Yet Another Settlement from N.D. California

Cerus Corporation (NASDAQ: CERS) today announced an agreement to settle the securities class action litigation pending against the company and certain current and former directors and officers. The litigation is pending before Judge Jeremy D. Fogel in the United States District Court for the Northern District of California.

Judge Fogel previously appointed Gaeton and Lionel Carnot as lead plaintiffs and Lerach Coughlin Stoia Geller Rudman & Robbins LLP as lead counsel in the Cerus litigation. A copy of that order can be found here.

The company's press release also indicates that derivative litigation pending in the Superior Court for the County of Contra Costa was also settled. A review of the docket reveals that Robbins Umeda & Fink, LLP is counsel for the plaintiff in both of the derivative actions pending there.

While the press release does not indicate the value of the settlements, an 8-K filed by Cerus gives some insight:

Under these settlement agreements, the Company's directors' and officers' liability insurance policy will fund a cash settlement amount and the Company has agreed to take or continue certain corporate governance measures.

The corporate governance measures to be taken, include:

• Making a good faith effort to add one or two independent directors to the company's board by September 1, 2007;
• If the company is unable to add these independent directors by that time, retaining a professional search firm to assist in the identification candidates, with the company using best efforts to add one or two independent directors to the board by December 31, 2008;
• Unless otherwise required by law, two thirds of the company's board of directors will consist, through January 1, 2009, of independent directors.

On an interesting side-note, a number of complaints were filed in the litigation, including two different amendments to complaints that had been filed just one or two months prior.

For example, on May 24, 2004, the plaintiffs filed a consolidated complaint, followed shortly thereafter on June 17, 2004, by an amended consolidated complaint (link unavailable) which added certain allegations attributed to a confidential witness.

On January 20, 2005, the Court dismissed the complaint with leave to amend within 60 days. On March 21, 2005, the plaintiffs filed a second amended consolidated complaint, and on May 24, 2005, the plaintiffs filed a third amended consolidated complaint.

Cerus is a Concord, California based bio-technology firm focused on developing blood safety systems and, more recently, immunotherapies for cancer and infectious disease.

Morrison & Foerster LLP is counsel for defendants in the litigation.

Daily Trivia: Morrison & Foerster has undergone 14 name changes in the firm's history and can trace it roots back to 1883. Brobeck, Phleger & Harrison LLP, the formerly omnipresent securities litigation powerhouse (and now defunct) law firm, was formed in 1925 by lawyers that left Morrison & Foerster.

Umm...yeah, I'm going to need to you to come in on Saturday alright?

The close relationship between plaintiffs' lawyers and labor unions (specifically their pension funds) is well documented, and often criticized.

A press release issued today by the law firm of Wolf Haldenstein Adler Freeman & Herz LLP piqued my interest, with a unique example of that relationship.

The firm announced that it was one of the prime sponsors of the Fifth Annual "DC Labor Film Festival," produced by the Metropolitan Washington Council of the AFL-CIO. The festival "was established as a part of a project to use the arts to highlight the plight of workers and their efforts to secure better conditions of employment."

While the festival features a number of independent films with serious themes, it also features one of my favorite comedies - Office Space, the 1999 cubicle comedy directed by Mike Judge.

For fellow devotees, this fan site has a number of memorable sound clips from the film.

Wolf Haldenstein opened its Washington, DC office on July 1st of this year, with the addition of Reuben Guttman, formerly of Milberg Weiss Bershad & Schulman, LLP. The Washington Business Journal has a story on the office opening here and the WSJ Blog has a post here.

Less is More?

A recent ruling in the CV Therapeutics, Inc. (NASDAQ: CVTX) securities litigation highlights some of the interesting issues that are filtering through the courts with respect to electronic discovery (e-discovery).

The case is pending in the United States District Court for the Northern District of California before Judge Susan Illston.

The parties had previously agreed on the entry of a stipulated order governing the discovery of material restored from defendant's backup tapes. The backup tapes contained approximately 425,000 documents.

Defendants applied a "de-duplication process" to the tapes, which reduced the number of documents to approximately 129,000. Defendants then produced about 4,000 documents. Plaintiffs objected to the de-duplication as well as the withholding of documents.

The defendants argued that it would be unduly burdensome and expensive to produce the remaining 125,000 documents, and asked the magistrate to require plaintiffs to select slightly less than half of the documents.

A virtual treasure trove of court filings from the litigation can be found on the Stanford website, here. Interestingly, Lerach Coughlin's "Designated Internet Site," is nearly bereft of filings from the CV Therapeutics litigation.

Magistrate Edward M. Chen found that de-duplication was an acceptable method of reducing the size of the production and ordered the defendants to apply search terms to narrow the remainder of the production.

A copy of Magistrate Chen's opinion is available here. The case can be cited as In re CV Therapeutics, Inc. Sec. Litig., 2006 WL 2458720 (N.D. Cal. Aug. 22, 2006).

In November 2003, Judge Ilston appointed David Crossen as lead plaintiff and Lerach Coughlin Stoia Geller Rudman & Robbins LLP (at the time, Milberg, Weiss, Bershad, Hynes & Lerach, LLP) as lead counsel in the CV Therapeutics litigation. A copy of the order appointing lead plaintiff and lead counsel is available here.

A copy of the consolidated amended complaint is available here.

Defense counsel in the case is Latham & Watkins, LLP.

Daily Trivia: Magistrate Chen is the first Asian-American to serve on the bench of the United States District Court for the Northern District of California.

No Pay, No Pal

According to news reports (InvestmentNews.com - registration required), a Cyprus based investment company is suing Clarium Capital Management, a hedge fund headed by PayPal founder Peter Thiel, alleging that it was defrauded out of millions of dollars over a period of eight years.

The suit was filed earlier this week by Amisil Holdings Ltd. of Cyprus in the United States District Court for the Northern District of California.

According to news reports, Amisil first invested in Clarium in 1998. At that time, Clarium was known as Thiel Capital Management. Amisil's investment is thought to be equivalent to a 1% interest in the hedge fund.

The article contains a colorful quote from a representative of the plaintiff:

Amisil has not received a single distribution from Clarium, while he [Mr. Thiel] has skimmed tens of millions of dollars out of Clarium into his own pockets. There's been no pay for us, and he's been no pal.

Amisil is represented by Harvey L. Leiderman of Reed Smith LLP's San Francisco office. Leiderman is a recent addition to the firm, according to this announcement.

Daily Trivia: Mr. Thiel started as a derivatives trader at Credit Suisse Group and in 2003 nearly bought Martha Stewart's Manhattan duplex condo. Ms. Stewart later sold the condo the day before she was sentenced for crimes related to her well-timed sale of Imclone Systems Inc. stock in late 2001.

Jackpot!

According to an 8-K filed last week, The Sands Regent (NASDAQ: SNDS), has agreed in principle to settle a shareholder class action, which challenged the proposed merger of Sands Regent with Herbst Gaming, Inc., the operator of the Terrible's casino chain.

The litigation was pending in the Second Judicial District Court for Washoe County, Nevada. Counsel for the plaintiff included Lerach Coughlin Stoia Geller Rudman & Robbins LLP and Ademi & O'Reilly, LLP.

A review of the docket reveals that the settlement was reached just one day after an amended complaint was filed.

The settlement requires the defendants to: 1) make certain modifications to the merger documents; 2) amend the disclosures contained in the proxy statement; 3) pay $345,000 in attorneys fees to plaintiffs' counsel.

The proposed merger, which was announced on May 17, 2006 is valued at approximately $148 million.

According to an earlier 8-K, you guessed:

The Company believes the lawsuit is without merit and intends to vigorously defend the action.

Daily Trivia: Herbst Gaming began in 1987 as an offshoot of the family business, Terrible Herbst Oil Company, which now operates 80 gasoline stations and convenience stores throughout Nevada. Herbst Gaming serviced the slot machines located in the Terrible Herbst locations and is now one of the largest slot route operators in the State of Nevada.

A Quick Trip Through The Blogosphere

A few interesting items from other blogs that you might find interesting.

• Kevin LaCroix, over at The D&O Diary, has an interesting post here about the recently filed options backdating litigation against Zoran Corporation (NASDAQ: ZRAN) and ten of its past or present directors and officers. The Zoran litigation appears to be somewhat unique because it focuses on allegedly improper or misleading solicitation of shareholder proxies and consent.
  

• The D&O Diary also has an interesting post here on the growing trend of activist hedge funds and their willingness to litigate to effectuate change. Not surprisingly, the post also has some thoughts on what this trend means for D&O liability.

• Lyle Roberts, author extraordinaire of The 10b-5 Daily, has a post here on a brewing circuit split on the application of the "collective scienter" theory, which allows a plaintiff to establish the scienter of a defendant corporation based on the collective knowledge of the corporation's employees.

• Michael Thomas, author of The Daily Caveat, has an update on the litigation swirling around Kirk Wright, and the failure of his hedge fund management company, International Management Associates here.

• Broc Romanek, editor of TheCorporateCounsel.net, has a post here discussing a recent New York State court decision analyzing whether a fiduciary relationship exists between an underwriter and an issuer and whether such a fiduciary relationship should be imputed to underwriter's counsel.
  

Appeal is the "Genesis" of a Settlement

Today Wolf Popper LLP announced the proposed settlement of the securities class action pending against Genesis Microchip Inc. (NASDAQ: GNSS) in the United States District Court for the Northern District of California.

The $1.75 million settlement came after the case was dismissed by Judge Jeffrey S. White, but before plaintiffs appeal was heard by the United States Court of Appeals for the Ninth Circuit. A copy of the stipulation of settlement is available here.

Wolf Popper LLP and Alexander, Hawes & Audet, LLP are lead and liaison counsel, respectively. The lead plaintiff in the litigation appears to be former model (and current wife of Carl Bernstein) Christine Kuehbeck.

The PSLRA Nugget has a post about some interesting, though unrelated litigation involving Ms. Kuehbeck.

Readers may recall this recent post which discussed the local rules of the District, which require the posting of virtually securities fraud class action litigation complaints and pleadings to a "Designated Internet Site" such as Stanford Law School's Securities Class Action Clearinghouse or Lerach Coughlin Stoia Geller Rudman & Robbins LLP's Securities Class Action Designated Internet Site. A search of both of those websites reveals nary a mention of the Genesis Microchip litigation.

Daily Trivia: Genesis is the leading supplier of the video processors used in liquid crystal display (LCD) monitors, which today are the most widely used display technology for PC monitors.

Intermagnetics Abandons "Vigorous Contest"

As this blog is relatively young, it should not surprise readers that the majority of cases discussed herein are either just beginning or nearly ending as they are substantially older than this fair publication.

Thus it is with great pleasure that I note the settlement announced earlier this week by Intermagnetics General Corp. (NASDAQ: IMGC) of two class action complaints filed in the Supreme Court of the State of New York for Albany County, challenging the proposed $1.3 billion sale of Intermagnetics to Philips Holding USA Inc., a subsidiary of Koninklijke Philips Electronics N.V. (NYSE: PHG).

It was exactly one week ago that the Intermagnetics litigation was first discussed, here. In that post, we noted that:

Intermagnetics believes that these allegations are without merit and intends to contest them vigorously.

No further information about the settlement is available from the Intermagnetics website or the company's SEC filings.

Complaints Missed the "Marc"

According to this press release the consolidated securities class action lawsuit pending against Digimarc Corporation (NASDAQ: DMRC) and certain of its current and former executive officers was dismissed by Judge Anna J. Brown of the United States District Court for the District of Oregon.

The litigation arose from accounting errors disclosed by the company in 2004 and a restatement of prior financial statements that soon followed.

A copy of Judge Brown's opinion is available on the Digimarc website, here.

Rex Boggs, Kennard McAdam, and Glenn Thomas are lead plaintiffs in the Digimarc litigation. Milberg Weiss Bershad & Schulman, LLP and the Portland firm of Stoll Stoll Berne Lokting & Shlachter PC are is lead counsel and liaison counsel, respectively in the Digimarc litigation.

Stoel Rives, LLP is defense counsel in the securities litigation.

Additionally, the company announced that companion state and federal derivative litigations were also dismissed.

The first derivative lawsuit was pending in the Circuit Court of the State Oregon for Washington County, and was dismissed by this stipulation. Lead counsel for plaintiffs in the state litigation were Schiffrin & Barroway, LLP and Danziger Shapiro & Leavitt, P.C. The Portland firm of Layne & Lewis, LLP was liaison counsel for the plaintiffs.

The second derivative lawsuit was pending in the United States District Court for the District of Oregon, and was dismissed by Judge Ancer L. Haggerty. A copy of Judge Haggert's opinion is available here.

Interestingly, among the reasons for granting the motion to dismiss the federal derivative litigation was the prior dismissal by Judge Brown of the securities class action.

Lead counsel for plaintiffs in the federal derivative litigation were Robbins Umeda & Fink, LLP and Faruqi & Faruqi LLP. The Portland firm of Grenley, Rotenberg, Evans, Bragg & Bodie, P.C. was liaison counsel for the plaintiffs.

Perkins Coie, LLP was defense counsel in both of the derivative lawsuits.

Daily Trivia: Digimarc provides products and services that enable the annual production of more than two-thirds of U.S. driver licenses.

Star Gas Partners Securities Litigation Dismissed

Today, Star Gas Partners, L.P. (NYSE: SGU) announced the dismissal of a securities class action against Star, Star's general partner, several of Star's former officers and directors and three investment banks that underwrote the public offerings of Star's common units in September 2002 and August 2003. A copy of the company's press release is available here.

The Star Gas litigation was pending in the United States District Court for the District of Connecticut before Judge Janet Bond Arterton.

Judge Arterton's opinion on the motions to dismiss is available here, and her prior opinion appointing lead plaintiffs and lead counsel is available here.

John E. Wertin, RS Holdings LLC, and James Rosner are lead plaintiffs in the Star Gas litigation and Labaton Sucharow & Rudoff LLP and Schiffrin & Barroway, LLP are lead counsel. Shepherd Finkelman Miller & Shah, LLC is liaison counsel in the litigation.

Readers may recall that RS Holdings is also a lead plaintiff in the recently settled DHB securities litigation, discussed previously here.

Though Star Gas never put out a "vigorous defense" press release, they did indicate in the first 10-Q filed after the litigation was commenced that they "will defend against the Class Actions vigorously."

Daily Trivia: Star Gas (or its subsidiary, Petro, Inc. depending on the information source) is the nation's largest retail distributor of home heating oil.

Holding "Penalty", Ten Yards

An article from today's Washington Business Journal announced the resignation of Hugh Panero from the board of directors of Vonage Holdings Corp (NYSE: VG).

Readers will no doubt recall that Vonage and several of the company's officers and directors are currently defendants in a securities class action lawsuit stemming from the company's May 2006 initial public offering. The D&O Diary has a post on the Vonage litigation, here.

Panero is named as a defendant in the Vonage litigation.

Mr. Panero is far more well known for his regular job - as chief executive officer and a member of the board of directors at XM Satellite Radio Holdings Inc (NASDAQ: XMSR).

Readers may recall that XM is currently a defendant in several securities class actions and a shareholder derivative action.

You guessed it - Panero is also a defendant in the XM litigation.

Mr. Panero has some high caliber legal talent representing him in both the Vonage and XM litigations - Wilmer, Cutler Pickering Hale and Dorr LLP a/k/a WilmerHale - but I have some free life advice for him - don't join the board of any more companies with the word "holding" in their name.

A Forbes story on Panero's resignation from the Vonage board notes another interesting coincidence - the stock was up nearly 4% following the announcement of Panero's departure.

Daily Trivia: According to their most recent 10-Q, the so-called "access charges" that Vonage pays to other telephone companies to transfer or "terminate" calls back onto the public switched telephone network accounted for just under 60% of the company's direct cost of providing telephone services to subscribers.

Parlux Redux

Well, it appears that The PSLRA Nugget's new law firm, Saxena White P.A. has finally decided to provide some fodder for this blog.

As noted here by Chris Jones, the author of The Nugget, the new firm is off to a fast start, having already been appointed leadership positions in a number of cases.

Last week, apparently hoping to add to the firm's success, Saxena White announced the filing of a class action complaint against Parlux Fragrances Inc. (NASDAQ: PARL).

Of interest to readers may be this little blurb at the end of the press release:

Saxena White P.A. has offices in Boca Raton, San Francisco, and Boston.

Unfortunately the firm's website is not yet fully functional, and as of press time, we had not heard back from Mr. Jones, so the new "office openings" will remain a Scooby Doo mystery for now.

Reuters has a story on the Parlux litigation, here.

Regular readers will note that this is the third trip to this fair blog for Parlux, with prior posts here and here.

Baked Alaska Pipeline

Last week, shareholders of BP p.l.c. (NYSE: BP) filed a derivative lawsuit in the United States District Court for the Southern District of New York. The case has been assigned to Judge Harold Baer.

The complaint alleges that BP had known for years about the severe pipeline corrosion that led to the shutdown of the Prudhoe Bay oil field earlier this month, but failed to adequately monitor and repair the oil transit lines that feed into the 800-mile Trans Alaska Pipeline System.

A copy of the complaint is available here.

In what can only be described as an unusual occurrence, the complaint lists but a single attorney as counsel for the plaintiff, Jules Brody of Stull, Stull & Brody.

Daily Trivia: The population of Prudhoe Bay is approximately 47 people, and a billion caribou.

Cisco Settles Shareholder Suits by the Seashore

Cisco Systems, Inc. (NASDAQ: CSCO) today announced an agreement to settle the securities class action litigation pending against the company and certain current and former directors and officers. The litigation is pending before Judge James Ware in the United States District Court for the Northern District of California.

Cisco's press release indicates that the settlement is for $91.75 million and will be paid by the company's liability insurers.

Press reports regarding the settlement are available here, (AP via Yahoo!), here (TheStreet.com), and here (BizJournals.com via Yahoo!).

Lead plaintiffs in the Cisco litigation are the Plumbers & Pipefitters National Pension Fund, the Central States, Southeast and Southwest Area Pension Fund, the Carpenters Pension Fund of Illinois, and Alexander Nehring.

Lerach Coughlin Stoia Geller Rudman & Robbins LLP and Levin Papantonio Thomas Mitchell Echsner & Proctor, PA are co-lead counsel in the Cisco litigation.

Prior to the entry of this scheduling stipulation last month, the trial had been set to begin on October 4, 2006. Count Carton over at Securities Litigation Watch must be very disappointed.

Thanks to an anonymous reader for the tip.

Daily Trivia: One of the founding partners of Levin Papantonio was Reubin Askew, a two-term governor of Florida and candidate for President of the United States.

UPDATE: The 10b-5 Daily has a post on the settlement, here.

Georgia on my Mind

Just when you thought I had exhausted every possible press release permutation that even tangentially related to securities litigation, this press release announcing the filing of an options backdating related securities class action against Witness Systems, Inc. (NASDAQ: WITS), provided a reminder of a peculiar quirk of the local rules in the United States District Court for the Northern District of Georgia.

But first, a brief detour.

Most securities practitioners are aware of the local rules of the United States District Court for the Northern District of California , which require the posting of virtually securities fraud class action litigation complaints and pleadings to a "Designated Internet Site."

Indeed, the enactment of those rules can be said to have spawned the creation of Stanford Law School's Securities Class Action Clearinghouse and its distant cousin, the Securities Class Action Designated Internet Site, operated by Lerach Coughlin Stoia Geller Rudman & Robbins LLP.

The Northern District of California's local rules have provided, as previously noted here, a veritable treasure trove of securities class action litigation related filings.

Now back to our regularly scheduled posting.

Far fewer securities practitioners are aware of the pertinent local rule in the Northern District of Georgia, Local Civil Rule 23.1(C)(4)(a), or, more properly, LR 23.1(C)(4)(a), NDGa. That rule was implemented in June 2003, and provides as follows:

(i) Contents of the Notice

. . . following the filing of any Reform Act class action in this District, each law firm on a complaint may choose to publish a notice. Such notice shall have as its headline "Notice of Filing Securities Class Action Against [Defendant or Defendants]" and shall provide the following information as required by the Reform Act:

1) the pendency of the action;

2) the claims asserted therein;

3) the purported class period;

4) that, not later than sixty (60) days after the date on which the first notice is published, any member of the purported class may move the court to serve as lead plaintiff of the purported class; and

5) contact information for the law firm issuing the notice, including the name of a contact person who is designated to discuss the lawsuit with putative class members, an address, a telephone number, and a website and e-mail address, if applicable. However, the notice shall not contain a promotional statement for any law firm.

The rule has further requirements:

(iii) Only One Notice Per Law Firm

Unless otherwise ordered by the court, there shall be only one notice per law firm regardless of the number of complaints filed in this Court arising out of the same or similar set of facts or circumstances.

No attorney seeking to represent the putative class shall initiate any other communication with putative class members unless approved in advance by the court. Such court approval will be granted if the communication is deemed by this Court to be reasonably necessary to achieve the purposes of the Reform Act.

This rule does not affect the rights or obligations of defendants to give notice of the pendency of the suit, nor does it preclude counsel for either party from contacting class members whom they believe to be fact witnesses or with whom they have an attorney-client relationship.

In deciding to implement the rule, The Court found that:

certain practices in Reform Act class actions have the potential to harm the interests of class members and/or defendants and can interfere with the orderly administration of justice.

For example, the court finds that numerous notices of the same litigation have been released, thereby creating the potential for confusion for potential class members and potential damage to the interests of shareholders and businesses.

The court finds further that the measures adopted herein are reasonably necessary to protect the interests of class members, realize the goals of the Reform Act, and balance the rights of those who wish to prosecute a Reform Act class action or communicate about it.

Arguably, the local rules would prohibit the use of "passive voice" press releases.

In case you were wondering, the notice issued by the law firm of Motley Rice LLC in the Witness Systems litigation does conform with the local rules outlined above.

But, that should come as no surprise. As noted several months ago by The D & O Diary, the securities litigation group at Motley Rice was substantially enlarged in February 2006 with the addition of four seasoned Atlanta-based lawyers from Chitwood Harley Harnes LLP.

Keep Those Doggies Rolling

Central Freight Lines, Inc. (NASDAQ: CENF) has reached an oral agreement in principle to settle the securities class action litigation pending against the company and certain of Central Freight's officers and directors in the United States District Court for the Western District of Texas.

According to a 10-Q filed earlier this week by the company, the agreement also settles two derivative actions arising out of the company's December 2003 IPO, as well as a third derivative action related to the January 30, 2006 announcement of a merger between Central and North American Truck Lines, LLC and Green Acquisition Company.

Jerry Moyes, the owner of North American Truck Lines, LLC and Green Acquisition Company is also both a defendant in the litigation and the former chairman of Central.

The settlement is for $2.6 million, inclusive of fees and expenses, and will be funded from the proceeds of Central's directors' and officers' liability insurance policy.

The Oklahoma Firefighters Pension and Retirement System is the lead plaintiff in the federal securities class action. Schiffrin & Barroway, LLP is lead counsel in that litigation and the Austin based firm of Smith, Robertson, Elliott, Glen, Klein & Bell, L.L.P. is liaison counsel.

Daily Trivia: Defendant Jerry Moyes is the majority investor in the Phoenix Coyotes Hockey Club and a limited partner of the Arizona Diamondbacks. Mr. Moyes is also a a member of the Board of Directors and the retired Chairman and CEO of Swift Transportation Co., a company he helped start with a single truck that has grown into the largest truckload fleet operator in the United States.

Institutional Investor Wire, No Longer Live

A number of readers have pointed out that in the short time between the post last night linking to Bernstein Litowitz Berger & Grossmann's new blog, the Institutional Investor Wire, and this morning, the blog has been removed.

No word on when (or if) Institutional Investor Wire will resume publishing.

Stay tuned.

Welcome To The New Kid On The Block

With little fanfare, a heavyweight from the securities litigation bar has arrived in the blogosphere.

Earlier this week, Bernstein Litowitz Berger & Grossmann LLP, a perpetual presence at the top of Bruce Carton's "SCAS 50," launched a blog, the Institutional Investor Wire, or iiWire.

Described as a "blog on current issues in securities litigation for institutional investors," the unnamed author indicates that their goal is:

to provide current news relating to institutional investors' involvement in securities litigation and corporate governance.

Sounds good to me.

Welcome to the blogosphere, BLBG!

Largest Customer Buys Supplier, Gets a Class Action As a Bonus

Shareholders of Intermagnetics General Corp. (NASDAQ: IMGC), a leading designer and manufacturer of magnetic resonance imaging (MRI) medical devices, have filed two class action complaints challenging the proposed $1.3 billion sale of Intermagnetics to Philips Holding USA Inc., a subsidiary of Koninklijke Philips Electronics N.V. (NYSE: PHG).

According to a 10-K filed last week by Intermagnetics, the complaints, filed in the Supreme Court of the State of New York for Albany County, allege that:

the directors of Intermagnetics breached their fiduciary duties, including by failing to publicly announce an open bidding process or otherwise seek additional offers to acquire Intermagnetics, and by failing to provide full disclosure of certain material financial information.

The complaints also allege that:

Intermagnetics (and, in one of the complaints, Philips) aided and abetted these alleged fiduciary violations. The plaintiffs seek equitable relief, including an injunction preventing us from proceeding with or consummating the merger.

Regular readers can guess what comes next:

Intermagnetics believes that these allegations are without merit and intends to contest them vigorously.

That's right, a close cousin of the "vigorous defense," the "vigorous contest."

The Albany Times Union has a story on the litigation here and The Business Review (Albany) has a story here.

The Times Union story indicates that the Albany law firm of O'Connell and Aronowitz is counsel for plaintiffs in both cases. Given the realities of securities litigation, it is likely that the firm is acting as local counsel for other more established members of the plaintiffs' bar. An attempt to review the dockets through the New York State Unified Court System's E.Court System proved fruitless.

Daily Trivia: Dr. Raymond V. Damadian is generally considered to be the father of MRI, though he was snubbed in 2003 when Paul Lauterbur and Sir Peter Mansfield were awarded the Nobel Prize in Medicine for their discoveries concerning MRI. Following the snub, Dr. Damadian took out this full-page advertisement in a number of newspapers, including the New York Times.

Flash Gordon, err, Flash Memory

According to press reports, two class action lawsuits have been filed in the Santa Clara County Superior Court by shareholders of msystems Ltd. (NASDAQ: FLSH), challenging the proposed acquisition of msystems by SanDisk Corporation (NASDAQ: SNDK).

According to a 10-Q filed by SanDisk this week, the complaints:

allege breaches of fiduciary duties by officers and directors of msystems relating to alleged option backdating and to allegedly furthering their own interests in connection with the merger, and that these alleged breaches were aided and abetted by the Company. The complaints further allege that the terms of the announced merger between the Company and msystems are not fair to msystems' shareholders.

So, Kevin LaCroix at The D&O Diary has a new case to add to his burgeoning list of options-backdating related litigation, perhaps even a whole new subcategory - "Merger-Related Options Backdating Derivative Litigation."

A review of the dockets reveals that plaintiffs' counsel include Lerach Coughlin Stoia Geller Rudman & Robbins LLP and Robbins Umeda & Fink, LLP.

Daily Trivia: msystems created the first of the now ubiquitous USB flash drives, also known as "thumb drives".