/raid1/www/Hosts/bankrupt/CAR

/raid1/www/Hosts/bankrupt/CAR_Public/121101.mbx C L A S S A C T I O N R E P O R T E R Thursday, November 1, 2012, Vol. 14, No. 217 Headlines ALTRIA: Argentinean Tobacco Workers File Class Action AMR CORP: "Turner" Antitrust Suit Remains Pending in California ANCESTRY.COM: Being Sold to Global Generations for Too Little BT MCELRATH: Recalls Peanut Butter Pave Due To Health Risks CANADA: B.C. Faces Class Action Over Foster Care Abuses CHICAGO, IL: Sued Over Firefighter Entrance Exam Discrimination CHINA-BIOTICS: Bid to Dismiss Claims in New York Suit Pending CHINA-BIOTICS: Lead Plaintiff Appointed in "Casper" Class Suit CITIZENS SOUTH: Files Supplement Under MOU to Settle "Heath" Suit CREDO PETROLEUM: Signs MOU to Settle Consolidated Merger Suit CSX CORP: Seeks to Appeal Class Cert. Ruling in Antitrust Suit GOVGUAM: Enters Into Mediation with Class Action Plaintiffs KNIGHT CAPITAL: Faces $440-Mil. Shareholder Class Action KNOX COUNTY, TN: Judge Denies Truancy Class Action Appeal MARCOS ESTATE: Appeals Court Upholds Fine in Human Rights Case MEDICIS PHARMA: Being Sold to Valeant for Too Little, Suit Says PARK STERLING: Files Supplements Under MOU to Settle "Heath" Suit PEET'S COFFEE: Gets Prelim. OK of Consolidated Suit Settlement ROTO-ROOTER: Sued for Allegedly Defrauding Homeowners SCHOEP'S ICE: Recalls Kay's Classic Vanilla Bean Ice Cream SYNGENTA AG: Settles Atrazine Class Action for $105 Million TEVA PHARMACEUTICAL: Faces Class Action Over Patent Settlement UNITED RENTALS: "Israni" Suit Settlement Approved in September VIA RAIL: Court Set to Hear Arguments in Derailment Class Action WAL-MART STORES: Disputes Gender Discrimination Class Action WARREN, MI: Settles Class Action Over Tree Damage for $1.42 Mil. WASHINGTON POST: Faces Class Action Over Distributors' Contracts WELLS FARGO: Sued for Misrepresenting HAMP Requirements WPCS INTERNATIONAL: Anticipates Dismissal of "Rapozo" Class Suit ZAYO GROUP: Continues to Defend AboveNet Acquisition Suits ********* ALTRIA: Argentinean Tobacco Workers File Class Action ----------------------------------------------------- Courthouse News Service reports that dozens of Argentinean tobacco workers claim their children suffered birth defects because Altria and other Big Tobacco companies sprayed their crops with toxic chemicals made by Monsanto, in Superior Court. AMR CORP: "Turner" Antitrust Suit Remains Pending in California --------------------------------------------------------------- The class action lawsuit captioned Turner v. American Airlines, et al., remains pending in California, according to AMR Corporation's October 17, 2012, Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended September 30, 2012. On June 20, 2006, the U.S. Department of Justice served the Company with a grand jury subpoena as part of an ongoing investigation into possible criminal violations of the antitrust laws by certain domestic and foreign passenger carriers. At this time, the Company does not believe it is a target of the DOJ investigation. The Company intends to cooperate fully with this investigation. On September 4, 2007, the Attorney General of the State of Florida served the Company with a Civil Investigative Demand as part of its investigation of possible violations of federal and Florida antitrust laws regarding the pricing of air passenger transportation. In the event that this or other investigations uncover violations of the U.S. antitrust laws or the competition laws of some other jurisdiction, such findings and related legal proceedings could have a material adverse impact on the Company. Approximately 52 purported class action lawsuits have been filed in the U.S. against the Company and certain foreign and domestic air carriers alleging that the defendants violated U.S. antitrust laws by illegally conspiring to set prices and surcharges for passenger transportation. On October 25, 2006, these cases, along with other purported class action lawsuits in which the Company was not named, were consolidated in the United States District Court for the Northern District of California as In re International Air Transportation Surcharge Antitrust Litigation, Civ. No. 06-1793 (the Passenger MDL). On July 9, 2007, the Company was named as a defendant in the Passenger MDL. On August 25, 2008, the plaintiffs dismissed their claims against the Company in this action. On March 13, 2008, and March 14, 2008, an additional purported class action complaint, Turner v. American Airlines, et al., Civ. No. 08-1444 (N.D. Cal.), was filed against the Company, alleging that the Company violated U.S. antitrust laws by illegally conspiring to set prices and surcharges for passenger transportation in Japan and certain European countries, respectively. The Turner plaintiffs have failed to perfect service against the Company, and it is unclear whether they intend to pursue their claims. In the event that the Turner plaintiffs pursue their claims, the Company will vigorously defend these lawsuits, but any adverse judgment in these actions could have a material adverse impact on the Company. ANCESTRY.COM: Being Sold to Global Generations for Too Little ------------------------------------------------------------- Courthouse News Service reports that directors of Ancestry.com are selling the company too cheaply through an unfair process to Global Generations International, for $32 a share or $1.6 billion, shareholders claim in Chancery Court. BT MCELRATH: Recalls Peanut Butter Pave Due To Health Risks ----------------------------------------------------------- BT McElrath Chocolatier, Inc. is initiating a voluntary recall of the seasonal peanut butter pave because they have the potential to be contaminated with Salmonella. Salmonella is an organism that can cause serious and sometimes fatal infections in young children, frail or elderly people, and others with weakened immune systems. Healthy persons infected with Salmonella often experience fever, diarrhea, nausea, vomiting, and abdominal pain. In rare circumstances, infection with Salmonella can result in the organism getting into the bloodstream and producing more severe illnesses such as arterial infections (i.e., infected aneurysms), endocarditis, and arthritis. The decision to recall was made due to the expanded recall of Sunland Inc.'s peanut butter. To date, there have been no confirmed illnesses or injuries reported in connection with any of the BT McElrath Chocolatier, Inc. recalled products, and no other BT McElrath Chocolatier, Inc. products are being recalled at this time. The following products are included in this recall: 2 and 5 Pieces Peanut Butter Pave * Lot# 12031 with a Best by date of 4-30-12 UPC code 693868102117 and 69386905312 * Lot# 12046 with a Best by date of 6-15-12 UPC code 693868102117 and 69386905312 * Lot# 12159 with a Best by date of 10-7-12 UPC code 693868102117 and 69386905312 * Lot# 12201 with a Best by date of 11-26-12 UPC code 693868102117 and 69386905312 The "lot number" is located on the exterior backing of the product on a white sticker; the "Best by date" is also located on this sticker. Pictures of the recalled products are available at: http://www.fda.gov/Safety/Recalls/ucm326123.htm The select products subject to this recall were manufactured between the dates of January 30th, 2012, through June 6th, 2012, and distributed nationwide through retail stores, mail order, and direct sales. This recall is being conducted with the knowledge of the United States Food and Drug Administration (FDA). Consumers with recalled product are urged not to eat the product, and to dispose of it or return it to BT McElrath Chocolatier or the retail establishment where it was purchased for a full refund. Consumers with questions about the recalled products may phone BT McElrath at (612) 331-8800. CANADA: B.C. Faces Class Action Over Foster Care Abuses ------------------------------------------------------- Darryl Greer at Courthouse News Service reports that British Columbia dropped the ball in pursuing civil damages against criminals who have victimized minors in state custody since 1972, two women claim in a class action. The named plaintiffs, both of Vancouver, claim in B.C. Supreme Court that they were in foster care when they were sexually assaulted, one by her foster father and the other by an assailant known to her foster family. One woman says she became a permanent ward of the government in 1972 and was in foster care when she was hit by a car and nearly killed at age 6. The accident put her in a coma for several days, and she had to wear a full body cast. She claims the government failed to sue the driver even though the accident was reported to police. When she was 7 and in the care of a different foster family, this woman says, she was sexually assaulted by a man who lived in the same neighborhood in the Vancouver suburb of Surrey. She says the man held a knife to her throat and the assault lasted at least an hour. It stopped when her foster brother saw it, shouted the girl's name, causing the man to drop the knife and flee. The woman says police investigated but did not allow her to participate in the investigation, and she doesn't know if the man was ever charged. Her foster brother died years later in a car crash and could have helped press her "legal rights against the assailant, or her claims for criminal injuries compensation, or any other action, had charges proceeded through the courts nearer to the time of the incident, or if, any other action had been initiated by the defendants," the complaint states. "The defendants did not pursue any action to recover damages or compensation on behalf of (the plaintiff) after the incident of the herein described motor vehicle accident or the incident of sexual assault," the complaint states. "The driver and owner of the vehicle that struck (her) had assets and insurance. The assailant had assets and if not, government programs for compensation if criminally assaulted, existed." The other named plaintiff claims that she and her sister were placed in the care of a single foster father in 1981. She says he began sexually abusing her when she was 11 and stopped only after she reported it to a school nurse, who told the government, which then removed the plaintiff and her sister from the home. The foster father was charged and convicted of sexually assaulting the plaintiff and her sister, according to the complaint. "The plaintiffs and the class could not have reasonably known that criminal injuries compensation was available to them due to their young age or how to sue for a tort," the complaint states. "The plaintiffs and the class were not in a position to make any later claims for compensation due to the lack [of] assistance from the defendants." The class sued Her Majesty the Queen in right of British Columbia as represented by the Attorney General and Public Guardian and Trustee of British Columbia. It includes "all persons who, while resident in British Columbia, suffered personal injury while a minor as a result of a tort by a third party, and on or after 1972, were in the custody of ministers, directors, or agencies responsible for family services, and for whom the Defendants did not make a claim under the Criminal Injuries Compensation Act, the Criminal Injury Compensation Act 1979, the Criminal Injury Compensation Act 1996, or the Crime Victim Assistance Act, or commence a civil action against the tortfeasor(s) to obtain compensation on their behalf, or hire a lawyer to represent their interests." They are represented by E.F. Anthony Merchant of Surrey, B.C. CHICAGO, IL: Sued Over Firefighter Entrance Exam Discrimination --------------------------------------------------------------- Maudlyne Ihejirika, writing for Chicago Sun-Times, reports that a physical abilities test the city is using to hire African-American firefighters in settlement of a race discrimination lawsuit is discriminatory against women, says a suit filed on Oct. 26 in U.S. District Court charges. Godfrey et al vs. City of Chicago was filed by 20 female plaintiffs on behalf of all female applicants who recently took the test and failed. "The city hasn't been served yet with the lawsuit, so we cannot comment at this time," said city Law Dept. spokesman Roderick Drew. The women are already members of two other class-action suits. They were members of Lewis et al vs. City of Chicago -- encompassing some 6,000 African-American firefighter applicants who sued over a 1995 firefighter entrance exam the federal courts agreed was racially discriminatory. That suit was finally settled last year. The Godfrey plaintiffs are also members of the lawsuit Vasich vs. City of Chicago, filed last year on behalf of women who passed the firefighter written exam but failed the physical abilities test. That suit, seeking to have the physical test replaced, is pending. "It's a test that doesn't really test for the abilities you need to become a firefighter, and screens out women needlessly and unjustifiably," said attorney Marni Willenson, who represents some of the women in the Godfrey suit and is lead attorney on Vasich. "We've been in settlement discussions for a year, yet the city made the decision again to use the test we were suing to throw out." As part of the settlement of the Lewis suit, the city agreed to hire 111 of the bypassed African-American applicants, and to pay damages that could reach as high as $78 million to the remaining 5,900. Some 1,000 of those African-American applicants were invited to try out, with the jobs to go to the first 111 passing the disputed physical test, drug and background checks, and medical exams. So where the Vasich suit covers women in general who have taken and failed the physical test since 2007, the Godfrey suit now covers African-American women from the Lewis suit who failed the same test. Both suits charge the physical test, which includes arm and leg lifts, arm endurance tests, hose dragging and stair climbing, discriminates by screening out women at a higher rate than men. In 2011, women still comprised only 2 percent of the more than 5,000 firefighters/emergency medical technicians staff, charges the Godfrey suit, which seeks back pay and other reliefs "to secure future protection and to redress the past deprivation of rights." The Oct. 26 lawsuit now represents the third time the physical abilities test has been the subject of a discrimination lawsuit by women. In 2008, five women who failed the paramedic physical ability test sued, and that first case is still pending in federal court. CHINA-BIOTICS: Bid to Dismiss Claims in New York Suit Pending ------------------------------------------------------------- China-Biotics, Inc.'s motions to dismiss certain claims in the shareholder class action lawsuit initiated in New York are currently pending, according to the Company's September 14, 2012, Form 10-K filing with the U.S. Securities and Exchange Commission for the year ended March 31, 2012. The Company and certain of its current and former officers and directors have been named as defendants in two putative shareholder class action lawsuits, one in the United States District Court for the Central District of California (Mohapatra v. China-Biotics, Inc., et al., No. 10-cv-6954 (C.D. Cal.), the "California Action") and the other in the United States District Court for the Southern District of New York (Hill v. China- Biotics, Inc., et al., No. 10-cv-7838 (S.D.N.Y.), the "New York Action"). After certain shareholders filed motions for appointment as lead plaintiff in both lawsuits, the plaintiff in the California Action voluntarily dismissed its case and the plaintiff in the New York Action, together with another shareholder, were appointed as lead plaintiffs. The lead plaintiffs filed an amended complaint in which they allege that the defendants violated Sections 11, 12(a)(2), and 15 of the Securities Act of 1933, and Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 by making material misstatements or failing to disclose certain material information regarding, among other things, the Company's financial condition, operations, and future business prospects, and the quality, nature, and quantity of the Company's retail outlets. The lead plaintiffs seek to represent a class of shareholders who bought the Company's securities between July 10, 2008, and August 27, 2010. On August 18, 2011, the Company filed a motion to dismiss the lead plaintiffs' amended complaint. The court dismissed the lead plaintiffs' Section 11 claim, but gave them leave to replead. The court did not rule on the motion to dismiss the Section 10(b) claim. On January 9, 2012, the lead plaintiffs filed a second amended complaint that included a new named plaintiff and new allegations for the Section 11 claim. On February 27, 2012, the Company filed a motion to dismiss the amended Section 11 claim. Both that motion and the original motion to dismiss the Section 10(b) and Section 20(a) claims are currently pending before the court. The Company intends to defend this action vigorously. CHINA-BIOTICS: Lead Plaintiff Appointed in "Casper" Class Suit -------------------------------------------------------------- The United States District Court for the Southern District of New York appointed the Blanck Investor Group as lead plaintiff in the class action lawsuit styled Casper v. Jinan, et al., according to China-Biotics, Inc.'s September 14, 2012, Form 10-K filing with the U.S. Securities and Exchange Commission for the year ended March 31, 2012. The Company and certain of its current and former officers and directors have been named as defendants in a putative stockholder class action in the United States District Court for the Southern District of New York (Casper v. Jinan, et al., No. 12-cv-4202 (S.D.N.Y.). The plaintiff alleges that the defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 by making material misstatements about the Company's projected revenue growth for 2011. The plaintiff seeks to represent a class of stockholders who bought the Company's securities between February 9, 2011, and July 1, 2011. On September 5, 2012, the court appointed the Blanck Investor Group as lead plaintiff. The Company intends to defend this action vigorously. CITIZENS SOUTH: Files Supplement Under MOU to Settle "Heath" Suit ----------------------------------------------------------------- Citizens South Banking Corporation filed with the U.S. Securities and Exchange Commission on September 14, 2012, a Form 8-K to make certain supplemental disclosures pursuant to a memorandum of understanding regarding the settlement of certain litigation relating to the Agreement and Plan of Merger (the "Merger Agreement"), dated as of May 13, 2012, between Citizens South Banking Corporation ("Citizens South") and Park Sterling Corporation ("Park Sterling"), pursuant to which Citizens South would be merged with and into Park Sterling, with Park Sterling as the surviving entity (the "Proposed Merger"). On June 6, 2012, plaintiff Kenneth Heath filed a putative class action complaint in the Delaware Court of Chancery, styled Kenneth Heath v. Kim S. Price et al., C.A. No. 7601-VCP, which seeks, among other things, injunctive relief, damages and equitable relief against Citizens South, its board of directors and Park Sterling ("Defendants"), alleging that the consideration being offered in the Proposed Merger was unfair, that Citizens South's board of directors had breached its fiduciary duties in connection with its consideration and approval of the Proposed Merger and that Citizens South and Park Sterling had aided and abetted those breaches of fiduciary duty (the "Action"). On August 6, 2012, the plaintiff filed an amended class action complaint in the Action. In addition to the original breach of fiduciary duty and aiding and abetting claims, the amended complaint alleges additional purported deficiencies in the process leading up the Proposed Merger and that the Joint Proxy Statement/Prospectus contains certain material omissions or misstatements. On August 8, 2012, the plaintiff filed motions for expedited proceedings and a preliminary injunction. Defendants determined not to oppose the motion for expedited proceedings and, on August 21, 2012, the parties entered into a stipulated scheduling order, governing the pre-hearing discovery and briefing in the Action and scheduling a hearing on the plaintiff's motion for preliminary injunction for September 14, 2012. On September 12, 2012, Defendants entered into a memorandum of understanding with the plaintiff regarding the settlement of the Action. Defendants continue to deny the allegations set forth in the amended complaint and believe that no further supplemental disclosure is required under applicable laws; however, to avoid the risk of the Action delaying or adversely affecting the Proposed Merger and to minimize the expense of defending the Action, Citizens South has agreed, pursuant to the terms of the proposed settlement, to make certain supplemental disclosures related to the Proposed Merger. Citizens South expressly acknowledges that the Action is the sole cause for its decision to make these supplemental disclosures. Subject to completion of certain confirmatory discovery by counsel to plaintiff, the memorandum of understanding contemplates that the parties will enter into a stipulation of settlement. The stipulation of settlement will be subject to customary conditions, including court approval following notice to Citizens South's stockholders. In the event that the parties enter into a stipulation of settlement, a hearing will be scheduled at which the Delaware Court of Chancery will consider the fairness, reasonableness, and adequacy of the settlement. If the settlement is finally approved by the Delaware Court of Chancery, it will resolve and release all claims in all actions that were or could have been brought challenging any aspect of the Proposed Merger, the Merger Agreement, and any disclosure made in connection therewith (excluding claims for appraisal under Section 262 of the Delaware General Corporation Law), pursuant to terms that will be disclosed to stockholders prior to final approval of the settlement. The proposed settlement will not affect the amount of the merger consideration that Citizens South's stockholders are entitled to receive in the Proposed Merger. In addition, in connection with the settlement, the parties contemplate that plaintiff's counsel will file a petition in the Delaware Court of Chancery for an award of attorneys' fees and expenses to be paid by Citizens South or its successor. Defendants have reserved the right to challenge any request for an award of attorneys' fees and expenses. Citizens South or its successor will pay or cause to be paid any attorneys' fees and expenses awarded by the Delaware Court of Chancery. There can be no assurance that the parties will ultimately enter into a stipulation of settlement or that the Delaware Court of Chancery will approve the settlement even if the parties were to enter into such stipulation. In such event, the proposed settlement as contemplated by the memorandum of understanding may be terminated. CREDO PETROLEUM: Signs MOU to Settle Consolidated Merger Suit ------------------------------------------------------------- CREDO Petroleum Corporation entered into a memorandum of understanding in September to settle a consolidated merger-related lawsuit, according to the Company's September 14, 2012, Form 8-K filing with the U.S. Securities and Exchange Commission. On September 14, 2012, CREDO Petroleum Corporation ("CREDO") signed a memorandum of understanding to settle the previously disclosed consolidated shareholder class action lawsuit captioned In re Credo Petroleum Corporation Shareholder Litigation, Consolidated C.A. No. 7641-VCP pending in the Delaware Court of Chancery (the "Merger Litigation"). The Merger Litigation relates to the Agreement and Plan of Merger, dated as of June 3, 2012, by and among Forestar Group Inc. ("Forestar"), Longhorn Acquisition Inc., a wholly owned subsidiary of Forestar, and CREDO. CREDO agreed to the settlement solely to avoid the costs, risks and uncertainties inherent in litigation, and without admitting any liability or wrongdoing. CREDO denies all liability with respect to the facts and claims alleged in the Merger Litigation and specifically denies that any breach of fiduciary duty occurred, or that any further disclosure is required to supplement the Proxy Statement under any applicable rule, statute, regulation or law. The settlement provides, among other things, that the parties will seek to enter into a stipulation of settlement which provides for the conditional certification of the Merger Litigation as a non opt-out class action pursuant to Court of Chancery Rule 23 on behalf of a class consisting of all record and beneficial owners of CREDO common stock during the period beginning on June 3, 2012, through the date of the consummation of the proposed merger, including any and all of their respective successors in interest, predecessors, representatives, and the release of all asserted claims. The asserted claims will not be released until such stipulation of settlement is approved by the court. There can be no assurance that the parties will ultimately enter into a stipulation of settlement or that the court will approve such settlement even if the parties were to enter into such stipulation. The settlement will have no effect on the merger consideration to be received by CREDO stockholders or the timing of the special meeting of CREDO stockholders scheduled on September 25, 2012. Additionally, as part of the settlement, CREDO has agreed to make certain additional disclosures related to the proposed merger. The additional disclosures supplement the disclosure contained in the proxy statement filed by CREDO with the Securities and Exchange Commission ("SEC") on August 10, 2012 (the "Proxy Statement"), and should be read in conjunction with the disclosures contained in the Proxy Statement, which in turn should be read in its entirety. About Credo Petroleum Credo Petroleum Corporation is an independent oil and gas exploration, development and production company based in Denver, Colorado. The Company has significant operations in the Williston Basin of North Dakota, Kansas, Nebraska, the Anadarko Basin of the Texas Panhandle and northwest Oklahoma, and in southern Oklahoma. Credo uses advanced technologies to systematically explore for oil and gas and, through its patented Calliope Gas Recovery System, to recover additional reserves from largely depleted gas reservoirs. For more information, please visit the Company's Web site at http://www.credopetroleum.com/or contact the Company at (303) 297-2200. CSX CORP: Seeks to Appeal Class Cert. Ruling in Antitrust Suit -------------------------------------------------------------- CSX Corporation disclosed in its October 16, 2012, Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended September 28, 2012, that it is seeking permission to appeal a class certification decision in a consolidated lawsuit over fuel surcharge. In May 2007, class action lawsuits were filed against the Company's principal operating subsidiary, CSX Transportation, Inc. ("CSXT") and three other U.S.-based Class I railroads alleging that the defendants' fuel surcharge practices relating to contract and unregulated traffic resulted from an illegal conspiracy in violation of antitrust laws. The lawsuit seeks treble damages allegedly sustained by purported class members as well as attorneys' fees and other relief. While the Company believes the case is without merit and recovery unlikely, plaintiffs are expected to allege damages at least equal to the fuel surcharges at issue. In November 2007, the class action lawsuits were consolidated and are now pending in federal court in the District of Columbia. On June 21, 2012, the court certified the case as a class action. The decision was not a ruling on the merits of plaintiffs' claims, rather a decision to allow the plaintiffs to seek to prove the case as a class. The defendant railroads have petitioned the U.S. Court of Appeals for the D.C. Circuit for permission to appeal the District Court's class certification decision. On August 28, 2012, the Court of Appeals referred the petition to a merits panel, and directed that the parties to the case submit briefs addressing both the petition and the merits of the appeal. The District Court currently is deciding whether to stay some or all proceedings pending the appellate court's decision on the defendants' petition for an appeal. CSXT believes that its fuel surcharge practices were arrived at and applied lawfully and that the case is without merit. Accordingly, the Company intends to defend itself vigorously. However, penalties for violating antitrust laws can be severe, and an unexpected adverse decision on the merits could have a material adverse effect on the Company's financial condition, results of operations or liquidity in that particular period or for the full year. CSX Corporation, based in Jacksonville, Florida, is a leading transportation company providing rail, intermodal and rail-to- truck transload services. The Company's transportation network spans approximately 21,000 miles with service to 23 eastern states and the District of Columbia, and connects to more than 70 ocean, river and lake ports. GOVGUAM: Enters Into Mediation with Class Action Plaintiffs ----------------------------------------------------------- Kevin Kerrigan, writing for Pacific News Center, reports that GovGuam and the plaintiffs in the class action against GovGuam have been ordered by Judge Consuelo Marshal to reach agreement on a "proposed" permanent injunction setting deadlines for the payment of tax refunds. A class action lawsuit was filed to force GovGuam to pay tax refunds in a timely manner. No agreement has been reached, but according to a stipulation filed in District Court on Oct. 26, both sides "have made progress" during the two mediation sessions they've held before Magistrate's Judge Joaquin Manibusan. And they "hope that additional negotiations may enable them to reach an agreement." They will hold a third mediation session with Judge Manibusan on November 5. In August, Judge Marshall ruled in favor of the Plaintiffs and agreed to issue a Permanent Injunction requiring GovGuam to pay tax refunds in a timely manner. She ordered both sides to submit their proposed orders by September 21. Plaintiff's Attorney Ike Aguigui submitted his proposal by the deadline, calling for the payment of a refund within 6 months after the claim is filed. But GovGuam failed to meet the deadline and asked for more time to submit a proposal arguing that GovGuam "requires more than six months to pay these [tax] refunds," and "the main impediment to developing a plan has been the insufficient cash available to meet all current year expenditures, unpaid prior year obligations and unpaid tax refunds." Judge Marshal ordered Magistrate's Judge Manibusan to mediate, and submit to her a proposed injunction that both sides had agreed to. In the Oct. 26 stipulation, the two sides agreed to extend the deadline for filing their joint, proposed, permanent injunction until November 16. KNIGHT CAPITAL: Faces $440-Mil. Shareholder Class Action -------------------------------------------------------- Courthouse News Service reports that Knight Capital Group and its CEO and CFO cost shareholders $440 million when their new trading software went haywire, shareholders claim in a federal class action. KNOX COUNTY, TN: Judge Denies Truancy Class Action Appeal --------------------------------------------------------- Matt Lakin, writing for Knoxville News Sentinel, reports that a judge denied class-action status to the appeal brought by two lawyers who sought to challenge Knox County's handling of more than 140 truancy cases. Dean Hill Rivkin and Brenda McGee argued in their appeal of four truancy cases from Knox County Juvenile Court that court officials illegally jailed 148 children over the past four years for skipping school. Tennessee law forbids locking up children for status offenses -- acts illegal for children solely because of their age, such as truancy, smoking or running away from home. The husband-wife team of lawyers, known for various legal crusades over the years on behalf of students, jail inmates and others, wanted to expand their appeal to cover other teenagers they believe had been jailed for truancy. Fourth Circuit Judge Bill Swann, who typically hears appeals from Juvenile Court, ruled that the pair reached too far and asked his court to make law rather than to settle it. The appeal "seek(s) to establish by class action that which lies solely in the province of the legislature (to create)," the judge wrote in an order filed on Oct. 23. "Petitioners laudably urge the advancement of a social policy which only the legislature can address." The judge's decision denied class-action status to the appeal but didn't specifically address the lawyers' claim that at least one of the students had been locked up illegally without a lawyer. Knox County prosecutors didn't file any evidence denying or admitting that claim. "If (the) petitioners' statement of material facts is correct -- which given the state's silence cannot be adjudged -- summary judgment would lie for (the) petitioners," the judge wrote. In most of the examples cited in the appeal, Juvenile Court Judge Tim Irwin ordered the students locked up not for skipping school but for violating probation orders, Judge Swann found -- a legal loophole authorized by federal law for chronic status offenders. Judge Swann said it's not his job to say whether that loophole should be closed. "This is an area of intensely important social policy -- school attendance," Judge Swann wrote. "It is an area in which thoughtful, well-intentioned, graduated and eventually corrective steps have been taken. It is not an area where advisory appellate opinions are meet. . . . For better or worse, in this society the mental development of our children is at present largely entrusted to the public schools -- and the enforcement of school attendance, when necessary, to the juvenile courts." Mr. Rivkin said he wasn't ready to respond to the judge's order on Oct. 26. John Gill, special counsel to the Knox County district attorney general, didn't comment on the decision. MARCOS ESTATE: Appeals Court Upholds Fine in Human Rights Case -------------------------------------------------------------- The Associated Press reports that a federal appeals court is upholding a $354 million fine against the widow and son of the late Philippine dictator Ferdinand Marcos. A three-judge panel of the Ninth Circuit Court of Appeals on Oct. 24 agreed with a U.S. District Court judge's ruling against Imelda Marcos and Ferdinand "Bongbong" Marcos, Jr. Judge Manuel Real imposed the fine after determining they violated a court order to freeze their assets so they could pay thousands of Marcos human rights abuse victims. The victims had won a class action lawsuit against the Marcos estate. Only a fraction of the $2 billion a federal jury in Honolulu awarded the victims in 1995 has been collected. Attorney Sherry Broder said on Oct. 26 lawyers will continue to pursue damages courts awarded to victims and their surviving family members. MEDICIS PHARMA: Being Sold to Valeant for Too Little, Suit Says --------------------------------------------------------------- Courthouse News Service reports that directors of Medicis Pharmaceutical Corp. are selling the company too cheaply through an unfair process to Valeant Pharmaceuticals, for $44 a share or $2.6 billion, shareholders claim in Chancery Court. PARK STERLING: Files Supplements Under MOU to Settle "Heath" Suit ----------------------------------------------------------------- Park Sterling Corporation filed a Form 8-K with the U.S. Securities and Exchange Commission on September 14, 2012, to make supplemental disclosures in connection with a memorandum of understanding regarding the settlement of certain litigation relating to the Agreement and Plan of Merger (the "Merger Agreement"), dated as of May 13, 2012, between Citizens South Banking Corporation ("Citizens South") and Park Sterling Corporation ("Park Sterling"), pursuant to which Citizens South would be merged with and into Park Sterling, with Park Sterling as the surviving entity (the "Proposed Merger"). On June 6, 2012, plaintiff Kenneth Heath filed a putative class action complaint in the Delaware Court of Chancery, styled Kenneth Heath v. Kim S. Price et al., C.A. No. 7601-VCP, which seeks, among other things, injunctive relief, damages and equitable relief against Citizens South, its board of directors and Park Sterling ("Defendants"), alleging that the consideration being offered in the Proposed Merger was unfair, that Citizens South's board of directors had breached its fiduciary duties in connection with its consideration and approval of the Proposed Merger and that Citizens South and Park Sterling had aided and abetted those breaches of fiduciary duty (the "Action"). On August 6, 2012, the plaintiff filed an amended class action complaint in the Action. In addition to the original breach of fiduciary duty and aiding and abetting claims, the amended complaint alleges additional purported deficiencies in the process leading up the Proposed Merger and that the Joint Proxy Statement/Prospectus contains certain material omissions or misstatements. On August 8, 2012, the plaintiff filed motions for expedited proceedings and a preliminary injunction. Defendants determined not to oppose the motion for expedited proceedings and, on August 21, 2012, the parties entered into a stipulated scheduling order, governing the pre-hearing discovery and briefing in the Action and scheduling a hearing on the plaintiff's motion for preliminary injunction for September 14, 2012. On September 12, 2012, Defendants entered into a memorandum of understanding with the plaintiff regarding the settlement of the Action. Defendants continue to deny the allegations set forth in the amended complaint and believe that no further supplemental disclosure is required under applicable laws; however, to avoid the risk of the Action delaying or adversely affecting the Proposed Merger and to minimize the expense of defending the Action, Citizens South has agreed, pursuant to the terms of the proposed settlement, to make certain supplemental disclosures related to the Proposed Merger. Citizens South has expressly acknowledged that the Action is the sole cause for its decision to make the supplemental disclosures. Subject to completion of certain confirmatory discovery by counsel to plaintiff, the memorandum of understanding contemplates that the parties will enter into a stipulation of settlement. The stipulation of settlement will be subject to customary conditions, including court approval following notice to Citizens South's stockholders. In the event that the parties enter into a stipulation of settlement, a hearing will be scheduled at which the Delaware Court of Chancery will consider the fairness, reasonableness, and adequacy of the settlement. If the settlement is finally approved by the Delaware Court of Chancery, it will resolve and release all claims in all actions that were or could have been brought challenging any aspect of the Proposed Merger, the Merger Agreement, and any disclosure made in connection therewith (excluding claims for appraisal under Section 262 of the Delaware General Corporation Law), pursuant to terms that will be disclosed to stockholders prior to final approval of the settlement. The proposed settlement will not affect the amount of the merger consideration that Citizens South's stockholders are entitled to receive in the Proposed Merger. In addition, in connection with the settlement, the parties contemplate that plaintiff's counsel will file a petition in the Delaware Court of Chancery for an award of attorneys' fees and expenses to be paid by Citizens South or its successor. Defendants have reserved the right to challenge any request for an award of attorneys' fees and expenses. Citizens South or its successor will pay or cause to be paid any attorneys' fees and expenses awarded by the Delaware Court of Chancery. There can be no assurance that the parties will ultimately enter into a stipulation of settlement or that the Delaware Court of Chancery will approve the settlement even if the parties were to enter into such stipulation. In such event, the proposed settlement as contemplated by the memorandum of understanding may be terminated. PEET'S COFFEE: Gets Prelim. OK of Consolidated Suit Settlement -------------------------------------------------------------- Peet's Coffee & Tea, Inc.'s settlement of a consolidated merger- related lawsuit got preliminarily approval on October 5, 2012, according to the Company's October 17, 2012, Form 8-K filing with the U.S. Securities and Exchange Commission. On October 5, 2012, the Superior Court of the State of California, County of Alameda, by the Honorable Wynn S. Carvill in Department 21 of that Court, approved an order preliminarily approving the settlement of the consolidated shareholder class action in the Superior Court of the State of California, County of Alameda that had challenged the consummation of the proposed transaction described in the July 23, 2012 Agreement and Plan of Merger among Peet's Coffee and Tea, Inc. ("Peet's") and JAB Holdings ("JAB") and Panther Merger Co. ("Merger Sub"), pursuant to which Merger Sub, JAB's wholly owned subsidiary, would merge with Peet's and holders of Peet's common stock would receive $73.50 in cash per share of Peet's common stock. Background of the Action On July 24, 2012, Schufman, a holder of Peet's common stock, filed a putative class action complaint in the Superior Court of the State of California, County of Alameda (the "Court") captioned Schufman v. Peet's Coffee & Tea, Inc. et al, Case No. RG12-640529 (the "Shufman Action"), on behalf of himself and all holders of Peet's common stock, except for Defendants and their affiliates, against Peet's, its Board of Directors (the "Board"), JAB, and the Merger Sub challenging the Proposed Transaction and asserting various claims for breach of fiduciary duty and aiding and abetting breaches of fiduciary duty. On July 25, 26, and 27, 2012, additional holders of Peet's common stock filed putative class action complaints in the Court, captioned, respectively, Light v. Peet's Coffee & Tea, Inc. et al, Case No. RG12-640783; Robertson v. Peet's Coffee & Tea, Inc. et al, Case No. RG12-640956; Weir v. Peet's Coffee & Tea, Inc. et al, Case No. RG12-641259; and Pearson v. Peet's Coffee & Tea, Inc. et al, Case No. RG12-641418 on behalf of themselves and all Peet's shareholders, except for Defendants and their affiliates, against Defendants, challenging the Proposed Transaction and asserting various claims for breach of fiduciary duty and aiding and abetting breaches of fiduciary duty (respectively, the "Light," "Robertson," "Weir," and "Pearson" actions). On August 9, 2012, Peet's filed with the U.S. Securities and Exchange Commission ("SEC") a Preliminary Proxy Statement on Form 14A (the "Proxy") with respect to the Proposed Transaction, wherein it was noted that the Board unanimously approved the Merger Agreement and, further, recommended that the shareholders vote to approve the Proposed Transaction. On August 16, 2012, Plaintiff in the Robertson Action filed a First Amended Shareholder's Class Action Complaint for Breach of Fiduciary Duty (the "Robertson Amended Complaint"), adding certain claims based on disclosures in the definitive proxy statement. On August 27, 2012, Peet's and the Individual Defendants filed an answer (the "Answer") to the Robertson Amended Complaint (filed in the Lead Case) and JAB and Merger Sub also demurred to the Robertson Amended Complaint (the "Demurrer"), which Demurrer the Court later set for hearing on October 3, 2012. On August 28, 2012, the Court entered an order providing for an October 3, 2012, hearing for Plaintiffs' anticipated motion for preliminary injunction, and a briefing schedule for that motion. On August 28, 2012, the "Schufman," "Light," "Robertson," "Weir," and "Pearson" actions were consolidated before the Court under the lead case number RG12-640529 (the "Lead Case" or the "Action") and Co-Lead Counsel were appointed in the Action (the "Consolidation Order"). Pursuant to the Consolidation Order, the Robertson Amended Complaint was deemed the operative complaint in the consolidated Action. On September 11, 2012, the First Amended Class Action Complaint for Breach of Fiduciary Duty (the "Amended Complaint") was re- filed in the Lead Case. On September 12, 2012, Plaintiffs filed an opposition to the Demurrer. Between August 31, 2012, and September 7, 2012, and in anticipation of Plaintiffs' forthcoming motion for preliminary injunction, Defendants provided a substantial amount of document discovery to Plaintiffs (which production was made subject to the entry of an appropriate confidentiality order), including copies of Board minutes, presentation materials, emails, and financial forecasts. In furtherance of the anticipated motion for preliminary injunction, Plaintiffs took the depositions of Valette, Chairman of Peet's Board, on September 10, 2012; O'Dea, Peet's President and Chief Executive Officer, on September 12, 2012; and Jeffery Schackner, a representative of Peet's financial advisor Citigroup Global Markets Inc. ("Citigroup") on September 12, 2012. After Plaintiffs, Plaintiffs' Counsel, and Plaintiffs' financial expert had substantially reviewed and analyzed the facts as revealed through discovery, Plaintiffs and Defendants, through their respective counsel and by engaging in arm's-length negotiations, reached an agreement to settle the Actions on the terms reflected in a memorandum of understanding ("MOU"). On September 19, 2012, the Settling Parties entered into the MOU binding the Settling Parties to an agreement in principle providing for the full settlement of the Action on the terms and subject to the conditions set forth in the MOU, including the obligation to issue specific supplemental disclosures (the "Supplemental Disclosures") and the obligations to negotiate in good faith, execute, and present the Proposed Settlement to the Court for approval (the Supplemental Disclosures attached hereto as Exhibit 1). Defendants acknowledge that the Supplemental Disclosures were made solely as a result of the efforts of Plaintiffs and Plaintiffs' Counsel in the Action, and Plaintiffs believe that the Supplemental Disclosures provide a material benefit to the proposed Settlement Class. On September 20, 2012, Peet's filed an Amended Preliminary Proxy with the SEC which included (among other amendments) the Supplemental Disclosures relating to the Proposed Transaction resulting from the prosecution of the Action, and in particular the claims raised by Plaintiffs in the Amended Complaint, which provided stockholders with additional information concerning the Proposed Transaction well in advance of the Stockholder Vote. Plaintiffs' Counsel, in consultation with their financial expert, have reviewed the facts revealed through discovery, and have concluded that the Supplemental Disclosures provide Peet's shareholders with a substantially improved opportunity to cast a fully-informed vote on the Proposed Transaction, and that the proposed Settlement is fair, reasonable, and adequate to the Settlement Class. All Settling Parties recognize the time and expense that would be incurred by further litigation, the uncertainties inherent in such litigation, and that the interests of the Settling Parties and the Settlement Class would best be served by a settlement of the Action, including the release of the Released Claims. Each Defendant denies having committed any violation of law or breach of fiduciary duty, including a breach of any duty to Peet's stockholders or the proposed Settlement Class, and maintain that they have committed no disclosure violations or any breach of duty whatsoever in connection with the Transaction or any public disclosures. There has been no admission or finding of facts or liability by or against any Defendant and nothing herein should be construed as such. On September 19, 2012, a purported Peet's shareholder filed a complaint captioned St. Louis Police Retirement System v. Peet's Coffee & Tea, Inc. et al Case No. RG12-648444 (the "St. Louis Action") alleging substantially similar claims as the Amended Complaint. Accordingly, the Settling Parties agree that the St. Louis Action is subject to the Consolidation Order, and that the claims provided in the St. Louis Action are included within the Released Claims herein. As of the date the Stipulation was signed, the plaintiff in the St. Louis Action filed a request for dismissal. On October 3, 2012, the Court determined to grant the request for dismissal filed by the plaintiff in the St. Louis Action. In addition to the Action, on and after August 1, 2012, certain purported holders of Peet's common stock commenced shareholder class actions relating to the Proposed Transaction in the Superior Court of the State of Washington for King County (the "Washington Actions"). The Washington Actions include litigation commenced by the plaintiff in the St. Louis Action. The Washington Actions have been consolidated, and the plaintiff in the St. Louis Action pending before this Court has been appointed Lead Plaintiff in the Washington Actions. Plaintiffs in the consolidated Washington Actions have not yet served the summons and complaint in those actions on all defendants named therein. Defendants have moved to dismiss or, in the alternative, stay the Washington Actions in deference to this Action. To the extent plaintiffs in the Washington Actions are Settlement Class Members, they will receive notice of the Proposed Settlement, as provided. The Settling Parties agree that the claims asserted in the Washington Action are included in the Released Claims. ROTO-ROOTER: Sued for Allegedly Defrauding Homeowners ----------------------------------------------------- Courthouse News Service reports that a class action accuses Roto-Rooter of defrauding homeowners for "unnecessary repair jobs," in Hennepin County Court. SCHOEP'S ICE: Recalls Kay's Classic Vanilla Bean Ice Cream ---------------------------------------------------------- Schoep's Ice Cream Company of Madison, Wisconsin, is alerting customers that because of a packaging error, Kay's Classic Vanilla Bean Ice Cream contains an undeclared allergen. Consumers, who have an allergy or severe sensitivity to pecans, run the risk of serious or life-threatening allergic reaction if they consume this product. The following product is included in the recall: * Kays Classic Vanilla Bean Ice Cream 48 oz. Round - UPC #0-87848-13021 with a Best if Used By Date of 02/28/14 A picture of the recalled products is available at: http://www.fda.gov/Safety/Recalls/ucm326107.htm The product was shipped to Food City and Super Dollar stores located in Kentucky, Virginia and Tennessee. This recall was initiated upon discovery that certain containers of Kays Vanilla Bean Ice Cream contained Kays Butter Pecan Ice Cream. No illnesses have been reported to date. Consumers who have purchased the affected product are urged to return it to the place of purchase for a full refund. Consumers with questions or concerns may contact Schoep's, the manufacturer, at 1-800-891-6411 extension 71. SYNGENTA AG: Settles Atrazine Class Action for $105 Million ----------------------------------------------------------- Baron & Budd on Oct. 26 announced a $105 million settlement on behalf of over 1,000 community water systems that have detected the chemical atrazine in their water supplies. The settlement concludes class action litigation that has been pending for more than eight years against Syngenta AG and Syngenta Crop Protection LLC, the chemical companies that produce and market atrazine and atrazine-containing products. Atrazine is an agricultural herbicide widely used in the United States -- and particularly in the Midwest -- to control weeds in corn and soybean crops. Once applied, the chemical easily runs off into surface waters and drinking water supplies. As a result, many municipalities and water providers have detected atrazine in their water supplies and spent significant sums to remove it from finished water. The settlement will reimburse those costs to more than 1,000 water providers who serve water to more than 30 million Americans. In 2004, a water provider filed a lawsuit in Illinois state court against Syngenta AG and Syngenta Crop Protection, Inc., alleging that Syngenta knew that atrazine would invade surface water such as lakes, rivers and streams but chose to sell the product without consideration for the expense water providers would incur to remove atrazine from water before supplying it to consumers. Then, in 2010, several public drinking water providers filed a similar suit in the United States District Court for the Southern District of Illinois. After extensive discovery and aggressive litigation, the parties reached a settlement on a class-wide basis. The Southern District approved the class settlement on October 23, 2012. "This settlement sends a message to chemical companies that they must bear the responsibility for products that contaminate water supplies and provides significant economic relief to water providers," said Baron & Budd shareholder Scott Summy, who was appointed Class Counsel along with Steve Tillery of the Korein Tillery law firm in St. Louis. TEVA PHARMACEUTICAL: Faces Class Action Over Patent Settlement -------------------------------------------------------------- Juan Carlos Rodriguez, writing for Law360, reports that Teva Pharmaceutical Industries Ltd. and GlaxoSmithKline LLC were hit on Oct. 25 with another proposed class action alleging the companies manipulated a patent settlement to inflate the cost of epilepsy drug Lamictal or its generic equivalent. The International Brotherhood of Electrical Workers Local 595 Health and Welfare Fund, the plaintiff in the current suit, says the companies' 2005 settlement inflated costs and delayed the availability of a generic version of the drug for years. UNITED RENTALS: "Israni" Suit Settlement Approved in September -------------------------------------------------------------- United Rentals, Inc. received final court approval of its settlement of a class action lawsuit arising from its subsidiary's merger with RSC Holdings Inc., according to the Company's October 16, 2012, Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended September 30, 2012. On December 28, 2011, a complaint was filed in Arizona Superior Court, captioned Israni v. RSC Holdings Inc., CV20 11-020579, on behalf of a putative class of RSC's stockholders against RSC, each member of the RSC board, certain of RSC's officers, and the Company challenging the merger. In an amended complaint, filed February 24, 2012, plaintiff alleged, among other things, that the directors and officers of RSC breached their fiduciary duties by allegedly agreeing to sell RSC at an unfair and inadequate price and by allegedly failing to take steps to maximize the sale price of RSC. The complaint also alleged that RSC and the Company aided and abetted in the directors' and officers' breach of their fiduciary duties, and that the defendants' public disclosures concerning the merger have been inaccurate or incomplete. On April 19, 2012, without agreeing that any of the claims had merit, the parties reached an agreement to settle the action, pursuant to which RSC and the Company agreed to make certain additional public disclosures regarding the merger and to pay certain attorneys' fees awarded by the court. On August 27, 2012, the court granted preliminary approval of the settlement and on September 28, 2012, the settlement was approved by the court. VIA RAIL: Court Set to Hear Arguments in Derailment Class Action ---------------------------------------------------------------- CBC News reports that an Ontario court will hear arguments this week whether to allow a class-action lawsuit against Via Rail and CN Rail. The lawsuit is in connection with the derailment of a Via passenger train near Burlington, Ont., on Feb. 27. Three Via employees died in the crash and one was badly injured. Thirty-two passengers were also injured. Faisal Abid was one of the passengers injured in the derailment and one of those hoping to join the class-action suit. Mr. Abid says he still dreads taking trains of any kind. "When it [the train] starts shaking, in my head the first that runs through is, what if this thing tips over?" An investigation determined train 92 -- making the journey from Niagara to Toronto -- was travelling at mover 100 km/h, four times faster than it should have. "We thought we were going to die," said Mr. Abid. In total 68 of the 75 passengers on the train that day have joined the lawsuit. Lawyer Ted Charney says Via Rail and CN Rail were negligent. "If they wanted to settle this case, we would be ready to settle tomorrow," said Mr. Charney. Via offered each passenger $3,000 in compensation in July. Only three accepted. A Toronto judge will hear Mr. Charney's arguments to launch the class-action lawsuit starting this week. WAL-MART STORES: Disputes Gender Discrimination Class Action ------------------------------------------------------------ Django Gold, writing for Law360, reports that Wal-Mart Stores Inc. on Oct. 25 fought back against a class action brought by a trio of women whose workplace discrimination claims were previously raised in Dukes v. Wal-Mart Stores Inc., arguing the plaintiffs couldn't revive "stale" class claims following the decertification in Dukes. Wal-Mart asked a Tennessee federal court to dismiss class allegations brought by a group of current and former female employees alleging widespread discrimination against female workers, saying the claims are barred by the statute of limitations and should be thrown out. WARREN, MI: Settles Class Action Over Tree Damage for $1.42 Mil. ---------------------------------------------------------------- Norb Franz, writing for Daily Tribune, reports that a 12-year court battle waged by a group of Warren residents who sued the city for damages caused by trees planted decades ago was expected to end with a $1.42 million settlement. Attorneys for the city and lawyers representing the homeowners in the class-action lawsuit were scheduled to put the agreement on record on Oct. 29 in Macomb County Circuit Court. "I'm ecstatic. I'm very happy," said Pat Demeyer, whose basement on Lowe Drive, near 14 Mile and Schoenherr roads, was flooded by raw sewage in April 2000. "It just proves that you can beat city hall." Conversely, the primary attorney handling the case for the city administration and the Warren City Council touted the settlement as a victory for Warren. Reached for comment, John Gillooly, the outside legal counsel hired by one of the city's insurance companies to represent the city, said the lawyers for the affected homeowners wanted $7 million at one point to settle the case. "When they came down that far (to $1.42 million), we couldn't risk it," Mr. Gillooly said. "Residents were essentially suing themselves in a lot of ways. We tried to convince everyone as loud as we could in every possible court, there was nothing wrong with the city requiring that trees be planted near the curb. "Ultimately, the city benefits from this. It amounts to a long, drawn-out legal victory for the city." WASHINGTON POST: Faces Class Action Over Distributors' Contracts ---------------------------------------------------------------- Courthouse News Service reports that The Washington Post unilaterally changed the terms of its distributors' contracts, a class action claims in Federal Court. WELLS FARGO: Sued for Misrepresenting HAMP Requirements ------------------------------------------------------- Becky Yerak, writing for Chicago Tribune, reports that a Chicago woman has filed a class-action lawsuit in a federal court in Illinois against Wells Fargo Bank, claiming that the lender misrepresented the requirements of the U.S. government's Home Affordable Modification Program. The lawsuit, filed in U.S. District Court in the Northern District of Illinois, alleges that Wells Fargo advised borrowers that they must miss mortgage payments to qualify for a loan modification. When customers followed that advice, Wells Fargo charged fees and penalties, reported delinquencies to credit-reporting agencies, and ultimately failed to modify the mortgage, the suit said. The lead plaintiff is Stephanie Watson, a resident of Chicago's Gold Coast neighborhood. She had inquired about a loan modification in spring 2010. That fall, Wells Fargo told her that she had to miss a mortgage payment to qualify, so in November 2010, she intentionally missed her mortgage payment, the lawsuit said. Then Wells Fargo charged her late fees and penalties and told her that if she didn't bring her account current, she'd face foreclosure. After a few months, she brought her account current, but still didn't get a mortgage modification. The Treasury Department's Web site says qualifications for HAMP include having a "financial hardship and are either delinquent or in danger of falling behind on your mortgage payments." The lawsuit also says that, according to the mortgage contract, Wells Fargo may hold a partial payment until a borrower makes sufficient additional payment to bring the loan current. But Wells Fargo must pay interest to the borrower on that partial payment, unless Wells Fargo applies the funds to the mortgage on the scheduled date. Ms. Watson's monthly mortgage payment was more than $2,300. On January 6, 2011, she inadvertently sent a payment of $2,000. Wells put that into an un-applied funds account and didn't apply any of it toward principal, interest or fees. On Jan. 27, Ms. Watson made a payment that brought her account current, but Wells Fargo didn't pay any interest on the $2,000 that it held for about 21 days, said the lawsuit, filed on behalf of Ms. Watson by Chicago lawyer Myron Cherry. Wells Fargo said it's "currently researching this case to better understand the nature of the lawsuit." "In general, we work hard to keep our customers in their homes when they encounter difficulties," Wells Fargo spokesman Jim Hines said. "Since January 2009 through the end of August 2012, more than 800,000 of the loans we service were in active trial or completed mortgage loan modifications. We can provide additional context when we have more information about the facts of the filing." WPCS INTERNATIONAL: Anticipates Dismissal of "Rapozo" Class Suit ---------------------------------------------------------------- WPCS International Incorporated is anticipating the dismissal of a consolidated acquisition-related class action lawsuit captioned Ralph Rapozo v. WPCS International Incorporated, et al., according to the Company's September 14, 2012, Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended July 31, 2012. On or about June 22, 2011, a purported shareholder of the Company filed a derivative and putative class action lawsuit in the Court of Common Pleas of Pennsylvania, Chester County against the Company and its directors, by filing a Summons and Complaint. The case is Ralph Rapozo v. WPCS International Incorporated, et al., Docket No. 11-06837 (No Judge has been assigned at this time). In this action, the plaintiff seeks to enjoin the proposed transaction in which Multiband Inc. would acquire all of the outstanding shares of the Company. The plaintiff alleges, among other things, that the consideration to be paid for such acquisition by Multiband is inadequate, and that the individual board members failed to engage in an honest and fair sales process for the Company and failed to disclose material information for the purposes of advancing their own interests over those of the Company and its shareholders. To that end, the plaintiff asserts a claim for breach of fiduciary duty against the Company's board of directors. In the event that the proposed transaction is consummated, the plaintiff seeks money damages. The plaintiff also asserts a claim against the Company and Multiband Corporation for aiding and abetting breach of fiduciary duty for which he seeks unspecified money damages. On or about June 22, 2011, a purported shareholder of the Company filed a derivative and putative class action lawsuit in the Court of Common Pleas of Pennsylvania, Chester County against the Company and its directors, by filing a Summons and Complaint. The case is Robert Shepler v. WPCS International Incorporated, et al., Docket No. 11-06838 (No Judge has been assigned at this time). In this action, the plaintiff also seeks to enjoin the proposed transaction in which Multiband would acquire all of the outstanding shares of the Company. The plaintiff alleges, among other things, that the consideration to be paid for such acquisition by Multiband Corporation is inadequate, and that the individual board members failed to engage in an honest and fair sales process for the Company and failed to disclose material information for the purposes of advancing their own interests over those of the Company and its shareholders. To that end, the plaintiff asserts a claim for breach of fiduciary duty against the Company's board of directors. In the event that the proposed transaction is consummated, the plaintiff seeks money damages. The plaintiff also asserts a claim against the Company and Multiband for aiding and abetting breach of fiduciary duty for which he seeks unspecified money damages. On August 11, 2011, the Shepler case was consolidated into the Rapozo vs. WPCS case. On or about June 30, 2011, a purported shareholder of the Company filed a derivative and putative class action lawsuit in the Court of Common Pleas of Pennsylvania, Chester County against the Company and its directors, by filing a Summons and Complaint. The case is Edwin M. McKean v. WPCS International Incorporated, et al., (Civil Action No. 3085). In this action, the plaintiff also seeks to enjoin a proposed transaction in which Multiband would acquire all of the outstanding shares of the Company. The plaintiff's allegations are substantially similar to the allegations in Rapozo v. WPCS and Shepler v. WPCS. The plaintiff alleges, among other things, that the consideration to be paid for such acquisition by Multiband is inadequate, and that the individual board members failed to engage in an honest and fair sales process for the Company and failed to disclose material information for the purposes of advancing their own interests over those of the Company and its shareholders. To that end, the plaintiff asserts a claim for breach of fiduciary duty against the Company's board of directors. In the event that the proposed transaction is consummated, the plaintiff seeks money damages. The plaintiff also asserts a claim against the Company and Multiband for aiding and abetting breach of fiduciary duty for which he seeks unspecified money damages. On October 18, 2011, the McKean case was consolidated into the Rapozo vs. WPCS case. WPCS' time to answer or move with respect to the Complaint in the Rapozo case has not yet expired. The Company and its directors deny the material allegations of this complaint and intend to vigorously defend this action if necessary, however, as Multiband has announced that it is no longer pursuing the acquisition of WPCS, the Company anticipates that the lawsuit will be dismissed. WPCS International Incorporated -- http://www.wpcs.com/-- provides design-build engineering services for communications infrastructure. The Company operates in three segments: Electrical Power, Wireless Communication, and Specialty Construction. The Company was founded in 1997 and is headquartered in Exton, Pennsylvania. ZAYO GROUP: Continues to Defend AboveNet Acquisition Suits ---------------------------------------------------------- Zayo Group, LLC continues to defend class action lawsuits arising from its acquisition of AboveNet, Inc., according to the Company's September 14, 2012, Form 8-K filing with the U.S. Securities and Exchange Commission. On March 18, 2012, Zayo Group, LLC ("Parent") entered into an Agreement and Plan of Merger (the "Merger Agreement") with AboveNet, Inc., and Voila Sub, Inc., a Delaware corporation and a wholly owned subsidiary of Zayo Group ("Merger Sub"), providing for the merger of Merger Sub with and into AboveNet (the "Merger"), with AboveNet surviving the Merger as a wholly owned subsidiary of Parent. The Merger Agreement was unanimously approved by AboveNet's Board of Directors. Zayo Group acquired AboveNet on July 2, 2012. On March 22, 2012, and March 28, 2012, two class actions on behalf of the stockholders of AboveNet, respectively styled Raul v. LaPerch, et al., Index. No. 54232/2012 (the "Raul Action"), and Wachsler v. AboveNet Inc., et al., Index No. 54662/2012 (the "Wachsler Action"), were filed in the Supreme Court for the State of New York, County of Westchester. On March 30, 2012, a class action on behalf of the stockholders of AboveNet, styled Miramar Firefighters Pension Fund v. AboveNet, Inc., Case No. 7376, was filed in the Court of Chancery of the State of Delaware (the "Delaware action," and together with the Raul Action and the Wachsler Action, the "Actions"). The Actions name as defendants AboveNet, Zayo Group, LLC and the members of AboveNet's Board of Directors, Jeffrey Brodsky, Michael J. Embler, William LaPerch, Richard Postma, Richard Shorten, Jr. and Stuart Subotnick. The Raul Action and Delaware Action also name Voila Sub, Inc. as a defendant. The Actions allege that the members of AboveNet's Board of Directors violated their fiduciary duties to AboveNet's stockholders in connection with the Merger. The Raul Action and the Delaware Action further allege that AboveNet, Zayo Group, LLC and Voila Sub, Inc. aided and abetted those purported breaches, and the Wachlser Action further alleges that AboveNet and Zayo Group, LLC aided and abetted those purported breaches. On April 17, 2012, the plaintiffs in the Delaware action filed an Amended Verified Class Action Complaint adding additional allegations in support of their breach of fiduciary duty claims, and on April 18, 2012, filed motions to expedite proceedings and for a preliminary injunction. On April 21, 2012, an Amended Class Action Complaint was filed in the Raul Action. On April 27, 2012, the parties in the Raul Action and the Wachsler Action filed stipulations providing that all further proceedings related to the merger would take place in the Delaware action and that the Raul Action and the Wachsler Action would be stayed through and including June 20, 2012. The stipulations also provided that all motions filed in either action would be adjourned. The Court approved these stipulations on April 30, 2012. On April 30, 2012, the defendants in the Delaware action filed a stipulated order and case management schedule. This order reflects, among other things, the parties' agreement that the defendants will provide certain limited discovery to the plaintiffs. The Actions seek, among other things, an order enjoining the Merger as well as unspecified damages. The defendants deny the allegations in the Actions and intend to defend the Actions vigorously. ********* S U B S C R I P T I O N I N F O R M A T I O N Class Action Reporter is a daily newsletter, co-published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland USA. Noemi Irene A. Adala, Joy A. Agravante, Ivy B. Magdadaro, Psyche A. Castillon, Julie Anne L. Toledo, Christopher Patalinghug, Frauline Abangan and Peter A. Chapman, Editors. Copyright 2012. All rights reserved. ISSN 1525-2272. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The CAR subscription rate is $575 for six months delivered via e-mail. 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