/raid1/www/Hosts/bankrupt/CAR

/raid1/www/Hosts/bankrupt/CAR_Public/990504.MBX C L A S S A C T I O N R E P O R T E R Tuesday, May 4, 1999, Vol. 1, No. 63 Headlines BUCKEYE PARTNERS: Delaware Complaint Dismissed by Stipulation DTE ENERGY: Faces Discrimination Claim, Arbitrates Michigan Case FIREARM MANUFACTURERS: States Consider Banning Class Actions GOODYS FAMILY: Employees Claim Discrimination and Harassment IRIDIUM WORLD: Weiss & Yourman File Suit in District of Columbia KEYSPAN ENERGY: $7.9 Million Settles Pay Dispute After Merger MCKESSON HBOC: Abbey Gardy Files Complaint in California MCKESSON HBOC: Bernstein Liebhard Files Complaint in California MCKESSON HBOC: Chitwood & Harley File Complaint in California MCKESSON HBOC: Earnings Restatement Attracts Brualdi Firm MCKESSON HBOC: Entwistle & Cappucci File Complaint in California MCKESSON HBOC: Hoffman & Edelson File Complaint in California MCKESSON HBOC: Lowey Dannenberg Files Complaint in California MCKESSON HBOC: Milberg Weiss Files Complaint in California MCKESSON HBOC: Rabin & Peckel File Complaint in California MCKESSON HBOC: Restatement Attracts Whittington von Sternberg MCKESSON HBOC: Schoengold & Sporn File Complaint in California MCKESSON HBOC: Spector & Roseman File Complaint in California MCKESSON HBOC: Wolf Popper Files Complaint in California OSICOM TECHNOLOGIES: Barrack Rodos Files Complaint in California SUMMIT TECHNOLOGY: Antitrust and Laser Surgery Litigation Update SUN HEALTHCARE: Facing Securities Suits, Settles RCA Claims ********* BUCKEYE PARTNERS: Delaware Complaint Dismissed by Stipulation ------------------------------------------------------------- On March 29, 1999, the complaint in the action Shakerdge v. Martinelli, et al., a putative class action against BUCKEYE PARTNERS L P, pending in the Delaware Court of Chancery, was dismissed without prejudice by stipulation among the parties. DTE ENERGY: Faces Discrimination Claim, Arbitrates Michigan Case ---------------------------------------------------------------- In a lawsuit filed in January 1999 in the Circuit Court for Wayne County Michigan (Cook, et al v. Detroit Edison), a number of individual plaintiffs have claimed employment-related sex, gender and race discrimination, as well as harassment. The suit seeks certification as a class action. Detroit Edison believes the claims are without merit. Detroit Edison and plaintiffs in a class action pending in the Circuit Court for Wayne County, Michigan (Gilford, et al v. Detroit Edison), as well as plaintiffs in two other pending actions which make class claims (Sanchez, et al v. Detroit Edison, Circuit Court for Wayne County, Michigan; and Frazier v. Detroit Edison, United States District Court, Eastern District of Michigan), are preparing for binding arbitration to settle these matters. A July 1998 Consent Judgement has received preliminary Court approval. A Fairness Hearing with respect to the terms of the settlement was held in August 1998, and no objections to the settlement were raised. A second Fairness Hearing is contemplated following the results of the arbitration. The settlement agreement provides that Detroit Edison's monetary liability is to be no less than $17.5 million and no greater than $65 million after the conclusion of all related proceedings. Detroit Edison has accrued an amount considered to be probable. FIREARM MANUFACTURERS: States Consider Banning Class Actions ------------------------------------------------------------ The Associated Press reports that state senators in Florida and North Carolina shelved bills banning class action lawsuits against gunmakers, saying debate would be unseemly after the shooting at Columbine High School. Meanwhile, House lawmakers in North Carolina and South Carolina approved similar measures. According to AP, the Florida bill appeared headed for passage before the massacre in Littleton, Colo., where two teen-agers used shotguns and semiautomatic weapons to kill 13 people and then themselves. "In light of the Colorado situation last week, I think the discussion of the bill would not be on the merits of the bill but on the emotional aspect of the tragic killings of the students and the teacher," Florida Senate President Toni Jennings told the Associated Press. The Florida House canceled debate on the bill last week, AP reports. The action came as legislatures in other states have been pulling gun proposals from debate. Meanwhile, cities including Miami, Chicago, New Orleans and Detroit have sued gunmakers in efforts to recover damages for crimes involving firearms. But, according to the AP story, there was some support for the gun industry in the Carolinas. In North Carolina, the House approved a bill Tuesday blocking class-action lawsuits against gun manufacturers. However, the Senate decided to pull its version of the plan from consideration. The bill's sponsor, Sen. Fountain Odom, remained confident it would be approved. "It's fairly limited in scope," the Democrat told the Associated Press. "It just deals with what political subdivisions should be allowed to take an action." In South Carolina, a bill banning local governments from suing gun manufacturers received approval in the House on Tuesday. The Associated Press wrote that the bill would allow only the state to sue the gun industry in cases involving design, marketing or sale of firearms. Gov. Jim Hodges, a Democrat, has said he would sign such a bill into law. GOODYS FAMILY: Employees Claim Discrimination and Harassment ------------------------------------------------------------ On February 25, 1999, a lawsuit was served on Goodys Family Clothing Inc. and Robert M. Goodfriend, its Chairman and Chief Executive Officer, by 20 named plaintiffs, generally alleging that the Company discriminated against a class of African- American employees at its retail stores through the use of discriminatory selection and compensation procedures and by maintaining unequal terms and conditions of employment. The plaintiffs further allege that the Company maintained a racially hostile working environment. The plaintiffs' claims are being brought under Title VII of the Civil Rights Act of 1964, as amended, and under the Civil Rights Act of 1866. The plaintiffs are seeking to have this action certified as a class action. In February 1999, another lawsuit was served on the Company. The lawsuit was filed by nine individual plaintiffs at one of the Company's retail stores, who generally allege discrimination with respect to employment opportunities, including, among other things, discrimination through their constructive discharge, failure to be promoted and failure to be paid wages equal to white employees. By way of damages, the plaintiffs in these actions are seeking, among other things, injunctive relief, back pay and other monetary relief. The Company disputes these claims and intends to defend these matters vigorously. It is too early to estimate the effect, if any, these two lawsuits may have on the Company's financial position or results of operations. IRIDIUM WORLD: Weiss & Yourman File Suit in District of Columbia ---------------------------------------------------------------- Weiss & Yourman filed a class action lawsuit in the United States District Court for the District of Columbia on behalf of all persons who purchased the securities of Iridium World Communications, Inc. (Nasdaq: IRID) between September 9, 1998 and March 29, 1999. The lawsuit charges Iridium, certain officers and directors of Iridium, and Motorola, Inc. ("Motorola") with violations of the federal securities laws and regulations of the United States. The Complaint alleges that defendants issued false and misleading statements and failed to disclose material facts concerning the Company's ability to fully launch the Iridium System. Specifically, defendants falsely reported achievable subscriber numbers and revenue figures, failed to disclose the serious technical problems with the Iridium System, failed to disclose delays in handset production which resulted in a shortage of the necessary handsets which were required to operate the Iridium System, and that, absent achieving the requisite subscriber numbers and revenue figures, the Company would violate covenants between itself and its lenders. The Company's fraudulent practices were disclosed on March 29, 1999 when, for the first time, the Company disclosed that it would not meet its necessary subscriber numbers and that as a direct consequence would not be able to satisfy its Secured Credit Facility covenants. Accordingly, the Company's common stock dropped approximately 73% since its May 1998 high. For more information, call Jordan L. Lurie or Leigh A. Parker at 800-437-7918 or write to wyinfo@wyca.com via email. KEYSPAN ENERGY: $7.9 Million Settles Pay Dispute After Merger ------------------------------------------------------------- KeySpan Energy (NYSE: KSE) has agreed to settle 13 class action lawsuits and two derivative actions initiated by shareholders of the Long Island Lighting Company (LILCO) and Brooklyn Union after the merger of the two companies in May 1998. The lawsuits, which had been filed in New York State Supreme Court, Nassau County, against each of the former officers and directors of LILCO and KeySpan, arose from compensation payments made to LILCO executives at the time of the merger. Under the proposed settlement, $7.9 million will be distributed (less plaintiffs' attorneys' fees) to the former LILCO and Brooklyn Union shareholders. KeySpan will provide specific details to its shareholders after the Court has approved the settlement. The company's insurance carrier will cover the entire $7.9 million settlement. In addition, KeySpan Energy has agreed to implement certain corporate governance and executive compensation procedures. If the Court approves the settlement, the parties will apply in the United States District Court, Eastern District of New York, for an order and final judgment dismissing three related federal actions, based on the binding effect of the state court judgment. The New York State Attorney General has also concluded his investigation of the executive compensation matter, and has decided to take no action against the former officers and directors. The Attorney General recommended that the Court approve the settlement of the shareholder action. KeySpan and its insurance carrier will evenly divide the $1.5-million cost of the State's investigation. KeySpan Energy operates two utilities that distribute natural gas under the Brooklyn Union name to approximately 1.6 million customers in New York City and on Long Island. Other KeySpan companies market energy-related services in the Northeast, operate electric-generation plants on Long Island, and provide operating and customer services to one-million electric customers of the Long Island Power Authority. KeySpan's unregulated energy activities focus on three principal lines of business: gas exploration and development, primarily through The Houston Exploration Company; domestic pipelines and storage; and international activities, including gas-processing in Canada, and gas pipelines and local-distribution in Northern Ireland. For more information, call Michael J. Taunton at 718-403-3265. MCKESSON HBOC: Abbey Gardy Files Complaint in California -------------------------------------------------------- A class action lawsuit was filed by Abbey, Gardy & Squitieri, LLP. on April 28, 1999, in the United States District Court for the Northern District of California, on behalf of all persons who purchased or otherwise acquired securities of McKesson Corporation or McKesson HBOC, Inc. (NYSE: MCK), between October 18, 1998 and April 27, 1999. The Complaint charges McKesson HBOC and certain officers and directors of the Company during the relevant time period with violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, by, among other things, issuing to the investing public false and misleading financial statements and press releases concerning McKesson HBOC's financial condition. On April 28, 1999, McKesson HBOC announced that to do the improper recognition of revenue from its software sales it would have to restate earnings for its fourth quarter and year end. Because of the issuance of a series of false and misleading financial statements and press release concerning McKesson HBOC's financial results, the price of McKesson HBOC's securities were previously artificially inflated. To learn more, call James Jay Seirmarco, Esq. at 415-538-3725 or write to jseirmarco@a-g-s.com via email, or call James S. Notis or Nancy Kaboolian at 800-889-3701 or 212-889-3700 or write to nkaboolian@a-g-s.com via email. MCKESSON HBOC: Bernstein Liebhard Files Complaint in California --------------------------------------------------------------- A securities class action lawsuit was commenced by Bernstein Liebhard & Lifshitz, LLP on behalf of purchasers of the common stock and call options and sellers of put options of McKesson HBOC, Inc. (NYSE: MCK) between October 18, 1998 and April 27, 1999, inclusive in the United States District Court for the Northern District of California. Additionally, if you held McKesson securities at the time of the merger with HBO & Company ("HBOC") (NYSE: HBOC) or if you purchased the common stock of HBOC at any time since April 22, 1998 you may have claims against the defendants in this lawsuit. The complaint charges McKesson and certain of its officers and directors with violations of the Securities Exchange Act of 1934 and Rule 10b-5. The complaint alleges that the defendants issued materially false and misleading financial statements in the Company's press releases and filings with the U.S. Securities and Exchange Commission. As a result, McKesson will be forced to restate its previously issued financial statements. On April 28, 1999, when it was disclosed that the Company would have to restate its financial results, the price of McKesson stock dropped more than 47%, plunging from $65-3/4 to $34-1/2. To learn more, call Mel E. Lifshitz Esq., or Michael S. Egan, Esq., at 800-217-1522 or 212-779-1414 or write to them at mckesson@bernlieb.com via email. MCKESSON HBOC: Chitwood & Harley File Complaint in California ------------------------------------------------------------- Chitwood & Harley filed a securities class action in the United States District Court for the Northern District of California on behalf of persons who acquired the stock of McKesson HBOC, Inc. and its predecessors McKesson Corp. and HBO & Company, between October 19, 1998, and April 27, 1999. The complaint alleges that McKesson and certain of its top officers violated the federal securities laws by issuing false and misleading statements regarding McKesson's business, earnings growth, financial stability and its ability to continue to achieve profitability. The complaint alleges that defendants artificially inflated McKesson's stock price to a high of $89-3/4 by issuing these false and misleading statements. However, when defendants released the true facts surrounding McKesson's troubled operations, diminished profitability and false financial statements, McKesson's stock plunged to as low as $32 per share. For more information, call Corey D. Holzer, Esq. at 888-973-3999 or 404/873-3900 or write to mdc@classlaw.com via email. MCKESSON HBOC: Earnings Restatement Attracts Brualdi Firm --------------------------------------------------------- The Law Offices of Richard B. Brualdi is investigating a suit against McKesson HBOC Inc. (NYSE: MCK) on behalf of McKesson investors who purchased their shares on the open market between July 28, 1998 and April 27, 1999 or who acquired their shares in conjunction with McKesson's acquisition of HBO & Co. ("HBOC"). This interest arises out of McKesson's disclosure, as reported in the Wall Street Journal, that it improperly recorded sales from HBOC, that it is restating its earnings and that it may make further revisions to its earnings as it continues an audit. To learn more, call 212-952-0602 or write rbrualdi@earthlink.net via email. MCKESSON HBOC: Entwistle & Cappucci File Complaint in California ---------------------------------------------------------------- Entwistle & Cappucci LLP filed a class action lawsuit for violations of the federal securities laws in the United States District Court for the Northern District of California against McKesson HBOC, Inc. (NYSE: MCK) and certain officers and directors of McKesson and the former HBO & Co. ("HBOC"). The lawsuit was brought on behalf of all persons who purchased the common stock of McKesson, or its predecessor, McKesson Corporation, between October 18, 1998 and April 27, 1999. The complaint charges McKesson and the individual defendants described above with violations of Sections 10(b) and 20(a) of the Exchange Act. Specifically, the complaint alleges that defendants issued materially false and misleading financial statements, which overstated the Company's assets, retained earnings, stockholders' equity, gross profit, income and earnings per share due to the overstatement of revenues from HBOC's software sales. Because of the issuance of such false and misleading financial statements, the price of McKesson common stock was artificially inflated. Indeed, on April 28, 1999, the Company announced that, due to its improper recognition of revenue, it would have to restate its 1999 fiscal year's earnings. As a result of that announcement, the Company's stock price dropped almost 50% from $65-3/4 on April 27, 1999 to as low as $33-1/8 on April 28, 1999. For more information, call Vincent R. Cappucci, Esq. at 212-894- 7200 or write to kviana@entwistle-law.com via email. MCKESSON HBOC: Hoffman & Edelson File Complaint in California ------------------------------------------------------------- Hoffman & Edelson filed a class action lawsuit in the United States District Court for the Northern District of California on behalf of investors who purchased both the common stock of McKesson HBOC Inc. (NYSE: MCK) between Oct. 19, 1998, and April 28, 1999 and all persons who owned shares of HBOC & Company ("HBOC") and whose shares of HBOC were converted into shares of McKesson following McKesson's acquisition of HBOC. The lawsuit charges that McKesson and certain of officers and directors of the Company violated the federal securities laws and regulations of the United States. On April 28, 1999 the Company announced that it was reducing previously reported annual earnings per share by 4.4 percent, saying it improperly recorded sales from the software business it acquired in January, 1999. To learn more, call Marc H. Edelson, Esq., at 877-537-6532 or write to hofedlaw@aol.com via email. MCKESSON HBOC: Lowey Dannenberg Files Complaint in California ------------------------------------------------------------- The law firm of Lowey Dannenberg Bemporad & Selinger, P.C. filed a class action in the United States District Court for the Northern District of California on behalf of purchasers of HBO & Company (NASDAQ: HBOC) common stock during the period April 14, 1998 through January 12, 1999. The complaint charges McKesson HBOC, Inc. (as the successor by merger with HBOC) and certain officers with issuing false and misleading financial statements in violation of the federal securities laws, which inflated the market price of HBOC shares. HBOC shares were exchanged for shares of McKesson at the time of the merger of McKesson and HBOC on January 12, 1999. On April 28, 1999, McKesson announced that it was restating its earnings for the quarter ended March 31, 1999, the prior three quarters, and the fiscal year ending March 31, 1999. The restatement resulted from the improper recording of software sales which were subject to certain unsatisfied contingencies, but were treated as completed sales, which inflated reported earnings for those periods. Following the announcement of the downward restatement of earnings, McKesson stock dropped from $64.75 to under $35, a loss of nearly 50% in one day. For more information, call Thomas M. Skelton, Esq. at 877-777- 3581 or write to ldbs@westnet.com via email. MCKESSON HBOC: Milberg Weiss Files Complaint in California ---------------------------------------------------------- Milberg Weiss filed a class action in the United States District Court for the Northern District of California on behalf of those who acquired the common stock of McKesson HBOC, Inc. and its predecessors McKesson Corp. and HBO & Company (NYSE: MCK) during the period between Oct. 19, 1998 and April 27, 1999. The complaint charges McKesson and certain of its officers and directors with violations of the federal securities laws by making misrepresentations about McKesson's business, earnings growth and financial statements and its ability to continue to achieve profitable growth. By issuing these allegedly false and misleading statements, defendants artificially inflated McKesson's stock price to a high of $89-3/4 in January 1999, before the true facts about McKesson's troubled operations, diminished profitability and false financial statements were revealed and McKesson's stock collapsed to as low as $32 per share. To learn more, call William Lerach, Alan Schulman or Darren Robbins at 800-449-4900 or write wsl@mwbhl.com via email. MCKESSON HBOC: Rabin & Peckel File Complaint in California ---------------------------------------------------------- The law firm of Rabin & Peckel LLP filed a class action in the United States District Court for the Northern District of California on behalf of all persons who purchased or otherwise acquired securities of McKesson HBOC, Inc. (NYSE: MCK) between July 28, 1998 and April 27, 1999, including purchasers of HBO & Company securities who received McKesson stock as a result of the merger between the two companies. This action, based on violations of section 10(b) of the Securities Exchange Act of 1934, arises out of a series of false and misleading statements made by Defendants McKesson and two of its senior officers concerning the Company's reported financial results, which were materially inflated as a result of McKesson's improper accounting of HBOC-related software transactions as sales when they were still subject to contingencies, in violation of Generally Accepted Accounting Principles ("GAAP"). It was only on April 28, 1999 that the Company disclosed that "software sales transactions aggregating $26.2 million in the company's fourth quarter ended March 31, 1999, and $16.0 million in the prior quarters of the fiscal year, were improperly recorded because they were subject to contingencies, and have been reversed. The audit process is ongoing and there is a possibility that additional contingent sales may be identified." As a consequence, the Company further reported that it will have to restate its financial statements for the fourth quarter and year ended March 31, 1998, and for the entire fiscal year ended March 31, 1999. The Complaint alleges that defendants' false and misleading financial statements violated GAAP and artificially inflated the price of McKesson securities. To learn more, call Joseph V. McBride at 800-497-8076 or 212- 682-1818 or write to email@rabinlaw.com via email. MCKESSON HBOC: Restatement Attracts Whittington von Sternberg ------------------------------------------------------------- Whittington, von Sternberg, Emerson & Wilsher is investigating potential securities fraud claims against McKesson HBOC, Inc. (NYSE: MCK) and those of the HBOC predecessor, arising from the disclosure that revenues recorded in the prior financial year have been improperly reported, and that earnings will have to be restated. Following this announcement, the trading price of McKesson shares fell by more than 45% from $65 per share to below $31. These claims involve investors who purchased their shares on the open market between July 28, 1998 and April 27, 1999 or in connection with McKesson's acquisition of HBOC & Co. To learn more, call John G. Emerson, Jr. or Craig von Sternberg at 713-798-8850 or write je-mlaw@worldnet.att.net via email. MCKESSON HBOC: Schoengold & Sporn File Complaint in California -------------------------------------------------------------- A class action lawsuit has been commenced by Schoengold & Sporn, P.C. and an international labor union pension fund in the United States District Court for the Northern District of California on behalf of purchasers of the common stock of McKesson HBOC, Inc. (NYSE: MCK) between July 28, 1998 and April 28, 1999 including all HBOC & Company ("HBOC") shareholders who tendered their shares which were then converted into McKesson common stock in connection with McKesson's acquisition of HBOC. The securities class action complaint charges the defendants with violations of the federal securities laws, by among other things, misrepresenting and/or omitting material information concerning the Company's improper recording of revenue from its software sales. On April 28 1999, the Company announced that due to its improper recognition of revenue from its software sales, it would have to restate its fiscal 1999 earnings. Upon the release of this devastating news, the Company's stock price dropped from its closing price of $65.75 on April 27, 1999 to close at $33.125 on April 28, 1999, with over 40 million shares changing hands. To learn more, call 800-232-8092 or write SCHOENGOLD@AOL.COM via email. MCKESSON HBOC: Spector & Roseman File Complaint in California ------------------------------------------------------------- A class action lawsuit has been commenced by Spector & Roseman, P.C., on behalf of all purchasers of the common stock of McKesson HBOC, Inc. (NYSE: MCK) between July 28, 1998 and April 28, and all persons who owned shares of HBOC & Company ("HBOC") and whose shares of HBOC were converted into shares of McKesson following McKesson's acquisition of HBOC. The complaint filed in the United States District Court for the Northern District of California charges McKesson and certain of its officers and directors with violations of the federal securities laws, alleging that defendants failed to disclose material facts concerning the Company's improper recording of revenue from its software sales. As a result, the Company announced on April 28, 1999 that due to its improper recognition of revenue from its sales of software, it would have to restate its revenues. As a result, shares of McKesson plunged close to 50 percent. To learn more, contact Ellen Gusikoff Stewart at 619-338-4514 or at Egusikoff@aol.com via email, or call Robert M. Roseman at 888-844-5862 or write to classaction@spectorandroseman.com via email. MCKESSON HBOC: Wolf Popper Files Complaint in California -------------------------------------------------------- McKesson HBOC, Inc. (NYSE: MCK) and three of its senior officers have been named in a securities fraud lawsuit filed by Wolf Popper LLP in the U.S. District Court for the Northern District of California. The lawsuit was filed on behalf of all who purchased the common stock and options of McKesson HBOC, Inc. or its predecessor, McKesson Corporation, on the open market, from November 27, 1998 through April 27, 1999, who were damaged by defendants' violations of the federal securities laws. The lawsuit alleges that McKesson Corporation and HBO & Company ("HBOC") filed a Registration Statement and Joint Proxy Statement/Prospectus in connection with the merger transaction between McKesson Corporation and HBOC into McKesson. The Prospectus contained, on a pro forma basis, the condensed balance sheet of McKesson and the pro forma condensed balance sheet of HBOC, along with, on a combined pro forma basis, the condensed statements of income of McKesson and the pro forma combined condensed statements of income of HBOC. On January 12, 1999, the shareholders of McKesson and HBOC approved the Transaction, and the Transaction closed that day. For a period of time, defendants published combined financials reporting strong growth in revenue and earnings, especially in what had formerly been the software business of HBOC. Defendants knew or were reckless in failing to know that the combined financials of McKesson published during this time were materially false and misleading because defendants improperly recognized revenues from software sales in fiscal 1999 which were subject to contingencies. As later admitted by the Company, as a result of the Company's improper accounting for software transactions in violation of generally accepted accounting principles ("GAAP"), the Company was required to restate it's annual and quarterly financials for fiscal year 1999. As a consequence of the restatement, the Company was compelled to, among other things, remove in excess of $42 million in revenue from the Company's previously reported financial statements. To learn more, call Paul 0. Paradis, Esq. or Michael A. Schwartz, Esq. at 877-370-7703 or 212-451-9676 or 212-451-9668, or write pparadis@wolfpopper.com or mschwart@wolfpopper.com via email. OSICOM TECHNOLOGIES: Barrack Rodos Files Complaint in California ---------------------------------------------------------------- Barrack, Rodos & Bacine filed a class action in the United States District Court for the Central District of California on behalf of all persons who purchased the securities of Osicom Technologies, Inc. (Nasdaq: FIBR) between July 2, 1998 and April 20, 1999. The complaint charges Osicom and certain of its officers and directors with violations of the Securities Exchange Act of 1934 by making misrepresentations about Osicom's business and its ability to achieve profitable growth. Defendants represented to the investment community that Osicom had a $90 million contract to sell wireless communication products in Japan. Ultimately, defendants admitted that the contract was only worth $175,000 and that the products it was attempting to sell were not really wireless. As a result, Osicom's stock price was artificially inflated to as high as $28-3/4 per share. When Osicom ultimately admitted to its prior false statements, its stock collapsed to as low as $9-5/8 on volume of 3.2 million shares before trading was halted. To learn more, call Maxine S. Goldman at 800-417-7305 or 215- 963-0600, or write to msgoldman@barrack.com via email. SUMMIT TECHNOLOGY: Antitrust and Laser Surgery Litigation Update ---------------------------------------------------------------- Summit Technology Inc. released an update on the federal and state litigation involving the company. In June, 1996, a Texas ophthalmologist, Robert G. Burlingame, sued Pillar Point, VISX, Summit Technology Inc. and certain affiliates in the Federal District Court for the Northern District of California alleging that the defendants have violated and are violating federal and state antitrust laws and alleging fraud in connection with certain of the Company's sales and marketing activities. The plaintiff seeks, things, antitrust damages of at least $30 plus $2 to $3 per month until the date of judgment, trebling of those damages, compensatory and punitive damages on the fraud claim against Summit Technology Inc. of at least $500 plus $2 to $3 per month until the date of judgment, attorney's fees, and a permanent injunction against future violations. On September 5, 1996, a Nevada ophthalmologist, John R. Shepherd, through his professional corporation, commenced a similar lawsuit against the same parties, in the same court, alleging substantially similar antitrust claims and seeking substantially similar relief, including damages before trebling of at least $125 plus $12 per month until the date of judgment. Summit Technology Inc. has denied the substantive allegations in these actions. Plaintiff's counsel in the Shepherd case has indicated that he intends to seek certification of the case as a class action. In May, 1998, The Eye Professionals, P.A. of Millville, New Jersey commenced an action in the Federal District Court for the District of New Jersey against Summit Technology Inc. and VISX. The case purports to be a class action on behalf of all individuals or entities that have paid a per-procedure fee directly to either defendant for use of a Summit or VISX laser to perform laser vision correction surgery. The complaint alleges, inter alia, price-fixing in violation of Section 1 of the Sherman Act. The action seeks, inter alia, treble damages, costs of suit, attorneys' fees, and various forms of declaratory and injunctive relief. Similar actions were also filed in May, 1998 by Metropolitan Eye Center and Outpatient Surgical Facility, Inc. in the U.S. District Court for the Northern District of California against Summit Technology Inc., VISX, Summit Partner, Inc., and VISX Partner, Inc., and by New England Laser Vision, Inc. in the U.S. District Court for the District of New Jersey against the Company and VISX. In August, 1998, David R. Shapiro, M.D., filed another similar purported class action against the Company and VISX in the United States District Court for the District of Arizona. Plaintiffs in each of these cases have agreed to consolidation of the four purported class actions and filed and served a single consolidated amended complaint. It purports to be a class action on behalf of all persons and entities (excluding governmental entities, defendants, subsidiaries and affiliates of defendants) in the United States who paid a per-procedure royalty to any defendant or any alleged co-conspirator or any subsidiary or affiliate thereof, at any time after September 1995. The Consolidated Amended Complaint seeks, among other things, unspecified treble damages on behalf of plaintiffs and the alleged class, along with attorneys' fees, costs, and injunctive and declaratory relief. In September, 1998, Laser Eye Center of Texas, L.L.P. and Warren D. Cross, M.D., filed a purported class action against the Company, Summit Partner, Inc., VISX, VISX, Partner, Inc., and Pillar Point Partners in the U.S. District Court for the Southern District of Texas. The suit purports to be a class action on behalf of all persons and entities who have paid money to defendants, or any of their subsidiaries, on a per procedure basis for the ability to use defendants' laser equipment or technology to perform laser vision correction surgery. Plaintiffs allege, among other things, violations of Sections 1 and 2 of the Sherman Act. They seek, among other things, treble damages on behalf of the alleged class, costs of suit, including attorneys' fees, and declaratory and injunctive relief. This case has now been transferred to the District of Arizona. In late March, 1998, Janice Camp of Atlanta, Georgia commenced an action in Federal District Court for the District of Massachusetts against the Company and VISX. As amended in April, 1998, the complaint adds as a named plaintiff Jon Singer of Congers, New York. The case has been transferred to Federal District Court for the District of Arizona for consolidated pretrial proceedings. The case purports to be a class action on behalf of all similarly situated individuals who have undergone laser vision correction surgery. The complaint alleges, inter alia, price-fixing, monopolization, conspiracy to monopolize, violations of the Clayton Act, violations of the RICO Act, and violations of state consumer protection statutes. The action seeks, inter alia, treble damages, punitive or exemplary damages, costs of suit, attorneys' fees, and various forms of equitable relief, including disgorgement of ill-gotten gains and restitution. In response to defendants' motion to dismiss, plaintiffs have abandoned their federal antitrust claims. A Magistrate Judge has recommended that defendants' motion to dismiss the RICO and state law claims be granted. Beginning in late March, 1998, a number of actions brought by individuals under the Cartwright Act and California unfair competition laws were commenced against Summit Technology Inc., VISX, and related defendants in Superior Court of Santa Clara County. In May, 1998, these actions were consolidated as IN RE PRK/LASIK CONSUMER LITIGATION. In June, 1998, plaintiffs B.J. Snyder, Donna McMahan, Paula Mobsby, Helen Thomas, Carmen Ocariz, Martin Hermans, Ken Bartlett, Jackie Kirk, Grace Geniusz, Jocelyn Joseph, Andrew Stoddard, and Cynthia Brubecker filed an Amended Consolidated Master Complaint for Damages ("Amended Complaint") in this matter against the Company, Summit Partner, Inc., VISX, and VISX Partner, Inc. The Amended Complaint purports to be filed on behalf of a nationwide class of persons who have undergone excimer laser surgery with a laser manufactured by the Company or VISX. The Amended Complaint seeks, inter alia, unspecified compensatory damages, restitution and/or disgorgement of alleged ill-gotten gains, prejudgment and postjudgment interest, costs of suit, and attorneys' fees, as well as various forms of declaratory and injunctive relief, including an order permitting any person or entity with which the Company or VISX or both have entered into any agreement since June 3, 1992, for the purchase, license, or use of any of the Pillar Point Patents to withdraw from such agreement without penalty or obligation. Summit Technology Inc. and Summit Partner, Inc. have filed an answer denying generally the allegations of the Amended Complaint in this litigation. James Ballard filed a similar suit against the Company, Summit Partner, Inc., VISX, VISX Partner, Inc., Pillar Point Partners, and other individual defendants in Superior Court of San Diego County. This suit has been transferred to Santa Clara County and consolidated as part of IN RE PRK/LASIK CONSUMER LITIGATION. In April, 1998, Penny Marks, an individual who allegedly has had laser vision correction surgery performed, commenced an action in Florida state court against the Company and VISX. The case purports to be a class action on behalf of all individuals similarly situated in the State of Florida. The complaint alleges various violations of the Florida Deceptive Trade and Unfair Practices Act. The complaint seeks unspecified damages, costs, expenses, and attorneys' fees, as well as declaratory and injunctive relief. Plaintiff has filed a motion seeking class certification. In June, 1998, Barbara Worcester, an individual who allegedly has had laser vision correction surgery performed, filed an action in Wisconsin state court against Summit Technology Inc., Summit Partner, Inc., VISX, VISX Partner, Inc., and Pillar Point Partners. The case purports to be a class action on behalf of all Wisconsin purchasers of refractive laser surgery procedures. The complaint alleges violations of Chapter 133 of the Wisconsin Statutes. The complaint seeks unspecified treble damages, attorneys' fees and costs, and declaratory and injunctive relief. Defendants removed this action to federal court, and it has been transferred to the District of Arizona. In January, 1999, Karen Frankson, Virginia Harmes, and Beth Luetschwager, three individuals who allegedly have had laser vision correction surgery performed, filed a similar purported class action in Wisconsin state court. Defendants have removed this action to Federal District Court in Wisconsin and are seeking to have it transferred to Federal District Court in Arizona. SUN HEALTHCARE: Facing Securities Suits, Settles RCA Claims ----------------------------------------------------------- In March 1999 and through April 19, 1999, several stockholders filed class action lawsuits against Sun Healthcare Group Inc. and three officers of the Company in the United States District Court for the District of New Mexico. The lawsuits allege, among other things, that the Company did not disclose material facts concerning the impact that PPS would have on the Company's results of operations. The lawsuits seek compensatory damages and other relief for stockholders who purchased the Company's common stock during the class-action period. Although the Company intends to vigorously defend itself in this matter, there can be no assurance that the outcome of this matter will not have a material adverse effect on the results of operations and financial condition of the Company. On June 30, 1998, a wholly owned subsidiary of the Company merged with Retirement Care Associates, Inc. ("RCA"), an operator of 98 skilled nursing facilities and assisted living centers in eight states primarily in the southeastern United States. Between August 25, 1997 and October 24, 1997, 10 putative class action lawsuits were filed in the United States District Court for the Northern District of Georgia on behalf of persons who purchased RCA Common Stock, naming RCA and certain of its officers and directors as defendants. The complaints have overlapping defendants and largely overlapping (although not identical) class periods. The complaints allege violations of Federal securities laws by the defendants for disseminating allegedly false and misleading financial statements for RCA's fiscal year ended June 30, 1996 and its first three quarters of fiscal year 1997, which the plaintiffs allege materially overstated RCA's profitability. Generally, each of the Actions seeks unspecified compensatory damages, prejudgment and postjudgment interest, attorneys' fees and costs and other equitable and injunctive relief. On November 25, 1997, RCA, the Company and representatives of the plaintiffs in the Actions entered into a Memorandum of Understanding ("MOU"). Pursuant to the MOU, the Company paid $9 million into an interest-bearing escrow account maintained by the Company (the "Escrow Account") to settle the Actions (the "Settlement"). RCA also agreed to assign coverage under its directors' and officers' liability insurance policy for these specific claims to the plaintiffs. All of the parties have signed the Settlement Agreement and it will become final upon court approval. Upon court approval of the Settlement, all claims by the class that were or could have been asserted by the plaintiffs against RCA or any of the other defendants in the Actions will be settled and released, and the Actions will be dismissed in their entirety with prejudice in exchange for the release of all funds from the Escrow Account to the Plaintiffs. No assurance can be given that the Settlement will become final. ********* 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., Princeton, NJ, and Beard Group, Inc., Washington, DC. Peter A. Chapman, Editor. Copyright 1999. All rights reserved. ISSN XXXX-XXXX. 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. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are $25 each. For subscription information, contact Christopher Beard at 301/951-6400. * * * End of Transmission * * *