/raid1/www/Hosts/bankrupt/CAR_Public/990922.MBX                 C L A S S   A C T I O N   R E P O R T E R

                Wednesday, September 22, 1999, Vol. 1, No. 161


ABLE TELCOM: Contests Securities Suit In Florida Over MFSNT Acquisition
ACXIOM CORP: Steven E. Cauley Files Securities Suit In Arkansas
ALASKA ELECTRICAL: Settles Pension Suit Re Trans-Alaska Pipeline
ALZA CORP: Plaintiff Dismisses Suit Over Disclosure Re Merger Agreement
CSK AUTO: Contests Store Managers' Suits In CA Over OT Pay

FEN-PHEN: NY Ct Certifies Class Against AHP For Medical Monitoring
HARRIS COUNTY: TX Residents Whose Homes Were Flooded Receive Settlement
ILM SENIOR: Settlement For Suit Over Merger Plan To Be Heard On Sept 30
LA PROBATION: Proposed Bias Suit Deal Calls For Reallocation Of Workers
LA UNIFIED: CA Ct Certifies Class Of Students In Bilingual Fight

MAXXIM MEDICAL: Circon Contests Stockholders Suit In CA Over Cabot Acq.
MAXXIM MEDICAL: Circon Settles Del & CA Suits Over US Surgical's Offer
MAXXIM MEDICAL: Faces Texas And Florida Suits Over Proposed Merger
PADUCAH PLANT: Memos Show Uranium Radiation Risks Long Concealed
RESIDENTIAL MORTGAGE: YSP Class Not Cert In Minn For Particular Facts

SECURITIES FIRMS: Antitrust Added To Yield-Burning Charges In Florida
SUN ORCHARD: Says FDA's Salmonella Test Failed To Find Contamination
THINK NEW: Moves To Dismiss Shareholders Suits In New York
USDA: 15000 Black Farmers Seek Shares In Settlement Over Discrimination
WYNDHAM INT'L: Settles Delaware Suit Over Investment And Restructuring


ABLE TELCOM: Contests Securities Suit In Florida Over MFSNT Acquisition
On May 21, 1998, SIRIT Technologies, Inc. filed a lawsuit in the United
States District Court for the Southern District of Florida against Able
Telecom Holding Corp.and Thomas M. Davidson, who has since become a
member of Able's Board of Directors. SIRIT asserts claims against Able
for tortious interference, fraudulent inducement, negligent
misrepresentation and breach of contract in connection with Able's
acquisition of MFSNT and seeks injunctive relief and compensatory
damages in excess of $100.0 million. At present, the parties are
conducting discovery in this case.

On or about September 10, 1998, Shipping Financial Services Corp. filed
a lawsuit in the United States District Court for the Southern District
of Florida against the Company, its then Chairman of the Board Gideon
Taylor, then Chief Executive Officer Frazier L. Gaines, Chief Accounting
Officer Jesus Dominguez, and then Chief Financial Officer Mark A. Shain.
All of these cases have been consolidated with the SFCS case. The
plaintiffs have not yet filed their consolidated amended complaint. The
consolidated complaint asserts claims under the federal securities laws
against Able and four of its officers and former officers allegedly that
the Defendants caused the Company to falsely represent and mislead the
public with respect to two acquisitions: the MFSNT Acquisition and the
acquisition of the COMSAT Contracts, and (ii) Able's ongoing financial
condition as a result of the acquisitions and the related financing of
those acquisitions.

Plaintiffs have received certification as a class action on behalf of
themselves and all others similarly situated persons and seek
unspecified damages and attorneys' fees. Able is currently assessing the
allegations set forth in the lawsuits and intends to vigorously defend
this matter. An adverse outcome in this lawsuit or in other shareholder
lawsuits would likely have a material adverse effect upon Able's
consolidated financial position, results of operations and cash flow.

ACXIOM CORP: Steven E. Cauley Files Securities Suit In Arkansas
The Law Offices of Steven E. Cauley announced that a class action has
been commenced in the United States District Court for the Eastern
District of Arkansas on behalf of purchasers of Acxiom Corporation
(Nasdaq: ACXM) stock.

The complaint charges Acxiom and certain of its officers and directors
with violations of Sections 11 and 15 of the Securities Act of 1933. The
complaint alleges that on July 23, 1999, Acxiom completed a secondary
offering of 5,421,000 shares of stock pursuant to a Registration
Statement/Prospectus that was false and misleading in that it contained
false financial results and failed to describe the significance of
Acxiom's recent contract renewal with its largest customer, Allstate.
The offering, which included 1.5 million shares sold by Acxiom and 3.921
million shares sold by the Pritzker Foundation, was priced at $27 per
share for total proceeds of $146.37 million.

On August 29, 1999, Acxiom announced it was reducing its work force by
5% and laying off 250 employees. Then, on August 30, 1999, Barron's
published a very negative article concerning Acxiom, indicating that
some observers following the Company believed that Acxiom was
manipulating its financial results and that the Company was suffering
stiff competition and was lowering prices which would have a very
negative impact on future earnings.

Acxiom's stock price reacted swiftly and negatively to these
revelations, falling to as low as $17-11/16 on huge volume of 5 million
shares, later falling to as low as $16-1/8, nearly $11 below the
offering price just six weeks earlier.

If you wish to serve as one of the lead plaintiffs in this lawsuit you
must file a motion with the court within 60 days of September 20, 1999.
Contact Steven E. Cauley Scott E. Poynter Gina M. Cothern 2200 N. Rodney
Parham Road Suite 218, Cypress Plaza Little Rock, AR 72212,
1-888-551-9944 - toll free or by e-mail at CauleyPA@aol.com

ALASKA ELECTRICAL: Settles Pension Suit Re Trans-Alaska Pipeline
The Alaska Electrical Pension Fund has settled a class action lawsuit
brought on behalf of current and former Plan participants who worked in
the late 1970s on the Trans-Alaska Pipeline project. Under the terms of
the settlement, $ 18 million was made available for payments to Class
Members, as well as payment for fees and expenses.

The suit, filed in 1990 by three former participants in the Plan, sought
to recover retirement benefits for workers with less than 10 years of
service who were laid off and ceased to be Plan participants during the
1978-1979 or 1984-1988 periods. An estimated 6,600 persons are listed as
Class Members, but payments will be made to only those members, or their
surviving spouse, who had terminated from the Trust prior to 1980, i.e.
were terminated following completion of the Alaska Pipeline project,
approximately 3,577 individuals. Under the terms of the settlement
individual class members who were terminated from active participant
status prior to 1980 and who file a claim form prior to Dec. 31, 1999
may be eligible to receive a distribution under the settlement. No
amounts will be payable to individuals who only worked in covered
employment after 1980. Amounts over $ 5,000 may be paid as annuities,
unless the worker and his or her spouse consent to a lump sum payment.

To receive a payment, members must submit a claim by Dec. 31, 1999.
Notices are being mailed to last known addresses and toll-free numbers
have been established to answer questions and assist people in filing

The origin of the suit dates to the construction of the Trans-Alaska
Pipeline. "Alaska enjoyed an economic boom during the 1970s that drew
thousands of workers from all parts of the U.S.," said plaintiffs'
attorney, Richard J. Birmingham, a partner with the Seattle law firm of
Birmingham Thorson & Barnett, P.C. "Employers contributed for these
employees to pension plans, most of which required ten years of service
to become vested." As the Pipeline project drew to a close, employment
and participation in the Alaska Electrical Pension Plan fell
dramatically. Because most workers laid off during these periods had not
reached the ten-year vesting point, benefits based on their employers'
contributions were forfeited, unless the workers returned to the Plan,
or a reciprocal plan within the electrical industry, within the next few

However, plans covering the Alaska Electrical Workers and several other
unions contained a provision mandated by the IRS, entitling affected
workers to become vested in the event of a partial termination of the
Plan. "A partial termination may occur when there is a substantial
reduction in participation under the Plan," stated Bruce Lamka, a
partner in the law firm of Davis Wright Tremaine.

The parties to this suit have disagreed about whether the Plan ever
experienced a partial termination, under the circumstances of this case.
"The basis of our suit," explains Birmingham, "was that the Alaska
Electrical Workers' Plan provisions protected the benefits of workers
who lost their jobs during these periods." Bruce McKenzie, a partner
with the law firm of Donaldson, Kiel and McKenzie, and defense attorney
for the Alaska Electrical Pension Fund responded that "most pension plan
professionals believe that a reduction in employment caused by a
completion of a large construction project should not be considered a
partial termination of a multiemployer plan under the applicable IRS
regulations, and that this was confirmed by a federal law passed in 1984
which specifically dealt with the Trans-Alaska Pipeline."

McKenzie noted, however, that other courts had found that Alaska Plans
had suffered partial terminations, and that the settlement would avoid
the expense and uncertainty of continued litigation without having any
adverse impact on the Fund's ability to provide benefits to its current
participants and beneficiaries. The Alaska Electrical Fund also noted
that in a similar case involving the Laborers the District Court
affirmatively ruled that a partial termination did not occur during the
1984-1988 Alaska recession. Therefore, workers who worked in Alaska only
after 1980 and who were terminated from active trust participation
between 1984-1988 will receive no compensation in this settlement.

To receive a settlement distribution individuals must meet the following
three requirements: (1) worked as a Union electrician in Alaska prior to
1980; (2) terminated from participation under the Alaska Electrical
Pension Trust during the period Jan. 1, 1978 through Dec. 31, 1979, or
terminated earlier but have not forfeited service under the Trust as of
Dec. 31, 1979 and (3) filed a claim form by Dec. 31, 1999.

ALZA CORP: Plaintiff Dismisses Suit Over Disclosure Re Merger Agreement
ALZA Corporation (NYSE: AZA) announced that the plaintiff in a lawsuit
filed as a class action against ALZA and its directors challenging,
among other things, disclosures relating to the merger agreement between
ALZA and Abbott Laboratories (NYSE: ABT) has agreed to dismiss the
action. No payments will be made by or on behalf of either ALZA or its
directors as a result of the dismissal. As a condition of the dismissal,
ALZA is providing the following information, which information has
previously been disclosed in publicly available documents filed with the
United States Securities and Exchange Commission.

Under the ALZA Stock Plan approved by vote of ALZA's stockholders in
1992, all outstanding options to purchase ALZA common stock issued under
the Stock Plan vest automatically at the closing of a merger such as the
proposed merger with Abbott. In addition, the restrictions on ALZA's
outstanding restricted stock automatically lapse at the closing of such
a merger. Pursuant to the provisions of the Stock Plan, the following
options held by ALZA's nonemployee directors, which otherwise would have
vested on various dates between 2000 and 2003, will vest upon the
closing of the merger: Dr. William R. Brody (director since 1996) --
options to purchase 8,000 shares at an exercise price of $24.875 per
share; Dr. Robert J. Glaser (director since 1987) -- options to purchase
6,000 shares at an exercise price of $25 per share; Dean O. Morton
(director since 1987) -- options to purchase 6,000 shares at an exercise
price of $25 per share; Denise O'Leary (director since 1996) -- options
to purchase 8,000 shares at an exercise price of $24.875 per share;
Isaac Stein (director since 1981) -- options to purchase 8,000 shares at
an exercise price of $39.2188 per share; and Julian N. Stern (director
since 1981 and from 1968 to 1978) -- options to purchase 8,000 shares at
an exercise price of $39.2188 per share. All of these options were
granted under the automatic grant provisions of the Stock Plan, under
which nonemployee directors are automatically granted a specified number
of options every five years. The exercise price of all outstanding
options issued under the Stock Plan equals the fair market value of
ALZA's common stock on the date of the option grant.

In addition, the two employee directors of ALZA have options which
otherwise would have vested on various dates between 2000 and 2003 that
will now vest upon the closing of the merger and all restrictions on
their restricted stock will lapse upon the closing of the merger: Dr.
Ernest Mario (Chairman of the Board, and ALZA's Chief Executive Officer
since 1993) -- options to purchase 225,000 shares at an average exercise
price of $37.26 per share and 32,273 shares of restricted stock
purchased for $.01 per share; and Dr. I. Craig Henderson (former
Chairman and Chief Executive Officer of SEQUUS Pharmaceuticals, Inc.,
which was acquired by ALZA in March 1999, and a senior medical advisor
to ALZA) options to purchase 60,000 shares at an exercise price of
$36.0313 per share and 6,772 shares of restricted stock purchased for
$.01 per share.

At the closing of the merger, each outstanding option to purchase ALZA
common stock will convert to an option to purchase 1.2 shares of Abbott
common stock, and the exercise price will be adjusted by dividing the
original exercise price by 1.2. As with all other shares of ALZA common
stock, each share of restricted stock will, at the closing of the
merger, convert to 1.2 shares of Abbott common stock. Although all
unvested options will vest and all restrictions on the employee
directors' restricted stock will lapse upon the closing of the merger,
under an agreement with Abbott, the ALZA directors' ability to sell
their shares of common stock, restricted stock or shares issuable on
exercise of stock options is restricted until after Abbott publicly
releases earnings that include the combined operations of the two
companies for at least 30 days.

Detailed information concerning stock options and restricted stock held
by ALZA directors is disclosed in each of the director's filings on
publicly available Forms 3 and Forms 4 filed with the Securities and
Exchange Commission, as well as in ALZA's proxy statements for its
annual meetings of stockholders, the most recent of which was held in
May 1999. The proxy statement for the special meeting of ALZA
stockholders to vote on the ALZA-Abbott merger states that all
outstanding stock options will be accelerated and that the restrictions
on outstanding restricted stock will lapse. Accordingly, ALZA believes
that information concerning these matters has been previously disclosed.

The ALZA-Abbott merger agreement was signed and publicly announced June
21, A proxy statement relating to the special stockholder meeting to
consider the merger was filed with the Securities and Exchange
Commission on August 16, 1999 and mailed to stockholders beginning
shortly thereafter.

CSK AUTO: Contests Store Managers' Suits In CA Over OT Pay
CSK Auto Corp. was served with a lawsuit that was filed in the Superior
Court in San Diego, California on May 4, 1998. The case is brought by
two former store managers and a former senior assistant manager. It
purports to be a class action for all present and former California
store managers and senior assistant managers and seeks overtime pay for
a period beginning in May 1995 as well as injunctive relief requiring
overtime pay in the future.

The Company was also served with two other lawsuits purporting to be
class actions filed in California state courts in Orange and Fresno
Counties by thirteen other former and current employees. These lawsuits
include similar claims to the San Diego lawsuit, except that they also
include claims for unfair business practices which seek overtime from
October 1994. The Orange County lawsuit initially included claims for
punitive damages and unlawful conversion, but the Court subsequently
dismissed both of these claims. The three cases have recently been
"coordinated" before one judge in San Diego County and discovery is
being conducted by the parties. If these cases are permitted by the
courts to proceed as a class action and are decided against the Company,
the aggregate potential exposure could be material to results of
operations or cash flows for the year in which the cases are ultimately
decided. The Company does not believe, however, that such an adverse
outcome, if it were to happen, would materially affect the Company's
financial position, operations or cash flows in subsequent periods.
Although at this stage in the litigation it is difficult to predict its
outcome with any certainty, the Company believes that there are
meritorious defenses to all of these cases and intends to defend them

FEN-PHEN: NY Ct Certifies Class Against AHP For Medical Monitoring
New York For the first time in New York, a judge has certified a class
action on behalf of persons with no disease but seeking medical
monitoring because of their exposure to an allegedly dangerous drug.
Certification was granted to a class consisting of about one million New
York consumers who took the diet drug cocktail known as fen-phen and
sold under the names Pondimin and Redux.

In Cunningham v. American Home Products Corp., Manhattan Supreme Court
Justice Helen E. Freedman became the eighth state court judge nationally
to greenlight a claim seeking a medical monitoring program for former
users of the diet drug. Plaintiffs in fen-phen medical monitoring
litigation claim that exposure to fenfluramine, an appetite suppressant,
has placed them at risk of heart maladies such as pulmonary hypertension
and valvular regurgitation. They claim that the manufacturers and
sellers of fen-phen defectively designed the drugs and sent them into
the marketplace while knowing of the danger or that they should have
known of the risks. The plaintiff class members have not yet developed
any heart condition.

American Home Products, the manufacturer of fen-phen, has denied that
the diet drugs enhance the long-term risk of heart damage.

Justice Freedman ruled that New York case law "either state[s] or
impl[ies] that, under the right circumstances, a medical monitoring
claim would be recognized in New York." Surveying the evidence in the
case, Justice Freedman said that the plaintiffs have made out a prima
facie case that they have been exposed to a harmful agent, allegedly
because of the defendants' negligence. "[T]here is increased risk of
contracting serious disease which ... makes periodic testing desirable,
and early detection and treatment are both possible and beneficial," she
wrote. Justice Freedman immediately stayed the New York action, since
New Yorkers are included in a national multidistrict case in
Philadelphia federal court. The decision was significant because until
Justice Freedman ruled, it was unclear whether New York law would
recognize a medical monitoring claim.

Judge Louis Bechtle, the Philadelphia federal judge handling the
multidistrict case, has dropped from the case the claims of residents of
states where medical monitoring relief is barred. Plaintiffs' counsel,
Paul Napoli of Napoli Kaiser & Bern, said that Justice Freedman's
decision "guarantees that New Yorkers will have a position in any
settlement that may come about, or they will have the right to proceed."
Napoli said that a medical monitoring program for New York consumers of
fen-phen could cost more than $ 1 billion.

In addition to the Napoli firm, Justice Freedman named as class counsel
Bernstein Litowitz Berger & Grossman; Greitzer & Locks; Davis Saperstein
& Solomon; Trief & Olk; and Garwin Bronzaft Gerstein & Fisher.

American Home Products Corp. has appealed class certification in all of
the cases in which it has been eligible to do so. Thomas C. Rice, of
Simpson Thacher & Bartlett, lead defense counsel in the New York class
action, declined to comment on the case.

The first medical monitoring class action trial is in progress in
Middlesex County, N.J., Superior Court. Pennsylvania, Texas and Illinois
are also among the states with medical monitoring classes in place, and
California is one of two states where courts have rejected
certification. This story originally appeared in the New York Law
Journal. (The Legal Intelligencer 9-20-1999)

HARRIS COUNTY: TX Residents Whose Homes Were Flooded Receive Settlement
About 275 northwest Harris County residents whose homes were flooded
last year by massive rain from Tropical Storm Frances filed a lawsuit
demanding Harris County, the Harris County Flood Control District and an
engineering firm compensate them for their losses.

The residents live in several subdivisions along White Oak Bayou, where
the storm reportedly dropped between 10-14 inches of rain in a nine-hour
period Sept. 11, 1998. About 1,000 homes were flooded along the bayou
north of U.S. 290, which had swollen 3 feet over its banks in that area.

The state district suit claims the county, the flood control district
and the engineering firm were responsible through improperly building a
"temporary dam" that exacerbated the problem and by not forcing nearby
developers to build retention ponds on their properties. "Property
owners have a right to be compensated when their property is damaged or
destroyed for public use," said Larry Doherty, one of the attorneys
representing the homeowners. "The county basically used the plaintiffs'
properties and homes to store storm water."

Plaintiffs' attorney James Bradley said it is still unclear how much
money will be requested, but he said it will be in the millions of

County officials have denied any wrongdoing since the allegations
surfaced in the spring, saying the deluge was an act of God that could
not have been foreseen and that flood control measures that have been
implemented prevented 1,000 other homes in the area from being flooded.
"We absolutely see the facts differently, and that's what the courts are
for," said Michael Talbott, director of the Harris County Flood Control

The lawsuit names a Houston engineering firm of Klotz Associates for
constructing a "dam structure" in 1994 spanning the bayou just west of
the North Houston-Rosslyn Road bridge. The suit claims the severe
flooding only occurred to the west, or upstream, of the
improperly-engineered structure. The suit is also asking that the
structure be removed.

Wayne Klotz, owner of the company, declined to discuss the matter
because of the pending litigation. He would only say, "I do not believe
anything we did was improper."

According to the suit, the flood control district ran out of money in
1994 to expand the bayou in the subdivisions where the plaintiffs live.
These are Ted Burger Estates, Creekside Estates, North Pines, Oakwood
Forest, White Oak Manor, Woodland Oaks II, Woodland Trails North and
Woodland Trails West. At the point where the widening of the bayou
stopped, the "dam structure" was built "to impede the flow of water in
White Oak Bayou, causing a backup of flood waters into plaintiffs'
subdivisions," the suit said. The suit said the structure is not part of
the 1984 master flood control plan.

Talbott said the claims are absurd. He said the flood control district
never "ran out of money" for widening of the bayou, but that it can only
get grants to widen certain portions because the overall project is so
massive. He said the structure helps offset the acceleration of the
water, and there are hundreds of such structures throughout the county.
The bayou is supposed to be widened upstream to Jersey Village. Talbott
said it is unclear when the next phase of the widening of the bayou will
take place, but he said the district will spend $ 75 million this year
on various flood control measures along the bayou, or about 25 percent
of its budget.

The lawsuit also claims the flood control district has not required
developers to build retention ponds since 1984. Instead of building the
ponds, developers are given the option of paying the county $ 3,000 per
acre that is developed.

Flood control district officials denied the program contributed to last
year's flooding, pointing out that heavy rains in previous years did not
create similar problems.

Plaintiffs' attorney Bradley said the lack of previous flooding shows
the various problems cited in the lawsuit are getting worse. He said his
law firm represented several dozen plaintiffs along Greens Bayou who
made similar allegations after a 1992 flood. He said the case settled
for more than $ 1 million, but he was not sure of the amount.

Talbott said the county and flood control district did nothing wrong in
the 1992 flooding, but settled that suit instead of continuing to pay
for lawyers. He also said he was not sure of the settlement amount. (The
Houston Chronicle 9-10-1999)

ILM SENIOR: Settlement For Suit Over Merger Plan To Be Heard On Sept 30
A Virginia finite-life corporation, Andrew A. Feldman & Jeri Feldman, as
trustees for the Andrew A. & Jeri Feldman Revocable Trust dated
September 18, 1990, commenced an action on May 8, 1998 on behalf of that
trust and a putative class of all other shareholders of the Company and
ILM II Senior Living, Inc., a Virginia finite-life corporation and
affiliate of the Company ("ILM II"), against the Company, ILM II and the
directors of each of the Company and ILM II.

On March 9, 1999, following the announcement of the execution of the
Agreement and Plan of Merger dated February 7, 1999, among the Company,
Capital Senior Living, Inc., a Delaware corporation, ("Capital"),
Capital Senior Living Acquisition, LLC, a Delaware limited liability
company and wholly owned subsidiary of Capital ("Merger Sub"), and
Capital Senior Living Trust I, a Delaware business trust and wholly
owned subsidiary of Capital (the "Trust"), the plaintiffs filed a second
amended complaint seeking to enjoin the transactions contemplated by the
Merger Agreement and, in the alternative, seeking damages in an
unspecified amount.

In response to the Company's motion to dismiss the second amended
complaint on June 7, 1999, which motion addressed only the pleadings,
the United States District Court, the Southern District of New York
issued an order dismissing the plaintiffs' federal securities law
claims, but denying defendants' motion to dismiss plaintiffs' claims for
breach of fiduciary duty and judicial dissolution.

On June 21, 1999, the Company, ILM II and each of their directors
answered the second amended complaint and denied any and all liability
to plaintiffs or the putative class, and moved for reconsideration of
the portion of the Court's June 7, 1999 order denying their motion to
dismiss. In response to discovery requests, the Company, ILM II and
other defendants produced documents to the plaintiffs and the
depositions of current and former directors as well as others were
taken. As of July 1, 1999, all discovery was completed in this action.

On July 2, 1999, the parties to this action reached an agreement-in-
principle to settle the action. On August 11, 1999, the parties entered
into a Stipulation of Settlement and on August 13, 1999, the Court "so
ordered" the Stipulation and provided for notice of the settlement to
the putative settlement class, which notice was mailed on August 16,
1999. The Court scheduled a hearing for September 30, 1999 to determine
whether the proposed settlement is fair, reasonable and adequate,
whether a final judgment should be entered dismissing the action with
prejudice to the plaintiffs and all members of the putative settlement
class, and whether an application to be made by plaintiffs' counsel and
the putative settlement class should be approved.

There can be no assurance that the Court will approve the Stipulation.
In the event that the Court does not approve the Stipulation, the
Company intends to continue to contest the action vigorously.

Pursuant to the Stipulation, among other matters, Capital has agreed to
increase the aggregate amount and modify the form of consideration to be
received by shareholders in the Merger Agreement by $1,128,000 to
$97,018,000 and provide each shareholder with the right to elect to
receive payment of the merger consideration in the form of all cash, or
a combination of cash and Capital Trust convertible preferred
securities, (which securities will ultimately be convertible into shares
of Capital's common stock); provided, that the preferred securities
elections may not, in the aggregate, exceed 35% of the total merger

To facilitate consummation of the Merger, Capital has also agreed to
amend the Merger Agreement to extend the previously scheduled October
31, 1999 outside termination date of the Merger to September 30, 2000.
The Company also generally has agreed to apprise class counsel of
certain material developments relating to extraordinary transactions
involving the Company.

Pursuant to the Stipulation, if the Company and ILM II consummate an
extraordinary transaction with Capital, including, but not limited to, a
transaction of the type contemplated by the Merger Agreement, Capital
has agreed to pay the class action plaintiffs' attorneys' fees awarded
by the Court an amount not to exceed $1,500,000, as well as
reimbursement of their out of pocket expenses. If the Company and ILM II
consummate extraordinary transactions with a third party purchaser other
than Capital, or the Company's and ILM II's Boards of Directors
ultimately approve extraordinary transactions with a third party
purchaser other than Capital, the Company and ILM II will, under the
Stipulation, be required to pay attorneys' fees awarded by the Court an
amount not to exceed $1,500,000, plus reimbursement of class counsel's
out of pocket expenses.

LA PROBATION: Proposed Bias Suit Deal Calls For Reallocation Of Workers
Panel urges settlement in civil rights action that would move more staff
and resources to central Los Angeles. The Los Angeles County Probation
Department would send more officers and resources to central Los Angeles
as part of a proposal recommended by a county panel to settle a massive
class action federal civil rights lawsuit.

The lawsuit, filed five years ago by the NAACP Legal Defense Fund on
behalf of black probation officers, community groups and churches,
alleged that the department for years has understaffed its offices in
Los Angeles' urban core, resulting in less guidance for youths on
probation in that area and a greater likelihood that they would end up
in prison. "That means a kid on probation in Santa Monica is in effect
getting much better services than a kid in Compton," said Kevin Reed, an
attorney for the plaintiffs. "We believe that is one of the things that
has contributed to the over-incarceration of African American men in Los
Angeles County and in the state of California."

Under the settlement, which will be considered by the Board of
Supervisors for formal approval next month, the department will study
how it staffs its various offices in the county and reallocate resources
toward the urban offices that were the focus of the lawsuit.

Without admitting wrongdoing, it will change personnel policies and
award $ 2 million to the plaintiffs--which include eight black probation
officers who allege that they were denied promotions and raises due to
race--their attorneys and other officers who may have been
professionally slighted due to alleged discrimination within the

In a memo to the county claims board, the body that recommended the
settlement, county lawyers warned that a jury could award as much as $ 8
million to plaintiffs in the job discrimination claims alone, noting
that an expert hired by the county to analyze the department's
promotional examinations showed a "disparate impact based on race."

At the time the suit was filed, blacks accounted for 50% of the agency's
more than 3,200 officers, but only 38% of its supervisors or managers.
Whites, who were 28% of the department, were 44% of the managerial and
supervisory staff.

The Probation Department declined to comment because the settlement has
not won final approval. County documents say that the changes are in
keeping with the department's current policies. Calvin House, one of the
lawyers who defended the county, said there was no racist intent in the
department's past operations. "The department was not in the business of
discrimination," House said. "It just turned out to be the way the
numbers turned out."

The settlement enables the county to avoid the risks of a federal trial
and the possibility that a federal judge would place the department
under a consent decree.

"This is something that's been hanging over the head of the Probation
Department for a long time," House said. "And now we're able to put it
behind us and not worry about a federal judge running the department."
He added that the issues in the 5-year-old lawsuit, brought when the
department was under different leadership, "are almost ancient history
now." At the time, the county in legal papers called the lawsuit "a
broad-based attack" on how it allocates resources.

The Probation Department, the nation's largest, is responsible for
monitoring 80,000 criminals and ensuring that they comply with the terms
of their court-ordered probation.

The department assigned officers based on regional caseloads rather than
the complexity of those individual cases. The lawsuit alleged that cases
in the gang-infested inner city were more complex than those in outlying
areas, but the complexity was not reflected in staffing. Reed said the
department essentially was saying that the cases of a Jordan high school
student flirting with gangs and a Santa Monica drunk driver were equal.
As a result, only four of the department's 56 anti-gang specialists were
assigned to the five offices in the lawsuit.

Overworked officers in those locations, who were predominantly black,
could not devote enough time to their cases and channel wayward youths
into social programs, lawyers alleged.

House countered that there was no solid statistical evidence that the
department's allocation of resources discriminated against inner-city
residents. He pointed out that Los Angeles' gang problems have expanded
to the suburbs.

Under the settlement, which must be approved by the trial judge, the
department will study how it allocates resources and make adjustments to
iron out any discriminatory effect. "This study will make sure it does
not happen in the future," House said. (Los Angeles Times 9-21-1999)

LA UNIFIED: CA Ct Certifies Class Of Students In Bilingual Fight
In granting the plaintiffs' motion for class certification, the U.S.
District Court for the Central District of California focused on the
shared interests among the proposed class members rather than their
differences in a suit challenging the school district's implementation
of Proposition 227. A. Doe, et al. v. Los Angeles Unified Sch. Dist., CV
98-6154 LBG RZX, [C.D. Cal. 1999].

On June 2, 1998, 61 percent of the state electorate voted for
Proposition 227, a state initiative designed to eliminate bilingual
education programs in public schools. Under Proposition 227, students
with limited English proficiency are allowed only one year of "English
immersion education" before integrating into all English classrooms.

Before the enactment of Proposition 227, the Los Angeles School District
created a "Master Plan for English Learners" which established three
bilingual education options for LEP students. The first option, or Basic
Program, required LEP students to take "English as a Second Language"
course while other academic courses were taught in their primary
language. The second option or "Alternative Instructional Program"
"stressed all instruction in English, with primary language support to
aid basic comprehension." The last option or "Dual-Language Programs"
taught students in both English and their primary language equally.

As a result of Proposition 227, the school district was required to
comply with the new mandates and issued "Revision to the Master Plan".
Under the revised plan, the district created two options. Under "Model
A" instruction is to be provided in English with students' primary
language being used only to clarify instruction. "Model B" requires
schools to instruct in English and "use a limited amount of primary
language to provide a context for learning new concepts in English."

Within two months of the passage of Proposition 227, the plaintiffs
filed a complaint challenging the measure violated their federal
statutory rights to an equal education. They also sought a temporary
restraining order that was denied, upon the court finding, among other
things, that "the California electorate's adoption of Proposition 227
demonstrates a public interest favoring denial."

Subsequently, plaintiffs amended their complaint, alleging that the
school district violated the Equal Educational Opportunties Act of 1974
based on the district's failure to address the English language learning
needs of LEP students. It also violated the Civil Rights Act of 1964 by
denying national origin minorities the opportunity to acquire English
language skills.

The plaintiffs also moved for class certification defined as "[a]ll
current and future public school children who are enrolled or who will
be enrolled in the Los Angeles School District, who have language
barriers that impede their equal participation in the District's
instructional programs and have been designated as . . . 'LEP'
students." The school district and superintendent opposed the motion.

The district court granted the motion, finding that the plaintiffs
satisfied the four elements for class certification. The court
determined that the proposed class shares a common, distinct identity
and is united in the relief they seek.

Moreover, the court found that the plaintiffs neither assert
individualized substantive claims nor do they assert individualized
damages. The court reasoned that the plaintiffs' claims are typical of
the class and represent the interests of the absent members.

The defendants argued against both factors, stating that there were
variables that rendered many of the members' claims unique. In rejecting
their argument, the court explained that minor factual differences among
class members were insufficient since they "all share the common
grievance that the district did not adequately prepare for the
implementation as to all LEP students and all schools."

Since the defendants do not dispute the fourth factor and the
plaintiffs' counsel has extensive experience in civil rights litigation,
the court concluded that the final factor was met.
(Your School and the Law 9-15-1999)

MAXXIM MEDICAL: Circon Contests Stockholders Suit In CA Over Cabot Acq.
Effective January 6, 1999, the Company successfully completed a tender
offer for Circon. The merger of Circon and Maxxim was completed on
January 8, 1999.

On May 28, 1996, two purported stockholders of Circon, Bart Milano and
Elizabeth Heaven, commenced an action in the Superior Court of the State
of California for the County of Santa Barbara, Case No. 213476,
purportedly on behalf of themselves and all others who purchased
Circon's common stock between May 2, 1995 and February 1, 1996, against
Circon, Richard A. Auhll, Rudolf R. Schulte, Harold R. Frank, John F.
Blokker, Paul W. Hartloff, Jr., R. Bruce Thompson, Jon D. St. Clair,
Frederick A. Miller, David P. Zielinski, Winton L. Berci, Jurgen Zobel,
Trevor Murdoch and Warren G. Wood.

That complaint alleged that defendants violated Sections 11 and 15 of
the Securities Act of 1933 Sections 25400-02 and 25500-02 of the
California Corporations Code, and Sections 1709-10 of the California
Civil Code, by disseminating allegedly false and misleading statements
relating to Circon's acquisition of Cabot Medical Corp. by merger and to
the combined companies' future financial performance. In general the
complaint alleged that defendants knew that synergies from the merger
would not be achieved, but misrepresented to the public that they would
be achieved, in order to obtain approval for the merger so they would be
executives of a much larger corporation. This alleged conduct allegedly
had the effect of inflating the price of Circon's common stock.

On July 29, 1996, defendants filed demurrers to the complaint on the
ground that plaintiffs' allegations fail to state facts sufficient to
constitute a cause of action. On or about August 6, 1996, plaintiffs
served their response to defendants' demurrers, stating their intention
to file an amended complaint prior to the hearing on defendants'
demurrers. On September 20, 1996, plaintiffs voluntarily dismissed
Rudolf R. Schulte, Harold R. Frank, John F. Blokker and Paul W.
Hartloff, Jr. from the action, without prejudice. On September 30, 1996,
plaintiffs, joined by a third purported stockholder of Circon, Adam
Zetter, filed a first amended complaint against the remaining
defendants. Plaintiffs' amended complaint is substantially similar to
the original complaint, but adds a new purported cause of action under
the unfair business practices provisions of the California Business &
Professions Code, Sections 17200, et seq. and 17500, et seq. Like the
original complaint, the amended complaint seeks compensatory and/or
punitive damages, attorneys' fees and costs, and any other relief
(including injunctive relief) deemed proper. On December 2, 1996,
defendants filed demurrers to the amended complaint again on the grounds
that plaintiffs' allegations fail to state facts sufficient to
constitute a cause of action.

On April 17, 1997, a hearing was held regarding the defendants'
demurrers to the first amended complaint. By order dated May 28, 1997,
the Superior Court overruled the defendants' demurrers to the amended
complaint. The parties are now engaged in discovery proceedings. Circon
believes plaintiffs' allegations to be without merit and intends to
vigorously defend the lawsuit.

MAXXIM MEDICAL: Circon Settles Del & CA Suits Over US Surgical's Offer
On August 15, 1996, an action captioned Steiner v. Auhll, et al., No.
15165 was filed in the Court of Chancery of the State of Delaware and
shortly thereafter, three substantially similar actions were filed by
three other shareholders of Circon. All four of these actions purported
to be brought as class actions on behalf of all Circon shareholders. On
August 16, 1996, a separate action captioned Krim v. Circon Corp., et
al., No. 153767, was filed in the Superior Court of California in Santa
Barbara. The plaintiff in that action also claimed to be a Circon
stockholder and purported to bring his claim as a class action. On
September 27, 1996, that action was stayed by the Court in favor of the
actions pending in Delaware; the Court also encouraged the plaintiff to
refile his action in Delaware. By order dated September 18, 1996, the
four Delaware actions were consolidated under the caption In re Circon
Corporation Shareholders Litigation, Consol. C.A. No. 15165.

The plaintiffs allege certain wrongdoing on the part of the defendants
in connection with the hostile tender offer by U.S. Surgical Corporation
announced on August 2, 1996. Plaintiffs allege, among other things, that
the defendants (i) breached their fiduciary duties to the Circon
stockholders by summarily rejecting the U.S. Surgical offer and by
failing to negotiate a friendly merger with U.S. Surgical; engaged in
actions which were not reasonable responses to the U.S. Surgical offer,
including the adoption on August 13, 1996, of a stockholders' rights
plan and retention plans designed to provide for cash payments to Circon
employees in the event of a change of control; (iii) were subject to
conflicts of interest and motivated by their own self-interests and
objectives designed to protect their positions in the Company; (iv)
manipulated the corporate machinery and impaired the corporate
democratic process by adopting the stockholders rights plan and the
retention plans; and (v) breached their duty of disclosure.

On July 27, 1999, the parties filed a stipulation of settlement. In the
stipulation, the parties agreed that (i) as a result, in part, of the
pendency and prosecution of the case, defendants decided to explore
strategic alternatives for the Company and ultimately to approve the
acquisition of Circon by Maxxim and (ii) the consideration received by
the Circon stockholders in connection with the transaction with Maxxim
represented the best price reasonably available. In connection with the
settlement, defendants have agreed that they will not oppose plaintiffs'
counsel's request for an award of attorneys' fees and expenses in an
aggregate amount not to exceed $800,000. The settlement and fee award
are subject to court approval. A hearing on the settlement is scheduled
to take place on October 20, 1999. The payment of such amount would be
covered by Circon's insurance.

MAXXIM MEDICAL: Faces Texas And Florida Suits Over Proposed Merger
A complaint was filed on June 15, 1999 in state court in Harris County,
Texas, and another was filed on June 25, 1999 in state court in Pinellas
County, Florida, each naming Maxxim Medical Inc., its directors and Fox
Paine & Company as defendants. Each complaint is brought on behalf of a
purported class of public shareholders of the Company and alleges that
the consideration being offered in the proposed merger between Fox Paine
Medic Acquisition Corporation and the Company is unfair and inadequate,
and that the directors of the Company breached their fiduciary duties by
failing to obtain the best price for the Company.

As relief, each complaint seeks, among other things, an injunction
against completion of the merger, and damages in an unspecified amount.
The defendants believe the allegations of each complaint are without
merit. The cases are titled Steiner v. Maxxim Medical, Inc., et al. No.
l999-30682 (281st Judl. Dist., Harris Cty., Tex) and Burnetti v. Maxxim
Medical, Inc., et al. No. 99-4347-CI-15 (6th Judl. Circ., Pinellas Cty.,

PADUCAH PLANT: Memos Show Uranium Radiation Risks Long Concealed
Managers of the government's Paducah, Ky., uranium plant knew for
decades of unusual radiation hazards inside the complex but failed to
warn workers because of fears of a public outcry, according to documents
to be released by a congressional panel this week.

Faded memos unearthed by workers and federal investigators shed new
light on what early plant officials knew about the presence of plutonium
and other highly radioactive metals in the plant -- knowledge that was
kept from the workers for nearly four decades.

In one 1960 document, a government physician wrote that hundreds of
workers should be screened for exposure to "transuranics" -- radioactive
metals such as plutonium and neptunium -- but he said plant officials
feared such a move would cause alarm and lead to higher labor costs.
"They hesitate to proceed to intensive studies because of the union's
use of this for hazard pay," says the memo, discovered by Energy
Department officials investigating the plant.

The documents from government archives have been turned over to a House
Commerce Committee panel, which is holding hearings Wednesday into
allegations of unsafe conditions at the Paducah Gaseous Diffusion Plant.

Accounts of plutonium contamination and illegal waste dumping at the
facility have triggered an Energy Department investigation and a class
action suit by employees who believe the plant put them at risk.

Energy Secretary Bill Richardson toured the plant and formally
apologized to workers for the government's failure to fully inform them
about the risks. He pledged millions of dollars in new spending to
compensate ailing workers and to accelerate the cleanup of the plant.
And he presented an award to the family of the late Joe Harding, an
employee who had tried vainly for years to convince Energy officials
that hazards in the plant had caused his fatal illness. "On behalf of
the government I'm here to say I'm sorry," Richardson said. "The men and
women who have worked in this facility helped the United States win the
Cold War and now help us keep the peace. We recognize and won't forget
our obligation to them."

Plant officials, while acknowledging the presence of plutonium at
Paducah, have said the amounts were small and were likely of little
threat to workers.

Government contractors who ran the plant over the last 47 years have
declined to comment because of pending litigation. A Union Carbide Corp.
spokesman, in a statement last month, said the alleged acts at Paducah
occurred long ago, and none of the current managers had any detailed
knowledge of what had happened. Union Carbide operated the plant from
1952 to 1983.

The documents and testimony to be presented at the congressional hearing
suggest that the federal government and private contractors running the
plant ignored decades of warnings to protect workers from plutonium, a
man-made metal that can cause cancer if inhaled in amounts as small as a
millionth of an ounce.

"What is clear is that the [government] contractors knew of the need to
protect workers from plutonium and other transuranics . . . as early as
1952," Jim H. Key, the ranking environmental and safety official for the
plant's unionized employees, states in prepared testimony to be

Key, who has not yet spoken publicly about the allegations of workers'
exposure, alleges "widespread, systematic and documented failures" by
the government and its contractors to control the spread of radioactive
hazards. He describes smoky, radioactive fires inside the plant and
thick clouds of radioactive uranium dust -- workplace hazards for which
workers were neither trained nor equipped.

Former workers also have come forward with evidence suggesting that past
managers viewed the contamination as a practical and economic problem.
John Tillson, a hydrologist who analyzed early operations at the plant
while working for a cleanup contractor, said Paducah managers tried to
recover the transuranics from the plant's waste stream in the 1950s and
1960s, when the metals were in high demand for nuclear materials

By 1970 the prices had dropped, and the recovery programs were halted,
he said. Plant officials even began processing sewage sludge from the
plant after it was found to contain high levels of uranium. Harold
Hargan, a 37-year employee who was detailed to the recovery program,
said the uranium in sludge came exclusively from the plant's sanitary
system, which included lavatories, wash rooms and laundry facilities.
"All that uranium was either on workers' clothes or bodies -- or inside
their bodies," he said.

Although no formal epidemiological study has been completed for Paducah,
some workers have long raised questions about what they believe are
unusual rates and types of cancers in their communities. Those fears
have risen sharply in the wake of reports that plutonium and other
highly radioactive metals were also present in the workplace, Key, the
union safety officer, says in his statement. "The majority of current
and former workers are afraid that they may have been exposed to
substances like plutonium without proper protection and that they will,
as a result, be stricken with a fatal disease," Key wrote. "I myself
have this fear from my 25 years at Paducah."

Hired by the plant's original contractor, Union Carbide, in 1974, Key
said he began witnessing safety problems almost immediately. During his
first year on the job, he was engulfed in radioactive smoke after
helping dump drumloads of highly flammable uranium metal into an open
pit on the plant's grounds. "The uranium spontaneously ignited . . . and
a pungent and irritating smoke enveloped us," said Key, an hourly worker
and officer in the local chapter of the Paper, Allied-Industrial,
Chemical and Energy Workers International Union. "To my knowledge this
dumping ground has never been characterized."

Workers inside the building where powdered uranium was processed were
not required to wear respirators, even though the dust at times was so
thick it was difficult to see, Key said. "I recall having to hold my
breath to get through clouds of unknown fumes," he said.

In the 1970s, Key would observe workers cleaning up spills of "black
powder," which he later learned consisted of recycled uranium from the
government's plutonium production facilities. Not until 1990 did plant
officials tell the union that the powder contained small amounts of
"transuranics" -- a class of highly radioactive metals that includes
neptunium and plutonium. Plutonium is 100,000 times more radioactive per
gram than uranium.

Key cited a 1952 Union Carbide memo that suggests the need for special
labeling of "plutonium contaminated locations."

Years later, in a 1985 memo, Energy officials advised Paducah's managers
to test workers who handled the recycled uranium for exposure to
transuranics. Key notes, "We have no evidence that these recommendations
were acted upon or communicated to the workforce."

In 1991, Martin Marietta Energy Systems, which was now operating the
plant, began a voluntary program to test workers for exposure. Thirty
workers participated, but the test results were "invalidated" due to
what the company termed "concerns and discrepancies" regarding the
testing lab, Key said.

He said the company refused to release the results to the union,
explaining in a memo that "management is reluctant to release this
information due to concerns about how it would be used."

Concerns about public reaction were echoed in the 1960 memo from H .D.
Bruner, a physician, to Union Carbide and Atomic Energy Commission
medical officials. He expressed concerns about relatively large amounts
of neptunium in recycled uranium delivered to the Paducah plant. "But I
am afraid the policy of the plant is to be wary of the unions and any
unfavorable public relations," the memo states.

Although workers in some buildings were furnished with gas masks, Bruner
said the respirators were not used and did not appear to be effective
against the tiny uranium particles in the air. "The human factor in
handling [the recycled material] should be considered a source of
potential exposure," he wrote. (The Washington Post 9-21-1999)

RESIDENTIAL MORTGAGE: YSP Class Not Cert In Minn For Particular Facts
The reasonableness of a yield spread premium demands inquiry into the
particular facts of a loan transaction to determine its legality under
Section 8 of the Real Estate Settlement Procedures Act. Borrowers who
cannot use general proof to support their claims that their mortgage
brokers received improper kickbacks will routinely fail Fed. R. Civ. P.
23's predominance requirement. Brancheau, et al. v. Residential Mortgage
and Mercantile Bank of St. Louis, No. 97-53 (JRT/RLE) (D. Minn. 7/1/99).

The Brancheaus retained Residential Mortgage to obtain a mortgage with
the best available interest rate for them. Residential solicited lenders
to finance the loan and Mercantile Bank of St. Louis responded with the
best terms. Mercantile offered to bank Residential .625 percent above
par for the Brancheaus' loan. This YSP was based on the interest rates,
the net asset value of the loan and the loan servicing value. Mercantile
Bank table-funded the Brancheaus' loan.

                          Culpepper Test

Believing that Residential received a kickback in the form of a YSP from
Mercantile for referring the loan, the borrowers filed a class action
under RESPA. The U.S. District Court for the District of Minnesota
relied on the framework set forth in Culpepper v. Inland Mortgage Corp.,
132 F.3d 692 (11th Cir.), as modified, 144 F.3d 717 (1998). Under the
Culpepper two-step analysis, which questions first if a payment was made
in exchange for goods of facilities actually furnished or services
actually performed and second, whether the payment bore a reasonable
relationship to the market value of the goods or services provided, the
court held that the YSP was not in exchange for goods or facilities.
However, it ruled that a question of fact existed as to whether the YSP
was compensation for Residential's services.

In addition to denying the defendants' motion for summary judgment, the
court certified a class upon finding that common questions of law or
fact, which could be evidenced with daily rate sheets, loan agreements
and Mercantile's YSP calculation method, predominated over individual
class members' claims.

The defendants moved for reconsideration of the certification claiming
that the loan was a "good" under Section 2607(c) of the act and that
individual facts predominated over factual questions common to the
class. The court granted the motion and reviewed it in light of the
Department of Housing and Urban Development's Statement of Policy
1999-1. Writing for the District Court, Judge John R. Tunheim explained
that HUD's recent policy statement states that a loan is not a "good
that the broker may sell to the lender and that the lender may pay for
based upon the loan's yield's relation to market value, reasonable or
otherwise." Therefore, the court rejected the defendants' first

                              HUD's Test

The court's reliance on the new Policy Statement was not totally
detrimental to the defendants, however. It replaced the Culpepper
analysis with that set forth by HUD. HUD's two-part analysis asks: (1)
whether the broker furnished the goods or facilities or performed
services for the compensation paid; and (2) if so, were the payments
reasonably related to the value of the goods or facilities that were
actually furnished or services that were actually performed. The HUD
analysis differs from Culpepper in that Culpepper asks if the broker's
goods or services were directly tied to the YSP.

Using HUD's test, the District Court held that its prior class
certification was inappropriate because neither of the two steps depend
on whether the YSP was tied to the services provided. Under this new
analysis, said the court, the plaintiffs cannot satisfy Rule 23(b)(3)'s
predominance requirement. Judge Tunheim explained that individual
inquires must be conducted into each class member's loan transaction to
see if Residential failed to provide services and if Residential's
compensation was reasonable in light of those services.

Because the court found no dispute that Residential actually provided
services in originating and processing the loan and no evidence that the
total fee was unreasonable, the District Court vacated its earlier
ruling granting the motion for certification with the warning that its
decision "should not be construed as suggesting that these premiums are
presumptively valid." In granting the defendants' motion for summary
judgment, the court added that YSPs "are worthy of close scrutiny
because they are based solely on the interest rate of the loan and offer
a tempting financial incentive to brokers unrelated to the quantity or
quality of services they provide."

William Crowder and Susan Bedor of Crowder & Bedor in St. Paul, Minn.,
and Daniel Edelman of Edelman & Combs in Chicago, represented the
plaintiffs. Edward Laine and Christopher Cain of Oppenheimer, Wolff &
Donnelly in Minneapolis; Mark Arnold and Joseph Conran of Husch &
Eppenberger of St. Louis; and Brian Johnson of Halleland, Lewis, Nilan,
Sipkins & Johnson in Minneapolis represented the defendants. (Consumer
Financial Services Law Report 8-12-1999)

SECURITIES FIRMS: Antitrust Added To Yield-Burning Charges In Florida
Dwight Brock, the clerk of Collier County, Fla., has added antitrust
violations to the charges he has made against more than a dozen
securities firms in his class action yield-burning suit. If upheld, the
charges would allow the county and other defendants to recover treble
damages from the firms.

Sources said the antitrust charges were added because of the county's
concerns that it and other issuers would not recover much money if the
firms globally settle charges over alleged yield-burning abuses with the
Securities and Exchange Commission and other federal agencies.

The SEC, Internal Revenue Service, and Justice Department are trying to
reach a global settlement agreement with several Wall Street firms
before the end of the year. The settlement is expected to total more
than $100 million and would cover dozens and perhaps hundreds of advance
refundings done in the early 1990s.

Brock added the antitrust charges in an amended complaint that was filed
with the U.S. District Court for the Middle District of Florida in Fort

The new complaint says the firms engaged in a "nationwide conspiracy ...
with the specific intent to achieve anti-competitive purposes" including
"the fixing of prices for Treasury securities" sold to issuers on a
negotiated basis for refunding escrows. "As a result of the unlawful
conduct" issuers " have paid a higher price than they would have" and
are "therefore entitled to recover treble damages ... in an amount to be
determined at trial," the complaint said. The county has also demanded
that the firms pay its costs and reasonable attorneys' fees and has
asked for a jury trial.

Brock first filed the yield-burning suit against Salomon Smith Barney
Inc., Merrill Lynch & Co., Goldman, Sachs & Co., and other firms last
year and has since amended it twice . The county clerk is represented by
Goodkind Labaton Rudoff & Sucharow. (The Bond Buyer 9-21-1999)

SUN ORCHARD: Says FDA's Salmonella Test Failed To Find Contamination
An officially-sanctioned FDA test failed to detect Salmonella in
Mexican-supplied raw juice, Sun Orchard officials told FDA last month,
citing the test as one of the reasons for an outbreak that apparently
killed one person and sickened more than 200 in the U.S. and Canada.
Sun Orchard defended its unpasteurized juice process in the letter to
FDA, which was in response to a warning letter from the agency.

The company resumed production of unpasteurized orange juice. A class
action suit against the company is pending.

After health officials linked Sun Orchard's juice to a Salmonella
muenchen outbreak, FDA inspectors isolated Salmonella from each of the
company's three juice holding tanks, which are used to blend citrus
juice during manufacturing at the Tempe, Ariz. plant, said the Aug. 20
warning letter. Because one of the tanks was cleaned "only a short time
earlier," FDA raised concerns about the efficacy of the company's
cleaning and sanitizing procedures. "Gross contamination with several
different Salmonella serotypes is extremely unusual and in our opinion
suggests a serious breakdown in control over either your suppliers or
transportation, or both," said FDA.

Inspectors also found that the Mexican juice supplier, Citrotram
International, added ice to bulk tanker trucks hauling the raw juice
into the United States. Bacteria-laden ice may have contaminated the
product, said FDA, and adding ice to unfermented juice compromises the
orange juice's standard of identity. "This constitutes adulteration of
the orange juice under section 402(b) of the Federal Food, Drug and
Cosmetic Act and would result in misbranding of the finished product
under section 403(g) of the Act." FDA went one step further in its
warning letter by charging that the company "may have had knowledge of
earlier imported unpasteurized orange juice shipments that contained

But in an Aug. 26 letter to FDA, Sun Orchard said the juice purchased by
outside suppliers tested negative for Salmonella using the FDA-approved
method in the Bacteriological Analytical Manual when it arrived at the
Tempe plant. Once the outbreak implicated the company's juice product,
Sun Orchard tested the remaining samples of the imported juice using
both the BAM method and a more sensitive detection method for Salmonella
"brought to the attention" by the Centers for Disease Control and
Prevention. All of the reserve samples tested positive for Salmonella
using CDC's method but produced negative results under the FDA-approved
BAM. Sun Orchard noted that FDA just recently included the CDC method in
the agency's BAM document.

According to Sun Orchard, "CDC's testing method was neither recognized
nor approved by FDA at the time for the detection of Salmonella nor to
our knowledge, was it known to the FDA, certain states, the industry, or
large, highly reputed registered laboratories."

But an FDA source told Food Chemical News that the agency does not limit
which testing method a company can use to screen its suppliers'
products, nor is it the agency's job to make sure companies are aware of
every test. The FDA source also questioned whether firms should depend
solely on end-product testing to ensure the safety of their suppliers'
products. Juice companies should ensure raw products are processed under
good manufacturing practices, the official said.

The University of Florida's Mickey Parish, who investigated the 1996
Odwalla fresh juice outbreak, agreed that fresh orange juice
manufacturers should be focused on following basic sanitation, good
manufacturing practices and even good agricultural practices for fruit
as the best means to ensure the safety of their products. But Parish
said there is still an art to finding Salmonella in food products. "No
single test method will find Salmonella in all foods all the time," he
explained. FDA's standard Salmonella method is not as broad as the more
costly CDC testing regimen because disease investigators will use a
series of different test methods to track down the cause of an outbreak.
Following the CDC testing regimen would be too costly to industry, he

Sun Orchard also responded to the agency's criticisms of the company's
cleaning and sanitizing procedures, saying the contamination was due to
the foreign-supplied juice introduced into the tank. The company also
denied it had any prior knowledge of the addition of ice to juice
supplied from foreign processors, and that the only instance it was
aware of the commercial-grade ice in a tanker at the Mexico-U.S. border
was on June 29 - after the contaminated juice was produced. At that
time, U.S. Customs agents found the ice during a routine temperature
check. Once the company found out about the ice, Sun Orchard said it
notified FDA investigators - who were already in the Tempe plant - of
the incident, and rejected all shipments from the foreign supplier.
Analyses of the ice samples from the shipment were negative for
Salmonella, said the company, which is considering legal action against
the Mexican firm.

                   FDA To Reopen Juice HACCP Proposal

Meanwhile, FDA is planning in mid-September to re-open its juice HACCP
proposal to gather more scientific input on the sanitary handling of
citrus fruit and the adequacy of the proposed five-log pathogen
reduction control measures for unpasteurized juice products. FDA held an
informal meeting with the juice industry recently to discuss new
research developed by FDA on the safety of citrus fruit, and announced
its plans to gather more data to take to the National Advisory Committee
on Microbiological Criteria for Foods as the agency continues to shape
its much-anticipated rule.

A juice industry source said the research discussed at the latest FDA
meeting was "very preliminary," and that the industry is concerned that
FDA is making "inaccurate assumptions" on how fruit is handled in the
industry. Nevertheless, the American Fresh Juice Council plans to survey
its members to "shed light on what's done to prepare fresh fruit for
juice," said Peter Chaires, the group's newly appointed chairman.
Findings from the survey will be forwarded to FDA, he said. (Food
Chemical News 9-6-1999)

THINK NEW: Moves To Dismiss Shareholders Suits In New York
On September 25, 1998, Michael R. Farrell, a shareholder of the Company,
filed a putative class action suit, styled Farrell v. Think New Ideas,
Inc., Scott Mednick, Melvin Epstein and Ronald Bloom, No. 98 Civ. 6809,
against the Company, Ronald Bloom (an officer of the Company), Melvin
Epstein and Scott Mednick (both former officers of the Company). The
suit was filed in the United States District Court for the Southern
District of New York on behalf of all persons who purchased or otherwise
acquired shares of the Company's common stock in the class period from
November 14, 1997 through September 21, 1998.

On various dates in October, 1998, six additional putative class action
suits were filed in the same court against the same parties by six
different individuals, each purporting to represent a class of
purchasers of Think New Ideas, Inc., common stock. These subsequent
suits claimed substantially similar class periods (one alleged a class
period starting on November 5, 1997, rather than November 14, 1997) and
made similar allegations as those made in the Farrell complaint. All
seven of these lawsuits were ultimately transferred to Judge Sidney H.
Stein of the United States District Court for the Southern District of
New York and consolidated by order of the Court dated December 15, 1998,
into one action styled In Re: Think New Ideas, Inc., Consolidated
Securities Litigation, No. 98 Civ. 6809 (SHS).

Pursuant to an order of the Court, the plaintiffs filed a Consolidated
and Amended Class Action Complaint on February 10, 1999. The
consolidated complaint supersedes all prior complaints in all of the
cases and shall serve as the operative complaint in the consolidated
class action. The consolidated complaint names fourteen individual
plaintiffs and purports to be filed on behalf of a class of individuals
who purchased Think New Ideas, Inc., common stock from November 5, 1997,
through September 21, 1998. The consolidated complaint makes
substantially similar allegations as the Farrell complaint. Like the
Farrell complaint, the consolidated complaint alleges that the Company
and certain of its current and former officers and directors
disseminated materially false and misleading information about the
Company's financial position and results of operations through certain
public statements and in certain documents filed by the company with the
Securities and Exchange Commission. The consolidated complaint further
alleges that these statements and documents caused the market price of
the Company's Common Stock to be artificially inflated. The plaintiffs
further allege that they purchased shares of common stock at such
artificially inflated prices and suffered damages as a result. The
relief sought in the consolidated complaint is unspecified, but includes
a plea for compensatory damages and interest, punitive damages where
appropriate, reasonable costs and expenses associated with the action
(including attorneys' fees and experts' fees) and such other relief as
the court deems just and proper.

Management believes that the Company has meritorious defenses to the
consolidated complaint and intends to contest it vigorously. The Company
has filed a motion to dismiss the consolidated complaint on a number of
grounds and the plaintiffs have opposed the motion. The motion is
currently pending before the court and the court has not yet determined
whether oral arguments will be heard.

USDA: 15000 Black Farmers Seek Shares In Settlement Over Discrimination
Nearly 15,000 black farmers have applied for a share of a
multibillion-dollar Federal settlement over past discrimination, far
surpassing the expected number of claims, lawyers said.

The class-action settlement was designed to compensate black farmers who
have complained for decades of being shut out of loan programs, disaster
assistance and other aid managed by the United States Agriculture

Lawyers for the farmers said they were surprised by the large number who
applied for a share of the settlement, especially the flood of claims
from people who lost their farms in the crisis of the 1980's.
"When we started the case, we thought maybe 1,000, 2,000" claims, said
one of the lawyers, Phil Fraas. "What that says is that we really are
addressing some of the past wrongs." Mr. Fraas said as many as 20,000
people could file claims by the deadline, Oct. 12. The settlement deal
was struck in January and approved by a Federal judge in April.

Black farmers documented many instances of discrimination. For example,
they said Agriculture Department employees made racial slurs or told
them the Government was out of money. Black farmers said that their loan
applications had repeatedly disappeared from files and that they had
been forced to wait in Agriculture Department offices for eight hours at
a stretch.

Under the settlement, most claimants would receive a tax-free cash
payment of $50,000. Debts to the Agriculture Department, which average
$75,000 to $100,000 per farmer, would also be erased.

Applications must be reviewed by two companies that the court appointed
to work on the case. The first batch of applications cleared the final
hurdle last week, Mr. Fraas said, adding that the first settlement
checks should be sent in November.

Agriculture Secretary Dan Glickman has heralded the settlement as a way
to compensate farmers for discrimination and has vowed to wipe out any
racism at his agency. (The New York Times 9-21-1999, Byline: Reuters)

WYNDHAM INT'L: Settles Delaware Suit Over Investment And Restructuring
Wyndham International, Inc. (NYSE:WYN) announced that it has set
September 30, 1999 as the record date for its previously announced
rights offering. The offering will grant holders of the company's class
A common stock and holders of certain outstanding limited partnerships
units transferable subscription rights to purchase in the aggregate up
to 3 million shares of the company's series A convertible preferred
stock at a subscription price of $ 100 per share.

Before setting the record date, the company said that it entered into a
Stipulation of Settlement on September 17, 1999 agreeing to settle the
consolidated class action lawsuit pending in the Delaware Chancery Court
related to the $ 1 billion equity investment and related restructuring
of the company completed on June 30. The registration statement filed
with the Securities and Exchange Commission must be declared effective
and the Delaware Chancery Court must approve the proposed settlement
before the company expects to distribute the rights to holders of class
A common stock and holders of certain outstanding limited partnership

Under terms of the offering, holders of the company's Class A common
stock would be entitled to one share of transferable subscription rights
for each share of Class A common stock, held at the close of business on
the September 30, 1999 record date. In accordance with customary trading
practices, investors must acquire shares of the company's class A common
stock by the close of business on September 27, 1999 in order to receive
the rights attendant to such shares.

Holders of outstanding units in Patriot American Hospitality
Partnership, L.P. would be entitled to 0.95 rights per unit and holders
of outstanding units in Wyndham International Operating Partnership,
L.P. would be entitled to .05 rights for each unit at the close of
business on the record date.

It is currently estimated that approximately 57 rights would be required
to purchase one share of the preferred stock. The company will use the
cash proceeds from the rights offering to redeem shares of its
outstanding series B preferred stock.

The company will not be obligated to complete the rights offering if the
court declines, in any respect, to enter a final order approving the
stipulation of settlement in a form satisfactory to the parties; there
is a pending court order, motion, legal proceeding or other action to
enjoin, prevent or delay the rights offering; or the rights offering
cannot, despite the company's good faith efforts, be completed by
December 17, 1999.

The Registration Statement for the rights offering has not yet become
effective. As soon as practicable after the effective date of the
Registration Statement, the Company expects to mail to holders of class
A common stock and holders of limited partnership units as of the record
date a prospectus for the rights offering accompanied by a subscription
warrant and related explanations for exercising or selling the rights.
The prospectus will contain a description of the rights offering and
other information.

                          Cautionary Statement

The Registration Statement for the rights offering has not yet become
effective. The underlying series A preferred stock may not be sold nor
may offers to buy be accepted before the time the Registration Statement
becomes effective. This release shall not constitute an offer to sell or
the solicitation of an offer to buy, nor shall there be any sale of such
series A preferred stock in any state in which such offer, solicitation
or sale would be unlawful prior to registration or qualification under
the securities laws of any such state.

This release contains "forward-looking statements" as that term is
defined under the Private Securities Litigation Reform Act of 1995.
Actual results could differ materially from those set forth in the
forward-looking statements. Factors that could cause actual results to
differ include the risk that the Stipulation of Settlement will not be
approved or may be approved on terms that differ from those described in
this release, the risk that the Registration Statement may not be
declared effective and the risk that the rights offering cannot be
completed on a timely basis.


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
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Washington, DC.  Theresa Cheuk and Peter A. Chapman, editors.

Copyright 1999.  All rights reserved.  ISSN 1525-2272.

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