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C L A S S A C T I O N R E P O R T E R
Tuesday, January 13, 2004, Vol. 6, No. 8
Headlines
ARGENTINA: NY Court Grants Certification Of Securities Lawsuit
BLUEBERRY GROWERS: $21M Proposed as Antitrust Settlement Amount
CALIFORNIA: San Francisco Motorists Protest Red Light Cameras
CARLISLE RESTAURANTS: IN Workers Commence Overtime Wage Lawsuit
CATERPILLAR INC: EEOC Seeks More Victims For Harassment Lawsuit
CATHOLIC CHURCH: Abuse Suit Seeks Consolidation of Prior Suits
ENRON: University of CA Adds Four New Defendants to Fraud Suit
ENTERGY CORPORATION: Motion To Stay Parallel Litigation Denied
GARFIELD ALLOYS: OH Plant Faces Suit Over Magnesium-Fueled Fire
GULF INSURANCE: CA Court Grants Summary Judgment Motion in Part
IPALCO ENTERPRISES: IN Court Grants Certification Of ERISA Suit
LOCKHEED MARTIN: CA Court Dismisses Securities Violations Suit
MBNA CORPORATION: DE Court Grants Attorneys Fees, Costs Petition
MFS FUNDS: Deadline For Lead Plaintiff Motion in Suit Set Feb. 9
MICROSOFT CORPORATION: CA Court Puts End To Lindows.com Claims
PARMALAT FINANZIARIA: Italian Police Probe BofA Office, Ex-Exec
PENNSYLVANIA: UPMC Lawyers Seek Dismissal Of 'PAP Smear' Lawsuit
UNITED STATES: Congress Moving On With Bill Curbing Legislation
New Securities Fraud Cases
ALSTOM SA: Marc Henzel Lodges Securities Fraud Suit in S.D. NY
AMERICAN PHYSICIANS: Marc Henzel Lodges Securities Lawsuit in MI
BEST BUY: Marc Henzel Lodges Securities Fraud Suit in MN Court
BOSTON COMMUNICATIONS: Wolf Haldenstein Files Stock Suit in MA
CAREER EDUCATION: Bull & Lifshitz Files Securities Suit in IL
CAREER EDUCATION: Marc Henzel Lodges Securities Fraud Suit in IL
CLEAN HARBORS: Marc Henzel Lodges Securities Suit in MA Court
FRIEDMAN'S INC.: Marc Henzel Lodges Securities Suit in S.D. GA
FRIEDMAN'S INC: Abbey Gardy Launches Securities Suit in N.D. GA
GILEAD SCIENCES: Cohen Milstein Files Securities Suit in N.D. CA
GOODYEAR TIRE: Marc Henzel Commences Securities Suit in N.D. OH
IBIS TECHNOLOGY: Marc Henzel Lodges Securities Suit in MA Court
LEAPFROG ENTERPRISES: Charles Piven Files Securities Suit in CA
LORAL SPACE: Wolf Haldenstein Files Securities Suit in S.D. NY
PORTAL SOFTWARE: Cohen Milstein Files Securities Suit in N.D. CA
SILICON IMAGE: Marc Henzel Commences Securities Suit in N.D. CA
TROPICAL SPORTSWEAR: Marc Henzel Lodges Securities Lawsuit in FL
*********
ARGENTINA: NY Court Grants Certification Of Securities Lawsuit
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The United States District Court for the Southern District of
New York granted class certification of a lawsuit brought
against the Republic of Argentina, on behalf of Plaintiff H.W.
Urban GMBH, et al., over allegations of securities fraud.
This is the second motion to obtain approval for class action
treatment. In the first motion there were additional
plaintiffs, and they sought to represent holders of 68 series of
Argentine bonds payable in six different currencies. The motion
was denied in an opinion dated May 12, 2003. The court held
that the proposed class was too large, too diverse, and too
vaguely defined for there to be a manageable class action.
The Amended Class Action Complaint names one plaintiff as the
proposed class representative, - a German company, owned by
Horst Urban, a German businessman. Plaintiff is the owner of
bonds from two series:
(1) Republic of Argentina bonds, issued January 30, 1997,
due January 30, 2017, bearing interest at 11 3/8% per
year; and
(2) Republic of Argentina bonds, issued April 7, 1999, due
April 7, 2017, bearing interest at 11 3/4% per year
The Plaintiff owns $1,000,000 worth of the first series bonds
and $145,000 worth of the second series bonds.
Attached to the complaint are the prospectuses for the two
series of bonds. The prospectus for the first series shows that
it involves bonds in the face amount of U.S. $2,000,000,000. The
prospectus for the second series shows that it involves bonds in
the face amount of U.S. $1,500,000,000.
The complaint defines the proposed class as all persons who, on
or before July 22, 2002 (the date on which the action was
filed), purchased bonds in either series and who hold the bonds
continuously through the date of "any judgment as to liability"
in the action. The complaint asserts that the members of the
class are so numerous that joinder of all members is
impracticable, although the exact number of class members is
unknown to plaintiff at the present time.
There are allegations about the December 2001 moratorium on bond
obligations declared by the Republic. There are also
allegations regarding consent to service of process in New York
City, the applicability of the laws of the State of New York,
and the waiver of sovereign immunity, all of which allegations
are based on the October 19, 1994 Fiscal Agency Agreement
attached to the complaint.
BLUEBERRY GROWERS: $21M Proposed as Antitrust Settlement Amount
---------------------------------------------------------------
Blueberry processors and growers could settle the antitrust
class action for $21 million, a figure being suggested in
initial negotiations between the two sides, sources close to the
negotiations told the Bangor Daily News.
Three wild blueberry growers were implicated in the suit, as
they allegedly participated in a four-year price-fixing
conspiracy to fix the base price which the defendants paid to
approximately 800 growers for wild blueberries. The suit,
styled "Nate Pease, et al. v. Jasper Wyman & Son, Inc., et al.,"
names as defendants:
(1) Cherryfield Foods, Inc.,
(2) Jasper Wyman & Son, Inc., and
(3) Allen's Blueberry Freezer, Inc.
In addition to the price-fixing claim, the plaintiffs alleged
that the defendants agreed not to solicit each other's growers,
a type of market allocation claim that also is a per se
violation of the antitrust laws, an earlier Class Action
Reporter story states.
Late last year, a Maine State Court jury found the defendants
liable for antitrust violations, and ordered them to pay $18.68
million in damages, the amount which the growers would have been
paid absent the defendants' conspiracy. After a mandatory
damage trebling under Maine antitrust law, the total amount of
the verdict for the plaintiffs is $56 million. Last week, the
processors appealed the case to the Maine Supreme Judicial Court
in Portland, saying that the growers abused the class action
process.
The $21 million figure surfaced during the first face-to-face
negotiation between the two sides last January 2, 2003, after
which Justice Joseph Jabar of the Knox County Superior Court
agreed to waive $5 million in interest that had begun to
accumulate from the civil jury's judgment.
However, attorneys for the defendants are critical of the
figure, the sources told the Daily News. One source said that
the processors planned to show up to negotiations scheduled for
Monday but they were not hopeful that a settlement would be
reached. The sides have agreed to meet again on Monday for more
negotiations in Augusta.
William Robitzek, the Lewiston attorney who has been the lead
lawyer representing Maine's 500 growers in the class action
suit, would not comment on last week's negotiations.
"I am not in a position to comment on any possible numbers," Mr.
Robitzek told the Daily News. "We are going to have more
discussions on Monday, and I don't want to jeopardize that."
He added that his manner of working is not to make a settlement
offer or demand, but to indicate a dollar figure that he could
recommend to his clients. "The processors have indicated that
they don't have the money to pay the judgment," he continued.
"We understand that while they don't have $56 million in cash,
they do have substantial assets, maybe tens of millions of
dollars' worth of land . There is nothing to preclude them
discussing with us the setting up a land trust for the benefit
of the class (the growers), so that profits from any blueberries
harvested on that land would go to their benefit."
Sources further revealed that while the amount is slightly more
than the initial jury recommendation of $18.6 million, there
might be more to the set offer, as the plaintiffs were asking
for a "five year, best-price guarantee" to go with the money,
which means that if the processors were to buy a grower's
berries for five years, the processors would have to show they
weren't buying anybody else's berries for a higher price.
The defendant processors have asserted that the four plaintiffs
are hardly "typical" members of the class, which are believed to
be 500 statewide. 121 growers have opted out of the suit.
A new set of negotiations will take place Monday, January 12,
2004 at 10a.m. in Augusta. Robert Spear, the state's agriculture
commissioner, has invited both sides to join with a professional
negotiator from the Maine Labor Relations Board. Additionally,
two or three growers will be present to possible a grower's
perspective separate from that of the four named plaintiffs.
Mr. Spear spent Friday morning working to identify growers whose
presence would be acceptable to both sides, if the growers could
handle a last-minute invitation to the table. "There are some
people I'd like to have. I'm trying to get people that would
make sense," Mr. Spear told the Daily News. Not wanting to harm
the meeting in advance, he declined to name the newcomers to the
negotiations.
The growers' attorneys agreed to the move. Alan Johnson of
Rockport, one of the original four plaintiffs, told the Daily
News he hoped Monday's meeting could lead to a settlement. "I
don't expect there will be $56 million paid out; I expect there
will be a settlement," he said. "What we want is a fair price
for our berries. That's the thrust of it. It's been long
overdue."
Cherryfield Foods spokesman Ted O'Meara told the Daily News,
""The commissioner's involvement is a positive thing. But there
is pessimism by Cherryfield Foods about the discussion, as long
as the growers' focus covers the past alleged damages by
processors rather than the future of the industry."
According to court documents, the processors' appeal, in part,
"raises substantial questions about the abuse of the class
action mechanism by a relatively few, small wild blueberry
growers to the detriment of the overwhelming majority of other
growers."
Attorneys for the processors said Friday they expect to file a
motion to expedite the appeal early next week. How soon the
Maine Supreme Judicial Court schedules the appeal depends partly
on the response the growers' attorneys will file in turn, the
Daily News reports.
CALIFORNIA: San Francisco Motorists Protest Red Light Cameras
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Attorneys for 230 drivers who received tickets when cameras
allegedly caught them zooming past red lights have asked a judge
to throw out the citations because they say the traffic
enforcement program is faulty, the Associated Press reports.
Lawyers are questioning the technical integrity of the cameras
and legality of using only a photograph taken without any
witnesses present when the machine clicks. The photos are taken
as vehicles approach the camera and the signal light is not
shown, added defense attorneys, who want the traffic program in
at least a dozen cities statewide dismantled.
Deputy City Attorney, Jennifer Choi, responded that each camera
is inspected and adjusted three times weekly by trained
technicians from an outside company, PRWT Inc. PRWT does not
sell the machines to the city. Police officers review each
photograph, Ms. Choi told AP, and tickets are dismissed if
prosecutors or a judge decide that the driver or his license
plate cannot be clearly identified.
A decision in the San Francisco case is expected by the end of
January, the Associated Press reports. Meanwhile, drivers
photographed running red lights in San Francisco, Sacramento,
Santa Rosa and six Southern California cities from 1996 to 1998
could get their money back through a $400,000 settlement
announced by lawyers working on an unrelated class action
lawsuit in San Diego.
More than 25,000 motorists have been cited in the city since
1996. The number of accidents attributed to red light runners
dropped from 955 in 1996 to 677 in 2002, according to the
Department of Parking and Traffic, which runs the red light
photo enforcement program.
CARLISLE RESTAURANTS: IN Workers Commence Overtime Wage Lawsuit
---------------------------------------------------------------
Restaurant management firm Carlisle Restaurants, Inc. faces a
class action filed by Portage, Indiana law firm Sarkisian &
Fleming on behalf of Portage resident Rodney Back, claiming
unpaid overtime, Knight-Ridder / Tribune Business News reports.
The lawsuit will be heard in U.S. District Court in Hammond,
where it was moved from Porter Superior Court.
The lawsuit alleges the Company failed to pay Mr. Back, and
possibly other workers, overtime in violation of federal and
state work laws. The lawsuit specifically alleges Mr. Back is
owed $9,108 in wages and penalties for 218.5 hours of overtime
worked between August 2001 and January 2003, after which he
ended his employment. Mr. Back performed maintenance work for
Carlisle in several of its KFC locations, earning about $23 an
hour, his lawyers said.
Stephen Mitchell, of East Chicago, and Ralph Saxe, of San
Pierre, Ind., have signed affidavits indicating they'll join the
lawsuit, said David Andrick, a lawyer with Sarkisian & Fleming,
lawyers for Mr. Back and the other workers.
Mr. Mitchell's affidavit indicates he was told by Carlisle
management that workers wouldn't be paid overtime for working
more than 40 hours a week. Mr. Mitchell said he was laid off in
May 2002 after about six years employment with the firm. Mr.
Saxe said he worked for Carlisle from November 2002 to April
2003, when he was terminated. Mr. Saxe said he wasn't paid for
overtime work except in his final paycheck, the only one to
indicate proper overtime wages, according to the lawsuit.
Carlisle Inc. operates 10 KFC, Taco Bell and A&W locations in
Lake and Porter counties, out of an office in Portage, according
to the firm's Website. A person answering the phone at Carlisle
would not give his name or respond to questions about the number
of restaurants it operates, the Tribune Business News states.
Jim Jorgensen, the lawyer for Carlisle Restaurants, told the
Business News the firm denies the allegations and claims Mr.
Back was paid in full.
CATERPILLAR INC: EEOC Seeks More Victims For Harassment Lawsuit
---------------------------------------------------------------
John Hendrickson, region attorney for the Equal Employment
Opportunity Commission (EEOC), said that an advertisement placed
in Friday's Beacon News, to try and find other victims of
alleged sexual harassment at Caterpillar Inc.'s Aurora plant, is
a tool commonly used in such class actions, the Beacon News
reports.
The advertisement asks that anyone sexually harassed at
Caterpillar's Aurora facility or anyone with information about
the alleged harassment contact the EEOC in Chicago. The suit
against Caterpillar was filed last August on behalf of five
women who were subjected to sexual comments and had their
breasts repeatedly touched by a supervisor, the EEOC said.
Since the announcement of the suit, the class of women has not
expanded, Mr. Hendrickson said. Running a notice in a local
newspaper is one of two ways the EEOC seeks to find other women
who may have been harassed. The other is to contact, in
writing, all recent female employees at the plant from a list
the employer typically provides to the EEOC. So far,
Caterpillar's lawyers have stalled an effort to acquire that
list, he continued.
Hendrickson added the size of the class should grow as the suit
moves on. "It's very unusual to simply have one person do it
and one person targeted by it," he told the Beacon News.
In a statement, Caterpillar said, "There is no merit to these
allegations, and we intend to defend vigorously against them."
The statement noted Caterpillar "has long-standing policies
prohibiting harassment and discrimination."
"Caterpillar's policies provide numerous avenues to report
harassment and discrimination. All such reports are taken very
seriously and investigated thoroughly. Caterpillar does not
tolerate retaliation against employees who report harassment,"
the statement added.
CATHOLIC CHURCH: Abuse Suit Seeks Consolidation of Prior Suits
--------------------------------------------------------------
A new sexual abuse suit advocates the consolidation of 11
existing lawsuits against the Santa Rosa Catholic diocese in
California in order for the suits to be finally settled,
thepressdemocrat.com reports.
The scandal-ridden diocese is nearing the end of its legal
exposure to lawsuits for long-past child molest cases. The
newest lawsuit and another claim were filed on December 24,
2003, beating the one-year legal window, allowing the filing of
lawsuits alleging decades-old child sex abuse.
According to the Associated Press, about 800 cases were filed
statewide against the Catholic Church, with about 675 filed in
Southern California. Unless the Legislature extends it, the
legal window is now closed, lawyers said, although some
plaintiffs might still join the proposed class-action case.
Lawyer for the alleged victims Joseph George told the
pressdemocrat that the latest suit could be beneficial to the
150,000-member diocese, still recovering from a $16 million
deficit attributed to a former bishop's mismanagement. "It just
makes sense from a business standpoint," he said.
Mr. George has filed about nine lawsuits - four allege abuse by
former priest Don Kimball, three relate to former priest Gary
Timmons and two accuse the Rev. Patrick Gleeson, who died in
1991. Mr. Timmons was convicted of molestation; the diocese
settled a suit against Mr. Kimball, whose conviction for child
molestation was vacated after a Supreme Court ruling last year,
the pressdemocrat states.
However, diocese attorney Dan Galvin is working to settle all
the claims through mediation, not class action. "It's in
everybody's best interest to try and resolve these cases sooner
rather than later," Mr. Galvin told the pressdemocrat. Healing
and reconciliation can follow financial settlements, he said.
Victims' lawyers have said the cases could cost the diocese
millions of dollars, and church officials have warned that
settlements could siphon resources from spiritual and social
missions. "The church needs some finality to this," Mr. Galvin
said.
The latest suit was filed on behalf of "Rebecca Doe," an
anonymous victim who allegedly was molested in 1976. Another
companion suit was filed on behalf of "Susan Doe," 49, who was
allegedly abused in 1971 at Sacred Heart Church in Eureka. Both
women are alleged victims of Kimball, Mr. George told the
pressdemocrat.
The suits claim that church officials "knew or should have
known" children were being molested and failed to stop it. The
diocese "maintained a web of predatory priests and other clergy
who perpetrated criminal acts of child sexual abuse," the
Rebecca Doe suit said.
ENRON: University of CA Adds Four New Defendants to Fraud Suit
--------------------------------------------------------------
As the lead plaintiff in the Enron Corporation shareholders
lawsuit, the University of California filed complaints in the
U.S. District Court for the Southern District Court of Texas in
Houston, adding Royal Bank of Canada and two prominent law firms
to a growing list of defendants accused of securities fraud in
connection with the Enron debacle. The defendants already
include 11 financial institutions, former Enron directors and
executives, Arthur Andersen LLP and the law firm of Vinson &
Elkins, AScribe Newswire reports.
Also included in the complaints, Goldman Sachs is alleged to
have violated Section 11 of the Securities Act of 1933, which is
not a fraud claim. Under Section 11, underwriters of securities
may be liable without proof of knowing or reckless conduct if
they sign a registration statement that contains false
statements.
"The new complaints lay out a detailed scheme of fraud pursuant
to Section 10(b) of the Securities Exchange Act of 1934 naming
the Royal Bank of Canada as well as Houston-based Andrews &
Kurth and New York-based Milbank, Tweed, Hadley & McCloy as
major players in a series of fraudulent transactions that
ultimately cost Enron investors many billions of dollars," said
James E. Holst, University of California general counsel.
As alleged in the complaint, the Royal Bank of Canada, much like
Citigroup, J.P. Morgan Chase and other financial institutions
previously named in the class action suit, structured and
participated in transactions that enabled Enron Corp. to inflate
its financial results by overstating its income and
underreporting its debt. Andrews & Kurth wrote false opinion
letters that allowed the transactions to be accounted for as
Enron wished, while Milbank Tweed documented the false
transactions and worked with both Enron and the banks in
furthering the scheme.
Milbank Tweed worked with Enron and the banks to structure
manipulative transactions that furthered a "Ponzi scheme," while
helping Enron raise billions of dollars from investors to keep
the scheme going. Andrews & Kurth wrote false opinion letters
that further enabled Enron to manipulate its accounting for
these transactions.
According to the complaint, Milbank Tweed represented Enron and
Enron's commercial banks and securities underwriters in an
extraordinarily large number of matters, including (I.) almost
all of Enron's significant off-balance-sheet-financing
transactions, which were structured by Milbank Tweed, and hid
billions of dollars of Enron's true debt levels, distorted its
balance sheet, created artificial income, and inflated its
results from operations; and (II.) the sale of billions of
dollars of Enron and Enron-related securities to investors via
false and misleading offering circulars that were written by
Milbank Tweed.
The law firm's involvement in Enron's improper transactions was
extensive: Milbank Tweed represented defendant banks, including
Citigroup, J.P. Morgan Chase, Credit Suisse First Boston,
Canadian Imperial Bank of Commerce, Deutsche Bank, Toronto
Dominion Bank, Royal Bank of Scotland, and Barclays Bank in more
than 50 Enron transactions involving $18 billion of off-balance-
sheet financings.
During 1999-2001, Enron also orchestrated a series of nine
securities offerings by related entities that raised cash for
Enron or entities it controlled. In the case of so-called credit
linked notes, these offerings shifted to unsuspecting purchasers
the credit risk of billions of dollars in disguised loans to
Enron. Enron insisted that the underwriters agree to use Milbank
Tweed as their counsel and arranged for the law firm to be paid,
not by the underwriters or initial purchasers, but directly by
Enron or out of the offering proceeds. Milbank Tweed
participated in the drafting of offering circulars that
contained false statements about Enron's finances.
At the same time, Milbank Tweed was also representing Enron (and
30 Enron-related and controlled entities) in more than 125
matters. For its Enron-related work -- direct representation of
Enron and its affiliates, banks and other clients included in
Enron-related matters -- Milbank Tweed received in excess of
$150 million.
On Nov. 24, 2003, the final report filed by Enron's bankruptcy
examiner, Neal Batson, was made public. Batson concluded that
substantial evidence showed that Andrews & Kurth knew Enron's
so-called FAS 125/140 transactions were false, but nonetheless
wrote opinion letters hiding the false nature of the
transactions from Enron's auditor and investors. The examiner
also referenced "examples in the documentary evidence that
Andrews & Kurth was on notice that Enron was characterizing the
proceeds received through the FAS 140 transactions as cash flow
from operating activities." Andrews & Kurth "knew that the
transactions were being used...to manipulate [Enron's] financial
statements."
Transactions in which Andrews & Kurth participated falsely
inflated Enron's reported net income and shareholder equity
approximately $350 million and cash flow $1.2 billion, and
falsely decreased Enron's reported debt approximately $1.1
billion. The bankruptcy examiner concluded the bogus FAS 140
transactions were in fact loans and not sales of assets -- as
Andrews & Kurth made them appear to be for Enron's desired
accounting treatment.
Royal Bank of Canada provided "structured finance" services to
Enron. In 1995-99, Royal Bank of Canada (RBC) structured, funded
and executed numerous deceptive transactions. Enron North
America's examiner has concluded that some of these transactions
were manipulative devices used to distort Enron's financial
statements. By 1995, according to the examiner, "RBC knew (in
connection with the Caribou transaction) that Enron was using a
prepay structure to obtain off-balance-sheet financing. In 1996,
RBC knew (in connection with the State Street transaction) that
Enron desired to monetize assets by removing them from its
balance sheet and using them as security for off-balance-sheet
financings, with substantial recourse against Enron Corp."
The examiner concluded: "By early October 2000, RBC knew that
(I.) there had been issues between Enron and its auditors for
some time; (II.) Enron's auditors wanted to maintain the
appearance that they were adhering to appropriate accounting
conventions; and (III.) Enron was a major global user of off-
balance-sheet financing. There are also indications that RBC
believed Enron's auditors were not closely examining Enron's
activities and that the US$800 million JEDI I refinancing RBC
was looking to become involved in would not involve true equity.
RBC also thought Enron would be looking to RBC 'to support them
over their year end.'"
Previously named in the investors' lawsuit were the financial
institutions of J. P. Morgan Chase, Citigroup, Merrill Lynch,
Credit Suisse First Boston, Canadian Imperial Bank of Commerce,
Bank America, Barclays Bank, Deutsche Bank, Lehman Brothers,
Toronto-Dominion Bank and the Royal Bank of Scotland (the last
two added in Dec. 2003) considered key players in a series of
fraudulent transactions that ultimately cost Enron Corp.
investors many billions of dollars. Other defendants include
various Enron former officers and directors, its accountants,
Arthur Andersen LLP, and its Houston-based corporate counsel,
Vinson & Elkins.
These banks set up false investments in clandestinely controlled
Enron partnerships, used offshore companies to disguise loans
and facilitated the phony sale of phantom Enron assets. As a
result, Enron executives were able to deceive investors by
moving billions of dollars of debt off their balance sheets and
artificially inflating stock values.
In February 2002, the University of California was named lead
plaintiff in the Enron shareholders' class action suit
previously filed against 29 top executives of Enron Corp. and
its accounting firm, Arthur Andersen LLP. UC filed a
consolidated complaint on April 8, 2002, adding the nine banks
and two law firms as defendants in the case.
In April 2003, U.S. District Court Judge Melinda Harmon
completed her rulings on the various defendants' motions to
dismiss and lifted the stay on discovery. Following those
rulings, UC filed a second amended complaint on May 14, 2003.
ENTERGY CORPORATION: Motion To Stay Parallel Litigation Denied
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The United States District Court for the Eastern District of
Texas, Beaumont County denied Plaintiffs motion to enjoin and
stay parallel litigation in the Louisiana State Court with
regards a lawsuit brought against Entergy Corporation, et al. on
behalf of Duane Corley, et al., in connection with Defendants'
construction and operation of a 1400-mile fiber optic
communications network.
This potential class action case has wound its way through the
court's docket for more than five years. Having survived
numerous dispositive motions and spent a significant amount of
time and money litigating this lawsuit, the plaintiffs now seek
class certification. A hearing regarding class certification is
scheduled for January 30, 2004. The class, if certified, would
include plaintiffs from Texas, Arkansas, Mississippi, and
Louisiana. Additionally, citizens of other states could become
class members. In April and August 2003, however, a different
group of Louisiana plaintiffs filed two identical class action
lawsuits against the Defendants in Louisiana State court in
relation to the same events giving rise to this lawsuit.
These class action lawsuits, however, only allege violations of
Louisiana law. After learning of these two class action
lawsuits, Fear Farms, Inc., on behalf of itself and all other
similarly situated Louisiana landowners in this lawsuit, filed
identical petitions in intervention in both lawsuits on October
2, 2003. Later that day, Defendants removed both cases to the
United States District Court for the Eastern District of
Louisiana. Two days later, the plaintiffs in the Louisiana class
action lawsuits filed a motion to remand and an alternative
motion to sever and remand state law claims. On October 20,
2003, Fear Farms filed a motion to transfer the cases to this
district pursuant to the "first-to-file" rule. One day later,
Defendants filed an amended notice of removal. On November 5,
2003, the Eastern District of Louisiana entered an order
remanding both cases and thus mooting Fear Farms' motion to
transfer. The state district court to where the cases were
remanded denied Defendants' motion to stay the proceedings and
scheduled a hearing on Plaintiffs' class certification motions
for December 23, 2003. .
Now pending before the court is Fear Farms' motion to enjoin the
two Louisiana class action lawsuits under the All Writs Act or,
in the alternative, enjoin Defendants from settling the two
Louisiana class action lawsuits without the court's leave
and approval.
GARFIELD ALLOYS: OH Plant Faces Suit Over Magnesium-Fueled Fire
---------------------------------------------------------------
Several Garfield Heights neighbors have sued metal recycling
business Garfield Alloys Co., where a magnesium-fueled fire
destroyed an industrial complex and knocked out windows in
nearby evacuated homes, newnet5.com reports.
John Climaco, an attorney, filed the lawsuit last week against
in Cuyahoga County Common Pleas Court, claiming the company was
negligent. He represents residents Mary Ann Fixel, Carolyn and
Charles Kurilko Sr., and David and Maria Wittingen.
The lawsuit asked the court to allow a class action for all
residents who were evacuated, suffered property damage and
breathed smoke from the December 29-30 fire. The lawsuit
alleged that the company did not follow safe practices, failed
to train its employees properly and had insufficient
firefighting plans. Other lawyers have been interviewing
residents and researching possible causes.
The state fire marshal blamed the fire on a grinder used to open
a chemical drum, newnet5.com stated. Garfield Alloys could not
be reached for comment. A call to one company phone listing
Friday during regular business hours went unanswered and another
number was no longer working. Two messages were left for the
attorney believed to be representing the company.
GULF INSURANCE: CA Court Grants Summary Judgment Motion in Part
---------------------------------------------------------------
The United States District Court for the Northern District of
California Granted in part, Denied in part Plaintiffs Motion for
Partial Summary Judgment, and Denied Defendants Motion for
Summary Judgment of a lawsuit brought against Defendant Gulf
Insurance Co., and Intervenor Michael J. Stone, on behalf of
James A. Harris.
Plaintiffs Harris and Stone are the former CEO and CFO,
respectively, of U.S. Aggregates, Inc. Harris and Stone are
defendants in several securities fraud class action lawsuits
filed in May 2001, now pending in this Court as a consolidated
lawsuit. As officers and directors of U.S. Aggregates, Harris
and Stone were insured against liability for securities fraud
claims brought against them pursuant to the terms of a Directors
and Officers Liability and Company Indemnification Insurance
Policy, issued by Defendant Gulf. As relevant here, that
policy provided that Gulf would pay any loss incurred by the
directors and officers of U.S Aggregates as a result of any
claims alleging that they committed a wrongful act, defined as
"any error, misstatement, misleading statement, act, omission,
neglect, or breach of duty committed or attempted, or allegedly
committed or attempted." Harris and Stone timely requested that
Gulf provide a defense for them in the underlying securities
fraud action. Gulf agreed to do so pursuant to a reservation of
rights, and did indeed reimburse reasonable litigation expenses
for a period of time.
However, on January 3, 2003, Gulf informed Harris and Stone that
it would no longer fund the reasonable costs of defending
against the underlying securities fraud action. Gulf asserted
that the recently filed consolidated amended complaint in the
underlying action referenced conversations with confidential
informants who were officers of subsidiaries of U.S. Aggregates,
rendering applicable the "insured vs. insured exclusion" in the
insurance policy. Harris and Stone contend that this exclusion
is inapplicable under the facts presented here, where two
"officers" of U.S. Aggregates, as that term is used in the
insurance policy, made statements in response to questions by a
person who contacted each of them by telephone and identified
him or herself as a representative of the plaintiffs in the
securities fraud class action.
Harris and Stone brought this action seeking a declaratory
judgment that this exclusion is inapplicable and Gulf is obliged
to pay the costs of defending them in the pending securities
fraud litigation. The parties have filed cross motions for
summary judgment based on the stipulated facts recited here. The
parties have stipulated that the motions for summary judgment
"shall be limited" to issue of whether "Gulf was warranted in
declining coverage pursuant to the 'insured vs. insured'
exclusion based on the stipulated facts."
The parties further agreed that "if Gulf is able to establish
the application of the 'insured vs. insured' exclusion based on
the Stipulated Facts, then Gulf shall be entitled to summary
judgment; however, if Gulf is unable to establish the
application of the 'insured vs. insured' exclusion based on the
Stipulated Facts, then Gulf shall be found to owe a duty to
advance Harris's and Stone's Defense Costs pursuant to Section
V.B of the Policy."
IPALCO ENTERPRISES: IN Court Grants Certification Of ERISA Suit
---------------------------------------------------------------
The United States District Court for the Southern District of
Indiana, Indianapolis Division, granted class certification of a
lawsuit brought against Ipalco Enterprises, et al., on behalf of
Plaintiffs Joseph J. Nelson, Michael Wycoff, and Tony Medvescek,
et al., over allegations that defendants IPALCO Enterprises,
Inc. and several former company officials who served as the
Employees' Committee for Employees' Thrift Plan of Indianapolis
Power & Light Company breached fiduciary duties under the
Employee Retirement Income Security Act.
IPALCO was a holding company whose principal subsidiary supplied
electricity to retail customers in Indianapolis, Indiana.
Plaintiffs' claims stem from the acquisition of IPALCO by the
AES Corporation in a stock-for-stock transaction. On July 15,
2000, the IPALCO board of directors executed a share exchange
agreement that called for each share of IPALCO common stock to
be exchanged for $25 worth of AES common stock. The exchange was
calculated based on the value of AES stock on the closing date,
which was March 27, 2001.
Plaintiffs allege that approximately 77 percent of the assets of
the Thrift Plan were invested in IPALCO stock, which upon
closing was exchanged for AES stock. According to plaintiffs,
IPALCO was a sound company with a long record of paying
dividends and maintaining a relatively stable stock value.
Plaintiffs allege that AES, by contrast, was a much larger but
highly leveraged company that did not pay dividends and
whose stock price was highly volatile. According to plaintiffs,
AES stock was not a suitable investment for the Thrift Plan.
Several months after the March 27, 2001 closing, AES stock began
a steep decline, losing roughly 80 to 90 percent of its value.
According to plaintiffs, at least several of the individual
defendants had sold some of their own shares of IPALCO stock for
cash at the same time that defendants were urging plan
participants and beneficiaries to hold IPALCO stock and then to
exchange it for AES stock.
Plaintiffs filed this action in March 2002. The amended
complaint asserts two counts based on the management of the
separate Thrift Plan. Count One addresses the plaintiffs'
individual accounts comprised of their own voluntary
contributions. Those accounts in the Thrift Plan were invested
among eight different investment vehicles according to each plan
participant's individual instructions. The Thrift Plan allowed
participants to contribute up to 21 percent of their eligible
compensation to the plan. Participants were entitled to shift
their voluntary contributions among the different investment
vehicles on any business day. At no time were plaintiffs'
investments of their own contributions locked in or frozen in
IPALCO or AES stock.
On the merits of Count One, defendants have argued that the
Thrift Plan did not authorize them to exercise any discretion
regarding plan participants' investment decisions. However,
plaintiffs contend that the defendants took upon themselves
a fiduciary responsibility by making statements that amounted to
advice about plaintiffs' investments. This theory presents a
relatively new type of ERISA claim, but one that has at least
some case support.
Plaintiffs also argue that the defendants breached their
fiduciary duties by even permitting the plaintiffs to invest
their plan assets in AES stock. The court has previously denied
defendants' motion to dismiss Count One for failure to state a
claim upon which relief can be granted.
Count Two addresses IPALCO's matching contributions to the
individual accounts. Under the Thrift Plan, IPALCO matched 100
percent of an employee's contributions, up to a maximum of four
percent of the employee's compensation. The Thrift Plan provided
that these employer matching contributions were to be invested
only in IPALCO stock. In Count Two, plaintiffs assert that
defendants breached their fiduciary duties by keeping the
employer's contribution assets invested in IPALCO and then AES
stock after the share exchange agreement was signed on July
15, 2000.
In general, a plan sponsor is entitled to design a plan in such
a way that the employer contributions are made only in the form
of employer stock. However, the court previously denied
defendants' motion to dismiss Count Two because plaintiffs may
be able to show that IPALCO and other defendants acted as
fiduciaries of the Thrift Plan when they directed that the
existing employer-contribution plan assets be converted from
IPALCO stock to AES stock.
Also, Count Two is more complex than the court indicated in its
ruling on the motion to dismiss. With respect to so-called "old
match" contributions made by IPALCO before 1995 for some
employees and before 1997 for all others, employees controlled
the investment of those employer contributions much as they
controlled the investment of their own contributions. In
addition, retired or former employees of IPALCO also had the
right to demand lump sum distributions of their plan account
balances, including all of the employer matching contributions.
As a result, as applied to "old match" contributions and/or to
former or retired employees, Count Two presents issues similar
to those that arise under Count One.
LOCKHEED MARTIN: CA Court Dismisses Securities Violations Suit
--------------------------------------------------------------
The United States District Court in Los Angeles, California
dismissed the securities class action filed against defense
contractor Lockheed Martin, alleging the Company misrepresented
its financial condition from January 28,1999 to June 9,1999, the
Washington Post reports.
The lawyer for the plaintiffs decided not to pursue the suit
after reviewing documents produced by the Company and analysts
who followed the Company's progress and publicly available
information, and after consulting with experts.
The Company employs about 130,000 people worldwide and
researches, designs and manufactures advanced technology
systems, products and services, the Post states.
MBNA CORPORATION: DE Court Grants Attorneys Fees, Costs Petition
----------------------------------------------------------------
The United States District Court for the District of Delaware
granted Plaintiffs Petition For Attorneys Fees & Costs with
regards a proposed class action settlement of a lawsuit brought
against MBNA Corporation, et al., on behalf of Plaintiff Andrew
B. Spark, et al. seeking damages arising from alleged misleading
advertising of promotional rate of interest
On May 24, 2001, the court conducted a Fairness Hearing on the
proposed class action settlement. At the end of the hearing, the
court asked class counsel to submit records showing the amount
of time expended and expenses incurred by them in this action,
even though class counsel's fee application was based on a
percentage of the fund theory. On June 7, 2001, John J. Pentz,
who represents objectors Cophen E. Sears, III, Daniel J. Hill
and Alan Shapiro, filed a supplemental opposition to class
counsel's application for attorneys' fees. Objectors' opposition
pointed out that class counsel's requested lodestar multiplier
was 7.4 and stated that, in the Third Circuit, the lodestar
multiplier may not exceed 3. Class counsel filed on June 18,
2001 the information requested by the court at the Fairness
Hearing and responded to objectors' opposition on June 20, 2001.
On August 1, 2001, the court approved the class action
settlement but rejected class counsel's proposed award for fees
and costs. Specifically, the court performed a cross check of
class counsel's proposed percentage award against the lodestar-
multiplier method and determined that class counsel's initial
request for $1,285,200 in fees and costs was unreasonably high.
First, the court noted that class counsel incorrectly calculated
its lodestar by adding the total hours worked by partners,
associates, law clerks and legal assistants and multiplying it
by the hourly billing rate for the senior partners only. Using
this method, class counsel represented that its requested
multiplier was 4.3.
However, the court stated that "in calculating counsel's
lodestar it is not appropriate to multiply a law clerk or
paralegal's billable hours by the senior partner's billing
rate. The objector was correct: the multiplier sought by
plaintiff's counsel is in the range of 7.4 and not 4.3. After
analyzing various factors, the court determined that "a
multiplier of 3 would be appropriate" and awarded class counsel
at total of $590,000 in fees and costs.
After the court approved the class action settlement and awarded
attorneys' fees to class counsel, Mr. Pentz filed a petition for
attorneys' fees and an incentive award for each of the three
objectors. Defendants opposed Mr. Pentz's petition and
plaintiffs filed a motion requesting the court to suspend a
decision on the petition pending appeal. The Court of Appeals
for the Third Circuit affirmed the court's decision on September
16, 2002. Thereafter, Mr. Pentz filed a renewed petition
requesting only attorneys' fees for himself. Defendants
opposed Mr. Pentz's renewed petition. Class counsel also filed
a supplemental petition for attorneys' fees for the costs of
handling the appeal on behalf of the class.
Defendants do not oppose class counsel's supplemental petition;
however, Mr. Pentz filed an opposition to class counsel's
petition on behalf of objector Shapiro. On February 23, 2003,
counsel for all parties agreed to await the court's decision on
the outstanding fee petitions rather than attempting to reach a
compromise position.
The Defendants in this case are MBNA CORP., MBNA American Bank,
N.A., MBNA Marketing Systems, Inc., Richard K. Struthers,
Terrance R. Flynn, David L. McGowan, and Mark C. Sullivan.
MFS FUNDS: Deadline For Lead Plaintiff Motion in Suit Set Feb. 9
----------------------------------------------------------------
The law firm of Schiffrin & Barroway, LLP announced that MFS
Mutual Fund investors have until February 9, 2004 to move for
lead plaintiff in a securities fraud class action recently
brought against MFS Mutual Funds, which are managed by
Massachusetts Financial Services, a subsidiary of Sun Life
Financial, Inc., in the United States District Court for the
District of Massachusetts, on behalf of purchasers of any of the
MFS Mutual Funds listed below between December 15, 1998 and
December 8, 2003, inclusive.
The following MFS Mutual Funds are subject to this lawsuit:
MFS Capital Opportunities Fund (NASDAQ:MCOFX), (NASDAQ:MCOBX),
(NASDAQ:MCOCX), (NASDAQ:MFCRX), (NASDAQ:MCOTX), (NASDAQ:EACOX),
(NASDAQ:EBCOX), (NASDAQ:ECCOX)
MFS Core Growth Fund (NASDAQ:MFCAX), (NASDAQ:MFCBX),
(NASDAQ:MFCCX), (NASDAQ:MCFRX), (NASDAQ:MCRRX)
MFS Emerging Growth Fund (NASDAQ:MEGRX), (NASDAQ:MEGBX),
(NASDAQ:MFECX), (NASDAQ:MFERX), (NASDAQ:MEGRX), (NASDAQ:EAGRX),
(NASDAQ:EBEGX), (NASDAQ:ECEGX)
MFS Growth Opportunities Fund (NASDAQ:MGOFX), (NASDAQ:MGOBX)
MFS Large Cap Growth Fund (NASDAQ:MCGAX), (NASDAQ:MCGBX)
MFS Managed Sectors Fund (NASDAQ:MMNSX), (NASDAQ:MSEBX),
(NASDAQ:MMNCX)
MFS Mid Cap Growth Fund (NASDAQ:OTCAX), (NASDAQ:OTCBX),
(NASDAQ:OTCCX), (NASDAQ:MMCRX), (NASDAQ:MCPRX), (NASDAQ:EAMCX),
(NASDAQ:EBCGX), (NASDAQ:ECGRX)
MFS New Discovery Fund (NASDAQ:MNDAX), (NASDAQ:MNDBX),
(NASDAQ:MNDCX), (NASDAQ:MFNRX), (NASDAQ:MNDRX), (NASDAQ:EANDX),
(NASDAQ:EBNDX), (NASDAQ:ECNDX)
MFS New Endeavor Fund (NASDAQ:MECAX), (NASDAQ:MECBX),
(NASDAQ:MECCX), (NASDAQ:MNERX), (NASDAQ:MENRX)
MFS Research Fund (NASDAQ:MFRFX), (NASDAQ:MFRBX),
(NASDAQ:MFRCX), (NASDAQ:MFRRX), (NASDAQ:MSRRX), (NASDAQ:EARFX),
(NASDAQ:EBRFX), (NASDAQ:ECRFX)
MFS Strategic Growth Fund (NASDAQ:MFSGX), (NASDAQ:MSBGX),
(NASDAQ:MFGCX), (NASDAQ:MSGRX), (NASDAQ:MSTRX), (NASDAQ:EASGX),
(NASDAQ:EBSGX), (NASDAQ:ECSGX)
MFS Technology Fund (NASDAQ:MTCAX), (NASDAQ:MTCBX),
(NASDAQ:MTCCX), (NASDAQ:MTQRX), (NASDAQ:MTERX)
Massachusetts Investors Growth Stock (NASDAQ:MIGFX),
(NASDAQ:MIGBX), (NASDAQ:MIGDX), (NASDAQ:MIGRX), (NASDAQ:MIRGX),
(NASDAQ:EISTX), (NASDAQ:EMIVX), (NASDAQ:EMICX)
MFS Mid Cap Value Fund (NASDAQ:MVCAX), (NASDAQ:MCBVX),
(NASDAQ:MVCCX), (NASDAQ:MMVRX), (NASDAQ:MCVRX), (NASDAQ:EACVX),
(NASDAQ:EBCVX), (NASDAQ:ECCVX)
MFS Research Growth and Income Fund (NASDAQ:MRGAX),
(NASDAQ:MRGBX), (NASDAQ:MRGCX), (NASDAQ:MGIRX), (NASDAQ:MRERX)
MFS Strategic Value Fund (NASDAQ:MSVTX), (NASDAQ:MSVCX),
(NASDAQ:MQSVX), (NASDAQ:MSVRX), (NASDAQ:MVSRX), (NASDAQ:EASVX),
(NASDAQ:EBSVX), (NASDAQ:ECSVX)
MFS Total Return Fund (NASDAQ:MSFRX), (NASDAQ:MTRBX),
(NASDAQ:MTRCX), (NASDAQ:MFTRX), (NASDAQ:MTRRX), (NASDAQ:EATRX),
(NASDAQ:EBTRX), (NASDAQ:ECTRX)
MFS Union Standard Equity Fund (NASDAQ:MUEAX), (NASDAQ:MUSBX),
(NASDAQ:MUECX)
MFS Utilities Fund (NASDAQ:MMUFX), (NASDAQ:MMUBX),
(NASDAQ:MMUCX), (NASDAQ:MMURX), (NASDAQ:MURRX)
MFS Value Fund (NASDAQ:MEIAX), (NASDAQ:MFEBX), (NASDAQ:MEICX),
(NASDAQ:MFVRX), (NASDAQ:MVRRX), (NASDAQ:EAVLX), (NASDAQ:EBVLX),
(NASDAQ:ECVLX)
Massachusetts Investors Trust (NASDAQ:MITTX), (NASDAQ:MITBX),
(NASDAQ:MITCX), (NASDAQ:MITRX), (NASDAQ:MIRTX), (NASDAQ:EAMTX),
(NASDAQ:EBMTX), (NASDAQ:ECITX)
MFS Aggressive Growth Allocation Fund (NASDAQ:MAAGX),
(NASDAQ:MBAGX), (NASDAQ:MCAGX), (NASDAQ:MAARX), (NASDAQ:MAWAX),
(NASDAQ:EAGTX), (NASDAQ:EBAAX), (NASDAQ:ECAAX)
MFS Conservative Allocation Fund (NASDAQ:MACFX), (NASDAQ:MACBX),
(NASDAQ:MACVX), (NASDAQ:MACRX), (NASDAQ:MCARX), (NASDAQ:ECLAX),
(NASDAQ:EBCAX), (NASDAQ:ECACX)
MFS Growth Allocation Fund (NASDAQ:MAGWX), (NASDAQ:MBGWX),
(NASDAQ:MCGWX), (NASDAQ:MGARX), (NASDAQ:MGALX), (NASDAQ:EAGWX),
(NASDAQ:EBGWX), (NASDAQ:ECGWX)
MFS Moderate Allocation Fund (NASDAQ:MAMAX), (NASDAQ:MMABX),
(NASDAQ:MMACX), (NASDAQ:MAMRX), (NASDAQ:MARRX), (NASDAQ:EAMDX),
(NASDAQ:EBMDX), (NASDAQ:ECMAX)
MFS Bond Fund (NASDAQ:MFBFX), (NASDAQ:MFBBX), (NASDAQ:MFBCX),
(NASDAQ:MFBRX), (NASDAQ:MBRRX), (NASDAQ:EABDX), (NASDAQ:EBBDX),
(NASDAQ:ECBDX)
MFS Emerging Markets Debt Fund (NASDAQ:MEDAX), (NASDAQ:MEDBX),
(NASDAQ:MEDCX)
MFS Government Limited Maturity Fund (NASDAQ:MGLFX),
(NASDAQ:MGLBX), (NASDAQ:MGLCX)
MFS Government Mortgage Fund (NASDAQ:MGMTX), (NASDAQ:MGTBX)
MFS Government Securities Fund (NASDAQ:MFGSX), (NASDAQ:MFGBX),
(NASDAQ:MFGDX), (NASDAQ:MGSRX), (NASDAQ:MGVSX), (NASDAQ:EAGSX),
(NASDAQ:EBGSX), (NASDAQ:ECGSX)
MFS High Income Fund (NASDAQ:MHITX), (NASDAQ:MHIBX),
(NASDAQ:MHICX), (NASDAQ:EAHIX), (NASDAQ:EMHBX), (NASDAQ:EMHCX)
(NASDAQ:MHIIX), (NASDAQ:MHIRX)
MFS High Yield Opportunities Fund (NASDAQ:MHOAX),
(NASDAQ:MHOBX), (NASDAQ:MHOCX), (NASDAQ:MHOIX)
MFS Intermediate Investment Grade Bond Fund (NASDAQ:MGBFX),
(NASDAQ:MGBVX), (NASDAQ:MGBCX), (NASDAQ:MGBEX), (NASDAQ:MIBRX)
MFS Limited Maturity Fund (NASDAQ:MQLFX), (NASDAQ:MQLBX),
(NASDAQ:MQLCX), (NASDAQ:EALMX), (NASDAQ:EBLMX), (NASDAQ:ELDCX),
(NASDAQ:MLDRX)
MFS Research Bond Fund (NASDAQ:MRBFX), (NASDAQ:MRBBX),
(NASDAQ:MRBCX), (NASDAQ:EARBX), (NASDAQ:EBRBX), (NASDAQ:ECRBX),
(NASDAQ:MRBIX), (NASDAQ:MRBRX)
MFS Strategic Income Fund (NASDAQ:MFIOX), (NASDAQ:MIOBX),
(NASDAQ:MIOCX), (NASDAQ:MFIIX)
MFS Alabama Municipal Bond Fund (NASDAQ:MFALX), (NASDAQ:MBABX)
MFS Arkansas Municipal Bond Fund (NASDAQ:MFARX), (NASDAQ:MBARX)
MFS California Municipal Bond Fund (NASDAQ:MCFTX),
(NASDAQ:MBCAX), (NASDAQ:MCCAX)
MFS Florida Municipal Bond Fund (NASDAQ:MFFLX), (NASDAQ:MBFLX)
MFS Georgia Municipal Bond Fund (NASDAQ:MMGAX), (NASDAQ:MBGAX)
MFS Maryland Municipal Bond Fund (NASDAQ:MFSMX), (NASDAQ:MBMDX)
MFS Massachusetts Municipal Bond Fund (NASDAQ:MFSSX),
(NASDAQ:MBMAX)
MFS Mississippi Municipal Bond Fund (NASDAQ:MISSX),
(NASDAQ:MBMSX),
MFS Municipal Bond Fund (NASDAQ:MMBFX), (NASDAQ:MMBBX)
MFS Municipal Limited Maturity Fund (NASDAQ:MTLFX),
(NASDAQ:MTLBX), (NASDAQ:MTLCX)
MFS New York Municipal Bond Fund (NASDAQ:MSNYX), (NASDAQ:MBNYX),
(NASDAQ:MCNYX)
MFS North Carolina Municipal Bond Fund (NASDAQ:MSNCX),
(NASDAQ:MBNCX), (NASDAQ:MCNCX)
MFS Pennsylvania Municipal Bond Fund (NASDAQ:MFPAX),
(NASDAQ:MBPAX)
MFS South Carolina Municipal Bond Fund (NASDAQ:MFSCX),
(NASDAQ:MBSCX)
MFS Tennessee Municipal Bond Fund (NASDAQ:MSTNX), (NASDAQ:MBTNX)
MFS Virginia Municipal Bond Fund (NASDAQ:MSVAX), (NASDAQ:MBVAX),
(NASDAQ:MVACX)
MFS West Virginia Municipal Bond Fund (NASDAQ:MFWVX),
(NASDAQ:MBWVX)
MFS Emerging Markets Equity Fund (NASDAQ:MEMAX), (NASDAQ:MEMBX),
(NASDAQ:MEMCX), (NASDAQ:MEMIX)
MFS Global Equity Fund (NASDAQ:MWEFX), (NASDAQ:MWEBX),
(NASDAQ:MWECX), (NASDAQ:MWEIX), (NASDAQ:MGERX)
MFS Global Growth Fund (NASDAQ:MWOFX), (NASDAQ:MWOBX),
(NASDAQ:MWOCX), (NASDAQ:MWOIX), (NASDAQ:MGLRX)
MFS Global Total Return Fund (NASDAQ:MFWTX), (NASDAQ:MFWBX),
(NASDAQ:MFWCX), (NASDAQ:MFWIX), (NASDAQ:MGRRX)
MFS International Growth Fund (NASDAQ:MGRAX), (NASDAQ:MGRBX),
(NASDAQ:MGRCX), (NASDAQ:MQGIX)
MFS International New Discovery Fund (NASDAQ:MIDAX),
(NASDAQ:MIDBX), (NASDAQ:MIDCX), (NASDAQ:EAIDX), (NASDAQ:EBIDX),
(NASDAQ:ECIDX), (NASDAQ:MWNIX), (NASDAQ:MINRX)
MFS International Value Fund (NASDAQ:MGIAX), (NASDAQ:MGIBX),
(NASDAQ:MGICX), (NASDAQ:MINIX)
MFS Research International Fund (NASDAQ:MRSAX), (NASDAQ:MRIBX),
(NASDAQ:MRICX), (NASDAQ:EARSX), (NASDAQ:EBRIX), (NASDAQ:ECRIX),
(NASDAQ:MRSIX), (NASDAQ:MRIRX)
The complaint charges Massachusetts Financial Services Company,
MFS Investment Management, Sun Life Financial, Inc. MFS Series
Trust I, MFS Series Trust II, MFS Series Trust III, MFS Series
Trust IV, MFS Series Trust V, MFS Series Trust VI, MFS Series
Trust VII, MFS Series Trust VIII, MFS Series Trust IX, MFS
Series Trust X, MFS Series Trust XI, MFS Mutual Funds, and the
Doe Defendants with violations of the Securities Act of 1933,
the Securities Exchange Act of 1934, the Investment Company Act
of 1940, and for common law breach of fiduciary duties.
The Complaint alleges that during the Class Period the
defendants engaged in illegal and improper trading practices, in
concert with certain institutional traders, which caused
financial injury to the shareholders of the MFS Mutual Funds.
According to the Complaint, the Defendants surreptitiously
permitted certain favored investors, including the Doe
Defendants, to illegally engage in "timing" of the MFS Mutual
Funds whereby these favored investors were permitted to conduct
short-term, "in and out" trading of mutual fund shares, despite
explicit restrictions on such activity in the MFS Mutual Funds'
prospectuses.
For more information, contact Marc A. Topaz, or Stuart L.
Berman, by Mail: Three Bala Plaza East, Suite 400, Bala Cynwyd,
PA 19004, by Phone: 1-888-299-7706 (toll free) or
1-610-667-7706, or by E-mail: info@sbclasslaw.com.
MICROSOFT CORPORATION: CA Court Puts End To Lindows.com Claims
--------------------------------------------------------------
San Francisco Superior Court Judge Paul H. Alvarado ordered the
rejection of claims in the California class action settlement
with Microsoft Corporation that were submitted through a
Lindows.com Inc. Web site, eWeek.com reports.
The judge's order, made on December 22 and announced last week
by Microsoft Corporation, marks the end of an effort by San
Diego-based Lindows.com to promote the use of its MSFreePC.com
Web site for the submission of consumer claims in the $1.1
billion settlement.
Lindows.com and Microsoft have waged a war of words in recent
months over whether claims submitted through the Lindows.com
site were valid. Lindows.com launched the site in September and
offered immediate access to the Lindows.com desktop Linux
operating system and other software that competes with Microsoft
if the users would qualify for between $50 and $100 in
settlement vouchers. It also promised a free network PC to the
first 10,000 people to buy $100 in software.
Microsoft argued that the Lindows.com process violated terms of
the class action settlement, reached in January 2003. In
November, Microsoft asked Judge Alvarado to reject settlement
claims submitted through Lindows.com. In his order, Judge
Alvarado ruled that claims filed through Lindows.com and its
MSfreePC.com site were invalid and that the only authorized
settlement Web site is www.microsoftcalsettlement.com, operated
by claims administrator Rust Consulting Inc. Rust must request
the names and mailing addresses of those who submitted claims
through the Lindows.com site and mail them information on
submitting paper claims.
"We are pleased with the judge's decision and remain committed
to implementing this settlement," said Microsoft spokeswoman
Stacy Drake, in a statement.
Lindows.com CEO Michael Robertson said that his company will not
turn over the names of about 15,000 consumers who have submitted
claims totaling about $1 million. Instead, the company next week
will notify those consumers itself about the judge's decision.
Robertson criticized the ruling and said the official settlement
Web site provides no way for consumers to file claims
electronically, instead requiring a lengthy paper-based process.
"The losers here are the consumers," he said. "By not putting
(the claims process) online, an enormous number of people will
not take advantage of the settlement, and Microsoft will get to
keep a big chunk of the money."
However, Microsoft said that the settlement includes a far-
reaching process for notifying California consumers about how to
submit claims. Consumers can use their portion of the
settlement to buy non-Microsoft software and hardware, including
products from Lindows.com, Mr. Drake said.
Meanwhile, Lindows.com and Microsoft also are embroiled in a
legal battle over trademark infringement. Microsoft has claimed
that the Lindows name violates its Windows trademarks. A U.S.
case is expected to go to trial early this year. A Swedish
court has ordered a temporary injunction against Lindows.com
pending the outcome of a lawsuit there.
PARMALAT FINANZIARIA: Italian Police Probe BofA Office, Ex-Exec
---------------------------------------------------------------
Italian police searched one of Bank of America's Milan offices
and the home of one of its former executives, in relation to
their investigation of food conglomerate Parmalat Finanziaria,
Reuters reports.
One of the world's biggest corporate scandals unraveled last
month after the Bank of America declared false a document which
showed the Company's Cayman Islands unit Bonlat Financing
Corporation as having EUR4 billion in cash with the Bank. The
SEC labeled the scandal "one of the largest and most brazen
corporate financial frauds in history," as it accused the
Company of fraud and misleading investors who bought $1.5
billion of its bonds.
Authorities have arrested nine people in the fraud case,
including founder Calisto Tanzi and two outside auditors. The
former head of Parmalat's operations in Venezuela and a Cayman
Islands unit at the heart of the scandal on Friday turned
himself in to justice authorities in the northern city of Parma,
Reuters stated. No charges have yet been filed, although
authorities are investigating suspected fraud, market rigging
and false accounting and say the hole in Parmalat's accounts
could surpass EUR10 billion euros ($12.83 billion).
Authorities in Italy, the United States and Luxembourg have
launched investigations into suspected crimes that Italian
prosecutors say stretched back more than a decade. Earlier this
week, Italian prosecutors questioned major bank, Deutsche, about
its participation in underwriting a Parmalat bond sale in
September last year.
In Milan, 25 people, including former Bank of America executive
Luca Sala and two executives of auditors Deloitte & Touche SpA
have been questioned. Mr. Sala worked for Bank of America until
mid-2003 when he became a Parmalat consultant, a judicial source
told Reuters. Investigators say he was linked to a $500-million
Parmalat bond placed by Bank of America.
"We expected a visit and are cooperating fully with their
inquiry and assisting in providing all requested documents," a
Bank of America spokeswoman in London told Reuters.
PENNSYLVANIA: UPMC Lawyers Seek Dismissal Of 'PAP Smear' Lawsuit
----------------------------------------------------------------
Lawyers asked the Allegheny County Common Please Court in
Pennsylvania to dismiss the class action filed against the
University of Pittsburgh Medical Center hospital system by two
women who accused the center and its Magee-Women's Hospital of
having an "unacceptably high error rate" for Pap tests, the
Pittsburgh Tribune Review reports.
Christine Walter, 58, of Sewickley, and Sharon King, 41, of West
Deer, filed the suit, seeking punitive damages and medical
monitoring for women who had the tests at Magee since 1995. In
court filings this week, the lawyers said the plaintiffs were
not harmed and their claims should be dismissed.
William Pietragallo II, UPMC lawyer said that because the two
women did not claim they were directly harmed physically or
financially, they have no standing to maintain a class action.
Mr. Pietragallo filed UPMC's preliminary objections Wednesday,
seeking to dismiss all five counts claimed by Ms. Walter and Ms.
King.
"When the 'sound and fury' are stripped away from this lawsuit,
all that remains for the Plaintiffs Walter and King are
accurately read Pap smears and their own good health and well-
being," the filing states.
The women's lawyers were forced last month to disable an
Internet site that included the Magee name in its address, but
reintroduced the site with a different address. The lawyers
have in the past declined to say how many other women have
contacted them with concerns about Pap tests analyzed at Magee.
Even if the women's claims are accurate, which he is not
conceding, Mr. Pietragallo said they do not support the lawsuit.
He added that UPMC will fight the lawsuit in court if necessary.
"At the end of the day when the dust all settles, everyone will
understand why we feel very confident in our position," he said.
Ms. Walter and Ms. King claimed that Magee attached
pathologists' signatures to negative Pap tests they had not
reviewed, and that that made them "inherently unreliable." They
asked the suit to be certified as a class action on behalf of
every woman who had a Pap test analyzed at Magee since 1995.
Lawyers for the two women could not be reached for comment, the
Tribune Review stated.
UNITED STATES: Congress Moving On With Bill Curbing Legislation
---------------------------------------------------------------
The United States Congress is inching closer to passing a bill
that would limit class-action lawsuits and large damage awards
against corporations, something big business has sought for
years, the Associated Press reports.
The Senate has been the stumbling block, but a deal struck just
before lawmakers left for the holidays could garner enough
Democratic support to approve the measure, which already has
passed the House and is backed by President Bush. The
legislation would move more class actions- where one person or a
small group represents the interests of an entire class of
people in court - out of state courts and into federal courts.
Opponents of the legislation say federal judges will either
throw many of the cases out or be less likely to issue
multimillion-dollar judgments against corporations.
Senate Republicans and the corporate community, for whom curbing
class action lawsuits is a major priority, say the legislation
is needed because businesses are drowning in lawsuits, many of
them frivolous, while trial lawyers profit handsomely by
sometimes just threatening legal action, AP states. However,
many Senate Democrats and other opponents say the legislation
only helps businesses escape judgments for wrongdoing. Huge
damage awards are needed to ensure corporations play by the
rules, they say.
GOP senators - all of whom except Sen. Richard Shelby, R-Ala.,
voted for the legislation - fell one vote short of achieving a
filibuster-proof, 60-vote majority in October, which effectively
killed the legislation for the year. However, several
Democrats, including Christopher Dodd of Connecticut and Charles
Schumer of New York, have now switched sides after striking a
deal with the Republican majority in November, which could give
the GOP the votes they need to push the bill through in
February.
Most of the legislation stays the same, but the Democrats,
fearing that some of their state constituents would lose their
right to sue in their own courts, got additional exceptions that
they say will preserve class-action lawsuits that belong in
state court.
"There were a bunch of little fixes that culminate in that
objective," Stan Anderson, executive vice president of the U.S.
Chamber of Commerce, told AP.
Originally, the bill said the only state class action lawsuits
would be those where at least two-thirds of plaintiffs and the
primary defendant are from the same state. Under the
compromise, a second category is added in which class action
suits can stay in state court if at least two-thirds of the
class action litigants, at least one of multiple defendants from
whom "significant" relief is sought and the incident that is the
focus of the lawsuit are from the same state.
However, the case will head to federal court if a class action
asserting the same claim against the same defendants had been
filed in state court during the preceding three years. In
addition, the compromise would reinstate "bounties," where the
main or first person to bring a class action lawsuit gets more
money than other plaintiffs.
The bill would also limit lawyers' fees in so-called coupon
settlements - when plaintiffs get discounts on products instead
of financial settlements - by linking the fees to the redemption
rate of the coupon or the actual hours spent working on the
case.
"Lawsuits have gotten out of control in America and something
needs to be done to rein them in," Mr. Schumer told AP in
November. "The agreement that we've struck on class action
lawsuits preserves the ability of Americans to bring lawsuits in
a fair and reasonable way while doing away with some of the
worst abuses."
However, the compromise doesn't make the legislation any better
to some of the groups fighting it, and they say they will keep
working to bottle up the legislation in the Senate. "We oppose
vehemently this compromise and we're shocked that these senators
have agreed to it," Joan Claybrook, Public Citizen president,
told AP.
That disagreement has turned some allies like Ms. Claybrook and
Mr. Schumer against each other. "He's a big fund-raiser and he
sees an opportunity to raise money here so he jumped on this
bandwagon," Ms. Claybrook said. "It's really unacceptable for
him to act this way when you're a critical vote in something
where tons of money is being poured into."
Mr. Schumer spokesman Phil Singer called his boss "the champion"
of groups like Public Citizen. "But he is also independent and
when he disagrees with them, he's going to stick to his
position," Mr. Singer told AP. "While he believes in the right
to sue, he also believes that there have been excesses and there
ought to be reform."
New Securities Fraud Cases
ALSTOM SA: Marc Henzel Lodges Securities Fraud Suit in S.D. NY
--------------------------------------------------------------
The Law Offices of Marc S. Henzel initiated a securities class
action lawsuit in the United States District Court for the
Southern District of New York on behalf of all purchasers of the
common stock of Alstom, SA (NYSE: ALS) from May 26, 1999 through
June 29, 2003, inclusive.
The complaint alleges that defendants violated Sections 10(b)
and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5
promulgated thereunder. Throughout the Class Period, as alleged
in the complaint, defendants issued numerous positive statements
concerning the growth and financial performance of its
transportation subsidiary.
The complaint alleges that these statements were materially
false and misleading because they failed to disclose and/or
misrepresented the following adverse facts, among others:
(1) that the Company had failed to recognize costs incurred
in a rolling-stock supply railcar contract at its
transportation unit in anticipation of shifting the
costs to other contracts;
(2) that the Company lacked adequate internal controls and
was therefore unable to ascertain the true financial
condition of the Company; and
(3) as a result of the foregoing, the value of the
Company's losses was materially understated at all
relevant times and the value of the Company's margins
was materially overstated at all relevant times.
On June 30, 2003, before the U.S. market opened for trading,
Alstom announced that it was ``conducting an internal review
assisted by external accountants and lawyers following receipt
of letters earlier this month alleging accounting improprieties
on a railcar contract being executed at the Hornell, New York
facility of ALSTOM Transportation Inc. (ATI), a U.S. subsidiary
of the Company.''
As part of the review, the Company ``identified that losses have
been significantly understated in ATI's accounts, in substantial
part due to accounting improprieties by the understatement of
actual costs incurred, including by the non-recognition of costs
incurred in anticipation of shifting them to other contracts,
and by the understatement of forecast costs to completion.''
As a result, the Company announced that it would record an
additional net after tax charge of 51 million euros ($58
million) for the year ended 31 March 2003.
For more details, contact Marc S. Henzel by Mail: 273 Montgomery
Ave., Suite 202, Bala Cynwyd, PA 19004 by Phone: 610-660-8000 or
888-643-6735 by Fax: 610-660-8080 or by E-Mail:
mhenzel182@aol.com
AMERICAN PHYSICIANS: Marc Henzel Lodges Securities Lawsuit in MI
----------------------------------------------------------------
The Law Offices of Marc S. Henzel filed a securities class
action lawsuit was filed in the United States District Court for
the Western District of Michigan on behalf of purchasers of the
securities of American Physicians Capital, Inc. (Nasdaq: ACAP)
between February 13, 2003 and November 6, 2003, inclusive.
The Complaint alleges that defendants AP Capital Inc., William
B. Cheeseman and Frank H. Freund violated Sections 10(b) and
20(a) of the Securities Exchange Act of 1934, and Rule 10b-5
promulgated thereunder. More specifically, the Complaint
alleges that defendants failed to disclose and indicate:
(1) that the Company's provisions for loss reserves were
inadequate;
(2) that defendants failed to sufficiently increase the
Company's loss reserves during the Class Period; and
(3) as a result of the foregoing, the Company's operating
results, an important metric used to value the
Company's financial performance, were overstated at all
relevant times.
On November 6, 2003, AP Capital shocked the market when it
issued a press release announcing that its earnings release
scheduled for that afternoon will be delayed until Wednesday,
November 12, 2003 after the market closes. The Company further
stated that it expects to announce a "substantial net loss" for
the quarter due to significant adjustments in reserves for
policy losses. The additional reserves are expected to
approximate $43 million, before taxes ($28 million, net of tax).
In addition, as a result of the net loss, the Company expects
that, for the foreseeable future, it will not be able to report
the deferred tax asset that results from its accumulated net
operating losses and other timing differences. This will require
the Company to incur a non-cash charge of approximately $50
million to establish a valuation allowance in order to eliminate
the deferred tax asset.
The Company also said it will discontinue offering workers'
compensation and health care insurance, which account for about
30 percent of its premiums. Upon this news, shares of the
Company's stock fell 37%, or $10.34 per share, to close at
$17.41 per share on extremely high trading volume.
For more details, contact Marc S. Henzel by Mail: 273 Montgomery
Ave., Suite 202, Bala Cynwyd, PA 19004 by Phone: 610-660-8000 or
888-643-6735 by Fax: 610-660-8080 or by E-Mail:
mhenzel182@aol.com
BEST BUY: Marc Henzel Lodges Securities Fraud Suit in MN Court
--------------------------------------------------------------
The Law Offices of Marc S. Henzel initiated a securities class
action in the United States District Court for the District of
Minnesota on behalf of purchasers of Best Buy Co., Inc. (NYSE:
BBY) publicly traded securities during the period between
January 9, 2002 to August 7, 2002, inclusive.
The Complaint alleges that defendants violated Sections 10(b)
and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5
promulgated thereunder, by issuing a series of material
misrepresentations to the market between January 9, 2002 and
August 7, 2002, thereby artificially inflating the price of Best
Buy common stock.
The Complaint alleges that these statements were materially
false and misleading because they failed to disclose and
misrepresented the following adverse facts, among others:
(1) that Best Buy Co.'s mall-based Sam Goody stores
(acquired as part of its acquisition of Musicland) were
performing worse than Best Buy's expectations,
requiring that Best Buy shrink the sizes of such Sam
Goody stores and close some Sam Goody stores
altogether;
(2) that Best Buy's "remerchandising" of the Sam Goody
stores was failing badly, materially depressing Best
Buy's operations and earnings;
(3) based on the foregoing, the Musicland acquisition was a
failure as the Company was saddled with a money-losing
chain of stores;
(4) that Best Buy was experiencing growing competition from
mass discounters such as Wal-Mart, which was devoting
more advertising to electronics to increase consumer
awareness of its presence in the category and
materially impacting Best Buy's profit margins;
(5) that Best Buy's strategy of capital expenditures to
enhance the high-tech look of their stores and raising
the service level was not yielding expected increases
in revenues; and
(6) that, as a result of the foregoing, defendants lacked a
reasonable basis for their positive statements about
the Company and their earnings projections.
The Class Period ends on August 8, 2002. On that date, Best Buy
issued a press release announcing that it was lowering its
earnings outlook for its second fiscal quarter to a range of 17
to 21 cents per diluted share, compared with prior guidance of
30 to 32 cents per diluted share.
In response to this announcement, the price of Best Buy common
stock declined sharply, falling from $30.80 per share on August
7, 2002 to $19.55 per share on August 8, 2002, or a one-day
decline of more than 36%. During the Class Period, prior to the
disclosure of the true facts about the Company, Best Buy
insiders sold more than $35 million of their personally-held
Best Buy common stock to the unsuspecting market and the Company
completed a debt offering raising hundreds of millions of
dollars
For more details, contact Marc S. Henzel by Mail: 273 Montgomery
Ave., Suite 202, Bala Cynwyd, PA 19004 by Phone: 610-660-8000 or
888-643-6735 by Fax: 610-660-8080 or by E-Mail:
mhenzel182@aol.com
BOSTON COMMUNICATIONS: Wolf Haldenstein Files Stock Suit in MA
--------------------------------------------------------------
Wolf Haldenstein Adler Freeman and Herz LLP initiated a class
action lawsuit in the United States District Court for the
District of Massachusetts on behalf of purchasers of Boston
Communications Group, Inc. publicly traded securities during the
period between April 16, 2003 and July 16, 2003, inclusive.
The complaint alleges that Boston Communications and certain of
its officers made materially false and misleading statements
during the class period concerning the Company's business.
Specifically, the complaint alleges that the Defendants issued
false and misleading statements concerning Boston
Communications' relationship with Verizon Wireless.
In particular, despite concerns by analysts regarding the
Company's ability to maintain relationships with its primary
customers and the possibility that such customers could
eliminate services performed by Boston Communications by
bringing them in-house, the Company attempted to allay such
concerns by reassuring investors that contract negotiations with
Verizon, and other customers, were continuing as planned. In
fact, Boston Communications was aware that Verizon would not be
renewing its billing services contract with Boston
Communications because Verizon was creating its own internal
billing system which would replace the use of Boston
Communications' billing services and that the loss of the
contract would lead to a significant loss of revenue for Boston
Communications.
On July 17, 2003, Verizon Wireless announced its intention to
"insource" the company's services. As a result, the Company's
stock declined 39%, or $8.46 from a closing price of $21.16 on
July 16, 2003 to close at $12.70 on July 17, 2003.
For more information, contact Fred Taylor Isquith, 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.
CAREER EDUCATION: Bull & Lifshitz Files Securities Suit in IL
-------------------------------------------------------------
The law firm of Bull & Lifshitz, LLP initiated a securities
class action in the United States District Court for the
Northern District of Illinois on behalf of purchasers of Career
Education Corporation common stock during the period between
January 28, 2003 and December 2, 2003, inclusive.
The complaint charges Career Education, John M. Larson, Patrick
K. Pesch with violations Sections 10(b) and 20(a) of the
Securities Exchange Act of 1934, and Rule 10b-5 promulgated
thereunder.
More specifically, the complaint alleges that the defendants'
statements made during the Class Period were materially false
and misleading because they failed to disclose and/or
misrepresented the following adverse facts, among others:
(a) that the Company's "record" financial growth was a
product of inflated student enrollment, retention, and
graduation rates procured through the falsification of
such records;
(b) that student records were falsified in order to show a
higher rate of enrollment, student retention, and
graduation so that the Company would qualify for state
and federal funding;
(c) that Company, in order to procure its "record"
financial results, forced its employees to falsify
student records; and,
(d) that the Company's earning and net income were
materially inflated and in violation of Generally
Accepted Accounting Principles because the Company's
financial results were derived from the defendants'
illegal practices.
Similarly on December 3, 2003, The Santa Barbara News-Press
reported that another former employee at a school owned by the
defendants had filed another lawsuit wherein she claimed that
"officials at the school acted illegally and improperly to
inflate enrollment and boost the bottom line." The former
employee also alleged that "(m)any staff members have been asked
by management to commit forgery, fraud, perjury or whatever else
is necessary to pass audit inspections." On news of this, shares
of Career Education fell nearly 28% or $15.28 per share to close
at $39.48 per share on December 3, 2003.
For more information, contact Peter D. Bull, or Joshua M.
Lifshitz, by Mail: 18 East 41st Street, New York, NY 10017, by
Phone: (212) 213-6222, by Fax: (212) 213-9405, or by E-mail:
counsel@nyclasslaw.com.
CAREER EDUCATION: Marc Henzel Lodges Securities Fraud Suit in IL
----------------------------------------------------------------
The Law Offices of Marc S. Henzel initiated a securities class
action in the United States District Court for the Northern
District of Illinois, Eastern Division on behalf of purchasers
of Career Education Corporation (NASDAQ: CECO) securities, who
were damaged thereby, during the period between April 22, 2003
and December 2, 2003, inclusive.
The complaint charges CEC and certain of its officers and
directors with violations of the Securities Exchange Act of
1934. The complaint alleges that Career Education publicly
touted its business and financial performance, the performance
of its stock price and its industry leading position as reasons
for why investors should purchase its stock.
These, and other statements particularized in the complaint,
were materially false and misleading because they failed to
disclose that CEC had been regularly falsifying student records
in order to increase graduation rates and enrollment, conceal
problems that could have threatened the accreditation of its
schools, and generally, to allow it to increase its
profitability.
On December 3, 2003, the market learned that the former
registrar of CEC's Brooks Institute of Photography in Santa
Barbara, California alleged, in a complaint filed with an
accreditation agency, that the school falsified student records
to ensure that the school passed inspections by accreditation
auditors and to increase enrollment.
In reaction to this announcement, CEC's stock price plummeted,
falling from $54.76 per share on December 2, 2003 to $39.48 on
December 3, 2003, a one-day drop of 28%, on trading volume of
18.2 million shares -- more than nine times the Company's three-
month daily average.
Throughout the Class Period, Career Education insiders,
including the individual defendants, sold a total of 1.7 million
(split-adjusted) shares of Career Education common stock at
artificially inflated prices, reaping gross proceeds in excess
of $69 million.
For more details, contact Marc S. Henzel by Mail: 273 Montgomery
Ave., Suite 202, Bala Cynwyd, PA 19004 by Phone: 610-660-8000 or
888-643-6735 by Fax: 610-660-8080 or by E-Mail:
mhenzel182@aol.com
CLEAN HARBORS: Marc Henzel Lodges Securities Suit in MA Court
-------------------------------------------------------------
The Law Offices of Marc S. Henzel initiated a securities class
action in the United States District Court for the District of
Massachusetts on behalf of purchasers of Clean Harbors, Inc.
(Nasdaq: CLHB) publicly traded securities during the period
between November 19, 2002 and August 14, 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. Specifically, the complaint alleges that
by the start of the Class Period, unbeknownst to investors,
Clean Harbors was experiencing difficulties integrating the
operations of Safety-Kleen Corp.'s Chemical Services Division,
which it had just acquired.
Moreover, the integration process was distracting the Company
from its core business, thereby causing the Company to
experience declining results. Notwithstanding the foregoing
difficulties, throughout the Class Period, defendants projected
increasing revenues and earnings for the Company, which caused a
dramatic increase in the price of Clean Harbors common stock.
While the stock was trading at these levels, certain Clean
Harbor insiders sold their personally-held Clean Harbors common
stock to the unsuspecting public.
In addition, defendant McKim engaged in a forward sale of
200,000 shares of his stock which permitted him to lock in gains
in his stock but not suffer from any decline in the price of
Clean Harbors stock. Then, on May 14, 2003, Clean Harbors
surprised the market by announcing that its EBITDA for the first
quarter of 2003 was below the quarterly minimum required by
certain covenants in the Company's loan agreements and that the
Company would have to renegotiate the terms of its agreements
with its lenders.
In response to this announcement, the price of Clean Harbors
stock plummeted from $12.89 per share to $10.90 per share on
extremely heavy trading volume. The true extent of the problems
at Clean Harbors were not finally revealed until August 14,
2003, when it announced that it would miss its earnings targets
for the second quarter of 2003 and that it was being negatively
impacted by a variety of factors. Following this announcement,
the price of Clean Harbors common stock declined further to
$6.23 per share.
For more details, contact Marc S. Henzel by Mail: 273 Montgomery
Ave., Suite 202, Bala Cynwyd, PA 19004 by Phone: 610-660-8000 or
888-643-6735 by Fax: 610-660-8080 or by E-Mail:
mhenzel182@aol.com
FRIEDMAN'S INC.: Marc Henzel Lodges Securities Suit in S.D. GA
--------------------------------------------------------------
The Law Offices of Marc S. Henzel initiated a securities class
action in the United States District Court for the Southern
District of Georgia, on behalf of purchasers of the securities
of Friedman's Inc (NYSE: FRM) between January 26, 2000 and
November 11, 2003 inclusive.
The complaint alleges that Defendants issued a series of false
and misleading statements regarding FRM's financial results and
business model, resulting in the Company materially overstating
its earnings for the fiscal years 2000 through 2002, and the
first three quarters of 2003.
The earnings issued and representations concerning those results
were false and misleading when made, as FRM's financial
statements during the Class Period were in violation of GAAP and
SEC rules. These improper practices are now the subject of a
Securities and Exchange Commission investigation, as well as an
investigation by the Department of Justice.
In fact, Defendants knew and failed to disclose material adverse
information and misrepresented the truth about the Company, its
financial performance, earnings momentum, and future business
prospects, including:
(1) the Company's allowance for doubtful accounts was
woefully inadequate;
(2) FRM's credit losses during the Class Period were
significantly higher than its reserves and higher than
defendants publicly represented; and
(3) Defendants failed to properly write-off uncollectible
receivables, and materially overstated FRM's financial
results by maintaining known uncollectible accounts as
assets during the Class Period.
As a result of the Defendants' false and misleading statements,
FRM's stock traded at inflated prices during the Class Period,
increasing to as high as $16.15 on September 8, 2003.
On November 11, 2003, FRM shocked the market by warning about
its future performance, and the material adverse impact of the
"increase in allowance for doubtful accounts". The Company also
revealed that FRM's Chief Financial Officer, Victoria Suglia,
had been placed on "leave" as a result of the government
investigations. As a result, FRM was forced to dramatically
boost its allowance for doubtful accounts, resulting in a
sizable charge of as much as $0.43 per share for 2003. In
response to the Company's devastating news concerning the
financial fraud, FRM's stock price plummeted by more than 40% on
volumes of about thirteen times the daily average.
The Individual Defendants engaged in such a scheme to inflate
the price of FRM securities in order to:
(i) protect and enhance their executive positions and the
substantial compensation and prestige they obtained
thereby;
(ii) enhance the value of their personal holdings of FRM
securities;
(iii) complete public offerings;
(iv) prevent violation of the covenants in the Company's
credit facility agreement and maximize the amount
allowed to be borrowed by the Company under this
agreement; and
(iv) avoid repaying millions of dollars in personal loans
from the Company.
For more details, contact Marc S. Henzel by Mail: 273 Montgomery
Ave., Suite 202, Bala Cynwyd, PA 19004 by Phone: 610-660-8000 or
888-643-6735 by Fax: 610-660-8080 or by E-Mail:
mhenzel182@aol.com
FRIEDMAN'S INC: Abbey Gardy Launches Securities Suit in N.D. GA
---------------------------------------------------------------
The law firm of Abbey Gardy, LLP initiated a Class Action
lawsuit in the United States District for the Northern District
of Georgia, on behalf of persons who purchased or otherwise
acquired publicly traded securities of Friedman's Inc. between
January 26, 2000 and November 17, 2003, inclusive, against the
Company and:
(1) Victor M. Suglia,
(2) Bradley J. Stinn,
(3) Sterling B. Brinkley, and
(4) Douglas Ander
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 Friedman's securities.
For more information, contact Susan Lee, by Mail: 212 East 39th
Street New York, New York 10016, by Phone: (212) 889-3700, or
(800) 889-3701 (Toll Free), by E-mail: slee@abbeygardy.com, or
visit the firm's Website: http://www.abbeygardy.com.
GILEAD SCIENCES: Cohen Milstein Files Securities Suit in N.D. CA
----------------------------------------------------------------
The law firm of Cohen, Milstein, Hausfeld & Toll, P.L.L.C.
initiated a class action lawsuit, on behalf of its client and on
behalf of purchasers of the securities of Gilead Sciences, Inc.
between July 14, 2003 and October 28, 2003, inclusive, in the
United States District Court for the Northern District of
California, against these defendants:
(1) the Company,
(2) John C. Martin,
(3) John F. Milligan,
(4) Mark L. Perry,
(5) Norbert W. Bischofberger,
(6) Anthony Carraciolo, and,
(7) William A. Lee
The lawsuit alleges that the 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 4, 2003 through
October 28, 2003.
More specifically, the complaint alleges that the defendants'
statements were materially false and misleading because they
failed to disclose and/or misrepresented the following adverse
facts:
(a) that Gilead was aware that its revenue was not
increasing due to sales of its drug Viread;
(b) that Gilead 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;
(c) that Gilead 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,
(d) that Gilead 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. The market reacted swiftly to
this news, with the Company's stock falling 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 Katrina Jurgill, by Mail: 1100 New
York Avenue, N.W., West Tower - Suite 500, Washington, D.C.
20005, by Phone: 888-240-0775 or 202-408-4600, or E-mail:
dsommers@cmht.com, or kjurgill@cmht.com.
GOODYEAR TIRE: Marc Henzel Commences Securities Suit in N.D. OH
---------------------------------------------------------------
The Law Offices of Marc S. Henzel initiated a securities class
action in the United States District Court for the Northern
District of Ohio on behalf of all purchasers of the common stock
of Goodyear Tire & Rubber Co. (NYSE:GT) from October 22, 1998
through October 22, 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 October 22, 1998 and
October 22, 2003, thereby artificially inflating the price of
Goodyear's publicly traded securities.
The Complaint alleges the statements were materially false and
misleading because they failed to disclose and/or misrepresented
the following adverse facts, among others:
(1) that the Company's implantation of an enterprise
resource planning accounting system in 1999 caused
Goodyear to materially overstate its net income and
earnings by up to $100 million;
(2) that the Company's financial statements were not
prepared in accordance with Generally Accepted
Accounting Principles (GAAP);
(3) that the Company lacked adequate internal controls and
was therefore unable to ascertain the true financial
condition of the Company; and
(4) that as a result, the value of the Company's net income
and financial results were materially overstated at all
relevant times.
On October 22, 2003, after the market had closed, Goodyear
announced that it would restate its financial results for the
years 1998-2002 and for the first and second quarters of 2003,
and that the restatement would result in a decrease in net
income over the restatement period by up to $100 million.
Market reaction to this news was swift and fast. Shares of
Goodyear fell more than 10 percent during inter-day trading and
traded as low as $5.55 per share on extremely heavy volume.
For more details, contact Marc S. Henzel by Mail: 273 Montgomery
Ave., Suite 202, Bala Cynwyd, PA 19004 by Phone: 610-660-8000 or
888-643-6735 by Fax: 610-660-8080 or by E-Mail:
mhenzel182@aol.com
IBIS TECHNOLOGY: Marc Henzel Lodges Securities Suit in MA Court
---------------------------------------------------------------
The Law Offices of Marc S. Henzel initiated a securities class
action in the United States District Court for District of
Massachusetts on behalf of all purchasers of the common stock of
Ibis Technology Corporation (NasdaqNM: IBIS) between October 2,
2003 and December 12, 2003.
The Complaint alleges that defendants violated the Exchange Act
by issuing material misrepresentations between October 2, 2003
and December 12, 2003 concerning Ibis' new generation SIMOX-SOI
implanter, including that Ibis had orders from Japanese wafer
manufacturers which would close prior to December 31, 2003.
Defendants also misrepresented the carrying value of the smaller
size wafers production line on Ibis' financial statements. On
December 15, 2003, defendants filed a Form 8-K with the SEC
admitting that there would be no sales of i2000 implanters in Q4
2003 from the Japanese wafer manufacturers and that they now
expected to receive order(s) for one to three i2000 implanters
sometime in 2004 but that the timing of the orders ``is very
difficult to predict because the sales require the purchaser to
enter into a license agreement with a third party.''
Defendants further admitted that Ibis would record a ``material
charge'' due to the impairment of its smaller size production
equipment. In reaction to the announcement, the price of Ibis'
common stock fell from a $15.40 per share close on December 12,
2003 to a close of $13.20 per share on December 15, 2003 and a
closing price of $10.37 on December 16, 2003, on extraordinary
high combined volume of 4.4 million shares, almost 50% of the
outstanding shares of Ibis common stock.
For more details, contact Marc S. Henzel by Mail: 273 Montgomery
Ave., Suite 202, Bala Cynwyd, PA 19004 by Phone: 610-660-8000 or
888-643-6735 by Fax: 610-660-8080 or by E-Mail:
mhenzel182@aol.com
LEAPFROG ENTERPRISES: Charles Piven Files Securities Suit in CA
---------------------------------------------------------------
The Law Offices Of Charles J. Piven, P.A. initiated a securities
class action in the United States District Court for the
Northern District of California against defendant LeapFrog and
certain of its officers and directors, on behalf of shareholders
who purchased, converted, exchanged or otherwise acquired the
common stock of LeapFrog Enterprises, Inc. between August 20,
2003 and October 21, 2003, inclusive.
The action charges that defendants violated federal securities
laws by issuing a series of materially false and misleading
statements to the market throughout the Class Period which
effectively artificially inflated the market price of the
Company's securities.
For more information, contact Charles J. Piven, by Mail: The
World Trade Center-Baltimore, 401 East Pratt Street, Suite 2525,
Baltimore, Maryland 21202, by Phone: 410/986-0036, or by E-mail:
hoffman@pivenlaw.com.
LORAL SPACE: Wolf Haldenstein Files Securities Suit in S.D. NY
----------------------------------------------------------------
The law firm of Wolf Haldenstein Adler Freeman & Herz LLP,
initiated a class action lawsuit in the United States District
Court for the Southern District of New York, on behalf of all
persons who purchased or acquired the securities of Loral Space
& Communications, Ltd. between July 31, 2002, through June 29,
2003, inclusive, against the following defendants:
(1) Bernard Schwartz (Chairman, CEO), and,
(2) Richard J. Townsend (CFO during the Class Period)
The complaint alleges that during the Class Period, the
defendants, among other things, materially misrepresented the
Company's financial performance and condition by inflating the
Company's revenues and net income, and by underreporting
expenses. These misrepresentations of the Company's financial
performance included:
(a) failing to timely account for the obsolescence of its
inventory;
(b) inappropriately accounting for general and
administrative costs in the second and third quarters
of 2002; and,
(c) improperly recognizing revenue from its Telstar
18/Apstar V contract with APT Satellite Company Ltd.
The Company finally recognized these improprieties in its
financial report filed on Form 10-Q with the Securities and
Exchange Commission on November 13, 2003, months after the July
15, 2003 bankruptcy.
For more information, contact Wolf Haldenstein Adler Freeman &
Herz LLP, by Mail: 270 Madison Avenue, New York, New York 10016,
by Phone: (212) 545-4600, or visit the firm's Web site:
http://www.whafh.com.
PORTAL SOFTWARE: Cohen Milstein Files Securities Suit in N.D. CA
----------------------------------------------------------------
Cohen, Milstein, Hausfeld & Toll, P.L.L.C. initiated a class
action lawsuit in the United States District Court for the
Northern District of California on behalf of all persons who
acquired securities of Portal Software, Inc., between May 20,
2003 and November 13, 2003, inclusive, against the Company and:
(1) John E. Little,
(2) Howard A. Bain III,
(3) David Labuda,
(4) Marc Aronson, and
(5) Arthur C. Patterson
The lawsuit alleges that defendants violated Sections 10(b) and
20(a) of the Securities Exchange Act of 1934, and Rule 10b-5
promulgated thereunder. The complaint alleges that defendants
issued false and materially misleading statements regarding
Portal's revenue growth, product and marketing initiatives, and
increasing revenues and profits when, in fact, defendants knew
that demand for the Company's products was declining.
Prior to disclosing this adverse information to the market,
defendants took advantage of their inside information about the
Company's financial health. Portal completed a limited public
offering of its common stock and raised over $56 million in net
proceeds. Further, the Individual Defendants and other high-
level executives at Portal sold substantial amounts of their
personally-held common stock at a gain of more than $4.8
million.
On November 13, 2003, Portal issued a press release announcing
that it expected net losses of $.30 - $.40 per share for third
quarter fiscal 2004. This result was far below defendants'
projections that the Company would generate profits of $.04 per
share. In the November 13th press release, Portal attributed its
poor results to contract delays and revenue recognition
deferrals. By November 14, 2003, shares of Portal decreased more
than 51% from the Class Period high they had reached just a
month earlier.
For more information, contact: Steven J. Toll, or Robert Smits,
by Mail: 1100 New York Avenue, N.W., West Tower - Suite 500,
Washington, D.C. 20005, by Phone: 888-240-0775 or 202-408-4600,
or E-mail: stoll@cmht.com or rsmits@cmht.com.
SILICON IMAGE: Marc Henzel Commences Securities Suit in N.D. CA
---------------------------------------------------------------
The Law Offices of Marc S. Henzel initiated a securities class
action in the United States District Court for the Northern
District of California, on behalf of a class of all persons who
purchased or acquired securities of Silicon Image, Inc.
(NasdaqNM: SIMGE) between April 15, 2002, the day the Company
announced its financial results for its first quarter ended
March 31, 2002 and November 15, 2003, the day the Company
announced an investigation into its revenue recognition
practices associated with its licensing transactions.
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 Silicon securities.
The Complaint alleges that Defendants made a series of false and
misleading statements starting on April 15, 2002. The Complaint
alleges that the press releases issued on April 15, 2002, June
13, 2002, July 23, 2002, October 15, 2002, January 15, 2003,
April 15, 2003, July 22, 2003, September 30, 2003 and October
19, 2003 were materially false and misleading. In additions, the
Complaint alleges that the Company's Form 10-Q's and Form 10-K
filed with the Securities and Exchange Commission (``SEC'') on
May 12, 2002, July 30, 2002, November 8, 2002, March 27, 2003,
May 8, 2003, and August 14, 2003 were materially false and
misleading.
The Complaint alleges that each of these above referenced press
releases and SEC filings were materially false and misleading
because, during the Class Period defendants, had overstated
Silicon's license revenue by improperly recognizing revenue that
did not satisfy revenue recognition criteria. The Complaint
also alleges that, as a result of the improper revenue
recognition, the Company's net income and earnings were
overstated and its financial statements were prepared in
violation of General Accepted Accounting Principles (GAAP).
In addition, the Complaint alleges that while in possession of
material non public information that defendants Lee, Gargus and
Tirado sold thousands of shares of their personally held Silicon
stock. On November 14, 2003, Silicon announced that its Form 10-
Q for the quarter ended September 30, 2003 would not be timely
filed because an investigation into the Company revenue
recognition practices associated with its licensing transaction.
On this news, Silicon's shares fell more than 27.7% to close at
$6.40.
For more details, contact Marc S. Henzel by Mail: 273 Montgomery
Ave., Suite 202, Bala Cynwyd, PA 19004 by Phone: 610-660-8000 or
888-643-6735 by Fax: 610-660-8080 or by E-Mail:
mhenzel182@aol.com
TROPICAL SPORTSWEAR: Marc Henzel Lodges Securities Lawsuit in FL
----------------------------------------------------------------
The Law Offices of Marc S. Henzel initiated a securities class
action in the United States District Court for the Middle
District of Florida, Tampa Division on behalf of purchasers of
Tropical Sportswear International Corporation (Nasdaq: TSIC)
securities during the period between April 17, 2002, to January
20, 2003.
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 17, 2002 and
January 20, 2003, thereby artificially inflating the price of
TSI's publicly traded securities.
The Complaint alleges the statements were materially false and
misleading because they failed to disclose and/or misrepresented
the following adverse facts, among others:
(1) that the Company's plan to consolidate certain
administrative, cutting and related functions was a
failure because the Company was having difficulties
streamlining its operations;
(2) that as a result of Project Synergy, the Company was
experiencing late deliveries, which forced the Company
to provide special sales allowances to customers and
lead to numerous customer cancellations;
(3) that Project Synergy's disruptions had a negative
impact on one-third of the Company's overall business;
(4) that sales of its Savane brand were flat;
(5) that sales of its Duck Head brand had materially
declined; and
(6) that the combination of the above factors had a
material effect on the Company's financial performance.
Despite the Company's representations of its fiscal soundness,
on January 20, 2003, the last day of the Class Period, the
Company reported that it had suffered a net loss of $5 million,
and that it would exit its Duck Head(R) retail outlet business
as leases expire. The Company's disclosure shocked the market,
causing stock prices to drop 7%, or $0.45 per share, to close at
$6.42 per share.
For more details, contact Marc S. Henzel by Mail: 273 Montgomery
Ave., Suite 202, Bala Cynwyd, PA 19004 by Phone: 610-660-8000 or
888-643-6735 by Fax: 610-660-8080 or by E-Mail:
mhenzel182@aol.com
*********
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news on asbestos-related litigation and profiles of target
asbestos defendants that, according to independent researches,
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*********
S U B S C R I P T I O N I N F O R M A T I O N
Class Action Reporter is a daily newsletter, co-published by
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USA. Roberto Amor, Aurora Fatima Antonio and Lyndsey Resnick,
Editors.
Copyright 2004. All rights reserved. ISSN 1525-2272.
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