/raid1/www/Hosts/bankrupt/CAR_Public/990528.MBX              C L A S S   A C T I O N   R E P O R T E R

                Friday, May 28, 1999, Vol. 1, No. 81


ALYDAAR SOFTWARE: Cohen Milstein Files Suit in North Carolina
AMERICA ONLINE: Volunteers Balk They're Not Making Minimum Wage
CELLSTAR CORPORATION: Milberg Weiss Files Complaint in Florida
COCA-COLA: Management Spam Says Keep Files & Diversify Staff
DECOSTER EGG: Unpaid Overtime Isn't Chickenfeed to Farm Workers

FLORIDA: ACLU Challenges State Ban on Gays and Lesbians Adopting
FORE SYSTEMS: Schiffrin & Barroway File Suit in Pennsylvania
GLS CAPITAL: Court Rules that County may Assign Tax Liens
GUN MANUFACTURERS: Jury Erred Finding Liability But Not Damages
INFORMIX CORP.: Settlement Official, Lawyers Take Their Shares

INTERNEURON PHARMACEUTICALS: Awaiting Decision in Redux Case
IRIDIUM WORLD: Shalov Stone Files Securities Complaint
NUCLEAR TESTS: Exposed New Zealand Veterans Seek Recognition
PERRIGO COMPANY: Insurance Reimburses $8 Million Legal Expenses
PRISON REALTY: Berman DeValerio Files Complaint in Tennessee

PRISONER RIGHTS: Class Suit Delays But Doesn't Prevent Hangings
XL CAPITAL: Shareholders Complain About Mid Ocean Sale in NY


ALYDAAR SOFTWARE: Cohen Milstein Files Suit in North Carolina
The law firm of Cohen, Milstein, Hausfeld & Toll, P.L.L.C. filed
a lawsuit in the United States District Court for the Western
District of North Carolina on behalf of persons who purchased
the Alydaar Software Corp. (Nasdaq:ALYD) common stock during the
period between Nov. 14, 1997, and April 1, 1999. The Complaint
charges Alydaar and certain of its officers and directors with
violations of the federal securities laws.

The complaint alleges, among other things, that during the Class
Period, defendants falsely reported Alydaar's financial results
and for the first, second, third and fourth quarters of 1998 and
1998 fiscal year ended Dec. 31, 1998, causing Alydaar's common
stock to trade at artificially inflated prices. Following
defendants' disclosure that Alydaar would be required to restate
its financial results, the company's common stock closed at $3
9/16 per share on April 5, 1999, a drop of over 81% from a high
of $19.375 per share. Alydaar's common stock price has not
recovered, and currently trades for less than $4 per share.

To learn more, call Andrew N. Friedman or Robert Smits at 888-
240-0775 or 202-408-4600.

AMERICA ONLINE: Volunteers Balk They're Not Making Minimum Wage
The Associated Press reports that two former "volunteers" for
America Online Inc. who helped advise the online giant's
millions of customers filed a lawsuit Tuesday alleging that AOL
violated labor laws by failing to pay them minimum wage. Kelly
Hallissey and Brian A. Williams filed the lawsuit in U.S.
District Court in Manhattan, seeking to obtain class-action
status so that as many as 10,000 AOL workers that AOL considered
volunteers can benefit from any outcome.

AP says the lawsuit alleged that the volunteers were entitled to
hourly wages and overtime wages to be determined as the case
proceeds. Hallissey and Williams are among the thousands of
volunteers who lead chat rooms, report violations of Internet
rules, and answer questions from puzzled users. In the early
days of the Internet, before companies went public and grew to
be worth billions of dollars, scholars of all kinds frequently
contributed their services to further the fledgling
communication device.

AOL spokeswoman Ann Brackbill recently defended the use of
volunteers, saying, "This whole volunteerism community and the
participants are what makes the Internet." (Associated Press)

CELLSTAR CORPORATION: Milberg Weiss Files Complaint in Florida
Milberg Weiss Bershad Hynes & Lerach filed a class action
lawsuit in the United States District Court for the Southern
District of Florida on behalf of all persons who purchased the
common stock of CellStar Corporation (Nasdaq: CLST) during the
period March 19, 1998 to September 21, 1998.

The complaint charges CellStar, and certain of its officers and
directors with violations of Sections 10(b) and 20(a) of the
Securities Exchange Act of 1934 as well as Rule 10b-5. The
complaint alleges that defendants issued a series of materially
false and misleading statements concerning the Company's
financial condition and results of operations. Because of the
issuance of a series of false and misleading statements the
price of CellStar common stock was artificially inflated.

To learn more, call Steven G. Schulman or Samuel Rudman at 800-
320-5081 or write endfraud@mwbhlny.com via email.

COCA-COLA: Management Spam Says Keep Files & Diversify Staff
The Atlanta Journal and Constitution reports that Coca-Cola Co.
has told all U.S. employees not to destroy any relevant
information concerning the racial discrimination suit filed
against the company last month. "Please suspend normal record
destruction practices for all documents or computer files ... on
subjects which are or may be at issue in the lawsuit," said an
email sent this week to the company's nearly 10,000 U.S.
employees. Company spokesman Robert Baskin said the notice from
Coca-Cola's information access department is "normal operating
procedure for safeguarding documentation for all lawsuits."

In fact, the memo also refers to five unrelated suits filed
against the company and outlines the specific documents that
need to be saved in each case. In one suit, for example, Pepsico
Inc. accuses Coca-Cola of antitrust violations. For the racial
discrimination suit, filed in Atlanta federal court, the memo
lists 14 types of documents that should be retained, including
those dealing with "any compensation, performance evaluation,
promotion or termination of any employee." One former and three
current employees have alleged in the suit that Coca-Cola has a
companywide practice of discriminating against African-Americans
in pay, promotions, performance evaluations and terminations.
The plaintiffs are seeking class-action status so they can
include another 1,500 black, salaried U.S. employees in the

The email also tells employees to hold on to all documents
related to the " marketing, advertising and promotion of company
products to African-American consumers." The discrimination suit
alleges that while Coca-Cola has "carefully cultivated African-
Americans as consumers of its product by public pronouncement,
strategic alliances and specific marketing campaigns, it has
failed to place the same importance on its African-American

The plaintiffs' attorney, Cyrus Mehri, had no comment Wednesday
on Coca-Cola's document retention memo.

Coca-Cola Co. also announced that it will step up efforts to
diversify its staff at all levels, and appointed its senior
African-American executive to help monitor those efforts. In an
email memo to all domestic employees, Chairman and Chief
Executive M. Douglas Ivester said the company supports a diverse
or racially mixed work force as "an asset that provides leverage
for better business results and greater learning and growth
opportunities for all of us." Ivester appointed Carl Ware, 55,
senior vice president in charge of the Africa Group, to co-chair
a newly created Diversity Advisory Council, along with Jack L.
Stahl, 46, senior vice president of the North America Group.

Even though Ivester has denied in previous messages to employees
that the company discriminates, he said he was stepping up his
surveillance "to assure that we are able to achieve our
different, better and special standard and to maximize the
benefits of diversity in our work force." In addition, Ivester
said, he plans to hold periodic meetings in the months ahead
with small groups of employees to "increase my own efforts to
open the lines of communications with all constituencies."

Wednesday's email and the idea of small group meetings, however,
may soon be the subject of a court challenge in the case.
Plaintiffs' attorney Cyrus Mehri said Wednesday he believes
"there is an obvious risk of coercion in this email and in
future meetings with small groups of employees the email talks
about." Mehri would not specifically comment on whether he would
be filing a motion to stop the alleged coercion, which he
believes targets those potential plaintiffs.

Ivester's email memo also does not contain two disclaimer
sentences that an Atlanta federal judge recently ordered the
company to include when it sends emails to employees about its
views on the case. According to The Atlanta Journal and
Constitution, the sentences are: "The foregoing represents Coca-
Cola's opinion of this lawsuit. It is unlawful for Coca-Cola to
retaliate against employees who choose to participate in this
case." But Coca-Cola spokesman Robert Baskin said the company
did not include those sentences because Ivester's memo dealt
with diversity at the company, not the lawsuit.

Ivester's statements came hours after Ware acknowledged in an
interview with The Atlanta Journal-Constitution that four years
ago he and a panel of African-American Coca-Cola executives
recommended ways to improve promotions and job opportunities for
blacks at the company. The recommendations came at the request
of Ivester, who was then president and chief operating officer.
The panel included Ware; Juan D. Johnson, now vice president and
director of learning and knowledge management; Ingrid Saunders
Jones, vice president for external affairs; and Thomas A.
Peters, assistant vice president and international treasury
services manager. "We came together for a day and a half," Ware
recalled, "to talk to one another, share thoughts and to
disclose how each of us rose to senior rank in the company."

The report given to Ivester consisted of suggestions for ways to
help young African-American executives move along to responsible
assignments. "We were interested in ways for African-Americans
to move more freely outside of such jobs as human resources and
external affairs, giving them a chance to work in profit-and-
loss departments," Ware said.

The pending suit alleges that African-American employees tend to
be restrained by glass ceilings that limit pay, and glass walls
that prevent them from moving as freely into operating jobs as
other employees. In a phrase repeated later in the day on
Wednesday, Ware said that his panel's report in 1995 was an
attempt to create a "gold standard" for management diversity,
accentuating efforts to include more African-Americans in all
aspects of the company. "We need to treat diversity management
as part and parcel of our effort to achieve business
advantages," Ware said. Ivester repeated that same point in his
afternoon memo.

Among the strategies the company would follow, according to the
Ware recommendations of 1995, would be a strong mentoring
program to connect promising black executives with senior
managers, as executive assistants, "so they could work in direct
and close personal contact with our top leaders." These
relationships would serve as a way to teach leadership, and keep
good employees in the eye of the talent scouts at the senior
level. Ivester eventually became a mentor to Juan Johnson, now a
vice president. Quinton Martin, who is now manager of national
accounts with bottlers, served as assistant to Stahl. Other
promising young black executives also were paired with senior

"We are not where we want to be, because we have set a high
standard," Ware told The Atlanta Journal and Constitution, "but
I think this company is working hard to improve."

While not responding to Ware's comments specifically, Mehri, the
plaintiffs' attorney, said Wednesday that the company should
have acted sooner. "Four years ago, top African-American
officials at the company identified the problem of segregation
at the highest ranks of the company," Mehri said. " We welcome
the establishment of the diversity council. However, it should
have been established four years ago, and it will not be fully
effective without input from the plaintiffs and the other
salaried, black employees."

Regarding the pending lawsuit, Ware said, "I don't know the four
people in the lawsuit, but I believe that we will see that
allegations about the Coca-Cola Co. are not true." (The Atlanta
Journal and Constitution; May 27, 1999)

DECOSTER EGG: Unpaid Overtime Isn't Chickenfeed to Farm Workers
Checks are in the mail to more than half the 1,200 workers of
the former DeCoster Egg Farm of Turner, Maine, who filed claims
for overtime pay, according to a United Press International
story. The checks range from $500 to $40,000 with many averaging
$4,000 to $5, 000. Half the recipients are in Maine with the
rest scattered as far away as Texas and Mexico. Some live in
Europe and a few are in prison.

These sums amount to stunning windfalls for poor farm workers
who labored from 1991 through 1997 at scarcely more than $5 an
hour on the egg farm of Austin "Jack" DeCoster. UPI wrote that
the DeCoster farm, once the world's largest producer of brown
eggs, wracked up a history of numerous and repeated health and
labor violations over a 20-year period. Former Labor Secretary
Robert Reich once labeled the conditions "as dangerous and
oppressive as any sweatshop we've seen." New England
supermarkets refused to sell the eggs because of those
deplorable conditions . At one point DeCoster was cited for raw
sewage backing up into the company trailers housing the workers.

According to the UPI report, some 1,275 workers joined in a
class action suit filed by Portland attorney Donald Fontaine.
Under a court-approved settlement, Fontaine is prevented from
disclosing the total amount being paid. But he told UPI,
"There's many about $15,000." The final checks are to be mailed
by mid-July. Some relatives are expected to partake of the
bonanza. Fontaine said, "Even members of DeCoster's family have
filed claims." (United Press International 05/27/99)

FLORIDA: ACLU Challenges State Ban on Gays and Lesbians Adopting
To Doug Houghton, the little boy he has raised since he was 3
years old is his son. To the boy, Houghton is the only dad he's
ever known. But the state of Florida would never sanction their
relationship by allowing Houghton to adopt the boy, now 7,
because Houghton is gay.

The Sun-Sentinel reports that the American Civil Liberties Union
of Florida took up Houghton's fight and that of other gays and
lesbians in the state by filing a class-action lawsuit
challenging the state law that bans homosexuals from adopting.
"If successful, this lawsuit will remove an outdated law that is
based on little more than ignorance and prejudice," said Howard
Simon, executive director of the ACLU of Florida.

Florida is the only state that expressly bars homosexuals from
adopting, although it does allow them to be foster parents.

The ACLU was joined in the lawsuit by Children First Project, a
Broward County children's advocacy group, which says that
parentless children are kept in limbo while people willing to
adopt them are systematically excluded from applying to be
parents. "We feel that's far better to have these children in
loving homes than meandering through a crisis-ridden foster care
system," Christina Zawisza, attorney for Children First told the

The group is representing the two children in the lawsuit,
identified as John Doe and John Roe, who is Houghton's child.
The ACLU is representing the gay and lesbian plaintiffs in the
suit, which was filed in U.S. District Court in Key West.

During a news conference to announce the lawsuit, Houghton, a
clinical nurse at Jackson Memorial Hospital, expressed his hopes
to adopt "John Roe," a sickly boy he met as a patient in his
ward. The two connected and the boy's father, overwhelmed by the
child's medical problems, eventually asked Houghton if he would
take care of the boy. Houghton, 36, became his legal guardian.
"I was thrilled," Houghton said. "It was always my dream to have
a child. And what I want is to be able to legally solidify this
relationship and adopt him. Like a good parent, I would die for
my son."

The 25-page complaint charges that the state law ignores the
best interests of children by precluding an entire class of
"qualified adults, rather than making adoption decisions on a
case by case basis," the lawsuit says. In Florida, there more
than 2,000 children in foster care who are awaiting adoption. In
Broward County, there are 210; in Miami-Dade and Monroe
counties, there are 495. Palm Beach County has more than 100
children waiting for a permanent home. Plaintiff Angela Gilmore,
36, of Hollywood, a lesbian and law professor at Nova
Southeastern University, thinks the ban is unconstitutional.
Gilmore wants to adopt an African-American child. "I want to
adopt, absolutely," said Gilmore, who is in a committed
relationship. "This law is systematic discrimination. You learn
to expect it from ignorant people, but not from the state." She
dismissed those who say a child reared by homosexuals will grow
up to be one. "I don't believe that. (Children) will become what
they already are," she said.

Wayne Smith, 43, a plaintiff from Key West who is also in a
long-term relationship, wants to adopt a child, but can't. He
also can't keep a promise to his sister, who wants him to adopt
her daughter in the event that anything happens to her. "It's
like a silent scream. You know you can be a good parent, but the
law says you can't do it," said Smith, an attorney.

Michael Adams, associate director of the national ACLU's Lesbian
and Gay Rights Project, said the Florida law is based on "myths
and stereotypes." It was passed by the Legislature in 1977, just
two days after Miami-Dade's first anti-gay discrimination law
was repealed in a campaign led by singer Anita Bryant. "Not only
does this law blatantly discriminate against homosexuals, but it
robs needy children of the opportunity to live in stable
families," Adams said.

It's not the first time the state law has been challenged. In
1997, June Amer, a Weston woman who was denied adoption because
she is a lesbian, sued the state in Broward Circuit Court. The
judge ruled against her, saying it was up to the Florida
Legislature to change the law.

The lawsuit names Florida Attorney General Bob Butterworth and
three Department of Children & Families officials: Secretary
Kathleen Kearney, Broward District Administrator Robert Pappas,
and Miami-Dade and Monroe District Administrator Sara Herald.
George Was, spokesman for Butterworth's office, said they were
aware of the lawsuit but had not seen it. "We will respond at an
appropriate time," he told the Sun-Sentinel.

Six states are considering bans on gays and lesbians as
candidates for foster parents or adoption. They are Arkansas,
Idaho, Indiana, Oklahoma, Texas and Utah. Many other states have
moved to safeguard the interests of children with gay or lesbian
parents. At least 21 states have granted dual-parent adoptions
to lesbians and gay couples, ensuring that their children can
enjoy the benefits of having two legal parents, especially if
one of the parents dies or becomes incapacitated. (Sun-Sentinel
May 27, 1999)

FORE SYSTEMS: Schiffrin & Barroway File Suit in Pennsylvania
The law firm of Schiffrin & Barroway, LLP filed a class action
lawsuit in the United States District Court for the Western
District of Pennsylvania on behalf of all FORE Systems, Inc.
(Nasdaq: FORE) shareholders subject to the Tender Offer
negotiated between FORE Systems, Inc. and GEC, P.L.C. of
England. The complaint charges FORE Systems, its executive
management and GEC with failing to abide by the "all holder,
best price" rule and contravening shareholder anti-
discrimination requirements.

To learn more, contact Andrew L. Barroway, Esq. at 888-299-7706
or 610-667-7706, or at info@scbclasslaw.com via email.

GLS CAPITAL: Court Rules that County may Assign Tax Liens
The Pennsylvania Law Weekly reports that the Commonwealth Court
has ruled en banc that a county has every right to assign its
tax liens to a third party under the Municipal Claims and Tax
Liens Act. The decision stems from a class action lawsuit in
Allegheny County where those involved said the county did not
have the right to sell 23,800 tax liens to GLS Capital Inc.,
which could then enforce them against the party owners.

The appellant argued that the language of the act does not allow
for a county to assign tax claims to a third party. But the
court ruled that the language of the section in question
included the assigning of tax liens as well as municipal claims.
"Appellant asserts, in essence, that Section 33 does not mean
what it says," Judge Bonnie Brigance Leadbetter wrote for the
majority in Maierhoffer v. GLS Capital Inc. PICS Case No. 99-
0937 (Pa. Commw. May 14, 1999) Leadbetter, J.; Friedman &
Pelligrini, JJ. dissenting; Kelley, J., dissenting (26 pages).
"She argues that 'any claim' necessarily refers only to
municipal claims, and not to tax claims, because tax claims
cannot be assigned to a 'third party,'" Leadbetter wrote. "We
cannot accept appellant's strained reading of the act. Statutes
are presumed to employ words in their popular and plain everyday

Judges Rochelle S. Friedman and James R. Kelley filed separate
dissenting opinions, both addressing the third party issue, with
Kelley saying the majority's ruling is in fact unconstitutional.
"The majority concluded that by using the term 'any claim,'
Section 33 allows a municipality to assign both its tax and
municipal claims, and the assignee thereby steps into the shoes
of the municipality and may enforce the claim as that entity
could. I strongly disagree with this notion," Kelley wrote.
"[T]he exercise of this awesome legislative power is
circumscribed. It may only be exercised by a legislative body
and, generally speaking, may not be constitutionally delegated
by that body." (Pennsylvania Law Weekly; May 24, 1999)

GUN MANUFACTURERS: Jury Erred Finding Liability But Not Damages
The Associated Press reports that a Brooklyn federal judge set
aside part of a jury's decision in a landmark lawsuit against
the gun industry. The plaintiffs' lead attorneys, Elisa Barnes
and Denise Dunleavy, have said they are using the Brooklyn case
as a basis for a class-action suit against the gun industry on
behalf of gunshot victims nationwide.

In a written ruling, U.S. District Court Judge Jack Weinstein
said he was dismissing the cases against gun makers in the
shootings of six victims because the jury despite finding
liability failed to award the victims any damages. AP reports
that he ruled an award of $500,000 to a seventh plaintiff would

Following a month-long civil trial in February, the jury found
several major handgun manufacturers liable for shootings because
of irresponsible marketing. But only three defendants American
Arms, Inc., Beretta USA, Inc., Taurus International
Manufacturing, Inc. were ordered to pay $500,000 to a man who
had survived being shot in the head with an illegal handgun. The
mixed verdict left both sides claiming victory. (AP Online;

INFORMIX CORP.: Settlement Official, Lawyers Take Their Shares
Informix(R) Corporation (Nasdaq:IFMX), signed a memorandum of
understanding with respect to the settlement of pending private
securities and related litigation against Informix, certain of
its current and former officers and directors, and Ernst & Young
LLP, Informix' former independent accountants, subject to court
approval. With the exception of two very small cases, the
settlement will resolve all litigation arising out of the
restatement of certain of Informix' financial statements that
was publicly announced in November, 1997.

If the settlement is approved, Informix will pay approximately
$3.2 million in cash. An additional amount of approximately
$13.8 million of insurance proceeds will be contributed on
behalf of certain of the Company's current and former officers
and directors. Finally, the Company will contribute a minimum of
9 million shares of Informix common stock worth $91 million.
Ernst & Young will pay $34 million in cash. The total amount of
the settlement will be $142 million. Given that the settlement
is funded largely through insurance and stock, the Company
believes that the settlement terms are very favorable.

The Company's decision to settle was driven solely by the
Company's desire to remove the uncertainty, expense and
distraction of continuing litigation. "We are pleased that we
have reached this settlement. It is a well-structured solution
that allows Informix to move forward unhindered. We can now
devote all of our effort to building the new Informix," said Bob
Finocchio, Informix chairman and chief executive officer.

Informix Corporation, based in Menlo Park, provides innovative
database products, ranging from small workgroups to very large
parallel processing applications.

The legal paper, The Recorder, reports that the case is one of
the biggest and most egregious stock drop cases to hit Silicon
Valley. U.S. District Court Judge Charles Breyer must still
approve the settlement, a process that is expected to take
several months. If Breyer does approve the settlement, the 58
plaintiffs firms, led by Milberg Weiss Bershad Hynes & Lerach,
intend to take about 65 percent of their fees in stock, the same
percentage their clients will receive. The settlement also does
away with a parallel class action filed in San Mateo Superior

While Mark Solomon in the San Diego office of Milberg Weiss told
The Recorder that he's unsure how much the attorneys will ask
for, plaintiffs firms typically receive about 25 percent of the
settlement. That works out to about $22.75 million in stock and
$12.5 million in cash.

Attorneys on both sides of the case told The Recorder that
including new stock to settle such security cases is a tactic
used before, and that taking stock for fees is becoming less of
a rarity. But the amount put on the table in the Informix case
breaks new ground. Attorneys involved say the reason for the
large stock payout is because the company faced such huge
liability -- one attorney close to the case estimated as much as
$1 billion -- that a straight cash deal would have killed the

Company officials stunned the market in November 1997 when they
announced Informix would restate its financial reports for the
previous 3-1/2 years, admitting that they overstated net income
by $248 million during that time. The restatement, according to
Ernst & Young, was the result of "acts of intentional wrongdoing
by Informix management." In the wake of the news, the company's
stock plummeted to $5.25 a share from a pre-announcement high of
$26. Meanwhile, before the announcement, eight company
executives sold nearly all of their stock -- valued at $37.5
million -- at an average price of $23.50.

"The company was faced with a very substantial restatement,
which current management inherited," said partner Steven Schatz
of Palo Alto's Wilson Sonsini Goodrich & Rosati, who represented
Informix. "The structure of the settlement allows the company to
remove a substantial cloud from over its head and move forward
unimpeded." The company was smacked with 25 separate suits in
the days after it announced its restatement and several
plaintiffs firms fought with each other to be named to the
lucrative status of lead plaintiffs counsel in In re Informix
Corp. Securities Litigation, 97-1289.

Under the Private Securities Litigation Reform Act of 1995,
judges appoint lead plaintiffs counsel based on whose clients
have the most at stake. A three-firm consortium of Milberg
Weiss, San Diego's Barrack, Rodos & Bacine and New York's
Kaplan, Kilsheimer & Fox -- with a combined 979 investors who
lost $14.6 million -- won lead counsel status. They beat out San
Francisco's Gold Bennett & Cera and Philadelphia's Berger &
Montague, who combined had 274 investors with a total of $5.7
million in losses.

Then Lieff, Cabraser, Heimann & Bernstein made a belated run for
the reins with a separate suit they filed on behalf of investors
in a company that Informix bought with the inflated stock. In
the end, Lieff, Cabraser managed to carve out a "subclass" for
itself and its clients and now say they are entitled to 10
percent of the proceeds.

Which attorneys get what is far from worked out. And with 58
plaintiffs firms clamoring for a piece of the pie, nasty fights
appear to be inevitable. The doling out of attorneys fees is
"going to be complicated," said Paul Bennett of Gold Bennett,
who filed the first suit in the matter. "That's all I can say."
(The Recorder; May 27, 1999)

INTERNEURON PHARMACEUTICALS: Awaiting Decision in Redux Case
Subsequent to the September 15, 1997 market withdrawal of the
weight loss medication Redux, INTERNEURON PHARMACEUTICALS INC
was named, together with other pharmaceutical companies, as a
defendant in approximately 1,049 product liability legal
actions, many of which purport to be class actions, in federal
and state courts involving the use of Redux and other weight
loss drugs.

On December 10, 1997, the federal Judicial Panel on
Multidistrict Litigation issued an Order allowing for the
transfer or potential transfer of the federal actions to the
Eastern District of Pennsylvania for coordinated pretrial
proceedings. On September 25, 1998, the U.S. District Court for
the Eastern District of Pennsylvania (the "Court") preliminarily
approved an Agreement of Compromise and Settlement (the
"Settlement Agreement") between the Company and the Plaintiffs'
Management Committee ("PMC") relating to the proposed settlement
of all product liability litigation and claims against the
Company relating to Redux. As part of the Settlement Agreement,
the Company and the PMC entered into a royalty agreement (the
"Royalty Agreement") relating to a portion of the payments
proposed to be made to the settlement fund.

On November 3, 1998, the Court issued a stay halting all Redux
product liability litigation against the Company, pending and
future, in state courts, following the issuance of a similar
stay halting Redux product liability litigation against the
Company with federal courts on September 3, 1998. These stays
will remain effective until further order of the Court.

The limited fund class action established by the Settlement
Agreement includes all persons in the United States who used
Redux, and certain other persons such as their family members,
who would be bound by the terms of the settlement. Membership in
the class is mandatory for all persons included within the class
definition. Under the terms of the proposed settlement, class
members asserting claims against Interneuron will be required to
seek compensation only from the settlement fund, and their
lawsuits against Interneuron will be dismissed. By agreeing to
the proposed settlement, Interneuron does not admit liability to
any plaintiffs or claimants.

The Settlement Agreement requires Interneuron to deposit a total
of approximately $15,000,000 in three installments into a
settlement fund. The first installment of $2,000,000 was
deposited into the settlement fund in September 1998. A second
installment of $3,000,000 is to be made after the Settlement
Agreement is approved by the Court, which would depend upon the
ruling in the Fairness Hearing, which was conducted between
February 25, 1999  and March 5, 1999 (see below). These
installments, less certain expenses, will be returned to
Interneuron if the settlement does not become final. A third
installment of $10,000,000, plus interest, is to be made after
the settlement becomes final.

In addition, the Settlement Agreement provides for Interneuron
to cause all remaining and available insurance proceeds related
to Redux to be deposited into the settlement fund. Interneuron
also agreed to make certain royalty payments to the settlement
fund pursuant to the Royalty Agreement which is part of the
Settlement Agreement, in the total amount of $55,000,000, over a
seven year period commencing when the settlement becomes final.
Royalties will be paid at the rate of 7% of gross sales of
Interneuron products sold by Interneuron, 15% of cash dividends
received by Interneuron from its subsidiaries related to product
sales, and 15% of license revenues (including license fees,
royalties or milestone payments) received by Interneuron from a
sublicensee related to product sales. All Interneuron products
will be subject to this royalty during the applicable term. If,
at the end of that seven year period, the amount of royalty
payments made by Interneuron is less than $55,000,000, the
settlement fund will receive shares of Interneuron stock in an
amount equal to the unpaid balance divided by $ 7.49 per share,
subject to adjustment under certain circumstances such as stock
dividends or distributions. Interneuron could be required to
issue up to 7,343,124 shares of Common Stock if it makes no
royalty payments.

The Settlement Agreement will not become final until approved by
the Court and the time for filing appeals of the Court's
judgment approving the Settlement Agreement has elapsed without
any appeals being filed or all appeals from the Court's judgment
approving the Settlement Agreement have been exhausted and no
further appeal may be taken. In this case, in order to approve
the settlement, the Court must make a determination that the
proposed settlement is fair and reasonable and meets each of the
prerequisites for a class action generally, and for a "limited
fund" class action in particular, all as required by the Federal
Rules of Civil Procedure. Pursuant to these rules, notice of the
proposed settlement was provided to potential class members in
November 1998.

Between February 25, 1999 and March 5, 1999, the Court conducted
a Fairness Hearing to determine whether the case is properly
certifiable as a limited fund class action and, if so, whether
the terms of the Settlement Agreement are fair and reasonable.
At the Fairness Hearing, the Court heard testimony from various
witnesses, received documentary evidence, and heard oral
arguments from the proponents and opponents of the settlement.
The Court has not yet rendered a decision.

The Company may withdraw from the Settlement Agreement, or the
Settlement Agreement may otherwise terminate, under any of the
following conditions: (i) final approval of the Settlement
Agreement is not entered by the Court; (ii) class certification
and/or approval of the Settlement Agreement is overturned on
appeal for any reason; (iii) pending and future litigation
against the Company or any other party released by the
Settlement Agreement ("Released Parties") is not permanently
enjoined on the final approval date; (iv) the class action and
all pending multi-district lawsuits against the Released Parties
are not dismissed with prejudice on the final approval date; (v)
an order is not entered by the Court permanently barring
contribution and indemnity claims by other defendants in the
diet drug litigation; or (vi) Interneuron is unable to compel
tender of its insurance proceeds.

On November 20, 1998, December 30, 1998 and February 5, 1999,
the Company's three product liability insurers filed actions
against Les Laboratoires Servier ("Servier") and the Company in
the Court, pursuant to the federal interpleader statute. The
insurers allege that both Servier and the Company have asserted
claims against commercial excess insurance policies issued by
the insurers to Interneuron with limits of $20,000,000,
$5,000,000 in excess of $20,000,000, and $15,000,000 in excess
of $25,000,000, respectively, a portion of which has been used
in the Company's defense of the litigation. The insurers have
deposited the available proceeds up to the limits of their
policies into the registry of the Court.

There can be no assurance that the Court will approve the
settlement. Even if the settlement is approved by the Court,
opponents of the settlement may appeal the Court's opinion to
the United States Court of Appeals for the Third Circuit. In
addition, there is a case pending before the United States
Supreme Court (Ortiz v. Fibreboard Corporation et al) ("Ortiz"),
that may influence the Court's decision or the outcome of any
appeal that might be taken. Oral argument in the Ortiz case was
heard on December 8, 1998 and the Supreme Court is likely to
render its opinion by June 1999, which is the end of the current
Supreme Court term. Although factually distinguishable in many
respects from the Company's proposed settlement, Ortiz involves
an appeal from a mandatory, putative "limited fund" class action
settlement. There can be no assurance that the Supreme Court's
rulings in Ortiz will not significantly influence the approval
process for, or potentially result in the overturning of, the
Settlement Agreement.

The Company will record initial charges to operations for the
estimated fair value of the Company's obligations under the
Settlement Agreement, exclusive of insurance proceeds, at such
time as the Company can determine that it is probable that the
conditions to final settlement have been or will be met. This is
expected to be subsequent to the Court's decision regarding
approval of  the Settlement Agreement and the Supreme Court
ruling in Ortiz. The amount of the liability to be recognized in
connection with these charges is likely to be significant and to
materially adversely affect the Company's net worth.
Additionally, if the Company records such charges prior to the
final settlement date, then, on the date the Settlement
Agreement becomes final, the Company will determine if there was
any increase in the fair value of the equity conversion feature
of the Royalty Agreement and record any such increase as an
additional charge to operations. From the date the Company
records the initial charge and related liability for the
settlement and through the term of the Royalty Agreement, the
Company may record additional charges to accrete the liability
attributable to the royalty feature of the Royalty Agreement up
to the amount of royalties the Company expects to pay pursuant
to the Royalty Agreement over the time the Company expects to
make such royalty payments.

The Company has also been named as a defendant in several
lawsuits filed by alleged purchasers of the Company's Common
Stock, purporting to be class actions, claiming violation of the
federal securities laws. It is not possible for the Company to
determine its costs related to its defense in these or potential
future legal actions, monetary or other damages which may result
from such legal actions, or the effect on the future operations
of the Company.

IRIDIUM WORLD: Shalov Stone Files Securities Complaint
The law firm of Shalov Stone & Bonner filed a class action
lawsuit on behalf of all persons who purchased the common stock
of Iridium World Communications, Inc. (Nasdaq: IRID), in
connection with Iridium's January 1999 Secondary Offering, as
well as those persons who purchased Iridium common stock in the
open market between January 21, 1999 through May 13, 1999 and
who trace their shares back to the Offering.

On January 21, 1999, Iridium filed its Final Prospectus and
Registration Statement for the sale of 7,500,000 shares of Class
A common stock in the Secondary Offering. The complaint alleges
that the Final Prospectus and Registration Statement contained
materially false and misleading statements and omitted to
disclose material facts concerning, among other things: (i) the
market for the Company's satellite system; (ii) the state of the
Company's distribution network; and (iii) the Company's
financial condition and future business prospects.

For more information, contact Lee S. Shalov at 212-686-8004
(ext. 13) or at lshalov@aol.com via email.

NUCLEAR TESTS: Exposed New Zealand Veterans Seek Recognition
From "down-under," the Southland Times reports that the
Government has refused to help pay for a class action by
veterans on New Zealand frigates involved in Britain's nuclear
bomb tests at Christmas Island in the Indian Ocean in 1957-58.

MAURICE HAYMAN of Riverton, a radio operator aboard the Pukaki,
recalls arriving at the island, after the tests had begun. "Our
sick berth attendant spent long periods on the ship's broadcast,
warning of the perils of VD. After our calls to Samoa and Fiji,
I thought he would be giving us some information on the perils
of Operation Grapple itself, but it seemed no special
precautions were required while operating in the area, except at
the time of an actual bomb burst."

It was Pukaki's second trip to the thermo nuclear bomb test area
at Christmas Island.

"We would let go high altitude balloons with radio transmitters,
to monitor the high level winds before each hydrogen "H" bomb
burst. We anchored and got cracking with the fishing lines.
Nuclear radiation or not, they sure tasted good."

"We continued our weather duties, letting the regular balloon go
aloft, as we approached the first of the drops to take place on
August 22. Our first drop was an atomic bomb, which was used as
a trigger for setting off the H bombs. They were in the kiloton
range and troops on the island considered them very small beer.
The A bomb was not dropped from the aircraft but suspended from
a balloon over the land. I was on duty in the Radio Room as the
detonation approached. Everything was shut down, which sent the
temperature up inside the ship. Everyone not required below was
up on deck, changing from the shorts and sandals to long pants
and shirts. Anti Flash gun crew gear was worn on the arms and
over the head and shoulders. The detonation lost me reception,
for a while, of the morse broadcast from New Zealand. Those on
deck reported the usual heat, flash, and shock wave, together
with the spectacular sight of the fireball. The view is always a
good one because the clouds are dissipated by the enormous

"It wasn't clear at the time why everyone not required for duty
had to sit up on deck close to the explosion. The correct
procedure for the fleet in event of a nuclear attack was to
spread out far and wide, close the ship down, and start up
outside water sprinklers."

A British Defence report dated May 20, 1953, on the nuclear
weapons trials answered this question. It read: "The object of
the exercise is to discover the detailed effects of various
types of explosion on equipment, stores and men with and without
various types of protection."

Maurice Hayman's booklet, Those Useless Wings, details his
experiences on Operation Grapple. While he has seen friends
sicken and die from illnesses linked to the exposure faced at
Christmas Island, Maurice Hayman and his family have no health
complaints and are not seeking compensation. His concerns that
the assignment should be formally recognized as overseas
service, and for widows to have pension entitlements, have been
satisfied. People should remember, he says, that those tests
developed the weaponry for nuclear submarines which kept the
peace for more than 25 years. (Southland Times NZ; 05/22/99)

PERRIGO COMPANY: Insurance Reimburses $8 Million Legal Expenses
Under the provisions of its liability insurance coverage,
Perrigo Company (Nasdaq: PRGO) will receive an $8 million
reimbursement for legal expenses and costs associated with the
recently dismissed class action lawsuit and the related
derivative lawsuit. As a result, the Company will recognize in
fiscal 1999's fourth quarter a one-time pre-tax gain of $8
million or approximately $5 million and $0.07 per basic share
after tax. The one-time gain will be accounted for as an offset
to unusual litigation expenses.

The U.S. District Court has approved the final dismissal of the
shareholder derivative lawsuit and an order in favor of Perrigo
was entered by the Honorable Gordon J. Quist, U.S. District
Judge for the Western District of Michigan on May 24, 1999,
dismissing the derivative lawsuit. This dismissal follows the
dismissal of a related shareholder class action lawsuit in late
March 1999.

"We have spent nearly four years aggressively defending our
position that these lawsuits were without merit. The Court has
agreed and vindicated us," stated Michael Jandernoa, Perrigo's
Chairman and Chief Executive Officer. "I am pleased that we will
be able to focus on our goal of profitably growing the Perrigo
Company without this distraction."

Perrigo Company is the nation's largest manufacturer of over-
the-counter (non-prescription) pharmaceutical and nutritional
products for the store brand market. Store brand products are
sold by national and regional supermarket, drugstore and mass
merchandise chains under their own labels and compete with
nationally advertised brands. The Company's products include
over-the-counter pharmaceuticals, such as analgesics, cough and
cold remedies, antacids, laxatives, suppositories and feminine
hygiene products and nutritional products, such as vitamins,
nutritional supplements and nutritional drinks.

PRISON REALTY: Berman DeValerio Files Complaint in Tennessee
Prison Realty Trust, Inc. (NYSE: PZN) was sued by shareholders
in a lawsuit filed by Berman, DeValerio & Pease LLP in the
United States District Court for the Middle District of
Tennessee on May 26, 1999. "The action charges that Prison
Realty concealed from investors at the time of the merger that
it would have to pay Corrections Corporation of America
substantial additional fees regarding the management and
development of prisons so that the merger would be approved"
said Jeffrey C. Block, one of the partners at Berman, DeValerio
& Pease LLP which is representing the plaintiff.

The lawsuit, which seeks class action status, is brought for
violations of 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. The class consists of (1) all investors whose
shares were converted into Prison Realty Trust common stock in
the December 31, 1998 merger between Prison Realty and
Corrections Corporation of America (NYSE: CCA) and (2) on behalf
of purchasers of Prison Realty's common stock during the period
October 16, 1998 through May 14, 1999.

On May 14, 1999 Prison Realty revealed in its form 10-Q, filed
with the SEC, that it would retroactively increase the fees it
paid to Corrections Corporation of America to operate and
develop new prisons. The increase in fees will cost Prison
Realty approximately an additional $80 million, as charged in
the lawsuit. Prison Realty's common stock price plummeted in
reaction to this news falling from its closing price of $19 3/4
per share before the filing of the 10-Q to close at $13 3/8 on
May 18, 1999, after the information was fully disclosed to the

For more information, contact Michael M. Sullivan, Esq.,
Jennifer L. Finger, Esq., or Jeffrey C. Block, Esq. at 800-516-

PRISONER RIGHTS: Class Suit Delays But Doesn't Prevent Hangings
From Port of Spain, Trinidad, the Caribbean news agency Cana
reports that Law Lords at the Privy Council on Wednesday 26th
May removed the stay of execution on nine condemned murderers in
Trinidad and Tobago when it dismissed arguments by lawyers
representing them.

"The state can now proceed with hangings," Peter Pursglove,
legal adviser to the attorney-general told Cana. The nine men
were scheduled to be hanged in groups of three last week.
Earlier the Privy Council, the country's highest court, had
granted a stay of execution to nine men until they heard

Lawyers for the men went to the Privy Council after they were
turned down by the local High Court and Appeal Court when they
sought a stay of execution for Dole Chadee and eight men said to
be members of his gang. The other convicted killers facing the
hangman are Joey Ramiah, Ramkhelawan Singh, Clive Thomas, Robin
Gopaul, Russel Sankerali, Joel Ramsingh, Stephen Eversley and
Bhagwandeen Singh. They were found guilty of killing Deo
Baboolal, his wife Rookmin, their daughter Monica and their son
Hamilton in the early hours of a January morning in 1994.

Lawyers for the condemned men argued for a stay of execution
until the outcome of a motion filed three weeks ago by a lawyer
on behalf of another death row prisoner which is challenging the
death penalty. The constitutional motion brought by convicted
killer Anthony Briggs seeks to have hanging abolished on grounds
that it is unconstitutional, cruel and unusual. Briggs, who was
sentenced to death for the murder of a taxi driver, is pursuing
a class action - which means that the motion applies to all
prisoners on death row.

The appeal court, however, ruled that the lawyers arguments were
"plainly hopeless, frivolous and bound to fail" . Lawyers said
the men have also filed a second petition to the Inter-American
Commission on Human Rights (IACHR) and should be allowed to have
it determined. Trinidad and Tobago has withdrawn membership from
the IACHR which became effective on Wednesday.

The nine convicted killers lost their appeal against the death
sentence more than two weeks ago when the Privy Council turned
down their appeal to have their constitutional motion heard in
the local court.

Death warrants were read to the men last November at the death
row cells and they were scheduled to be hanged in groups of
three on three consecutive days. Hanging did not take place when
they filed a constitutional motion complaining about a number of
issues, including poor prison conditions, as reasons why they
should not be hanged. (British Broadcasting Corporation; BBC
Summary of World Broadcasts, May 28, 1999)

XL CAPITAL: Shareholders Complain About Mid Ocean Sale in NY
XL CAPITAL LTD, Mid Ocean and the directors of Mid Ocean have
been named as defendants in a purported class action lawsuit
filed in connection with the Arrangements in the Supreme Court,
County of New York, State of New York. Harbor Finance Partners
v. Newhouse, et al., C.A. No. 1998/601266. The Shareholder
Action alleges that the defendants breached their fiduciary
duties to the Mid Ocean shareholders by failing to exercise
independent business judgment (due to their alleged conflict of
interest) and by agreeing to sell Mid Ocean at an unfair and
inadequate price.

The Shareholder Action is brought on behalf of a purported class
of persons consisting of Mid Ocean shareholders other than the
defendants. As relief, the Shareholder Action seeks, among other
things, an order enjoining consummation of the Arrangements, or,
in the event the Arrangements are consummated, rescission of the
Arrangements, and an award of compensatory damages in an
unspecified amount, as well as costs, including fees for
plaintiff's counsel and experts' fees and expenses.

On January 25, 1999, the Supreme Court granted the defendants'
motion to dismiss the Shareholder Action on the grounds that the
Shareholder Action (i) failed to state a claim upon which relief
may be granted under Cayman Islands law and (ii) was not brought
in an appropriate forum (forum non conveniens). The Supreme
Court's decision is subject to appeal.


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. Kent L.
Mannis, Project Editor.

Copyright 1999. 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. 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  * * *