/raid1/www/Hosts/bankrupt/CAR_Public/051006.mbx
C L A S S A C T I O N R E P O R T E R
Thursday, October 6, 2005, Vol. 7, No. 198
Headlines
BLACK WARRIOR: Mentioned in Texas St. James Merchant Suit
CALIFORNIA: Federal Judge Awards $1.7M to Kovacevich Farmworkers
CANADA: B.C. Justice OKs Settlement For Breast Implants Lawsuit
CANADA: Parents of Dyslexic Child Sue Education Ministry, Boards
CANADA: Suit Targets Government, Makers of Asbestos Insulation
CITIGROUP GLOBAL: Continues To Face NY Shareholder Litigation
CITIGROUP GLOBAL: Faces Litigation Due To Relationship W/ Enron
CITIGROUP GLOBAL: Inks Settlement For TX Dynegy Securities Suit
CITIGROUP GLOBAL: Finalizing Settlement of NY WorldCom Lawsuit
CITIGROUP GLOBAL: Reaches Settlement For NY Global Crossing Suit
CORRECTIONAL SERVICES: NJ Court Dismisses Claims in Inmate Suit
CORRECTIONAL SERVICES: NJ Court Approves Inmate Suit Settlement
EMACHINES INC.: Trial in CA Suit V. Empire Merger Set Jan. 2006
GEOPHARMA INC.: NY Judge Dismisses Investors' Suit Over Mucotrol
GOLD KIST: GA Court Refuses Certification For Sex Bias Lawsuit
GOLD KIST: AL Court Dismisses Poultry Farmers' Antitrust Lawsuit
GROUPE NORBOURG: Investor Seeks Approval to Sue Northern Trust
GULF GROUP: Faces Lawsuit Over FL Levee Break Due To Katrina
HARDEE'S: EEOC Lodges Sexual Harassment Suit V. Hardee's Manager
ILLINOIS: Disabled Citizens Launch ADA Suit V. City of Chicago
IMPERIAL PETROLEUM: Reaches Settlement For TX Moss Unit Lawsuit
KANSAS: Price Manipulation Suit Filed V. Natural-Gas Companies
KPMG LLP: NJ Lawsuit Over Bogus Tax Shelters Settled For $225M
KPMG LLP: NJ Lawsuit Over Bogus Tax Shelters Settled For $225M
NBO INC.: Asks IL Court To Dismiss Consumer Suit V. Gift Cards
OMEGA FLEX: Asks AR Court To Junk TracPipe Product Defect Suit
PAPERWEIGHT DEVELOPMENT: Faces Injury, Damage Suit in S.D. Ohio
PARAGON FINANCIAL: NY Court Preliminarily OKs Lawsuit Settlement
SOUTH KOREA: Seoul YMCA Files Price-Fixing Suit V. Telecom Firms
STAPLES INC.: CA Court Considers Certification For Wage Lawsuit
STOCKERYALE INC.: NH Court Consolidates Securities Fraud Suits
TRUMP ENTERTAINMENT: Pension Plan Members Face ERISA Suit in NJ
TYSON MEATS: New Chief Justice Hears Appeal in Employee Lawsuit
UNION PACIFIC: Twelve Individuals Face Indictment Over Claims
VASO ACTIVE: Inks Settlement for MA Consolidated Securities Suit
WHITE LILY FOODS: Recalls Mixes Due to Undeclared Wheat Flour
WORLD AIRWAYS: Faces NY Lawsuit On Cancelled Nigeria Flights
New Securities Fraud Cases
ABERCROMBIE & FITCH: Lerach Coughli Lodges Securities Suit in OH
AMERIGROUP CORPORATION: Charles J. Piven Lodges Fraud Suit in VA
AMERIGROUP CORPORATION: Dyer & Shuman Sets Plaintiff Deadline
AMERIGROUP CORPORATION: Schatz & Nobel Lodges Fraud Suit in VA
WORLD HEALTH: Pomerantz Haudek Files Securities Fraud Suit in PA
*********
BLACK WARRIOR: Mentioned in Texas St. James Merchant Suit
---------------------------------------------------------
Black Warrior Wireline Corporation was mentioned in a class
action filed against St. James Merchant Bankers, L.P. ("SJMB")
and St. James Capital Partners, L.P. ("SJCP") (collectively "the
St. James Partnerships"), their general partners and Charles E.
Underbrink, who is a Director of the Company and a director of
the general partners of the St. James Partnerships.
Two of the limited partners of the St. James Partnerships filed
the amended suit in March 2005, in Texas State Court. The
action was originally instituted in December 2004 against the
auditors of the St. James Partnerships. The plaintiffs brought
the action as a class action on behalf of all the limited
partners of the St. James Partnerships and are seeking class
action certification.
No claim has been asserted against the Company and the Company
is not a defendant in the action. However, the complaint and
the amended complaint in the action contain allegations that the
Company participated with Mr. Underbrink in actions the
plaintiffs allege were fraudulent and constituted securities
violations, the Company stated in a disclosure to the Securities
and Exchange Commission. The Company has not concluded that it
is probable that a claim will be asserted against it and does
not believe that if a claim is asserted that there is a
reasonable possibility that the outcome would be unfavorable to
the Company or that any resulting liability would be material to
the Company's financial condition.
CALIFORNIA: Federal Judge Awards $1.7M to Kovacevich Farmworkers
----------------------------------------------------------------
Farmworkers who initiated a class action suit against their
employer after being forced to work unpaid hours in California's
grape fields were recently awarded $1.7 million by a Fresno
federal judge, The Associated Press reports.
Originally filed by four farmers against Kovacevich "5" Farms in
2004, the suit is now representing about 500 other farmers. In
their suit, the farmworkers alleged that between 2001 and 2003
the Delano-based grape grower required them to get to the fields
in time to unload wheelbarrows and other equipment needed for
harvest, but didn't pay them for those hours of preparatory
work.
The judge agreed and thus approved the settlement, saying it was
"a significant victory" for the workers.
Manuel Hernandez, the lead plaintiff in the case, who has picked
grapes for Kovacevich for 21 years, told The Associated Press,
"Every day, I prayed that this would come true, and it did. It's
a great feeling, to help another brother worker."
A woman who answered the phone at the Kovacevich family farm
refused to give her name or comment on the settlement. The
farm's lawyer, Ron Barsamian, did not return repeated calls as
well.
Commenting on the case, Manuel Cunha, president of Nisei Farmers
League, which represents 1,000 growers, told The Associated
Press, "This case is a call to be aware and conscious" of the
workplace protections for workers. Mr. Cunha reminded farmers to
contact a local agricultural organization if they're in doubt
about any laws.
Attorneys for the workers told The Associated Press that the
settlement will give them more than four times the amount of
wages lost, which is an amount meant to reward the workers and
to serve as a deterrent against other violations. "This sends a
strong message to growers that the law will not tolerate
requiring workers to work off the clock," according to Tom
Lynch, one of the plaintiffs' attorneys.
Aside from the monetary aspect, the settlement also requires the
farm to keep records of wages paid, and to provide their workers
with equipment like protective gloves, pruning shears and
clippers. Additionally, it also requires farmers to avoid
retaliating against the workers involved. Arturo Rodriguez,
president of the United Farm Workers, told The Associated Press
that the case was important because it raised awareness of a
problem he said is widespread in the industry.
The attorneys told The Associated Press that farmworkers are
particularly vulnerable to work rights violations because
they're often unaware of their protections under law. According
to another of the plaintiffs' attorney, Sarah Siskind, "These
are workers who are not familiar with the American legal system,
who have little resources. They're people who the growers might
not believe are likely to assert their rights."
CANADA: B.C. Justice OKs Settlement For Breast Implants Lawsuit
---------------------------------------------------------------
Justice E.R.A. Edwards of the British Columbia Supreme Court
approved a settlement of a class action for Canadian women who
had silicone gel breast implants. The settlement, which was made
without any admission of liability by the defendants, is for
women who had silicone gel breast implants made or supplied by
Bristol-Myers Squibb Company, Baxter Healthcare or 3M.
The class action covers women who, on February 14, 1997, resided
anywhere in Canada other than Ontario or Quebec or who were
implanted with silicone gel breast implants anywhere in Canada
other than Ontario or Quebec.
The defendants have agreed to pay between $2.5 million and $4.3
million depending on how many women come forward with claims. A
further amount of up to $200,000 will be paid for the cost of
notice and settlement administration. The deadline for opting
into or out of the settlement is December 2, 2005. The deadline
for filing claims is February 1, 2006.
For further information: contact class counsel: David A. Klein,
Klein Lyons, 1333 W. Broadway, Suite 1100, Vancouver, B.C.,
Phone: (604) 874-7171; Kevin W. Whitley, Acheson Whitley, 535
Yates St., 4th Floor, Victoria, B.C., Phone: (250) 384-6262;
Mark R. Steven, Trial Lawyer, 1155 W. Pender St., Suite
708, Vancouver, B.C., Phone: (604) 801-7408.
CANADA: Parents of Dyslexic Child Sue Education Ministry, Boards
----------------------------------------------------------------
Parents of a dyslexic child are launching a class action lawsuit
against the Quebec Education Ministry and nine Montreal-region
school boards, demanding that they track dyslexic children and
provide services adapted to their needs and that they compensate
parents for their errors of the past, The Montreal Gazette.
Jacques Desgagn, and Christine Frigon filed the class action
suit, which was approved by Quebec Superior Court Judge Jeannine
Rousseau. If the child's parents are successful with their
lawsuit, school boards would be forced to look for dyslexia
among children with learning difficulties and to provide
specialized services for them. Essentially, the lawsuit could
include as many as 100,000 people and could force school boards
to pay them compensation, the Gazette reports.
CANADA: Suit Targets Government, Makers of Asbestos Insulation
--------------------------------------------------------------
A class action lawsuit was initiated in B.C. Supreme Court
against former makers and marketers of the asbestos-based
insulation Zonolite as well as the federal government, which
alleges that Ottawa pushed its use despite knowing it was
potentially unsafe, The Canadian Press reports. The suit claims
that living in Zonolite-insulated houses made some residents
sick and the houses all but unsaleable even if the material was
removed.
Specifically, the suit names as the defendants, U.S.-based
construction giant W. R. Grace, which filed for bankruptcy
protection in 2001, and affiliated companies who made and sold
Zonolite, as well as the federal government, chiefly the
Department of National Defense, which used Zonolite widely in
military housing. According to the suit, Zonolite was also used
to build homes on First Nations reserves.
Attorneys spearheading the class action told The Canadian Press
that the impact could be as far-reaching as the furor over urea-
formaldehyde foam insulation, which is also known as UFFI that
forced the federal government to pay out $181 million in
compensation to homeowners forced to gut their houses of the
toxic material.
During the oil-price spikes of the 1970s and early 1980s as a
way to conserve energy, the government promoted the use of both
Zonolite and UFFI. Along with promoting its usage, the
government offered grants and rebates to homeowners who
installed the material. Though it still remains unproven, the
statement of claim alleges that the defendants knew or should
have know asbestos-containing products such as Zonolite posed a
health risk, especially if the microscopic fibers were inhaled.
The suit singles out the government for "putting political and
business interests above the health and well being of the
plaintiffs and other class members . recklessly and deliberately
. and instead advancing and protecting the interests of the
Canadian asbestos industry."
Zonolite was the trade name for a type of vermiculite, an
asbestos-containing mineral mined by Grace in Libby, Montana.
The suit claims that inhaling its tiny, needle-like asbestos
particles can cause various kinds of lung damage and cancer.
Lawyers Tony and Evatt Merchant filed several Zonolite class
actions in Federal Court, as well as in Alberta and
Saskatchewan. A separate suit is also underway in Quebec.
CITIGROUP GLOBAL: Continues To Face NY Shareholder Litigation
-------------------------------------------------------------
Citigroup Global Markets, Inc. (formerly Salomon Smith Barney,
Inc.) and other investment banks continue to face a consolidated
securities class action filed in the United States District
Court for the Southern District of New York, alleging violations
of certain federal securities laws (including Section 11 of the
Securities Act of 1933, as amended, and Section 10(b) of the
Securities Exchange Act of 1934, as amended) with respect to the
allocation of shares for certain initial public offerings and
related aftermarket transactions and damage to investors caused
by allegedly biased research analyst reports.
On February 19, 2003, the Court issued an opinion denying
defendants' motion to dismiss. On October 13, 2004, the court
granted in part the motion to certify class actions for six
focus cases in the securities litigation. The Company is not a
defendant in any of the six focus cases. The underwriter
defendants in the focus cases have filed a petition to the
United States Court of Appeals for the Second Circuit seeking
review of this decision.
Also filed in the same court against the Company and other
investment banks were several alleged class actions that were
consolidated into a single class action alleging violations of
certain federal and state antitrust laws in connection with the
allocation of shares in initial public offerings when acting as
underwriters. On November 3, 2003, the court granted the
Company's motion to dismiss the consolidated amended complaint
in the antitrust case. An appeal to the Second Circuit of the
dismissal granted to the Company in November 2003 with respect
to the antitrust case relating to the allocation of shares for
certain initial public offerings is pending.
CITIGROUP GLOBAL: Faces Litigation Due To Relationship W/ Enron
---------------------------------------------------------------
Citigroup Global Markets, Inc. (formerly Salomon Smith and
Barney, Inc., now CGM), Citigroup, Inc. (Citigroup) and various
other Citigroup-related entities are working to resolve over 20
civil lawsuits pending in state and federal courts throughout
the United States, alleging claims based on their dealings with
Enron Corporation. The majority of these cases have been brought
by purchasers and sellers of Enron equity and debt securities
and Enron-linked securities. Many of the plaintiffs in these
actions are large, institutional investors that had substantial
Enron and Enron-linked holdings.
The lawsuits collectively allege as against Citigroup and/or its
affiliates and subsidiaries, among other things, federal
securities fraud, state law claims of negligent
misrepresentation, fraud, breach of fiduciary duty, aiding and
abetting a breach of fiduciary duty and related claims. In most
of these lawsuits, Citigroup is named as a co-defendant along
with other investment banks alleged to have had dealings with
Enron. The majority of cases pending in the federal courts have
been, or are in the process of being, consolidated before a
single judge in the United States District Court for the
Southern District of Texas.
In addition, in five adversary proceedings in the Enron Chapter
11 bankruptcy, Enron and, in one case, its co-debtor affiliates
and subsidiaries, and the Official Committee of Unsecured
Creditors of Enron Corp., et al., have named Citigroup and/or
its affiliates or subsidiaries as defendants.
A Citigroup affiliate, along with other defendants, settled all
claims against it in "In Re Newpower Holdings Securities
Litigation," a class action brought on behalf of certain
investors in NewPower securities. The Company reached this
settlement agreement without admitting any wrongdoing. On
September 13, 2004, the United States District Court for the
Southern District of New York preliminarily approved the
settlement.
On June 13, 2005, Citigroup announced a settlement of the Enron
class action litigation, styled "Newby, et al. v. Enron Corp.,
et al.," currently pending in the United States District Court
for the Southern District of Texas, Houston Division. This
settlement resolves all claims against Citigroup brought on
behalf of the class of purchasers of publicly traded equity and
debt securities issued by Enron and Enron-related entities
between September 9, 1997 and December 2, 2001. The settlement,
which involves a pre-tax payment of $2.0 billion to the
settlement class, is fully covered by Citigroup's existing
litigation reserves. It is subject to approval by the Board of
Regents of the University of California (the lead plaintiff),
the Citigroup Board and the District Court in Texas.
CITIGROUP GLOBAL: Inks Settlement For TX Dynegy Securities Suit
---------------------------------------------------------------
Citigroup, Inc. reached a global settlement for the class action
filed against it, Citibank NA and Citigroup Global Markets, Inc.
in the United States District Court for the Southern District of
Texas on behalf of purchasers of publicly traded debt and equity
securities of Dynegy Inc.
The plaintiffs allege violations of Sections 10(b) and 20(a) of
the Securities Exchange Act of 1934, as amended, against the
Citigroup defendants. The Citigroup defendants filed a motion to
dismiss in March 2004, which motion was granted by the Court in
October 2004. The court denied lead plaintiff's request for
leave to appeal. The court had also previously denied lead
plaintiff's motion for leave to amend. No appeal was yet timely
while the remainder of the case remained pending.
On April 15, 2005, as part of a global settlement involving all
defendants, the Company entered into a memorandum of
understanding to settle this case. The amount to be paid in
settlement is covered by existing litigation reserves.
The suit is styled "The Regents of the University of California
v. Dynegy, Inc., et al, case no. 4:02-cv-02374," filed in the
United States District Court for the Southern District of Texas,
under Judge Sim Lake. Representing the plaintiffs is Lerach
Coughlin Stoia Geller et al, 9601 Wilshire Bld, Ste 510 Los
Angeles, CA 90210 Phone: 310-859-3100.
CITIGROUP GLOBAL: Finalizing Settlement of NY WorldCom Lawsuit
--------------------------------------------------------------
Citigroup Global Markets, Inc. (formerly Salomon Smith & Barney,
Inc.) is working on the settlement of the consolidated
securities class action filed against it, WorldCom, Inc.,
certain of its officers and directors, and several other
WorldCom former auditors on behalf of individuals and entities
who purchased or acquired publicly traded securities of WorldCom
between April 29, 1999 and June 25, 2002.
The suit, styled "In Re: Worldcom, Inc. Securities Litigation,"
asserts claims against the Company under Sections 11 and
12(a)(2) of the Securities Act of 1933, as amended, in
connection with certain bond offerings in which it served as
underwriter, and Sections 10(b) and 20(a) of the Securities
Exchange Act of 1934, as amended, and Rule 10b-5 promulgated
under Section 10(b), alleging that it participated in the
preparation and/or issuance of misleading WorldCom registration
statements and disseminated misleading research reports
concerning WorldCom stock.
In 2003, the district court denied the Company's motion to
dismiss the consolidated class action complaint and granted the
plaintiffs' motion for class certification. Pursuant to an
order entered May 28, 2003, the District Court consolidated
approximately seventy-eight individual actions with the class
action for pretrial proceedings. The claims asserted in these
individual actions are substantially similar to the claims
alleged in the class action and assert state and federal
securities law claims based on the Company's research reports
concerning WorldCom and/or its role as an underwriter in
WorldCom offerings. Plaintiffs in certain of these actions filed
motions to remand their cases to state court. The District
Court denied these motions and its rulings were upheld on
appeal.
Numerous other actions asserting claims against the Company in
connection with its research reports about WorldCom and/or its
role as an investment banker for WorldCom are pending in other
federal and state courts around the country. These actions have
been remanded to various state courts, are pending in other
federal courts, or have been conditionally transferred to the
United States District Court for the Southern District of New
York to be consolidated with the class action. In addition to
the court suits, actions asserting claims against Citigroup and
certain of its affiliates relating to its WorldCom research
reports are pending in numerous arbitrations around the country.
These actions assert claims that are substantially similar to
the claims asserted in the class action.
On May 10, 2004, the Company announced that it had agreed to pay
$2.58 billion to settle the WorldCom class action suits. The
United States District Court for the Southern District of New
York granted approval to the proposed settlement on November 10,
2004.
The suit is styled "In Re: Worldcom, Inc. Securities & "ERISA"
Litigation, case no. 1:02-md-01487-DLC," filed in the United
Staes District Court for the Southern District of New York under
Judge Denise L. Cote. Representing the plaintiffs is Edwin J.
Mills of Stull Stull & Brody, 6 East 45th Street, 5th Floor, New
York, NY 10017, Phone: (212)-687-7230, Fax: (212)-490-2022, E-
mail: ssbny@aol.com. Representing the Company is Shelby J.
Bush, Piper, Marbury, 1717 Main Street, Dallas, TX 75201, Phone:
(214) 743-4529
CITIGROUP GLOBAL: Reaches Settlement For NY Global Crossing Suit
----------------------------------------------------------------
The United States District Court for the Southern District of
New York granted preliminary approval to the settlement of the
class action filed against Citigroup Global Markets, Inc.,
Citigroup, Inc., Citigroup Global Market Holdings, Inc. (CGMH),
styled "In Re: Global Crossing, Ltd. Securities Litigation."
The suit also names as defendants certain of Global Crossing's
officers and current and former employees.
The consolidated complaint was filed on behalf of purchasers of
the securities of Global Crossing and Asia Global Crossing. The
purported class action complaint asserts claims under the
federal securities laws alleging that the defendants issued
research reports without a reasonable basis in fact and failed
to disclose conflicts of interest with Global Crossing in
connection with published investment research.
On March 22, 2004, the lead plaintiff amended its consolidated
complaint to add claims on behalf of purchasers of the
securities of Asia Global Crossing. The added claims assert
causes of action under the federal securities laws and common
law in connection with the Company's research reports about
Global Crossing and Asia Global Crossing and for its roles as an
investment banker for Global Crossing and as an underwriter in
the Global Crossing and Asia Global Crossing offerings.
The Citigroup related defendants moved to dismiss all of the
claims against them on July 2, 2004. The plaintiffs and the
Citigroup related defendants have reached an agreement in
principle on the terms of a settlement of this action.
In March 2005, the plaintiffs and the Citigroup-related
defendants reached a settlement of all claims against the
Citigroup-related defendants, including both research and
underwriting claims, and including claims concerning losses in
both Global Crossing and Asia Global Crossing, for a total of
$75 million. The Court granted preliminary approval of the
settlement on March 8, 2005.
The suit is styled "In Re: Global Crossing Ltd. Securities &
"ERISA" Litigation, case no. 1:02-md-01472-GEL," filed in the
United States District Court for the Southern District of New
York, under Judge Gerard E. Lynch. For more details, contact
Jay W. Eisenhofer, Esq., Sidney S. Liebesman, Esq. or Grant &
Eisenhofer P.A. of Chase Manhattan Centre, 1201 N. Market St.,
Wilmington, DE, 19801, Phone: (302) 622-7149, Fax:
(302) 622-7100 or visit the Website:
http://www.globalcrossinglitigation.com
CORRECTIONAL SERVICES: NJ Court Dismisses Claims in Inmate Suit
---------------------------------------------------------------
The United States District Court for the District of New Jersey
dismissed several claims in the lawsuit filed against
Correctional Services Corporation (formerly Esmor Correctional
Services, Inc.), styled "Jama, Hawa Abdi, et al. v. Esmor
Correctional Services, Inc., et al., Case No. 973093."
A group of former detainees in the in the INS Detention Center
that the Company formerly operated in Elizabeth, New Jersey
filed the suit in July 1997, asserting that the Company is
liable for personal injuries and property damage allegedly
caused by the negligent and intentional acts of the Company,
certain of the current and former officers of the Company and a
number of former employees of the Company who served as guards
at the detention facility. The Complaint filed in this case
asserts numerous legal theories. No monetary damages have been
stated. The Plaintiffs in this case are represented by the
Rutgers University Law School Constitutional Law Clinic. This
case is currently in the latter stages of discovery.
During the course of discovery, the trial court dismissed and/or
granted summary judgment to the Company on a number of claims
initially asserted by the plaintiffs in the case. Accordingly,
at the present time, the Company's defense counsel is preparing
the remaining claims for trial. The Company also has filed an
interlocutory appeal from the District Court asserting that the
District Court erred in ruling that the nine (9) remaining
plaintiffs properly opt-out of the "Brown" class action,
discussed below. This appeal is currently pending before the
Third Circuit Court of Appeals. (As discussed below, the
District Court approved a settlement in the "Brown," "Samson"
class action on August 10, 2005.)
The suit is styled "JAMA, et al v. INS, et al., case no. 2:97-
cv-03093-DRD-SDW," filed in the United States District Court for
the District of New Jersey, under Judge Dickinson R. Debevoise.
The plaintiffs are represented by Frank Askin, Constitutional
Litigation Clinic, Rutgers Law School, 15 Washington Street,
Newark, NJ 07102, Phone: (973) 353-5687. The Company is
represented by Jeffrey L. Chase, CHASE KURSHAN SUHR WEIDENFELD
HERZFELD & RUBIN, LLC, 5N Regent Street, Suite 508, Livingston
NJ 07039-1617; and Steven D. Weinstein, BLANK, ROME, COMISKY &
MCCAULEY, Woodland Falls Corporate Park, 210 Lake Drive East,
Suite 200, Cherry Hill, NJ 08002 Phone: (856) 779-3600, E-mail:
weinstein@blankrome.com.
CORRECTIONAL SERVICES: NJ Court Approves Inmate Suit Settlement
---------------------------------------------------------------
The United States District Court for the District of New Jersey
formally approved the settlement of the class action filed
against Correctional Services Corporation (formerly Esmor
Correctional Services, Inc.), styled "Brown, Samson, et al., v.
Esmor Correctional Services, Inc., Esmor, Inc., Esmor New York
State Correctional Facilities, Inc., Esmor Management, Inc.,
Esmor Manhattan, Inc, Esmor Brooklyn, Inc., Esmor New Jersey,
Inc., James Slattery and Aaron Speisman," (Superior Court of the
State of New York, No. 8654/96; removed to US District Court for
the Southern District of New York; transferred to the US
District Court for the District of New Jersey).
The Brown suit was filed in March 1996 in the Supreme Court of
the State of New York, County of Bronx by several former
detainees in the INS Detention Center that the Company formerly
operated for the INS in Elizabeth, New Jersey, on behalf of
themselves and others similarly situated, in which the
plaintiffs in the suit claimed $500,000,000 in compensatory and
punitive damages on a variety of legal theories. This suit was
removed to the United States District Court, Southern District
of New York, in April 1996, and subsequently transferred to the
United States District Court for the District of New Jersey. The
plaintiffs in this case obtained certification from the Court to
try their case as a class action on behalf of themselves and all
other persons who were detained in the Elizabeth INS Detention
Center while the Company operated it.
On February 17, 2005, the District Court approved the terms of a
settlement in this case that was negotiated by the Company's
liability insurance carrier and the plaintiffs' case in order to
resolve this case. The Company has no obligation to contribute
to this settlement. On August 10, 2005, the District Court
formally approved this settlement. Accordingly, this matter has
been resolved.
The suit is styled "BROWN, et al v. ESMOR CORRECTIONAL, et al.,
case no. 2:98-cv-01282-DRD-SDW," filed in the United States
District Court for the District of New Jersey, under Judge
Dickinson R. Debevoise. Representing the Company is Bruce J.
Ressler of RESSLER & RESSLER, 48 Wall Street, New York, NY
10001, Phone: 212 695-6446, E-mail: ewerther@resslerlaw.com.
EMACHINES INC.: Trial in CA Suit V. Empire Merger Set Jan. 2006
---------------------------------------------------------------
Trial in the shareholder class action filed against eMachines,
Inc. is anticipated to occur in January 2006 in the California
State Superior Court, County of Orange.
The suit, styled "Dvorchak v. eMachines, Inc., et al.," relates
to a 2001 transaction in which the Company, which was then a
public company, was taken private. The action originally sought
to enjoin the Company's merger with Empire Acquisition
Corporation, to effectuate taking the Company private. The court
denied the requested injunction on December 27, 2001, allowing
the consummation of the Merger. After the Merger, plaintiffs
filed amended complaints seeking unspecified monetary damages
and/or recision relating to the negotiations for and terms of
the Merger through allegations of breaches of fiduciary duties
by eMachines, its board members prior to the Merger, and certain
of its officers.
The court granted class certification on August 25, 2003. A
dispositive motion filed by the defendants was heard and denied
by the Court in August 2004. It is anticipated that further
dispositive motions on behalf of the defendants will be heard
and ruled upon by the Court prior to trial.
GEOPHARMA INC.: NY Judge Dismisses Investors' Suit Over Mucotrol
----------------------------------------------------------------
The United States District Court for the Southern District of
New York dismissed the securities class action filed against
GeoPharma, Inc., alleging that it violated federal securities
laws by issuing false or misleading public statements relating
to the Company's December 1, 2004 announcement of Mucotrol's(TM)
clearance by the FDA was dismissed on September 30, 2005 without
prejudice by a judge in. The judge, however, allowed plaintiffs
twenty days to attempt to replead their claims.
Mihir Taneja, GeoPharma's CEO commented: "We are extremely
pleased by the Court's ruling, which granted our motion to
dismiss the Complaint. We are aggressively moving forward with
the launch of Mucotrol(TM)."
On November 24, 2004, the Food and Drug Administration (FDA)
granted 510-K approval for the marketing of Mucotrol(TM) as a
medical device. Mucotrol(TM) concentrated oral gel wafer has a
mechanical action indicated for the management and relief of
pain by adhering to the mucosal surface of the mouth and
soothing oral lesions of various origins including oral
mucositis/stomatitis, which may be caused by chemotherapy or
radiotherapy, irritation due to oral surgery and traumatic
ulcers caused by braces or ill fitting dentures or diseases.
For more details, contact Carol Dore-Falcone, VP/CFO of
GeoPharma, Inc. Phone: 727-544-8866 x244, E-mail:
cdf@onlineihp.com or Rachel Levine, Investor and Media Relations
of The Global Consulting Group, Phone: 646-284-9439, E-mail:
rlevine@hfgcg.com.
GOLD KIST: GA Court Refuses Certification For Sex Bias Lawsuit
--------------------------------------------------------------
The United States District Court for the Northern District of
Georgia refused to grant class certification to the gender
discrimination class action filed against Gold Kist Inc.
Four female employees of the Company's Corporate Office
Information Services (I/S) Department filed the Equal Employment
Opportunity Commission (EEOC) sex discrimination suit, asserting
gender-based claims about employment and promotion decisions in
the Corporate Office I/S Department. One of the employees
continues to be employed by the Company.
After its administrative consideration of the claims, the EEOC
issued "Right to Sue" letters to the four complainants in these
claims, meaning that the EEOC would not sue or participate in a
suit against the Company on behalf of the parties in these
actions nor would it pursue a systemic discrimination charge in
this matter. The letter provided that the individuals could
pursue their claims and litigation on their own should they so
desire. The four complainants filed an action in federal
district court on March 19, 2003, seeking class certification
for their claims of gender discrimination, unspecified monetary
damages and injunctive relief.
The court, in an Order entered June 13, 2005, denied the motion
of the plaintiffs to certify the litigation as a class action.
The Court's ruling, for which the plaintiffs did not seek an
interlocutory appeal, means that the litigation will not proceed
as a class action and will be litigated as individual claims of
the four named plaintiffs.
The suit is styled "Dorsey v. Gold Kist, Inc., case no. 2:05-cv-
00085-WCO-SSC," filed in the United States District Court for
the Northern District of Georgia under Judge William C.
O'Kelley. Representing the plaintiffs is Stacy Dane Barnett,
The Barnett Law Firm, 181 East Main Street, Canton, GA 30114,
Phone: 770-720-9522, E-mail: BARNETTLAWOFFICE@AOL.COM.
Representing the Company are Brandon Michael Cordell and
Lawrence Dale Owens of Jackson Lewis LLP, 245 Peachtree Center
Avenue, N.E., 1900 Marquis One Tower, Atlanta, GA 30303-1226,
Phone: 303-525-8200, E-mail: cordellb@jacksonlewis.com or
owensd@jacksonlewis.com.
GOLD KIST: AL Court Dismisses Poultry Farmers' Antitrust Lawsuit
----------------------------------------------------------------
The United States District Court for the Northern District of
Alabama dismissed the class action filed against Gold Kist
Foods, Inc., and four additional chicken-processing firms.
Plaintiffs alleged that the defendants conspired to prevent
competition for production contracts and sought to represent a
putative class of all contract farmers and sellers of hatching
eggs and live broilers who produced hatching eggs or live
broilers in the United States since February 23, 1998.
The suit is styled "Gaston v. Gold Kist Foods Inc, et al., case
no. 3:04-cv-00326-VEH," filed in the United States District
Court for the Northern District of Alabama, under Judge Virginia
Emerson Hopkins. Representing the plaintiffs is Tyler C. Vail
of DAVIS & NORRIS LLP, 2151 Highland Avenue, Suite 100,
Birmingham, AL 35205, Phone: 205-930-9900, E-mail:
tvail@davisnorris.com. Representing the company are Robin H.
Jones and W. Stancil Starnes, STARNES & ATCHISON LLP, PO Box
598512, Birmingham, AL 35259-8512, Phone: 205-868-6000, Fax:
205-868-6099, E-mail: RHJ@starneslaw.com or wss@starneslaw.com.
GROUPE NORBOURG: Investor Seeks Approval to Sue Northern Trust
--------------------------------------------------------------
Shefford resident Jocelyn Desrochers, who invested $270,235 in
now-frozen Groupe Norbourg mutual funds, is seeking the go-ahead
to launch a class action suit against Northern Trust, the
Toronto-based company responsible for the safekeeping of
Norbourg assets, The Montreal Gazette.
Mr. Desrochers, who estimates at $135,117 his potential losses
from financial irregularities in the Norbourg family of funds,
alleges that Northern Trust, as custodian, wrongfully permitted
$5.1 million to be diverted to the account of a company called
Norbourg International days before provincial regulators shut
down Groupe Norbourg on August 24.
Recently, L'Autorite des Marches Financiers (AMF) revealed that
Groupe Norbourg's 29 mutual funds had $75 million in assets with
Northern Trust at the end of July, which was $130 million less
than what it claimed.
In his Superior Court action, Mr. Desrochers claims that
Northern Trust should have had measures in place to flag
inappropriate transfers and designated personnel to block them.
Thus, he argues that Northern Trust's ineffectiveness led to a
significant reduction in the value of the mutual fund units held
by investors.
Along with interest and unspecified damages, Mr. Desrochers is
seeking about $135,117 for himself and an amount covering the
losses of all other holders of the four Evolution Perfolio
mutual funds.
At a recent AMF news conference, it was estimated Perfolio
investors represented 500 to 700 of the more than 9,000 holders
of Norbourg and Evolution mutual funds.
GULF GROUP: Faces Lawsuit Over FL Levee Break Due To Katrina
------------------------------------------------------------
A construction company based in the Florida Panhandle denied
allegations in a federal lawsuit filed by a Reserve, Louisiana
attorney, which alleges that it was partly to blame for the
failure of a New Orleans levee after Hurricane Katrina, THe
Associated Press reports.
Court records show that Daniel Becnel Jr. initiated a class
action lawsuit against Gulf Group Inc. of Southport, a Panama
City suburb, in New Orleans last week, claiming that vehicles
and heavy equipment the company left on the 17th Street Canal
levee contributed to its failure. Gulf Group was building a
bridge near the levee, the records show.
According to Gulf Group vice president Sam Stone, "The affected
area is 300 yards from the bridge we built. The only thing
that's still standing out there is that bridge we built." Mr.
Stone, who called the suit "frivolous," pointed out that Mr.
Becnel is known for filing baseless claims. "This is the typical
lawyer that gives lawyers a bad name," he added.
Mr. Becnel told The Associated Press that he hopes to expand the
suit, which was filed on behalf of people affected by flooding
after the levee failed, with other defendants, possibly
including the Army Corps of Engineers, after further research.
He also said that the levee's base material was not sunk deeply
enough when it was built and recent dredging weakened it. "I
have more victims than I know what to do with, and they're just
furious," Mr. Becnel added.
HARDEE'S: EEOC Lodges Sexual Harassment Suit V. Hardee's Manager
----------------------------------------------------------------
The U.S. Equal Employment Opportunity Commission filed a lawsuit
against the store manager at a Hardee's franchise in Vestavia
Hills, Alabama, on behalf a group of female employees, including
at least one work release inmate, alleging the manager sexually
harassed them, The Associated Press reports.
The suit, filed on behalf of three women and is seeking class
action status, alleges that since his hiring in September 2003,
store manager Johnell Myers sexually harassed the women with
offensive remarks and "inappropriate touching of their private
body parts."
In a press statement, Charles E. Guerrier, regional attorney for
the EEOC's Birmingham District said, "Sexual harassment
typically involves supervisors who target the most vulnerable
employees." Mr. Guerrier stated that the case is unusual
because the plaintiffs include work release inmates who are
trying "to become members of society." He added, "These woman
should not be forced to choose between incarceration and a work
environment polluted by sexual harassment."
In a telephone call to Hardee's in Vestavia Hills, a suburb just
south of Birmingham, an employee who answered told The
Associated Press that Mr. Myers no longer works at the
restaurant. Efforts by The Associated Press to reach Mr. Myers
at home were unsuccessful.
ILLINOIS: Disabled Citizens Launch ADA Suit V. City of Chicago
--------------------------------------------------------------
A group of disabled people initiated a class action lawsuit
against the City of Chicago claiming that it violated federal
law by failing to make sidewalk ramps accessible to people in
wheelchairs, The Chicago tribune reports.
Filed in the U.S. District Court in Chicago, the suit claims
that many sidewalk ramps installed are too steep to use while
many sidewalks have no wheelchair-accessible ramps. The suit,
which asks for unspecified damages, calls on the city to install
properly pitched ramps while doing other street and sidewalk
repairs, the Chicago Tribune reported.
According to Jo Holzer, executive director of the Council for
Disability Rights, which also is a plaintiff in the suit, "These
sidewalk barriers often cause pedestrians in wheelchairs to use
the street, further endangering their own physical well-being as
well as creating hazards for drivers."
Asked to comment on the suit, a spokeswoman for Mayor Richard
Daley told Chicago Tribune that the city's legal department was
still reviewing the suit.
The suit is styled, "Council for Disability Rights et al v. City
Of Chicago, Case No. 1:05-cv-05689," filed in the United States
District Court for the Northern District of Illinois, under
Judge Wayne R. Andersen. Representing the Plaintiff/s are,
Theodore Arthur Woerthwein of Woerthwein & Miller. 70 West
Madison St., Suite 1400, Chicago, IL 60602, Phone: (312) 654-
0001, E-mail: ted@wamlaw.com.
IMPERIAL PETROLEUM: Reaches Settlement For TX Moss Unit Lawsuit
---------------------------------------------------------------
Imperial Petroleum, Inc., through its predecessor in interest,
reached a settlement for the class action lawsuit filed against
it in Texas Superior Court, seeking damages by the plaintiffs
for inadequate development of the Moss Unit located in Panola
County, Texas. The plaintiffs sought unspecified damages.
The lawsuit was settled subsequent to year-end through the
execution of a farmout agreement with a company nominated by the
plaintiffs to drill additional wells in the Unit. The Company
retained an over-riding royalty interest in the farmout wells to
be drilled and all rights to its existing proration unit
surrounding the Moss well, as well as $132,500 as consideration
for executing the farmout. Three additional wells have
subsequently been drilled in the Unit.
KANSAS: Price Manipulation Suit Filed V. Natural-Gas Companies
--------------------------------------------------------------
Learjet Inc. and Cross Oil Refining & Marketing Inc. initiated a
class action lawsuit that accuses some of the nation's largest
energy providers of conspiring to manipulate natural-gas prices
in Kansas, The Kansas City Star reports.
Filed in Wyandotte County District Court, the suit alleges that
the defendants "engaged in a pervasive and widespread scheme to
violate the Kansas Restraint of Trade Act" by providing false or
misleading information to firms that compiled natural-gas price
indexes. Gas utilities use the indexes a to set prices and
settle commodity transactions.
Learjet and Cross Oil filed the suit on behalf of themselves and
Kansas customers, who bought natural gas between January 1,
2000, and October 31, 2002, the period of the alleged
conspiracy.
According to one of the plaintiffs' attorneys, Jennifer Gille
Bacon of Shughart Thomson & Kilroy, "The allegations are that a
group of natural-gas companies systematically over the course of
three or four years, by reporting false trades and wash trades,
manipulated the price of natural gas."
A wash trade is a prearranged transaction between two parties at
the same price with no economic risk to either side and no
change in ownership. Though there is no profit to be made, the
trades can be used to inflate revenues as well as be used to
help set an artificial price that affects market prices.
The suit seeks unspecified damages for the allegedly higher
prices paid by customers because of the defendants' purported
antitrust violations. It names as defendants 20 natural-gas
companies, including Oneok Inc., Williams Companies Inc.,
American Electric Power Co., Duke Energy Corporation, Dynegy
Marketing & Trade, El Paso Corporation, CMS Energy Corporation,
Centerpoint Energy Inc., Reliant Energy Inc., Coral Energy
Resources and affiliates of those companies.
Commenting on the suit, American Electric Power spokesman, Pat
Hemlepp, told The Kansas City Star that the company had not seen
the lawsuit but that it was one of several nationwide in which
AEP had been accused of manipulating the natural gas market. He
also said, "Our feeling is that these suits are without merit
and that if this suit proceeds to trial, we will aggressively
defend ourselves."
Spokesmen for the other companies named in the suit, like Duke
Energy, Dynegy and El Paso Corporation declined to comment,
while others could not be reached or did not return phone calls
seeking comment.
KPMG LLP: NJ Lawsuit Over Bogus Tax Shelters Settled For $225M
--------------------------------------------------------------
KPMG, LLP and Sidley, Austin, Brown & Wood reached a $225
million settlement with plaintiffs in a class action suit, Simon
v. KPMG LLP, 05-3189, which charges the firms with having sold
bogus tax shelters, The New Jersey Law Journal reports.
The settlement, which is subject to approval by U.S. District
Judge Dennis Cavanaugh in Newark, New Jersey, who will hear the
matter soon, would end litigation lodged by KPMG clients who, in
the late 1990s, bought tax shelters that R.J. Ruble, a partner
for Sidley Austin's predecessor firm, Brown & Wood, helped
develop.
Court records show that R.J. Ruble wrote more than 600 letters
to clients declaring that the shelters would withstand Internal
Revenue Service scrutiny. However, plaintiffs claim that even
while the shelters were being sold, KPMG officials wrote memos
expressing doubts about their validity. Eventually, sale of the
shelters was discontinued after the IRS disallowed them.
The agreement was reached after both parties agreed to a year of
mediation with former U.S. District Judges Nicholas Politan of
New Jersey and Daniel Weinstein of California.
Plaintiffs counsel Melvyn Weiss asked the court to give
preliminary approval to the settlement on September 27. Mr.
Weiss said in a declaration that the pact, which provides $195
million for the class and $30 million in plaintiffs counsel fees
and costs, would give claimants more than the payouts in
settlements of individual suits filed against the two firms.
Aside from asking for preliminary approval of the settlement,
Mr. Weiss also asked the court to certify the class, appoint his
firm, Milberg Weiss Bershad & Schulman of New York, as lead
class counsel and appoint former judges Politan and Weinstein as
special masters to carry out the settlement.
Milberg Weiss though faced a challenge from another class action
firm, Bernstein Litowitz Berger & Grossman, which had brought a
similar action in federal court in Arkansas that was denied
class certification. Intervening in the New Jersey case,
Bernstein Litowitz accused Milberg Weiss of conducting a
"reverse auction" -- negotiating with defendants before filing
suit.
Two other putative class actions were filed in the Southern
District of New York in August and September of this year. Mr.
Weiss asked Judge Cavanaugh to grant an order giving preliminary
approval to the settlement, which he said would enjoin class
members from continuing with prosecution of other suits.
However, on September 29, the plaintiffs in one of the New York
class actions, Kottler v. KPMG, moved to intervene in the New
Jersey case. They asked Judge Cavanaugh to stay the settlement
pending the outcome of a transfer motion before the
Multidistrict Litigation Panel. In addition, the plaintiffs also
sought to have Milberg Weiss disqualified as class counsel,
claiming a conflict of interest, since the law firm had
represented lead plaintiff Mark Kottler in Florida state court
while it filed its class action in federal court in Newark.
The suit is styled, "SIMON et al v. KPMG LLP et al, Case No.
2:05-cv-03189-DMC-MF," filed in the United States District Court
for the District of New Jersey, under Judge Dennis M. Cavanaugh.
Representing the Plaintiff/s are James E. Cecchi and Melissa E.
Flax of CARELLA BYRNE BAIN GILFILLAN CECCHI STEWART & OLSTEIN,
PC, 5 Becker Farm Road, Roseland, NJ 07068, Phone: (973) 994-
1700, Fax: (973) 994-1744, E-mail: jcecchi@carellabyrne.com and
mflax@carellabyrne.com. Representing the Defendant/s are, Dennis
J. Drasco of LUM, DANZIS, DRASCO & POSITAN, LLC, 103 Eisenhower
Parkway, Roseland, NJ 07068-1049, Phone: (973) 403-9000, E-mail:
ddrasco@lumlaw.com; and Anthony J. Marchetta of Pitney Hardin,
200 Campus Drive, Florham Park, NJ 07932, Phone: 973-966-8032,
E-mail: amarchetta@pitneyhardin.com.
KPMG LLP: NJ Lawsuit Over Bogus Tax Shelters Settled For $225M
--------------------------------------------------------------
KPMG, LLP and Sidley, Austin, Brown & Wood reached a $225
million settlement with plaintiffs in a class action suit, Simon
v. KPMG LLP, 05-3189, which charges the firms with having sold
bogus tax shelters, The New Jersey Law Journal reports.
The settlement, which is subject to approval by U.S. District
Judge Dennis Cavanaugh in Newark, New Jersey, who will hear the
matter soon, would end litigation lodged by KPMG clients who, in
the late 1990s, bought tax shelters that R.J. Ruble, a partner
for Sidley Austin's predecessor firm, Brown & Wood, helped
develop.
Court records show that R.J. Ruble wrote more than 600 letters
to clients declaring that the shelters would withstand Internal
Revenue Service scrutiny. However, plaintiffs claim that even
while the shelters were being sold, KPMG officials wrote memos
expressing doubts about their validity. Eventually, sale of the
shelters was discontinued after the IRS disallowed them.
The agreement was reached after both parties agreed to a year of
mediation with former U.S. District Judges Nicholas Politan of
New Jersey and Daniel Weinstein of California.
Plaintiffs counsel Melvyn Weiss asked the court to give
preliminary approval to the settlement on September 27. Mr.
Weiss said in a declaration that the pact, which provides $195
million for the class and $30 million in plaintiffs counsel fees
and costs, would give claimants more than the payouts in
settlements of individual suits filed against the two firms.
Aside from asking for preliminary approval of the settlement,
Mr. Weiss also asked the court to certify the class, appoint his
firm, Milberg Weiss Bershad & Schulman of New York, as lead
class counsel and appoint former judges Politan and Weinstein as
special masters to carry out the settlement.
Milberg Weiss though faced a challenge from another class action
firm, Bernstein Litowitz Berger & Grossman, which had brought a
similar action in federal court in Arkansas that was denied
class certification. Intervening in the New Jersey case,
Bernstein Litowitz accused Milberg Weiss of conducting a
"reverse auction" -- negotiating with defendants before filing
suit.
Two other putative class actions were filed in the Southern
District of New York in August and September of this year. Mr.
Weiss asked Judge Cavanaugh to grant an order giving preliminary
approval to the settlement, which he said would enjoin class
members from continuing with prosecution of other suits.
However, on September 29, the plaintiffs in one of the New York
class actions, Kottler v. KPMG, moved to intervene in the New
Jersey case. They asked Judge Cavanaugh to stay the settlement
pending the outcome of a transfer motion before the
Multidistrict Litigation Panel. In addition, the plaintiffs also
sought to have Milberg Weiss disqualified as class counsel,
claiming a conflict of interest, since the law firm had
represented lead plaintiff Mark Kottler in Florida state court
while it filed its class action in federal court in Newark.
The suit is styled, "SIMON et al v. KPMG LLP et al, Case No.
2:05-cv-03189-DMC-MF," filed in the United States District Court
for the District of New Jersey, under Judge Dennis M. Cavanaugh.
Representing the Plaintiff/s are James E. Cecchi and Melissa E.
Flax of CARELLA BYRNE BAIN GILFILLAN CECCHI STEWART & OLSTEIN,
PC, 5 Becker Farm Road, Roseland, NJ 07068, Phone: (973) 994-
1700, Fax: (973) 994-1744, E-mail: jcecchi@carellabyrne.com and
mflax@carellabyrne.com. Representing the Defendant/s are, Dennis
J. Drasco of LUM, DANZIS, DRASCO & POSITAN, LLC, 103 Eisenhower
Parkway, Roseland, NJ 07068-1049, Phone: (973) 403-9000, E-mail:
ddrasco@lumlaw.com; and Anthony J. Marchetta of Pitney Hardin,
200 Campus Drive, Florham Park, NJ 07932, Phone: 973-966-8032,
E-mail: amarchetta@pitneyhardin.com.
NBO INC.: Asks IL Court To Dismiss Consumer Suit V. Gift Cards
--------------------------------------------------------------
The Twentieth Judicial Circuit Court of Illinois, St. Clair
County has yet to rule on NBO Inc.'s motion to dismiss the
consumer class action filed against it, styled "Ripperda, et al
v. NBO, Inc., et al, Case No. 04L91."
On February 13, 2004, Thomas Ripperda, et al, filed an action
against the Company in connection with gift cards sold at the
St. Clair Square Mall in St. Clair County, Illinois. The
plaintiffs' complaint seeks to establish a class action.
However, as of this date, the plaintiff has not moved to certify
a class. The complaint alleged that the term "valid thru"
appearing on the face of the gift card next to the expiration
date of the gift card is misleading in violation of the Illinois
unfair business practices laws. The plaintiff seeks a return of
all administrative fees charged against his gift card prior to
the "valid thru" date. If a class were certified, then the
plaintiff would seek to recover similar fees with respect to all
gift cards that the Company has sold.
Under the terms and conditions of the gift cards and the gift
card program, the Company disclosed that it may charge an
administrative fee against a gift card if the gift card is not
used within 90 days from the date of purchase. The "valid thru"
date is typically between 12 months and 18 months after the date
the gift card is purchased. In some cases, the administrative
fee reduces the amount of the gift card prior to the "valid
thru" date on the card. The Company disclosed the charge of an
administrative fee on the backside of the gift card and again in
the written terms and conditions that are distributed to
customers when they purchase the gift cards. The Company also
disclosed that a gift card may be renewed after the "valid thru"
date with the payment of a renewal fee, the Company said in a
regulatory filing.
The Company has filed a motion to dismiss, but the plaintiffs
have not yet filed an opposition. The parties are continuing to
conduct discovery.
OMEGA FLEX: Asks AR Court To Junk TracPipe Product Defect Suit
--------------------------------------------------------------
Omega Flex, Inc. faces a class action filed in the Clark County
Circuit Court in Arkansas, styled "Berry, et al. v. Titeflex
Corp., et al."
The suit alleges, among other things, that the Company's
corrugated stainless steel tubing (CSST) product TracPipe and
similar products manufactured by several other manufacturers
(also named as defendants in the case) is defective, or that
instructions, warnings and training in the installation of
corrugated stainless steel tubing are defective, against
potential damage to the corrugated stainless steel tubing
systems and the structures served by these systems, caused by
the nearby lightning strikes.
The plaintiffs in this case have named three other corrugated
stainless steel tubing manufacturers, and one plumber residing
in Arkansas, as defendants in this matter, and are seeking class
action certification as representatives of all similarly
situated persons in the United States, or in the alternative, in
Arkansas and Texas, pursuant to the Arkansas rules of civil
procedure.
The Company filed motions to dismiss the amended complaint and
the cross-complaint of the individual Arkansas plumber
defendant, who likewise proposed a class action cross-claim on
behalf of installers of CSST. Full discovery is proceeding and
disposition of the class certification issue is expected in
2006. The Company will oppose both class certification and any
request for a national class.
PAPERWEIGHT DEVELOPMENT: Faces Injury, Damage Suit in S.D. Ohio
---------------------------------------------------------------
Paperweight Development Corporation (formerly Appleton Papers,
Inc.) faces a class action filed in the United States District
Court for the Southern District of Ohio on behalf of local
residents who allegedly live (or have lived) near the wastewater
treatment plant of the mill.
The suit, initially filed in Montgomery County, Ohio Superior
Court, alleges that the Company has released and continues to
release hazardous substances from the mill, including
polychlorinated biphenyls (PCBs), dioxins and fluorochemicals,
which allegedly caused injury to the plaintiffs and/or damage to
their property. The lawsuits were later removed to federal
court. The local resident plaintiffs have requested that the
court certify the matter as a class action. The plaintiffs
request compensatory and punitive damages, remediation and other
relief.
The suit is styled "McCracken et al v. Appleton Papers Inc.,
case no. 3:05-cv-00160-WHR," filed in the United States District
Court for the Southern District of Ohio, under Judge Walter H.
Rice. Representing the Company is Joseph P. Thomas of Ulmer &
Berne - 1, 600 Vine Street, Suite 2800, Cincinnati, OH 45202-
2409, Phone: 513-698-5004, E-mail: jthomas@ulmer.com.
Representing the plaintiffs are Robert A. Bilott and Joseph
Steven Justice, Taft Stettinius & Hollister, 1800 Firstar Tower,
425 Walnut St, Cincinnati, OH 45202-3597, Phone: 513-381-2838
and E-mail: bilott@taftlaw.com and justice@taftlaw.com; and
David B. Byrne, III, J. Mark Englehart, Rhon E. Jones,
Beasly Allen Crow Methvin Portis & Miles PC, PO Box 4160,
Montgomery, AL 36103-4160, Phone: 334-269-2343, Fax:
334-954-7555, E-mail: david.byrne@beasleyallen.com,
mark.englehart@beasleyallen.com, rhon.jones@beasleyallen.com.
PARAGON FINANCIAL: NY Court Preliminarily OKs Lawsuit 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 Paragon
Financial Corporation, certain of its former officers and
directors and the underwriters of its initial public offering.
Several suits were initially filed, alleging violations of the
federal securities laws. In mid-2002, the complaints against
the Company were consolidated into a single action. The essence
of the complaint is that in connection with the Company's
initial public offering in October 1999 (IPO), the defendants
issued and sold the Company's common stock pursuant to a
registration statement which did not disclose to investors that
certain underwriters in the offering had solicited and received
excessive and undisclosed commissions from certain investors
acquiring the Company's common stock in connection with the IPO.
The complaint also alleges that the registration statement
failed to disclose that the underwriters allocated Company
shares in the IPO to customers of the underwriters in exchange
for the customers' promises to purchase additional shares in the
aftermarket at pre-determined prices above the IPO price. The
action seeks damages in an unspecified amount. The action is
being coordinated with approximately 300 other nearly identical
actions filed against other companies that had initial public
offerings of securities between 1997 and 2000 same time period.
The Company has approved a Memorandum of Understanding (MOU) and
related agreements which set forth the terms of a settlement
between the Company, the plaintiff class and the vast majority
of the other approximately 300 issuer defendants. Among other
provisions, the settlement contemplated by the MOU provides for
a release of the Company and the individual defendants for the
conduct alleged in the action to be wrongful. The Company would
agree to undertake certain responsibilities, including agreeing
to assign away, not assert, or release certain potential claims
the Company may have against its underwriters. It is
anticipated that any potential financial obligation of the
Company to plaintiffs pursuant to the terms of the MOU and
related agreements will be covered by existing insurance.
Therefore, the Company does not expect that the settlement will
involve any payment by the Company. The MOU and related
agreements are subject to a number of contingencies, including
the negotiation of a settlement agreement and its approval by
the Court.
The suit is styled "IN RE PARAGON FINANCIAL 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
SOUTH KOREA: Seoul YMCA Files Price-Fixing Suit V. Telecom Firms
----------------------------------------------------------------
The Seoul Young Men's Christian Association filed class action
suits against both KT and Hanaro Telecom for allegedly making
illegal agreements to fix prices, The Joongang Ilbo reports.
A group of 482 Hanaro Telecom subscribers from 27 regions around
the nation were represented under the class action, which asked
for a total of $430,000 (482 million won), according to the
association.
The Fair Trade Commission earlier this year fined KT and Hanaro
Telecom $111.6 million (116 billion won) and $2.31 million (2.4
billion won) respectively for fixing charges on local calls and
private cables for Internet cafes.
STAPLES INC.: CA Court Considers Certification For Wage Lawsuit
---------------------------------------------------------------
California Superior Court heard motions for class certification
of a lawsuit filed against Staples, Inc., for alleged violations
of what is known as California's "wage and hour" law.
The plaintiffs alleged that the Company improperly classified
both general and assistant store managers as exempt under the
California wage and hour law, making such managers ineligible
for overtime wages. The plaintiffs are seeking to require the
Company to pay overtime wages to the putative class for the
period from October 21, 1995 to the present. The motion for
class certification was heard by the court on July 15, 2005, and
the matter was taken under advisement.
STOCKERYALE INC.: NH Court Consolidates Securities Fraud Suits
--------------------------------------------------------------
The United States District Court for the District of New
Hampshire consolidated the securities class actions filed
against StockerYale, Inc., on behalf of purchasers of the firm's
securities between April 19, 2004 and May 23, 2005. The actions
also name as defendants Mark W. Blodgett (CEO, President and
Chairman), Francis J. O'Brien (former CFO), Richard P. Lindsay
(current CFO), and Ricardo A. Diaz (COO). No class has yet been
certified in the above actions.
The complaints, which assert claims under Sections 10(b) and
20(a) of the Securities Exchange Act of 1934 and Rule 10(b)(5)
promulgated thereunder, allege that certain disclosures made by
the Company in press releases dated April 19, 2004 and April 21,
2004 were materially false or misleading. The complaints seek
unspecified damages.
The suit is styled "In re StockerYale, Inc. Securities
Litigation, case no. 1:05-cv-00177-JM," filed in the United
States District Court for the District of New Hampshire, under
Judge James R. Muirhead. Representing the Company is Douglas C.
Doskocil, Goodwin Procter LLP (MA), Exchange Place, 53 State St
Boston, MA 02109-2881, Phone: 617 570-1000, E-mail:
ddoskocil@goodwinprocter.com. Representing the plaintiffs is
William L. Chapman and Jennifer A. Eber, Orr & Reno PA, One
Eagle Sq, PO Box 3550, Concord, NH 03302-3550, Phone: 603-224-
2381, E-mail: wlc@orr-reno.com or jaeber@orr-reno.com.
TRUMP ENTERTAINMENT: Pension Plan Members Face ERISA Suit in NJ
---------------------------------------------------------------
Certain persons and organizations that included members of The
Trump Entertainment Resorts, Inc.'s Capital Accumulation Plan
Administrative Committee face a class action filed in the United
States District Court for the District of New Jersey, Camden
Division, alleging violations of the Employee Retirement Income
Security Act (ERISA).
In their complaint, the plaintiffs alleged, among other things,
that such persons and organizations, who were responsible for
managing the Trump Capital Accumulation Plan, breached their
fiduciary duties owed to the plan participants when Old Common
Stock held in employee accounts was allegedly sold without
participant authorization if the participant did not willingly
sell such shares by a specified date in accordance with the
plan. The plaintiffs brought this suit under the Employee
Retirement Income Security Act of 1974, as amended, on behalf of
themselves and certain other plan participants and beneficiaries
and sought to have the court certify their claims as a class
action. In their complaint, the plaintiffs also sought, among
other things, damages for losses suffered by certain accounts of
affected plan participants as a result of such allegedly
improper sale of Old Common Stock and reasonable costs and
attorneys' fees. The case is in its initial phase with
discovery, commenced in September 2005.
The suit is styled "NOA et al v. KEYSER et al., case no. 1:05-
cv-00776-FLW-AMD," filed in the United States District Court for
the District of New Jersey, under Judge Freda L. Wolfson.
Representing the plaintiffs is Eric M. Wood, FOX ROTHSCHILD LLP,
Midtown Building, 1301 Atlantic Avenue, Suite 400, Atlantic
City, NJ 08401-7278 Phone: (609)-348-4515, E-mail:
ewood@foxrothschild.com. Representing the Company is Florina A.
Moldovan, MCELROY, DEUTSCH, MULVANEY AND CARPENTER, LLP, 1300
Mount Kemble Avenue, Morristown NJ 07962-2075, Phone:
(973)993-8100, E-mail: fmoldovan@mdmc-law.com.
TYSON MEATS: New Chief Justice Hears Appeal in Employee Lawsuit
---------------------------------------------------------------
The court, headed by new Chief Justice John Roberts, heard
arguments in the case that affects more than 800 workers at the
Tyson Fresh Meats plant in Pasco. The suit, involves a wage
dispute at an Eastern Washington meat processing plant, is one
of the first cases to be handled by the 17th chief justice of
the U.S. Supreme Court, The Associated Press reports.
Workers brought the class action lawsuit, Alvarez vs. IBP, six
years ago saying they should be paid for the time it takes them
to put on protective clothing. The workers argued that because
federal law and the company required the gear, their workday
should begin when they start to put it on. The company though
argued that the 1947 Portal-to-Portal Act required only that
they start paying the workers when they arrived at their actual
workstations.
A district court judge and the 9th U.S. Circuit Court of Appeals
later agreed with the workers, though another federal appeals
court issued a differing opinion in a similar case. IBP, now a
part of Tyson Foods, appealed the case to the Supreme Court,
which agreed to hear whether workers should be paid for the time
it took to walk from the changing room to the production line.
During arguments before the Supreme Court a lawyer for the
company told The Associated Press that the appeal could trigger
billions in liabilities for other businesses where workers have
to change clothes.
UNION PACIFIC: Twelve Individuals Face Indictment Over Claims
-------------------------------------------------------------
A federal indictment was brought against twelve individuals, who
are accused of inventing a family reunion in Eunice to claim a
share in the $65 million legal settlement for people injured by
or evacuated because of a derailment there in May 2000, The
Associated Press reports.
According to Terry Hoychick, an attorney for Union Pacific
Railroad Co., although the lot where the individuals say they
had a tent, barbecue pits and a band is now vacant, it was
occupied by two houses at the time of the derailment, and
neighbors said they could not remember any reunion occurring.
The claim was among more than 200 rejected by special masters
appointed by the court to oversee the payout of settlement money
from the class action suit brought by more than 12,000 people
and businesses.
At the request of U.S. District Judge Richard Haik, FBI agents
sat in on settlement hearings to see whether any of the
questionable claims amounted to criminal fraud. The fraud
charges brought against the 12 individuals are the only ones so
far.
U.S. Attorney Donald Washington though told The Associated
Press, "The investigation is not yet complete. It just takes
time to work our way through it."
Attorney Hoychick told The Associated Press that some other
questionable claims were made by people who said they were
visiting or shopping in Eunice at the time of the derailment,
which forced the evacuation of much of the town after three rail
cars carrying hazardous materials exploded. Union Pacific's
attorney also pointed out, "It was pretty clear somebody was
making up some stuff."
Last year at fairness hearing in Louisiana, U.S. District Judge
Richard Haik formally approved the $65 million settlement over a
May 2000 train derailment that forced the evacuation of more
than 3,000 Eunice area residents after train cars carrying
hazardous chemicals jumped the track, an earlier Class Action
Reporter story (September 1, 2004) reports.
Under the terms of the settlement the Union Pacific Railroad
Company will pay $65 million as compensation. Minus attorney's
fees, the money will be split among the 12,273 people who have
filed claims in the case. Taking into account the maximum
allowable attorneys fees of 40 percent, each plaintiff could
receive an average of $3,177, an earlier Class Action Reporter
story (September 1, 2004) reports.
According to Pat Juneau, court-appointed overseer of the
settlement payout, the amount paid to each person will be
determined through a review process, an earlier Class Action
Reporter story (September 1, 2004) reports.
VASO ACTIVE: Inks Settlement for MA Consolidated Securities Suit
----------------------------------------------------------------
Vaso Active Pharmaceuticals, Inc. and certain of its officers
reached a settlement for the consolidated securities class
action filed in the United States District Court for the
District of Massachusetts, styled "IN RE VASO ACTIVE
PHARMACEUTICALS SECURITIES LITIGATION , Civ. No. 04-10708
(RCL)."
In April, May, and June 2004, several securities class action
lawsuits were filed, seeking equitable and monetary relief, an
unspecified amount of damages, with interest, attorney's fees
and costs. The suits were allegedly filed on behalf of
purchasers of the Company's Class A common stock during the
period December 11, 2003 to March 31, 2004. The complaints
allege that during the period in question the Defendants
violated the federal securities laws by allegedly failing to
make accurate and complete disclosures concerning the Company,
its financial condition, its business operations and future
prospects, the clinical trial and endorsement of the Company's
Termin8 anti-fungal product (previously known as "deFEET") and
the institutional demand for the Company's securities. These
complaints are captioned as follows:
(1) DENNIS E. SMITH V. VASO ACTIVE PHARMACEUTICALS, INC.,
ET AL., Civ. No. 04-10708 (RCL) (D. Mass.);
(2) RICHARD SHAPIRO V. VASO ACTIVE PHARMACEUTICALS, INC.,
ET AL., Civ. No. 04-10720 (RCL) (D. Mass.);
(3) CHRISTOPHER PEPIN V. VASO ACTIVE PHARMACEUTICALS, INC.,
ET AL., Civ. No. 04-10763 (RCL) (D. Mass.);
(4) MODHI GUDE, ET AL. V. VASO ACTIVE PHARMACEUTICALS,
INC., ET AL., Civ. No. 04-10789 (RCL) (D. Mass.);
(5) KIM BENEDETTO, ET AL. V. VASO ACTIVE PHARMACEUTICALS,
INC., ET AL., Civ. No. 04-10808 (RCL) (D. Mass.);
(6) DEAN DUMMER V. VASO ACTIVE PHARMACEUTICALS, INC., ET
AL., Civ. No. 04-10819 (RCL) (D. Mass.);
(7) EDWARD TOVREA V. VASO ACTIVE PHARMACEUTICALS, INC., ET
AL., Civ . No. 04-10851 (RCL);
(8) KOUROSH ALIPOR V. VASO ACTIVE PHARMACEUTICALS, INC., ET
AL., Civ. No. 04-10877 (RCL);
(9) PAUL E. BOSTROM V. VASO ACTIVE PHARMACEUTICALS, INC.,
ET AL., Civ. No. 04-10948 (RCL);
(10) IRA A. TURRET SEP-IRA DATED 01/24/02 V. VASO ACTIVE
PHARMACEUTICALS, INC., ET AL., Civ. No. 04-10980 (RCL);
(11) RICHARD PAGONA V. VASO ACTIVE PHARMACEUTICALS, INC., ET
AL., Civ. No. 04-11100 (RCL);
(12) JAMES KARANFILIAN V. VASO ACTIVE PHARMACEUTICALS,., ET
AL. , Civ. No. 04-11101 (RCL); and
(13) CHARLES ROBINSON V. VASO ACTIVE PHARMACEUTICALS, INC.,
ET AL., Civ. No. 04-11221 (RCL)
The Court has consolidated the above-referenced cases, other
than the TOVREA and KARANFILIA complaints in the United States
District Court for the District of Massachusetts. On November
4, 2004, the Court appointed Schiffrin & Barroway LLP as lead
counsel for the Consolidated Action and appointed Shapiro, Haber
& Urmy LLP as local counsel. The Court also appointed Edwin
Choi, Richard Ching, and Joe H. Huback as interim co-lead
plaintiffs, pending a determination of whether the Consolidated
Action may proceed as a class action. The Court further ordered
that co-lead plaintiffs file a consolidated amended complaint in
the Consolidated Action no later than December 4, 2004. On
December 3, 2004, plaintiffs filed the Consolidated Amended
Complaint, which added as defendants the Company's directors at
the time of the Company's initial public offering and issuance
of its 2003 Annual Report, and alleged that during the period in
question the Defendants made false and misleading statements
concerning FDA approval of its current products and related
misstatements and concerning the clinical trial of the anti-
fungal product. On January 20, 2005, the Defendants filed an
Answer to the Complaint essentially denying the allegations and
liability.
In June 2005, the company entered into a Memorandum of
Understanding Concerning Settlement Terms (MOU) to settle the
pending consolidated securities class action lawsuit. Under the
terms of the MOU, the lead plaintiffs and the settling
defendants agree that the final stipulation will contain a
disclaimer of liability consistent with the MOU.
Subject to the terms and conditions set forth in the MOU,
settling defendants will pay into escrow for the benefit of the
class $1,100,000 in cash and $750,000 face amount of 2-year 5%
subordinated callable notes convertible at $1.75 per share
within 10 business days of preliminary approval of the
settlement by the court. In consideration of this payment, the
parties will fully and finally release and discharge all claims
against each other. The settlement still needs court approval.
The Company's insurance carrier has agreed to pay the $1,100,000
cash payment in exchange for a release of its liability under
its insurance policy with the Company, an earlier Class Action
Reporter story (June 6,2005) stated.
The suit is styled "In Re Vaso Active Pharmaceuticals Securities
Litigation, case no. 1:04-cv-10708-RCL," filed in the United
States District Court in Massachusetts, under Judge Reginald C.
Lindsay. Representing the Company is Michael G. Bongiorno of
Wilmer Cutler Pickering Hale and Dorr LLP, 60 State Street,
Boston, MA 02109, Phone: 617-526-6145, Fax: 617-526-5000, E-
mail: michael.bongiorno@wilmerhale.com. Representing the
plaintiffs are Stuart L. Berman, Darren Check, Sean M. Handler
of Schiffrin & Barroway, LLP, 280 King of Prussia Road, Radnor,
PA 19087, Phone: 610-667-7706, Fax: 610-667-7056, E-mail:
ecf_filings@sbclasslaw.com.
WHITE LILY FOODS: Recalls Mixes Due to Undeclared Wheat Flour
-------------------------------------------------------------
The White Lily Foods Company of Knoxville, Tennessee is
recalling bags of self-rising cornmeal mix sold under the brand
name "Three Rivers", because it contains undeclared wheat flour.
People who have an allergy or severe sensitivity to wheat run
the risk of an allergic reaction if they consume this product.
The self-rising cornmeal mix was distributed in Alabama,
Florida, Georgia, Kentucky, North Carolina, Ohio, South
Carolina, Tennessee, Indiana, West Virginia and Virginia through
grocery stores and wholesalers.
The product is contained in (a) 5 lb. bags bearing dates
beginning "29 MAR 06" and ending on "20 JUN 06"; and (b) 2 lb.
bags bearing dates beginning "18 MAY 06" and ending on "26 JUN
06". No illnesses have been reported to date.
The recall was initiated after it was discovered that product
containing wheat flour was distributed in packaging that did not
reveal the presence of the wheat flour.
This recall only covers self-rising cornmeal mix produced under
the Three Rivers brand and does not affect any cornmeal,
cornmeal mix or other products sold under the White Lily brand
name.
Consumers who have purchased Three Rivers Self-Rising Cornmeal
Mix with these dates may contact the company at 1-888-606-9907
for more information, during the hours of 8:00 a.m. to 5:00 p.m.
Eastern.
WORLD AIRWAYS: Faces NY Lawsuit On Cancelled Nigeria Flights
------------------------------------------------------------
World Air Holdings, Inc. continues to face a consolidated class
action, arising out the discontinuance of flights to Lagos,
Nigeria. The suit is pending in the United States District
Court for the Eastern District of New York.
In January 2004, ten purported class action complaints (six in
the United States District Court for the Eastern District of New
York, one in the United States District Court for the Southern
District of New York, one in the Superior Court of DeKalb
County, Georgia, one in the United States District Court for the
Northern District of New Jersey and one in the United States
District Court for the Northern District of Illinois) and four
individual complaints (all in the United States District Court
for the Eastern District of New York), and thirteen small claims
actions (one in California, three in New Jersey, one in Georgia
and eight in New York) were filed against the Company arising
out of the discontinuance of charter flights upon the expiration
of the Company's obligation to provide services under an air
services agreement.
Seven of the eight small claims actions in New York were settled
for a total of $14,000 (or $2,000 per plaintiff). The purported
class action cases were consolidated for discovery purposes into
the Eastern District of New York.
The Company had operated the charter flights between cities in
the United States and Lagos, Nigeria for Ritetime Aviation and
Travel Services, Inc. ("Ritetime"). The Company's obligation to
perform air services for Ritetime ended with the last chartered
flight on December 30, 2003. From the allegations made by the
various plaintiffs, it appears that Ritetime continued to sell
tickets to passengers for flights purportedly scheduled to
depart after the expiration of the Company's contractual
obligations for air services. The plaintiffs purport to act for
themselves and on behalf of other persons who held tickets
issued by Ritetime for the non-contracted flights. Ritetime is
also named as a defendant in each of these lawsuits. The
plaintiffs seek compensatory, punitive and/or treble damages and
costs and expenses, including attorneys fees, based on various
legal theories including breach of contract, fraud, negligent
misrepresentation, unjust enrichment, illegal/excess tax and
violations of U.S. federal laws and regulations governing air
transportation and of the Federal Racketeer Influenced and
Corrupt Organization Statute (RICO).
The Company's insurance carrier has responded and assumed the
defense of these cases and agreed to conditionally indemnify the
Company for the costs of litigation and any judgment. In March
2004, Ritetime filed a Demand to Arbitrate in Peachtree City,
Georgia, and subsequently the Company responded and filed a
counterclaim. The matter was heard in October 2004, and the
arbitrator awarded the Company the amount of $2.2 million
against Ritetime, plus indemnification on all judgments, fees
and expenses incurred by the Company in the Ritetime litigation.
However, it is doubtful that Ritetime has assets to pay the
award. The DOT is investigating this matter and the Company is
negotiating the terms of a settlement with the DOT, without
admitting or denying any allegations, which settlement the
Company believes will not be material to its financial
condition, results of operations or liquidity.
The suit is styled "In re: Nigeria Charter Flights Contract
Litigation, case no. 1:04-md-01613-RJD-MDG," filed in the United
States District Court in New Hampshire, under Judge Raymond J.
Dearie. Representing the Company is Frank J. Costello, Zuckert,
Scoutt & Rasenberger, L.L.P., 888 Seventeenth Street, N.W.,
Washington, DC 20006-3309, Phone: (202) 298-8660, Fax: (202)
342-0683, E-mail: fjcostello@zsrlaw.com.
New Securities Fraud Cases
ABERCROMBIE & FITCH: Lerach Coughli Lodges Securities Suit in OH
----------------------------------------------------------------
The law firm of Lerach Coughlin Stoia Geller Rudman & Robbins
LLP ("Lerach Coughlin") initiated class action in the United
States District Court for the Southern District of Ohio on
behalf of purchasers of Abercrombie & Fitch Co. ("Abercrombie")
(NYSE:ANF) publicly traded securities during the period between
June 2, 2005 and August 16, 2005 (the "Class Period").
The complaint charges Abercrombie and certain of its officers
and directors with violations of the Securities Exchange Act of
1934. Abercrombie is a retailer operating four "brand concepts"
of "casual luxury" goods and apparel.
The complaint alleges that during February and March 2005,
defendants made a series of express promises that Abercrombie
was continuing to report the high margins and earnings achieved
during the 2004 holiday season because it had purportedly
"eliminated" its reliance on profit-diminishing promotional sales.
Instead of focusing on transaction volume, Abercrombie
differentiated itself amongst other apparel distributors by
promising it was rigorously maintaining a high price/high margin
sales model. Purportedly based on this sales model, coupled with
internal sales forecasts, during March 2005 defendants made
fiscal 2005 earnings projections of $2.80-$3.00 per share, or
approximately $0.70-$0.75 per share on a quarterly basis.
According to the complaint, between June 2, 2005 and August 16,
2005, defendants caused Abercrombie's shares to trade at
artificially inflated levels by concealing that its business had
deteriorated and as a result, its previously issued earnings
projections were grossly overstated. Despite defendants' earlier
promises, during May and June 2005 the Company held an extended
promotional sale under the guise of moving out older product
lines to make room for newer lines, which permitted defendants
to make the net sales and comparable store sales figures the
market expected for May and June 2005. Defendants' positive
statements had their intended effect and the Company's stock
price spiraled to a Class Period high of $73.14 on July 7, 2005.
Between June 2, 2005 and July 15, 2005 Abercrombie's senior
executives sold approximately 1.9 million shares of the
Company's stock at inflated prices, pocketing approximately $137
million in proceeds.
Following a moderate stock price decline on August 4, 2005 when
Abercrombie's actual July 2005 sales results, depressed by the
huge May-June promotional activities, were reported, the
Company's stock price plummeted on August 16, 2005, when
Abercrombie released its Q2 05 financial results. Instead of
reporting $0.70-$0.75 per share in earnings, the Company
reported $0.63 per share in earnings on lower than expected
margins. The Company's stock price plunged to a price
approximately 20% lower than its Class Period high, erasing over
$1.2 billion in market capitalization.
For more details, contact William Lerach or Darren Robbins of
Lerach Coughlin, Phone: 800-449-4900 or 619-231-1058, E-mail:
wsl@lerachlaw.com, Web site:
http://www.lerachlaw.com/cases/abercrombie/.
AMERIGROUP CORPORATION: Charles J. Piven Lodges Fraud Suit in VA
----------------------------------------------------------------
The Law Offices Of Charles J. Piven, P.A. initiated a securities
class action on behalf of shareholders who purchased, converted,
exchanged or otherwise acquired the common stock of AMERIGROUP
Corporation (NYSE: AGP) between April 27, 2005 and September 28,
2005, inclusive (the "Class Period").
The case is pending in the United States District Court for the
Eastern District of Virginia against defendant AMERIGROUP and
one or more of its officers and/or directors. The action charges
that defendants violated federal securities laws by issuing a
series of materially false and misleading statements to the
market throughout the Class Period, which statements had the
effect of artificially inflating the market price of the
Company's securities. No class has yet been certified in the
above action.
For more details, contact The Law Offices Of Charles J. Piven,
P.A., The World Trade Center-Baltimore, 401 East Pratt St.,
Suite 2525, Baltimore, MD 21202, Phone: 410-986-0036, E-mail:
hoffman@pivenlaw.com.
AMERIGROUP CORPORATION: Dyer & Shuman Sets Plaintiff Deadline
-------------------------------------------------------------
The law firm of Dyer & Shuman, LLP, is encouraging all persons
who purchased the common stock of AMERIGROUP Corporation (NYSE:
AGP) between April 27, 2005 and September 28, 2005 ("Class
Members") to contact Kip B. Shuman of Dyer & Shuman, LLP at 1-
800-711-6483 or via email at KShuman@DyerShuman.com, or their
counsel of choice, concerning their rights and interests as
potential class members in the shareholder class action lawsuit
recently filed in the United States District Court for the
Eastern District of Virginia. The lawsuit alleges that
AMERIGROUP violated federal securities laws by issuing false and
misleading statements regarding its business and financial
condition.
The firm reminds investors that they have until December 2, 2005
to file for lead plaintiff in the case.
For more details, contact Kip B. Shuman of Dyer & Shuman, LLP,
Phone: 1-800-711-6483, E-mail: KShuman@DyerShuman.com, Web site:
http://www.dyershuman.com.
AMERIGROUP CORPORATION: Schatz & Nobel Lodges Fraud Suit in VA
--------------------------------------------------------------
The law firm of Schatz & Nobel, P.C. initiated a lawsuit seeking
class action status in the United States District Court for the
Eastern District of Virginia on behalf of all persons who
purchased the common stock of AMERIGROUP Corporation (NYSE:AGP)
("the Company") between April 27, 2005 and September 28, 2005
(the "Class Period").
The Complaint alleges AMERIGROUP violated federal securities
laws by issuing materially false statements regarding the
Company's business and financial condition. Specifically,
AMERIGROUP failed to account for at least $23 million in medical
costs incurred in prior quarters but not included in the results
for those quarters. This caused the Company's stock to trade as
high as $49.30 per share during the Class Period. Defendants
took advantage of this artificial inflation, selling 170,712
shares of their AMERIGROUP stock for proceeds of $6.1 million.
On September 28, 2005, after the market closed, the Company
issued a press release announcing that "It expects to report a
third quarter 2005 loss of $0.06 to $0.08 per diluted share, as
compared to current consensus earnings estimate of $0.48 per
diluted share. As a result, the Company will not meet its 2005
annual earnings guidance of $1.73 to $1.78 per diluted share.
The third quarter results will include additional estimated
medical costs related to services performed in prior periods,
primarily the first and second quarters of 2005, of
approximately $23 million, or $0.26 per diluted share . . .
Third quarter earnings per diluted share, excluding the impact
of the prior period development, are estimated to be $0.18 to
$0.20 as compared to current consensus earnings estimate of
$0.48 per diluted share." On this news, AMERIGROUP fell $14.70
per share before closing at $19.81 per share.
For more details, contact Wayne T. Boulton or Nancy A. Kulesa of
Schatz & Nobel, P.C., Phone: (800) 797-5499, E-mail:
sn06106@aol.com, Web site: http://www.snlaw.net.
WORLD HEALTH: Pomerantz Haudek Files Securities Fraud Suit in PA
----------------------------------------------------------------
The law firm of Pomerantz Haudek Block Grossman & Gross, LLP,
initiated a class action lawsuit against World Health
Alternatives, Inc. (World Health or the "Company") (OTCBB:
WHAIE), three of the Company's senior officers and Daszkal
Bolton LLP, the Company's independent outside auditor, on behalf
of all persons or entities who purchased the securities of World
Health between June 26, 2003 and August 18, 2005 (the "class
period"). The case is being filed in the United States District
Court, Western District of Pennsylvania. The lawsuit is seeking
to pursue remedies under the Securities Exchange Act of 1934.
World Health is a Pittsburgh based company that provides
medical, professional, and administrative staffing services to
the healthcare industry in the United States. During the class
period, Defendants issued, or caused to be issued, false and
misleading statements to artificially inflate the value of World
Health Stock. Through Defendants' false and misleading
statements, the Company was
(1) able to mislead investors as to the number of
outstanding shares the Company had,
(2) manipulate financial statement recognition of a
convertible debenture and warrant agreement,
(3) underpay certain tax liabilities in excess of $4
million, and
(4) obtain an additional $6.5 million in funding from its
lenders that was in excess to its loan agreements by
submitting irregular reports to the Company's lenders.
As a result, the Company has terminated its outside auditor,
Daszkal Bolton LLP, retained outside counsel and the Board of
Directors has retained special counsel to assist it with its
investigation. Further, the Company has determined that it will
be restating its prior financial statements and has warned
investors not to rely on the information contained therein.
Thus, Company's reported earnings statements for the interim
periods were inflated in violation of Generally Accepted
Accounting principles ("GAAP").
The complaint also alleges that World Health and Richard E.
McDonald, the Company's Chairman of the Board and President,
Marc D. Roup, Chief Executive Officer and Director, John C.
Sercu, Chief Operating Officer and subsequent Interim Chief
Executive Officer and Acting President, were privy to
confidential and proprietary information concerning the Company.
By reasons of their positions with the Company, the Individual
Defendants had access to internal Company documents, reports and
other information, including the adverse non-public information
concerning the Company's services, financial condition, and
future prospects. As a result of the foregoing, they were
responsible for the truthfulness and accuracy of the Company's
public reports and released described herein.
The complaint further alleges that Daszkal Bolton LLP, the
Company's independent outside auditor at all relevant times,
issued audit reports on the Company's publicly filed annual
financial statements certifying:
(i) that it had audited World Health's financial statements
in accordance with generally accepted auditing
standards;
(ii) that it had planned and performed its audits "to obtain
reasonable assurance about whether the financial
statements are free of material misstatements";
(iii) that, in its opinion, the Company's financial
statements "present fairly, in all material respects,
the financial position" of World Health in conformity
with generally accepted accounting principles; and
(iv) that its audits provided "a reasonable basis for (its)
opinions."
For more details, contact Teresa Webb or Carolyn Moskowitz of
Pomerantz Haudek Block Grossman & Gross, LLP, Phone
(888) 476-6529, E-mail: tlwebb@pomlaw.com or csmoskowitz@pomlaw.com.
*********
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Wednesday's edition of the Class Action Reporter. Submissions
via e-mail to carconf@beard.com are encouraged.
Each Friday's edition of the CAR includes a section featuring
news on asbestos-related litigation and profiles of target
asbestos defendants that, according to independent researches,
collectively face billions of dollars in asbestos-related
liabilities.
*********
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Copyright 2005. All rights reserved. ISSN 1525-2272.
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Beard at 240/629-3300.
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