/raid1/www/Hosts/bankrupt/CAR

/raid1/www/Hosts/bankrupt/CAR_Public/050502.mbx C L A S S A C T I O N R E P O R T E R Monday, May 2, 2005, Vol. 7, No. 85 Headlines ADAMS GOLF: Mediation For DE Securities Suit Set June 1, 2005 AFC ENTERPRISES: Discovery Proceeds in GA Securities Fraud Suit AFC ENTERPRISES: Full Court To Brief Appeal of GA Suit Remand AMAZON.COM INC.: Agrees To Settles Securities Lawsuit For $47.5M BAY NETWORKS: CA Court Dismisses Securities Fraud Lawsuits BEDFORD LABORATORIES: Recalls Injections Due To Sterility DAIMLERCHRYSLER: Kirk Kerkorian Appeals Ruling Over 1998 Merger DELL INC.: Seeger Weiss Launches Amended Consumer Lawsuit in NY DOREL JUVENILE: Recalls 189,552 Child Seats For Injury Hazard DRESS BARN: Working On Settlement For CA Overtime Wage Lawsuit E-LOAN INC.: NY Court Preliminary Approves Stock Suit Settlement E-LOAN INC.: Faces Suit For Fair Credit Reporting Act Violations EPDM LITIGATION: Antitrust Settlement Hearing Set May 20, 2005 FLEETWOOD ENTERPRISES: Recalls 543 Motorhomes For Crash Hazard FLORIDA: Bills To Curb Suits Passes Through GOP-Dominated House GENERAL MOTORS: Recalls 316,508 SUVS Due To Fire, Injury Hazard HERTZ CORPORATION: NJ Appeals Court Hears Suit Dismissal Appeal HERTZ CORPORATION: Seeks Summary Judgment For FL Consumer Suit HERTZ CORPORATION: TX Court Refuses Summary Judgment in Lawsuit HERTZ CORPORATION: OK Court Dismisses Consumer Lawsuit V. FSC HYPERCOM CORPORATION: Faces Shareholder Fraud Suits in AZ Court INSTINET GROUP: Shareholder Lodges Suit Over Unfair Transaction INSWEB CORPORATION: NY Court Preliminarily OKs Suit Settlement JAGUAR CARS: Recalls 253 Jaguar X3 Cars Due To Crash Hazard KING PHARMACEUTICALS: Discovery Proceeds in TN Securities Suit M2 AUTOMOTIVE: Employees Lodges Suit Over Abrupt Closure in CA MICROSOFT CORPORATION: Settles NE Antitrust Complaint For $22M MOLEX INC.: Shareholders Lodge Securities Fraud Suits in N.D. IL NORTEL NETWORKS: Continues To Face NY Securities Fraud Lawsuit NORTEL NETWORKS: Continues To Face ERISA Violations Suit in TN NORTEL NETWORKS: Plaintiffs Agree To Dismiss Claim in NY Lawsuit NORTEL NETWORKS: Shareholders Launch Fraud Suit in Canada Court NORTEL NETWORKS: Canadian Investors Launch Securities Fraud Suit PITNEY BOWES: Lawsuit Settlement Hearing Set May 25, 2005 RHEE BROS: Recalls Bellflower Root Due To Undeclared Sulfites RUBBER CHEMICALS: Lawsuit Settlement Hearing Set June 21, 2005 SMITHKLINE BEECHMAN: Judge Approves $65M Paxil Suit Settlement SONICWALL INC.: NY Court Preliminarily Approves Suit Settlement UNIPROP MANUFACTURED: Faces MI Damage Suit Over Old Dutch Farms ZOMAX INC.: Settles Shareholder Suit For $2.25M Plus Stocks New Securities Fraud Cases LEAPFROG ENTERPRISES: Cohen Milstein Files Securities Suit in CA PETCO ANIMAL: Milberg Weiss Lodges Securities Fraud Suit in CA R&G FINACIAL: Scott + Scott Lodges Securities Fraud Suit in NY WILLIAM LYON: Brualdi Law Firm Lodges Shareholders' Suit in DE WILLIAN LYON: Sarraf Gentile Launches Shareholders' Suit in DE WILLIAM LYONS: Wolf Popper Launches Shareholders' Lawsuit in DE ********* ADAMS GOLF: Mediation For DE Securities Suit Set June 1, 2005 ------------------------------------------------------------- Mediation in the consolidated securities class action filed against Adams Golf, Inc., certain of its current and former officers and directors and three underwriters of the Company's initial public offering (IPO), is set for June 1,2005 in the United States District Court for the District of Delaware. Beginning in June 1999, the first of seven class action lawsuits was filed, alleging violations of Sections 11, 12(a)(2) and 15 of the Securities Act of 1933, as amended, in connection with the Company's IPO. In particular, the complaints alleged that the Company's prospectus, which became effective July 9, 1998, was materially false and misleading in at least two areas. Plaintiffs alleged that the prospectus failed to disclose that unauthorized distribution of the Company's products (gray market sales) threatened the Company's long-term profits. Plaintiffs also alleged that the prospectus failed to disclose that the golf equipment industry suffered from an oversupply of inventory at the retail level, which had an adverse impact on the Company's sales. On May 17, 2000, these cases were consolidated into one amended complaint, and a lead plaintiff was appointed. The plaintiffs were seeking unspecified amounts of compensatory damages, interest and costs, including legal fees. On December 10, 2001, the United States District Court for the District of Delaware dismissed the consolidated, amended complaint. Plaintiffs appealed. On August 25, 2004, the appellate court affirmed the dismissal of plaintiffs' claims relating to oversupply of retail inventory, while reversing the dismissal of the claims relating to the impact of gray market sales and remanding those claims for further proceedings. This case is now in the discovery phase in the district court. The suit is styled "Shockley, et al v. Adams Golf Inc., et al, case no. 1:99-cv-00371-KAJ," filed in the United States District Court for the District of Delaware under Judge Kent A. Jordan. Representing the Company is Kevin G. Abrams and Jeffrey L. Moyer of Richards, Layton & Finger, One Rodney Square P.O. Box 551 Wilmington, DE 19899 Phone: (302) 658-6541 E-mail: moyer@rlf.com. Representing lead plaintiff M.D. F. Kenneth Shockley is Carmella P. Keener of Rosenthal, Monhait, Gross & Goddess Citizens Bank Center, Suite 1401 P.O. Box 1070 Wilmington, DE 19899-1070, Phone: (302) 656-4433 E-mail: CKeener@rmgglaw.com. AFC ENTERPRISES: Discovery Proceeds in GA Securities Fraud Suit --------------------------------------------------------------- Discovery commenced in the consolidated securities class action filed against AFC Enterprises, Inc. and certain of its current and former directors and officers in the United States District Court for the Northern District of Georgia. On March 25, 2003, plaintiffs filed the first of eight securities class action lawsuits. By order dated May 21, 2003, the district court consolidated the eight lawsuits into one consolidated action. On January 26, 2004, the plaintiffs filed a Consolidated Amended Class Action Complaint on behalf of a putative class of persons who purchased or otherwise acquired the Company's stock between March 2, 2001 and March 24, 2003. In the Consolidated Complaint, plaintiffs allege that the registration statement filed in connection with the Company's March 2001 initial public offering (IPO) contained false and misleading statements in violation of Sections 11 and 15 of the Securities Act of 1933. The defendants to the 1933 Act claims include the Company, certain of its current and former directors and officers, an institutional shareholder of the Company, and the underwriters of its IPO. Plaintiffs also allege violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. The plaintiffs' 1934 Act allegations are pled against the Company, certain of its current and former directors and officers, and two institutional shareholders. The plaintiffs also allege violations of Section 20A of the 1934 Act against certain current and former directors and officers and two institutional shareholders based upon alleged stock sales. The Consolidated Complaint seeks certification as a class action, compensatory damages, pre-judgment and post-judgment interest, attorney's fees and costs, an accounting of the proceeds of certain defendants' alleged stock sales, disgorgement of bonuses and trading profits by the Company's CEO and former CFO, injunctive relief, including the imposition of a constructive trust on certain defendants' alleged insider trading proceeds, and other relief. On December 29, 2004, the Court entered an Order granting in part and denying in part the Defendants' Motions to Dismiss the Complaint. The Court dismissed all insider trading claims; dismissed Section 10(b) and Rule 10b-5 claims against certain current and former officers and directors. Because Plaintiffs declined to re-plead their allegations, the foregoing claims have been dismissed with prejudice. Subsequent to the Court's December 29, 2004 Order, the Company and the former CFO filed a Motion to Dismiss the Section 10(b) and Rule 10b-5 claims of the named Plaintiffs for lack of standing (jurisdiction), as both remaining Plaintiffs continue to hold the AFC stock made the subject of their claims and, therefore, given the recovery and continuing rise of the AFC stock price, Plaintiffs can prove no damages under Section 10(b) or Rule 10b-5. Also, pending are certain motions filed by the outside directors for reconsideration of portions of the December 29, 2004 Order. Discovery commenced on February 23, 2005. The plaintiff firms in this litigation are: (1) Abbey Gardy, LLP, 212 East 39th Street, New York, NY, 10016, Phone: 212.889.3700, E-mail: info@abbeygardy.com (2) Bernstein Liebhard & Lifshitz LLP (New York, NY), 10 E. 40th Street, 22nd Floor, New York, NY, 10016, Phone: 800.217.1522, E-mail: info@bernlieb.com (3) Faruqi & Faruqi LLP, 320 East 39th Street, New York, NY, 10016, Phone: 212.983.9330, Fax: 212.983.9331, E- mail: Nfaruqi@faruqilaw.com (4) Goodkind Labaton Rudoff & Sucharow LLP, 100 Park Avenue, New York, NY, 10017, Phone: 212.907.0700, Fax: 212.818.0477, E-mail: info@glrslaw.com (5) Hoffman & Edelson, 45 West Court Street, Doylestown, PA, 18901-4223, Phone: 215.230.8043, (6) Landskroner - Grieco, Ltd., 1360 West 9th St., Suite 200, Cleveland, OH, 44113-1904, Phone: 866.522.9500, E- mail: jack@landskronerlaw.com (7) Milberg Weiss Bershad Hynes & Lerach, LLP (New York, NY), One Pennsylvania Plaza, New York, NY, 10119-1065, Phone: 212.594.5300, (8) Much Shelist Freed Denenberg Ament & Rubenstein, PC, Chicago, IL, Phone: 800-470-6824, Fax: 312-621-1750, (9) Wolf, Haldenstein, Adler, Freeman & Herz LLP, 270 Madison Avenue, New York, NY, 10016, Phone: 212.545.4600, Fax: 212.686.0114, E-mail: newyork@whafh.com (10) Terry D. Goldberg & Associates, Phone: 215.354.9100, E- mail: no1piguy@aol.com AFC ENTERPRISES: Full Court To Brief Appeal of GA Suit Remand ------------------------------------------------------------- A panel of the United States Eleventh Circuit Court of Appeals ruled that the full court, as opposed to the panel only, could consider defendants' request to reconsider the appeals court's ruling saying that they lacked jurisdiction to hear plaintiffs' appeal of the remand of the class action filed against AFC Enterprises, Inc. to Georgia State Court. On May 15, 2003, a plaintiff filed a securities class action lawsuit in Fulton County Superior Court, State of Georgia, against the Company and certain current and former members of the Company's board of directors on behalf of a class of purchasers of the Company's common stock "in or traceable to" AFC's December 2001 $185.0 million secondary public offering of common stock. The lawsuit asserts claims under Sections 11 and 15 of the 1933 Act. The complaint alleges that the registration statement filed in connection with the secondary offering was false or misleading because it included financial statements issued by the Company that were materially in error. The complaint seeks certification as a class action, compensatory damages, attorneys' fees and costs, and other relief. The plaintiff claims that as a result of AFC's announcement that it was restating its financial statements for fiscal year 2001 (and at the time of the complaint, were examining restating its financial statements for fiscal year 2000), AFC will be absolutely liable under the 1933 Act for all recoverable damages sustained by the putative class. On July 20, 2003, the defendants removed the action to the United States District Court for the Northern District of Georgia. The plaintiff filed a motion to remand the case to state court. The defendants opposed the motion to remand. On November 25, 2003, the federal district court entered an order remanding the case to state court but staying the order to allow the defendants to appeal the decision. On November 5, 2004, after briefing and argument, the United States Court of Appeals for the Eleventh Circuit ruled that it lacked jurisdiction to hear the appeal. Defendants filed a Motion to Reconsider the Court's ruling on November 24, 2004. On February 22, 2005, the Eleventh Circuit panel ruled that the full Court, as opposed to the panel only, could consider defendants' request to reconsider the Court's November 5, 2004 Order. AMAZON.COM INC.: Agrees To Settles Securities Lawsuit For $47.5M ---------------------------------------------------------------- Amazon.com Inc. (AMZN) agreed in principle to settle class- action lawsuits claiming it violated U.S. securities laws for a total of $47.5 million, MarketWatch reports. According to its quarterly report that was filed with the Securities and Exchange Commission, it agreed earlier this month to settle a class-action lawsuit claiming it violated securities laws under the Securities Act of 1933. As previously reported in the March 15, 2005 edition of the Class Action Reporter, Amazon.com paid $27.5 million to settle a class-action suit that accused the it of violating security laws. That federal lawsuit against was filed in 2001 by shareholders, who claim that Amazon.com executives and directors made false and misleading statements from 29 October 1998 to 23 October 2001. The plaintiffs, also alleging violations under the Securities Act of 1933, claim the defendants made false or misleading statements in connection with its February 2000 offering of 6.875% premium adjustable convertible securities. Court documents show that the alleged statements were related to the Company's business, financial condition and results, inventories, future prospects and strategic alliance transactions. The $47.5 million total includes that $27.5 million, which was pending approval from the US District Court in Washington. The filing also stated that if the settlements are finalized and approved by the court, it would dispose of all claims asserted in these lawsuits. The filing adds that its insurers would fund the payment that the Company would make in connection with the settlements. The Company said that both principle agreements are with the counsel representing a class of securities holders who filed a lawsuit against Amazon.com, its directors and officers, alleging violations of some U.S. securities laws. BAY NETWORKS: CA Court Dismisses Securities Fraud Lawsuits ---------------------------------------------------------- The California Superior Court for the County of Santa Clara dismissed the securities class actions filed against Bay Networks, Inc. and ten of its then current and former officers and directors. On March 4, 1997, shareholders had filed two separate lawsuits against the Company in the U.S. District Court for the Northern District of California and the California Superior Court, County of Santa Clara purportedly on behalf of a class of shareholders who purchased the Company's common shares during the period of May 1, 1995 through October 14, 1996. On August 17, 2000, the Federal Court granted the defendants' motion to dismiss the federal complaint. On August 1, 2001, the U.S. Court of Appeals for the Ninth Circuit denied the plaintiffs' appeal of that decision. On April 18, 1997, a second lawsuit was filed in the California State Court, purportedly on behalf of a class of shareholders who acquired the Company's common shares pursuant to the registration statement and prospectus that became effective on November 15, 1995. The two actions in the California Court were consolidated in April 1998; however, the California Court denied the plaintiffs' motion for class certification. In January 2000, the California Court of Appeal rejected the plaintiffs' appeal of the decision. A petition for review was filed with the California Supreme Court by the plaintiffs and was denied. In February 2000, new plaintiffs who allege to have been shareholders of the Company during the relevant periods, filed a motion for intervention in the California state Court seeking to become the representatives of a class of shareholders. The motion was granted on June 8, 2001 and the new plaintiffs filed their complaint-in-intervention on an individual and purported class representative basis alleging misrepresentations made in connection with the purchase and sale of securities of Bay Networks in violation of California statutory and common law. On March 11, 2002, the California Court granted the defendants' motion to strike the class allegations. The plaintiffs were permitted to proceed on their individual claims. The intervenor-plaintiffs appealed the dismissal of their class allegations. On July 25, 2003, the California Court of Appeal reversed the trial court's dismissal of the intervenor- plaintiffs' class allegations. On September 3, 2003, the defendants filed a petition for review with the California Supreme Court seeking permission to appeal the Court of Appeal decision. On October 22, 2003, the California Supreme Court denied, without opinion, the defendants' petition for review. On December 22, 2003, the plaintiffs served their motion for certification of a class of purchasers of Bay Networks' common shares from July 25, 1995 through to October 14, 1996. Hearing of the plaintiffs' motion for class certification was held on May 4, 2004. On July 27, 2004, the Court entered an Amended Order Denying Motion of Intervenor Plaintiffs for Class Certification and Setting Further Hearing. On August 9, 2004, the intervenor-plaintiffs obtained Court approval to dismiss their claims and this action and, on September 30, 2004, the Court entered dismissal with prejudice of the entire action of all parties and all causes of action. BEDFORD LABORATORIES: Recalls Injections Due To Sterility --------------------------------------------------------- Bedford Laboratories, a division of Ben Venue Laboratories, Inc., Bedford, Ohio, is voluntarily recalling one lot of Famotidine Injection, 20 mg/2 mL (NDC 55390-029-10), Lot# 609336, exp. 04/06, due to a lack of sterility assurance. This prescription product was distributed in August 2004 throughout the United States to wholesalers and distributors, who further distributed the product to hospitals. Customers that have any vials of this lot of Famotidine Injection should discontinue distribution and use of the lot immediately and contact Bedford Laboratories Customer Service Department (1-800- 562-4797) for a returned goods authorization. Bedford Laboratories is working with the USFDA on this recall. No serious health or safety reports have been received that are attributed to this situation. Bedford Laboratories supplies the US and International markets with multisource and specialty injectable products. Headquartered in Bedford, Ohio, Bedford Laboratories is a division of Ben Venue Laboratories, Inc., a subsidiary of Boehringer Ingelheim Corporation based in Ridgefield, CT, and a member of the Boehringer Ingelheim group of companies. DAIMLERCHRYSLER: Kirk Kerkorian Appeals Ruling Over 1998 Merger --------------------------------------------------------------- Billionaire investor Kirk Kerkorian appealed to the 3rd U.S. Circuit Court of Appeals in Philadelphia, a federal judge's rejection of his claims that he was defrauded in the 1998 merger of DaimlerBenz and Chrysler Corporation, The Associated Press reports. As previously reported in the April 11, 2005 edition of the Class Action Reporter, a federal judge rejected the lawsuit by the billionaire investor over the 1998 merger that U.S.-German automaker DaimlerChrysler AG, which claims that Company deceptions cost him more than $1 billion. Mr. Kerkorian had sued DaimlerChrysler in 2000, alleging that DaimlerBenz engineered a takeover of Chrysler Corporation in 1998, and then cheated him out of billions by casting the deal as a merger of equals. The 87-year-old billionaire, who, according to the latest list compiled by Forbes, has an estimated net worth of $8.9 billion, contended that DaimlerBenz saved billions on the transaction price by not pursuing a true acquisition of the Company. However, DaimlerChrysler vehemently insisted that the merger was one of equals and that Mr. Kerkorian, whose Tracinda Corporation was Chrysler's largest shareholder at the time, grew disgruntled when the stock price fell, AP reports In the recently released decision, U.S. District Judge Joseph Farnan Jr. wrote, "After considering the evidence adduced at trial, including the testimony of Mr. Kerkorian and other Tracinda representatives, the Court finds that the corporate governance issues, including the 'merger of equals' label, the selection of the German AG form, and the voting status of members of the management, were not significant to Tracinda." Terry Christensen, a Los Angeles attorney representing Tracinda, told AP Judge Farnan erred in agreeing with DaimlerChrysler's claim that representations by Daimler and Chrysler executives that the transaction would be a merger of equals and that the new Company would be jointly managed were good only up to the point when shareholders had voted and the merger closed. Ms. Christensen told AP, "We disagree with the court's ruling that representations made to Tracinda and other Chrysler shareholders in the proposed merger with Daimler-Benz were required to be good only for a moment in time and believe the court's decision conveys the wrong message to the investment community and shareholders of public companies. If that analysis were correct, no shareholder could rely on any statement about any transaction, whether made in a proxy statement or otherwise, to be accurate after the shareholder vote and the transaction closed. We believe this issue is larger than the dispute between Tracinda and DaimlerChrysler and for that reason, Tracinda has appealed." She also adds that Tracinda is appealing the denial of its right to a jury trial. For its part, DaimlerChrysler spokesman Han Tjan described the appeal as "a futile effort." J. Michael Schell, lead attorney for DaimlerChrysler, told AP that Tracinda's case had no merit, and that he expects Judge Farnan's 123-page opinion to be upheld by the 3rd U.S. Circuit Court of Appeals in Philadelphia. He also adds, "The U.S. District Court found no factual or legal basis for Tracinda's claims and an appeal will not change that. Apart from devastating Tracinda's case, we think the opinion is virtually bulletproof. Nevertheless, we will give it a most vigorous defense." While defeating Kerkorian's claim, DaimlerChrysler agreed in August 2003 to pay $300 million to settle a $22 billion class- action lawsuit filed by other investors who also claimed they were misled. DELL INC.: Seeger Weiss Launches Amended Consumer Lawsuit in NY --------------------------------------------------------------- The law firm of Seeger Weiss LLP initiated an Amended Complaint in the U.S. District Court for the Southern District of New York against Dell, Inc. ("Dell") (NASDAQ:DELL), Dell Financial Services L.P. ("DFS") and CIT Bank, Inc. ("CIT"). The Amended Complaint was filed on behalf of consumers who financed the purchase of Dell electronics through DFS and/or purchased Dell products but allegedly received costlier or substandard versions of the advertised products. A copy of the Amended Complaint filed in this action is available from the Court or by contacting counsel below. The Amended Complaint alleges a new claim that Dell engages in a practice of advertising low-priced products but, when consumers call to purchase these advertised products, Dell steers them to purchasing costlier products, tells them that the advertised products will not meet their needs, charges consumers more than they are quoted or ships consumers products with lesser quality components than they ordered. The Amended Complaint alleges that Dell's sales practices violate the consumer protection laws for all fifty states and the District of Columbia and further seeks to certify a nationwide sales class of the injured consumers. The Amended Complaint further alleges that defendants lure consumers to call Dell by advertising illusory offers of 0% or low interest financing. When the consumers agree to finance their purchases with defendants, they are allegedly misled to believe that they qualified for the promotional rates. Only when consumers receive their finance statements do they allegedly learn that they did not qualify for the promotional financing. By then, however, the consumers are trapped into defendants' financing, which is laden with hidden fees, late charges and excessive interest rates. The Amended Complaint seeks to certify a second class consisting of consumers who were victims of the defendants' alleged bait and switch financing scheme. The Amended Complaint also alleges that defendants had a duty under federal law to disclose the terms of financing to consumers before placing them into defendants' financing plans. Defendants allegedly do not disclose the applicable financing rates, late penalties and other material terms of the financing agreements at the time the consumers enter into the agreements. The Amended Complaint seeks to certify a third class that includes all consumers who financed a Dell purchase and were assessed late fees, charges or interest without defendants disclosing the material terms of the financing agreements. For more details, contact Christopher A. Seeger, Esq., Eric T. Chaffin, Esq. or Roopal P. Luhana, Esq.Seeger Weiss LLP by Mail: One William Street, New York, NY 10004 by Phone: (212) 584-0700 or (877) 539-4125 by E-mail: cseeger@seegerweiss.com, echaffin@seegerweiss.com or rluhana@seegerweiss.com or visit their Web site: http://www.seegerweiss.com. DOREL JUVENILE: Recalls 189,552 Child Seats For Injury Hazard ------------------------------------------------------------- The Dorel Juvenile Group is cooperating with the National Highway Traffic Safety Administration (NHTSA) by voluntarily recalling 189,552 child seats, namely: (1) COSCO / 22-300 JOS GB1B (2) EDDIE BAUER / 22-625 AFD GB1B (3) EDDIE BAUER / 22-625 EDG GB1B (4) EDDIE BAUER / 22-625 GLC GB1B (5) EDDIE BAUER / 22-625 MAC GB1B (6) SAFETY 1ST / 22-325 CMB GB1B (7) SAFETY 1ST / 22-325 DTA GB1B (8) SAFETY 1ST / 22-325 TST GB1B (9) SAFETY 1ST / 22-325 VIN GB1B If these certain DJG Designer 22 rear-facing only infant child restraints manufactured between August 19,2003 and October 20,2004 is not properly tightened, the infant seat can experience web movement or web creep. It is important to note the GB1B line code located next to the model number on the child restraint indicates the unit was manufactured by Good Baby Products and is the only line included in the recall. Any line other than GB1B, such as DE1B, is not included in the recall. If web creep were to occur, in the event of a vehicle crash, the child could move too far forward, possibly increasing the risk of injury. The Company will notify its customers and provide a free in-home remedy kit consisting of two clips and installation instructions free of charge. The recall is expected to begin during April 2005. Owners who do not receive the free remedy within a reasonable time should contact the Company by Phone: 1-800-881-0570 or the NHTSA's auto safety hotline: 1-888-327-4236. DRESS BARN: Working On Settlement For CA Overtime Wage Lawsuit -------------------------------------------------------------- The Dress Barn, Inc. is working to settle the class action filed against it in California state court, alleging violations of the state's labor laws. The suit, filed on March 17, 2003, was brought on behalf of all Managers, Assistant Managers and Associate Managers who worked for the Company in California. The complaint alleges that the Company improperly classified these employees as "salaried exempt." E-LOAN INC.: NY Court Preliminary Approves Stock Suit Settlement ---------------------------------------------------------------- The United States District Court for the Southern District of New York granted preliminary approval to the settlement of the consolidated securities class action filed against E-LOAN, Inc. and: (1) Christian Larsen, (2) Janina Pawlowski, (3) Frank Siskowski, (4) The Goldman Sachs Group, Inc., (5) FleetBoston Robertson Stephens, Inc., (6) Merrill Lynch Pierce Fenner & Smith, Inc., (7) Credit Suisse First Boston Corp. and (8) J.P. Morgan Chase & Co. Five suits were initially filed between August 10, 2001 and September 25, 2001 on behalf of the plaintiffs and others similarly situated. The complaints have since been consolidated into a single action. The Consolidated Amended Complaint alleges, among other things, that the underwriters of the Company's initial public offering violated Section 12(a) of the Securities Act of 1933 by receiving excessive and undisclosed commissions and fees, and by entering into unlawful private agreements with brokers' customers, and that all defendants violated Section 11 of the Securities Act of 1933, and Section 10(b) and Rule 10b-5 under the Securities Exchange Act of 1934 by making material false and misleading statements in the Company's initial public offering prospectus concerning brokers' commissions and private agreements with brokers' customers. The plaintiffs seek to recover damages on behalf of all those who purchased or otherwise acquired E-LOAN securities during the respective class period. Similar complaints have been filed against over 300 other issuers that have had initial public offerings since 1998 and all such actions have been included in a single coordinated proceeding. On October 9, 2002, the Company's individual defendants were dismissed, without prejudice, from the lawsuit, pursuant to a stipulated agreement with the plaintiffs. On June 25, 2003, a committee of the Company's Board of Directors conditionally approved a proposed partial settlement with the plaintiffs in this matter. The settlement would provide, among other things, a release of the Company and of the individual defendants for the conduct alleged in the action to be wrongful in the Amended Complaint. The Company would agree to undertake other responsibilities under the partial settlement, including agreeing to assign away, not assert, or release certain potential claims the Company may have against its underwriters. The committee agreed to approve the settlement subject to a number of conditions, including the participation of a substantial number of other Issuer Defendants in the proposed settlement, the consent of the Company's insurers to the settlement, and the completion of acceptable final settlement documentation. In June 2004, an agreement of settlement was submitted to the court for preliminary approval. The court granted the preliminary approval motion on February 15, 2005, subject to certain modifications. The parties are directed to report back to the court regarding the modifications. If the parties are able to agree upon the required modifications, and such modifications are acceptable to the court, notice will be given to all class members of the settlement, a "fairness" hearing will be held and if the court determines that the settlement is fair to the class members, the settlement will be approved. The suit is styled "In Re E-LOAN, Inc. Initial Public Offering Securities Litigation," filed in relation to "IN RE INITIAL PUBLIC OFFERING SECURITIES LITIGATION, Master File No. 21 MC 92 (SAS)," both pending in the United States District Court for the Southern District of New York, under Judge Shira N. Scheindlin. The plaintiff firms in this litigation are: (i) Bernstein Liebhard & Lifshitz LLP (New York, NY), 10 E. 40th Street, 22nd Floor, New York, NY, 10016, Phone: 800.217.1522, E-mail: info@bernlieb.com (ii) Milberg Weiss Bershad Hynes & Lerach, LLP (New York, NY), One Pennsylvania Plaza, New York, NY, 10119-1065, Phone: 212.594.5300 (iii) Schiffrin & Barroway, LLP, Mail: 3 Bala Plaza E, Bala Cynwyd, PA, 19004, Phone: 610.667.7706, Fax: 610.667.7056, E-mail: info@sbclasslaw.com (iv) Sirota & Sirota, LLP, 110 Wall Street 21st Floor, New York, NY, 10005, Phone: 888.759.2990, Fax: 212.425.9093, E-mail: Info@SirotaLaw.com (v) Stull, Stull & Brody (New York), 6 East 45th Street, New York, NY, 10017, Phone: 310.209.2468, Fax: 310.209.2087, E-mail: SSBNY@aol.com (vi) Wolf, Haldenstein, Adler, Freeman & Herz LLP, 270 Madison Avenue, New York, NY, 10016, Phone: 212.545.4600, Fax: 212.686.0114, E-mail: newyork@whafh.com E-LOAN INC.: Faces Suit For Fair Credit Reporting Act Violations ---------------------------------------------------------------- E-LOAN, Inc. faces seven class actions filed in the United States District Court for the Northern District of Illinois, Eastern Division, alleging violations of the Fair Credit Reporting Act. On March 1, 2005, Thomas A. Murray filed the complaint, designated as case no. 05C-1219. The complaint alleges that the Company violated the federal Fair Credit Reporting Act in connection with a direct mailing sent to Mr. Murray. The complaint seeks damages in an unspecified amount, attorneys' fees, litigation expenses and costs of suit. The complaint purports to be a class action filed on behalf of all persons with Illinois addresses who received the mailing. The Company has not yet filed a response to the complaint. Seven similar complaints were recently filed in the district court against other parties, and on March 17, 2005 the district court denied the plaintiff's motion to reassign the cases to the judge who was presiding over a similar case that was filed in 2002. The case is pending. EPDM LITIGATION: Antitrust Settlement Hearing Set May 20, 2005 -------------------------------------------------------------- The United States District Court for the District of Connecticut will hold a fairness hearing for the proposed $25.4 million settlement in the matter: In re Ethylene Propylene Diene Monomer (EPDM) Antitrust Litigation on behalf of all individuals or entities (excluding government entities) who directly purchased EPDM in the United States or form a facility located in the United States from any defendant from January 1, 1997 to December 31, 2001. The Court will hold a fairness hearing on May 20, 2005, at 10:00 a.m. at the United States District Court for the District of Connecticut, Court room 1, 141 Church Street, New Heaven, CT. For more details, contact In re Ethylene Propylene Diene Monomer (EPDM) Antitrust Litigation c/o Gilardi & Co., LLC by Mail: P.O. Box 1110, Corte Madera, CA 94976-1110 or visit their Web site: http://www.gilardi.com/php/shownotice.php?casetype=S&casename=EP DM+%28DDE%29&page_string=All%20claims&script_string=all.php&case code=epdm1 OR Michael D. Hausfeld of Cohen, Milstein, Hausfeld & Toll, P.L.L.C. by Mail: 1100 New York Avenue, N.W. Suite 500, West Tower, Washington, District of Columbia 20005-3964 Phone: 202-408-4600 or by Fax: 202-408-4699. FLEETWOOD ENTERPRISES: Recalls 543 Motorhomes For Crash Hazard -------------------------------------------------------------- Fleetwood Enterprises, Inc. is cooperating with the National Highway Traffic Safety Administration (NHTSA) by voluntarily recalling 543 motorhomes, namely: (1) FLEETWOOD / AMERICAN EAGLE, model 2004-2005 (2) FLEETWOOD / AMERICAN TRADITION, model 2004-2005 On certain Class A motorhomes, a pneumatic line can become pinched between the hydraulic filter and a compartment door strut. The chaffing caused by opening and closing of the compartment door can cause the filter to rupture and result in a hydraulic fluid leak. The loss of hydraulic fluid causes the power steering feature to not function. This can result in loss of vehicle control, personal injury or a vehicle crash. Dealers will inspect, replace or repair damaged lines and relocate the affected hydraulic lines. The recall is expected to begin on May 9,2005. For more details, contact the Company by Phone: 1-800-435-7345 or contact the NHTSA's auto safety hotline: 1-888-327-4236. FLORIDA: Bills To Curb Suits Passes Through GOP-Dominated House --------------------------------------------------------------- Under new measures that passed easily in Florida's Republican dominated Legislature, stores cannot anymore be sued for merely selling defective products and companies would get a chance to remedy problems before facing a class-action suit, The Associated Press reports. According to legal experts, the new bills would also make it clear that defendants with a small role in hurting someone would pay only a small portion of the damages and limit the venues where injured people can sue. The bills were heavily backed by Republicans that have made controlling lawsuits a major part of its agenda this year, as has the GOP nationally. Opponents of the bills though contend that legitimately injured victims will lose the chance to get justice and the poor who can't afford to pay lawyers for small grievances will suffer most. However, Rep. Don Brown, R-DeFuniak Springs countered by saying that businesses are crumbling under the weight of unfair lawsuits and the chance of having to make a jackpot payout. Rep. Brown also said before the House passed his bill (HB 1513) with a 79-32 vote and sent it to the Senate, "We need to create a better environment in the state of Florida so that we can have jobs," AP reports. HB 1513 takes on the legal doctrine known as "joint and several liability," which allows defendants with a small role in hurting someone pay a large share of the damages in some cases. It also seeks to eliminate the doctrine that opponents say unfairly allows plaintiffs to target the defendant with the most money. In addition, the bill also would prohibit people from suing a merchant for selling a defective product unless the seller was involved somehow in the manufacture or design of the product, or changed it in some way to make it dangerous. Another bill (HB 1925), which the House passed on a 90-20 vote, seeks to decrease business exposure to class action suits. That bill, which is sponsored by Rep. David Simmons, R-Longwood, would block out-of-state residents from joining many Florida class-action lawsuits and give defendants a 60-day window to settle the case and fix whatever is wrong before such a suit is filed. Supporters of the bills have long argued that plaintiffs in class action suits sometimes receive very little or maybe no money at all but instead get a coupon for a rebate off a product from the sued Company while lawyers collect hefty fees for representing the group. However, opponents counter that class- action suits protect the little guy, who often doesn't have the means to sue over a small loss, but as part of a class can get some justice for a wrong. Rep. Arthenia Joyner, D-Tampa, even reiterates, "The class- action is the best and most efficient way to protect the interest of consumers, especially when a large corporation rips off a bunch of unknowing, hardworking people," AP reports. With the passing of the bills in the house, both will now be forwarded to the Senate, where there is some appetite for some litigation changes, although decidedly less than in the House. GENERAL MOTORS: Recalls 316,508 SUVS Due To Fire, Injury Hazard --------------------------------------------------------------- General Motors Corporation is cooperating with the National Highway Traffic Safety Administration by voluntarily recalling 316,508 sport utility vehicles, namely: (1) CHEVROLET / SUBURBAN, model 2000-2001 (2) GMC / YUKON XL, model 2000-2001 The trucks and sport utility vehicles were built with fuel module reservoir assemblies that contain fuel pump wires. Connectors may overheat under certain operating conditions. If the ignition circuit wire is exposed, the fuel pump fuse will blow, disabling the fuel pump and causing an engine stall or no- start condition. If sufficient heat is conducted to the pass- through connector, a hole in the connector may result, which may cause a `service engine soon' light to be illuminated during the emission system diagnostic routine. Fuel vapor and in some cases liquid fuel may leak out of the fuel tank through the hole in the connector body. Fuel leakage in the presence of an ignition source could result in a fire. Also if ignition circuit or ground wire is exposed and shorts to the fuel level sender card wires, inaccurate fuel level readings may result. Dealers will remove the fuel tank and remove the module reservoir assemblies from the tank, and install a new service kit. The recall is expected to begin on May 31,2005. For more details contact Chevrolet by Phone: 1-800-630-2438 by Phone: 1-866-996-9463 or contact the NHTSA's auto safety hotline: 1-888-327-4236. HERTZ CORPORATION: NJ Appeals Court Hears Suit Dismissal Appeal --------------------------------------------------------------- The New Jersey Superior Court, Appellate Division has briefed plaintiffs' appeal of the dismissal of the class action filed against The Hertz Corporation, styled "Naomi R. Henderson, individually and on behalf of all others similarly situated, v. The Hertz Corporation." The suit was filed in the Superior Court of New Jersey, Essex County in August 2003. The suit purports to be a class action on behalf of all persons who purchased optional insurance products in the State of New Jersey or in other states from or through the Company at times that the Company did not have required licenses to sell such insurance. In January 2004, the Company's motion to dismiss was granted and an order of dismissal was thereafter entered. The plaintiff has appealed the dismissal, and that appeal has now been briefed, argued and submitted to the New Jersey Appellate Division for a decision. HERTZ CORPORATION: Seeks Summary Judgment For FL Consumer Suit -------------------------------------------------------------- The Hertz Corporation asked the Circuit Court of the Thirteenth Judicial Court of the State of Florida, in and for Hillsborough County to grant summary judgment in its favor in the class action filed against it, styled "Stephen Moore, on behalf of himself and all others similarly situated, v. The Hertz Corporation. The suit purports to be a class action on behalf of persons who rented vehicles from the Company in Florida and were allegedly overcharged for the recovery of a tire and battery solid waste management fee and the recovery of registration fees for the issuance of Florida license plates. Similar lawsuits were separately commenced by the same plaintiff against Avis Rent A Car System Inc. and Budget Rent A Car System, Inc. In February 2004, the plaintiff filed an amended class action complaint alleging that, in addition to the initial causes of action, the Company deceptively collected an improper "federal excise tax" for frequent flyer mileage awards to class members. The Company answered the amended complaint and discovery commenced. In January 2005, the Company filed a motion for summary judgment and the plaintiff filed a revised motion for class certification. Rulings on these motions are expected in the second quarter of 2005. HERTZ CORPORATION: TX Court Refuses Summary Judgment in Lawsuit --------------------------------------------------------------- The 214th Judicial District Court of Nueces County, Texas denied The Hertz Corporation's motion for summary judgment in the class action filed against it, styled "Jose M. Gomez, individually and on behalf of all other similarly situated persons, v. The Hertz Corporation." The suit purports to be a class action filed alternatively on behalf of all persons who were charged a Fuel and Service Charge (FSC) by the Company or all Texas residents who were charged a FSC by the Company. The complaint alleges that the FSC is an unlawful penalty and that, therefore, it is void and unenforceable. In response to various motions by the Company, the plaintiff has filed two amended complaints, scaling back the putative class from a nationwide class to a class of all Texas residents who were charged a FSC by the Company or by its Corpus Christi Licensee. A new cause of action was also added for conversion. After some limited discovery, the Company filed a motion for summary judgment in December 2004. That motion was denied in January 2005. More extensive discovery will now commence. HERTZ CORPORATION: OK Court Dismisses Consumer Lawsuit V. FSC ------------------------------------------------------------- The District Court in and for Tulsa County, State of Oklahoma dismissed the class action filed against The Hertz Corporation, styled "Keith Kochner, individually and on behalf of all similarly situated persons, v. The Hertz Corporation. The suit purports to be a class action, this time on behalf of Oklahoma residents who rented from the Company and incurred the Company's Fuel and Service Charge (FSC). The petition alleges that the imposition of the FSC is a breach of contract and amounts to an unconscionable penalty or liquidated damages in violation of Article 2A of the Oklahoma Uniform Commercial Code. In March 2005, the trial court granted the Company's motion to dismiss the action but also granted the plaintiff the right to replead. HYPERCOM CORPORATION: Faces Shareholder Fraud Suits in AZ Court --------------------------------------------------------------- Hypercom Corporation continues to face several shareholder class actions filed in the United States District Court for the District of Arizona, in connection with the restatement of the Company's quarterly results for the first three quarters of 2004. The suits also name as defendants the Company's chief executive officer, and its chief financial officer. The suits allege that the Company and its executive management engaged in violations of the Securities Exchange Act of 1934 by issuing false and misleading statements concerning the Company's financial results for the first three quarters of 2004. Also in connection with the restatement, a shareholder's derivative action was filed against the Company, its chief executive officer, chief financial officer, and its board of directors alleging breach of fiduciary duties. This action is based on the same facts and circumstances alleged in the shareholder suits discussed above, and alleges that the defendants participated in issuing misleading and inaccurate statements and failed to implement adequate internal controls. The lead suit is styled "Randy Ray et al. v. Hypercom Corporation, et al.," filed in the United States District Court for the District of Arizona. The plaintiff firms in this litigation are: (1) Baron & Budd, P.C., 3102 Oak Lawn Avenue, Suite 1100, Dallas, TX, 75219, Phone: 800-946-9646, E-mail: info@baronbudd.com (2) Brian Felgoise, 230 South Broad Street, Suite 404, Philadelphia, PA, 19102 Phone: 215.735.6810, Fax: 215/735.5185, (3) Brodsky & Smith, LLC, 11 Bala Avenue, Suite 39, Bala Cynwyd, PA, 19004, Phone: 610.668.7987, Fax: 610.660.0450, E-mail: esmith@Brodsky-Smith.com (4) Charles J. Piven, World Trade Center-Baltimore,401 East Pratt Suite 2525, Baltimore, MD, 21202 Phone: 410.332.0030, E-mail: pivenlaw@erols.com (5) Cohen, Milstein, Hausfeld & Toll, P.L.L.C. (New York, NY), 825 Third Avenue - 30th Floor, New York, NY, 10022 Phone: 212.838.7797, Fax: 212.838.7745, E-mail: lawinfo@cmht.com (6) Dyer & Shuman, LLP, 801 East 17th Avenue, Denver, CO, 80218-1417, Phone: 303.861.3003, Fax: 800.711.6483, E- mail: info@dyershuman.com (7) Federman & Sherwood, 120 North Robinson, Suite 2720, Oklahoma City, OK, 73102 Phone: 405-235-1560, E-mail: wfederman@aol.com (8) Goodkind Labaton Rudoff & Sucharow LLP, 100 Park Avenue, New York, NY, 10017 Phone: 212.907.0700, Fax: 212.818.0477, E-mail: info@glrslaw.com (9) Schatz & Nobel, P.C., 330 Main Street, Hartford, CT, 06106 Phone: 800.797.5499, Fax: 860.493.6290, E-mail: sn06106@AOL.com (10) Schiffrin & Barroway, LLP, 3 Bala Plaza E, Bala Cynwyd, PA, 19004 Phone: 610.667.7706, Fax: 610.667.7056, E- mail: info@sbclasslaw.com (11) Smith & Smith LLP, 3070 Bristol Pike, Suite 112, Bensalem, PA, 19020 Phone: (866)759-2275, E-mail: howardsmithlaw@hotmail.com INSTINET GROUP: Shareholder Lodges Suit Over Unfair Transaction --------------------------------------------------------------- Directors of Instinet Group Inc., the electronic brokerage being bought by Nasdaq Stock Market Inc. for $1.88 billion, were sued by investor Michael Amparo, who contends the transaction undervalues the stock, The NY Post reports. Nasdaq agreed on April 22 to pay $5.44 per share in cash for Instinet, which is 62 percent owned by Reuters Group Plc, the world's largest publicly traded financial information provider. In his lawsuit, which was filed in Delaware Chancery Court in Wilmington, Mr. Amparo contends that the offer "is unfair and inadequate" based on analysts' reports that the stock is worth more than $7 a share. He further contends that Instinet directors are legally bound to get the best price. The buyout would combine the two largest electronic markets for U.S. equities, increasing competition for the New York Stock Exchange. The NYSE announced last week that it would buy trader Archipelago Holdings Inc. Instinet spokesman Stephen Austin though told the NY Post, "It is our strong belief that this lawsuit has no merit." Nevertheless, Mr. Amparo has asked a judge to give the suit class-action status, which would convert it into a group suit on behalf of all Instinet shareholders, to stop the transaction and to award damages and legal fees. INSWEB CORPORATION: NY Court Preliminarily OKs Suit Settlement -------------------------------------------------------------- The United States District Court for the Southern District of New York granted preliminary approval to the settlement of the consolidated securities class action filed against InsWeb Corporation, certain current and former officers and directors, and three investment banking firms that served as underwriters for its initial public offering in July 1999. A securities class action lawsuit was filed on December 5, 2001, purportedly on behalf of all persons who purchased the Company's common stock from July 22, 1999 through December 6, 2000. The complaint, as subsequently amended, alleges violations of Sections 11 and 15 of the Securities Act of 1933 and Sections 10 and 20 of the Securities Exchange Act of 1934, on the grounds that the prospectuses incorporated in the registration statements for the offering failed to disclose, among other things, that the underwriters had solicited and received excessive and undisclosed commissions from certain investors in exchange for which the underwriters allocated to those investors material portions of the shares of Company stock sold in the offerings and the underwriters had entered into agreements with customers whereby the underwriters agreed to allocated shares of the stock sold in the offering to those customers in exchange for which the customers agreed to purchase additional shares of InsWeb stock in the aftermarket at pre-determined prices. No specific damages are claimed. Similar allegations have been made in lawsuits relating to more than 300 other initial public offerings conducted in 1999 and 2000, all of which have been consolidated for pretrial purposes. In October 2002, all claims against the individual defendants were dismissed without prejudice. In February 2003, the Court dismissed the claims in the InsWeb action alleging violations of the Securities Exchange Act of 1934 but allowed the plaintiffs to proceed with the remaining claims. In June 2003, the plaintiffs in all of the cases presented a settlement proposal to all of the issuer defendants. Under the proposed settlement, the plaintiffs will dismiss and release all claims against participating defendants in exchange for a contingent payment guaranty by the insurance companies collectively responsible for insuring the issuers in all the related cases, and the assignment or surrender to the plaintiffs of certain claims the issuer defendants may have against the underwriters. The Company and most of the other issuer defendants have accepted the settlement proposal. The settlement was given preliminary approval by the Court in February 2005, pending a modification to the settlement documents. The suit is styled "In Re InsWeb Corporation Initial Public Offering Securities Litigation," filed in relation to "IN RE INITIAL PUBLIC OFFERING SECURITIES LITIGATION, Master File No. 21 MC 92 (SAS)," both pending in the United States District Court for the Southern District of New York, under Judge Shira N. Scheindlin. The plaintiff firms in this litigation are: (1) Bernstein Liebhard & Lifshitz LLP (New York, NY), 10 E. 40th Street, 22nd Floor, New York, NY, 10016, Phone: 800.217.1522, E-mail: info@bernlieb.com (2) Milberg Weiss Bershad Hynes & Lerach, LLP (New York, NY), One Pennsylvania Plaza, New York, NY, 10119-1065, Phone: 212.594.5300 (3) Schiffrin & Barroway, LLP, Mail: 3 Bala Plaza E, Bala Cynwyd, PA, 19004, Phone: 610.667.7706, Fax: 610.667.7056, E-mail: info@sbclasslaw.com (4) Sirota & Sirota, LLP, 110 Wall Street 21st Floor, New York, NY, 10005, Phone: 888.759.2990, Fax: 212.425.9093, E-mail: Info@SirotaLaw.com (5) Stull, Stull & Brody (New York), 6 East 45th Street, New York, NY, 10017, Phone: 310.209.2468, Fax: 310.209.2087, E-mail: SSBNY@aol.com (6) Wolf, Haldenstein, Adler, Freeman & Herz LLP, 270 Madison Avenue, New York, NY, 10016, Phone: 212.545.4600, Fax: 212.686.0114, E-mail: newyork@whafh.com JAGUAR CARS: Recalls 253 Jaguar X3 Cars Due To Crash Hazard ----------------------------------------------------------- Jaguar Cars Ltd. is cooperating with the National Highway Traffic Safety Administration (NHTSA) by voluntarily recalling 253 JAGUAR / XK cars, model 2006. On certain passenger vehicles, the accelerator pedal arms were incorrectly assembled by the supplier. The clearance between the accelerator pedal and the brake pedal may be reduced. This condition can increase the risk of both pedals being operated at the same time by the driver. The accelerator pedal could be held down by the pedal stop assembly increasing the risk of a crash. Dealers will inspect the pedal assembly and replace the accelerator pedal. The manufacturer has not yet provided an owner notification schedule. For more details, contact the Company by Phone: 1-800-452-4827 or contact the NHTSA's auto safety hotline: 1-888-327-4236. KING PHARMACEUTICALS: Discovery Proceeds in TN Securities Suit -------------------------------------------------------------- Discovery is continuing in the consolidated securities class action filed against King Pharmaceuticals, Inc., its current and former directors and executive officers and a subsidiary in the United States District Court for the Eastern District of Tennessee. Beginning in March 2003, 22 purported class action complaints were filed by holders of the Company's securities, alleging violations of the Securities Act of 1933 and/or the Securities Exchange Act of 1934. These 22 complaints have been consolidated. In addition, holders of our securities filed two class action complaints alleging violations of the Securities Act of 1933 in Tennessee state court. The Company removed these two cases to the United States District Court for the Eastern District of Tennessee, where these two cases were consolidated with the other class actions. Plaintiffs in these actions unsuccessfully moved to remand these two cases back to Tennessee state court. These two actions therefore remain part of the consolidated action. The district court has appointed lead plaintiffs in the consolidated action, and those lead plaintiffs filed a consolidated amended complaint on October 21, 2003. The complaint alleges that the Company, through some of its executive officers, former executive officers, directors, and former directors, made false or misleading statements concerning its business, financial condition, and results of operations during periods beginning February 16, 1999 and continuing until March 10, 2003. Plaintiffs in the consolidated action have also named the underwriters of the Company's November 2001 public offering as defendants. The Company and other defendants filed motions to dismiss the consolidated amended complaint. On August 12, 2004, the court ruled on defendants' motions to dismiss. The Court dismissed all claims as to Jones Pharma, Inc., a predecessor to one of the Company's wholly owned subsidiaries, King Research and Development, Inc., and as to defendants Dennis Jones and Henry Richards. The Court also dismissed certain claims as to five other individual defendants. The Court denied the motions to dismiss in all other respects. Following the Court's ruling, on September 20, 2004, the Company and the other remaining defendants filed answers to plaintiffs' consolidated amended complaint. Discovery and other proceedings in the case are continuing, and no trial date has been set. Another purported class action complaint was filed on August 16, 2004 in Tennessee State court against the Company and the members of its board of directors. This new case largely asserts substantially the same claims and seeks the same relief as the class action claim that was recently added to the state derivative action described above. Defendants in that action filed a motion to dismiss on November 30, 2004; that motion is pending and no hearing date has been set. Additionally, a class action complaint was filed in the United States District Court for the Eastern District of Tennessee under the Employee Retirement Income Security Act, which we refer to as "ERISA." As amended, the complaint alleges that the Company and certain of its executive officers, former executive officers, directors, former directors and an employee violated fiduciary duties that they allegedly owed the Company's 401(k) Retirement Savings Plan's participants and beneficiaries under ERISA. The allegations underlying this action are similar in many respects to those in the class action litigation described above. The defendants filed a motion to dismiss the ERISA action on March 5, 2004. The District Court Judge referred the motion to a Magistrate Judge for a report and recommendation. On December 8, 2004, the Magistrate Judge held a hearing on this motion, and, on December 10, 2004, he recommended that the District Court Judge dismiss the action. The District Court Judge accepted the recommendation and dismissed the case on February 4, 2005. The suit is styled "In re King Pharmaceuticals, Inc. Securities Litigation, case no. 03-CV-77," filed in the United States District Court for the Eastern District of Tennessee, under Judge Thomas Gray Hull. Representing the plaintiffs is Bernstein Litowitz Berger & Grossmann LLP (San Diego, CA), 12544 High Bluff Drive, Suite 150, San Diego, CA, 92130 Phone: 858.793.0070, Fax: 858.793.0323, E-mail: blbg@blbglaw.com. M2 AUTOMOTIVE: Employees Lodges Suit Over Abrupt Closure in CA -------------------------------------------------------------- Former employee Darren Shepard initiated a lawsuit against an automotive repair company in Los Angeles that abruptly went out of business and closed its 27 shops, The Associated Press reports. The suit was filed in Superior Court in an effort to recover back wages, accrued vacation time, sick leave and overtime compensation. It seeks class-action status as well as compensatory and punitive damages on behalf of the other approximately 750 employees of Santa Monica-based M2 Automotive Inc., which closed this month. A few weeks ago, Allstate Corp. sued Credit Managers Association of California, which is liquidating the repair company's assets. According to the insurance giant, the association had refused to give up more than 100 vehicles owned by Allstate customers. As a result of the Allstate's legal action, about 1,000 cars awaiting collision repairs at M2 centers are now being held until its assets are sold. MICROSOFT CORPORATION: Settles NE Antitrust Complaint For $22M -------------------------------------------------------------- Microsoft Corporation reached a $22 million settlement in a class action lawsuit alleging that Microsoft violated Nebraska's antitrust and unfair competition laws, The Press Esc, India reports. Under the terms of the settlement, Microsoft will issue vouchers totaling up to $22.6 million to schools in Nebraska, which can be used to buy hardware and software products, including those not manufactured by Microsoft. According to the settlement, eligible schools are public schools (K-12) in which at least 50% of the attending students are eligible to receive free or reduced price meals through the National School Lunch Program. Additionally, under the settlement terms, consumers who, between February 28, 1997 and December 31, 2002, resided in Nebraska and indirectly purchased certain Microsoft operating system, productivity suite, spreadsheet or word processing software for use in Nebraska and not for resale will be eligible to apply for the vouchers. In a press statement, Robert M. Hillis, attorney for the Plaintiffs, "We're very pleased with the settlement and the recovery that will be made by Nebraska consumers and businesses. In addition, we are very happy with the structure of the settlement that will benefit the school children of Nebraska." On the other hand, Tom Burt, corporate vice president and deputy general counsel for Microsoft also said in a separate press statement, "This settlement will help schools all across Nebraska get the computers and software they need. This settlement allows us to focus on the future and building great software, and avoids the cost and uncertainty of litigation." MOLEX INC.: Shareholders Lodge Securities Fraud Suits in N.D. IL ---------------------------------------------------------------- Molex, Inc. faces four securities class actions filed in the United States District Court for the Northern District of Illinois, Eastern Division between March 2, 2005 and March 11, 2005, each purporting to be on behalf of a class of Company shareholders. The suits also name some or all of the following officers and employees: (1) J. Joseph King, (2) Diane S. Bullock, (3) John H. Krehbiel Jr., (4) Frederick A. Krehbiel, (5) Louis A. Hecht, (6) Ronald L. Schubel and (7) Martin P. Slark The suits are styled: (i) The Takara Trust v. Molex Incorporated, Et. Al., Case No. 05C 1245; (ii) BDM, LLC v. Molex Incorporated, Et. Al., Case No. 05C 1372; (iii) James Baker v. Molex Incorporated, Et. Al., Case No. 05C 1467; and (iv) Drywall Acoustic Lathing and Insulation Local 675 Pension Fund v. Molex Incorporated, Et. Al., Case No. 05C 1461 The complaints in the Shareholder Actions generally allege, among other things, that during the period from April 15, 2004 (or July 27, 2004 in the case of the complaints filed by The Takara Trust and the Drywall Acoustic Lathing and Insulation Local 675 Pension Fund) to February 14, 2005 the named defendants made or caused to be made a series of materially false or misleading statements about Molex's business, prospects, operations, and financial statements which constituted violations of Section 10(b) of the Exchange Act of 1934, as amended, and Rule 10b-5 promulgated thereunder and Section 20(a) of the Exchange Act. The complaint filed by BDM, LLC also alleges that certain of the named defendants engaged in insider trading in violation of Section 10(b) and Rule 10b-5. As relief, the complaints seek, among other things, declaration that the action be certified as a proper class action, unspecified compensatory damages (including interest) and payment of costs and expenses (including fees for legal counsel and experts). The complaint filed by BDM, LLC also seeks, as relief, an accounting of the proceeds received by certain of the named defendants from the sale of Molex stock during the period from April 15, 2004 to February 14, 2005 and the imposition of a constructive trust on such proceeds. NORTEL NETWORKS: Continues To Face NY Securities Fraud Lawsuit -------------------------------------------------------------- Nortel Networks Corporation (NNC) continues to face a consolidated securities class action filed in the United States District Court for the Southern District of New York, subsequent to the February 15, 2001 announcement in which the Company provided revised guidance for financial performance for the 2001 fiscal year and the first quarter of 2001. The Company and certain of its then-current officers and directors were initially named as defendants in more than twenty-five purported class action lawsuits filed in the U.S. District Courts for the Eastern District of New York, for the Southern District of New York and for the District of New Jersey and the provinces of Ontario, Quebec and British Columbia in Canada, on behalf of shareholders who acquired the Company's securities as early as October 24, 2000 and as late as February 15, 2001. The suits allege, among other things, violations of U.S. federal and Canadian provincial securities laws. These matters also have been the subject of review by Canadian and U.S. securities regulatory authorities. On May 11, 2001, the defendants filed motions to dismiss and/or stay in connection with the three proceedings in Quebec primarily based on the factual allegations lacking substantial connection to Quebec and the inclusion of shareholders resident in Quebec in the class claimed in the Ontario lawsuit. The plaintiffs in two of these proceedings in Quebec obtained court approval for discontinuances of their proceedings on January 17, 2002. The motion to dismiss and/or stay the third proceeding was heard on November 6, 2001 and the court deferred any determination on the motion to the judge who will hear the application for authorization to commence a class proceeding. On December 6, 2001, the defendants filed a motion seeking leave to appeal that decision. The motion for leave to appeal was dismissed on March 11, 2002. On October 16, 2001, an order in the Southern District of New York was filed consolidating twenty-five of the related U.S. class action lawsuits into a single case, appointing class plaintiffs and counsel for such plaintiffs. The plaintiffs served a consolidated amended complaint on January 18, 2002. On December 17, 2001, the defendants in the British Columbia action served notice of a motion requesting the court to decline jurisdiction and to stay all proceedings on the grounds that British Columbia is an inappropriate forum. The motion has been adjourned at the plaintiffs' request to a future date to be set by the parties. A class action lawsuit against the Company was also filed in the U.S. District Court for the Southern District of New York on behalf of shareholders who acquired the securities of JDS Uniphase Corporation (JDS) between January 18, 2001 and February 15, 2001, alleging violations of the same U.S. federal securities laws as the above-noted lawsuits. On April 1, 2002, the Company filed a motion to dismiss both the above consolidated U.S. shareholder class action and the above JDS shareholder class action complaints on the grounds that they failed to state a cause of action under U.S. federal securities laws. With respect to the JDS shareholder class action complaint, the Company also moved to dismiss on the separate basis that JDS shareholders lacked standing to sue the Company. On January 3, 2003, the District Court granted the motion to dismiss the JDS shareholder class action complaint and denied the motion to dismiss the consolidated U.S. class action complaint. Plaintiffs appealed the dismissal of the JDS shareholder class action complaint. On November 19, 2003, oral argument was held before the Second Circuit on the JDS shareholders' appeal of the dismissal of their complaint. On May 19, 2004, the Second Circuit issued an opinion affirming the dismissal of the JDS shareholder class action complaint and on July 14, 2004 the Second Circuit denied plaintiffs' motion for rehearing. On October 12, 2004, the plaintiffs filed a petition for writ of certiorari in the U.S. Supreme Court. On November 12, 2004, the defendants filed Brief for the Respondents in Opposition, and on November 22, 2004, the plaintiffs filed Reply to Brief in Opposition. On January 10, 2005, the U.S. Supreme Court denied the petition for writ of certiorari. With respect to the consolidated U.S. shareholder class action, the plaintiffs served a motion for class certification on March 21, 2003. On May 30, 2003, the defendants served an opposition to the motion for class certification. Plaintiffs' reply was served on August 1, 2003. The District Court held oral arguments on September 3, 2003 and issued an order granting class certification on September 5, 2003. On September 23, 2003, the defendants filed a motion in the Second Circuit for permission to appeal the class certification decision. The plaintiffs' opposition to the motion was filed on October 2, 2003. On November 24, 2003, the Second Circuit denied the motion. On March 10, 2004, the District Court approved the form of notice to the class, which was published and mailed. On July 17, 2002, a new purported class action lawsuit (the "Ontario Claim") was filed in the Ontario Superior Court of Justice, Commercial List, naming the Company, certain of its current and former officers and directors and its auditors as defendants. The factual allegations in the Ontario Claim are substantially similar to the allegations in the consolidated amended complaint filed in the U.S. District Court described above. The Ontario Claim is on behalf of all Canadian residents who purchased Nortel Networks Corporation securities (including options on Nortel Networks Corporation securities) between October 24, 2000 and February 15, 2001. The plaintiffs claim damages of Canadian $5,000, plus punitive damages in the amount of Canadian $1,000, prejudgment and postjudgment interest and costs of the action. On September 23, 2003, the Court issued an order allowing the plaintiffs to proceed to amend the Ontario Claim and requiring that the plaintiffs serve class certification materials by December 15, 2003. On September24, 2003, the plaintiffs filed a notice of discontinuance of the original action filed in Ontario. On December 12, 2003, plaintiffs' counsel requested an extension of time to January 21, 2004 to deliver class certification materials. On January 21, 2004, plaintiffs' counsel advised the Court that the two representative plaintiffs in the action no longer wished to proceed, but counsel was prepared to deliver draft certification materials pending the replacement of the representative plaintiffs. On February 19, 2004, the plaintiffs' counsel advised the Court of a potential new representative plaintiff. On February 26, 2004, the defendants requested the Court to direct the plaintiffs' counsel to bring a motion to permit the withdrawal of the current representative plaintiffs and to substitute the proposed representative plaintiff. On June 8, 2004, the Court signed an order allowing a Second Fresh as Amended Statement of Claim that substituted one new representative plaintiff, but did not change the substance of the prior claim. The suit is styled "Weinstein et al v. Nortel Networks, et al., case no. 1:01-cv-01855-RMB-MHD," filed in the United States District Court for the Southern District of New York, under Judge Richard M. Berman. Lead plaintiff Ontario Public Service Employees' Union Pension Trust Fund is represented by Daniel Bernard Scotti and Steven G. Schulman of Milberg Weiss Bershad & Schulman LLP (NYC), Mail: One Pennsylvania Plaza New York, NY 10119 Phone: (212) 594-5300 Fax: 212-868-1229 Email: dscotti@milberg.com or sschulman@milberg.com. The Company is represented by Stuart J. Baskin, and Tai Hyun Park of Shearman & Sterling, L.L.P., 599 Lexington Avenue New York, NY 10022-6069 Phone: (212) 848-4000 Email: sbaskin@shearman.com or tpark@shearman.com. NORTEL NETWORKS: Continues To Face ERISA Violations Suit in TN -------------------------------------------------------------- Nortel Networks Corporation faces an amended consolidated class action filed in the United States District Court for the Middle District of Tennessee, alleging violations of the Employee Retirement Income Security Act (ERISA). A purported class action lawsuit was initially filed in the United States District Court for the Middle District of Tennessee on December 21, 2001, on behalf of participants and beneficiaries of the Nortel's Long-Term Investment Plan (the "Plan") at any time during the period of March 7, 2000 through the filing date and who made or maintained Plan investments in Nortel Networks Corporation common shares, under ERISA for Plan- wide relief. The suit alleges, among other things, material misrepresentations and omissions to induce Plan participants to continue to invest in and maintain investments in Nortel Networks Corporation common shares in the Plan. A second purported class action lawsuit, on behalf of the Plan and Plan participants for whose individual accounts the Plan purchased Nortel Networks Corporation common shares during the period from October 27, 2000 to February 15, 2001 and making similar allegations was filed in the same court on March 12, 2002. A third purported class action lawsuit, on behalf of persons who are or were Plan participants or beneficiaries at any time since March 1, 1999 to the filing date and making similar allegations, was filed in the same court on March 21, 2002. The first and second purported class action lawsuits were consolidated by a new purported class action complaint, filed on May 15, 2002 in the same court and making similar allegations, on behalf of Plan participants and beneficiaries who directed the Plan to purchase or hold shares of certain funds, which held primarily Nortel Networks Corporation common shares, during the period from March 7, 2000 through December 21, 2001. On September 24, 2002, plaintiffs in the consolidated action filed a motion to consolidate all the actions and to transfer them to the U.S. District Court for the Southern District of New York. The plaintiffs then filed a motion to withdraw the pending motion to consolidate and transfer. The withdrawal was granted by the District Court on December 30, 2002. A fourth purported class action lawsuit, on behalf of the Plan and Plan participants for whose individual accounts the Plan held Nortel Networks Corporation common shares during the period from March 7, 2000 through March 31, 2001 and making similar allegations, was filed in the U.S. District Court for the Southern District of New York on March 12, 2003. On March 18, 2003, plaintiffs in the fourth purported class action filed a motion with the Judicial Panel on Multidistrict Litigation to transfer all the actions to the U.S. District Court for the Southern District of New York for coordinated or consolidated proceedings pursuant to 28 U.S.C. section 1407. On June 24, 2003, the Judicial Panel on Multidistrict Litigation issued a transfer order transferring the Southern District of New York action to the U.S. District Court for the Middle District of Tennessee (the "Consolidated ERISA Action"). On September 12, 2003, the plaintiffs in all the actions filed a consolidated class action complaint. On October 28, 2003, the defendants filed a motion to dismiss the complaint and a motion to stay discovery pending disposition of the motion to dismiss. On March 30, 2004, the plaintiffs filed a motion for certification of a class consisting of participants in, or beneficiaries of, the Plan who held shares of the NNC Stock Fund during the period from March 7, 2000 through March 31, 2001. On April 27, 2004, the Court granted the defendants' motion to stay discovery pending resolution of defendants' motion to dismiss. On June 15, 2004, the plaintiffs filed a First Amended Consolidated Class Action Complaint that added additional current and former officers and employees as defendants and expanded the purported class period to extend from March 7, 2000 through to June 15, 2004. NORTEL NETWORKS: Plaintiffs Agree To Dismiss Claim in NY Lawsuit ---------------------------------------------------------------- Plaintiffs agreed to dismiss a claim in the consolidated securities class action filed in the United States District Court for the Southern District of New York against Nortel Networks Corporation. Subsequent to the March 10, 2004 announcement in which the Company indicated it was likely that it and Nortel Networks Ltd. would need to revise their previously announced unaudited results for the year ended December 31, 2003, and the results reported in certain of their quarterly reports for 2003, and to restate their previously filed financial results for one or more earlier periods, the Company and certain of its then current and former officers and directors were named as defendants in 27 purported class action lawsuits. These lawsuits in the U.S. District Court for the Southern District of New York, filed on behalf of shareholders who acquired the Company's securities as early as February 16, 2001 and as late as May 15, 2004, allege, among other things, violations of U.S. federal securities laws. On June 30, 2004, the Court signed Orders consolidating the 27 class actions and appointing lead plaintiffs and lead counsel. The plaintiffs filed a consolidated class action complaint on September 10, 2004, alleging a class period of April 24, 2003 through and including April 27, 2004. On November 5, 2004, the Company and the Audit Committee Defendants filed a motion to dismiss the consolidated class action complaint. On January 18, 2005, the lead plaintiffs, the Company, and the Audit Committee Defendants reached an agreement in which the Company would withdraw its motion to dismiss and plaintiffs would dismiss Count II of the complaint that asserts a claim against the Audit Committee Defendants. NORTEL NETWORKS: Shareholders Launch Fraud Suit in Canada Court --------------------------------------------------------------- Nortel Networks Corporation, Nortel Networks Ltd. and certain of their current and former officers and directors continues to face a purported class proceeding in the Ontario Superior Court of Justice on behalf of shareholders who acquired Nortel Networks Corporation securities as early as November 12, 2002 and as late as July 28, 2004. This lawsuit alleges, among other things, breaches of trust and fiduciary duty, oppressive conduct and misappropriation of corporate assets and trust property in respect of the payment of cash bonuses to executives, officers and employees in 2003 and 2004 under the NNC Return to Profitability bonus program and seeks damages of Canadian $250 and an order under the Canada Business Corporations Act directing that an investigation be made respecting these bonus payments. NORTEL NETWORKS: Canadian Investors Launch Securities Fraud Suit ---------------------------------------------------------------- Nortel Networks Corporation and certain of its current and former officers and directors and its auditors face a purported class proceeding filed in the Ontario Superior Court of Justice, Commercial List, on behalf of all Canadian residents who purchased the Company's securities from April 24, 2003 to April 27, 2004. This lawsuit alleges, among other things, negligence, misrepresentations, oppressive conduct, insider trading and violations of Canadian corporation and competition laws in connection with the Company's 2003 financial results and seeks damages of Canadian $3,000, plus punitive damages in the amount of Canadian $1,000, prejudgment and postjudgment interest and costs of the action. PITNEY BOWES: Lawsuit Settlement Hearing Set May 25, 2005 --------------------------------------------------------- The Montgomery County Circuit Court in Alabama will hold a fairness hearing for the proposed settlement in the matter: Ann Harbin, et al. v. Pitney Bowes Inc. and Pitney Browse Credit Corporation, Civil No. 2002-769 on behalf of all persons who paid a Valuemax fee to Pitney Bowes Credit Corporation between January 1, 1999 and December 31, 2004, but not those customers for whom PBCC has repaired or replaced its equipment through Valuemax. The court will hold the fairness hearing on May 25, 2005 at 8:30 a.m. in the courtroom of the Honorable Charles Price, 251 South Lawrence Street, Montgomery, AL 36102. For more details, contact Charles A. McCallum, III of McCallum Hoaglund Cook & Irby, LLP by Mail: 2062 Columbiana Road, Vestavia Hills, Alabama 35216 (Jefferson & Shelby Cos.) by Phone: 205-824-7767 or by Fax: 205-824-7768. RHEE BROS: Recalls Bellflower Root Due To Undeclared Sulfites ------------------------------------------------------------- Rhee Bros., Inc. of Columbia, MD is recalling its 16 oz. Packages of 'Assi Brand Dried Bellflower Root' because they may contain undeclared sulfites. People who have allergies to sulfites run the risk of serious life-threatening allergic reaction if they consume these products. The recalled product was distributed in retail stores on the Eastern part of the United States. The product comes in a 16 oz. package marked with 'Assi brand Dried Bellflower Root'. Its item number is 06034K on the label. No illnesses have been reported to date in connection with this problem. The recall was initiated after sampling by 'Florida State Department of Agriculture & Markets' food inspectors discovered that the sulfite-containing product was distributed in packaging that did not reveal the presence of sulfites. Subsequent investigation indicates the problem was caused by a temporary breakdown in the labeling processes. Wholesale distribution of the product has been suspended until the Company is certain that the label has been replaced with a corrected label. Consumers who have purchased 16 oz. Packages of 'Assi brand Dried Bellflower Root' are urged to return them to the place of purchase for a full refund. Consumers with questions may contact the Company at 1-410-381-9000. RUBBER CHEMICALS: Lawsuit Settlement Hearing Set June 21, 2005 -------------------------------------------------------------- The United States District Court for the Northern District of California will hold a fairness hearing for the proposed $18.5 million settlement in the matter: In re Rubber Chemicals Antitrust Litigation (MDL Docket No. C-04-1648 (MJJ)) on behalf of all persons (excluding government entities) which purchased rubber chemicals and/or miscellaneous included chemicals in the United States, including purchases for delivery in the United States, directly from any Defendants at any time during the period from May 1, 1995 through December 31, 2001. The court will hold the fairness hearing on June 21, 2005, at 9:30 a.m. at the United States District Court for the Northern District of California, 450 Golden Gate Ave., Courtroom 11, 19th Floor, San Francisco, CA. For more details, contact In re Rubber Chemicals Antitrust Litigation c/o Gilardi & Co., LLC by Mail: P.O. Box 8060, San Rafael, CA 94912-8060 or visit their Web site: http://www.gilardi.com/php/shownotice.php?casetype=C&casename=Ru bber+Chemicals+%28Flexsys%29&page_string=All%20claims&script_str ing=all.php&casecode=rbbr1 OR Michael D. Hausfeld of Cohen, Milstein, Hausfeld & Toll, P.L.L.C. by Mail: 1100 New York Avenue, N.W. Suite 500, West Tower, Washington, District of Columbia 20005-3964 Phone: 202-408-4600 or by Fax: 202-408-4699. SMITHKLINE BEECHMAN: Judge Approves $65M Paxil Suit Settlement -------------------------------------------------------------- U.S. District Judge John R. Padova granted final approval to SmithKline Beecham's $65 million settlement of a class action antitrust suit brought by consumers who said they paid inflated prices for Paxil, a popular anti-depressant drug, The Legal Intelligencer reports. According to court documents, the suit alleged that SmithKline illegally maintained a monopoly by filing a series of "sham" patent lawsuits that were designed to delay any generic version of the drug from reaching the market. The filing of a patent suit delays a generic drug from entering the market by 30 months, the court documents further show. In his 77-page decision Nichols v. SmithKline Beecham Corp., Judge Padova approved the settlement and awarded $19 million in attorney fees to a team of plaintiffs' lawyers who logged more than 17,000 hours on the case since December 2000. In the consumer class action suit, plaintiffs lawyers alleged that SmithKline attempted to monopolize the Paxil market by filing "sham" patent litigation against Apotex Inc. and TorPharm Inc., both of Weston, Ontario, soon after the generic manufacturers notified SmithKline that they were seeking approval from the Food & Drug Administration to copy Paxil. The attorneys further alleged that SmithKline used sham lawsuits and bogus patents filings to delay the debut of generic Paxil by months or even years. In assessing whether the settlement was a fair and reasonable one, Judge Padova applied the 3rd Circuit's nine-factor test in the 1975 decision in Girsh v. Jepson and concluded that nearly every factor weighed in favor of approval. He thus wrote, "Given the enormous amounts of money at stake in this litigation, and the vigorous advocacy of counsel for both parties over the last four years, it can reasonably be expected that whichever party did not prevail at trial would file post-trial motions and an appeal." As a result, Judge Padova found that the litigation would continue for several more years if the case did not settle. The judge also found that the plaintiffs also faced considerable risks, since their theory of liability was a novel one and SmithKline had asserted strong defenses. In addition he found that the settlement also came after four years of intense litigation in which the lawyers had reviewed hundreds of thousands of documents and months of arm's length negotiations. "The court concludes, therefore, that the parties had an adequate appreciation of the merits of this case at the time they negotiated the settlement," Judge Padova wrote. If the case had gone to trial, Judge Padova found, the proof of damages "would undoubtedly result in a 'battle of the experts' with each side presenting its figures to the jury and with no guarantee whom the jury would believe." He also fond that class certification also posed a potential obstacle, because the plaintiffs alleged several theories of liability under federal and state antitrust laws, state consumer protection laws, and state common law. In his ruling he thus wrote, "If this case were to proceed to trial, the variations in the state laws under which plaintiffs' state law claims have been brought would create significant issues with respect to typicality and adequacy of representation and the predominance of individual issues," Even if the class were certified, Judge Padova adds, "it could be decertified at any time later in the litigation as a result of the difficulties presented by the need to apply so many different states' laws." On the issue of whether $65 million is a fair amount, Judge Padova found that the sum was somewhere roughly between 9 and 13 percent of the possible maximum damages. An expert for the plaintiffs, he noted, had estimated damages ranging from $466 million to $693 million depending on the date that the generic version of Paxil hit the market. He thus wrote in his ruling, "This percentage is consistent with those approved in other complex class action cases. Taking all of the risks of litigation into consideration, as well as the total amount of the settlement fund and the percentage of total damages ... the court finds that this settlement is within the range of reasonableness." In the final section of his ruling, Judge Padova found that the plaintiffs' lawyers were entitled to 30 percent of the settlement fund as their fee. Billing at their normal hourly rates, he found that the plaintiffs' team had invested more than $6.1 million in time by logging more than 17,000 hours. As a result, he said, the requested $19 million fee represented a "multiplier" of 3.15. On this regard Judge Padova wrote, "This litigation presented enormously complex legal and factual issues. In light of [SmithKline's] strong defenses to plaintiffs' theories of liability, and the possibility that this case could not be maintained as a class action through trial, the risk of non-payment has been high throughout this litigation." The suit is styled, Nichols v. SmithKline Beecham Corp., filed in the United States District Court for the Eastern District of Pennsylvania under U.S. District Judge John R. Padova. The plaintiffs' team was led by attorneys Ellen Meriwether of Miller Faucher & Cafferty in Philadelphia, Dianne M. Nast of Roda Nast in Lancaster, Pa., and Kenneth A. Wexler of The Wexler Firm in Chicago. SONICWALL INC.: NY Court Preliminarily Approves Suit Settlement --------------------------------------------------------------- The United States District Court for the Southern District of New York granted preliminary approval to the settlement of the consolidated securities class action filed against SonicWALL, Inc., three of its officers and directors and certain of the underwriters of the Company's initial public offering (IPO) in November 1999 and its follow-on offering in March 2000. On December 5, 2001, a securities class action complaint was filed. Similar complaints were filed in the same court against numerous public companies that conducted IPOs of their common stock since the mid-1990s. All of these lawsuits were consolidated for pretrial purposes before Judge Shira Scheindlin. On April 19, 2002, plaintiffs filed an amended complaint. The amended complaint alleges claims under the Securities Act of 1933 and the Securities Exchange Act of 1934, and seeks damages or rescission for misrepresentations or omissions in the prospectuses relating to, among other things, the alleged receipt of excessive and undisclosed commissions by the underwriters in connection with the allocation of shares of common stock in the Company's public offerings. On July 15, 2002, the issuers filed an omnibus motion to dismiss for failure to comply with applicable pleading standards. On October 8, 2002, the Court entered an Order of Dismissal as to all of the individual defendants in the SonicWALL IPO litigation, without prejudice. On February 19, 2003, the Court denied the motion to dismiss the Company's claims. A tentative agreement has been reached with plaintiff's counsel and the insurers for the settlement and release of claims against the issuer defendants, including the Company, in exchange for a guaranteed recovery to be paid by the issuer defendants' insurance carriers and an assignment of certain claims. Papers formalizing the settlement among the plaintiffs, issuer defendants, including the Company, and insurers were presented to the Court on June 14, 2004. The settlement is subject to a number of conditions, including approval of the proposed settling parties and the Court. On July 14, 2004, underwriter defendants filed with the Court a memorandum in opposition to plaintiff's motion for preliminary approval of the settlement with defendant issuers and individuals. Plaintiffs and issuers subsequently filed papers with the Court in further support of the settlement and addressing issues raised in the underwriter's opposition. The suit is styled "In Re SonicWALL, Inc. Initial Public Offering Securities Litigation, 01 Civ. 10941 (Sas)," filed in relation to "IN RE INITIAL PUBLIC OFFERING SECURITIES LITIGATION, Master File No. 21 MC 92 (SAS)," both pending in the United States District Court for the Southern District of New York, under Judge Shira N. Scheindlin. The plaintiff firms in this litigation are: (1) Bernstein Liebhard & Lifshitz LLP (New York, NY), 10 E. 40th Street, 22nd Floor, New York, NY, 10016, Phone: 800.217.1522, E-mail: info@bernlieb.com (2) Milberg Weiss Bershad Hynes & Lerach, LLP (New York, NY), One Pennsylvania Plaza, New York, NY, 10119-1065, Phone: 212.594.5300 (3) Schiffrin & Barroway, LLP, Mail: 3 Bala Plaza E, Bala Cynwyd, PA, 19004, Phone: 610.667.7706, Fax: 610.667.7056, E-mail: info@sbclasslaw.com (4) Sirota & Sirota, LLP, 110 Wall Street 21st Floor, New York, NY, 10005, Phone: 888.759.2990, Fax: 212.425.9093, E-mail: Info@SirotaLaw.com (5) Stull, Stull & Brody (New York), 6 East 45th Street, New York, NY, 10017, Phone: 310.209.2468, Fax: 310.209.2087, E-mail: SSBNY@aol.com (6) Wolf, Haldenstein, Adler, Freeman & Herz LLP, 270 Madison Avenue, New York, NY, 10016, Phone: 212.545.4600, Fax: 212.686.0114, E-mail: newyork@whafh.com UNIPROP MANUFACTURED: Faces MI Damage Suit Over Old Dutch Farms --------------------------------------------------------------- Uniprop Manufactured Housing Communities Income Fund, a Michigan Limited Partnership faces a class action filed in the Circuit Court of Oakland County, Michigan. The suit also names as defendants P.I. Associates Limited Partnership, a Michigan limited partnership, the General Partner of the Partnership. The suit claims that the Old Dutch Farms community did not honor its obligations with respect to operating various aspects of the community. The complaint requests damages, costs and injunctive relief. Counsel for the Partnership is presently reviewing and preparing an answer to the complaint on behalf of the Partnership. While the discovery process has not yet begun, the Partnership intends to vigorously defend against this claim. The amount of potential liability, if any is indeterminable at the time, the Partnership stated in a disclosure with the Securities and Exchange Commission. ZOMAX INC.: Settles Shareholder Suit For $2.25M Plus Stocks ----------------------------------------------------------- Zomax Inc. agreed to pay $2.25 million and issue 1.5 million shares of stock to settle a shareholder suit, accusing it of misleading investors while former officers were selling the stock five years ago, The Minneapolis Star Tribune reports. Clint Morrison, research director at Feltl and Co., told the Tribune that the agreement is "a positive, some progress in a thing that's been overhanging the Company for so long." At the same time though, he noted that the Company has not yet reached an agreement with the Securities and Exchange Commission, which has made similar claims about the Company's activities in 2000. According to the Plymouth-based software duplication and distribution Company, its directors and officers' insurance would pay the full amount of the cash settlement in the class- action shareholder case with the settlement payments being distributed to those who incurred losses as a result of stock purchases between May 25, 2000, and October 18, 2002. Additionally, Zomax in a press statement said that it already has taken an $8.5 million charge against earnings over the third and fourth quarters related to the 1.5 million shares included in the settlement and to the possible settlement of the SEC case. That charge, according to the Company, will continue to be adjusted based on the market price of the Company's stock until the court approves the agreement. CEO Anthony Angelini said in a prepared statement that the settlement would allow the Company to focus its time and efforts on its operations, although he made no other specific comments about what might result from those efforts. New Securities Fraud Cases LEAPFROG ENTERPRISES: Cohen Milstein Files Securities Suit in CA ---------------------------------------------------------------- The law firm of Cohen, Milstein, Hausfeld & Toll, P.L.L.C. filed lawsuit on behalf of its client and other similarly situated purchasers of the securities of LeapFrog Enterprises, Inc. (NYSE:LF); ("LeapFrog" or the "Company") from February 11, 2004, through October 18, 2004, inclusive (the "Class Period"), in the United States District Court for the Northern District of California. The complaint charges LeapFrog and certain of its officers and directors (collectively the "defendants") with violations of the Securities Exchange Act of 1934 resulting from defendants' false and misleading statements and omissions, which artificially inflated the price of LeapFrog's stock during the Class Period, causing harm to LeapFrog's investors. The Complaint alleges that throughout the Class Period, defendants continually assured investors that LeapFrog had taken the necessary steps to correct the problems in its IT systems and supply chain infrastructure (and that these efforts had been successful) and misrepresented and/or failed to disclose that: (1) the Company had not in fact materially improved either its IT systems or its supply chain infrastructure; and (2) these issues were continuing to have a materially negative effect on its business and on its ability to accurately forecast results and meet analysts' sales and earnings expectations. The Complaint claims that on October 18, 2004, LeapFrog announced that its 2004 earnings would miss its estimates by more than 60% due, in large part, to its failure to correct the IT and supply chain problems it said it had taken steps to correct. The announcement prompted a large sell-off of LeapFrog shares, which fell 34% in a single day, to a then all-time low of $11.99. Since then, LeapFrog has also missed fourth quarter estimates by a wide margin and replaced three members of its senior management, including its Chief Financial Officer and Chief Operating Officer. For ore details, contact Steven J. Toll, Esq. or Kari Fiore of Cohen, Milstein, Hausfeld & Toll, P.L.L.C. 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 by E-mail: stoll@cmht.com or kfiore@cmht.com. PETCO ANIMAL: Milberg Weiss Lodges Securities Fraud Suit in CA -------------------------------------------------------------- The law firm of Milberg Weiss Bershad & Schulman LLP initiated a class action lawsuit on behalf of purchasers of the securities of Petco Animal Supplies, Inc. ("Petco" or the "Company") (Nasdaq: PETC) between November 18, 2004 and April 14, 2005, inclusive, (the "Class Period") seeking to pursue remedies under the Securities Exchange Act of 1934 (the "Exchange Act"). The action is pending in the United States District Court for the Southern District of California against defendants Petco, James M. Myers (CEO), Rodney Carter (CFO) and Brian K. Devine (Chairman). The complaint alleges that during the Class Period, defendants reported strong earnings and sales growth and represented that such growth would continue in 2005. In fact, unbeknownst to investors, Petco's fourth quarter earnings were materially artificially inflated through accounting manipulations. In particular, Petco had been under-accruing expenses, thereby inflating its earnings. For the same reason, Petco's favorable projections for 2005 were lacking in any reasonable basis and were premised on the continuation of improper accounting practices. On April 15, 2005, before the open on regular trading, Petco issued a press release announcing that it will delay filing its Form 10-K with the SEC due to accounting errors relating to under-accrual of expenses. Based on its review, Petco will need to adjust downward, possibly in a restatement, its reported fourth quarter 2004 earnings per share by $0.05 to $0.07. Petco's expected 2005 earnings will be reduced by the same amount, according to the Company. In response to the announcement that Petco had inflated its earnings through accounting manipulation, Petco's stock price dropped by 13.6% in one day, from $35.14 per share on April 14, 2005 to April 15, 2005, on unusually heavy trading volume. For more details, contact Steven G. Schulman by Mail: One Pennsylvania Plaza, 49th fl., New York, NY, 10119-0165 by Phone number: (800) 320-5081 by E-mail: sfeerick@milbergweiss.com OR Maya Saxena, Joseph E. White III or Ariel Acevedo by Mail: 5200 Town Center Circle, Suite 600, Boca Raton, FL 33486 by Phone: (561) 361-5000 by E-mail: msaxena@milbergweiss.com or jwhite@milbergweiss.com or aacevedo@milbergweiss.com or visit their Web site: http://www.milbergweiss.com. R&G FINACIAL: Scott + Scott Lodges Securities Fraud Suit in NY -------------------------------------------------------------- The law firm of Scott + Scott, LLC initiated a class action in the United States District Court for the District of New York on behalf of the purchasers of R&G Financial Corp (NYSE: RGF; "R&G Financial" or the "Company") securities between April 21, 2003 and April 26, 2005, inclusive (the "Class Period"). The deadline for purchasers of the securities of R&G Financial to move for lead plaintiff is June 27, 2005. Plaintiff alleges that during the Class Period, R&G Financial failed to disclose and misrepresented the following material adverse facts, which were known to Defendants or recklessly disregarded by them: (1) that R&G Financial's earnings quality had been significantly weakened by the Company's use of overly aggressive assumptions to generate gain on sale income, as well as to boost the value it retained in its interest only ("IO") residuals in securitization transactions; (2) that R&G Financial's methodology used to calculate the fair value of its IO residual interests retained in securitization transactions was incorrect and caused the Company to overstate its financial results by at least $50 million; (3) that the Company's financial statements were not prepared in accordance with Generally Accepted Accounting Principles ("GAAP"); (4) that the Company lacked adequate internal controls and was therefore unable to ascertain the true financial condition of the Company; and (5) that as a result, the value of the Company's net income and financial results were materially overstated during the Class Period. On March 25, 2005, after the market closed, R&G Financial announced that it would restate its financial results for fiscal years 2003 and 2004. News of this shocked the market. Shares of R&G Financial, on April 26, 2005, fell $8.14 per share, or 35.12 percent, to close at $15.04 on unusually heaving trading volume. After the market closed on April 26, 2005, R&G Financial issued a press release announcing that it was also now subject to an informal SEC probe relating to its restatement announcement. For more details, contact Neil Rothstein of Scott + Scott, LLC by Phone: 1-800-332-2259 or by E-mail: nrothstein@scott- scott.com. WILLIAM LYON: Brualdi Law Firm Lodges Shareholders' Suit in DE -------------------------------------------------------------- The Brualdi Law Firm announces iniitated a class action lawsuit on behalf of all common stockholders of William Lyon Homes ("WLS" or the "Company") (NYSE:WLS). The action is pending in the Court of Chancery of the State of Delaware against the Company and its directors: General William Lyon ("General Lyon"), Wade H. Cable, General James E. Dalton, Richard E. Frankel, William H. Lyon, William H. McFarland, Alex Meruelo, Michael L. Meyer and Randolph W. Westerfield ("Defendants"). The Complaint seeks to enjoin the defendants from causing the Company to be acquired by its controlling shareholder, Chairman of the Board and CEO, General Lyon at an inadequate consideration. For more details, contact Richard B. Brualdi, Esq. or Gaitri Boodhoo, Esq. of THE BRUALDI LAW FIRM by Mail: 29 Broadway, Suite 2400, New York, NY, 10006 by Phone: (212) 952-0602 or (877) 495-1187 or by E-mail: rbrualdi@brualdilawfirm.com. WILLIAN LYON: Sarraf Gentile Launches Shareholders' Suit in DE -------------------------------------------------------------- The Law Firm of Sarraf Gentile LLP initiated a class action has been commenced on behalf of minority shareholders of William Lyon Homes ("WLS" or the "Company") (NYSE: WLS). The case is pending in the Court of Chancery of the State of Delaware against the Company and its directors. The action seeks to enjoin the defendants from causing the Company to be acquired by its controlling shareholder, Chairman of the Board and CEO, for inadequate consideration. The suit alleges that the consideration being offered in the buyout fails to offer fair value to the Company's shareholders for their equity interests in WLS. For more details, contact Sarraf Gentile LLP by Mail: 111 John Street, 8th Floor, New York, New York by Phone: 212/433-1312 or by E-mail: joseph@sarrafgentile.com. WILLIAM LYONS: Wolf Popper Launches Shareholders' Lawsuit in DE --------------------------------------------------------------- The law firm of Wolf Popper LLP initiated a class action lawsuit on behalf of public shareholders of William Lyon Homes ("William Lyon" or the "Company") (NYSE: WLS) on April 28, 2005 in the Delaware Court of Chancery, New Castle County. The Complaint seeks to enjoin a proposed buy-out transaction in which William Lyon's Chairman and Chief Executive Officer seeks to buy out the outstanding public shares of the Company for inadequate consideration. For more details, contact Michael A. Schwartz, Esq. of Wolf Popper LLP by Phone: +1-212-451-9668 or 1-877-370-7703 by Fax: +1-212-486-2093 or 1-877-370-7704 or by E-mail: irrep@wolfpopper.com. ********* A list of Meetings, Conferences and Seminars appears in each Wednesday's edition of the Class Action Reporter. Submissions via e-mail to carconf@beard.com are encouraged. Each Friday's edition of the CAR includes a section featuring news on asbestos-related litigation and profiles of target asbestos defendants that, according to independent researches, collectively face billions of dollars in asbestos-related liabilities. ********* S U B S C R I P T I O N I N F O R M A T I O N Class Action Reporter is a daily newsletter, co-published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland USA. Glenn Ruel Senorin, Aurora Fatima Antonio and Lyndsey Resnick, Editors. Copyright 2005. All rights reserved. ISSN 1525-2272. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. 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