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             C L A S S   A C T I O N   R E P O R T E R

               Wednesday, May 5, 1999, Vol. 1, No. 64

                            Headlines

AETNA INC: Dismissal Denied, Trial Scheduled for December
BORDERS GROUP: Updates Three Actions by Bookstores of Last Year
BOSTON SCIENTIFIC: Hasn't Answered 16 Suits, Intends to Defend
CSK AUTO: Store Managers Sue for Unpaid Overtime
IRIDIUM WORLD: Strauss & Troy File Suit in District of Columbia

MCKESSON HBOC: Alexander Hawes Files Complaint in California
MCKESSON HBOC: Cohen Milstein Files Complaint in California
MCKESSON HBOC: Colton & Roesser File Complaint in California
MCKESSON HBOC: Gross Firm Files Compalint in California
MCKESSON HBOC: Kaplan Kilsheimer Files Complaint in California

NEMATRON CORPORATION: Michigan Securities Litigation Dismissed
OWENS CORNING: High Court Reviews National Asbestos Settlement
RENT A CENTER: Settlements Announced in Thorn Americas Suits
TOYS R US: Settling 30 Cases After Warehouse Club Complaints
Y2K LITIGATION: Court Upholds Limitation in Software License


                            *********


AETNA INC: Dismissal Denied, Trial Scheduled for December
---------------------------------------------------------
Purported Class Action Complaints were filed in the United
States District Court for the Eastern District of Pennsylvania
on November 5, 1997 by Eileen Herskowitz and Michael Wolin, and
on December 4, 1997 by Pamela Goodman and Michael J. Oring.
Other purported Class Action Complaints were filed in the United
States District Court for the District of Connecticut on
November 25, 1997 by Evelyn Silvert, on November 26, 1997 by the
Rainbow Fund, Inc., and on December 24, 1997 by Terry B. Cohen.

The Connecticut actions were transferred to the United States
District Court for the Eastern District of Pennsylvania (the
"Court") for consolidated pretrial proceedings with the cases
pending there. The plaintiffs filed a Consolidated and Amended
Complaint (the "Complaint") seeking, among other remedies,
unspecified damages resulting from defendants' alleged
violations of federal securities laws. The Complaint alleged
that the Company and three of its current or former officers or
directors, Ronald E. Compton, Richard L. Huber, and Leonard
Abramson, are liable for certain misrepresentations and
omissions regarding, among other matters, the integration of the
merger with U.S. Healthcare and the Company's medical claim
reserves.

The Company and the individual defendants filed a motion to
dismiss the Complaint on July 31, 1998. On February 2, 1999, the
Court dismissed the Complaint, but granted the plaintiffs leave
to file a second amended complaint. On February 22, 1999, the
plaintiffs filed a second amended complaint against the Company,
Ronald E. Compton and Richard L. Huber.

The Company and the remaining individual defendants filed a
motion to dismiss the second amended complaint, and the Court
denied that motion in March, 1999. Defendants are pursuing an
interlocutory appeal of that denial. Trial currently is
scheduled to begin in December, 1999. The Company is defending
the actions vigorously.


BORDERS GROUP: Updates Three Actions by Bookstores of Last Year
---------------------------------------------------------------
In March 1998, the American Booksellers Association ("ABA") and
twenty-six independent bookstores filed a lawsuit in the United
States District Court for the Northern District of California
against Borders Group Inc. and Barnes & Noble Inc. alleging
violations of the Robinson-Patman Act, the California Unfair
Trade Practice Act and the California Unfair Competition Law.
The Complaint seeks injunctive and declaratory relief;
unspecified treble damages on behalf of each of the bookstore
plaintiffs, and, with respect to the California bookstore
plaintiffs, any other damages permitted by California law;
disgorgement of money, property and gains wrongfully obtained in
connection with the purchase of books for resale, or offered for
resale, in California from March 18, 1994 until the action is
completed and pre-judgment interest on any amounts awarded in
the action, as well as attorney fees and costs. Borders Group
Inc. intends to vigorously defend the action.

In August 1998, The Intimate Bookshop, Inc. and its owner,
Wallace Kuralt, filed a lawsuit in the United States District
Court for the Southern District of New York against Borders
Group Inc., Barnes & Noble, Inc., Amazon.com, Inc., certain
publishers and others alleging violation of the Robinson-Patman
Act and other federal law, New York statutes governing trade
practices and common law. An Amended Complaint was subsequently
filed eliminating the class action allegations contained in the
original Complaint. The Amended Complaint alleges that the named
plaintiffs have suffered damages of $11,250,000 or more and
requests treble damages on behalf of the named plaintiffs, as
well as of injunctive and declaratory relief (including an
injunction requiring the closure of all of the defendants'
stores within 10 miles of any location where plaintiff either
has or had a retail bookstore during the four years preceding
the filing of the Complaint, and prohibiting the opening by
defendants of any bookstore in such areas for the next 10
years), disgorgement of alleged discriminatory discounts,
rebates, deductions and payments, punitive damages, interest,
costs, attorneys fees and other relief. Many of the allegations
in the Amended Complaint are similar to those contained in the
action instituted by the ABA and 26 bookseller plaintiffs
against the Company and Barnes & Noble in March of 1998. Borders
Group Inc. intends to vigorously defend the action.

On November 20, 1998, six independent booksellers instituted an
action against Borders Group Inc. and Barnes & Noble in the
United States District Court for the Northern District of
California asserting claims, and seeking relief, similar to
claims made and relief sought in the ABA litigation described
above. The Company intends to vigorously defend the action.


BOSTON SCIENTIFIC: Hasn't Answered 16 Suits, Intends to Defend
--------------------------------------------------------------
Beginning November 4, 1998, a number of shareholders, on behalf
of themselves and all others similarly situated, filed purported
stockholders' class action suits in the U.S. District Court for
the District of Massachusetts alleging that BOSTON SCIENTIFIC
CORP and certain of its officers violated certain sections of
the Securities Exchange Act of 1934.

The complaints principally allege that as a result of certain
accounting irregularities involving the improper recognition of
revenue by the Company's subsidiary in Japan, the Company's
previously issued financial statements were materially false and
misleading.

In all, 16 purported class action suits have been filed.
Plaintiffs have moved for the appointment of lead plaintiffs and
lead counsel. The Company and its officers have not yet filed an
answer, but intend to vigorously defend all actions.


CSK AUTO: Store Managers Sue for Unpaid Overtime
------------------------------------------------
A lawsuit was filed in the Superior Court in San Diego,
California on May 4, 1998 against CSK Auto Corp. The case is
brought by two former store managers and a former assistant
manager. It purports to be a class action for all present and
former California store managers and senior assistant managers
and seeks overtime pay for a period beginning in May 1995 as
well as injunctive relief requiring overtime pay in the future.
This case is in the early stages of discovery.

CSK Auto Corp was recently served with two other lawsuits
purporting to be class actions filed in California state courts
in Orange and Fresno Counties by thirteen other former and
current employees. These lawsuits include similar claims to the
San Diego lawsuit, except that they also include claims for
unfair business practices which seek overtime from October 1994.
The Orange County lawsuit initially included a claim for
punitive damages based on an unlawful conversion theory. On
March 9, 1999, the Orange County court dismissed the conversion
theory and claim for punitive damages but gave the plaintiff 30
days to refile an amended claim. These plaintiffs have since
filed an amended complaint which also includes a claim for
conversion and asks for punitive damages. We have again
requested the court to eliminate these items from the case.

The three cases have recently been "coordinated" before one
judge in San Diego County who will be selected shortly. Although
at this early stage in the litigation it is difficult to predict
their outcomes with any certainty, CSK Auto Corp believes that
it has meritorious defenses to all of these cases and intends to
defend them vigorously.


IRIDIUM WORLD: Strauss & Troy File Suit in District of Columbia
---------------------------------------------------------------
On April 29, 1999, Strauss & Troy filed a class action lawsuit
in the United States District Court for the District of Columbia
on behalf of investors who purchased Iridium World
Communications, Inc. (Nasdaq: IRID) stock between September 9,
1998 and March 29, 1999. The Complaint alleges that defendants
violated Section 10(b) and 20(a) of the Securities Exchange Act
of 1934 by misrepresenting or failing to disclose material
information concerning the company's ability to fully launch the
Iridium System, a global mobile wireless communications system.

On March 29, 1999, Iridium revealed that they would not be able
to meet its necessary subscriber numbers and, therefore, would
not be in compliance with certain bank loans. As a result of
defendants' false and misleading statements and omissions, the
price of Iridium's stock was artificially inflated.

To learn more, call Richard S. Wayne at 800-669-9341 or 513-621-
2120 or write to rswayne@strauss-troy.com via email.


MCKESSON HBOC: Alexander Hawes Files Complaint in California
------------------------------------------------------------
Alexander, Hawes & Audet, LLP, filed a class action lawsuit in
the United States District Court for the Northern District of
California on behalf of investors who purchased either common
stock of McKesson HBOC, Inc., (NYSE: MCK) or common stock of
HBOC & Company prior to April 28, 1999, including 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 officers and
directors of the Company violated the federal securities laws
and regulations of the United States. The Complaint alleges that
defendants failed to disclose material facts concerning the
Company's improper recording revenue from its software sales.

On April 28, 1998, the Company announced that due to its
improper recognition of revenue from its software sales, it
would have to restate its 1999 fiscal year's earnings. Upon the
release of this news, the Company's stock dropped from its
closing price on April 27, 1999, of $63 3/4 as low as $33 1/8 on
April 28, 1999, (i.e., almost 50%).

For more information, contact William M. Audet, Esq. or Ryan
Hagan at 800-724-1776 or at waudet@alexanderlaw.com by email.


MCKESSON HBOC: Cohen Milstein Files Complaint in California
-----------------------------------------------------------
The law firm of Cohen, Milstein, Hausfeld & Toll, P.L.L.C. on
April 29 , 1999, filed a lawsuit in the United States District
Court for the Northern District of California on behalf of the
purchasers of the common stock of McKesson HBOC, Inc. (Nasdaq:
HBOC)(NYSE: MCK) between January 12, 1999 through April 27,
1999, and purchasers of the common stock of HBOC, Inc. ("HBOC")
between July 13, 1998 through January 12, 1999, and the former
stockholders of US Servis ("Servis") who acquired the common
stock of HBOC in a business combination accounted for as a
pooling of interests completed October 1, 1998; and the former
stockholders of IMNET Systems, Inc. ("IMNET") who acquired the
common stock of HBOC in a business combination accounted for as
a pooling of interests completed October 30, 1998; and the
former stockholders of Access Health, Inc. ("Access") who
acquired the common stock of HBOC in a business combination
accounted for as a pooling of interests completed in December,
1998.

The complaint charges McKesson and certain officers and
directors of McKesson and HBOC with violations of the Securities
Exchange Act of 1934 and the Securities Act of 1933. The
complaint alleges that the defendants issued materially false
and misleading statements and failed to disclose material facts
in the Company's public filings and public statements. The
complaint alleges that as a result of these misrepresentations
and omissions, the price of McKesson's common stock was
artificially inflated between January 12, 1999 through April 27,
1999, and the price of HBOC common stock was inflated between
July 13, 1998 through January 12, 1999. In addition, during the
period that HBOC common stock is alleged to have been inflated,
HBOC used its stock to acquire US Servis (October 1998), IMNET
Systems, Inc. (October 1998), and Access Health, Inc. (December
1998). As such, the complaint also asserts claims on behalf of
the persons who formerly held stock in US Servis, IMNET Systems,
Inc. or Access Health, Inc., who exchanged their shares of those
companies for the inflated stock of HBOC.

To learn more, contact Steven J. Toll, Matthew J. Ide or Emma
Larson at 888-240-1238 or 206-521-0080 or at stoll@cmht.com or
elarson@cmht.com via email.


MCKESSON HBOC: Colton & Roesser File Complaint in California
------------------------------------------------------------
Colton & Roesser filed a class action lawsuit in the United
States District Court for the Northern District of California on
behalf of investors who purchased either common stock of
McKesson HBOC Inc., (NYSE: MCK) or common stock of HBOC &
Company prior to April 28, 1999, including 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 officers and
directors of the Company violated the federal securities laws
and regulations of the United States. The Complaint alleges that
defendants failed to disclose material facts 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 1999 fiscal year's earnings. Upon the release of
this devastating news, the Company's stock dropped from its
closing price on April 27, 1999, of $65 3/4 to as low as $33 1/8
on April 28, 1999, (i.e., almost 50%).

For more information, call Grant Puleo, Esq. or Matt Rifat, Esq.
at 619-259-1100 or write gpuleo@colton-roesser.com via email.


MCKESSON HBOC: Gross Firm Files Complaint in California
-------------------------------------------------------
The Law Offices Bernard M. Gross, P.C. on April 28, 1999, filed
a class action lawsuit in the United States District Court for
the Northern District of California on behalf of investors who
purchased the common stock of McKesson HBOC, Inc. (NYSE: MCK)
from October 19, 1998 through April 27, 1999. The Complaint
charges McKesson HBOC with violations of Section 10(b) and
certain of its officers and directors with violations of
Sections 10(b) and 20(a) of the Securities Exchange Act of 1934,
as amended, and Rule 10b-5.

The complaint alleges that defendants issued a series of false
statements and failed to disclose material facts concerning,
among others, the Company's business, operating results and its
future prospects. The false and misleading statements caused the
price of MCK's common stock to be artificially inflated.

For additional information, call Susan Gross, Esq. or
Christopher Reyna, Esq. at 800-258-9349 or 215-561-3600 or write
susang@bernardmgross.com or chris@bernardmgross.com via email.


MCKESSON HBOC: Kaplan Kilsheimer Files Complaint in California
--------------------------------------------------------------
Kaplan, Kilsheimer & Fox LLP filed a class action suit against
MCKESSON HBOC, INC. (NYSE: MCK) and certain individuals
associated with the Company in the United States District Court
for the Northern District of California. The suit is brought on
behalf of all persons or entities who purchased or otherwise
acquired common stock of McKesson and its predecessors McKesson
Corp. and HBO & Company between October 18, 1998 and April 27
1999. The Complaint alleges that defendants violated Sections
10(b) and 20(a) of the Securities Exchange Act of 1934 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 34-1/2
on April 28, 1999, a decline of almost 50%, on exceptionally
heavy volume of over 40 million shares.

To learn more, call Frederic S. Fox, Esq., Janine Azriliant,
Esq., or Donald R. Hall, Esq., at 800-290-1952 or 212-687-1980,
or write to lawkkf@aol.com via email.


NEMATRON CORPORATION: Michigan Securities Litigation Dismissed
--------------------------------------------------------------
A securities class action suit that had been filed in May 1998
against Nematron Corporation (OTC Bulletin Board: NEMA) and
certain of its officers, its former auditors and its investment
bankers, has been dismissed. The Company's motion to dismiss was
granted pursuant to an order by the U.S. District Court -
Eastern District of Michigan following written briefs in
February and March, and oral arguments on April 16th.

The dismissal ruling noted that plaintiffs' claims of securities
fraud failed to adequately allege particularized facts
sufficient to establish false or misleading statements by the
defendants, that such statements were material, or that there
was any viable basis for bringing the securities action. The law
allows plaintiffs a ten-day period to file an amended complaint
and a thirty-day period for an appeal of the ruling in the suit,
captioned Levine v. Nematron Corporation, et. al.

Matt Galvez, President of Nematron, said, "We are obviously
pleased with the order of the Court granting our motion to
dismiss. This has been a significant distraction for some time
and has caused our customers, vendors, employees and
stockholders undue concern." Nematron designs and manufactures
PC-based industrial automation products that include software
for direct machine control, process visualization and data
acquisition.

For additional information, call David P. Gienapp, VP - Finance
& Administration, at 734-214-2128.


OWENS CORNING: High Court Reviews National Asbestos Settlement
--------------------------------------------------------------
The U.S. Supreme Court is expected to rule soon on a global
class action settlement involving Owens Corning (NYSE: OWC) and
established by its wholly owned subsidiary, Fibreboard
Corporation. The company said its previously announced National
Settlement Program includes plans to accommodate the Court's
decision, regardless of whether the decision is to affirm or
overturn the global settlement.

If the global settlement is approved, Fibreboard will be
protected by a continuing and permanent injunction from pending
and future asbestos personal injury claims. Under the global
settlement, Fibreboard's claims will be resolved by an
insurance-funded, court-supervised claims processing trust. The
National Settlement Program will remain in place for Owens
Corning's asbestos claims.

If the global settlement is overturned, Fibreboard's insurance
settlement will become final and insurance proceeds of
approximately $1.9 billion will be set aside in a trust. These
funds will be used by Owens Corning to resolve Fiberboard's
pending and future asbestos claims under the National Settlement
Program. Under the terms of this program, long-term agreements
with more than 80 law firms will resolve pending Fibreboard
cases and establish an administrative process to resolve future
claims without litigation.

Questions about the Fibreboard settlement or the Owens Corning
National Settlement Program should be directed to 419-248-6190.


RENT A CENTER: Settlements Announced in Thorn Americas Suits
------------------------------------------------------------
RENT A CENTER INC recently settled in principle three class
actions arising out of operations in New Jersey. In Robinson v.
Thorn Americas, Inc., a New Jersey state court entered a
judgment against Thorn Americas requiring Thorn Americas to pay
the class of plaintiffs an amount in excess of $140 million.
Thorn Americas posted a $163 million supersedeas bond. The other
two class actions in New Jersey assert claims similar to the
claims made against Thorn Americas in Robinson v. Thorn
Americas, Inc. Robinson has been settled in principle for $48.5
million, and the other two have been settled in principle for a
total of $11.5 million.

Robinson v. Thorn Americas, Inc. The plaintiffs filed this class
action on April 19, 1994 in state court in New Jersey. The class
consists of all residents of New Jersey who are or have been
parties to Thorn Americas' rent-to-own contracts since April 19,
1988. During this period, Thorn Americas operated approximately
23 stores in New Jersey. The plaintiffs' claims are for alleged
violations of the New Jersey Retail Installment Sales Act and
the New Jersey Consumer Fraud Act, usury, unlawful contractual
penalty and conversion. On January 5, 1998, the court entered a
judgment against Thorn Americas and ordered Thorn Americas to
pay the plaintiffs the amount equal to (A) all reinstatement
fees collected by Thorn Americas since April 29, 1988, and (B)
40% of all rental revenue collected by Thorn Americas from the
plaintiffs from April 29, 1988, trebled. Later, the court added
an incentive award to the class representative, the inclusion of
attorneys' fees, and granted plaintiff's counsel 25% of the
amount to be distributed to the class. The judgment is secured
by a supersedeas bond posted by Thorn Americas in the amount of
$163 million, which amount was derived from an accounting by
plaintiffs of the projected amount of the judgment liability
through April 1999. Thorn Americas filed its notice of appeal on
January 26, 1998 and the appeal is now fully briefed. In
December 1998, we settled this matter in principle for
approximately $48.5 million, subject to preliminary and final
approval of the court. The final settlement documents are
currently being negotiated. We anticipate that the execution of
these settlement documents and the preliminary approval of the
court will occur in April 1999.

Burney v. Thorn Americas, Inc. The plaintiffs originally filed a
class action in federal court in Wisconsin alleging Thorn
Americas' rent-to-own contracts violated the Wisconsin Consumer
Act and federal RICO and truth-in-lending statutes. The court
first granted the plaintiffs' motion for summary judgment as to
liability under the Wisconsin Consumer Act. The court then
withdrew that decision and dismissed the action for lack of
federal subject matter jurisdiction once the plaintiffs withdrew
their federal claims. The plaintiffs' refiled the action on
February 28, 1997 in state court in Wisconsin, and the court
granted plaintiffs' motion for class certification on July 7,
1998. The class is comprised of the persons who were party to
rent-to-own contracts with Thorn Americas in Wisconsin after
October 19, 1988 and who have paid Thorn Americas an amount
equal to or greater than the value of the merchandise. During
this period, Thorn Americas operated approximately 23 stores in
Wisconsin. The plaintiffs have asserted that the value of the
merchandise for class certification purposes is 60% of the
amount required to obtain ownership. This limitation on the
members of the class distinguishes Burney from Robinson. We
settled this matter for $16.25 million, subject to final
approval by the court. The court approved the settlement on
March 19, 1999.

Colon v. Thorn Americas, Inc. The plaintiffs filed this class
action in November 1997 in New York state court. Thorn Americas
removed the case to the U.S. District Court for the Southern
District of New York. Plaintiffs filed a motion to remand, which
was granted. The plaintiffs acknowledge that rent-to-own
transactions in New York are subject to the provisions of New
York's Rental Purchase Statute but contend the Rental Purchase
Statute does not provide Thorn Americas immunity from suit for
other statutory violations. Plaintiffs allege Thorn Americas has
a duty to disclose "effective interest" under New York consumer
protection laws, and seek damages and injunctive relief for
Thorn Americas' failure to do so. In their prayers for relief,
the plaintiffs have requested the following:
- class certification,
- injunctive relief requiring Thorn Americas to (A) cease
  certain marketing practices, (B) price their rental purchase
  contracts in certain ways, and (C) disclose effective
  interest,
- unspecified compensatory and punitive damages,
- rescission of the class members contracts,
- an order placing in trust all moneys received by Thorn
  Americas in connection with the rental of merchandise during
  the class period,
- treble damages, attorney's fees, filing fees and costs of
  suit,
- pre- and post-judgment interest, and
- any further relief granted by the court.

This suit also alleges violations relating to late fees,
harassment, undisclosed charges, and the ease of use and
accuracy of its payment records. The plaintiffs did not specify
a specific amount on their damages request.

The proposed class includes all New York residents who were
party to Thorn Americas' rent-to-own contracts from November 26,
1991 through November 26, 1997. We are vigorously defending this
action and on September 24, 1998, filed motions to deny class
certification and dismiss the complaint. Plaintiff responded and
filed a motion for summary judgment asking the court to declare
that the transaction includes an undisclosed interest component.
The motions are fully briefed and are awaiting a ruling by the
court. There can be no assurance that these motions will be
granted or that we will be found not to have any liability.

Anslono v. Thorn Americas, Inc. This is a putative class action
filed in Massachusetts state court on January 6, 1998.
Plaintiffs acknowledge that rent-to-own contracts constitute
"consumer leases" under Massachusetts' rent-to-own statute, but
contend that Thorn Americas failed to comply with certain
statutory provisions and Thorn Americas failed to provide
certain disclosures. Plaintiffs seek actual and statutory
damages and an injunction to prohibit Thorn Americas from
engaging in the acts complained of. Specifically, the plaintiffs
have requested in their prayers for relief, the following:
- class certification,
- unspecified damages, together with an award of treble damages
   under Massachusetts law,
- costs and expenses, including reasonable attorneys' fees,
- injunctive relief, enjoining Thorn Americas from engaging in
   unfair or deceptive practices relating to certain advertising
   practices,
- an order eliminating the plaintiffs' obligation to pay their
   final periodic rent-to-own installment payment, and
- any other further relief that the plaintiffs may be entitled
   to.

The proposed class includes all Massachusetts residents who were
parties to Thorn Americas' rent-to-own contracts in the four-
year period prior to the January 6, 1998 filing. We are
vigorously defending this action. However, there can be no
assurance that we will be found not to have any liability.

Allen v. Thorn Americas, Inc. The plaintiffs filed August 15,
1997 a putative nationwide class action suit in federal court in
Missouri, alleging that Thorn Americas has discriminated against
African-Americans in its hiring, compensation, promotional and
termination policies. We settled this matter for approximately
$6.75 million, and the settlement was paid during 1998.

Cooks v. Thorn Americas, Inc. The plaintiff filed a putative
class action in Texas state court in 1993, alleging violations
of Texas' usury statute, Deceptive Trade Practices Act and
Insurance Code. In their prayers for relief, the plaintiffs have
requested:
- class certification,
- unspecified compensatory damages in an amount less than
   $50,000 per class member,
- reasonable attorneys' fees,
- costs of the suit,
- pre- and post-judgment interest, and
- other further relief, as the court may deem necessary or
   appropriate.

This case has been dormant since 1995. We intend to defend this
action should it once again become active. However, there can be
no assurance that we will be found not to have any liability.

In connection with the Thorn Americas acquisition, Thorn plc
agreed to indemnify and hold us harmless from the following two
lawsuits and deposited $40 million in escrow in respect of these
two lawsuits and other indemnification claims that we may have
against Thorn plc.

Fogie v. Thorn Americas, Inc. The plaintiffs filed this class
action on December 4, 1991 in Minnesota. The class consists of
residents of Minnesota who entered rental purchase contracts
with Thorn Americas from August 1, 1990 through November 30,
1996. The plaintiffs alleged that Thorn Americas' rent-to-own
contracts violated Minnesota's Consumer Credit Sales Act and the
Minnesota General Usury Statute. On April 15, 1998, the court
entered a final judgment against Thorn Americas and ordered it
to pay approximately $30 million to the plaintiffs. Under
certain provisions of the judgment, Thorn Americas may receive
certain credits against the judgment. On May 15, 1998, Thorn
Americas filed a notice of appeal from the damages finding only
and is vigorously pursuing its appeal.

Willis v. Thorn Americas, Inc. The Willis action consolidated
three separate but related actions, the first of which was filed
in 1994, that cover the period from December 22, 1988 to
September 9, 1996. The plaintiffs alleged that prior to
Pennsylvania's enactment of rent-to-own legislation, Thorn
Americas' rent-to-own contracts were actual installment sales
contracts in violation of Pennsylvania law. Thorn Americas
entered into a settlement agreement with the plaintiffs whereby
Thorn Americas agreed to pay $9.35 million. On July 8, 1998, the
court approved the settlement and rebate checks have been sent
to eligible members of the class.

The following litigation matters pending against us have been
settled in principal in connection with the settlement of the
Robinson matter:

Gallagher v. Crown Leasing Corporation. On January 3, 1996, we
were served with a class action complaint adding us as a
defendant in this action originally filed in April 1994 against
Crown and certain of its affiliates in state court in New
Jersey. The class consists of all New Jersey residents who
entered into rent-to-own contracts with Crown between April 25,
1988 and April 20, 1995. During this period, Crown operated
approximately five stores in New Jersey. The lawsuit alleges,
among other things, that under certain rent-to-own contracts
entered into between the plaintiff class and Crown, some of
which were purportedly acquired by us pursuant to the
acquisition of Crown and certain of its affiliates, the
defendants failed to make the necessary disclosures and charged
the plaintiffs fees and expenses that violated the New Jersey
Consumer Fraud Act and the New Jersey Retail Installment Sales
Act. The plaintiffs seek damages including, among other things,
a refund of all excessive fees and/or interest charged or
collected by the defendants in violation of such acts, state
usury laws and other related statutes and treble damages, as
applicable.

Pursuant to the Asset Purchase Agreement entered into between
Crown, its controlling shareholder and us in connection with the
Crown acquisition, we did not contractually assume any
liabilities pertaining to Crown's rent-to-own contracts for the
period prior to the acquisition of Crown. The plaintiffs have
obtained class certification and a summary judgment against
Crown on the liability issues. Subsequent to these decisions by
the New Jersey state court, Crown filed for protection from its
creditors under Chapter 11 of the federal bankruptcy laws. The
bankruptcy court allowed the lawsuit to proceed in New Jersey,
where the state court granted summary judgment on the
plaintiff's damages formula against Crown. The plaintiffs
calculated actual damages for purposes of their summary judgment
motion at approximately $7.6 million. The court ruled that the
plaintiffs are entitled to three times actual damages. However,
the state court's ruling requires certain minor adjustments
pursuant to an accounting. Together with the Boykin matter, we
settled this matter in principle for approximately $11.5
million, subject to preliminary and final approval of the court.
The final settlement documents are currently being negotiated.
We anticipate that the execution of these settlement documents
and the preliminary approval of the court will occur in April
1999.

Michelle Newhouse v. Rent-A-Center, Inc./Handy Boykin v. Rent-A-
Center, Inc. On November 26, 1997 a class action complaint was
filed against us by Michelle Newhouse in New Jersey state court
alleging, among other things, that under certain rent-to-own
contracts entered into between the plaintiffs and us, we failed
to make the necessary disclosures and charged the plaintiffs
fees and expenses that violated the New Jersey Consumer Fraud
Act and the New Jersey Installment Sales Act. The claims arising
from this action are similar to the claims made in Robinson v.
Thorn Americas, Inc. and Gallagher v. Crown Leasing Corporation.
The proposed class consists of all residents of New Jersey who
are or have been parties to contracts to rent-to-own merchandise
from us within the past six years. During this period, we
operated approximately 17 stores in New Jersey.

We removed the case to federal court on January 21, 1998, and
were then advised by the plaintiffs' attorney that Michelle
Newhouse no longer wished to serve as class representative. A
motion to voluntarily dismiss the Newhouse case filed by the
plaintiffs' attorney was granted shortly thereafter. However, on
May 1, 1998, a new class action complaint against us made by
Handy Boykin was filed by the plaintiffs' attorney in the
Newhouse matter in New Jersey state court alleging the same
causes of action with the same proposed class as that of the
Newhouse matter. This new filing essentially constitutes a
replacement of the named plaintiff in the Newhouse matter with a
new named plaintiff, Handy Boykin. We anticipated this
replacement. We removed the Boykin case to federal court, where
Boykin's motion to remand to New Jersey state court is now
pending. Together with the Gallagher matter, we settled this
matter in principle for approximately $11.5 million, subject to
preliminary and final approval by the court. The final
settlement documents are currently being negotiated. We
anticipate that the execution of these settlement documents and
the preliminary approval of the court will occur in April 1999.

The settlements in Robinson, Gallagher and Boykin are contingent
on one another.


TOYS R US: Settling 30 Cases After Warehouse Club Complaints
------------------------------------------------------------
On May 22, 1996, the Staff of the Federal Trade Commission (the
"FTC") filed an administrative complaint against Toys R Us
alleging that the Company is in violation of Section 5 of the
Federal Trade Commission Act for its practices relating to
warehouse clubs. The complaint alleges that the Company reached
understandings with various suppliers that such suppliers not
sell to the clubs the same items that they sell to the Company.
The complaint also alleges that the Company "facilitated
understandings" among the manufacturers that such manufacturers
not sell to clubs. The complaint seeks an order that the Company
cease and desist from this practice.

The matter was tried before an administrative law judge in the
period from March through May of 1997. On September 30, 1997,
the administrative law judge filed an Initial Decision upholding
the FTC's complaint against the Company. On October 13, 1998,
the FTC issued a final order and opinion upholding the FTC's
complaint against the Company.

The Company has appealed the FTC's decision to the United States
Court of Appeals for the Seventh Circuit.

After the filing of the FTC complaint, several class action
suits were filed against the Company in State courts in Alabama
and California, alleging that the Company has violated certain
state competition laws as a consequence of the behavior alleged
in the FTC complaint. After the Initial Decision was handed
down, more than thirty purported class actions were filed in
federal and state courts in various jurisdictions alleging that
the Company has violated the federal antitrust laws as a
consequence of the behavior alleged in the FTC complaint. In
addition, the attorneys general of forty-four states, the
District of Columbia and Puerto Rico have filed a suit against
the Company in their capacity as representatives of the
consumers of their states, alleging that the Company has
violated federal and state antitrust laws as a consequence of
the behavior alleged in the FTC complaint. These suits seek
damages in unspecified amounts and other relief under state
and/or federal law.

The Company believes that it has always acted fairly and in the
best interests of its customers and that both its policy and its
conduct in connection with the foregoing have been and are
within the law. However, to avoid the cost and uncertainty of
protracted litigation the Company has reached an agreement in
principle to settle all of the class action and attorney general
lawsuits in a manner which will not have a material adverse
effect on its financial condition, results of operations or cash
flow. The Company has accrued all anticipated costs relating to
this matter as of January 30, 1999.


Y2K LITIGATION: Court Upholds Limitation in Software License
------------------------------------------------------------
In a case that announces important legal precedent for Year 2000
(Y2K) compliance, the Marion County (Ohio) Court of Appeals
Wednesday affirmed a lower court decision dismissing a class
action suit against Marion-based Macola Software.

"This was the second Y2K case to be decided in the United States
and is the first to be decided by an appellate court," said
Macola's attorney Bruce L. Ingram, of the Columbus law firm
Vorys, Sater, Seymour and Pease LLP.

In December 1998, Marion County Common Pleas Judge Robert S.
Davidson dismissed the class action lawsuit that accused Macola
of breach of warranty and fraud in connection with a version of
the company's software that was not Y2K compliant. Lawyers for
the plaintiff, Paragon Networks International, argued that
Macola's advertising slogan, "Software You'll Never Outgrow,"
was an express warranty breached because of the Y2K problem. The
suit sought millions of dollars in damages on behalf of 16,000
customers. Macola successfully argued that it complied with its
obligations under a warranty in the license agreement that
accompanied the software. Judge Davidson agreed and dismissed
the case.

The Marion County Appellate Court affirmed the judgment of the
trial court and rejected Paragon's attempt to deny the validity
of the license agreement. "This case is of crucial importance to
software developers concerned about Y2K compliance because it
signals that the courts will enforce the terms of the license
agreements that typically accompany software delivered to the
end user," Ingram said. "A well written license agreement is the
best protection against Y2K liability and will severely limit
the ability of a plaintiff to be successful in these cases,
particularly class action suits."

For more information, call Judith F. Myers at 614-464-8210.



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Class Action Reporter is a daily newsletter, co-published by
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Copyright 1999. All rights reserved. ISSN XXXX-XXXX.

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