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C L A S S A C T I O N R E P O R T E R
Tuesday, November 25, 2003, Vol. 5, No. 233
Headlines
AEROSONIC CORPORATION: Shareholders Lodges Securities Suit in FL
AGENT ORANGE: SC To Hear Case Of Cancer-Inflicted Vietnam Vets
BOSTON COMMUNICATIONS: Faces Securities Fraud Suit in MA Court
CAPSTONE TURBINE: Reaches Settlement For Securities Fraud Suit
CHI-CHI'S INC: Moves To Settle Claims In Hepatitis A Outbreak
CHOICEPOINT INC.: Faces Two Suits For DPPA Violations in FL, LA
COLUMBIA UNIVERSITY: Indian American Lodges Suit For Racial Bias
DEAN MILK CO: Recalls Reduced Fat Milk Due To Undeclared Eggnog
ELECTRONIC DATA: Plaintiffs File Consolidated TX Securities Suit
ENTRUST INC.: No Appeal Received For Securities Suit Dismissal
ERP OPERATING: FL Grants Certification To Consumer Fraud Lawsuit
FACTUAL DATA: Asks CO Court To Dismiss Securities Fraud Lawsuit
FTD INC.: DE Court Approves Securities Fraud Lawsuit Settlement
GEMSTAR-TV GUIDE: Plaintiffs File Second Amended Suit in C.D. CA
HPSC INC.: SEC Bares Sentencing of Trader Over Financial Fraud
INSIGHT ENTERPRISES: Plaintiffs File Amended AZ Securities Suit
NEBRASKA: Omaha Woman Content With Settlement in Insurance Suit
NEW CENTURY: Court Remands Consumer Lawsuit To CA Federal Court
NEW CENTURY: Oral Arguments in IL Consumer Suit Set Dec. 2003
NEW CENTURY: CA Court To Hear Suit Dismissal Motion in Nov. 2003
NEW CENTURY: Plaintiffs File Second Amended Consumer Suit in IL
NEW CENTURY: LA Court Orders FLSA Violations Suits Consolidated
NEW CENTURY: MN Court To Hear Employee Lawsuit Dismissal Motion
NEW CENTURY: Faces Lawsuit Alleging TILA Violations in N.D. IL
NEW CENTURY: Faces Lawsuit for TILA Violations in N.D. IL Court
PLANET 3: Recalls 3,500 TV Stands Because of Production Defect
PMA CAPITAL: Shareholders Lodge Securities Fraud Suit in E.D. PA
PMA CAPITAL: Faces Two Securities Fraud Suits Filed in E.D. PA
PMA CAPITAL: Shareholders Lodge Securities Fraud Suit in E.D. PA
PSS WORLD: Trial in Securities Lawsuit Set April 2005 in M.D. FL
PSS WORLD: Jury Trial Commences in Securities Lawsuit in M.D. FL
SILVERLEAF RESORTS: Trial In MO Homeowner Suit Set For June 2004
SILVERLEAF RESORTS: TX Court Approves Consumer Suit Settlement
T-NETIX INC.: Discovery Proceeds in Consumer Fraud Lawsuit in CA
T-NETIX TELEPHONE: Inmates Appeal Dismissal of Civil Rights Suit
TRIPOS INC.: Shareholders Launch Securities Fraud Lawsuit in MO
TRIUMPH CAPITAL: CT Court Enters Final Judgment in SEC Complaint
VIGNETTE CORPORATION: Reaches Settlement For NY Securities Suit
New Securities Fraud Cases
GILEAD SCIENCES: Bull & Lifshitz Commences Stock Suit in N.D. CA
PILGRI MBAXTER: Barrack Rodos Files Securities Suit in E.D. PA
*********
AEROSONIC CORPORATION: Shareholders Lodges Securities Suit in FL
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A class action lawsuit was filed in the United States District
Court for the Middle District of Florida by Sebastian P. Gaeta,
individually and on behalf of all others similarly situated,
against Aerosonic Corporation and:
(1) PricewaterhouseCoopers LLP, the Company's independent
accountant,
(2) J. Mervyn Nabors, a current director and former
President and CEO of the Company,
(3) Eric J. McCracken, former Chief Financial Officer of
the Company, and
(4) Michael T. Reed, former Controller of the Company.
The action alleges violations of Sections 10(b) and 20(a) of the
Securities Exchange Act of 1934 and Rule 10b-5 promulgated under
that act, including, among other things, that the Company made
materially false statements concerning the Company's financial
condition and its future prospects.
The plaintiff alleges that he suffered damages as the result of
his purchase and sale of the Company's Common Stock during the
period from November 11, 1998 through March 17, 2003. The action
seeks compensatory and other damages, and costs and expenses
associated with the litigation.
AGENT ORANGE: SC To Hear Case Of Cancer-Inflicted Vietnam Vets
--------------------------------------------------------------
The United States Supreme Court will hear this week arguments on
whether two Vietnam War veterans, Joseph Isaacson, a vice
principal at a middle school in Irvington, N.J., and Daniel
Stephenson, a retired helicopter pilot living in Florida, can
sue the chemical companies that manufactured the defoliant Agent
Orange - which they claim gave them cancer, AP news reports.
"We want to see if we can reopen the case for all Agent Orange
veterans who came down ill," Mr. Isaacson said. "This is what
this case is about."
The chemical companies argue that a class action settlement has
ended their liability, and a corporate advocacy group says the
case could threaten the finality of all class action judgments.
A federal judge agreed, ruling that the men's damage claims were
pre-empted by a 1984 class action settlement agreed to by Dow
Chemical Co., Monsanto and other companies that supplied Agent
Orange to the military. The chemical was used in Vietnam to
strip away the dense jungle foliage that provided cover for
enemy forces. The 2nd US Circuit Court of Appeal reversed that
ruling, setting up the Supreme Court hearing.
In 1984, neither Mr. Isaacson nor Mr. Stephenson was ill and
could not claim to have been injured by Agent Orange. "We
weren't aware of the suit," Mr. Isaacson said. "We hadn't come
down ill, and we would have had no interest in the suit."
An attorney representing Mr. Stephenson, Stephen Murray Jr.,
said the Supreme Court has held in previous cases that class
action settlements - designed to handle huge numbers of similar
damage claims - do not preclude people from claiming damages for
injuries that surface later. "An individual who has yet to
manifest any injury does not know if he has a valid claim," said
Mr. Murray.
Mr. Isaacson, 54, volunteered for the Air Force and served as a
crew chief for an F-100 fighter jet in 1968 and 1969. Mr.
Isaacson's base was a depot for Agent Orange and the flight line
where he worked also was used by aircraft that sprayed the
chemical, according to court records. An appendectomy in 1996
revealed he had non-Hodgkins lymphoma, a form of cancer that has
been connected with Agent Orange exposure. Following
chemotherapy, his cancer is now in remission.
"During the operation, they found an abscess and sent it out for
a biopsy," Mr. Isaacson said. "All in all, it was a blessing in
disguise. They caught it at an early stage."
Mr. Stephenson served in Vietnam from 1965 to 1970 on the ground
and as an Army helicopter pilot. In 1998, he was diagnosed with
multiple myeloma, a bone marrow cancer, and underwent a bone
marrow transplant. Mr. Stephenson, like Isaacson, enjoyed good
health before his cancer diagnosis and had a career as a
civilian helicopter pilot in Louisiana, said attorney Gerson
Smoger. "The legal issue from our side is whether a class
action far away can dismiss somebody's entire rights," Mr.
Smoger said.
The companies set aside $180 million to compensate anyone
injured by the end of 1994 and to pay for programs to benefit
all veterans. Their attorneys argue that veterans who got sick
after 1994 benefited from the programs that the settlement
funded.
The Product Liability Advisory Council, a corporate advocacy
group, has argued in court briefs that the 2nd Circuit's ruling
"could, in principle, threaten to upset the finality of every
class action settlement or judgment ever rendered." The
American Insurance Association, a trade group representing
insurance companies that often cover much of the cost of class
action settlements, has asked the Supreme Court to bar Mr.
Isaacson and Mr. Stephenson from suing.
"A class action settlement has to reach finality in order for
legitimate claims to be paid," said Lynda Mounts, AIA senior
counsel. "Defendants and insurers will have very little
incentive to settle class action lawsuits and avoid expensive
trials if a settlement is never truly final."
BOSTON COMMUNICATIONS: Faces Securities Fraud Suit in MA Court
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The Boston Communications Group, Inc. and two of its senior
executives face a class action filed in the United States
District Court for the District of Massachusetts, on behalf of a
putative class of purchasers of the Company's common stock
between June 12, 2003 and July 16, 2003 inclusive.
The lawsuit claims violations of Sections 10(b) and 20(a) of the
Securities Exchange Act of 1934 and Rule 10b-5 promulgated
thereunder and seeks unspecified damages, attorneys' fees and
costs. The lawsuit asserts, among other things, that during the
alleged class period defendants did not adequately disclose the
status of the Company's relationship and discussions with
Verizon Wireless, one of the Company's customers.
The complaint also includes allegations regarding sales by the
two individual defendants, both before and during the alleged
class period. The Company intends to contest the lawsuit and
believes that it and the two executive officers named as
defendants have highly meritorious defenses to the allegations
set forth in the lawsuit.
CAPSTONE TURBINE: Reaches Settlement For Securities Fraud Suit
--------------------------------------------------------------
Capstone Turbine Corporation reached a settlement for the
consolidated securities class action filed against it, two of
its officers, and the underwriters of its initial public
offering in the United States District Court for the Southern
District of New York.
The suit purports to be a class action filed on behalf of
purchasers of the Company's common stock during the period from
June 28, 2000 to December 6, 2000. Plaintiffs allege that the
underwriter defendants agreed to allocate stock in the Company's
June 28, 2000 initial public offering and November 16, 2000
secondary offering to certain investors in exchange for
excessive and undisclosed commissions and agreements by those
investors to make additional purchases of stock in the
aftermarket at pre-determined prices. Plaintiffs allege that
the prospectuses for these two public offerings were false and
misleading in violation of the securities laws because they did
not disclose these arrangements.
A committee of the Company's Board of Directors conditionally
approved a proposed partial settlement with the plaintiffs in
this matter. The settlement would provide, among other things,
a release of the Company and of the individual defendants for
the conduct alleged in the action to be wrongful in the Amended
Complaint. The Company would agree to undertake other
responsibilities under the partial settlement, including
agreeing to assign away, not assert, or release certain
potential claims the Company may have against its underwriters.
The Company's insurers are expected to absorb any of the
proposed settlement's direct financial impact.
The committee agreed to approve the settlement subject to a
number of conditions, including the participation of a
substantial number of other defendants in the proposed
settlement, the consent of the Company's insurers to the
settlement, and the completion of acceptable final settlement
documentation. Furthermore, the settlement is subject to a
hearing on fairness and approval by the court.
CHI-CHI'S INC: Moves To Settle Claims In Hepatitis A Outbreak
-------------------------------------------------------------
Louisville-based Chi-Chi's Inc. has asked a federal bankruptcy
judge in Delaware for permission to use up to $500,000 to settle
claims from victims of the hepatitis A outbreak connected to its
restaurant at the Beaver Valley Mall, about 25 miles northwest
of Pittsburgh, the Courier Journal reports.
Chi-Chi's asked to use the money to pay items such as medical
costs and lost wages for more than 540 customers and employees
diagnosed with hepatitis A. Three people have died. Chi-Chi's
and several other subsidiaries of its California-based parent
company filed for Chapter 11 bankruptcy protection Oct. 8,
before the outbreak began early this month.
Claims are likely to be much more than $500,000, the company
said, but that's the amount of liability self-insurance -
effectively a deductible - it carries. It's total liability
insurance is $51 million.
While Chi-Chi's said in the court filing that it wouldn't admit
liability, compensating the victims would be "doing the right
thing," it said, adding that its risk-management consultants had
advised the move to "reduce the risk potential of class action
and other personal-injury claims."
Numerous lawsuits against Chi-Chi's already have been filed over
the outbreak, said the company, which hopes to reduce litigation
expenses and potential legal judgments by using risk managers
SRM to administer and settle early claims. Negative publicity
from the outbreak has hurt sales at all of the chain's 100
restaurants and the company said fair treatment of the victims
could shorten the fallout. Without the ability of money to
start paying claims, Chi-Chi's is "likely to continue to receive
unfavorable media attention," which will hurt its ability to
stay in business.
That attention is likely to continue. Pennsylvania Health
Department officials said this week that more infections are
expected because people who get hepatitis A usually don't
exhibit its early, flu-like symptoms for 28 to 30 days.
Health investigators are looking at foods, including green
onions, which are hard to clean and have been linked to smaller
outbreaks in other states. Chi-Chi's removed green onions from
all of its restaurants as a precaution. Questions to Chi-Chi's
parent company Prandium, in Irvine, California, were referred to
a spokesman for SRM, who did not return calls by late yesterday,
the Courier Journal stated.
The three deaths have shocked western Pennsylvanians, because
health authorities have been saying that hepatitis A is usually
not fatal and normally runs its course in a few weeks after
causing such symptoms as fever, jaundice, nausea and abdominal
pain. State Health Department spokesman Richard McGarvey said
there does not appear to be anything surprising about this
outbreak. The fatality rate for hepatitis A is one to three
deaths per 1,000 cases, though it rises to 18 per 1,000 for
those over 50, and higher for those with chronic liver problems.
About 8,500 people have been inoculated against hepatitis A
since the outbreak was reported and linked to the Chi-Chi's
outlet. Thirteen of the restaurant's employees tested positive
for hepatitis A and all 60 employees will remain under medical
supervision until they are cleared. Some victims are slowly
recovering. The restaurant is closed until January 2.
CHOICEPOINT INC.: Faces Two Suits For DPPA Violations in FL, LA
---------------------------------------------------------------
Choicepoint, Inc. faces two class actions alleging violations of
the federal Drivers' Privacy Protection Act (DPPA).
One suit, styled "Fresco, et al. v. Automotive Directions Inc.,
et al.," alleges that the Company has obtained, disclosed and
used information obtained from the Florida Department of Highway
Safety and Motor Vehicles (Florida DHSMV) in violation of the
DPPA. The plaintiffs seek to represent classes of individuals
whose personal information from Florida DHSMV records has been
obtained, disclosed and used for marketing purposes or other
allegedly impermissible uses by the Company without the express
written consent of the individual. The suit is pending in the
United States District Court for the Middle District of Florida.
A number of the Company's competitors have also been sued
in the same or similar litigation in Florida.
In addition, on July 10, 2003, a plaintiff filed a class action
lawsuit against the Company in the United States District Court
for the Eastern District of Louisiana (styled Betty D. Russell
v. ChoicePoint Services, Inc.) that alleges substantially
similar violations of the DPPA. This plaintiff seeks to
represent a national class of all individuals whose information
the Company has obtained from motor vehicle records and a
subclass of all individuals domiciled in Louisiana whose
information the Company has obtained from motor vehicle records
in Louisiana.
Each of these complaints seeks certification as a class action,
compensatory damages, attorney's fees and costs, and injunctive
and other relief.
COLUMBIA UNIVERSITY: Indian American Lodges Suit For Racial Bias
----------------------------------------------------------------
Randy Raghavendra, an Indian American senior management analyst
at Columbia University's Office of Institutional Real Estate
(IRE), has filed a class action lawsuit against the New York
university for racial discrimination--the second such lawsuit
the institution has had to face in less than nine months, the
Indo-Asian News Service Reports.
Mr. Raghavendra said that he hoped his case would help to
publicize "the blatant racial discrimination I and other racial
minorities may have suffered or continue to suffer at Columbia
University," according to The Cornell Daily Sun, one of the
country's oldest daily college newspapers.
Mr. Raghavendra sent an e-mail message to all Ivy League student
newspapers this week after an article about the case was
published in the Columbia Spectator. The e-mail included a
press release outlining the details of his alleged
victimization.
The lawsuit, filed in the New York State Supreme Court in July,
was against William Scott, the deputy vice president of IRE,
Karen Fry, the assistant vice president of IRE, and the board of
trustees of Columbia University. Mr. Raghavendra said they
"(practice) blatant racial discrimination and (use) various
deceptive tactics to keep out blacks and other dark-skinned
minorities from higher-paying managerial and executive positions
of power."
Mr. Raghavendra, who describes himself as a dark-skinned Indian
American, filed the lawsuit after he was turned down for a
promotion. After working at IRE for a year, Mr. Raghavendra
applied for a one-level promotion to the position of manager of
finance/accounting in September 2002. He claimed that by the
time he was interviewed, the position had been filled by a
younger white woman, Jennifer Fabrizio. He called his interview
with Ms. Fry "a joke" and "a fake interview".
Mr. Raghavendra, who has nearly 20 years of professional
experience and two masters degrees, said Ms. Fabrizio has a
third of his qualifications. She was hired through an outside
search firm, a common practice in IRE. After six months, Ms.
Fabrizio left the position.
The press release said Mr. Raghavendra also felt that "they go
out of their way to prevent you from getting any higher rank" if
one is a "dark-skinned minority." He said there were no African
Americans in a position higher than his in IRE and the one
Pakistani who has a higher title "is not really that dark-
skinned". Mr. Raghavendra claimed that when he first met Mr.
Scott, the white man made sarcastic race-related comments about
affirmative action. On another occasion, the press release
said, "Scott asked him, 'Do you often get hassled at the airport
security?' suggesting . Raghavendra looked like a potential
terrorist."
However, Mr. Scott was quoted as saying that the charges of
racial discrimination against him were "bizarre", "have no
merit" and are "silly beyond belief."
Mr. Raghavendra said he did not have his own office and has
shared office space with up to two other people. He claimed
that all white officers, even those in lower positions, "had
their own comfortable office space and a separate mailbox".
Mr. Scott said that Mr. Raghavendra is a relatively new
employee, and other employees also share offices and mailboxes,
and it "has nothing to do with race."
Mr. Raghavendra's lawsuit comes on the heels of a December 2002
Federal Court case filed against Columbia by Zenobia White-
Farrell, the university's former acting director of the Office
of Equal Opportunity and Affirmative Action. Ms. White-Farrell,
in her complaint, alleged "a pattern and practice of
discrimination against African Americans in terms of
compensation, hiring and promotion."
Mr. Raghavendra pointed out the irony that the previous lawsuit
was filed by the former head of the very department that deals
with cases of discrimination. "The person who has been
appointed to investigate my case appears to be the beneficiary
of racial discrimination herself," Mr. Raghavendra wrote. Susan
Reiger, associate provost of the OEOAA, holds the position that
was contested by Ms. White-Farrell.
Mr. Raghavendra filed a complaint with Reiger and Colleen
Crooker, vice president of Human Resources, but said they
"played games" with him. He claimed that "no meaningful
internal investigation was ever conducted." Once he "lost faith
in the equal opportunity office", Mr. Raghavendra said he
withdrew his complaint from OEOAA, just three months after the
initial grievance was filed. He is now being represented by
Kaiser, Saurborn and Mair, PC, the same firm that represented
Ms. White-Farrell.
According to Columbia's response to Mr. Raghavendra's court
complaint, he "failed to utilise his internal administrative
remedies, including the complaint policies and procedures
provided by Columbia."
Mr. Raghavendra seeks punitive damages and "equitable relief".
He said he hoped to be offered the position of manager of
finance/accounting and would like to stay at Columbia after the
suit was settled.
DEAN MILK CO: Recalls Reduced Fat Milk Due To Undeclared Eggnog
---------------------------------------------------------------
Dean Milk Company, Inc., a Louisville, Kentucky dairy company,
in cooperation with the U.S. Consumer Product Safety Commission
is voluntarily recalling gallon and one-half gallon containers
of 2% reduced fat milk because they may have come in contact
with eggnog during processing.
The recall was initiated after the company detected eggnog in
the 2% milk. Individuals with allergies to eggs run the risk of
a serious or life threatening reaction if they consume this
product. No illness or allergic reactions have been reported.
The recalled milk was processed at the Dean Milk Company, Inc.
plant located in Louisville, Kentucky, and may have been
distributed to Kroger, Winn- Dixie, Wal-Mart, Wesselman's and
convenience stores in Kentucky, Tennessee, Indiana and Ohio.
The following brand labels are subject to the recall: Dean's,
Winn Dixie, Wesselman's, and Great Value.
Only plastic gallon and half-gallon containers of 2% reduced fat
milk with the following information are involved in the recall.
Consumers will find the printed information on the top of the
one-gallon container and on the side of the half-gallon
container, above the label, and it will contain one of the
following codes: "SELL BY NOV 27 2108B" or "SELL BY NOV 27
2108C." The number 2108 in the code information represents the
Louisville dairy company's plant code.
Dean Foods and retailers are removing the product from store
shelves. Consumers can return the product to their place of
purchase for a full refund. Consumers with questions may contact
Dean Milk Company, Inc. toll free at (877) 234-0022.
ELECTRONIC DATA: Plaintiffs File Consolidated TX Securities Suit
----------------------------------------------------------------
Plaintiffs in the various securities class actions against
Electronic Data Systems Corporation and certain of its former
officers filed a consolidated amended suit in the United States
District Court for the Eastern District of Texas.
The Company and certain of its former officers are defendants in
numerous purported shareholder class action suits filed from
September through December 2002 in response to its September 18,
2002 earnings pre-announcement, publicity about certain equity
hedging transactions that it had entered into, and the drop in
the price of the Company's common stock. The cases alleged
violations of various federal securities laws and common law
fraud based upon purported misstatements and/or omissions of
material facts regarding the Company's financial condition.
In addition, five purported class actions were filed on behalf
of participants in the Company's 401(k) Plan against the
Company, certain of its current and former officers and, in some
cases, its directors, alleging the defendants breached their
fiduciary duties under the Employee Retirement Income Security
Act (ERISA) and made misrepresentations to the class regarding
the value of EDS shares.
The Company's motions to centralize all of the foregoing cases
in the U.S. District Court for the Eastern District of Texas
have been granted.
Representatives of two committees responsible for administering
the Company's 401(k) Plan notified the Company of their demand
for payment of amounts they believe are owing to plan
participants under Section 12(a)(1) of the Securities Act of
1933 as a result of an alleged failure to register certain
shares of EDS common stock sold pursuant to the plan during a
period of approximately one year ending on November 18, 2002.
The committee representatives have asserted that plan
participants to whom shares were sold during the applicable
period are entitled to receive a return of the amounts paid for
the shares, plus interest and less any income received, upon
tender of the shares to EDS. The Company believes it can assert
arguments and defenses that could significantly reduce or
eliminate any liability. However, some of the legal principles
involved in these arguments and defenses are subject to
significant uncertainties.
The lead plaintiff in the consolidated securities action and the
lead plaintiffs in the consolidated ERISA action described above
each filed a consolidated class action complaint. The amended
consolidated complaint in the securities action alleges
violations of Section 10(b) of the Securities Exchange Act of
1934 Rule 10(b)(5) thereunder and Section 20(a) of the Exchange
Act. The plaintiffs allege that the Company and certain of its
current and former officers made false and misleading statements
about the financial condition of the Company, particularly with
respect to the NMCI Contract and the accounting for that
contract. The class period is alleged to be from February 7,
2001 to September 18, 2002.
The consolidated complaint in the ERISA action alleges violation
of fiduciary duties under ERISA by some or all of the defendants
and violation of Section 12(a)(1) of the Securities Act by
selling unregistered EDS shares to plan participants. The named
defendants are EDS and, with respect to the ERISA claims,
certain current and former officers of EDS, members of the
Compensation and Benefits Committee of its Board of Directors,
and certain current and former members of the two committees
responsible for administering the plan.
ENTRUST INC.: No Appeal Received For Securities Suit Dismissal
--------------------------------------------------------------
Plaintiffs have yet to appeal the United States District Court
for the Eastern District of Texas' dismissal of the class action
filed against Entrust Technologies, Inc., styled "Frankel v.
Entrust Technologies Inc., et al., No. 2-00-CV-119."
The consolidated complaint purported to be a class action
lawsuit brought on behalf of persons who purchased or otherwise
acquired Common stock of the Company during the period from
October 19, 1999 through July 3, 2000. The consolidated
complaint alleged that the defendants misrepresented and failed
to disclose certain information about the Company's business and
prospects, as required by the Securities Exchange Act of 1934.
It did not specify the amount of damages sought.
September 30, 2002, Judge T. John Ward issued an order
dismissing this purported securities class action pending
against the Company with prejudice; however, the order is
subject to the possibility of an appeal. As of the date of the
filing of this report, the Company has not learned of any
appeal being filed. If an appeal is granted, an adverse
judgment or settlement in this lawsuit could have a significant
adverse impact on the Company's future financial condition or
results of operations.
ERP OPERATING: FL Grants Certification To Consumer Fraud Lawsuit
----------------------------------------------------------------
Florida State Court granted class certification to the lawsuit
filed against the ERP Operating Partnership Ltd., alleging that
several of the types of fees that the Operating Partnership
charged when residents breached their leases were illegal, as
are all efforts to collect them.
The Company vigorously contests the plaintiffs' claims and will
seek immediate appellate review of the certification. While no
assurances can be given, the Company does not believe that this
lawsuit, if adversely determined, will have a material adverse
effect on the Operating Partnership, it stated in a disclosure
to the Securities and Exchange Commission.
FACTUAL DATA: Asks CO Court To Dismiss Securities Fraud Lawsuit
---------------------------------------------------------------
Factual Data Corporation asked the District Court for the County
of Larimer, Colorado to dismiss the consolidated securities
class action filed against it and its directors, styled "William
Troxler v. Factual Data Corporation, Jerald H. Donnan, Todd A.
Neiberger, Robert J. Terry, J. Barton Goodwin, Daniel G. Helle,
Abdul H. Rajput and James N. Donnan."
The plaintiff alleges, among other things, that the individual
defendants engaged in self-dealing in connection with the
negotiation and approval of the merger agreement and the merger.
The plaintiff also claims the individual defendants obtained
benefits not shared by the plaintiff, and that they breached
their fiduciary duties of care, loyalty, candor and independence
owed under Colorado law to the Company's public shareholders.
The plaintiff further alleges that the Company aided and abetted
the other defendants' breaches of fiduciary duty and failed to
disclose material information to the shareholders.
The plaintiff seeks certification of the case as a class action,
and preliminary and permanent injunctive relief declaring that
the merger agreement is unlawful and unenforceable. The
plaintiff also seeks an order enjoining consummation of the
agreement, and an order directing the defendants to exercise
their fiduciary duties to obtain a transaction in the best
interests of Factual Data shareholders, and that they
arrange to rescind any implemented terms of the transaction.
Finally, the plaintiff demands that the court impose a trust on
any benefits received by the defendants, and award attorneys'
fees and costs. The plaintiff is seeking equitable relief only,
not monetary damages.
On July 23, 2003, the plaintiff filed a motion for expedited
discovery, which motion was never ruled on by the court. On
August 1, 2003, the plaintiff filed an amended complaint and a
response to the Company's motion to dismiss. On August 5, 2003,
the plaintiff requested oral argument on the request for
expedited discovery, which request was not granted by the court.
On August 15, 2003, the Company moved to dismiss the plaintiff's
amended complaint. On September 15, 2003, the plaintiff filed a
response to the Company's motion to dismiss. On September 26,
2003, the Company filed an amended reply in support of its
motion to dismiss the first amended complaint. The court has
not yet ruled on the Company's motion to dismiss the amended
complaint.
FTD INC.: DE Court Approves Securities Fraud Lawsuit Settlement
---------------------------------------------------------------
The Court of Chancery for New Castle County in Wilmington,
Delaware approved the settlement proposed by FTD, Inc. for the
consolidated securities class action styled "In Re: FTD.COM
Shareholders Litigation." The suit names as defendants the
Company, FTD, FTD.COM and the directors of the Company and
FTD.COM.
The complaint alleges that:
(1) the offer by the Company to exchange 0.26 shares of
Class A Common Stock for each share of FTD.COM common
stock is inadequate;
(2) the individual defendants breached the fiduciary duties
they owed in their capacity as directors by, among
other things, failing to conduct an auction or
otherwise check the market value of FTD.COM before
voting to accept the merger proposal;
(3) the Company and its board of directors prevented the
FTD.COM board of directors from conducting a meaningful
review of the transaction, and
(4) the Company, FTD.COM and certain individual defendants
timed the 2002 Merger to deny public stockholders the
full potential increase in FTD.COM's stock price
following the 2002 Merger.
The Company reached an agreement to settle the consolidated
suit. A Stipulation and Agreement of Compromise, Settlement and
Release relating to this matter has been executed. The terms of
the Stipulation and Settlement Agreement include no finding of
wrongdoing on the part of any of the defendants, or any other
finding that the claims alleged had merit. The Company and the
other defendants have denied, and continue to deny, that they
have committed any violation of federal securities or other
laws.
Pursuant to the Stipulation and Settlement Agreement, the
Company has agreed to issue shares of FTD, Inc. Class A Common
Stock valued at $10.7 million to the members of the class. In
connection with the settlement, the Company recorded an $11.0
million charge in the fourth quarter of fiscal year 2003 with
respect to the settlement and related administrative costs.
As of September 30, 2003, the distribution of the settlement and
related administrative costs has not been approved by the Court
of Chancery for New Castle County in Wilmington, Delaware, and
the consolidated balance sheet reflects $11.0 million of other
accrued liabilities related to the fourth quarter of fiscal year
2003 charge.
GEMSTAR-TV GUIDE: Plaintiffs File Second Amended Suit in C.D. CA
----------------------------------------------------------------
Plaintiffs filed a second amended securities class action
against Gemstar-TV Guide International, Inc. and certain of its
executive officers and directors in the United States District
Court for the Central District of California.
The suit alleges violations of the Securities Exchange Act of
1934 (the 1934 Act) and the Securities Act of 1933 (the 1933
Act). The alleged claims were brought under Sections 10(b) and
20(a) of the 1934 Act, Section 11 of the 1933 Act and SEC Rule
10b-5 and seek unspecified monetary damages.
The court appointed the Teachers Retirement System of Louisiana
and the General Retirement System of the City of Detroit as co-
lead plaintiffs, and appointed Bernstein, Litowitz, Berger &
Grossman, L.L.P. as lead plaintiffs' counsel.
Plaintiffs filed an amended, consolidated complaint, alleging
violations of the securities laws in connection with the
Company's accounting for certain transactions which were
subsequently restated between November 2002 and March 2003. The
amended complaint seeks money damages on behalf of a purported
class of holders of the Company's securities during the relevant
time period.
On May 2, 2003, the Company filed a motion to dismiss the
amended consolidated complaint, which was heard on July 14,
2003. On August 18, 2003, the court granted the Company's
motion to dismiss. The court also granted plaintiffs leave to
amend the amended complaint.
HPSC INC.: SEC Bares Sentencing of Trader Over Financial Fraud
--------------------------------------------------------------
The Securities and Exchange Commission announced that on
November 6, Mildred K. Miller was sentenced to 60 months
imprisonment and ordered to pay more than $4.7 million in
connection with criminal charges brought by the United States
Attorney for the District of Connecticut.
On March 7, 2003, Ms. Miller, age 54, of West Hartford,
Connecticut, pleaded guilty to one count of wire fraud in
violation of 18 U.S.C. 1343 for her role in a financial fraud
perpetrated at a American Commercial Financial Corporation
(ACFC), a wholly-owned subsidiary of Boston-based HPSC, Inc.
In a related civil enforcement action, the Commission alleged
that Ms. Miller improperly received more than $4.7 million in
connection with a financial fraud perpetrated by Kevin J.
Morrison, also of West Hartford, Connecticut. According to the
Complaint, between 1997 and May 2002, Mr. Morrison, the former
executive vice president of ACFC, improperly diverted more than
$4.7 million of corporate assets to Ms. Miller, a purported ACFC
factoring customer. Mr. Morrison attempted to conceal his
embezzlement by regularly providing fictitious financial
reports, which were incorporated in the parent company's Forms
10-K and Forms 10-Q filed with the Commission for the periods
ended Dec. 31, 1997, through March 31, 2002, causing HPSC to
materially overstate its net income and earnings per share by
between 4% and 112% during the affected filing periods.
On February 13, 2003, the Commission obtained a default judgment
against Mr. Miller. The court ordered Mr. Miller to pay
disgorgement of $4,782,381.26, plus prejudgment interest thereon
of $189,813.63.
On November 21, 2002, in a separate criminal action, Mr.
Morrison pleaded guilty for his role in the fraudulent scheme
before Judge Hall to one count of wire fraud in violation of 18
U.S.C. 1343. On March 31, 2003, Mr. Morrison was sentenced to
serve 16 months in prison and ordered to pay restitution of more
than $4.7 million.
INSIGHT ENTERPRISES: Plaintiffs File Amended AZ Securities Suit
---------------------------------------------------------------
Plaintiffs filed an amended consolidated class action against
Insight Enterprises in the United States District Court,
District of Arizona. The suit also names as defendants certain
of the Company's officers.
The lawsuit alleges violations of Section 10(b) of the
Securities Exchange Act of 1934 and SEC Rule 10b-5. The
plaintiff alleges that the defendants made false and misleading
statements pertaining to its business, operations and management
in an effort to inflate the price of the Company's common stock.
The lawsuit also names as co-defendants:
(1) Eric J. Crown, the Chairman of the Board of Directors;
(2) Timothy A. Crown, Chief Executive Officer and President
and a director; and
(3) Stanley Laybourne, Executive Vice President, Chief
Financial Officer and Treasurer and a director
The Plaintiff seeks class action status to represent all buyers
of the Company's common stock from September 3, 2001 through
July 17, 2002. On September 27, 2003, the court granted the
Company's motion to dismiss, but allowed plaintiffs leave to
file an amended complaint.
The Company will continue to defend itself, and intends to file
a motion to dismiss the newly amended complaint. The costs
associated with defending the allegations in this lawsuit and
the potential outcome cannot be determined at this time and,
accordingly, no estimate for such costs, other than the
deductible amount under the Company's directors and officers
liability insurance policies has been included in these
condensed consolidated financial statements.
NEBRASKA: Omaha Woman Content With Settlement in Insurance Suit
---------------------------------------------------------------
An Omaha insurance company will pay out about $20 million to
victims of catastrophic illness and accidents because of a class
action lawsuit filed by Yankton woman, Kay Bergonzi, who will -
by her own choice, get less than one-tenth of 1 percent of the
settlement. She could have settled for hundreds of thousands of
dollars but chose not to, AP news/ Argus Leader reports.
"I explained to her there were two different ways to go," her
lawyer, Mike Abourezk of Rapid City, told AP. "In an individual
suit, quite frequently in cases like this there is a very strong
chance the insurance company will pay you a lot of money to go
away quietly . In a class action, there isn't any going away
quietly. It's all got to be out in public. It is longer,
harder, more expensive and more difficult, and you won't get
nearly as much money. The only upside is if you win, a lot of
people get paid."
Ms. Bergonzi chose to file a class action lawsuit against a
backdrop of being a single mother with an 18-year-old son still
at home, and as a breast cancer victim who had lost a sister to
cancer within a year of her own diagnosis and her father to the
disease before that. "I just thought it was the right thing to
do," she said. "I thought about it long and hard, and it was
just going to benefit so many people and cancer patients. Who
could say no to that?"
The lawsuit was settled in U.S. District Court in Sioux Falls on
Tuesday, with Judge Karen Schreier presiding. Central States
Health and Life Co. of Omaha will immediately pay $7.5 million
to 1,236 claimants nationwide. During the next 10 years it will
pay approximately $9.6 million more than it would have to future
claimants, based on a recalculation of its payment formula.
Richard Kizer, CSO president, said the class action resolved
discrepancies in the interpretation of a supplemental medical
policy the company first sold about 15 years ago. "With medical
advances, it was just not an easy policy to interpret. We spent
months working with lawyers on both sides to come up with
language and a formula that provides an answer to
policyholders," Mr. Kizer told AP. "Medical treatments are
vastly different than at the time this policy was written. That,
in large part, created disagreement."
The settlement Tuesday was the largest CSO has ever entered
into, Mr. Kizer said, but it does not threaten the company's
future. CSO has done business in South Dakota about 70 years
and still insures about 1,200 in the state with the supplemental
medical policy.
Mr. Abourezk got involved with CSO in 1997, when his sister
Carol, terminally ill with cancer, was seeking treatment in
Houston. She was covered by a CSO policy her husband bought,
but it paid only cents on the dollar, Mr. Abourezk said. "I
then located several other people with the same policy who had
filed similar claims and found that the company was doing the
same thing to each of them," he said.
Ms. Bergonzi knows how this could happen. "When I was going
through chemo(therapy), I was getting some of the insurance
letters back that I was not qualified for this or that," she
said. "I thought it was kind of weird, but I did not pursue it
at the time. Chemotherapy just zaps your energy."
Her experience with the supplemental policy was probably
typical. In the late 1990s, "where I was working, the health
insurance plan was kind of a low-end plan, and I was not happy
with the deductibles," she says. "Here comes this little policy
around. I thought, ``This should be great. It will cover my co-
pays and give me a little extra cash if I have to miss any work
. I was really happy when our employer offered that policy to
us. I had it six months before I needed to use it. I think it
started in July, and I was diagnosed in December 1998."
In pursuing his sister's case against CSO, and in light of all
the other plaintiffs it brought to light, Mr. Abourezk thought
about filing a class action lawsuit, but legal consultants he
talked to in Seattle convinced him it would take years to
litigate.
His sister died in 1999, and he put her case on hold to
concentrate on the cases of four individual plaintiffs still
living. He filed these as a single action, and in July 2001, US
District Judge Lawrence Piersol ruled CSO had underpaid on those
claims. The company also paid punitive damages.
"I felt that we had won, because now CSO would have to start
paying all the other people properly," Mr. Abourezk said. But
the company did not redress underpayments to claimants who did
not sue, and it did not change its payment formula, he said.
When appeals to the Nebraska director of insurance, a former CSO
executive, fell on deaf ears, Mr. Abourezk decided a class
action lawsuit made sense. He tried to rework his sister's case
into such a suit, but CSO objected, and Mr. Abourezk said it
appeared to him the company would prevail because aspects of the
case were not sufficiently broad to represent a class. At that
point, he decided to look for other individual plaintiffs.
That's when he found Ms. Bergonzi. He thought she would make a
good class action plaintiff, but he told Ms. Bergonzi that if
she went that route, she would recoup only what CSO had
underpaid, plus an administrative fee. " I told her she would be
giving up a minimum of hundreds of thousands of dollars, and
that's not speculation," he said.
Plaintiffs' victories on individual lawsuits had convinced CSO
it would continue to lose on contested underpayment, and the
threat of a class action lawsuit convinced the company that it
would eventually lose big, Mr. Abourezk said, so it sought a
settlement. "At this point, the company is paying what they are
supposed to pay," he said. "I am not accusing the company of
wrongdoing at this point in time."
Mr. Kizer said CSO announced a new payment structure on the
supplemental policy in "a mailing to all our policyholders who
have this type of policy." He said about 1,200 claims have been
filed, and there are between 15,000 and 18,000 outstanding
policies of this type across the country. CSO no longer sells
that type of policy.
Ms. Bergonzi said that when she receives her settlement, "I will
probably just bank it for now." She said she has caught up with
outstanding expenses stemming from her illness, and her health
now is "OK." She took a day off work Tuesday to come to Sioux
Falls for the class action settlement hearing.
Ms. Bergonzi hasn't met any of the CSO claimants who will be
affected by her lawsuit, but "I would love to see the faces of
the people who get the checks," she said. "Mike tries to make
out like I'm a big hero. I'm not . I'm just an everyday person
who goes to work and pays their bills. I'm just an average
person. Sometimes he forgets that."
NEW CENTURY: Court Remands Consumer Lawsuit To CA Federal Court
---------------------------------------------------------------
The United States Appeals Court remanded to the United States
District Court for the Northern District of California a class
action filed against New Century Mortgage Corporation, by
Richard L. Grimes and Rosa L. Grimes.
The action seeks rescission, restitution and damages on behalf
of the two plaintiffs, others similarly situated and on behalf
of the general public for an alleged violation of the Federal
Truth in Lending Act (TILA) and Business & Professions Code
17200. The judge held that New Century Mortgage had not
violated the TILA and dismissed the 17200 claim without
prejudice.
The plaintiffs appealed in February 2002 and in August 2003, the
U.S. Court of Appeals ruled that a material issue of fact as to
the existence and terms of the contract remained, reversed
summary judgment and remanded the case for further proceedings.
The case will now proceed in the court.
NEW CENTURY: Oral Arguments in IL Consumer Suit Set Dec. 2003
-------------------------------------------------------------
Oral arguments for the appeal of the dismissal of the class
action filed against New Century Mortgage Corporation is set for
December 2,2003 in the Circuit Court of Cook County, Chicago,
Illinois.
The complaint alleges the unauthorized practice of law and
violation of the Illinois Consumer Fraud Act for performing
document preparation services for a fee by non-lawyers, and
seeks to recover the fees charged for the document preparation,
compensatory and punitive damages, attorneys' fees and costs.
The Company filed a motion to dismiss in February 2002; the case
was then consolidated with other similar cases filed against
other lenders. The motion to dismiss was granted in August
2002. The plaintiff in the individual case filed an appeal in
September 2002. The appeal was consolidated and briefs filed by
the parties in June and August.
NEW CENTURY: CA Court To Hear Suit Dismissal Motion in Nov. 2003
----------------------------------------------------------------
The Superior Court for the Alameda County, California will hear
on November 25,2003 New Century Financial Corporation's motion
to dismiss the class action filed against it and:
(1) New Century Mortgage Corporation,
(2) U.S. Bancorp,
(3) Loan Management Services, Inc., and
(4) certain individuals affiliated with Loan Management
Services
The complaint alleges violations of California Consumers Legal
Remedies Act, Unfair, Unlawful and Deceptive Business and
Advertising Practices in violation of Business & Professions
Code Sections 17200 and 17500, Fraud-Misrepresentation and
Concealment and Constructive Trust/Breach of Fiduciary Duty and
damages including restitution, compensatory and punitive
damages, and attorneys' fees and costs.
The plaintiffs filed an amended complaint on July 10, 2003, and
on September 12, 2003, the judge granted the Company's demurrer
challenging their claims in part. The Consumers Legal Remedies
claim was dismissed and the plaintiffs withdrew the Constructive
Trust/Breach of Fiduciary Duty claim. The Company filed its
answer to the plaintiffs' amended complaint in September 2003
and advised the plaintiffs of its intention to file a 128.7
sanctions motion seeking dismissal of the case.
NEW CENTURY: Plaintiffs File Second Amended Consumer Suit in IL
---------------------------------------------------------------
Plaintiffs filed a second amended class action against New
Century Mortgage Corporation in the Circuit Court of Cook
County, Chicago, Illinois, seeking damages for receiving
unsolicited advertisements to telephone facsimile machines in
violation of the Telephone Consumer Protection Act, 47 U.S.C.
227, and the Illinois Consumer Fraud Act.
The plaintiffs filed an amended complaint on May 1, 2003 and on
September 18, 2003 the judge granted the Company's motion to
dismiss with respect to the Illinois Consumer Fraud Act and
permitted the plaintiff to re-plead on an individual, not
consolidated, basis. On September 30, 2003, the plaintiff filed
a motion for class certification and second amended complaint.
Discovery is proceeding.
NEW CENTURY: LA Court Orders FLSA Violations Suits Consolidated
---------------------------------------------------------------
The United States District Court for the Middle District of
Louisiana ordered consolidated two class actions filed against
New Century Financial Corporation.
In April 2003, a complaint seeking class action status was filed
by two former, short-term employees, Kimberly A. England and
Gregory M. Foshee, against the Company and:
(1) New Century Mortgage Corporation,
(2) Worth Funding Incorporated, and
(3) The Anyloan Company
The action was removed on May 12, 2003 from the 19th Judicial
District Court, Parish of East Baton Rouge, State of Louisiana
to the U.S. District Court for the Middle District of Louisiana
in response to the Company's Petition for Removal. The
complaint alleges failure to pay overtime wages in violation of
the federal Fair Labor Standards Act. The plaintiffs are
currently moving to dismiss this case.
The plaintiffs filed an additional action in Louisiana state
court 19th Judicial District Court, Parish of East Baton Rouge
on September 18, 2003, adding James Gray as a plaintiff and
seeking unpaid wages under state law, with no class claims.
This second action was removed on October 3, 2003 to the
U.S. District Court for the Middle District of Louisiana.
NEW CENTURY: MN Court To Hear Employee Lawsuit Dismissal Motion
---------------------------------------------------------------
The United States District Court for the District of Minnesota
will hear in January 2004, New Century Financial Corporation's
motion to dismiss the class action filed against it and New
Century Mortgage Corporation, alleging failure to pay overtime
wages in violation of the federal Fair Labor Standards Act.
Michael Klas, a former loan officer of New Century Mortgage
Corporation's retail branch in Minnesota, filed the case. The
Company filed its answer in July 2003. In September 2003, the
Company filed its Motion to Dismiss the entire case due to the
fact that similar claims were raised in an earlier filed case.
NEW CENTURY: Faces Lawsuit Alleging TILA Violations in N.D. IL
--------------------------------------------------------------
New Century Mortgage Corporation was served with a complaint
filed by Canales Jose Ines and Maria S. Marquez seeking class
action status filed in the United States District Court,
Northern District of Illinois.
The complaint also named the broker, title company and related
parties as defendants:
(1) Tamayo Financial Title, Inc.,
(2) Presidential Title, Inc.,
(3) Juan Tamayo Jr.,
(4) Jose Tamayo and
(5) Luis Tamayo
The complaint alleges violations of the Federal Truth in Lending
Act related to the fees charged for title insurance and
recording fees. The class is estimated to include less than 100
loans.
NEW CENTURY: Faces Lawsuit for TILA Violations in N.D. IL Court
---------------------------------------------------------------
New Century Mortgage Corporation was served with a complaint
filed by Denise Wade seeking class action status filed in the
U.S. District Court, Northern District of Illinois. The
complaint also named as defendants the broker, title company,
and current servicer:
(1) Providential Bancorp, Ltd.,
(2) Jet Title Services, LLC, and
(3) Ocwen Federal Bank, FSB
The complaint alleges violations of the Federal Truth in Lending
Act related to the fees charged for title insurance and
recording fees. The class is estimated to include less than 100
loans.
PLANET 3: Recalls 3,500 TV Stands Because of Production Defect
--------------------------------------------------------------
Planet 3, of Deerfield, Illinois, in cooperation with the U.S.
Consumer Product Safety Commission, is recalling 3,500 units of
Television Stands sold at Circuit City since the television
stand can tip over when a television is placed on it, possibly
causing injuries to nearby consumers or death to young children.
There have been no reports of injuries or incidents related to
this product.
The recall includes all "Cherry Bentwood" model television
stands. The three-tier stands are made from mahogany wood and
have curved glass ends. They are 30 inches high and 45 inches
wide, and sold for use with televisions up to 36 inches in
diameter. Model number PTT 22018 is written on the packaging
and instructions. There is no writing on the stands themselves.
The TV stands, manufactured in China, were sold at Circuit City
stores nationwide from July 2003 through September 2003 for
about $250.
Consumers should remove televisions from these stands
immediately and return the stands to Circuit City for a refund.
For more information, contact Planet 3 toll-free at
(888) 616-5700 between 8:30 a.m. and 5 p.m. CT Monday through
Friday.
PMA CAPITAL: Shareholders Lodge Securities Fraud Suit in E.D. PA
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PMA Capital Corporation faces a class action filed in the United
States District Court in the Eastern District of Pennsylvania,
captioned Pitt v. PMA Capital Corporation, et. al., on behalf of
purchasers of the Company's securities from May 7, 2003 to
November 3, 2003.
The complaint names the Company and certain officers as
defendants. The complaint alleges, among other things, that the
defendants violated Rule 10b-5 of the Securities Exchange Act of
1934 by making materially false and misleading public statements
and material omissions during the class period regarding the
Company's loss reserves.
PMA CAPITAL: Faces Two Securities Fraud Suits Filed in E.D. PA
--------------------------------------------------------------
PMA Capital Corporation faces two securities class actions,
styled ""Augenbaum v. PMA Capital Corporation, et. al.," and
"Klinghoffer v. PMA Capital Corporation, et. al.," filed in the
United States District Court in the Eastern District of
Pennsylvania.
The suit was filed on behalf of alleged purchasers of the
Company's 4.25% Convertible Debentures and 8.50% Monthly Income
Senior Notes. The complaints name the Company, PMA Capital
Trust I, PMA Capital Trust II, certain of the Company's officers
and directors and investment banking firms as defendants.
The complaints allege, among other things, that the defendants
violated Section 11, 12(a)(2) and 15 of the Securities Act of
1933 by making materially false and misleading statements about
its reserves in the registration statement, prospectuses and
prospectus supplements in connection with the debt.
PMA CAPITAL: Shareholders Lodge Securities Fraud Suit in E.D. PA
----------------------------------------------------------------
PMA Capital Corporation faces a class action, captioned "Newman
v. PMA Capital Corporation, John W. Smithson, Francis W.
McDonnell and William E. Hitselberger," filed in the United
States District Court for the Eastern District of Pennsylvania.
The suit was filed by alleged shareholders of PMA Capital who
ask to represent a class of purchasers of PMA Capital securities
from November 13, 1998 to November 3, 2003. The complaint
alleges, among other things, that the defendants violated Rule
10b-5 of the Securities Exchange Act of 1934 by making
materially false and misleading public statements and material
omissions during the class period regarding the
Company's loss reserves.
PSS WORLD: Trial in Securities Lawsuit Set April 2005 in M.D. FL
----------------------------------------------------------------
Trial in the securities class action filed against PSS World
Medical, Inc. and certain of its current and former officers and
directors is set for April 2005 in the United States District
Court for the Middle District of Florida, Jacksonville Division.
The suit is styled "Jack Hirsch v. PSS World Medical, Inc., et
al., Civil Action No.3:98-CV 502-J-32TEM."
The plaintiff seeks indeterminate damages, including costs and
expenses. The plaintiff initially alleged, for himself and
for a purported class of similarly situated stockholders who
purchased the Company's stock between December 23, 1997 and May
8, 1998 that the defendants engaged in violations of certain
provisions of the Exchange Act, and Rule 10b-5 promulgated there
under.
The allegations were based upon a decline in the Company's stock
price following a Company announcement in May 1998 regarding the
Gulf South Medical Supply, Inc. merger, which resulted in
earnings below analysts' expectations.
By order dated December 18, 2002, the Court granted the
Company's motion to dismiss the plaintiff's second amended
complaint with prejudice with respect to the Section
10(b) claims. The plaintiffs filed their third amended
complaint in January 2003 alleging claims under Sections 14(a)
and 20(a) of the Exchange Act on behalf of a putative class
of all persons who were shareholders of the Company as of March
26, 1998.
In May 2003, the Court denied the defendants' motion to dismiss.
The court will conduct a hearing on class certification on
December 5, 2003. Mediation is to occur during the week of June
15, 2004. The case is set for trial in April 2005. The Company
intends to vigorously defend the proceedings; however, there can
be no assurance that this litigation will be ultimately resolved
on terms that are favorable to the Company.
PSS WORLD: Jury Trial Commences in Securities Lawsuit in M.D. FL
----------------------------------------------------------------
Jury trial has started in the consolidated securities class
action filed against PSS World Medical, Inc. in the United
States District Court for the Middle District of Florida, styled
"In Re PSS World Medical Inc. Securities Litigation."
The suit also named as defendants certain of the Company's
current and former officers and directors. The amended
complaint was filed as a purported class action on behalf of
persons who purchased or acquired the Company's common stock at
various times during the period between October 26, 1999 and
October 3, 2000. The amended complaint alleges, among other
things, violations of Sections 10(b) and 20(a) of the Securities
Exchange Act of 1934 and Rule 10b-5 promulgated there under, and
seeks indeterminate damages.
The plaintiffs allege that the Company issued false and
misleading statements and failed to disclose material facts
concerning, among other things, the Company's financial
condition. The plaintiffs further allege that because of the
issuance of false and misleading statements and/or failure to
disclose material facts, the price of the Company's common stock
was artificially inflated during the class period.
The court granted plaintiff's motion for class certification on
November 14, 2002. On December 10, 2002, the court entered an
order approving plaintiff's method of notifying class members
that a class has been certified and further set a schedule of
dates for such notice. On December 10, 2002, the court also
entered an order setting forth a schedule of dates for pre-trial
procedures and trial.
The Company believes that the allegations contained in the
amended complaint are without merit.
SILVERLEAF RESORTS: Trial In MO Homeowner Suit Set For June 2004
----------------------------------------------------------------
Trial in the lawsuit filed against Silverleaf Resorts, Inc.,
styled "Ozark Mountain Condominium Association, Inc. et al v.
Silverleaf Resorts, Inc., Stone County, Missouri" is set for
June 2004 in Missouri State Court.
The homeowners' associations of a condominium project that a
former subsidiary of the Company constructed in Missouri filed a
suit, charging the Company with construction defects and breach
of management agreements. This litigation has been ongoing for
several years.
Discovery continued in the lawsuit during the period ended
September 30, 2003, but is still far from complete. Among other
things, the plaintiffs have not yet turned over the reports of
their expert witnesses and the Company is unclear as to exactly
what damages are being claimed by the Plaintiffs.
At this time, a majority of the Company's legal fees and costs
of litigation are being paid by two insurance carriers, subject
to a reservation of rights by these insurers. Since the Company
does not know what damages are being claimed, and cannot predict
the final outcome of these claims, it cannot estimate the
additional costs it could incur, or whether its insurance
carriers will continue to cover its costs in connection with
these claims.
SILVERLEAF RESORTS: TX Court Approves Consumer Suit Settlement
--------------------------------------------------------------
The District Court for the 73rd Judicial District, Bexar County,
Texas approved the settlement proposed by Silverleaf Resorts,
Inc. for the class action styled "Huizar et al v. Silverleaf
Resorts, Inc.," filed on behalf of persons who purchased a
Vacation Interval from the Company.
The plaintiffs alleged that the Company violated the Texas
Government Code by charging a document preparation fee in regard
to instruments affecting title to real estate. Alternatively,
the plaintiffs alleged that the $275 document preparation fee
constituted a partial prepayment that should have been credited
against their note and sought a declaratory judgment. The
petition asserted Texas class action allegations and sought
recovery of the document preparation fee and treble damages on
behalf of both the Plaintiffs and the alleged class they
purported to represent, and an injunctive relief preventing the
Company from engaging in the unauthorized practice of law in
connection with the sale of its Vacation Intervals in Texas.
The Company and the Plaintiffs executed a Stipulation and
Agreement of Compromise, which was determined by the Court to be
a fair, reasonable, and adequate settlement of the class claims
at a hearing held on September 4, 2003.
In accordance with the Settlement, the Company has refunded all
amounts paid by the two named Plaintiffs who conveyed their
Vacation Interval back to the Company. Additionally, the
Company will issue to each timeshare owner who was a member of
the class a $275 certificate, which can be used for an upgrade,
as a credit on the purchase of an additional Vacation Interval,
or for a limited stay at one of the Company's resorts.
The Company estimates that there are approximately 16,400
members of the class. The Settlement also provided for payment
of the named Plaintiffs' attorney fees in the amount of
$400,000, plus expenses, both of which were expensed in the
quarter ended September 30, 2003. The Company has been released
from all liability with respect to the settled claims, and the
action has been dismissed by the named Plaintiffs and the class
with prejudice.
T-NETIX INC.: Discovery Proceeds in Consumer Fraud Lawsuit in CA
----------------------------------------------------------------
Discovery has commenced in the class action filed against T-
Netix, Inc. in California Superior Court for Alameda County,
styled "Condes v. Evercom Systems, Inc., et al." The suit also
names as defendants:
(1) SBC Communications,
(2) Pacific Bell Tel. Co. and
(3) Evercom Systems, Inc.
The suit alleges unfair trade practices based on asserted
billing of collect calls which were not accepted or authorized,
and requesting class action certification. The Company was
joined as a defendant on March 11, 2003.
T-NETIX TELEPHONE: Inmates Appeal Dismissal of Civil Rights Suit
----------------------------------------------------------------
Plaintiffs appealed the dismissal of the class action filed
aginst T-NETIX Telephone Company and various Nebraska
correctional officials in the District Court of Johnson County,
Nebraska styled "Dukhan Iqraa Jihad Mumin, Vicky Marie Kitt v.
T-NETIX Telephone Company, et al."
The suit, brought pro se by an inmate on behalf of himself and
the other plaintiffs, alleges violations of privacy, United
States and Nebraska constitutional and civil rights. The
complaint includes a demand for compensatory damages of $500,000
and a total of $3,000,000 in treble and compensatory damages.
TRIPOS INC.: Shareholders Launch Securities Fraud Lawsuit in MO
---------------------------------------------------------------
Tripos, Inc. and two of its executive officers were sued in the
United States District Court in St. Louis, Missouri on behalf of
purchasers of the Company's common stock during the first half
of 2002.
The suit alleges that statements made by the Company in press
releases and other public disclosures contained materially false
and misleading information in violation of the federal
securities laws.
The Company strongly believes that that these assertions are
without merit. The Company expects that over at least the next
two quarters, it will incur expense to investigate these
allegations and defend itself.
TRIUMPH CAPITAL: CT Court Enters Final Judgment in SEC Complaint
----------------------------------------------------------------
The Connecticut federal district court entered final judgments
by consent in a fraud action filed by the Securities and
Exchange Commission against Triumph Capital Group, Inc., an
investment firm headquartered in Boston, Massachusetts, and its
chairman, Frederick W. McCarthy.
The Commission's charges against Triumph and Mr. McCarthy arose
out of an alleged fraudulent scheme involving the former
Connecticut State Treasurer's investment of state pension fund
money with private equity firms, including Triumph, in exchange
for the firms' agreement to pay lucrative fees to the
Treasurer's friends and associates.
In a complaint filed against eleven defendants in the US
District Court for the District of Connecticut, the Commission
alleged that Paul J. Silvester, the former Treasurer of the
State of Connecticut, agreed to invest $200 million of state
pension funds with Triumph in November 1998. The complaint
alleged that in return, Triumph, through its chairman Mr.
McCarthy and its general counsel Charles B. Spadoni, agreed to
provide $1 million consulting contracts to Mr. Silvester's
friends, Christopher A. Stack and Lisa A. Thiesfield.
The Commission's complaint alleged that Triumph and Mr. McCarthy
violated their fiduciary duty to the state pension fund by
failing to disclose the alleged quid pro quo arrangement.
Triumph and Mr. McCarthy, without admitting or denying the
allegations contained in the Commission's complaint, consented
to the entry of final judgments against them. Triumph agreed to
the entry of a permanent injunction against future violations of
Section 17(a) of the Securities Act of 1933, Section 10(b) of
the Securities Exchange Act of 1934 and Rule 10b-5 thereunder,
and Sections 206(1) and 206(2) of the Investment Advisers Act of
1940.
Mr. McCarthy agreed to a permanent injunction against future
violations of the same provisions, a civil penalty of $110,000,
and a permanent bar from serving as an officer or director of
any publicly-traded company.
On July 16, 2003, Triumph and Mr. Spadoni were found guilty by a
jury in a related criminal trial for their roles in this matter.
The jury found Triumph and Mr. Spadoni guilty of various
charges, including racketeering and racketeering conspiracy
concerning acts of bribery and obstruction of justice,
theft/bribery concerning programs receiving federal funds, and
wire fraud/theft of honest services. On September 4, 2003, Mr.
McCarthy pleaded guilty to criminal charges for his role in this
matter. Mr. McCarthy pleaded guilty to one charge of corruptly
rewarding a public official. Under Mr. McCarthy's plea
agreement, he may pay a criminal penalty of between $4,000-
$40,000 and may be sentenced to between 15-21 months in prison.
VIGNETTE CORPORATION: Reaches Settlement For NY Securities Suit
---------------------------------------------------------------
Vignette Corporation reached a settlement for the consolidated
securities class action filed against it and certain of its
current and former officers and directors in the United
States District Court for the Southern District of New York.
The suit was filed on behalf of purchasers of the Company's
common stock between February 18, 1999 and December 6, 2000.
Also named as defendants were four underwriters involved in the
Company's initial public offering of Vignette stock in February
1999 and the Company's secondary public offering of Vignette
stock in December 1999:
(1) Morgan Stanley Dean Witter, Inc.,
(2) Hambrecht & Quist, LLC,
(3) Dain Rauscher Wessels and
(4) U.S. Bancorp Piper Jaffray, Inc.
The complaint alleges violations of Sections 11, 12(a)(2) and 15
of the Securities Act of 1933 and Section 10(b) of the
Securities Exchange Act of 1934 and Rule 10b-5 promulgated
thereunder, based on, among other things, claims that the four
underwriters awarded material portions of the shares in the
Company's initial and secondary public offerings to certain
customers in exchange for excessive commissions.
The complaint also asserts that the underwriters engaged in
"tie-in arrangements" whereby certain customers were allocated
shares of Company stock sold in its initial and secondary public
offerings in exchange for an agreement to purchase additional
shares in the aftermarket at pre-determined prices.
With respect to the Company, the complaint alleges that the
Company and its officers and directors failed to disclose the
existence of these purported excessive commissions and tie-in
arrangements in the prospectus and registration statement for
the Company's initial public offering and the prospectus and
registration statement for the Company's secondary public
offering.
The action is being coordinated with approximately 300 other
nearly identical actions filed against other companies. On July
15, 2002, the Company moved to dismiss all claims against it.
On October 9, 2002, the Court dismissed the Individual
Defendants from the case without prejudice based upon
Stipulations of Dismissal filed by the plaintiffs and the
Individual Defendants. This dismissal disposed of the Section
15 and 20(a) control person claims without prejudice, since
these claims were asserted only against the Individual
Defendants. On February 19, 2003, the Court denied the motion
to dismiss the complaint against the Company.
The Company has approved a Memorandum of Understanding (MOU) and
related agreements which set forth the terms of a settlement
between the Company and the plaintiff class. It is anticipated
that any potential financial obligation of the Company to
plaintiffs due pursuant to the terms of the MOU and related
agreements will be covered by existing insurance. Therefore,
the Company does not expect that the settlement will involve any
payment by the Company. The MOU and related agreements are
subject to a number of contingencies, including the negotiation
of a settlement agreement, and approval by the Court.
New Securities Fraud Cases
GILEAD SCIENCES: Bull & Lifshitz Commences Stock Suit in N.D. CA
----------------------------------------------------------------
The law firm of Bull & Lifshitz, LLP initiated a securities
class action lawsuit in the United States District Court for the
Northern District of California on behalf of purchasers of
Gilead Sciences, Inc. securities, between July 14, 2003 and
October 28, 2003, inclusive.
The Complaint alleges that defendants violated Sections 10(b)
and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5
promulgated thereunder, by issuing a series of material
misrepresentations to the market between July 14, 2003 and
October 28, 2003. Due to these misrepresentations, the price of
Gilead securities became artificially inflated.
Specifically, defendants failed to disclose that:
(1) The Company was aware that its revenue was not
increasing due to sales of its drug Viread;
(2) The Company was aware that Viread sales had only
increased because wholesalers bought an excessive
amount of the drug before July 27, 2003, in an attempt
to avoid the price increase scheduled for July 27,
2003;
(3) The Company was aware that its wholesalers' over-buying
of Viread, to avoid the price increase, accounted for
$33 to $37 million, not the $25 to $30 million that
Gilead originally purported; and
(4) The Company was aware that the wholesaler over-buying
would decrease projected revenue in the future.
On October 28, 2003, Gilead announced that sales of Viread in
the third quarter 2003 would be less than expected due to an
inventory buildup by wholesalers. As a result the Company's
stock fell 12% or $7.46 per share from a high of $59.46 per
share on October 28, 2003 to close at $52.00 per share on
October 29, 2003.
For more information, contact Peter D. Bull, or Joshua M.
Lifshitz, Esq., of Bull & Lifshitz, LLP, by Phone:
(212) 213-6222, by Fax: (212) 213-9405, by E-mail:
counsel@nyclasslaw.com,
Or visit the firm's Website: http://www.nyclasslaw.com.
PILGRI MBAXTER: Barrack Rodos Files Securities Suit in E.D. PA
---------------------------------------------------------------
The law firm of Barrack, Rodos & Bacine initiated a class action
in the United States District Court for the Eastern District of
Pennsylvania on behalf of purchasers of Pilgrim Baxter Funds
between November 13, 1998 to November 13, 2003, inclusive.
The following PBHG Mutual Funds are subject to this class
action:
* PBHG Growth Fund (Nasdaq: PBHGX)
* PBHG Emerging Growth Fund (Nasdaq: PBEGX)
* PBHG Large Cap Growth Fund (Nasdaq: PBHLX)
* PBHG Select Growth Fund (Nasdaq: PBHEX)
* Equity Fund (Nasdaq: PBHEX)
* PBHG Focused Fund (Nasdaq: PBFVX)
* Fund (Nasdaq: PBFVX)
* PBHG Large Cap Fund (Nasdaq: PLCVX)
* Value Fund (Nasdaq: PLCVX)
* PBHG Large Cap 20 Fund (Nasdaq: PLCPX)
* PBHG Strategic Small Company Fund (Nasdaq: PSSCX)
* PBHG Disciplined Equity Fund (Nasdaq: PBDEX)
* PBHG Mid-Cap Fund (Nasdaq: PBMCX)
* Fund (Nasdaq: PBMCX)
* PBHG Small Cap Fund (Nasdaq: PBSVX)
* Value Fund (Nasdaq: PBSVX)
* PBHG Clipper Focus Fund (Nasdaq: PBFOX)
* PBHG Small Cap Value Fund (Nasdaq: PSMVX)
* Cap Value Fund, LLC) (Nasdaq: PSMVX)
* PBHG REIT Fund (Nasdaq: PBRTX)
* PBHG Technology & Communications Fund (Nasdaq: PBTCX)
* PBHG IRA Capital Preservation Fund (Nasdaq: PBCPX)
* PBHG Intermediate Fixed Income Fund (Nasdaq: PBFIX)
* PBHG Cash Reserves Fund (Nasdaq: PBCXX)
The complaint charges Pilgrim Baxter & Associates, Ltd, Harold
J. Baxter, Gary L. Pilgrim, PBHG Funds, PBHG Fund Distributors,
PBHG Mutual Funds, and Doe Defendants with violations of the
Securities Act of 1933, the Securities Exchange Act of 1934, and
the Investment Company Act of 1940, and for common law breach of
fiduciary duties.
The complaint alleges that during the Class Period the PBHG
Mutual Funds and the other defendants engaged in illegal and
improper trading practices, in concert with certain traders that
caused financial injury to the shareholders of the PBHG Mutual
Funds. According to the complaint, the defendants permitted
certain favored investors, including defendant Pilgrim's private
investment limited partnership, to engage in "timing" of
transactions in PBHG Mutual Funds whereby the favored investors
were permitted to conduct short-term, "in and out" trading of
mutual fund shares, despite explicit restrictions on such
activity in the PBHG Mutual Funds' prospectuses.
For more information, contact: Maxine Goldman, Shareholder
Relations Manager, at Barrack, Rodos & Bacine, by Mail: 3300 Two
Commerce Square, 2001 Market Street, Philadelphia, PA 19103, by
Phone: 215-963-0600, Fax: 215-963-0838, by E-mail:
mgoldman@barrack.com, or visit the firm's Website:
http://www.barrack.com.
*********
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Wednesday's edition of the Class Action Reporter. Submissions
via e-mail to carconf@beard.com are encouraged.
Each Friday's edition of the CAR includes a section featuring
news on asbestos-related litigation and profiles of target
asbestos defendants that, according to independent researches,
collectively face billions of dollars in asbestos-related
liabilities. The Asbestos Defendant Profiles is backed by an
online database created to respond to custom searches. Go to
http://litigationdatasource.com/asbestos_defendant_profiles.html
*********
S U B S C R I P T I O N I N F O R M A T I O N
Class Action Reporter is a daily newsletter, co-published by
Bankruptcy Creditors' Service, Inc., Fairless Hills,
Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland
USA. Roberto Amor, Aurora Fatima Antonio and Lyndsey Resnick,
Editors.
Copyright 2003. All rights reserved. ISSN 1525-2272.
This material is copyrighted and any commercial use, resale or
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