more details, contact Leigh Lasky by Phone: 800-321-0476 or
by E-mail: Investorrelations@Laskyrifkind.com
FLOWSERVE CORPORATION: Landskroner-Grieco Files Stock Suit in TX
----------------------------------------------------------------
Landskroner - Grieco, Ltd. initiated a securities class action
in the United States District Court for the Northern District of
Texas, Dallas Division, on behalf of all purchasers of
securities of Flowserve Corporation (NYSE:FLS) between October
23, 2001, and September 27, 2002, inclusive. The suit is
brought against the Company, C. Scott Greer, and Renee J.
Hornbaker.
The complaint alleges that defendants violated Sections 10(b)
and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5
promulgated thereunder, by issuing a series of material
misrepresentations to the market between October 23, 2001 and
September 27, 2002, thereby artificially inflating the price of
Flowserve securities.
During the class period, the Company alleges that Defendants,
among other things:
(1) misrepresented that the Company's aftermarket sales
(the Company's ``quick turnaround'' business) were
steady, stable and consistent streams of revenue;
(2) misrepresented that the Company's growth made it less
dependent upon the chemical and industrial segments,
which had historically been very sensitive to economic
downturn;
(3) failed to disclose that the Company had instructed one
or more of its plants to stop building inventory as a
result of the projected (albeit undisclosed) continuing
decline in sales; and
(4) without any reasonable basis, projected full year 2002
earnings at ranges that were unattainable due to the
declines the Company was experiencing in critical
business segments.
On September 27, 2002, the Company warned of a 21% earnings
shortfall for the quarter ending September 30, 2002, and cut its
full year 2002 earnings guidance by over 60%, to $1.45 per
share, from the $2.30 per share earnings guidance shared with
investors during road show presentations promoting Flowserve's
public offerings less than six months prior.
Market reaction to the Company's announcement was swift and
severe. Flowserve shares fell over 38% to close at $8.70 on
September 27, 2002, a decline of more than 75% from the Class
Period high of $34.90 reached on May 2, 2002. Prior to
disclosure of the true facts, Flowserve completed two public
offerings of its common stock, thereby raising more than $430
million, and Flowserve insiders sold their personally-held
Flowserve common stock for substantial profit.
For more details, contact Jack Landskroner by Mail: 1360 West
9th St., Ste. 200, Cleveland, Ohio 44113 by Phone:
(866) 522-9500 or (216) 522-9000 by E-mail:
jack@landskronerlaw.com or visit the firm's Website:
http://www.landskronerlaw.com
IMPATH INC.: Marc Henzel Lodges Securities Fraud Suit in S.D. NY
----------------------------------------------------------------
The Law Offices of Marc S. Henzel initiated a securities class
action in the United States District Court for the Southern
District of New York, on behalf of purchasers of the securities
of IMPATH, Inc. (NasdaqNM:IMPH) between April 25, 2001 and July
29, 2003, inclusive, seeking to pursue remedies under the
Securities Exchange Act of 1934. The action is pending against
the Company and:
(1) Carter Eckert,
(2) James Agnello,
(3) David Cammarata,
(4) Richard P. Adelson,
(5) Anu D. Saad
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 April 25, 2001 and July
29, 2003.
The complaint alleges that IMPATH's quarterly press releases and
SEC filings were materially false and misleading because they
failed to disclose that the Company had materially overstated
its accounts receivables and improperly capitalized a material
asset, thereby artificially inflating the Company's reported
Class Period results and financial condition.
On July 30, 2003, before the open regular trading, IMPATH issued
a press release announcing that its audit committee had begun an
investigation into possible "accounting irregularities" by the
Company and that the Company believes it has overstated its
accounts receivable had been improperly capitalizing its
GeneBank asset.
As a result of these developments, IMPATH warned that a
restatement of previously filed financial reports was "likely,"
and that the Company has advised its creditors that its
financial reports "may have been inaccurate as a result of these
issues." In response to this announcement, the NASDAQ Stock
Market halted trading in the Company's common stock and
announced that the stock will not resume trading until IMPATH
provides NASDAQ with additional information.
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.
IMPATH INC.: Wolf Haldenstein Lodges Securities Suit in S.D. NY
---------------------------------------------------------------
Wolf Haldenstein Adler Freeman & Herz LLP initiated a securities
class action in the United States District Court for the
Southern District of New York, on behalf of all persons who
purchased or otherwise acquired the securities of Impath, Inc.
(Nasdaq: IMPHE) between February 21, 2001 and July 29, 2003,
inclusive, against Impath and certain officers and directors of
the Company.
Throughout the class period, defendants issued statements, press
releases, and filed quarterly and annual reports with the SEC
describing the Company's business operations and financial
condition. These representations were materially false and
misleading because they failed to disclose that throughout the
class period, the Company had materially misstated its operating
earnings and assets.
On July 30, 2003, Impath stunned the market when it issued a
press release announcing that it had initiated an investigation
into the possible overstating of its accounts receivables. The
Company stated that it believed the impact of the overstatement
would be "material" and that "investors should not rely on the
consolidated financial statements or the independent auditors
reports, where applicable, contained in the Company's previously
filed periodic reports, including those set forth in the
Company's Annual Reports on Form 10-K for 2002 and prior
periods, and the most recently filed Quarterly Report on Form
10-Q for the period ended March 31, 2003."
Furthermore, the Company announced that while it was reviewing
the carrying value of its GeneBank asset, the Company discovered
discrepancies relating to the amounts capitalized to date on
this asset. As a result, the Company would likely incur a one-
time charge as it wrote down the value of the asset to more
accurately reflect its true value. The Company also announced
the resignations of its Vice President of Finance and its
Corporate Controller effective immediately.
As a result of the announcement, trading in the Company's stock
was halted. Although the stock remains halted, it is likely to
decline substantially when trading resumes.
For more details, contact Fred Taylor Isquith, Gregory M.
Nespole, Christopher S. Hinton, George Peters, or Derek Behnke
by Mail: 270 Madison Avenue, New York, New York 10016, by Phone:
(800) 575-0735 by E-mail: classmember@whafh.com or visit the
firm's Website: http://www.whafh.com. All e-mail correspondence
should make reference to Impath.
IMPATH INC.: Emerson Poynter Lodges Securities Suit in S.D. NY
--------------------------------------------------------------
Emerson Poynter 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 Impath,
Inc. (NasdaqNM:IMPHE) from February 21, 2001 through July 29,
2003, inclusive.
On July 30, 2003, Impath announced that it had begun an internal
investigation into accounting irregularities related to its
accounts receivables and that a restatement of the Company's
financials was likely. This past Friday, on August 22nd, the
Company revealed that the Securities Exchange Commission was now
investigating these accounting problems and that the Company had
hired legal and financial advisors which may lead to a Chapter
11 bankruptcy filing. It was also revealed that the Company had
received a delisting notice from NASDAQ.
For more details, contact the firm's Investor Relations
Department by Mail: 830 Apollo Lane, Houston, Texas 77058 by
Phone: 1 (800) 663-9817 by E-mail: shareholder@emersonfirm.com
MATRIA HEALTHCARE: Marc Henzel Lodges Securities Suit in N.D. GA
----------------------------------------------------------------
The Law Offices of Marc S. Henzel initiated a securities class
action in United States District Court for the Northern District
of Georgia on behalf of all persons who purchased or otherwise
acquired the securities of Matria Healthcare, Inc.,
(NASDAQ:MATR) between October 24, 2001 and June 25, 2002,
inclusive.
The complaint charges that defendants violated Sections 10(b)
and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5
promulgated thereunder, by issuing a series of materially false
and misleading statements to the market between October 24, 2001
and June 25, 2002. During the class period, the defendants
touted the "strong performance" of all of its diabetes
businesses and repeatedly bragged about the company's growth,
noting the signing of new contracts and anticipated contracts.
Defendants assured the market during this time that they were
ramping up the company's infrastructure and implementing a major
systems change that would help them fulfill their goal to be the
most technologically advanced provider in their sector of the
health industry and that would significantly increase their
capabilities. Citing their growth, defendants explained that
the reason expenses had exceeded anticipated revenues at certain
times was that it was difficult to time the need for additional
personnel and infrastructure with the receipt of large contracts
because "contractual negotiations can delay the anticipated
start dates for new disease management programs."
Unbeknownst to the investors, however, the complaint alleges
that the company was experiencing serious known problems that
rendered defendants' Class Period statements false and
misleading and that defendants had a duty to disclose under Item
303(a)(ii) to Regulation S-K.
Specifically, the complaint alleges that the defendants failed
to disclose until June 25, 2002, despite a duty to do so, the
following adverse, known facts:
(1) the company's Health Enhancement Segment was
experiencing significant "information system
constraints" which led to unfilled customer orders;
(2) the company's Facet Technologies division was
experiencing higher costs as a result of undisclosed
inventory and supply chain management problems;
(3) Facet's gross margins were materially and adversely
affected by decreasing price concessions from its major
suppliers;
(4) Matria's gross profit margins were being negatively
impacted by an increase in the price of one of its key
drugs; and
(5) the company's Health Enhancement revenues would be
negatively impacted by at least $800,000 due to the
bankruptcy of a health plan whose deteriorating
financial condition the defendants knew of or were
severely reckless in disregarding.
The complaint alleges that the defendants were motivated to
conceal these problems in order to inflate the purchase price of
Matria common stock because defendants negotiated two
acquisitions during the Class Period, using Matria common stock
as currency.
On June 25, 2002, after the close of trading, defendants shocked
the market by revising the company's financial outlook for
fiscal 2002 and revealing the problems discussed above. In
response to the Company's shocking news, the price of Matria's
common stock plummeted on unusually heavy volume the next
trading day, dropping from nearly $12 to $7 before closing at
$8.95 per share. A chorus of Wall Street analysts also
downgraded the stock as a result.
For more details, contact Marc S. Henzel by Mail: The Law
Offices of Marc S. Henzel, 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.
MATRIA HEALTHCARE: Lasky & Rifkind Lodges Securities Suit in GA
---------------------------------------------------------------
Lasky & Rifkind, Ltd. initiated a securities class action in the
United States District Court for the Northern District of
Georgia, on behalf of persons who purchased or otherwise
acquired publicly traded securities of Matria Healthcare Inc.
(NASDAQ:MATR) between October 24, 2001 and June 25, 2002,
inclusive. The lawsuit was filed against Matria and certain
officers of the Company.
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 false and misleading
statements concerning the Company's business. Specifically, the
complaint alleges that the defendants failed to disclose and had
a duty to disclose that the Company was experiencing significant
information system constraints, that the Company's Facet
division was experiencing higher costs as a result of
undisclosed inventory and supply chain management problems, and
that the Company's margins were being adversely affected by
price concessions.
On June 25, 2002, after the close of trading, defendants shocked
the market by revising the Company's financial outlook for
fiscal 2002 and revealing the problems discussed above. In
response to the news, Matria's common stock plummeted from
nearly $12 to $7.
For more details, contact Leigh Lasky by Phone: 800-321-0476
POLAROID CORPORATION: Goodkind Labaton Files NY Securities Suit
---------------------------------------------------------------
Goodkind Labaton Rudoff & Sucharow LLP and The Jacob D.
Fuchsberg Law Firm, 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 securities of
Polaroid Corporation (OTC:PRDCQ) during the period April 2, 2001
to August 16, 2001, inclusive.
The complaint charges that Defendants KPMG LLP ("KPMG") and
Polaroid Chairman and CEO Gary DiCamillo, CFO Carl Leuders, and
Controller Donald Halsted, violated Section 10(b) and 20(a) of
the Securities Exchange Act of 1934, 15 U.S.C. 78j(b) and 78t
and Rule 10b-5, 17 CFR 240.10b-5 promulgated thereunder by
making materially false and misleading statements during the
Class Period.
Specifically the complaint alleges that Polaroid's year-end 2000
and first quarter 2001 financial statements were false and
misleading due to:
(1) the improper inclusion of deferred tax credits that had
little or no future value;
(2) the improper reversal of reserves in the fourth quarter
of 2000; and
(3) the failure of the Company to properly classify its
debt as short-term.
In addition, the unqualified audit and review opinions issued by
KPMG during the Class Period were false and misleading due to
the foregoing GAAP violations and KPMG's failure to issue a
"going concern" qualification.
For more details, contact one of Goodkind Labaton's
representatives by E-mail: nching@glrslaw.com or contact Henry
Young by Phone: 800-321-0476, or by E-mail: alf@fuchsberg.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, Judith Cruz,
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
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Information contained herein is obtained from sources believed
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are $25 each. For subscription information, contact Christopher
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