/raid1/www/Hosts/bankrupt/CAR_Public/990602.MBX              C L A S S   A C T I O N   R E P O R T E R

              Wednesday, June 2, 1999, Vol. 1, No. 84


3COM CORP.: Chitwood & Harley Files Complaint in California
AMERICAN BANKERS: Denies Wrongdoing, Will Contribute $15 Million
ASCEND COMMUNICATIONS: Intends Vigorous Defense of CA Litigation
CANDIES, INC.: Cohen Milstein Files Complaint in New York
COLUMBUS TN: Lease Holders Claim Old, Historic & Cheap Rights

EUROPA CRUISES: Awaiting Decision on Gamblers' Class Claims
GUILFORD MILLS: Files Motion to Dismiss Consolidated Suit
HOLOCAUST SURVIVORS: Victim's Insurance Trial Begins Feb. 2000
INTELOS: "Lifetime" ISP Customers Claim Fraud in West Virginia
IRIDIUM WORLD: Kaplan Kilsheimer Files Securities Complaint

NATIVE AMERICANS: Judge Upholds Chippewa Treaty with King George
OLSTEN CORP.: Securities Complaint Breeds Derivative Lawsuit
PICTURETEL CORP.: Discovery Continues in Consolidated Suit
RANDALLS FOOD: MSP Participants Class Partially Certified
STUCCO LITIGATION: Trial Set on Home Owners' Water Damage Claims

TORONTO TRANSIT: Lawyer's Press Release Wasn't Contempt of Court


3COM CORP.: Chitwood & Harley Files Complaint in California
Chitwood & Harley filed a securities class action in the United
States District Court for the Northern District of California on
behalf of purchasers of 3Com Corp. (Nasdaq:COMS) common stock
for the period between September 22, 1998 and March 2, 1999. The
complaint alleges that 3Com and certain of its officers and
directors violated the Securities Exchange Act of 1934.

The complaint alleges that beginning in September 1998,
defendants made false and misleading statements regarding 3Com's
business prospects and financial health. More specifically, the
complaint alleges that during 3Com's 1st and 2ndQ F99, 3Com's
insiders used $130.4 million of 3Com's cash to repurchase 4.3
million 3Com shares on the open market in order to help
manipulate and artificially inflate the stock so that 3Com
insiders would be able to sell their own shares at much higher
and more profitable prices. Due to these false and misleading
statements 3Com's stock soared from as low as $23 1/8 on
September 1, 1998 to as high as $51 1/8 on December 23, 1998.
Moreover, the complaint alleges that from November 1998 through
January 1999, 3Com's top insiders sold 4.2 million shares of
their own 3Com stock at artificially inflated prices as high as
$48.69 per share, reaping proceeds of roughly $189 million in
unlawful insider sales.

In early February 1999, 3Com's stock fell sharply, falling from
$47 1/4 to $30 9/16 upon rumors that Intel Corp. was gaining NIC
market share from 3Com, and two 3Com distributors announced
disappointing results. However, when 3Com assured analysts that
its business model remained intact, and that it was on track to
achieve 3rdQ F99 and 4thQ F99 EPS consistent with its prior
guidance, 3Com's stock stabilized and then recovered to as high
as $35 9/16. However, on March 2, 1999, 3Com revealed that, due
to weak sales of Systems Products, and particularly weak sales
of Client Access Products, 3Com's 3rdQ F99 EPS, and its results
going forward, would be substantially worse than earlier
forecasted. 3Com's stock plummeted from $30 11/16 on March 1,
1999 to as low as $22 3/4 on March 3, 1999.

To learn more, contact Corey D. Holzer, Esq. at 888-873-3999 or
at mail@classlaw.com via email.

AMERICAN BANKERS: Denies Wrongdoing, Will Contribute $15 Million
are presently parties to a number of individual consumer and
class action lawsuits pending in Alabama involving premium,
rate, marketing, sales practices, disclosure, and policy
coverage issues. While a number of similar suits have been filed
in other jurisdictions, the insurance and finance industries
have been targeted in Alabama by plaintiffs' lawyers who enjoy a
favorable judicial climate.

The Company typically has been named as a co-defendant with one
or several retailer or finance companies who have sold the
Company's product to a consumer. Other insurers are also joined
as co-defendants in some of the suits. Although the Alabama
lawsuits and similar suits pending in Mississippi and other
jurisdictions generally involve relatively small amounts of
actual or compensatory damages, they typically assert claims
requesting substantial punitive awards or purport to represent a
large class of policyholders.

On November 12, 1998, the Company and three of its clients
entered into a settlement of all claims in class action
litigation consolidated by the Panel on Multi-District
Litigation in the United States District Court for the Middle
District of Alabama, contingent upon approval of the fairness of
the settlement by the District Court and other conditions. This
series of class actions involved the largest collective class
exposure to the Company. Under the terms of the settlement,
without admitting any liability, the Company will contribute
approximately $15 million in distributions to the classes and
subclasses, and has agreed to be bound by an injunction limiting
the percentage of authorized non-file insurance premium to be
charged consumer finance and retailer accounts during 6 year and
18 month periods, respectively. The Company has accrued
additional expenses associated with implementing the settlement.

While none of the Company's remaining cases are necessarily
significant in terms of financial risk to the Company, the
judicial climate in certain jurisdictions is such that the
outcome of these cases is extremely unpredictable. Moreover,
class action lawsuits to which the Company is a party do not
lend themselves to potential damage calculation. There are still
a number of cases pending, and it is expected that more suits
alleging essentially the same causes of action are likely to
continue to be filed during 1999.

The Company denies any wrongdoing in any of these suits and
believes that it has not engaged in any conduct that would
warrant an award of punitive damages or that the class
allegations have merit. The Company has been advised by legal
counsel that it has meritorious defenses to all claims being
asserted against it.

ASCEND COMMUNICATIONS: Intends Vigorous Defense of CA Litigation
ASCEND COMMUNICATIONS INC and various of its current and former
officers and directors are parties to a number of consolidated
lawsuits pending in the United Stated District Courts for the
Central District of California, which purport to be class
actions filed on behalf of all persons who purchased or acquired
the Company's stock (excluding the defendants and parties
related to them) for the period November 5, 1996 to September
30, 1997.

In addition, the Company and one if its officers were recently
named as defendants in a securities action filed in the Superior
Court of Alameda County, California. The Alameda County action
purports to be brought in behalf of all purchasers of the
Company's stock between July 15, 1997 and September 29, 1997
(excluding the defendants). The lawsuits allege that the
defendants violated the federal or state securities laws by
engaging in a scheme to artificially inflate and maintain the
Company's stock price by disseminating materially false and
misleading information concerning its business and earnings and
the development, efficiency, introduction and deployment of its
digital modems based on 56K-bps technology.

These actions are in the early stages of proceedings and the
Company is currently investigating the allegations. Based on its
current information, the Company believes the suits to be
without merit and intends to defend itself and its officers and
directors vigorously.

CANDIES, INC.: Cohen Milstein Files Complaint in New York
The law firm of Cohen, Milstein, Hausfeld & Toll, P.L.L.C. on
June 1, 1999, filed a lawsuit in the United States District
Court for the Southern District of New York, on behalf of those
persons who purchased or acquired Candies, Inc. (Nasdaq:CAND)
common stock during the period between May 28, 1997, and May 12,
1999. The Complaint alleges that defendants violated Section
10(b) and 20(a) of the Securities Exchange Act of 1934 by
issuing a series of materially false and misleading statements
regarding Candies financial results for fiscal 1998 and for the
first three quarters of fiscal 1999.

On May 12, 1999, the company announced that its previously
reported results for fiscal 1998 and the first three quarters of
fiscal 1999 might have to be restated due to the material
overstatement of revenue and earnings and that the financial
statements could no longer be relied upon.

To learn more, call Andrew N. Friedman or Robert Smits at 888-
240-0775 or 202-408-4600 or write to afriedman@cmht.com or
rsmits@cmht.com via email.

COLUMBUS TN: Lease Holders Claim Old, Historic & Cheap Rights
No one would expect to pay Manhattan rental rates for real
estate in this quaint, antebellum town. But $11.62 a year for
prime land on Main Street seems like a steal to some state
officials. Nevertheless, nearly 1,400 lease-holders here,
citizens who make up the cultural and financial heart of this
Old South community, are clinging to leases drafted 178 years
ago that state officials contend cheat the owner of the land -
the public schools - out of millions of dollars.

"Right now, the entire square mile in downtown Columbus produces
about $2,500 (in rent), total," says Secretary of State Eric
Clark, perhaps the least popular person in town these days. "It
should be producing a minimum of a half million (dollars) a

Columbus is among the state's oldest and most picturesque
cities. Magnolias shade lush gardens, and front-yard signs
announce the names of grand homes built by earlier generations.
The city was spared much of the fighting of the Civil War. But
today, Columbus feels like a city under siege as the community's
most influential residents continue to vigorously fend off a
decade of efforts to raise rents to reflect today's real estate
market. Moreover, the land within the square mile owned by the
schools is home to banks, law offices, businesses, the local
media, churches and restaurants. The area also includes many of
the city's finest homes.

And these powerful leaders are entrenched. While leaseholders in
other cities and counties renegotiated their rental agreements,
the establishment here has put up half a million dollars to fund
a class-action lawsuit now pending in federal court. Local
dissent is undetectable. So fervent the fight, the school board
that once pursued higher lease rates says it is now satisfied
with the paltry rents. It is, though, contemplating budget cuts.

The City Council and Board of Supervisors declared a vested
public interest in the fight, recently donating $25,000 each in
public tax dollars to the private lawsuit - despite a 1996
attorney general's opinion questioning their authority to do so.
And the city is suffering a public relations black eye. "I think
the perception around the state is that greed is driving
Columbus's resistance to changes in the . . . leases. I don't
think that's the case at all," says Birney Imes III, whose
family newspaper, The Commercial Dispatch, pays the $11.62 rate.
Rather, he believes, most lease-holders worry that a 200 percent
increase in rates would rock the town. "Start playing around
with these leases and you will see an eventual erosion of the
tax base and lessening of interest in downtown development," he
says. "I don't think that's in the best interest of the schools
or the town."

Like so much of Columbus, today's fight is intimately linked to
the past. In the 18th and 19th Centuries, the federal government
granted land to new states with the provision that a square mile
in each township - the 16th of 36 one-square-mile sections - be
used for the benefit of public education. (Many north
Mississippi counties do not have 16th-Section land. Instead,
they receive a payment from the state to compensate for the
lands sold off when Mississippi acquired the Chickasaw Nation's
territory). To help settle this wilderness outpost, known then
as Possum Town and cut off from the rest of Mississippi by
Choctaw territory, the Mississippi Legislature in 1821
authorized the leasing of 16th- Section land for a school. The
proceeds were dedicated to Franklin Academy, the state's oldest
public school, which today still serves as an elementary school.
The "renewable forever" clause added by lawmakers nine years
later, say lease-holders, was to provide stability and encourage
long-term development.

Over the decades, the antiquated lease rates and outright abuse
of the public trust lands around the state eventually inspired a
change in the political momentum. The Legislature in 1978 passed
a reform act. And in the 1980s, then-Secretary of State Dick
Molpus began demanding school districts everywhere revise lease
agreements. Most counties and leaseholders complied, especially
after a state Supreme Court decision in 1989 declared that the
pennies-per-acre rates were tantamount to donating public
property to private individuals. The 16th-Section leases around
Mississippi that once produced $5 million for public schools now
bring in $50 million a year.

Columbus, though, fought back. And it claims to be unique. "To
understand why it's fair, you have to look back to the early
1800s and think about what land cost," says Randolph Lipscomb, a
gentlemanly lawyer whose great-grandfather penned the history of
the community and whose Queen Anne- style boyhood home on the
corner of the Courthouse Square today serves as his law office.
"The going price for land in the Indian territories when they
opened for settlement in 1822 was $1.25 an acre." Lipscomb, who
pays $1.45 a year for the land beneath his law office, says some
Delta planters were allowed to simply purchase 16th-Section land
at such paltry rates and face no such "attack."

Lease-holders argue they support the public schools, paying the
fifth-highest property tax rates in the state on the leased
property. (Lease-holders in other counties where rents have been
renegotiated also pay property taxes as if they owned the land,
state officials note.) And, Lipscomb complains the ongoing
battle has made it difficult to sell property, get title
insurance or competitive interest rates on mortgages. To raise
rents, Lipscomb and others fear, would put elderly homeowners
out on the streets and shake downtown. He says it would also put
at risk of civil liability a real estate industry that for
decades guaranteed clear title on the properties.

Columbus feels so threatened that Lipscomb recently accused
Clark of intending to "destroy" Columbus. And when Imes's
newspaper, which in years past has run front-page stories
written by lease-holders, did not print a response from Clark,
Clark blasted back in a letter to the editor, calling Lipscomb's
remarks "outrageously false and irresponsible."

Indeed, while most citizens rarely give the Secretary of State
much thought, the office ignites passionate indignation here.
Imes says his newspaper's decision to endorse 1995 Democratic
gubernatorial candidate Molpus over Kirk Fordice, for reasons
other than the 16th-Section dispute, was unpopular among
readers. "In every other city, leases have been resolved to the
benefit of the schoolchildren and to the lease-holders . . . it
has been a win- win situation," says Molpus. "There has been
more demonization by some of the leadership of Columbus of the
Secretary of State than legitimate efforts to find common ground
to solve this problem."

Both Clark and Molpus dismiss the notion Columbus would be
harmed. Rather, they argue, clearing confusion over the validity
of the leases would open the door to more development. They
point to other cities around the state that have flourished
since lease rates were renegotiated, ranging from Brandon - a
small town east of Jackson that once collected less than $50,000
a year on downtown leases and today takes in $6 million - to the
Gulf Coast, where a mall is being built on 16th-Section land.
The property, they contend, is rich with development after the
validity of the leases was resolved.

Moreover, argues Clark, the taxpayers outside of the 16th
Section in Columbus are subsidizing those within it with higher
property tax rates. In fact, debate rages here over whether the
high property tax rates discourage development.

But Columbus lease-holders are encouraged these days. In a
ruling last year ordering a trial court to hear the case, a
three-judge panel of the U.S. Fifth Circuit Court of Appeals
noted that the state Supreme Court in 1898 appeared to have
approved the validity of the leases. The case is scheduled for
trial next year and will center on technical questions over the
validity of the leases.

Lipscomb, though, has filed a motion seeking a final court
judgment. The case is about the past, he says, joking that a
trial would require a seance. And the issue, he stresses, is the
value of a contract, no matter how seemingly politically
incorrect. "What if the Chickasaws said, 'Our chiefs were drunk
and the treaty (ceding much of Northeast Mississippi) is no
good. You bribed our chiefs,'" says Lipscomb, noting the treaty
actually itemized payments to chiefs. "You can't ascribe late
20th-Century concepts and values to early 19th-Century actions
in the wilderness. History (and these lease agreements) has to
be taken in perspective with the times."

EUROPA CRUISES: Awaiting Decision on Gamblers' Class Claims
On or about November 29, 1994, William Poulos filed a class
action lawsuit on behalf of himself and all others similarly
situated against approximately thirty-three defendants,
including Europa Cruises of Florida 1, Inc. and Europa Cruises
of Florida 2, Inc. in the United States District Court, Middle
District of Florida, Orlando Division (Case No. 94-1259-CIV-ORL-
22). Europa Cruises of Florida 1, Inc. and Europa Cruises of
Florida 2, Inc. were served with the Complaint on or about March
15, 1995.

The suit was filed against the owners, operators and
distributors of cruise ship casinos which utilized casino video
poker machines and electronic slot machines. The Plaintiff
alleges violation of the Federal Civil RICO statute, common law
fraud and deceit, unjust enrichment and negligent
misrepresentation. The plaintiff had filed a similar action
against most major, land-based casino operators in the United
States. The earlier action, which did not name the Company or
any of its subsidiaries as defendants, was transferred from the
U.S. District Court in Orlando, Florida to the U.S. District
Court in Las Vegas, Nevada.

The plaintiff contends in both actions that the defendant owners
and operators of casinos, including cruise ship casinos, along
with the distributors and manufacturers of video poker machines
and electronic slot machines have engaged in a course of
fraudulent and misleading conduct intended to induce people to
play their machines based on a false understanding that the
machines operate in a truly random fashion. The plaintiff
alleges that these machines actually follow fixed, preordained
sequences that are not random, but rather are both predictable
and subject to manipulation by defendants and others. The
plaintiff seeks damages in excess of $1 billion dollars against
all defendants.

Management believes there is no support for plaintiff's factual
claims and the Company intends to vigorously defend this

On September 13, 1995, the United States District Court for the
Middle District of Florida, Orlando Division, transferred the
case pending in that Court against Europa Cruises of Florida 1,
Inc. and Europa Cruises of Florida 2, Inc. and other defendants
to the United States District Court for the District of Nevada,
Southern Division. Accordingly, the case against Europa and the
other defendants in the cruise ship industry will be litigated
and perhaps tried together with those cases now pending against
the land-based casino operators and the manufacturers,
assemblers and distributors of gaming equipment previously sued
in federal court in Nevada. Management believes the Nevada forum
provides a more favorable forum in which to litigate the issues
raised in the Complaint.

The Company is sharing the cost of litigation in this matter
with other defendants.

On November 3, 1997, the Court heard various motions in the
case, including a Motion to Dismiss filed by the cruise ship
defendants. The motion was denied. On March 18, 1998, the
Plaintiffs filed a Motion for Class Certification. The motion is

GUILFORD MILLS: Files Motion to Dismiss Consolidated Suit
Several purported class action lawsuits have been filed on
behalf of purchasers of GUILFORD MILLS INC common stock against
the Company and certain of its officers and directors. These
lawsuits were consolidated by order of the Court on January 8,
1999. A Consolidated and Amended Class Action Complaint was
filed on February 8, 1999.

The Consolidated Complaint purports to allege claims under
Sections 10(b) and 20(a) of the Securities Exchange Act of 1934
and Rule 10b-5 promulgated thereunder, in connection with the
Company's public disclosure of accounting irregularities at the
Hofmann Laces unit in fiscal year 1998. Specifically, the
Consolidated Complaint alleges that, during the alleged class
period (January 20, 1998 through October 26, 1998), defendants
materially misrepresented the Company's financial condition and
overstated the Company's reported earnings. No specific amount
of damages is sought in the Consolidated Complaint.

On April 9, 1999, defendants filed a motion to dismiss the
Consolidated Complaint. On May 7, 1999, plaintiffs filed their
opposition to the motion to dismiss. Defendants have until May
27, 1999 to file a reply. The Company intends to vigorously
defend the lawsuits.

HOLOCAUST SURVIVORS: Victim's Insurance Trial Begins Feb. 2000
The Fresno Bee reports that a date has been set for the first
trial in the United States involving insurance companies accused
of failing to pay claims to Holocaust survivors and their
families. Los Angeles Superior Court Judge Florence-Marie Cooper
on Friday rejected arguments by insurance company lawyers who
argued that California courts didn't have the jurisdiction to
hear the case. Cooper set Feb. 9, 2000, for the trial of Adolf
Stern vs. Assicurazioni Generali.

Stern, 82, and six other family members, some of whom live in
Los Angeles, are seeking $135 million, claiming that Generali --
a large Italian-based insurer -- has acted in bad faith in
failing to honor claims that family members lodged several times
since the end of World War II on a policy purchased in 1929 by
family patriarch, Moshe "Mor" Stern. Moshe Stern was killed in
the gas chamber at Auschwitz, along with his wife and three of
their seven children. Adolf Stern, who lives in Florida, is a
surviving son of Moshe Stern.

The judge's ruling was made on 55th anniversary of the day the
Stern family was sent to Auschwitz.

"This is a real benchmark day for Holocaust survivors" because
now some of them may get a trial within their lifetimes, said
Claremont lawyer William M. Shernoff, who represents the Sterns
and plaintiffs in three other cases against Generali.

Other Holocaust-related suits have been filed in several U.S.
cities and in Europe, including massive class-action cases
against Generali and a dozen other insurers in New York and
Newark, N.J., but there have been no rulings on whether those
cases can go forward.

Generali and other insurers have argued that the cases should be
heard in the European country where the policy was purchased.

In January, Cooper ruled that California courts have
jurisdiction under the Holocaust Victims Insurance Act, which
extends until 2010 the statute of limitations for filing
Holocaust-era insurance lawsuits. A state appeals court upheld
Cooper's ruling and Generali has asked the California Supreme
Court to review the case. The state's highest court has until
June 15 to decide on a review.

Defense lawyer Peter Simshauer said Generali and four other
European-based insurers are members of an international
commission attempting to settle global Holocaust claims. The
company also has approached California Insurance Commissioner
Chuck Quackenbush, who has been an advocate for Holocaust
survivors, about settling the case, he said. (Fresno Bee;

INTELOS: "Lifetime" ISP Customers Claim Fraud in West Virginia
The Charleston Daily Mail reports that a pair of lawyers is
hoping to represent customers of an Internet company who may
have lost lifetime service contracts when the company they
originally contracted with was bought by another company.

The class-action suit was filed Friday in Kanawha County Circuit
Court on behalf of all customers who bought lifetime packages
from West Virginia Internet before it was absorbed by Intelos, a
Virginia-based Internet firm. The suit was filed by lawyers
William DePaulo and Mary Anne Maul on behalf of Charles Allen of
Charleston and other, unnamed customers.

Maul had estimated there could be more than 1,000 potential
clients from the ranks of West Virginia Internet, and perhaps
thousands more who bought such contracts from Intelos' most
recent West Virginia acquisition, New Wave Internet. "This could
be very big. There might have been quite a lot of people who
have been affected."

But Intelos president David Lowe said Friday that its records
show fewer than 100 of West Virginia Internet's nearly 1,200
customers bought lifetime plans. Later Friday, Maul told the
Charleston Daily Mail, "We had heard that there could be more
than 1,000 affected parties, but they (Intelos) would have
better access to that information than I do." Lowe also said New
Wave Internet, which became part of the company only this week,
had no lifetime service plans. "Their numbers, well, they're
just absurd," Lowe said.

Lowe said the lifetime service customers were a subject
addressed when Intelos bought West Virginia Internet from its
previous owner, Timothy Davis. "That was part of the purchase
agreement. The seller (Davis) took the responsibility of dealing
with those customers," Lowe said.

Maul agreed that Davis should be held responsible - he also is
named in the suit. She maintains, though, that Intelos should
have to repay the lifetime customers and pay damages to punish
it for what she calls "fraud." (Charleston Daily Mail; 05/29/99)

IRIDIUM WORLD: Kaplan Kilsheimer Files Securities Complaint
On May 28, 1999, Kaplan, Kilsheimer & Fox LLP filed a Class
Action lawsuit against Iridium World Communications, Ltd.
(NASDAQ: IRID), certain of its officers and directors, and its
principal investor. The suit is brought on behalf of all persons
or entities who purchased or otherwise acquired the common stock
of Iridium between September 9, 1998 and March 29, 1999.

The complaint alleges that defendants issued a series of false
and misleading statements, and failed to disclose material
information, about the Company's ability to fully deploy its
global mobile wireless communications system known as the
Iridium System. The Company's false and misleading statements
and omissions caused Iridium's common stock to trade at
artificially inflated prices during the Class Period. Certain
insiders and directors sold approximately 49,000 shares of
Iridium stock to the unsuspecting investing public and over $1.3
million in proceeds was realized as a result of these sales.

To learn more, contact Jonathan K. Levine, Esq. Christine M.
Comas, Esq. or Adrienne L. Valencia, Esq. at 800-290-1952 or
212-687-1980, or write lawkkf@aol.com via email.

NATIVE AMERICANS: Judge Upholds Chippewa Treaty with King George
In upholding a Chippewa class-action land claim to a four-
square-mile chunk of urban Sarnia, Justice Archie Campbell of
the Ontario Superior Court made it clear that the decision does
not imperil other land-claims areas in Canada, according to a
report in The Lawyers Weekly.

The defendants had raised an in terrorem argument to the effect
that if the Chippewa won in Sarnia, then the entire city of
Ottawa together with 8.5 million acres surrounding it, all of
British Columbia west of the Rockies (including Vancouver), all
of Nova Scotia and New Brunswick and large parts of Quebec might
also have to be conveyed to Native people.

Justice Campbell dismissed this alarmist notion, saying that the
Chippewa case "is driven entirely by its own narrow facts and it
does not raise the defendants' spectre of an 'acre-by-acre
battle' right across the country."

The narrow facts of the case, said Justice Campbell, were that
the Chippewa never lawfully surrendered the Sarnia land. They
surrendered 2,000,000 surrounding acres, but under 1827's Treaty
29 with King George IV they specifically reserved the Sarnia
land for the Chippewa "and their posterity at all times
hereafter, for their own exclusive use and enjoyment."

In spite of that, Chippewa "wheeler dealer" Joshua Wawanosh and
two other chiefs privately sold the reserved land to speculator
Malcolm Cameron in 1839. Justice Campbell declared that sale
null and void. However, he disallowed the Chippewa action
against the present property owners, including 2,100 homeowners,
175 industries, businesses, schools, churches and others,
because they were "good faith purchasers for value without
notice." He said it would be "unconscionable" to let an action
proceed against them. Instead, the Chippewa may continue their
action against the Crown for damages.

The quantum of damages that might eventually flow remains an
open question, given Justice Campbell's finding that the
Chippewa are "strangers to this land and have no communal memory
or oral history of wrongful dispossession," and that "without
speculating on what might be argued or decided in the ongoing
damage action, it is uncontradicted that they received for the
land substantial if not full payment in trust at a price thought
by some at the time to be fair and by their expert witness to-
day to be reasonable. There is no evidence of fraud."

Counsel for the Attorney General of Canada Charlotte Bell said
she is pleased that the present landowners are now out of the

Counsel for the Chippewa, Earl Cherniak of Toronto's Lerner &
Associates, said his clients are appealing the ruling and making
a bid for actual possession of the Sarnia land. (THE LAWYERS
WEEKLY; June 4, 1999)

OLSTEN CORP.: Securities Complaint Breeds Derivative Lawsuit
On September 8, 1998, a Consolidated Amended Class Action
Complaint was filed by the plaintiffs in four purported class
action lawsuits (Weichman, Goldman, Waldman and Cannold) pending
against Olsten and certain of its officers and directors. The
Amended Complaint asserts claims under Sections 10(b) (including
Rule 10b-5), 14(a) and 20(a) of the Securities Exchange Act of
1934 and Sections 11, 12(a)(2) and 15 of the Securities Act of

On October 19, 1998, the Company and the individual defendants
served a motion seeking an Order dismissing the Amended
Complaint; that motion was fully briefed on December 23, 1998.
While the Company is unable at this time to assess the probable
outcome of the Class Action or the materiality of the risk of
loss in connection therewith (given the preliminary stage of the
Class Action and the fact that the Amended Complaint does not
allege damages with any specificity), the Company believes that
it acted responsibly with respect to its shareholders and has
vigorously defended the Class Action.

On or about May 11, 1999, a Complaint was served in a derivative
lawsuit, captioned Robert Rubin, et al. v. John M. May, et al.,
No. 17135-NC (Delaware Chancery Court), which was filed against
the following current and former directors of the Company: John
M. May, Raymond S. Troubh, Jo[sh] S. Weston, Victor F. Ganzi,
Stuart R. Levine, Frank N. Liguori, Miriam Olsten, Stuart Olsten
and Richard J. Sharoff.

The Complaint, which names Olsten as a nominal defendant,
alleges a claim for breach of fiduciary duties arising out of
the Class Action referenced above and certain Healthcare
Investigations. Plaintiffs seek a judgment (1) requiring the
defendants to account to the Company for unspecified alleged
damages resulting from the defendants' alleged conduct; (2)
directing the defendants to establish and maintain effective
compliance programs; and (3) awarding plaintiffs the costs and
expenses of the lawsuit, including reasonable attorneys' fees.

PICTURETEL CORP.: Discovery Continues in Consolidated Suit
Since September 23, 1997, seven class action shareholders'
complaints have been filed against the Company, Norman E. Gaut,
Director and former Chairman of the Board and Chief Executive
Officer, and Les Strauss, the former Vice President and Chief
Financial Officer, in the United States District Court for the
District of Massachusetts. The plaintiffs filed a consolidated
complaint on February 11, 1998.

The original complaints were filed following the Company's
announcement on September 19, 1997 that it would restate its
financial results for the first quarter of the fiscal year
ending December 31, 1997 and the last two quarters of the fiscal
year ending December 31, 1996 and were amended when the Company
announced on November 13, 1997 that it would also restate the
second quarter of the fiscal year ending December 31, 1997. The
consolidated complaint alleges that PictureTel and Messrs. Gaut
and Strauss violated Sections 10(b) and 20(a) of the Exchange
Act and Rule 10b-5 promulgated thereunder, during the period
from October 17, 1996 through November 13, 1997, through the
alleged preparation and dissemination of materially false and
misleading financial statements which artificially inflated the
price of PictureTel Common Stock. The consolidated complaint
seeks to recover an unspecified amount of damages, including
attorneys' and experts' fees and expenses.

On April 7, 1998, the Company filed a motion to dismiss the
complaint. On October 28, 1998, the motion to dismiss Norman E.
Gaut was granted and the motion to dismiss PictureTel and Les
Strauss was denied. Limited discovery has occurred, and the
Company expresses no opinion as to the likely outcome.

RANDALLS FOOD: MSP Participants Class Partially Certified
Following the acquisition by RANDALLS FOOD MARKETS INC of Cullum
Companies, Inc. in August 1992, the Company terminated the
Cullum's Management Security Plan for Cullum Companies, Inc.
("the MSP"). In respect of such termination, the Company paid
MSP participants the greater of (i) the amount of such
participant's deferral or (ii) the net present value of the
participant's accrued benefit, based upon the participant's
current salary, age and years of service.

Thirty-five of the former MSP participants have instituted a
claim against the Company on behalf of all persons who were
participants in the MSP on its date of termination (which is
alleged by plaintiffs to be approximately 250 persons).

On May 7, 1997, the plaintiffs filed an amended complaint for
the Court to recognize their action as a class action, to
recover additional amounts under the MSP, for a declaration of
rights under an employee pension benefit plan and for breach of
fiduciary duty. The plaintiffs assert that the yearly plan
agreement executed by each participant in the MSP was a contract
for a specified retirement and death benefit set forth in such
plan agreements and that such benefits were vested and

A pre-trial order in the MSP litigation, which was submitted to
the Court on October 22, 1997, states that an expert for the
plaintiffs, assuming class certification, may testify that the
damages allegedly sustained by the plaintiff class may range
from approximately $18.0 million to $37.2 million and, assuming
that a court were to award additional damages based on a rate of
return achieved by an equity index over the relevant period,
that such damages may range from approximately $37.4 million to
$70.6 million.

On June 16, 1998, the Court certified the case as a class action
for the limited issue of determining if the MSP was an exempt
"top hat plan" (a plan which is unfunded and maintained by an
employer primarily for the purpose of providing deferred
compensation for a select group of management or highly
compensated employees). The Court defined the class as all
persons who, on the date of the termination of the MSP, were
participants in the MSP and were employed by Randall's Food
Markets, Inc. The trial of the limited class action issue was
conducted before the Court, sitting without a jury, on October
26, 1998.

Upon order of the Court, both parties submitted post-trial
briefs on November 6, 1998. On February 18, 1999, the Court
ruled on the limited class action issue finding that the MSP was
not an exempt top hat plan. In addition, the Court requested on
the same date a joint statement from the parties concerning
future scheduling. The parties submitted the requested joint
statement, but the Court has not yet issued any scheduling

On March 4, 1999, the Company filed a motion requesting that the
Court amend its order to allow an interim appeal and confirm
that the Company did not stipulate that it bore the burden of
proof at the trial. On March 26, 1999, the Court denied the
motion for an interim appeal and confirmed that the Company bore
the burden of proof at the trial. When the Court certified the
limited class issue, it stated that once that issue was
resolved, it would make an evaluation as to whether any other
issues should be dealt with in a class action context.

On April 8, 1999, the Plaintiffs filed a new Motion for Class
Certification, seeking class action treatment on all remaining
issues. In addition, on April 8, 1999, the plaintiffs filed a
new damages model in which they appear to seek total damages of
approximately $65.1 million with prejudgement interest of
approximately $28.0 million. Also, the plaintiffs have provided
to the Company an additional schedule indicating that damages
allegedly sustained may range from $65.1 million to $72.4
million, and assuming reinvestment, such damages may approximate
$200 million.

The Company filed its brief in opposition to the Motion on April
28, 1999 and will oppose the request by the Plaintiffs for class
certification of further issues. Based upon current facts, the
Company is unable to estimate any meaningful range of possible
loss that could result from an unfavorable outcome of the MSP

STUCCO LITIGATION: Trial Set on Home Owners' Water Damage Claims
From North Carolina, The News and Observer reports that a
lawsuit against the manufacturers of synthetic stucco can
proceed as a statewide class-action case and will go to trial in
the fall, a Superior Court judge will rule this week.

Ben F. Tennille of Greensboro, a special Superior Court judge
who handles complex business cases, notified opposing attorneys
Thursday that he would order a series of trials against six
manufacturers to begin Oct. 4. Tennille also said he would move
the trials from New Hanover County to Johnston County at the
request of the manufacturers.

The problem with synthetic stucco surfaced three years in New
Hanover County, where a county building inspector has led a
campaign drawing national attention to the issue. Hundreds of
stuccoed homes there might have suffered water damage. Many
homes in Cary have also had problems. Statewide, there are more
than 15,000 houses that have been treated with the synthetic
stucco, also known as EIFS. Most of them have not reported a
drainage problem.

Gary K. Shipman of Wilmington, a lead attorney for the
plaintiffs, filed the lawsuit in January 1996 on behalf of
homeowners in North Carolina whose houses are clad with
synthetic stucco. The suit alleges that the material is
defective because it doesn't provide a way for water to drain.
When water gets behind the stucco, the walls rot. Thousands of
homeowners across the state might have that problem, and
hundreds of lawsuits have already piled up in state courts. The
N.C. Attorney General's Office calls it possibly the worst
consumer problem the state has ever faced.

Manufacturers blame the contractors who applied the synthetic
stucco and deny their product is inherently defective. In
November, a manufacturer settled a lawsuit that was already in
progress for an undisclosed amount. Shortly after that, a
Greensboro jury awarded a couple $187,000 in their suit against
a builder. Senergy, one of the manufacturers that had been named
in the state class-action lawsuit, settled last year by creating
a $20 million fund to pay claims from homeowners across the
country. Six manufacturers remain in the lawsuit, and unless
they settle there will be six separate trials, with the company
that has the largest market share going first. The manufacturers
are Dryvit Systems, Sto Corp., Parex, United States Gypsum,
Continental Stucco, and Bonsal and Thomas Waterproof Coatings.

Each trial will be split into two phases. In the first phase, a
jury will decide whether the material is defective and whether
the manufacturers failed to warn consumers of its defects. If
the jury returns verdicts against the manufacturers in the first
phase, it will then determine the amount of damages the
companies will have to pay.

Manufacturers tried to prevent the case from proceeding as a
class-action lawsuit, and unsuccessfully argued that third
parties such as builders and contractors should also be brought
into the case. (The News and Observer; June 1, 1999)

TORONTO TRANSIT: Lawyer's Press Release Wasn't Contempt of Court
The Lawyers Weekly reports that a superior court judge has
rejected contentions that a Toronto law firm representing
plaintiffs in a class action over a subway fire was in contempt
of court when it issued a press release stating that the class
action had been certified for $30 million, that the Toronto
Transit Commission had been held liable and the only remaining
question was how much individual plaintiffs would receive.

Although it acknowledged that lawyers are entitled to speak to
the media, the TTC objected to the press release, on grounds it
constituted a "notice of certification" pursuant to ss. 17-20 of
the Class Proceedings Act (the purpose of which is to give class
members complete information about their legal rights). Such
notices require court approval, which had not been given.

The release might encourage exaggerated or fabricated claims,
said the TTC, particularly because it inaccurately stated that
"all the passengers will be entitled to receive compensation,"
whereas in truth only passengers who can prove damages will be

In their application to Superior Court Justice Robert Sharpe,
TTC lawyers also expressed concern that the mention of $30
million might cause inflated expectations and make individual
claims hard to settle. They were also concerned that new
claimants might be attracted.

In rejecting the TTC's position, Justice Sharpe ruled that the
press release did not constitute a notice of certification under
the Act, nor was it a formal document. It "merely provided the
media with information." In so ruling, Justice Sharpe
distinguished Mangan v. Inco, (1998), 38 O.R. (3d) 703 (Gen.
Div.) where class counsel (the same firm as in the present case)
sent "claim kits" to potential class members. The kits violated
the notice provisions of the Act because they left out important
elements of a court-approved notice, such as coupons by which
potential class members could opt out.

In the present case, the press release bore "no relation to the
'claim kit' distributed in the Mangan case," he ruled. "The
press release is not a formal document, nor does it resemble
one. It is impossible to imagine that anyone could read it as
constituting legal notice of certification, of the choices
available, or the steps to be taken to implement those choices.
... Nor was there any risk that the press release would
undermine or evade the requirements of the court-approved

The plaintiffs, passengers aboard a Bloor-Danforth subway train,
allege they suffered smoke inhalation and property damage from
burning rubber in a nearby subway tunnel.

Class counsel in the present case is Toronto firm McGowan &
Associates. The TTC is represented by Toronto's Dutton, Brock.
(THE LAWYERS WEEKLY; June 4, 1999)


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  * * *