BERNSTEIN LITOWITZ BERGER & GROSSMANN LL P ALAN SCHULMAN (Bar No 128661) BLAIR A NICHOLAS (Bar No 178428) 12544 High Bluff Drive, Suite 15 0 San Diego, CA 92130 Tel (858) 793-0070 Fax (858) 793-0323
BERNSTEIN LIEBHARD & LIFSHITZ, LLP JEFFREY M HABER TIMOTHY J MACFALL DANIELLE MAZZINI-DALY 10 East 40`h Stree t New York, NY 10016 Tel (212) 779-1414 Fax (212) 779-321 8
Co-Lead Counsel for Lead Plaintiff RADIANT ADVISERS, LLC
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF CALIFORNIA
OAKLAND DIVISION
In re TURNSTONE SYSTEMS, INC Master File No CV-01-1256 SBA SECURITIES LITIGATION CLASS ACTION This Document Relates To Date October 7, 2003 ALL ACTIONS Time 1 00 p m Place 3, third floor Judge Honorable Saundra Brown Armstrong
JOINT DECLARATION OF JEFFREY M HABER AND BLAIR A NICHOLAS IN SUPPORT OF APPROVAL OF THE PROPOSED SETTLEMENT, AWARD OF ATTORNEYS' FEES AND REIMBURSEMENT OF EXPENSES, AND PLAN OF ALLOCATION OF SETTLEMENT PROCEED S
JOINT DECLARATION OF JEFFREY M HABER AND BLAIR A NICHOLAS Master File No CV-0I-1256 SBA 1 JEFFREY M HABER and BLAIR A NICHOLAS, declare as follows
2 I Jeffery M Haber is a member of the law firm of Bernstein Liebhard & Lifshitz ,
3 LLP, and Blair A Nicholas is associated with Bernstein Litowitz Berger & Grossmann, LLP, the
4 court-appointed Co-Lead Counsel for the Lead Plaintiff, Radiant Advisers, LLC ("Radiant"), in
5 the above-captioned consolidated action (the "Action") We make this declaration in support of
6 Plaintiffs' application for (1) approval of the settlement (the "Settlement"), (2) approval of the
7 Plan of Allocation of Settlement Proceeds, and (3) an award of attorneys' fees an d
8 reimbursement of expenses incurred We have personal knowledge of the matters set forth in
9 this declaration, and if called as witnesses, we could and would testify competently theret o
1 0 I PRELIMINARY STATEMENT
11 2 The purpose of this declaration is to set forth the basis for and background of the
12 Action, its procedural history, and the negotiations that led to the Settlement This declaration
13 demonstrates why the Settlement is fair reasonable and adequate and should be approved by the
14 Court, why the Plan of Allocation is fair and reasonable, and why the application for attorneys'
15 fees and reimbursement of expenses is reasonable and should also be approved by the Cour t
16 3 The Settlement is for a total of $7,000,000 in cash , and any interest accrued
17 thereon (the "Settlement Fund") The Settlement Fund is to be transferred to, and will be
18 maintained by, Co-Lead Counsel in an escrow account Z Co-Lead Counsel seek approval of an
19 award of attorneys' fees of 25% of the Settlement Fund, plus reimbursement of expenses of
20 $104,263 60
2 1 4 The Settlement was reached only after Co-Lead Counsel had conducted a n
22
23 ' The terms and conditions of the Settlement are contained in the Stipulation of 24 Settlement, dated July 22, 2003 (the "Stipulation"), the original of which was filed with the Court on July 22, 2003 25 2 The Class is comprised of all Persons and entities who purchased shares ofTurnstone 26 Systems, Inc ("Turnstone" or the "Company") common stock issued pursuant to the Company's Secondary Offering on September 26, 2000, which was completed pursuant to a Registration 27 Statement/Prospectus filed with the SEC and declared effective September 21, 2000 (the 28 "Registration Statement/Prospectus"), and who suffered damages thereb y
JOINT DECLARATION OF JEFFREY M HABER AND BLAIR A NICHOLAS Master File No CV-01-1256 SBA 1 extensive investigation of the underlying facts, interviewed numerous witnesses, prepared and
2 filed a detailed amended complaint specifying Defendants' violation of the federal securities
3 laws, opposed Defendants' motions to dismiss the amended complaint, engaged in supplemental
4 briefing concerning Lead Plaintiff's claims under the Securities Act of 1933 (the "Securities
5 Act"), drafted a second amended complaint asserting only Securities Act claims on behalf of
6 Lead Plaintiff and the Plaintiff Louisiana School Employees' Retirement System ("LSERS")
7 (collectively "Plaintiffs"), consulted extensively with an expert in financial damage analysis, and
8 reviewed and analyzed thousands of pages of documents
9 5 Settlement negotiations were hard-fought and included a mediation conducted
10 under the supervision of the Honorable Eugene Lynch, United States District Judge (Ret) The
11 1 Settlement was reached at a time when Plaintiffs and Co-Lead Counsel were fully cognizant of
1 2 the strengths and weaknesses of the case, and the risks of continued litigation, and had the benefit
13 of independent expert analysis of Turnstone's financial condition and its ability to fund a
14 settlement at various levels
15 6 The Settlement is an excellent result, particularly when considered in light of th e
16 substantial risks to Plaintiffs in continuing the Action Indeed, as set forth below, there was a
17 substantial risk that Defendants could have prevailed on a motion for summary judgment or trial
1 8 and, even if Plaintiffs were successful, there was a significant risk that the Class would not be
19 1 able to recover more than the Settlement provides The Action and settlement discussions were
20 1 complicated by the financial condition of the Company Turnstone's business is suffering and its
21 stock is trading at less than $3 00 per share As a consequence of the collapse of the competitive
22 local exchange carrier ("CLEC") market - Turnstone's primary market - the Company has
23 virtually ceased the sale of its products Turnstone noted in its recent quarterly report, "we have
24 ~ generally ceased all direct sales efforts related to [Turnstone's products], and do not expect to
25 generate material revenues from them for the foreseeable future " In January 2003, Turnstone
26 engaged Goldman, Sachs & Co as its financial advisor to explore various strategic alternatives to
27 maximize stockholder value, including possible merger and asset sale transactions, licensin g
28
JOINT DECLARATION OF JEFFREY M HABER AND BLAIR A NICHOLAS Master File No CV-O1-1256 SBA -2- arrangements, and dissolution of the Company and distribution of assets to its stockholders O n
2 April 24, 2003, Turnstone announced that it had initiated actions to terminate most of Its
3 remaining employees except for a limited team of employees that will continue to handle matters
4 related to the Company's previously announced exploration of strategic alternatives Turnstone's
5 Board of Directors approved the headcount reductions due to the continued lack of visibility with
6 respect to both the demand for the Company's existing products and the potential demand for its
7 products under development Despite these obstacles, Co-Lead Counsel were able to achieve a
8 substantial cash se ttlement on behalf of the Class
9 7 The Settlement negotiations were conducted by experienced counsel on both sides
10 with a firm understanding of the strengths and weaknesses of their clients' respective claims and
11 defenses During these negotiations, both sides presented a complete picture of their respective
12 cases on liability and damages The Settlement confers an immediate and substantial benefit on
13 the Class and eliminates the risk of continued litigation under circumstances where a favorable
14 outcome could not be assured and there was a significant risk that Plaintiffs would be unable to
1 5 recover any judgment due to the financial condition of Turnstone Co-Lead Counsel's fe e
16 request is 25% of the Settlement Fund, which the Ninth Circuit has repeatedly held is the
17 "benchmark" fee in the Circuit in common fund case s
18 8 The Plan of Allocation was devised by Co-Lead Counsel in consultation with
19 Plaintiffs' damages expert The plan, which is based on a damages formulation devised by
20 Plaintiffs' damages expert, provides that Class members who submit timely, valid claims will
21 share in a pro rata distribution of the Net Settlement Fund Accordingly, it is respectfully
2 2 submitted that the Settlement and Plan of Allocation should be approved as fair, reasonable and
23 1 adequate, and Co-Lead Counsel should be awarded attorneys' fees of 25% of the Settlement
24 Fund and reimbursement of expenses for creating a substantial benefit on behalf of the Clas s
25 11 HISTORY OF THE ACTION
26 9 The following is a summary of the principal events during the course of this
27 Action
28
JOINT DECLARATION OF JEFFREY M HABER AND BLAIR A NICHOLAS Master File No CV-O1-1256 SBA -3- 1 A Background
2 10 Turnstone provides software and equipment for the digital subscriber lin e
3 ("DSL") market DSL is a technology that enables individuals and businesses to access th e
4 Internet using existing copper telephone lines, rather than alternative access technologies, such a s
5 fiber optic or cable connections ¶¶ 2, 42' DSL networks use existing copper lines because they
6 are less expensive to deploy than fiber optic or cable connections T 4 2
7 1 I Two types of companies offer DSL services to customers CLECs and incumben t
8 local exchange carriers ("ILECs") CLECs are companies that are authorized to compete in local
9 communications services markets pursuant to the Telecommunications Act, or comparable
10 legislation in countries outside of the United States CLECs are typically smaller telephone
1 1 companies created to compete with exist ing major telephone companies that provide telephone
12 service in a given area ILECs are companies hold ing an exclusive license to offer local
13 telephone services prior to the Telecommunications Act (e g , the Bell operating companies), or
14 the equivalent legislation in foreign countries ¶ 4 3
15 12 . At all relevant times to this litigation, Turnstone's customer base consisted almos t
16 entirely of CLECs The Company's CLEC customers included, among others, Northpoint
17 Communications Inc ("Northpoint "), Mpower Communications, McLeod USA, Covad
18 Communications ("Covad"), Rhythms NetConnections ("Rhythms"), KPN Quest NV, D O
19 Communications, and Sunrise Telecom ¶ 3
20 13 In the mid-to-late 1990's, various competitive dynamics prompted local exchang e
21 carriers to target either the consumer or business market segments using DSL technology Cable
22 operators, such as AT&T@Home and RoadRunner , began delivering high-speed consumer
23 services, prompting incumbent local exchange carriers to respond by accelerating thei r
24 investments in DSL technologies ILECs generally focused their DSL deployments on the
25 consumer segment by using versions of DSL that worked in conjunction with existing analog
26 voice services, as well as the associated line maintenance procedures However, these consumer-
27
28 3 References to 'I _," are to paragraphs of the Second Amended Complaint
JOINT DECLARATION OF JEFFREY M HABER AND BLAIR A NICHOLA S Master File No CV-O1-1256 SBA -4- 1 oriented versions of DSL typically had limitations that made them unattractive for businesses
2 ¶7
3 14 According to market analysts, 1999 was a breakout year for DSL deployment ,
4 with the number of DSL lines in North America rising nine fold Such growth was driven mainly
5 by the demand for high-speed access to the Internet This was especially true as low-speed dial-
6 up connections proved to be inadequate to support the more sophisticated and bandwidth
7 intensive applications (i e , video) Cf ¶ 5
8 15 The number of users accessing the Internet, and the amount of informatio n
9 available via the Internet, was (and is) continually expanding ¶ 5 . Internet content is becoming
10 more data-intensive because websites have expanded their offerings to include streaming vide o
11 and audio, software downloads, and animation As the number of users and the available Internet
12 content increase, the demand for high-speed connections increases The explosive demand for
1 3 high-speed DSL solutions was straining service providers' ability to provision DSL services ¶
14 46
15 16 To meet this demand, local exchange carriers began to offer high-speed Internet
16 access and other services over existing telephone lines The existing lines that comprise the local
17 loop extend from a telephone company's central offices out to businesses and residences ¶ 6
18 17 In June 2000, the FCC required ILECs to give CLECs access to the upper
19 frequency of existing plain old telephone service ("POTS ") lines as a means of providing DSL
20 service to potential customers The arrangement requires CLECs and ILECs to share the same
2 1 physical copper loop in order to deliver services to their customers, thereby allowing CLECs t o
22 provide DSL services through the use of the same copper pair that ILECs use for voice services .
23 Copper phone lines extend from the telephone companies' central offices to residences and
24 businesses To gain access to the local loop (i e , the existing telephone lines), CLECs lease
25 space in the central office of an ILEC CLECs then install network equipment in this space and
26 1 lease specific copper phone lines to connect subscribers ¶ 4 4
27 1 18 Loop sharing by CLECs and ILECs necessitates a loop management system t o 28
JOINT DECLARATION OF JEFFREY M HABER AND BLAIR A NICHOLAS Master File No CV-Q1-1256 SBA -5- 1 ensure that neither type of provider adversely impacts the other's use of the loop . Loop
2 management entails the automation and remote control of installation, qualification, an d
3 maintenance of standard copper phone lines 14 5
4 19 Despite the new revenue opportunities DSL provided, CLECs encountered severa l
5 major challenges in deploying and maintaining a new DSL infrastructure For example, DSL
6 service providers often experienced difficulty with the identification, installation, and quality
7 assessment of particular lines . DSL operates at higher frequencies than traditional voice servic e
8 and, therefore, the length and quality of the copper line is critical Thus, for service providers to
9 provide efficient DSL service, they had to be able to qualify and monitor the copper lines, ¶J 11 ,
1 0 47
11 20 Another difficulty facing DSL service providers was the significant time an d
12 expense incurred in deploying, installing, and maintaining DSL service by means of traditional
13 labor-intensive procedures, such as additional truck rolls or field technician visits ¶IJ 12, 48
14 Therefore, manual loop testing was not feasible from either a cost perspective or an efficiency
15 perspective ¶ 48 This was especially important as Turnstone's CLEC customers began to
16 experience financial difficulties in the latter part of 200 0
17 21 The demand for DSL services also strained service providers' ability to deliver
18 services in a timely and cost-effective manner According to Telechoice, problems arose i n
19 approximately 85% of all DSL deployments, requiring service calls (i e, truck rolls and/o r
20 technician visits) to solve the problem
21 22 The CX100, was created to address the challenges faced by DSL service providers
22 by, inter aba, enabling telephone access providers to remotely evaluate, manage, and control
23 DSL connections within the telephone central office, and identify copper lines that are suitable
24 for DSL, thus making installation and maintenance of DSL on those lines more efficient ¶ 4 9
2 5 Thus, the CX 100 was designed to reduce the need to dispatch technicians ¶¶ 13, 4 9
26 I 23 The CX 100 also was designed to provide the loop testing , qualification, and
27 1 protection switching functions considered important to delivering high quality, DSL-base d
281
JOINT DECLARATION OF JEFFREY M HABER AND BLAIR A NICHOLAS Master File No CV-01-1256 SBA -6- 1 services The CX 100 is deployed in a central office co-location between the DSL access
2 multiplexer ("DSLAM") and the DSL customer, and is generally sold with about 100 lines, or
3 about one-fifth capacity As service providers provisioned new lines and/or added DSLAMs,
4 more modules, each of which supported 25 lines, could be added to keep supply in line with
5 demand ¶ 5 0
6 24 A typical CX100 unit was sold with either a 19 inch chassis (capable of holding
7 about 425 DSL lines) or 23 inch chassis (capable of holding up to 550 DSL lines), one P 100
8 module, which performs the management and control operations, and one or more L140
9 modules, which connect to the DSL lines As service providers provision additional lines and/or
10 add DSLAMs, more L 140 modules, each of which support 25 lines, could be added to keep
11 supply in-line with demand .
12 25 CrossWorks is a value-added software enhancement to the functionality of th e
13 CX100 CrossWorks software was designed to enable service providers to integrate the CX100
14 loop management functions into back-office OSS, thereby enhancing their ability to efficiently
15 scale DSL service offerings to meet customer demand ¶ 51 Specifically, the Cross Works wa s
16 supposed to enable service providers the ability to automate the management of copper lines,
17 CX100's and its modules, and DSLAMs, while at the same time integrating the functionality o f
1 8 the product with operational support systems
19 26 Cross Works' client-server architecture was designed to interface with a se rvice
20 provider's back-office OSS ¶ 51 CrossWorks could be used on a stand-alone basis via a client-
21 server application Alternatively, CrossWorks could be used with the se rvice provider's own
22 user interface, in which case the CrossWorks server, which had the majority of the automatio n
23 functionality, could accessed via COBRA, JAVA, remote method indication (RMI), simple
24 network management protocol (SNMP), or distributed component object model (DCOM)
25 27 Together, a service provider could remotely perform loop quali fication and testing
26 necessary to test the copper loops provided by the ILEC to determine their suitability for planne d
27 service If impediments were detected, the CX100 was supposed to identify and locate the
28
JOINT DECLARATION OF JEFFREY M HABER AND BLAIR A NICHOLAS Master File No CV-01-1256 SI3A -7- 1 problem The CXI00 was also supposed save technician hours and reduce human error in
2 identifying the proper line for DSL connection Aside from automating installation and pre-
3 qualification , the CX100 also alleviated customer downtime with a process called protection
4 switching With protection switching , a subscriber could instantly be rerouted from faile d
5 equipment to properly working spare equipment, thereby removing the need for a field technician
6 to physically make the switc h
7 28 As long as the CX100 and CrossWorks operated reliably and properly, CLEC s
8 were able to conserve resources by not having to put in man-hours in every central office 24
9 hours per day, seven days a week Internal reports show that the CXI00 and CrossWorks were
l0 i unreliable and did not operate as represented This became a tremendous issue as the
telecommunications sector, in particular the CLEC community, fell on hard times by the fall of
12 1 2000 Consequently, the demand for the CX100 and CrossWorks declined as the CLECs had
13 less money to spend to open new central offices with new equipment that was not reliable and/or
14 profitably operate existing ones
15 B Summa of Defendants' Wrongdoing
16 29 Turnstone conducted an initial public offering of its common stock in February
17 2000 Shares of Tumstone common stock have been traded on the NASDAQ National Market
18 System since February 1, 2000 126, 54 Since Turnstone's inception, the Company has
1 9 financed its operations through private and public sales of securities and, to a lesser extent,
20 equipment lease financin g
21 30 To capitalize on the revenue opportunities generated by the FCC's November
22 1999 order, Turnstone's Board of Directors (the "Board") authorized the Company to conduct the
23 Secondary Offering in August 2000, to raise money "for general corporate purposes, including
24 working capital and capital expenditures and potential acquisitions of, or investments in,
25 complementary businesses, technologies and products " In doing so, the Board authorized the
26 filing of the Registration Statement/Prospectus with the SEC that permitted the Company and
27 certain existing stockholders, including Defendants Tinsley and Duffie, to sell shares of th e
28
JOINT DECLARATION or JEFFREY M HABER AND BLAIR A NICHOLAS Master File No CV-01-1256 SBA -8- 1 11 Company's common stock in the Secondary Offering ¶ 14 I
2 31 On September 26, 2000, Tumsione announced the completion of the Secondary
3 Offering in which 4,000,000 shares of common stock were sold to the investing public pursuant
4 to the Registration Statement/Prospectus The Company received approximately $166 3 million
5 from the shares issued in the Secondary Offering, net of underwriters' commissions Further, the
6 Individual Defendants sold 264,500 shares of Turnstone common stock, for proceeds in excess of
7 $11 2 million, in the Secondary Offering ¶ 5 6
8 32 Plaintiffs allege that the Registration Statement/Prospectus, which was signed b y
9 Defendants Tinsley and Duffie, contained untrue statements of material fact and omitted to state
10 material facts required to be stated in order to make the statements made not misleading
11 Specifically, Defendants represented that the CX 100 "rapidly and efficiently deploy[ed] high
12 speed digital services on existing copper telephone lines," "enable[d] carriers to remotely identify
13 and qualify any copper telephone line in their network, without the need for on-site labor," and
1 4 "improve[d] network reliability and availability " Defendants also represented that th e
15 1 CX1 00 enabled carriers to accurately perform remote "line qualification, testing and maintenance 16 1 on any line connected through the system " ¶¶ 15, 57, 6 4
17 33 The representations in the Registration Statement/Prospectus were materially fals e
18 and misleading because the CX 100 was fraught with problems that rendered it incapable of
19 performing "reliable," "rapid," "efficient," and "accurate" installation, management, deployment,
20 or testing of DSL services Specifically, the CX 100 defects included, among others things,
21 blown capacitors, malfunctioning chips, and inaccurate calibration that caused the CX100 to
22 provide inaccurate and unreliable test data on the DSLs ¶¶ 16, 5 8
23 34 For example , blown capacitors caused the CX100 to give erroneous line test
24 readings When a capacitor is blown, the voltage flow is not consistent with the parameters fo r
25 the test and, therefore, the CX100 would show incorrect test results for the line being tested ¶
26 59 According to a former employee, Rhythms had complained about Turnstone's capacitanc e
27 measurements
28
JOINT DECLARATION OF JEFFREY M HABER AND 13LAIR A NICHOLAS Master File No CV-O1-1256 SBA -9- 1 35 In addition, the CX 100 utilized a number of circuit cards that comprised the
2 circuitry to perform line testing When malfunctioning or defective chips at the circuit card leve l
3 were used in the CX100, the product operated outside its design specifications ¶ 60 Asa result ,
4 the CX100 showed lower than normal readings in telecom circuitry tests, falsely indicating that
5 the circuitry was working within proper specifications Conversely, malfunctioning chips also
6 caused the CX 100 to falsely indicate that the circuitry was not working within prope r
7 specifications In addition, the malfunctioning chips shortened the effective range of testing b y
8 the CX 100 Id
9 36 The software used to operate the CX100 - the Cross Works an d
10 CrossConfiguration - were also rife with errors, particularly data communication errors in the
software code 4 These errors required new releases of the CX 100 software called maintenanc e
12 releases, but jokingly referred to as " bug" releases by Company employees ¶ 6 1
13 37 Northpoint and Covad complained about the number of "fix" releases issued b y
14 Turnstone As Rhythms learned, with each new release, Rhythms needed to reconfigure its
15 system The problem was that the settings for the older version of the firmware were not
16 compatible with the new verison 5 To get the CX 100 to work with the newer version, the
1 7 customer had to take the product offline causing service interruptions for the end user To avoid
18 1 losing customers, Turnstone's customers delayed deployment of the CX100 until the product
19 1 would operated bug free 20 1 38 Turnstone's customers also found that problems were not limited to the CX100
21 Covad found serious connectivity problems with Turnstone's loop testing software The software
22
23
24 4 NorthPoint also complained of connectivity problems with the CXI 00 For example, 25 NorthPoint found that problems with FTP syntax, though ultimately resolved, resulted in continual loss of connection to the co-location Connectivity issues adversely impacted NorthPoint's U S 26 installations In fact, as a consequence of this and other problems, by September 2000, NorthPoint , 27 had installed only 3 CX100 units in the United States out 242 purchased
28 5 Firmware is the basic operating instructions for the hardware - the CX100
JOINT DECLARATION OF JEFFREY M I IABER AND BLAIR A NICHOLAS Master File No CV-O1-1256 SBA -10- 1 could not handle the DSL traffic that the CXI 00 was designed to control 6 Covad found that its
2 loop management tests kept timing out because the CrossWorks server could not handle enough
3 simultaneous requests from Covad's customers As a consequence, DSL service was constantly
4 interrupted
5 39 In addition, the failure to properly ground the unit during installation caused
6 inaccurate calibration The CX100 regulated the wave length of the voice transmissions
7 traveling along the copper wire The wavelengths had to be contained within certain bandwidth
8 specifications, and wavelengths that were longer or shorter than specified for the bandwidth
9 would affect the quality of the voice transmissions on that wire The wavelengths were defined
10 against a graph, displayed on a screen The CX 100 would measure whether the wavelengths
11 remained consistent over the length of the wire and stayed within the appropriate bandwidth
12 When inaccurately calibrated, the measurements made by the CX100 were incorrect This, in
13 turn, would hamper the ability to provide optimal DSL service over the copper wire 6 2
14 40 As a consequence of these problems, Tumstone's customers were unable to
15 "remotely identify and qualify" copper lines in the network without on-site labor, rapidly restore
16 network services following an equipment failure, improve the installation and management of
17 DSL services, or deliver high levels of reliability and scalabihty in large, complex networks ¶
1 8 63
19 41 Tumstone's product problems, however, were not confined to the foregoing The
20 CX100's functionality was also more limited than the products of rival companies, putting
21 Turnstone at a competitive disadvantage Defendants represented that Turnstone's products were
22 compatible with those of its competitors, and that the carrier could continue to use the CX100 for
23 all DSL additions in order to avoid incurring the additional equipment, inventory, training, an d
24
25 b Tumstone represented that the CX 100 could handle about 100 simultaneous sessions In reality, the CrossWorks server could handle only 40-50 simultaneous sessions- 26 7 NorthPoint had complained that it was unable to obtain accurate test measurements 27 due to air conditioning interference - the magnetic field generated when the air conditioning in the 28 central office operated
JOINT DECLARATION OF JEFFREY M HABER AND BLAIR A NICHOLAS Master File No CV-0I-1256 SBA -II- 1 operational costs associated with switching to another vendor In the Registration
2 Statement/Prospectus Defendants represented "The CX 100 is designed to be compatible with all
3 types of local loop services and all types of DSL access multiplexers A single CX100 may be
4 deployed with multiple DSL access multiplexers from a varie ty of vendors, including Alcatel,
5 Cisco, Copper Mountain , Lucent, Nokia and Paradyne " ¶ 6 4
6 42 These representations were materially false and misleading Far from offerin g
7 compatibility and interoperability with the equipment of a variety of vendors, the above-
8 described problems with the CX 100 caused it to malfunction with all types of DSLAMs and
9 when used with all types of local loop services 8 For example, Covad and NorthPoint
10 ; complained about the CX100's lack of interoperability with products from Harris Corporation In
11 short, the CX 100 was not compatible with other products because of the above-described defect s
12' ¶ 65
1 3 43 Given the number of problems with the CX 100 and CrossWorks an d
14 CrossConfiguration software, Turnstone's relationship with its customers turned "tense " This
15 was true well before the start of the Class Period Indeed, these problems exacerbated the
16 Company's ability to sell its CX 100 and CrossWorks products to the CLECs who, by late
17 summer 2000, were experiencing financial difficulties For the most part, CLECs were highly
18 leveraged, undercapitalized start-up companies that relied heavily upon vendor-financing to build
1 9 service networks As vendor-financing became increasingly difficult to obtain, and product
20 1 defects could not be resolved, the CLECs became concerned that the Turnstone product could not
2 1 be deployed, thereby impacting their ability to generate revenue Discovery showed that the
22 CLEC equated cost savings with product reliability As these concerns grew, the CLECs sharply
23 curtailed orders for new CX 100s
24 44 The decreasing demand for Turnstone's products, which was exacerbated by the
25 defects discussed above, caused Turnstone's Class Period inventory levels to rise dramaticall y
26
27 8 NorthPoint even encountered problems installing the CrossWorks on servers running 28 Windows NT,
JOINT DECLARATION OF JEFFREY M HABER AND BLAIR A NICHOLAS Master File No CV-01-1256 SBA -12- In the Company's first quarter 2000 Form 10-Q, filed with the SEC on May 8, 2000, Turnstone
2 reported that its pre-Class Period inventory was $3,206,000 In its Form 10-Q for the second
3 quarter of 2002, filed with the SEC on August 7, 2000, Turnstone reported its second quarter
4 inventory had tripled from its first quarter 2000 level, to $9,665,000 The Company's third
5 quarter 2000 Form 10-Q, filed with the SEC on November 7, 2000, reported that Turnstone's
6 inventory level had more than doubled from the second quarter, to $20,203,000 Finally, by the
7 end of 2000, the period ending December 31, 2000 -- only two days prior to the close of the Class
8 Period - the Company reported that its inventory levels had reached a staggering $29,502,000
9 Thus, during the Class Period - a period of nine months - Turnstone's inventory increased more
10 than ninefold Several months after the end of the Class Period, in the Company's Form 10-Q for
11 the second quarter of 2001, Turnstone reported that it had written-off $35 million in inventory ¶
12 68
1 3 45 Based, in part, on the problems described above, on November 6, 2000 (only 4 1
14 days after the Secondary Offering), Turnstone was forced to announce a major downward
15 revision of its fourth quarter revenue estimates from $56 2 million to $38 million, a decrease of
16 more than 30% The Company attributed its downward guidance "to increased weakness among
17 its competitive local exchange carrier [CLEC] customers and recent changes to their capital
18 spending plans " Following the Company's surprising announcement, the price of Turnstone
19 common stock lost 65% of its value, plummeting from the previous business day's close of
20 $29 50 per share to $10 375 per share on exceptionally heavy trading of over 16 million share s
21 46 Less than two months after the November 6`h announcement, on January 2, 2001 ,
22 Turnstone was forced to reveal that the lack of demand for its products by the Company's CLEC
23 customers had a greater impact on the Company than previously disclosed, announcing that
24 fourth quarter 2000 revenue would be "substantially below" market estimates because its CLEC
25 customers had canceled and/or reduced their orders ¶ 69 The Company announced revenue of
26 $26-$28 million for the quarter -- 37% lower than consensus analyst estimates, and only half of
27 the revenue guidance figure provided by the Company on October 17, 2000 Id The Company
28
JOINT DECLARATION OF JEFFREY M 1-IABER AND BLAIR A NICHOLAS Master File No CV-01-]256 SBA -13- I also disclosed that it expected to take a $13 million to $15 5 million charge to increase its
2 inventory reserves and bad debt reserves, thus causing Turnstone to forecast an operating loss of
3 $12 million to $14 million for the quarter Id Following this announcement, Turnstone's shares
4 fell to $6 31 per share Id
5 47 In its Annual Report on Form 10-K for the fiscal year ended December 31, 2000 ,
6' filed after the Class Period, the Company further disclosed that several of its customers had
7 become delinquent in making their payments for prior sales, and that two of those customers,
8 Digital Broadband Communications, Inc and Vectris Communications, Inc , had filed for
9 bankruptcy protection Consequently, the Company was forced to record a charge to its bad debt
10 reserve for the receivables of those customers in the fourth quarter of 2000 ' 70 The Company
11 also reported that it had taken a $4 1 million charge to write down the value of inventory on-hand
12 at December 31, 2000, as well as a $7 3 charge to write down the value of components ordered
13 for future delivery in the fourth quarter Id
1 4 48 In the Company's 10-Q for the second quarter of 2002, filed with the SEC o n
1 5 August 7, 2000, Tumstone's pre-Secondary Offering inventory was reported as $9,665,000 16 1 However, in its 10-Q for the third quarter of 2000 - the quarter in which the Secondary Offering
17 was conducted - Turnstone reported that by September 31, 2000, its inventory was $20,203,000,
18 more than double that of the previous quarter By the end of the fourth quarter 2000 - the quarter
19 following the Secondary Offering - Turnstone reported that its inventory was a staggering
20 $29,502,000, more than a threefold increase from the Company's pre-Secondary Offering level s
21 C Commencement Of The Federal Action And Appointment Of Lead Plaintiff And Lead Counse l 22 49 On March 28, 2001, the LSERS filed an action against Defendants under Section s 23 11, 12(a)(2), and 15 of the Securities Act on behalf of all purchasers of Turnstone's common 24 stock in the Secondary Offering, alleging that Defendants issued false and misleading statement s 25 in the Registration Statement/Prospectus 26 50 Subsequently, four actions were filed asserting claims against Defendants for th e 27 issuance of materially false and misleading statements during the period June 5, 2000 an d 28i
JOINT DECLARATION OF JEFFREY M HABER AND BLAIR A NICHOLAS Master File No CV-O1-1256 SBA -14- 1 January 2, 2001, in violation of Sections 10(b) and 20 (a) of the Securities Exchange Act of 1934, , I 2 15 U S C §§ 78j(b) and 78t( a), and Rule I Ob-5 promulgated under Section 10(b) by the SEC, 1 7 3 C F R § 240 1 Ob-5 One of these actions was filed by Radian t
4 51 On January 7, 2002, the Court entered the Stipulation and Proposed Order
5 designating Radiant as Lead Plaintiff and appointing Bernstein Liebhard & Lifshitz, LLP and
6 Bernstein Litowitz Berger & Grossman LLP Co-Lead Counsel for Lead Plaintiff and the Class
7 52 On March 19, 2002, Lead Plaintiff filed two separate amended consolidate d
8 complaints, each of which was based on essentially the same course of conduct One complaint
9 asserted claims under the Securities Act, while the other asserted claims under the Exchange Act
10 Following proceedings in which Lead Plaintiff explained its reasons for filing two separat e
11 complaints, and pursuant to Court order, Radiant filed an Amended Consolidated Complaint on
1 2 September 13, 2002 (the "Amended Complaint")
13 53 On October 8, 2002, the Turnstone Defendants and the Underwriter Defendants
14 filed motions to dismiss the Amended Complaint Defendants argued in their motions to dismiss
15 that the Amended Complaint (i) failed to state a claim for securities fraud because Lead Plaintiff
16 did not plead fraud with particularity as required by the Private Securities Litigation Reform Act
17 of 1995, (ii) failed to plead facts constituting strong circumstantial evidence of deliberat e
18 recklessness or conscious misconduct, ()ii) failed to identify any false or misleading statement
1 9 made by any of the defendants as required under the Exchange Act, (v) that the statements
20 identified by Lead Plaintiff were protected by the bespeaks caution doctrine, and (vi) failed to
21 state claims under the Exchange Act or the Securities Act because Lead Plaintiff failed to plead
22 fraud with the requisite particularity under Fed R Civ P 9(b)
23 54, Lead Plaintiff opposed the motions on November 4, 2002 With the filing o f
24 Defendants' reply memoranda on November 19, 2002, the motions were deemed fully submitte d
25 55 On December 10, 2002, the Court requested supplemental briefing on the issue o f
26- whether the Amended Complaint sounded in fraud sufficient to apply Fed R. Civ P 9(b) to
2 7 Lead Plaintiff's Securities Act claims On February 4, 2003, the Court issued a comprehensiv e
281
JOINT DECLARATION OF JEFFREY M HABER AND BLAIR A NICHOLAS Master File No CV-41-1256 SEA -15- I order granting in part and denying in part Defendants' motions to dismiss, and dismissing the
2 Amended Complaint with leave to amend In particular, the Court sustained Lead Plaintiff's
3 Securities Act claims, asserted in Counts I, 11, and III against all Defendants, except Defendant
4 Savoie with regard to Count II The Court found that as to Counts IV and V - the Exchange Act
5 claims - Lead Plaintiff failed to adequately plead facts giving rise to a violation of the Exchange
6 Act Pursuant to the February 4" Order, the Second Amended Complaint was filed on behalf o f
7 ~ Lead Plaintiff and LSERS
8 1 Informal Interviews
9 56. Throughout the pendency of this Action, Co-Lead Counsel identified numerous
10 material witnesses who provided relevant information pertaining to Plaintiffs ' claims The
11 information derived from these interviews was important and served as the factual basis for the
12 detailed allegations contained in the amended complaints
13 2 Experts
14 57 During the litigation, Co-Lead Counsel conferred on many occasions with a
15 consultant with expertise about loss causation and damage analysis issue s
1 6 58 Plaintiffs' damages expert analyzed the potential recoverable damages and the
17 materiality of the alleged false and misleading statements The damage consultant also assiste d
18 in formulating the Plan of Allocation in connection with the Settlement
19 III SETTLEMENT
20 A Settlement Negotiations
21 59 Settlement negotiations began soon after Plaintiffs filed the Second Amended
22 Complaint The settlement negotiations took place at arm' s-length between experienced counse l
23 for both sides
24 60 Throughout the course of the negotiations, Co-Lead Counsel consulted
25 extensively with their damages expert Defendants strongly disputed the analysis and
26 conclusions of Plaintiffs' damages expert, particularly the amount of recoverable damages
27 Defendants argued that any damages to the Class were caused by market factors, notably, th e
28
JOINT DECLARATION OF JEFFREY M HABER AND BLAIR A NICHOLAS Master File No CV-01-1256 SBA -16- 1 sudden collapse of the CLEC market Co-Lead Counsel, together with Plaintiffs' damages
2 expert, analyzed and attempted to refute Defendants' conclusions Settlement discussions were
3 further complicated by the financial condition of Turnstone, which had ceased all material direct
4 selling activitie s
5 61 On July 9, 2003, the parties participated in mediation before Judge Lynch In
6 advance of the July 9, 2003 mediation, Co-Lead Counsel prepared a detailed, confidential,
7 mediation statement setting forth the history of the Action and the key evidence Co-Lea d
8 Counsel had obtained in support of the allegations in the Second Amended Complaint During
9 the mediation session, Co-Lead Counsel and Defendants' counsel made presentations to Judg e
10 Lynch concerning their respective views regarding the merits of the Action and the various issues
11 with respect to establishing liability and damages In addition, the parties discussed the
12 Company's financial condition, including the fact that Turnstone has ceased all manufacturing
13 and selling operations
1 4 62 Upon reaching an agreement , the parties and Judge Lynch participated in a n 15 I telephonic conference in which the Court was apprised of the successful resolution of the Actio 16 B The Significant Litigation Risks of Establishing Defendants' Liabilit y
17 63 As both parties acknowledged, there were substantial risks of establishing both
18 liability and damages and recovering any judgment The core of Plaintiffs' case (and damages )
19 was that the Registration Statement/Prospectus signed by Defendants Tinsley and Duffl e
20 contained materially false statements concerning the functioning and performance of Tumstone's
21 principal product, the CX100
22 64 Defendants raised two principal affirmative defenses (a) the underlying factual
23 premise for the Second Amended Complaint is wrong, namely, that product returns were de
24 minimus and customer satisfaction with Tumstone and its products was very favorable, and (b)
25 even if the allegations are proven, factors other than any alleged untrue statement of material fact ,
26 omission of material fact,-or misleading statement of fact caused Plaintiffs' alleged damage s
27 65 During the litigation, Defendants produced numerous documents to Plaintiffs ,
28
JOINT DECLARATION OF JEFFREY M HABER AND GLAIR A NICHOLAS Master F ile No CV-O1-1256 SBA -17- 1 including documents relating to Turnstone's customer complaints, product returns, and
2 installation problems After reviewing the Company's documents, Co-Lead Counsel concluded
3 that while the Company had experienced product-related and installation-related customer
4 complaints, customer satisfaction was not unusually lo w
5 66 Instead, discovery showed that Turnstone's CLEC customers - which were highl y
6 leveraged, undercapitalized, start-up companies - had increasing difficulty obtaining the vendor-
7 financing upon which they relied to build service networks As a consequence, the demand for
8 Turnstone's products rapidly dropped as the CLECs were unable to continue building service
9 networks
10 67 In sum, Co-Lead Counsel believes that this was a very difficult case, and that
11 there were substantial risks of establishing liability
12 68 While the risks of establishing liability were considerable, the risks of provin g
13 damages - and of recovering a judgment - were at least as substantial, if not more so Even if
14 Plaintiffs were able to establish Defendants' liability, there was a considerable risk that a jury (or
1 5 this Court on summary judgment) could determine that damages were, primarily , the result of the 16 sudden collapse of the CLEC market and that Plaintiffs and the Class were ent itled to far less
17 than the Settlement amount - and a significant risk that Pla intiffs could recover nothing
18 69 Plaintiffs' damages expert opined that, assuming Plaintiffs prevailed on all thei r
19 I claims, likely recoverable damages would be approximately $50 million However, Defendant s
20 vigorously disputed this amount
21 70 Had this case proceeded to trial and Plaintiffs obtained a judgment, Defendant s 22 would have obviously appealed, and the Company's resources would undoubtedly be seriously 23 depleted by the time any judgment became final Based upon Co-Lead Counsel's experience in
24 litigating complex securities actions, Co-Lead Counsel believe that a trial of this action would
25 not have occurred for at least one year, and by that time the Company's assets would likely be
26 significantly diminished Thus, while damages may have been approximately $50 million,
27 Plaintiffs and Co-Lead Counsel understood that, even if they were successful at tnal, there was a
28
JOINT DECLARATION OF JEFFREY M HABER AND BLAIR A NICHOLAS Master File No CV-O1-1256 SBA -18- substantial risk that they would recover less than the Settlement amount after many years of
2 litigation
3 71 In light of the risks of establishing liability and collecting a judgment, Co-Lead
4 Counsel and Plaintiffs respectfully submit that the Settlement represents an outstanding result fo r
5 the Class The Settlement will provide Class Members with a substantial benefit now, rathe r
6 I than after years of continued litigation Based on these considerations, Plaintiffs respectfull y
7 submit that the Settlement is fair , reasonable and adequate and should be approved by the Court
8 C Mailing And Publication Of Notice Of Settlement
9 72 The Court' s order preliminarily approving the Se ttlement and providing for notic e
10 was entered on July 25, 2003 (the "Notice Order") It directed Co-Lead Counsel to cause the
11 mailing of the Notice of Proposed Settlement of Class Action (the "Notice") and the Proof o f
12 Claim and Release (the "Proof of Claim") to all potential Class Members identifiable with
13 reasonable effort by August 1, 2003
14 73 The Notice Order also directed Co-Lead Counsel to cause the Summary Notice for
15 Publication ("Publication Notice") to be published in Investor's Business Daily on or before
1 6 August 1, 200 3
17 74 Submitted concurrently herewith is the Affidavit of Shandarese Gan, Assistan t
18 Vice President of Securities Operation of the Garden City Group, the Claims Administrator,
19 stating that over 5,634 Notices have been mailed to potential Class Members, and that the
20 Publication Notice was published in Investor's Business Daily on August 1, 2003, as directed by
21 the Court Affidavit of Shandarese Garr, sworn to September 25, 2003 ("Garr Affidavit" or
22 "Garr Aff "), ~¶ 7, 9, Ex C 23 75 Neither Co-Lead Counsel nor the Claims Administrator have received an y
24 I objections to the Settlement or Plaintiffs' request for the award of 25% of the Settlement Fund a s
25 attorneys' fees, plus reimbursement of expenses up to $150,000 9 Garr Aff , ~ 10 Co-Lead 26 27 9 Plaintiffs' Counsel are seeking reimbursement of $104,263 60 in expenses, 28 substantially less than provided in the Notic e
JOINT DECLARATION OF JEFFREY M HABER AND BLAIR A NICHOLAS Master File No CV-01-1256 SBA -19- 1 Counsel respectfully submit that the reaction of the Class militates strongly in favor of approvin g
2 both the Settlement and the request for the award of attorneys' fees and expenses '0
3 IV THE PLAN OF ALLOCATIO N
4 76 The objective of the proposed Plan of Allocation is to equitably distribute th e
5 Settlement proceeds to those members of the Class who suffered economic losses as a result of
6 the misrepresentations in the Registration StatementiProspectus, as opposed to losses caused by
7 market, industry, or other factors The misrepresentations alleged in this case relate primarily to
8 the performance and functionality of the Company' s primary product, the CX100 Thes e
9 misrepresentations increased investors' expectations of the Company's future prospects These
10 misrepresentations artificially inflated the price of Turnstone common stock in the Secondary
11 Offering Based on Plaintiffs ' damages expert's review of the available information, curative
12 disclosures occurred on November 6, 2000 - when Turnstone announced revenue and EPS
13 declines for the qua rter ending December 31, 2000 due "to increased weakness among its
14 competitive local exchange carrier (CLEC) customers and recent changes to their capital
15 spending plans " - and January 2, 2001 - when Turnstone announced that its 4th Qua rter 2000
16 revenue would be 37% lower than consensus market analyst estimates , and that the Company
1 7 forecasted an operating loss of $12 million to $14 million for the quarter On each occasion,
1 8 Turnstone's stock price suffered a statistically significant price decline The economic losses
19 resulting from these corrective disclosures provides a reasonable basis for allocating the
20 settlement proceeds among Se ttlement Class Members Declaration of Bjorn I Steinholt, dated
21 September 25, 2003 ("Steinholt Decl "), at 117-1 0
22 77 The entirety of the Net Settlement Fund will be distributed to Authorize d
23 Claimants based on a pro rata basis
24
25
26 10 Two individuals - Katherine K Bingham and Patricia Leonard - have requested exclusion from the Class However, according to their exclusion requests, neither Ms Bingham nor 27 Ms Leonard purchased Turnstone stock pursuant to the Secondary Offering Joint Decl , ¶ 77, Garr 28 Aff, ¶ 10, Ex D Therefore, neither individual is a member of the Class
JOINT DECLARATION OF JEFFREY M F-HABER AND BLAIR A NICHOLAS Master File No CV-01-1256 SBA -20- PLAN OF ALLOCATION
2 The Net Settlement Fund will be distr ibuted to Settlement Class Members who submit valid and timely Proof of Claim forms ("Authorized Claimants") 3 under the Plan of Allocation described belo w
4 razed C di N
5
6 Notice of Pendency and Proposed Settlement of Class Action (Stipulation, Ex A-1 at p 8) In
7 other words, the amount of an Authorized Claimant's claim does not necessarily equal the
8 recovery the Authorized Claimant will receive It simply determines the relative portion of Net
9 Settlement Fund an Authorized Claimant is entitled to receive, which could be more or less tha n
1 0 the claim amount
11 78 . Under the Plan of Allocation, claim valuation is based, inter alma, on the number
12 of Turnstone shares purchased in the Secondary Offering and whether such shares were retained
13 or sold, and, if sold, the date of the sale The Plan provides that for Authorized Claimants who
14 purchased Turnstone stock in the Secondary Offering and sold such shares prior to November 6,
15 2000 - the date of the first curative disclosure - the claim for each such share shall be $0. For
16 Authorized Claimants who purchased Turnstone stock in the Secondary Offering and sold such
17 stock during the period November 6, 2000 through January 2, 2001- after the first curative
1 8 disclosure, but prior to the second disclosure - the claim for each such share shall be $19 13 For
19 Authorized Claimants who purchased Turnstone stock in the Secondary Offering and retaine d
20 such stock at the end of January 2, 2001 - the date of the final curative disclosure - the claim for
21 each such share shall be $19 7 5
22 79 A Class member will be eligible to receive a distribution from the Net Settlement
23 Fund only if such Class member had a net loss, after all profits from transactions in Turnstone
24 common stock purchased in the Secondary Offering However, the proceeds from sales of shares
25 that are matched against shares held on September 26, 2000 will not be used in the calculation o f
26 such net loss
27 80 For Class members who purchased Turnstone common stock pursuant to the
28
JOINT DECLARATION OF JEFFREY M HABER AND BLAIR A NICHOLAS Master File No CV-O1-1256 SBA -21- I Secondary Offering and held Turnstone stock on September 26, 2000, the first-in, first-out
2 ("FIFO") method will be applied to such holdings, purchases, and sales for purposes of
3 calculating a claim Under the FIFO method, sales of securities between September 26, 2000 and
4 January 2, 2001, will be matched in chronological order, first against shares held on September
5 26, 2000 The remaining sales of shares during the Class Period will then be matched, in
6 chronological order, against shares purchased pursuant to the September 26, 2000 Secondary
7 Offering The determination of the price paid per share and the price received per share shall be
8 exclusive of all commissions, taxes, fees, and charges Pursuant to the plan of allocation, the
9 Court reserves jurisdiction to allow, disallow, or adjust the claim of any Settlement Class
10 Member on equitable grounds
1 1 81 This Plan of Allocation was adequately explained in the Notice sent to Class
121 Members It was prepared in consultation with Plaintiffs' damages expert and tracks Plaintiffs'
13 theory of damages See Steinholt Decl at ~J 7-10 As detailed in the Steinholt Declaration, the
14 Plan of Allocation allocates the settlement proceeds to those Class members who suffered
15 economic losses as a result of the alleged misrepresentations in the Registration
16 Statement/Prospectus Id Accordingly, it is fair and equitable to the Class and should b e
17 approved.
18 V ATTORNEYS' FEES AND EXPENSES
19 82 Plaintiffs seek an award of attorneys' fees of 25% of the Settlement Fund, a
20 percentage that is well within the range for attorneys' fees awarded in this Circuit in cases of thi s
21 nature, and is reasonable based on the quality of counsels' work and the substantial benefit
22 obtained for Class Members in light of the risks discussed above
23 83 As set forth in the memorandum of points and authorities in support of Plaintiffs '
24 motion for an award of attorneys' fees and reimbursement of expenses submitted concurrently
25 herewith, the Ninth Circuit has consistently held that a fee of 25% of the common fund is the
26 "benchmark" award for attorneys' fees in class action litigation In securities class actions,
27 numerous district courts in this Circuit have awarded attorneys' fees of 25-30% Accordingly, an
28 I
JOINT DECLARATION OF JEFFREY M HABER AND BLAIR A NICHOLAS Master File No CV-01-1256 SBA -22- 1 attorneys' fee award of 25% of the Settlement Fund fully comports with the Ninth Circuit's
2 "benchmark" award for attorneys' fees in class action litigation
3 84 The reasonableness of Plaintiffs' Counsels' request is further demonstrated under
4 a lodestar/multiplier analysis Plaintiffs' Counsel spent in excess of 2,250 hours prosecuting th e
5 Action for a total lodestar in excess of $931,100 00 Accordingly, Plaintiffs' Counsel seek a
6 1 multiplier of approximately 1 8 8 7 85 Plaintiffs' Counsel have efficiently and vigorously prosecuted the Actio n
8 Plaintiffs' Counsels' experience as counsel in class action and securities cases allowed us to
9 identify the complex issues involved in the Action and to formulate strategies to effectively
10 prosecute a litigation of this complexity Moreover, Plaintiffs' Counsel submit that their
11 reputations as attorneys able and willing to see a meritorious case through trial and appeals
12 assisted in the settlement negotiations
13 86 As discussed above, Plaintiffs' Counsel faced significant risks in pursuing this
1 4 Action This was not a case where any recovery was assured Compounding the risk, Plaintiffs '
15 1 Counsel have received no compensation during the more than two years that this Action has been
16 1 pending, their fees being totally contingent and dependent upon a successful result and an awar d 17 1 by this Court Plaintiffs' Counsel believe that the outstanding Settlement was the result of thei r
18 hard work, persistence, and skill
19 87 Plaintiffs' Counsel also request reimbursement of the expenses incurred in
20 connection with the prosecution of the Action Plaintiffs' Counsel have submitted summaries
2 1 providing the basis for their expenses See Declaration of Jeffrey M Haber in Support of Joint
22 Petition for Reimbursement of Expenses, dated September 26, 2003, ¶ 5, Exhibits 1-9 Those
23 expenses are reflected in the books and records maintained by Plaintiffs' Counsel and are
24 accurate recordings of the expenses incurred Id In total, Plaintiffs' Counsel have incurred
25 reimbursable expenses in the amount of $104,263 60 Id Included in this amount are the fees
26 payable to Plaintiffs' expert who provided them with extensive assistance during this Action
27 Co-Lead Counsel respectfully submit that all of these expenses are reasonable and necessaril y
28
JOINT DECLARATION OF JEFFREY M HABBR AND BLAIR A NICHOLAS Master File No CV-O1-1256 SBA -23- 1 incurred in connection with the prosecution of this Action
2 A Other Factors To Be Considered In Support Of The Requested Attorneys' Fee Award 3 1 . Extent Of Litigation 4 88 As described above, this case was settled only after Co-Lead Counsel conducted 5 an extensive investigation into Defendants' violation of the federal securities laws, interviewe d 6 numerous material witnesses, thoroughly researched the law pertinent to the Class members ' 7 claims and Defendants ' defenses, prepared and filed two detailed amended complaints specifying 8 Defendants ' violations of the federal securities laws, vigorously opposed Defendants ' motions to 9 dismiss the allegations detailed in the amended complaint , filed a supplemental memorandum 10 with regard to the applicability of Fed R Civ P 9(b) to Securities Act claims ; consulted 11 extensively with an expert in financial damage analysis, and engaged in hard fought, arm's- 12 length settlement negotiations with Defendants' counsel, including mediation before Judge 13 Lynch 14 2 Risks Of Contingent Litigation 15 89 The Action was undertaken by Plaintiffs' Counsel on a wholly contingent basi s 16 From the outset, Plaintiffs' Counsel understood that they were embarking on complex, 17 expensive, and lengthy litigation (with no guarantee of compensation for the enormous 18 investment of time, money, and effort the case would require) In undertaking that responsibility , 19 Plaintiffs' Counsel were obligated to assure that sufficient resources of attorneys were dedicated 20 to the prosecution of the Action and that funds were available to compensate staff and the 21 considerable out-of-pocket costs a case such as this entails Furthermore, lawyers that represent 22 hourly, fee-paying clients require their clients to pay fees as the work is done, creating funds for 23 investment and the creation of additional revenues Such additional revenues were not availabl e 24 to Co-Lead Counsel in this Actio n 25 3 Standing And Expertise Of Co-Lead Counse l 26 90 The expertise and experience of Co-Lead Counsel is described in the Firm 27 Resumes annexed hereto as Exs 1, 2 Co-Lead Counsel are among the most experienced and 28
JOINT DECLARATION OF JEFFREY M HABER AND BLAIR A NICHOLAS Master File No CV-01-1256 SBA -24- 1 skilled practitioners in the securities litigation fiel d
2 4 Standing And Caliber Of Opposition Counse l
3 91 Defendants are represented by outstanding law firms and attorneys at Wilson
4 Sonsini Goodrich & Rosati and Sullivan & Cromwell, who spared no effort or expense in the
5 defense of their clients In the face of opposition of this caliber, Co-Lead Counsel developed this
6 case so as to persuade Defendants to settle the Action on a basis favorable to the Clas s
7 92 When Co-Lead Counsel undertook to represent Plaintiffs and the Class in this
8 matter, it was with the knowledge that the firms would spend many hours of hard work against
9 some of the best defense lawyers in the United States with no assurance of ever obtaining any
1 0 compensation for their efforts, or even for the overhead of their offices, which is an increasingly
11 substantial consideration Co-Lead Counsel were aware that the only way they would be
12 compensated was to achieve a successful result The benefits conferred on the Plaintiffs and th e
13 Class by this Settlement are particularly noteworthy in that a Settlement Fund was obtained for
14 the Class despite the existence of substantial risks and the vigorous defense mounted by
15 Defendants
1 6 VI CONCLUSIO N
17 93 For the reasons set forth above and in the accompanying ( 1) Memorandum of
18 Points and Authorities in Support of Final Approval of Settlement and Approval of Plan of
19 Allocation of Settlement Proceeds, (2) Memorandum of Points and Authorities in Support of
20 Plaintiffs ' Application For Award of Attorneys' Fees and Reimbursement of Expenses , (3) the
2 1 Steinholt Declaration , (4) the Garr Affidavit, an d (5) the Declaration of Jeffrey M Haber in
22 Support of Joint Petition for Reimbursement of Expenses, submitted concurrently herewith, we
23 respectfully submit that (1) the Settlement is fair, reasonable and adequate and should be
24 approved, (ii) the Plan of Allocation represents a fair method for the distribution of the Net
25 Settlement Fund among Class Members and should also be approved, and (iii) the application for
26
27
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JOINT DECLARATION OF JEFFREY M FIABER AND BLAIR A NICHOLAS Master File No CV-0 1-1256 SBA -25- 1 attorneys' fees and reimbursement of expenses should be granted .
2 Dated September 30, 2003 Respectfully submitted,
3 BERNSTEIN LIEBHARD & LIFSHITZ, LLP
4
5
6 TIMOTHY MACFALL 7 DANIELLE MAZZINI-DALY 10 East 40th Stree t 8 New York, NY 10016 Tel (212) 779-1414 9 Fax (212) 779 .321 8
10 BERNSTEIN LITOWITZ BERGER 11 & GROSSMANN LL P
12
13
14 LAIR A NICHOLAS
15 ALAN SCHULMAN 12544 High Bluff Drive, Suite 150 16 San Diego, CA 9213 0 Tel (858) 793-0070 17 Fax (858) 793-0323 - and - 18 DOUGLAS M McKEIGE 1285 Avenue of the Americas 19 New York, NY 1001 9 Tel (212) 554-1400 20 Fax (212) 554-1444
21 Co-Lead Counsel for Lead Plaintiff RADIANT ADVISERS, LLC 22
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25
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28 JOINT DECLARATION OF JEFFREY M HABER AND BLAIR A NICHOLAS CV NO C01-1256(SBA) -26- BERNSTEIN LIEBHARD & LIFSHITZ, LL P
10 East 40'h Street 2050 Center Avenue 231 State Stree t New York, New York 10016 Fort Lee, New Jersey 07024 Harrisburg, PA 17101 (212) 779-1414 (201) 592-3201 (717) 234-664 6
www bernlieb co m
BERNSTEIN LiEBHARD & LIFSHITZ, LLP was established in 1993 as a boutique specializin g
in the representation of plaintiffs in class, group and individual securities, derivative, antitrust
and consumer protection cases through the United States The firm has grown to over twent y
lawyers, with offices in New York, New Jersey and Pennsylvani a
Our attorneys - including former prosecutors and SEC trial lawyers - have tried hundred s
of cases before both state and federal courts We have been appointed lead counsel in numerou s
class actions around the country and have actively tried and/or settled scores of actions to
successful conclusions Currently, the firm serves in a lead counsel position in several of the
largest pending securities fraud class actions , including In re Initial Public Offering Securities
Litigation, and In i e Xerox Securities Litigation, and is pursuing claims seeking billions o f
dollars on behalf of investors
We have significant experience in prosecuting complex securities class actions Fo r
example, the firm, as a lead counsel, has successfully obtained many multi-million dollar
settlements of securities class actions and complex cases These cases include Bankers Trust
Securities Litigation ($58 million), Bausch & Lomb, Inc Securities Litigation ($42 million) ,
Riscorp Inc Securities Litigation ($21 million), AXA Financial Shareholders Litigation ($500
million increased merger consideration), Lin Broadcasting Corporation Shareholders Litigation ($64 million increased merger consideration), and Arco Chemical Company Shareholders
Litigation ($17 6 million)
The firm has had particular success in using litigation to accomplish corporate
governance improvements for shareholders We have served as lead counsel in numerous
corporate governance and corporate takeover litigation (both hostile and fnendly) on behalf of
stockholders of public corporations, and have prosecuted actions challenging numerous highly
publicized corporate transactions which violated fair process and fair price, and the applicability
of the business judgment rule These efforts brought about multi-million dollar improvements in
transaction terms and in strengthening the democratic rights of public shareholder s
In In re Sears and Roebuck Derivative Litigation, founding partner Stanley D Bernstei n
pioneered the use of litigation to achieve corporate governance reform in the early 1990's ,
gaining the addition of outside directors to Sears's board, and expanding the role of outside
directors in the company's nominating committe e
In In re Archer Daniels Midland Corp Derivative Litigation the firm, as lead counsel ,
effected important corporate governance improvements such as the requirement that the majority
of the board be comprised of outside directors, creation of a nominating committee, requiring th e
audit committee to oversee corporate compliance, and requiring that the audit committee b e
composed of outside directors
In Arco Chemical Company Shareholders Litigation, the firm's advocacy led the
Delaware Supreme Court to require the company to broaden the rights of public shareholders i n
change of control transactions
Recently, the firm successfully represented the public stockholders of Quickturn Desig n
Systems, Inc in a trial in the Delaware Chancery Court, which invalidated a modified "dead-
-2- hand" poison pill anti-takeover provision The Delaware Supreme Court affirmed the trial verdict, paying the way for a takeover of Quickturn at a substantial premiu m
The firm's efforts in In re Foamex International Inc Shareholders Litigation accomplished corporate governance improvements such as the requirement that the compan y appoint two independent directors, constitute a nominating committee to search for and recommend new independent directors, and that any related party transaction be reviewed an d approved by a majority of disinterested directors
OUTSTANDING REPUTATION WITH THE JUDICIAR Y
Courts have repeatedly praised the efforts of the firm and its partners For exampl e
Judge Denise Cote, in approving a recent settlement where the Firm served as sole lead counsel, found that "Plaintiffs are represented by counsel who are skilled in federal securities and class action litigation Counsel have been diligent and well prepared. Jeffrey Haber, in particular, was especially helpful Plaintiffs' counsel has performed an important public service in this action and have done so efficiently and with integrity . . . You have the thanks of this court ." In re Take Two Interactive Software, Inc Securities Litigation, 01 Civ 9919 (S D N Y ), Transcript of Hearing, October 4, 2002, at 40, 44
Vice Chancellor (now Delaware Supreme Court Justice) Myron T Steele, in approving a shareholder class action settlement, stated "I'm impressed with the innovative nature of the benefit that's been provided It's my turn to make a compliment in open court that the plaintiff is represented by highly competent counsel, a counsel that demonstrates consistently to me an incredible work ethic in achieving the benefits that were achieved here " In re Illinois Central Corporation Shareholders Litigation, C A 16184 (Del Ch ), Transcript of Hearing, Feb 25, 1999 at 29-3 0
Judge Wayne Andersen of the Northern District of Illinois, in approving a proxy fraud settlement, commented to partner Stanley Bernstein "Mr Bernstein, it has actually been a pleasure getting to know and work with you on this [Y]ou make a really good presentation " Hager v Schawk, Inc , No 95 C6974 (N D III ), Transcript of Hearing, May 21, 1997 at 22
In approving a settlement on beh alf of the purchasers of Tower Air, Inc securities and describing the Firm 's services for the class as sole lead counsel , Judge Reena Raggi of the Eastern District of New York commented that "[t]he quality of the legal work
-3- throughout has been high and conscientious . "In re Tower Air, Inc Securities Litigation, 94 Civ 1347 (E D N Y ), Transcript of Hearing, February 9, 1996 at 5 2
Judge Robert Cindrich of the Western District of Pennsylvania, in approving a securities fraud settlement, endorsed the findings that "Counsel have been professional and realistic in this matter The court has been impressed with the competence and candor of counsel " DeCicco v American Eagle Outfitters, Inc C A 95-1937 (W D. Pa ), Report and Recommendation of Magistrate Judge Kenneth Benson, November 25, 1996 at 6 (adopted as opinion of Court by Judge Cindrich, December 12, 1996 )
FIRM BIOGRAPHY
Partners
Stanley D Bernstein is a 1980 graduate of the New York University School of Law ,
where he was an editor of the Journal of International Law and Politics He is a frequent lecture r
on directors and officers liability, class action and securities law issues at seminars organize d
nationwide by Practising Law Institute, The American Conference Institute, Tillinghast-Towers
Perrin and other organizations Prior to forming Bernstein Liebhard & Lifshitz, LLP, Mr
Bernstein practiced securities and commercial litigation at Weil, Gotshal & Manges, Gelberg &
Abrams and Kreindler & Kreindler Mr Bernstein is vice chair of the Plaintiffs' Executiv e
Committee in In re Initial Public Offering Securities Litigation, and was lead counsel in many of the leading securities cases enforcing and expanding the rights of shareholders, including In re
Sears, Roebuck Derivative Litigation and In re Archer Daniels Midlands Corp Derivative
Litigation, (pioneering cases which improved corporate governance at both companies), In re
Bankers Trust Securities Litigation (largest recovery ever on behalf of defrauded securities sellers - $58 million), and, Shapiro v Quickturn Design Systems (successfully tried in Delaware
Chancery Court and affirmed by Delaware Supreme Court, invalidating anti-takeover device)
-4- He has been lead counsel in scores of securities class actions and is one of the most activ e
litigators in the nation on behalf of shareholder nghts in the Delaware Chancery Court wher e
most important corporate governance litigation is conducted He has tned many cases in stat e
and federal court, and has successfully argued appeals on behalf of shareholders to the Delawar e
Supreme Court and the United States Second Circuit Court of Appeals He is admitted to th e
Bars of the States of New York and Florida
Sandy A Liebhard is a 1988 graduate from Brooklyn Law School and has practiced all
aspects of securities law for the past 15 years He has been lead or co-lead counsel in such majo r
securities cases as AXA Financial Shareholders Litigation ($500 million in increased merger
consideration), Lin Broadcasting Corporation Shareholders Litigation (recovering $64 millio n
in increased merger consideration), Bausch & Lomb, Inc Securities Litigation (achieving a $42
million recovery for defrauded shareholders), and In re Tenneco Securities Litigation ($50
million recovery) Mr Liebhard presently serves as lead or co-lead counsel in such major case s
as In re Terayon Communication Systems, Inc Securities Litigation, In re Revlon, Inc Securitie s
Litigation, In re BellSouth Corp Securities Litigation, and is currently serving on Plaintiffs '
Executive Commi ttee in In re Initial Public Offering Securities Litigation He is admitted to th e
Bars of the State of New York and the United States District Court for the Southern and Eastern
Districts of New York
Mel E Lifshitz is a 1989 graduate of Brooklyn Law School Mr Lifshitz's practice focuses on securities and consumer class action litigation lie most recently achieved a $5 8 million settlement on behalf of shareholders in the Bankers Trust Securities Litigation, was co- lead counsel in Riscorp Inc Securities Litigation, which resulted in a $21 million settlement on behalf of shareholders, and is currently co-lead counsel in the In re Federated Department Stores
-5- Securities Litigation , Chairman of the Executive Commi ttee in In re Abercrombie & Fitch Co
Securities Litigation, co-lead counsel in In re Xerox, Inc Securities Litigation, co-lead counsel in
In re Deutsche Telekom AG Securities Litigation, co-lead counsel in In re Cigna Corp Securities
Litigation, as well as lead and co-lead counsel in many other large securities class actions H e
was also the lead counsel in Tuchman v Volvo Cars of North America, Inc , a consumer clas s
action which resulted in a settlement value of more than $30 million He is admitted to the Bar s
of the State of New York and the District of Columbia, the United States Court for the Souther n
District of New York and the Eastern District of New York
Keith M Fleischman received his B A degree from the University of Vermont in 198 0
and a J D degree-from California Western School of Law in 1984 Upon graduation from la w
school, he was an Assistant District Attorney in the Rackets and Major Offense Bureau of the
Bronx County District Attorney's Office and a Member of the Joint Bronx District Attorney's
Office/United States Attorney's Office, Southern District of New York investigation int o
corruption by New York City Public Officials In 1988, he joined the United States Departmen t
of Justice as a Trial Attorney in the Fraud Section, and in 1990 he served in the United State s
Attorney's Office, District of Connecticut, as an Assistant United States Attorney Until joinin g
the Firm in early 2003, Keith was a Partner and on the Management Committee of Milber g
Weiss Bershad Hynes & Lerach, LLP
During his eight years as a prosecutor, Mr Fleischman tried numerous cases to verdic t
and served as Chief Trial Counsel in one of the largest savings and loan prosecution s
successfully brought by the federal gove rnment, including United States v Heath, 970 F 2d 1397
(5th Cir 1992) Additionally, he served as a Trial Practice Instructor for the Attorney General' s
Advocacy Institute, U S Department of Justice, as a member of the New England Bank Frau d
-6- Task Force, Coordinating Committee, and the Connecticut Bank Fraud Working Group Keit h
has also received awards from the Director of the FBI and the Attorney General for his wor k
while serving in the Justice Department
In 1995, Mr Fleischman was plaintiffs' Chief Trial Counsel in Robbins v Koger
Properties, Inc, 116 F 3d 1441 (11th Cir 1997), in which a Federal jury found Deloitte &
Touche liable for securities violations and awarded the class $81 3 million after a month-lon g
trial Additionally, Mr Fleischman also successfully argued before the Second Circuit the cas e
of Novak v Kasaks, 216 F 3d 300 (2d Cir 2000), the precedent- setting decision regarding th e
pleading standard and disclosure of confidential informants under the PSLRA Mr Fleischma n
has also served as lead or co-lead counsel and on the executive committee for many notable an d
successful litigations including America Online, Ann Taylor, Motorola, Aetna and John Hancoc k
which collectively resulted in hundreds of millions of dollars in settlements to the respective
classes
Mr Fleischman is a member of the Bar of the State of New York, the United States
District Court for the Southern District of New York, the Second and Eleventh Circuit Courts o f
Appeals, and the United States Supreme Court He lectures in the U S and abroad on the
investigation, litigation and prevention of Securities Frau d
Jere M Haber received his B S from the State University of New York at Buffalo in
1985, graduating magna cum laude as a member of Phi Beta Kappa He received his J D in
1988 from Hofstra University School of Law, where he was a notes and comments editor for th e
International Property Law Journal Upon graduation , Mr Haber concentrated his practice i n securities and commodity law, with a New York law firm, where he represented both plaintiffs and defendants in litigations in various state and federal courts and in arbitrations in self-
-7- regulatory agencies In 1991, Mr Haber became associated with, and later a member of, a Ne w
York plaintiffs' firm, Weschler Harwood LLP, where he concentrated his practice on securities-
and consumer-fraud class actions, antitrust class actions, and shareholder-rights litigation I n
April 2000, Mr Haberjoined Bernstein Liebhard & Lifshitz, LLP as a partner, concentrating hi s
practice in complex class action litigation involving shareholders' rights, securities fraud, an d
consumer protection In his career, Mr Haber has been a member of multiple trial teams in civil
cases, and has conducted numerous securities arbitrations before the NASD and NYSE
Mr Haber has been lead counsel, co-lead counsel, or a member of an executive
committee in a number of notable and successful class action litigations, including In re Taxable
Municipal Bonds Litigation (E D La) ($ 110 mil lion settlement) and In re JDNRealty Corp
Securities Litigation (N D. Ga) ($16 8 million settlement) Mr Haber also has been lea d
counsel, co-lead counsel, or a member of an executive committee in a number of successfu l
shareholder rights litigations, including In re The Times Mirror Co Shareholders Litigation ,
(Del Ch) (settlement benefit in excess of $20 million ) and Edge Partners L. P v Dockser, ( D
Md) (settlement benefit in excess of $ 11 million) Mr Haber played a key role in the factua l
investigation of In re Home Shopping Network Inc Derivative Litigation (S D Fla ), which led
to a settlement benefit in excess of $20 million He also played a significant role in the
investigation and prosecution ofIn re Banc One Securities Litigation (N D Ill ), which resulted
in a $45 million settlement Mr Haber further served as lead counsel in a precedent -setting decision under the Investment Company Act of 1940 regarding the independence of directors serving on multiple boards of mutual funds operated by the same investment company Mr
-Haber is currently co-lead counsel in In re Xerox Securities Litigation (D Conn ), among other notable securities class actions
-8- Mr Haber is admitted to the Bar of the State of New York, the United States Court of
Appeals for the Fifth Circuit, and the United States District Courts for the Southern and Easter n
Districts of New York, the Western District of Pennsylvania, and the District of Anzona
Robert J Berg graduated from Amherst College cum laude with a B A degree in 1979, majoring in Economics and Psychology Mr Berg received a J D degree in 1983 from the
University of Chicago Law School, and he also received an M B A degree from the Universit y of Chicago Graduate School of Business in 1983 Mr Berg began his career as an attorney in
1983 at Skadden, Arps, Slate, Meagher & Flom, in New York, where he specialized in antitrus t litigation, and continued his career at LeBoeuf, Lamb, Greene & MacRae Mr Berg then joine d
Wolf Popper LLP, and Lite DePalma Greenberg & Rivas, where he concentrated his practice o n representing plaintiffs in securities and consumer fraud class actions In 1998, Mr Berg Joined
Bernstein Liebhard & Lifshitz, LLP where he concentrates his practice in complex class action litigation involving shareholders' rights, securities fraud, consumer fraud, false advertising, an d antitrust issues Mr Berg presently is one of the liaison counsel in the In re Initial Publi c
Offerings Securities Litigation He was one of lead atto rneys representing plaintiffs in Bankers
Trust Securities Litigation, which was settled for $58 million in May 2002, a few weeks before teal Mr Berg is co-lead counsel for plaintiffs in In re Deutsche Telekom AG Securitie s
Litigation He is also a member of Plaintiffs' Executive Committees in major antitrust clas s actions against Venzon, SBC, and BellSouth Prior to joining the firm, Mr Berg was the chief plaintiffs' attorney in Princeton Economics Group, Inc v AT&T Corp , a national consumer fraud class action against AT&T for false advertising, which was one of the largest consumer fraud cases ever settled in the New Jersey state court system (a settlement valued by the Court at over $90 million) Mr Berg and the firm have also achieved other large settlements in national
-9- consumer fraud class actions, such as Tuchman v Volvo Cars of North America, Inc (more than
$30 million) and Barton v Saab Cars of North America, Inc ($4 25 million) Mr. Berg is
admitted to the Bars of the States of New York and New Jersey, the federal cou rts of the
Southern and Eastern Districts of New York and the District of New Jersey, and the Courts o f
Appeals for the Second, Third, and D C Circuits Mr Berg is the Resident Partner in the firm's
New Jersey office Mr Berg has been a member of the Trade Regulation Committee and th e
Consumer Affairs Committee of the New York County Lawyers Association, and has been an
arbitrator for the Civil Court of the City of New York
Francis P Karam graduated from Holy Cross college in 1977 with an A B in the
Classics, and in 1981 received his J D from Tulane University School of Law Upon graduation,
he practiced Admiralty and Maritime law with a New York law firm, where he represente d
international insurance companies in commercial arbitrations and litigation in various Federa l
courts From 1984 to 1990, Mr Karam was an Assistant District Attorney in the Bronx, where h e
served as a senior Trial Attorney in the Homicide Bureau He entered private practice in 1990 ,
specializing in trial and appellate work in state and federal courts Before joining the firm, Mr
Karam was a partner at Milberg, Weiss, Bershad, Hynes & Lerach LLP Mr Karam has, in his
career, tried over 100 criminal and civil cases, including complex cases involving tax fraud an d
commercial fraud He has argued numerous appeals in the State and Federal courts Recently ,
Mr Karam played a significant role in the factual investigation and successful opposition to th e
defendants' motions to dismiss in In re Enron Securities Litigation He was co-lead counsel in In re Thomas and Betts Securities Litigation where he achieved a $46 5 million settlement on behal f
of the shareholder class He-is currently co-lead counsel in In re Xerox Securities Litigation Mr
Karam concentrates his practice in complex class action litigation involving shareholders' right s
-10- and securities fraud Mr Karam is an active teacher and lecturer for the National Institute of Trial
Lawyers, and recently was a panelist at the ABA Business Law section seminar Corporate
Accounting in the Wake of Enron He is admitted to the Bars of the State of New York and the
Commonwealth of Pennsylvania, the United States Court of Appeals for the Second Circuit, an d
the United States District courts for the Southern and Eastern Districts of New York
Rebecca M Katz is a 1990 graduate of Hofstra University School of Law where she was a
member of the Hofstra Law Review . She has been prosecuting securities fraud cases on behal f
of the SEC and private investors since the early 1990's As Senior Trial Counsel in the
Enforcement Division of the U S Securities and Exchange Commission from 1993 - 1998, sh e
prosecuted major cases involving violations of the federal securities laws, including inside r
trading, market manipulation, and accounting fraud Representative cases include SEC v
Karczewski, et al , (Stockbridge Funding) (S D N Y ), SEC v Dillon et al , (Business Week) ( D
Conn ), SEC v F N Wolf & Co, Inc, et al, (S D N Y), SEC v Sarivola, et al, (S D N Y 1995)
Prior to joining the firm in 2001, she was associated with Lieff, Cabraser, Heimann & Bernstein,
LLP where she served as Counsel for plaintiff classes in several securities cases, includin g
Dietrich v Bauer, et al, (S D N Y ) (securities class action involving trading in the secu rities of
Scorpion Technologies Inc ), and is presently serving on Plaintiffs' Executive Committee in In re
Initial Public Offering Securities Litigation (S D N Y ) She is admitted to the New York State
Bar and to the bars of the federal district courts for the Southern and Eastern Districts of New
York
U Seth Ottensoser graduated with high honors in 1992 from Queens College of the City
University of New York, where he was elected to and became a member of phi beta kappa M r
Ottensoser received a J D degree in 1995 from the University of Southern California School o f
-11- Law Mr. Ottensoser concentrates his practice in the areas of merger and acquisition litigation ,
securities class actions and corporate litigation He is a frequent lecturer on the issues of civil
procedure, federal practice, class actions and corporate governance and has written extensivel y
and been published on those matters Mr Ottensoser has served as a member of the Special
Committee on Mergers, Acquisitions and Corporate Control Contests of the Association of th e
Bar of the City of New York Before joining Bernstein Liebhard & Lifshitz, LLP, he was a
partner at Milberg Weiss Bershad Hynes & Lerach LL P
Mr Ottensoser has been involved in many successful class actions, including In re
Aetna, Inc Securities Litigation ($82 5 million recovery), In re Triton Energy Ltd Securities
Litigation ($49 5 million recovery), In re Ascent Entertainment Derivative Litigation ($40
million derivative settlement relating to the sale of the Denver Nuggets and Colorado
Avalanche), In re Waste Management Derivative Litigation ($25 million recovery), and In re
Kinkos Shareholder Litigation ($ 8 5 million recovery for class consisting of approximately 160
shareholders) He is admitted to the Bars of the State of New York and the United States Court s
for the Southern and Eastern Districts ofNew York
Senior Counsel
William A K Titelman is a 1980 graduate of The Dickinson School of Law Throughou t
his career, he has been actively involved in government, public policy and politics Mr Titelma n began his career in the administration of Pennsylvania Governor Milton Shapp, serving in several key positions including Director of Motor Vehicles and Special Assistant to the Governor fo r
Government Management Then, after law school, Mr Titelman led the Pennsylvania Trial
-Lawyers Association for nearly a decade -Subsequently, he became a partner at Klett Roone y
-12- Lieber & Schorling, LLP, a leading Pennsylvania law firm, where he served on the firm's Boar d
of Directors and chaired both its Harrisburg office and its Administrative Law and Governmen t
Affairs Practice Group Among his accomplishments , he organized and led a national campaig n
involving shareholders, including major public pension funds and other institutional investors,
shareholder rights activists, former SEC Commissioners, leading economists and deans o f
business and law schools, to oppose and successfully amend Pennsylvania Senate Bill 1310 ,
which The Wall Street Journal described as the most onerous anti-takeover, anti-shareholder bill
ever proposed in the United States Mr Titelman went on to serve as Executive Vice President,
Managed Care and Public Affairs, at a Fortune 200 corporation Prior to joining Bernstein
Liebhard & Lifshitz, LLP, he was a partner in the Washington D .C. office of Duane Morris, LLP ,
a 500-lawyer national law firm
Mr Titelman is a prominent Democratic fund raiser He is currently Co-Chair of th e
National Finance Committee of the Democratic Governors Association Most recently, he serve d
as National Finance Chair for the election of Pennsylvania Governor Ed Rendell Additionally ,
Mr Titelman has served the Democratic National Committee as Co-Chair of its Major
Supporters Council and, in 2000, as a Finance Vice Chair and Co-Chair of Convention Affairs
He was an early supporter of President Bill Clinton and served on his National Financ e
Committee in both campaigns and as a member of the Electoral College Mr Titelman has als o been active with the Democratic Senate Campaign Committee, the Democratic Congressiona l
Campaign Committee, and as a founding member of Senator Tom Daschle' s political action committee (DASHPac) In a unique exception, he was one of six statewide Finance Chairs for
-the election of Pennsylvania Governor Tom Ridge, a Republican Mr Titelman is admitted t o
-13- the Bars of the Commonwealth of Pennsylvania and the United States District Court for the
Middle District of Pennsylvania
Of Counsel
Timothy J MacFall is a 1985 graduate of Brooklyn Law School Mr MacFal l
concentrates in complex class-action litigation involving shareholders' rights, securities fraud ,
and antitrust issues Mr MacFall has previously served as a Special Assistant United State s
Attorney in the Southern District of New York, a Trial Attorney in the Immigration &
Naturalization Service, and an Assistant District Attorney in Kings County, New York He is a
member of the Bar of the State of New York, and is admitted to practice before the United States
District Courts for the Southern and Eastern Districts of New York and the District of Colorado ,
and the United States Court of Appeals for the Second Circuit
Mark T Millkey received an M A in English from the University of Virginia in 1983, and
a J.D from the University of Virginia in 1987 He has practiced as an associate at Powell,
Goldstein, Frazer & Murphy in Atlanta and at Simpson Thacher & Bartlett in New York, and a s
Special Counsel at Milberg Weiss Bershad Hynes & Lerach, LLP in New York . Mr Millkey has
extensive experience in consumer-fraud, securities-fraud, and derivative litigation at both the
trial and appellate level Mr Millkey is admitted to the Bars of the States of New York and
Georgia
Associates
Abraham I Katsman is a 1989 graduate of the Cardozo School of Law and has practice d
all aspects of securities litigation, including trial, since that time He is admitted to the Bars o f the States of New York and New Jersey and the District of Columbia
-14- Michael S Egan is a 1991 graduate of the Fordham University School of Law and
received a L L M in International Law from the Georgetown University School of Law in 1992
Mr Egan has practiced securities and class action litigation exclusively since 1993 He i s
admitted to the Bar of the States of New York and New Jersey
Maa U Hoover is a 1992 graduate of the Fordham University School of Law M s
Hoover has practiced securities and commercial litigation almost exclusively since that tim e
She is admitted to the Bars of the States of New York and Connecticut
Felecia Stern is a 1992 graduate of the University of Pennsylvania Law School where sh e
served on the editorial board of the University of Pennsylvania Law Review Ms Ste m
previously clerked for the Honorable Francis X Altiman of the United States Court of Appeal s
for the Second Circuit Prior to joining Bernstein Liebhard & Lifshitz, LLP, Ms Stem was
associated for years with the firm of Simpson Thacher & Bartlett where she represented
defendants in securities class actions, complex commercial litigation, and SEC and othe r governmental investigations Ms Stem concentrates her practice in complex class action litigation involving shareholders' rights and securities fraud issues She is admitted to the Bar o f the State of New York
Ronald J Aranoffis a 1995 graduate of Benjamin N Cardozo School of Law M r
Aranoff has previously served as an Assistant District Attorney in Kings County, New York , where he successfully tried numerous cases to verdicts and as a civil and criminal litigator Mr
Aranoff concentrates his practice on consumer class action litigation He is admitted to the Ba r of the State of New York
Jose h-R Seidman Jr is a 1997-graduate of St John's University School of Law and ha s practiced securities and class action litigation exclusively since that time He is admitted to th e
-15- Bar of the State of New York
Gregory M Egleston is a 1997 graduate of New York Law School Mr Egelston has
practiced secunties and class action litigation exclusively since that time He is admi tted to the
Bars of the States of New York and Connecticu t
Danielle Mazzini-Daly is a 1997 graduate of Boston University School of Law, where she
was an editor of the International Law Journal Ms Mazzini-Daly previously served as a n
Assistant District Attorney in Kings County, New York where she tried several cases to verdict
successfully She is admitted to the Bar of the State of New York
Michael S Began is a 1999 graduate of St John's University School of Law, where he wa s
a member of the American Bankruptcy Institute Law Review and Moot Court Honor Society
Mr Begin has practiced securities litigation exclusively since 1999 . He is admitted to the Bar of
the State of New York
Stephanie M Berge graduated summa cum laude from Touro College Jacob D Fuchsberg
Law Center in 2000, and was a member of the Touro Law Review Prior to joining Bernstein
Liebhard & Lifshitz, LLP, Ms Beige was associated with the firm of Milberg Weiss Bersha d
Hynes & Lerach LLP, where she represented plaintiffs in securities class actions and mass to rt
actions She is admitted to the Bar of the State of New York
Andrea H Williams received her B S in Accounting from the City University of Ne w
York, Medgar Evers College in 1996, graduating summa cum laude as class valedictorian She
is also a New York State licensed CPA since 1998, after having spent two years as a publi c
auditor with a Big Six (now Big Four), Public Accounting Firm She received her J D in 200 2
-from Seton Hall University School of Law During law school, she was employed as an internal
auditor with a major investment banking firm Andrea is admitted to the bar in New York an d
-16- New Jersey since 2002 She is also admitted to practice before the federal District Courts for th e
Southern and Eastern District of New York, and the federal District Court for the District of Ne w
Jersey, since 2002
Jessica L Francisco is a 2002 cum laude graduate of Case Western Reserve Universit y
School of Law She is admi tted to the Bar of the State of New York
July 2003
-17- BERNSTEIN LITOWITZ BERGER & GROSSMANN LL P ATTORNEYS AT LA W
CALIFORNIA NEW YORK NEW JERSE Y
FIRM RESUME
Visit our web site at www blbglai com for the most up-to-date information on the firm, its lawye rs and practice group s
Bernstein Litowitz Berger & Grossmann LLP, a firm of over 30 a ttorneys in offices
located in New York, California, New Jersey and Louisiana, prosecutes class and private actions,
nationwide, on behalf of individual and institutional clients The firm's litigation practic e
concentrates in the areas of securities class actions in federal and state courts, corporate
governance litigation, including claims for breach of fiduciary duty and proxy violations,
antitrust, prosecuting violations of federal and state anti-discnmination laws and vindication o f
employee rights, and consumer class actions We also handle, on behalf of major institutional
clients and lenders, more general complex commercial litigation involving allegations of breac h
of contract, accountants' liability, breach of fiduciary duty, fraud and negligence
We are the nation' s leading firm in representing institutional investors in securities fraud
class action litigation The firm's institutional client base includes the New York State Common
Retirement Fund, the California Public Employees Retirement System (CaIPERS), and the Ne w
York City Pension Funds, the largest public pension funds in the United States, collectivel y managing over $300 billion in assets, the Los Angeles County Employees' Retirement
Association (LACERA), the Chicago Municipal , Police and Labor Retirement Systems , the State of Wisconsin Investment Board, the Retirement Systems of Alabama, the Connecticu t
Retirement Plans and Trust Funds, the City of Detroit Pension Systems, the Housto n
Firefighters' and Municipal Employees' Pension Funds, the Louisiana School, State, Teacher s and Municipal Police Retirement Systems, the Public School Teachers' Pension and Retirement
12544 HIGH BLUFF DRIVE SUITE 150 • SAN DIEGO • CA 92130-2076 TELEPHONE 858-793-0070 www blbglaw coin • FACSIMILE 858-793-0323 BERNSTEIN LITOWITZ BERGER & GROSSMANN LL P
Fund of Chicago, the New Jersey Division of Investment of the Department of the Treasury ,
TIAA-CREF and other private institutions , as well as numerous other pub lic and Taft-Hartley
pension entitie s
Since its founding in 1983, Bernstein Litowitz Berger & Grossmann LLP has litigated
some of the most complex cases in history For example, the firm was lead counsel in the
celebrated In re Washington Public Power Supply System Litigation, which, after seven years of
litigation and three months of jury trial, resulted in the then largest securities fraud settlemen t
ever Equally important, Bernstein Litowitz Berger & Grossmann LLP has successfull y
advanced novel and socially beneficial principles by developing important new law in the areas
in which we litigate
Recently, the firm served as co-lead counsel on behalf of Texaco's African-Amenca n
employees in Roberts v Texaco Inc, which similarly resulted in the largest settlement ever in a
race discrimination case The creation of a Task Force to oversee Texaco's human resource s
activities for five years was unprecedented and will, undoubtedly, serve as a model for publi c
companies into the next century
The firm currently represents twelve public pension funds, including the New York State
Common Retirement Fund, CaIPERS, LACERA and other institutional investors , in McCall v
Scott, a derivative suit filed against the directors and officers of Columbia/HCA Healthcar e
Corporation, the subject of the largest health care fraud investigation in history
In addition, the firm is Co-Lead Counsel in the In re Cendant Corporation Securitie s
Litigation, which recently settled for more than $3 billion in cash This settlement is the larges t
ever recovered from a public company and a public accounting firm and includes the mos t
2 BERNSTEIN LITOWITZ BERGER & GROSSMANN LL P
significant corporate governance changes ever achieved through a securities class action
litigation The firm represents Lead Plaintiffs CaIPERS, the New York State Commo n
Retirement Fund, and the New York City Pension Funds on behalf of all purchasers of Cendant
securities during the class perio d
The firm 's recent prosecution of Arthur Andersen LLP, for Andersen 's role in the 199 9
collapse of the Baptist Foundation of Arizona ("BFA"), received intense national and
international media attention As lead trial counsel for the defrauded BFA investors, the fir m
obtained a cash settlement of $217 million from Andersen, after six days of what was schedule d
to be a three month trial In combination with prospective BFA asset sales and a settlement wit h
BFA's former law firm, it is expected that the over 11,000 retirees and investors will recove r
over 70% of their losses The case was covered in great detail by The Wall Street Journal, The
New York Times, The Washington Post, 60 Minutes H, National Public Radio and the BBC a s
well as various other international news outlets.
We were also recently appointed Lead Counsel for the class (again representing the New
York State Common Retirement Fund) in In re WorldCom, Inc Securities Litigation, arising
from the financial fraud and subsequent bankruptcy at WorldCom, Inc , now the largest
securities fraud action in history
In the consumer field, the firm has gained a nationwide reputation for vigorousl y
protecting the rights of individuals and for achieving exceptional settlements In severa l
instances, the firm has obtained recoveries for consumer classes that represented the entirety o f
the class' losses - an extraordinary result in consumer class cases Additionally, the firm ha s
become a leader in the area of Internet Privacy and is counsel in several of the seminal cases that BERNSTEIN LITOWITZ BERGER & GROSSMANN LL P
have been brought on behalf of Internet users whose personal information is being intercepte d
and sent to Web-based companie s
Our firm is dedicated to litigating with the highest level of professional competence ,
striving to secure the maximum possible recovery for our clients in the most efficient an d
professionally responsible manner In those cases where we have served as either lead counse l
or as a member of plaintiffs' executive committee, the firm has recovered billions of dollars fo r
our clients
4 BERNSTEIN LITOWITZ BERGER & GROSSMANN LL P
THE FIRM'S PRACTICE AREA S
Securities Fraud Litigation
Securities fraud litigation is the cornerstone of the firm' s class action litigation practice
Since its founding, the firm has tried and settled many high profile securities fraud class actions
and continues to play a leading role in major securities litigation pending in federal and stat e
courts The firm has the distinction of having prosecuted one of the most complex cases in
securities law history In the In re Washington Public Power Supply System Litigation ,
commenced in 1983, the firm was appointed Chair of the Executive Committee responsible fo r
litigating the action on behalf of the class The action involved an estimated 200 million pages
of documents produced in discovery, the depositions of 285 fact witnesses and 34 expert
witnesses, more than 25,000 introduced exhibits ; six published district court opinions, seve n
appeals or attempted appeals to the Ninth Circuit , and a three-month jury tr ial, which resulted in
a settlement of over $700 million - the largest securities fraud settlement ever achieve d
Moreover, since passage of the Private Securities Litigation Reform Act of 1995, whic h
sought to encourage institutional investors to become more pro-active in securities fraud class
action litigation, the firm has become the nation's leader in representing institutional investors i n
securities fraud and derivative litigation As stated, the firm serves as Co-Lead Counsel in the In
re Cendant Securities Litigation, which recently settled for over $3 billion in cash, the largest
settlement ever recovered in a securities class action
The attorneys in the securities fraud litigation practice group have extensive experience i n
the laws that regulate the securities markets and in the disclosure requirements of corporation s
-that-issue-publicly traded securities Many of the attorneys in this practice group also have BERNSTEIN LITOWITZ BERGER & GROSSMANN LL P
accounting backgrounds and one is a certified public accountants The group has access to state- ,
of-the-art, online financial wire services and databases, which enable them to instantaneousl y
investigate any potential securities fraud action involving a public company's debt and equit y
securities.
Corporate Governance and Shareholders ' Rights
The corporate governance and shareholders' rights practice group prosecutes derivative
actions, claims for breach of fiduciary duty and proxy violations on behalf of individual and
institutional investors in state and federal courts throughout the country The group has
prosecuted actions challenging numerous highly publicized corporate transactions which violate d
fair process and fair price, and the applicability of the business judgment rule The group ha s
also addressed issues of corporate waste, shareholder voting rights claims, and executiv e
compensation. As a result of the firm's high profile and widely recognized capabilities, th e
corporate governance practice group is increasingly in demand by institutional investors who are
exercising a more assertive voice with corporate boards regarding corporate governance issues
and the board's accountability to shareholders A major component of the Cendant settlement
referenced above is Cendant's agreement to adopt the most extensive corporate governance
changes in history
Employment Discrimination and Civil Right s
The employment discrimination and civil rights practice group prosecutes class and mult i
plaintiff actions, and other high impact litigation against employers and other societal institution s
6 BERNSTEIN LITOWITZ BERGER & GROSSMANN LL P
that violate federal or state employment, anti-discrimination and civil rights laws The practic e
group represents diverse clients on a wide range of issues including Title VII actions, race,
gender, sexual orientation and age discrimination suits, sexual harassment and "glass ceiling "
cases in which otherwise qualified employees are passed over for promotions to managerial o r
executive positions
Bernstein Litowitz Berger & Grossmann LLP is committed to effecting positive socia l
change in the workplace and in society The practice group has the necessary financial an d
human resources to ensure that the class action approach to discrimination and civil rights issue s
is successful This litigation method serves to empower employees and other civil rights victims ,
who are usually discouraged from pursuing litigation because of personal financial limitations,
and offers the potential for effecting the greatest positive change for the greatest number o f
people affected by discriminatory practice in the workplace As stated, the firm's practice grou p
recently settled the Texaco Inc racial discrimination lawsuit for $176 million, the larges t
settlement in the history of employment discrimination cases
Consumer Advocacy
The consumer advocacy practice group at Bernstein Litowitz Berger & Grossmann LLP
prosecutes cases across the entire spectrum of consumer rights, consumer fraud and consume r
protection issues The firm represents victimized consumers in state and federal courts
nationwide in individual and class action lawsuits that seek to provide consumers and purchaser s
of defective products with a means to recover their damages The attorneys in this group are
well versed in the vast array of laws and regulations that govern consumer interests and are
7 BERNSTEIN LITOWITZ BERGER & GROSSMANN LL P
aggressive, effective, court-tested litigators The consumer practice advocacy group ha s
recovered hundreds of millions of dollars for millions of consumers throughout the countr y
Most notably, in a number of cases, the firm has obtained recoveries for the class that were the
entirety of the potential damages suffered by the consumer For example, in recent actions
against MCI and Empire Blue Cross, the firm recovered all of the damages suffered by the class
The group has achieved its successes by advancing innovative claims and theories of
liabilities, such as obtaining recent decisions in Pennsylvania and Illinois appellate courts tha t
adopted a new theory of consumer damages in mass marketing cases Be rnstein Litowitz Berger
& Grossmann LLP is, thus, able to lead the way in protecting the rights of consumers . For
example, the firm has recently become a recognized leader in the new area of Internet privacy ,
where it is prosecuting several seminal cases on behalf of Web users whose personal information
has been unwittingly intercepted and sent to Internet companies in violation of federal statutes
and state law
Antitrust
The antitrust practice group prosecutes traditional price-fixing and restraint of trade
cases The group utilizes both class action litigation methods and individual representation in
federal and state courts throughout the United States The group is a growing component in th e
Firm's class action litigation practice
8 BERNSTEIN LITOWITZ BERGER & GROSSMANN LL P
THE COURTS SPEAK
Throughout the firm 's history, many courts have recognized the professional competence
and diligence of the firm and its members A few examples are set forth belo w
Recently Judge Walls (District of New Jersey), in approving the $3 2 billion Cendant settlement, said that the recovery from all defendants, which represents a 37% recovery to the Class, "far exceeds recovery rates of any case cited by the parties " The Court also held that the $335 million separate recovery from E&Y is "large" when "[v]iewed in light of recoveries against accounting firms for securities damages " In granting Lead Counsel's fee request, the Court determined that "there is no other catalyst for the present settlement than the work of Lead Counsel This Court, and no otherjudicial officer, has maintained direct supervision over the parties from the outset of litigation to the present time In addition to necessary motion practice, the parties regularly met with and reported to the Court every five or six weeks during this period about the status of negotiations between them [T]he Court has no reason to attribute a portion of the Cendant settlement to others' efforts, Lead Counsel were the only relevan t material factors for the settlement they directly negotiated " The Court found that "[t]he quality of result, measured by the size of settlement, is very high The Cendant settlement amount alone is over three times larger than the next largest recovery achieved to date in a class action case for violations of the securities laws, and approximately ten times greater than any recovery in a class action case involving fraudulent financial statements The E&Y settlement is the largest amount ever paid by an accounting firm in a securities class action " The Court went on to observe that "the standing, experience and expertise of the counsel, the skill an d professionalism with which counsel prosecuted the case and the performance and quality of opposing counsel were high in this action Lead Counsel are experienced securities litigators who ably prosecuted the action " The Court concluded that this Action resulted in "excellent settlements of uncommon amount engineered by highly skilled counsel with reasonable cost to the class " After approving the settlement in Alexander v Pennzoil Company, the Honorable Vanessa D Gilmore of the United States District Court for the Southern District of Texas ended the settlement hearing by praising our firm for the quality of the settlement and our commitment to effectuating change in the workplace " the lawyers for the plaintiffs did a tremendous, tremendous job not only in the monetary result obtained, but the substantial and ver y
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innovative programmatic relief that the plaintiffs have obtained in this case treating people fairly and with respect can only inure to the benefit of everybody concerned I think all thes e lawyers did an outstanding job trying to make sure that that's the kind of thing that this case left behind " On February 23, 2001, the United States District Court for the Northern District o f California granted final approval of the $259 million cash settlement in In re 3Com Securities Liligatron, the largest settlement of a securities class action in the Ninth Circuit since the Privat e Securities Litigation Reform Act was passed in 1995, and the fourth largest recovery ever obtained in a securities class action The district court, in an Order entered on March 9, 2001, specifically commented on the quality of counsel's efforts and the settlement, holding that "counsel's representation [of the class] was excellent, and . the results they achieved were substantial and extraordinary " The Court described our firm as "among the most experienced and well qualified in this country in [securities fraud] litigation " United States District Judge Todd J. Campbell of the Middle District of Tennesee hear d arguments on Plaintiffs' Motion for Preliminary Injunction in Cason v Nissan Motor Acceptance Corporation Litigation, the highly publicized discriminatory lending class action, on September 5, 2001 He exhibited his own brand of candor in commenting on the excellent work of counsel in this ma tter "In fact, the lawyenng in this case is as good as I've seen in any case So y'all are to be commended for that " In approving the $30 million settlement in the Assisted Living Concepts, Inc Securitie s Litigation, the Honorable Ann L Aiken of the Federal District Court in Oregon, praised the recovery and the work of counsel She stated that, " without a doubt this is a tremendous result as a result of very fine work by the attorneys in this case " The Honorable Judge Edward A Infante of the United States District Court for th e Northern District of California expressed high praise for the settlement and the expertise of plaintiffs' counsel when he approved the final settlement in the Wright v MCI Communications Corporation consumer class action "The settlement is a very favorable settlement to the class to get an 85% result was extraordinary, and plaintiffs' counsel should be complimented for it on this record The recommendations of experienced counsel weigh heavily on the court The lawyers before me are specialists in class action litigation They're well known t o me, particularly Mr Berger, and I have confidence that if Mr Berger and the other plaintiffs '
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counsel think this is a good, well-negotiated settlement, I find it is " The case was settled for $14 5 million At the recent In re Computron Software, Inc Securities Litigation settlement hearing , Judge Alfred J Lechner, Jr of the United States District Court for the District of New Jersey approved the final se ttlement and commended Bernstein Litowitz Berger & Grossmann ' s efforts on behalf of the Class "I think the job that was done here was simply outstanding I think all of you just did a superlative job and I'm appreciat[ive] not only for myself, but the court system and the plaintiffs themselves The class should be very, very pleased with the way this turned out, how expeditiously it's been moved " In In re Computron Software, Inc Securities Litigation was a securities fraud class action filed on behalf of shareholders who purchased Compu tron common stock at inflated prices due to alleged misrepresentation about the company's financial obligation The case settled for $15 million dollars The In re Louisiana -Pacific Corporation Securities Litigation, filed in the United States District Court, District of Oregon, was a securities class action alleging fraud and misrepresentations in connection with the sale of defective building materials Our firm, together with co-lead counsel, negotiated a settlement of $65 1 million, the largest securities fraud settlement in Oregon history, which was approved by Judge Robert Jones on February 12, 1997 The Court there recognized that " , the work that is involved in this case could only be accomplished through the unique talents of plaintiffs' lawyers which involved a talent that i s not just simply available in the mainstream of litigators " Judge Kimba M Wood of the United States District Court for the Southern District of New York, who presided over the six-week securities fraud class action jury trial in In re ICN/Viratek Securities Litigation , also recently praised our firm for the quality of the representation afforded to the class and the skill and expertise demons trated throughout the litigation and tri al especially The Court commented that " plaintiffs ' counsel did a superb job here on behalf of the class This was a very hard fought case You had ve ry able, superb opponents, and they put you to your task The trial work was beautifully done and I believe very efficiently done Similarly, the Court in the In re Prudential-Bache Energy income Partnership Securitie s Litigation, United States District Court, Eastern District of Louisiana, recognized Bernstein Litowitz-Berger & Grossmann LLP's " professional standing among its peers " In that case, which was settled for $120 million, our firm served as Chair of Plaintiffs' Executive Committee BERNSTEIN LITOWITZ BERGER & GROSSMANN LL P
In the landmark securities fraud case, In re Washington Public Power Supply Syste m Litigation (United States District Court, District of Arizona), the district court called the quality of representation "exceptional," noting that "[t]his was a case of overwhelmingly unique proportions . a rare and exceptional case involving extraordinary services on behalf of Class plaintiffs " The Court also observed that "[a) number of attorneys dedicated significant portion s of their professional careers to this litigation, champion[ing] the cause of Class members in the face of commanding and vastly outnumbering opposition . . . [and] in the face of uncertain victory [T]hey succeeded admirably " Likewise, in In re Electro-Catheter Securities Litigation, where our firm served as co- lead counsel, Judge Nicholas Politan of the United States District Court for New Jersey sai d
Counsel in this case are highly competent, very skilled in this very specialized area and were at all times during the course of the litigation always well prepared, well spoken, and knew their stuff and they were a credit to their profession They are the top of the line
In our ongoing prosecution of the In re Bennett Funding Group Securities Litigation, the largest "Ponzi scheme" fraud in history, partial settlements totaling over $140 million have been negotiated for the class While the action continues to be prosecuted against other defendants, the United States District Court for the Southern District of New York has already found our firm to have been "extremely competent" and of "great skill" in representing the clas s Judge Sarokin of the United States District Court for the District of New Jersey, after approving the $30 million settlement in In re First Fidelity Bancorporation Securities Litigation , a case in which were lead counsel, praised the " outstanding competence and performance" o f the plaintiffs' counsel and expressed "admiration" for our work in the cas e
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RECENT ACTION S
Currently, Bernstein Litowitz Berger & Grossmann LLP is counsel in many divers e
nationwide class and individual actions Some examples from our practice groups include .
Securities Class Action s
In re WorldConi, Inc. Securities Litigation (United States District Court for the Southern Distract of New York) The largest securities fraud class action in history The court appointed BLB&G client the New York State Common Retirement Fund as Lead Plaintiff and the firm as Lead Counsel for the class in this securities fraud action arising from the financial fraud and subsequent bankruptcy at WorldCom, Inc The complaints in this litigation allege that WorldCom and others disseminated false and misleading statements to the investing public regarding its earnings and financial condition in violation of the federal securities and other laws As a result, investors suffered tens of billions of dollars in losses . The Complaint further alleges a nefarious relationship between Salomon Smith Barney and WorldCom, carried out primarily by Salomon employees involved in providing investment banking services to WorldCom (most notably, Jack Grubman, Salomon's star telecommunications analyst), and by WorldCom's former CEO and CFO, Bernard J Ebbers and Scott Sullivan, respectively . On November 21, 2002, the Court granted the Common Retirement Fund's request for a partial lifting of the PSLRA discovery stay The Court's opinion requires WorldCom to produce the approximately one million pages it has previously produced to Congress, the SEC, and the grand jury in the government's criminal investigation into the alleged fraud surrounding the Company's bankruptc y
In re Cendant Corporation Securities Litigation -- (United States District Court, District of New Jersey) Securities class action filed against Cendant Corporation, its officers and directors and Ernst & Young, its auditors Cendant settled the action for $2 8 billion and Ernst & Young settled for $335 million The settlements are, by far, the largest in history in a securities fraud action Plaintiffs allege that the company disseminated materially false and misleading financial statements concerning CUC's revenues, earnings and expenses for its 1997 fiscal year As a result of company-wide accounting irregularities, Cendant has restated its financial results for its 1995, 1996 and 1997 fiscal years and all fiscal quarters therein The firm represents Lead Plaintiffs CaLPERS - the California Public Employees Retirement System, the New York State Common Retirement Fund and the New York City Pension Funds, the three largest public pension funds in America, in this action
Baptist Foundation ofArizona v. Arthur Andersen, LLP -- (Superior Court of the State of Arizona in and for the County of Mancopa) Firm client , the Baptist Foundation of Arizona Liquidation Trust ("BFA") filed a lawsuit charging its former auditors, the "Big Five" accounting firm of Arthur Andersen LLP, with negligence in conducting its annual audits of BFA's financial statements for a 15-year period beginning in 1984, and culminating in BFA's bankruptcy in late 1999 Investors lost hundreds of millions of
13 BERNSTEIN LITOWITZ BERGER & GROSSMANN LL P
dollars as a result of BFA's demise The lawsuit alleges that Andersen ignored evidence of corruption and mismanagement by BFA's former senior management team and failed to investigate suspicious transactions related to the mismanagement These oversights of accounting work, which were improper under generally accepted accounting principles, allowed BFA's undisclosed losses to escalate to hundreds of million of dollars, and ultimately resulted in its demise On May 6, 2002, after one week of trial, Andersen agreed to pay $217 million to settle the litigation The court approved the settlement on September 13, 2002 and, ultimately, investors are expected to recover 70% of their losses
In re Legato Systems, Inc. Securities Litigation (United States District Court for the Northern District of California {San Jose)) This securities fraud class action alleges that Legato Systems, Inc and certain of its officers overstated the Company's fiscal 1999 financial results The resultant need for a restatement of the company's financial reports caused by improper accounting practices led to a loss in the value of the stock and the plaintiff class of shareholders seek recovery of said losses In April 2002, Legato agreed to settle the case for $85 million and the Court granted final approval of the settlement on July 31, 2002 The firm represents the Policemen and Firemen Retirement System of the City of Detroit as Lead Plaintiff in the action.
In re Bristol-Myers Squibb Securities Litigation (United States District Court for the Southern District of New York) Securities fraud class action filed on behalf of purchasers of Bristol-Myers Squibb's securities . The allegations in this litigation pertain to the Company's statements about the strength of Bristol-Myer' s sales and the Company's investment in ImClone, the developer of Erbitux On October 24, 2002, Bristol-Myers Squibb announced that it would have to restate its earnings for years 2000, 2001 and 2002, reducing sales revenues for the period by more than $2 billion . The Company also announced that it would write-down $367 million of its investment in lmClone The restatement is related to the Company's controversial inventory practices and will cause a decrease in earnings for 2000 and 2001 On October 4, 2002, The Honorable Loretta A Preska of the United States District Court for the Southern District of New York, appointed BLB&G clients the Teachers' Retirement System of Louisiana and the General Retirement System of the City of Detroit as two of the four public pension funds who will serve as Co-Lead Plaintiffs Several days after Judge Preska's order was signed, Bristol-Myers disclosed that the Office of the United States Attorney for the District of New Jersey had opened a criminal investigation into the sales and inventory practices of the Company BLB&G was also appointed Co-Lead Counsel for the Class by Judge Preska
Independent Energy Holdings Litigation (United States District Court for the Southern District of New York) Securities fraud class action against Independent Energy Holdings PLC filed on behalf of all persons or entities who, from February 14, 2000 through September 8, 2000 (the "Class Period") (1) purchased or acquired Independent Energy American Depository Shares ("depository shares") that were issued in a secondary offering pursuant to the Registration Statement and Prospectus filed with the SEC on form F-3 that was declared effective on March 28, 2000, (2) otherwise purchased o r
14 BERNSTEIN LITOWITZ BERGER & GROSSMANN LL P
acquired those depository shares, (3) if residing in the United States or its territories, purchased or acquired ordinary shares of Independent Energy, (4) or any combination thereof The Complaint alleges that the registration statement and prospectus for the Secondary Offering, declared effective on or about March 28, 2000 failed to disclose an investigation of the Company by the Office of Gas and Electricity Markets ("OFGEM"), an energy regulator in the United Kingdom, and contained materially false and misleading facts and omitted certain material facts relating to the Company's billing and customer service problems as well as problems relating to it's third party service provider The Complaint also alleges that vanous other statements prior and subsequent to the Registration Statement which are attributable to certain of the Defendants were also materially false and misleading for many of the same reasons In May 2002, the Court certified the Class BLB&G, Court-appointed Lead Counsel for the Class, represents the Court-appointed Lead Plaintiffs and Class Representatives in this actio n
In re Assisted Living Concepts, Ina Securities Litigation -- (United States District Court, District of Oregon) -- Securities fraud class action against ALC and its auditors ansing from the restatement of ALC's financial statements for the years ended December 31, 1996, December 31, 1997 and the first three quarters of 1998 The complaint alleges that defendants issued a series of false and misleading statements about Assisted Living's earnings, profitability and business condition and issued financial statements that were materially false and misleading and violated Generally Accepted Accounting Principles . The firm represents Lead Plaintiff Miami Police Relief and Pension Fund in this action The Company settled for $30 million KPMG Peat Marwick LLP, which served as ALC's auditor during the Class Period, settled for $13 5 million The combined receipts of the two settlement funds provide class members with approximately 60% of their damages
In re McKesson HBOC, Inc. -- (United States District Court, Northern District of California) Securities fraud litigation filed on behalf of purchasers of HBOC, McKesson and McKesson HBOC securities On April 28, 1999, the Company issued the first of several press releases which announced that, due to its improper recognition of revenue from contingent software sales, it would have restate its previously reported financial results Immediately thereafter, McKesson HBOC common stock lost $9 billion in market value On July 14, 1999, the Company announced that it was restating $327 .8 million of revenue improperly recognized in the HI3OC segment of its business dunng the fiscal years ending March 31, 1997, 1998 and 1999 The complaint alleges that, during the Class Penod, Defendants issued materially false and misleading statements to the investing public concerning HBOC's and McKesson HBOC's financial results, which had the effect of artificially inflating the prices of HBOC's and the Company's securities The firm represents Lead Plaintiff the New York State Common Retirement Fund in this action
In re Lucent Technologies, Inc. Securities Litigation -- (United States District Court for --the-District-of New Jersey) A securities fraud class action filed on behalf of purchasers of the common stock of Lucent Technologies, Inc The Plaintiffs allege that, during the Class Period, Defendants made materially false and misleading statements regarding Lucent's optical networking business and reported financial results that were false an d
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inflated Indeed, on December 21, 2000, Lucent announced that it had improperly recognized nearly $679 million in revenues for fiscal year 2000 and that it had notified the SEC of these revenue recognition violations As court-appointed Lead Counsel, the firm represents the Anchorage Police and Fire Retirement System and the Louisiana School Employees ' Retirement System and the Parnassus Fund , in this action
In re Conseco, Inc. Securities Litigation (United States District Court for the Southern District of Indiana) Securities fraud class action On March 31, 2000, Conseco Inc had announced that it would take a $350 million charge as a result of losses on its interest- only securities Additionally, the company announced that it would also take a substantial charge on the future sale of Conseco Finance Conseco Finance, formerly known as Greentree, is a wholly-owned subsidiary of Conseco that was acquired in 1998 for over $6 billion, and specializes in the consumer financing business On Apn1 14, 2000, Conseco restated its earnings for the first three quarters of 1999 and the second quarter of 1998 Various complaints, subsequently consolidated, allege violations of the Securities Act of 1933 and the Exchange Act of 1934 The action has recently settled for $120 million The firm was appointed Lead Counsel in this action on behalf of its clients, the Anchorage Police & Fire Retirement System and the State of Louisiana Firefighters' Retirement System, Lead Plaintiffs in the case
In re Bennett Funding Group Securities Litigation -- (United States District Court, Southern District of New York) Investor class action involving the sale of $570 million in fraudulent investments, described as the largest "Ponzi" scheme in United States history The action was prosecuted against over fifty defendants including Bennett's former auditors, insurers and broker-dealers who sold Bennett investment The class includes all purchasers of Bennett securities from March 29, 1992 through March, 29, 1996 The action settled with multiple defendants for over $165 millio n
In re 3Com Securities Litigation -- (United States District Court, Northern District of California) Class action on behalf of purchasers of 3Com common stock, alleging that defendants knowingly and recklessly caused 3Com to issue materially false an d misleading statements to the financial community regarding the company's products, inventory and distribution The complaint further alleges insider trading on these publicly disseminated materially false and misleading statements The firm represented Lead Plaintiffs the Louisiana School Employees ' Retirement System and the Louisiana Municipal Police Employees ' Retirement System This action resulted in the largest settlement - $259 million - ever obtained from a corporate defendant in a securities fraud class action in the Ninth Circui t
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Corporate Governance and Shareholders ' Rights
McCall v. Scott -- (United States District Court, Middle District of Tennessee) A derivative action filed on behalf of Columbia/HCA Healthcare Corporation -- now "HCA" -- against certain former senior executives of HCA and current and former members of the Board of Directors seeking to hold them responsible for directing or enabling HCA to commit the largest healthcare fraud in history, resulting in hundreds o f millions of dollars of loss to HCA The firm represents the New York State Common Retirement Fund as Lead Plaintiff, as well as the California Public Employees' Retirement System ("Ca1PERS"), the New York City Pension Funds, the New York State Teachers' Retirement System and the Los Angeles County Employees' Retirement Association ("LACERA") in this action Although the district court initially dismissed the action, the United States Court of Appeals for the Sixth Circuit reversed that dismissal and upheld the complaint in substantial part, and remanded the case back to the district court We have been vigorously prosecuting the action since the remand On February 4, 2003, the Common Retirement Fund, announced that the parties had agreed in principle to settle the action, subject to approval of the district court . As part of the settlement, HCA will adopt a corporate governance plan that goes well beyond the requirements both of the Sarbanes-Oxley Act and of the rules that the New York Stock Exchange has proposed to the SEC, and also enhances the corporate governance structure presently in place at HCA HCA also will receive $14 million Under the sweeping governance plan, the HCA Board of Directors will be substantially independent, and will have increased power and responsibility to oversee fair and accurate financial reportin g
Rainforest Cafe Shareholder Rights Proceeding (Minnesota District Court, Hennepin County) Bernstein Litowrtz Berger & Grossmann LLP, on behalf of the State of Wisconsin Investment Board , Central Florida Investments and over 70 individuals, initiated a proceeding seeking the payment of fair value for their shares in Rainforest Cafee, Inc These shareholders who held approximately 4 3 million shares (nearly 20% of the voting shares) of Rainforest, opposed the December 1, 2000, takeover of Rainforest by Landry"s Seafood Restaurants on the grounds that the $3 25 per share buyout offer accepted by the Rainforest Board of Directors was inadequate based on the financial condition and prospects of Rainforest These investors are demanding additional compensation for the fair value of their shares pursuant to Minnesota law A bench trial of the matter before the Honorable Gary Larson in Hennepin County, Minnesota concluded on January 13, 2003 Plaintiffs await Judge Larson's verdic t
Employment Discrimination and Civil Rights
Roberts v. Texaco, Inc. (United States District Court for the Southern District of New York) Six highly qualified African-American employees filed a class action complaint against Texaco Inc alleging that the Company failed to promote African-American employees to upper level jobs and failed to compensate them fairly in relation t o
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caucasian employees in similar positions Two years of intensive investigation on the part of the lawyers of Bernstein Litowitz Berger & Grossmann LLP, including retaining the services of high level expert statistical analysts, revealed that African-Amencans were significantly under-represented in high level management jobs and Caucasian employees were promoted more frequently and at far higher rates for comparable positions within the Company Settled for over $170 million Texaco also agreed to a Task Force to monitor its diversity programs for five years The settlement has been described as the most significant race discrimination settlement in histor y
Saks v. Franklin Covey Company -- (United States District Court, Southern Distract of New York) Charge of Discrimination filed with the EEOC alleging that Franklin Covey discriminated against Ms Saks on the basis of sex, pregnancy and disability b y maintaining a self-insured health benefits plan that excludes virtually all medically necessary treatments for women suffering from the illness of infertility
GMAC/NMAC/FordlToyota/Chrysler Consumer Finance Discrimination Litigation The cases involve allegations that the lending practices of General Motors Acceptance Corporation, Nissan Motor Acceptance Corporation, Ford Motor Credit, Toyota Motor Credit and Chrysler Financial cause black and Hispanic car buyers to pay millions of dollars more for car loans than similarly situated white buyers At issue is a discriminatory kickback system under which minorities typically pay about 50% more in dealer mark-up which is shared by auto dealers with the defendant s
Alexander v. Pennzoil Company - (United States District Court, Southern District of Texas) A class action on behalf of all salaried African-American employees at Pennzoil alleging race discrimination in the Company's promotion, compensation and other job related practices The action settled for $6 75 millio n
Butcher v. Gerber Products Company - (United States District Court, Southern District of New York) Class action asserting violations of the Age Discrimination in Employment Act arising out of the mass discharging of approximately 460 Gerber sales people, the vast majority of whom were long-term Gerber employees aged 40 and older . Settlement terms are confidentia l
Consumer Class Actions
E*Trade Group, Inc. -- (Superior Court of California, Santa Clara County) A class action filed on behalf of all individuals who have or had accounts with E*Trade from September 1996 to the present The complaint alleges that E*Trade's representations to customers regarding the manner in which their accounts would be handled were false and misleading, that the electronic trading systems were inadequate to meet customer demands, and that, as a result of these misrepresentations, customers suffered significan t
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losses and have been depraved of the benefits which E*Trade had represented they would receive
General Motors Corporation -- (Superior Court of New Jersey Law Division, Bergen County) A class action consisting of all persons who owned W-body cars with defective rear disc brake caliper pins which tended to corrode, creating both a safety hazard and premature wearing of the front and rear disc brakes, causing extensive economic damage BLB&G is co-lead counsel in this case where a proposed settlement would provide $19 5 million to the class for reimbursement of brake repairs
Rent-A-Center -- (Supreme Court of the State of New York, Bronx County) Deceptive sales and marketing in "rent-to-own" transactions In this case , BLB&G recently obtained a landmark ruling upholding a rental-purchasers' right to bung sui t
Empire Blue Cross -- (United States District Court, Southern District of New York) Overcharging health care subscribers BLB&G was lead counsel in a recently approved $6 6 million settlement that represented 130% of the class' damages and offered all the overcharged subscribers 100 cents on the dollar repayment
DoubleClick - (United States District Court, Southern Distract of New York) Internet Privacy. A class action on behalf of Internet users who have had personal information surreptitiously intercepted and sent to a major Internet advertising agency . In the settlement agreement reached in this action, DoubleClick commits to a series of industry-]eadmg privacy protections for online consumers while continuing to offer its full range of products and services This is likely the largest class action there has ever been -- virtually every, if not every, Internet user in the United State s
Antitrust
In re Flat Glass Antitrust Litigation (United States District Court for the District of Minnesota) Antitrust class action brought against major glass manufacturers on behalf of direct purchasers of "flat glass" Plaintiffs allege that they paid artificially inflated pnces due to Defendants' conspiracy to raise, fix or maintain the pace of flat glass sold in the United States In re High Pressure Laminates Antitrust Litigation (United States Distnct Court for the Southern District of New York) Antitrust class action on behalf of direct purchasers of high pressure laminates Plaintiffs allege that they paid artificially inflated prices due to Defendants' conspiracy to raise , fix or maintain the price of the laminates
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Toxic/Mass Tort s
Fen/Phen Litigation -- Class action lawsuits alleging that a number of pharmaceutical companies produced drugs which, when used in combination, can lead to life-threatening pulmonary hypertension and heart valve thickening The complaint alleges that these manufacturers knew or should have known of the serious health risks created by the drugs and should have warned users of these risks It is also alleged that the manufacturers knew that the fenlphen combination was not approved by the FDA, had not been adequately studied, and yet, was being routinely prescribed by physicians BLB&G has been Liaison Counsel in the New York State cases, where it obtained certification of a medical monitoring class in the first New York State court decision to recognize medical monitoring, and is the designated New York State Class Counsel to the proposed multi-billion dollar American Home Products settlement in federal court
20 i z
BERNSTEIN LITOWITZ BERGER & GROSSMANN LL P
CLIENTS AND FEE S
Most of the firm's clients are referred by other clients, law firms and lawyers ,
bankers, investors and accountants A considerable number of clients have been referred to th e
firm by former adversaries We have always maintained a high level of independence and
discretion in the cases we decide to prosecute As a result, the level of personal satisfaction and
commitment to our work is high
As stated, our client roster includes many large and well known financial an d
lending institutions and pension funds, as well as privately held corporate entities which are
attracted to our firm because of our reputation, particular expertise and fee structure ,
We are firm believers in the contingency fee as a socially useful, productive an d
satisfying basis of compensation for legal services, particularly in litigation Wherever
appropriate, even with our corporate clients, we will encourage a retention where our fee is a t
least partially contingent on the outcome of the litigation This way, it is not the number of
hours worked that will determine our fee but, rather, the result achieved for our client
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IN THE PUBLIC INTERES T
Bernstein Litowitz Berger & Grossmann LLP is guided by two principles excellence i n
legal work and a belief that the law should serve a socially useful and dynamic purpos e
Attorneys at the firm are active in academic, community and pro bono activities , as well as
participating as speakers and contributors to professional organizations In addition, the firm
endows a public interest law fellowship and sponsors an academic scholarship at Columbia La w
School
The Bernstein Litowitz Berger & Grossmann Public Interest Law Fellowship , Columbia Law School Bernstein Litowitz Berger & Grossmann LLP is committed to fighting discnmination and effecting positive social change In support of this commitment, the firm donated funds to Columbia Law School to create the Bernstein Litowitz Berger & Grossmann Public Interest Law Fellowship This newly endowed fund at Columbia Law School will provide two or three Fellows with 100% of the funding needed to make payments on their law school tuition loans so long as such graduates remain in the public interest law field The Bernstein Litowitz Berger & Grossmann Fellows will be able to leave law school free of any law school debt if they make a long term commitment to public interest law
The Paul M. Bernstein Memorial Scholarship, Columbia Law School, Paul M Bernstein was the founding senior partner of the firm of Bernstein Litowitz Berger & Grossmann LLP Mr Bernstein led a distinguished career as a lawyer and teacher and was deeply committed to the professional and personal development of young lawyers The Paul M Bernstein Memorial Scholarship Fund is a gift of the firm of Bernstein Litowitz Berger & Grossmann LLP, and the family and friends of Paul M Bernstein Established in 1990, the scholarship is awarded annually to one or more second-year students selected for their academic excellence in their first year, professional responsibility, financial need and contributions to fellow students and the community
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THE MEMBERS OF THE FIRM
MAX W. BERGER, a founding partner of the firm, supervises the firm's litigation practice Mr Berger prosecutes class and individual actions in all areas of the firm's practice He is also responsible for negotiating, on behalf of shareholders, consumers and institutional clients, some of the firm's most successful and highly praised litigations, including the In re Cendant Corporation Securities Litigation, which settled for $3 2 billion dollars Although Mr Berger is an active, practicing attorney, he serves as a member of Columbia Law School's Dean's Council and Board of Visitors, the senior alumm advisory groups to the law school and co-chairs the Board's Education of Lawyers Committee He has also taught Profession of Law, an ethics course at Columbia Law Schoo l Mr Berger is past chairman of the Commercial Litigation Section of the Association of Trial Lawyers of America and lectures before the Practicing Law Institute, the American Bar Association and the Federal Judicial Center, as well as numerous other professional association s In 1997, Mr Berger was honored for his outstanding contribution to the public interest by Trial Lawyers For Public Justice, where he was a Trial Lawyer of the Year Finalist for his work in Roberts v Texaco, the celebrated race discrimination case on behalf of Texaco's Afncan- Amencan employees Mr Berger received an Accounting degree from City College of New York in 1968 At City College, he was President of the student body, a member of the national honor accounting society and won numerous awards Mr. Berger received his J D from Columbia Law School in 1971, where he was an editor of the Columbia Survey of Human Rights Law
ADMISSIONS Admitted to bar, 1972, New York 1973, U S . District Court, Southern District of New York 1973, U S . Court of Appeals, Second Circuit 1975, U S . District Court, Eastern District of New York, 1992, U .S District Court, District of Arizona
EDWARD A. GROSSMANN, one of the firm's founding partners, graduated cum laude from the University of Wisconsin in 1970 and the University of Michigan School of Law i n 1973 Mr Grossmann served as lead counsel in the Prudential-Bache Energy Income Limited Partnership and the Bennett Funding Group class actions, well-publicized cases which have each settled for in excess of $120 million He is a past chairman of the Class and Derivative Action Trials Subcommittee of the Litigation Section of the American Bar Association as well as the Commercial Litigation section of the Association of Trial Lawyers of America, an organization for which he has lectured Mr Grossmann is a member of the Committee of Visitors of the University of Michigan Law School He is a past President of the JCC on the Palisades and is currently the Treasurer of the UJA Federation of Bergen Count y
ADMISSIONS Admitted to bar, 1974, New York 1974, U .S District Court, Southern and Eastern Districts of New York 1975, U S Court of Appeals, Second Circuit 1990, U S Court of Appeals, Third Circuit 1991, U S Court of Appeals, Ninth Circuit 1993, U S Court of Appeals, Fifth Circuit 1996, U S Court of Appeals, Eleventh Circui t
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DANIEL L. BERGER, graduated from Haverford College in 1976 and Columbia Law School in 1979, where he was a Harlan Fiske Stone Scholar Mr Berger served as an Assistant Attorney General of the State of New York, Civil Rights Division, from 1979 through 1983, where he was active in prosecuting many important civil rights cases, including State of New York v OFCCP, a suit to compel the OFCCP to enforce affirmative action goals and timetables in the construction industry in New York Mr Berger is the partner principally responsible for the firm's New York-based securities and employee rights practice groups In 1997, he was honored for his outstanding contnbution to the public interest by Trial Lawyers For Public Justice, where he was a Trial Lawyer of the Year Finalist for his work as co-lead counsel on behalf of African -American employees in Roberts v Texaco, the celebrated discrimination litigation Recently, Mr Berger served as the lead trial attorney on the team that prosecuted Rainforest Cafe, Inc v State of Wisconsin Investment Board, et al, a shareholders ' dissenter rights action teed in Hennepin County , Minnesota on behalf of firm clients , the State of Wisconsin Investment Board, Central Florida Investments Inc, and 70 other former investors in Rainforest Cafe In addition, Mr Berger was lead trial attorney in the ICN/Viratek Pharmaceuticals Securities Litigation and the Datapoint Securities Litigation, two of the few securities class actions to be tried to jury verdict. Mr Berger has also been lead counsel responsible for prosecuting some of the firm' s largest and most significant recent securities class actions, including cases against Cendant Corporation , McKesson HBOC, Inc and Conseco, Inc
ADMISSIONS Admitted to bar, 1980, New York 1980, U S . District Court, Southern District of New York 1983, U S. Court of Appeals, Second Circuit 1989, U S Court of Appeals, Fifth Circuit 1991, U.S Court of Appeals, Ninth Circuit 1992, U S Distract Court, Eastern Distract of New York 1999, U S Court of Appeals, Sixth Circuit 2001, U S . Court of Appeals, Seventh Circui t
ALAN SCHULMAN is the partner in charge of the firm's West Coast office in San Diego He specializes in complex class action litigation and has been practicing in that field for more than 20 years Mr Schulman received his B A from New York University in 1971 and his J D. from Louisiana State University School of Law in 1974, where he was Order of the Coif and Associate Editor of the Louisiana Law Review Mr Schulman was the co-chair of the Securities Law Committee of the American Bar Association's Litigation Section (1998-2001) and served as President (2001) and as a member of the Board of Governors of the Association of Business Trial Lawyers of San Diego (1995-2001) He was co-chair of the Southern District of California Lawyer Representatives to the Ninth Circuit Judicial Conference (2000-2001) and currently serves on the Ninth Circuit Judicial Conference Executive Committee Mr Schulman has served as lead counsel in some of the largest and most significant securities class actions litigated over the past 20 years, including the largest recoveries in Ninth Circuit history Media reports have referred to him as among "the most influential" west coas t
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plaintiffs ' securities litigators (The Recorder/Cal Law, January 3, 2000) and as a "heavy hitter nationally who is on everyone' s short list of top securities lawyers " (New York Law Journal, January 4, 2000) Mr Schulman was one of the firm partners responsible for successfully prosecuting and settling BFA Liquidation Trust v Arthur Andersen LLP which resulted in a payment by Andersen of $217 million -- the largest ever settlement by Andersen and the second largest by any accounting firm in history Mr Schulman is Adjunct Professor of Law at the University of San Diego School of Law where he teaches Complex Litigation
ADMISSIONS Admitted to bar, 1974, Louisiana and Texas 1982, Washington 1986, California 1995, United States Supreme Court, U S . Court of Appeals- 1981, Fifth, and Eleventh Circuits, 1982, Ninth Circuit; U S District Courts 1987, Southern District of California, 1989, Northern and Central Districts of Californi a
DOUGLAS M . MCKEIGE, received a B A , cum laude, in Economics from Tufts University in 1979 and a J D, magna cum laude, from Tulane University in 1986, where he was Order of the Coif and Articles Editor of the Tulane Law Review Mr McKeige prosecutes securities fraud class actions on behalf of the firm and counsels institutional investors with respect to the prosecution of federal and state securities claims . He has successfully prosecuted many significant federal securities class actions including In re 3Com Securities Litigation, which settled for $259 million, the largest settlement of a securities fraud class action in the history of the Ninth Circuit Mr McKeige is a popular speaker and lecturer and is a member of the National Association of Public Pension Attorneys, the Society of Pension Professionals, the National Association of State Treasurers, the National Council on Teacher Retirement and the National Conference on Public Employee Retirement Systems
ADMISSIONS Admitted to bar, 1987, New York 1988, U S Distract Courts, Southern and Eastern Districts of New York
JOHN P. ("SEAN") COFFEY is a graduate of the United States Naval Academy, receiving a B S in Ocean Engineering, with merit, in 1978 He received his J D , magna cum laude, from Georgetown University Law Center in 1987, where he was Articles Editor of the Georgetown Law Journal, a member of the Order of the Coif, and recipient of the Charles A Keigwin Award for academic excellence Before graduating law school, Mr Coffey was a Commissioned Officer in the United States Navy where he served as a Naval Flight Officer, an Intern in the Organization for the Joint Chiefs of Staff and the personal military aide to then Vice President George H W . Bush A former P-3C Orion patrol plane mission commander, he continues to serve in the Naval Reserves, where he has commanded a P-3C squadron and the Naval Reserve component of th e
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Enterprise carrier battle group staff He currently holds the rank of Captain and is assigned to the Office of the Secretary of Defense at the Pentagon Mr Coffey served as an Assistant United States Attorney for the Southern District of New York from 1991 to 1995, where he conducted numerous complex fraud investigations and tried many cases to verdic t Mr Coffey was the lead trial attorney in BFA Liquidation Trust v Arthur Andersen LLP, an audit malpractice case arising from the 1999 collapse of the Baptist Foundation of Arizona, the largest non-profit bankruptcy in U S history The case, which was closely covered by The Wall Street Journal, New York Times, Washington Post, 60 Minutes II and the British Broadcasting System, settled on May 6, 2002 when, six days into what was scheduled to be a three month trial, Andersen agreed to pay $217 million to the plaintiff investor s Mr Coffey is a frequent commentator for the news media, appearing in the Wall Street Journal, National Journal, and other periodicals, and on NBC Nightly News and the Today show Prior to joining Bernstein Litowitz Berger & Grossmann LLP, Mr Coffey was a partne r in the litigation department of Latham & Watkins He was also an Adjunct Professor of Law at Fordham University, where he taught a seminar on criminal law, and is a recipient of the Thurgood Marshall Award, from the Association of the Bar of the City of New York, for his extensive work in the death penalty are a
ADMISSIONS Admitted to bar, 1988, New York, 1989, U S District Court, Southern District of New York. 1992, U S Court of Appeals, Second Circuit 1995, U S. District Court, Western District of New York 1998, U S District Court, Eastern District of New York 1999, New Jersey.
ROBERT S. GANS, received an A B ., cum laude, in Government, from Dartmouth College in 1987 and a J D from New York University School of Law in 1990, where he was a member of the Order of the Banisters, an editor of the Moot Court Board, and a recipient of the Securities Regulation Awar d Mr Gans primarily focuses in the areas of securities fraud, accountants' liability and corporate governance, and he has successfully prosecuted many of the firm's significant cases In January 2000, Mr Gans left New York after seven years to join Alan Schulman in opening the firm's San Diego office He was part of the trial team which successfully prosecuted BFA Liquidation Trust v Arthur Andersen LLP, resulting in a $217 million settlement -- the largest settlement ever by Andersen and the second largest by a public accounting firm in history Mr Gans frequently lectures to groups concerning shareholder rights, and has authored several articles on this subject as well He is a member of the Association of the Bar of the City of New York, the New York State Bar Association, the California State Bar Association and the American Bar Association Mr Gans is currently Co-Chair of the Rule 23 Subcommittee of the ABA Litigation Section's Class Actions and Derivative Suits Committe e
ADMISSIONS Admitted to the bar, 1991, New York 1992, U .S District Courts, Southern and Eastern Districts of New York 2001, California
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DARNLEY D. STEWART, graduated from Princeton University in 1984 and received her J D from Northeastern University School of Law in 1990 She served as law clerk to the Hon R Ammi Cutter and the Hon Mel Greenberg of the Massachuse tts Court of Appeals from 1990 to 199 1 Ms Stewart, along with senior partner Daniel L Berger, is the partner principally responsible for the firm's employment discrimination and employee rights practice group She has acted as co-lead counsel in many of the firm's high profile discrimination cases, including Rapier, et al v Ford Motor Company, Inc, which resulted in one of the largest sexual harassment class action settlements in history Ms Stewart is a member of the Title VII Committee of the National Employment Lawyers Association and serves on the Executive Board of the New York affiliate (NELA/NY) of that organization She is a member of the Individual Rights and Responsibilities Committee of the New York State Bar Association and serves as Plaintiffs' Co-Chair of the Class Action Subcommittee of the Amencan Bar Association's Employment Rights and Responsibilities Committee and Programs Co-Chair of the Technology Committee of the American Bar Association's Labor and Employment Section Ms Stewart regularly lectures and writes on employment class action litigation .
ADMISSIONS . Admitted to the bar, 1990, Massachusetts 1993, New York 1993, U S District Court, Southern District of New York 1998, U S . District Court, Western District of Michigan 2000, U S Court of Appeals, Sixth Circuit 2001, U S Court of Appeals, Second Circuit 2001, U S Court of Appeals, Third Circuit
STEVEN B. SINGER specializes in securities fraud litigation. Mr Singer received his B A , cum laude, from Duke University in 1988 and his J D from Northwestern Umversity in 1991 He has worked on a number of high profile cases for the firm, including the In re 3Com Securities Litigation, which resulted in the largest securities fraud class action settlement in Ninth Circuit history, and the celebrated Texaco discrimination litigation His work on that case led to his nomination in 1997 for "Trial Lawyer of the Year" by the Trial Lawyers for Public Justice Mr Singer is a member of the New York State and American Bar Association s
ADMISSIONS Admitted to the bar, 1992, New York 1992, U S District Courts, Eastern and Southern Districts of New York
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OF COUNSEL
J. ERIK SANDSTEDT, Of Counsel to the firm, received his B A, with distinction, from the University of North Carolina at Chapel Hill, and his J D from Columbia University School of Law, where he was a Harlan Fiske Stone Scholar and an Editor of the Columbia Journal of Law and Social Problems Mr Sandstedt has been involved with a number of high profile securities fraud litigations for the firm, including In re WorldCom, Inc Securities Litigation and In re McKesson HBOC, Inc Securities Litigation He is currently one of the lead trial attorneys in In re Independent Energy Holdings PLC Securities Litigation, pending in the Southern District of New York, and In re Suprema Specialties Securities Litigation, pending in the District of New Jersey He is an active member of the state and federal bar associations in New Jersey and is the attorney-in-charge of the firm's New Jersey office He is also a frequent lecturer at the firm's Institutional Investor Forum, and he has served as a commentator on programs and shows such as NPR's "Marketplace " Before joining the firm, Mr Sandstedt was the Deputy Chief of Staff of the Criminal Division of the United States Department of Justice In that capacity, Mr Sandstedt was responsible for the development and implementation of criminal justice policy, overseeing major prosecutions and legislative initiatives, and managing the day-to-day affairs of the Division In particular, Mr Sandstedt helped coordinate the response of federal law enforcement to the events of September 11th and was involved with negotiating and drafting portions of the USA Patriot Act From 1998 through 2001, Mr, Sandstedt was an Assistant United States Attorney in the Special Prosecutions and Criminal Divisions of the United States Attorney's Office for the District of New Jersey There, he conducted numerous complex fraud and corruption investigations and tried many cases to verdict . He also led the District's efforts to combat money laundering as the head of a task force consisting of agents from the IRS, FBI, DEA, LISPS and Customs, and he served as the liaison to the IRS Criminal Investigations Division with respect to all criminal tax matters Mr Sandstedt won numerous awards and commendations as a federal prosecutor He also was an Associate of the Edward Bennett Williams Inn of Court, an Adjunct Professor at Seton Hall University School of Law, and a lecturer on "The Role of the Federal Prosecutor" at Georgetown, George Washington, American and Catholic Law Schools . Mr Sandstedt began his legal career as a litigation associate at Latham & Watkins, where he was primarily involved with corporate investigations and the defense of securities fraud and white collar criminal cases ADMISSIONS Admitted to bar, 1995, New Jersey and U S District Court for the District of New Jersey 1996, New York and U S District Courts for the Southern and Eastern Districts of New York 1998, U S Court of Appeals, Third Circui t
G . ANTHONY GELDERMAN, I II , formerly a partner with Tarcza & Gelder-man in New Orleans, Louisiana, has served as Of Counsel to BLB&G for the last several years and heads the firm's Louisiana offic e Mr Gelderman served as Chief of Staff and General Counsel to the Treasurer of the State of Louisiana, (1992 - 1996) and prior to that served as General Counsel to the Louisiana Department of the Treasury Mr Gelderman also coordinated all legislative matters for the State
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Treasurer during his tenure with the Treasury Department Earlier in Mr Gelderman's legal career, he served as law clerk to U S District Judge Charles Schwartz, Jr, Eastern District of Louisiana (1986 - 1987) Mr Geldennan is a former adjunct professor of law at the Tulane Law School where he has taught a course in legislative process He is a member of the Louisiana State (Chairman, Young Lawyers Continuing Legal Education Committee, 1990-1993) and American Bar Associations In 1995, Mr Gelderman was profiled by the American Bar Association in Barrister magazine as one of the 25 young lawyers in America making a difference in the legal profession ADMISSIONS Admitted to bar, 1986, Louisiana 1997, U S Distract Courts for the Eastern Distract and Middle District of Louisiana .
DEBORAH STURMAN is a distinguished international litigator She represents European institutional investors in securities actions in the United States and also counsels European investors in connection with their United States investment s Ms Sturman conceived of and filed the first suits in United States courts on behalf of Holocaust-era slave labor victims that led to recoveries of approximately $7 billion She has been profiled in both The Wall Street Journal and Financial Times for her innovative lawyering. Ms Sturman regularly appears as a legal commentator on German, Dutch and Belgian television, as well as on numerous international and national Continuing Legal Education panels for complex and international litigatio n During the 1990's, she represented Holocaust survivors and their heirs seeking restitution of real property in the former East Germany "Aryanized" during World War If Deborah is a member of the California Holocaust Era Insurance Oversight Committee, to which she was appointed by California Governor Gray Davis in 2000 She was also appointed Special Liaison Counsel in In re Holocaust Victim Assets Litigation In 2000, she was a runner-up for National Law Journal Lawyer of the Year Ms Sturman received a Prix d'Excellence from the Royal Brussels Conservatory of Music and a J D from the University of California at Los Angeles School of Law She practices primarily out of the firm's New York office ADMISSIONS Admitted to bar, 1995, California 1995, Supreme Court of the State of California 1999, Federal Circuit Court of Appeals and U S District Court for the Distract of Columbia Admitted to bar, 2000, New York 2000, U S District Courts for the Southern and Eastern Districts of New York 2000, U S Court of Appeals, Second Circuit
RONALD LITOWITZ, a founding partner of the firm, has practiced in the areas of securities fraud and derivative litigation Mr Litowitz received his bachelor's degree from Williams College in 1961 and his J.D from New York University (LL B) in 1964 where he was a John Norton Pomeroy Scholar Mr Litowitz was also the Editor of the Annual Survey ofAmerican Law from 1963-1964. ADMISSIONS Admitted to bar, 1965, New Jersey and U S District Court, District of New Jersey 1967, New York, U S District Court for the Southern and Eastern Districts of New York and U S Court of Appeals, Second, Sixth and Ninth Circuits 1986, U S Supreme Cour t
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SENIOR COUNSEL
ROCHELLE FEDER HANSEN, Senior Counsel to the firm, received her B A from Brooklyn College of the City University of New York in 1966 and her M S . in 1976 She received her J D , magna cum laude, from Benjamin N Cardozo School of Law in 1979, where she was a member of the Law Review Ms Hansen was the principal associate on a number of high profile securities fraud cases at the firm, including Storage Technology, First Republic, and the RJR Nabisco Litigation She has also acted as Antitrust Program Coordinator for Columbia Law School's Continuing Legal Education Trial Practice Program for Lawyers She is a member of the bar of the State of New York (1980), the U S District Courts for the Southern (1980) and Eastern (1980) Districts of New York, and the U S Court of Appeals, Fifth Circuit (1993) as well as the Northern District of New York (1996)
JEFFREY N. LEIBELL specializes in prosecuting secunties class actions as well as derivative actions involving breaches of fiduciary duty and corporate governance on behalf of the firm's clients Also a Certified Public Accountant, Mr Leibell served as a Senior Manager in the Audit Department of Deloitte & Touche LLP, where he audited "Fortune 500" and other companies in a variety of industries, prior to attending law school Since joining the firm in 1996, he has prosecuted a number of the firm's most significant cases, including In re Cendant Corporation Securities Litigation, which resulted in a $3 2 billion settlement, and McCall v Scott, the Columbia/HCA Derivative Litigation . He received his B S , cum laude, in Accounting from Brooklyn College of the City University of New York in 1979, and a J D . from Columbia University in 1992, where he was the Senior Notes Editor of the Columbia Business Law Review and a Harlan Fiske Stone Scholar. Mr Leibell is the author of "Accountant's Liability in the Savings & Loan Crisis An Argument in Favor of Affirmative Defenses " Mr Leibell is a member of the New York State Society of Certified Public Accountants, the New York State Bar Association and the American Bar Associatio n He is admitted to the bar of the State of New York (1992), U S District Courts for the Southern and Eastern Districts of New York (1993), U S Court of Appeals, Second Circuit (1996), U S District Court for the Eastern District of Michigan (1996), U S. Court of Appeals, Sixth Circuit (1999), U S District Court for the District of Colorado (2000) and the U S Court of Appeals, Third Circuit (2000)
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THE ASSOCIATES OF THE FIRM
JAVIER BLEICHMAR received his bachelor's degree in 1992 from the University of Pennsylvania, and received his J D from Columbia Law School in 1998, where he was a Harlan Fiske Stone Scholar and Managing Editor of the Journal of Law and Social Problems Mr Bleichmar is the author of "Deportation as Punishment A Historical Analysis of the British Practice of Banishment and Its Impact on Modem Constitutional Law," published in the Fall 1999 volume of the Georgetown Immigration Law Journal He has actively participated in the Immigrants' Rights Project sponsored by the New York State Defenders' Association Mr Bleichmar's practice at the firm focuses on securities fraud litigation Together with firm partners Daniel Berger and Steven Singer, Mr Bleichmar successfully prosecuted In re Conseco Securities Litigation resulting in an $120 million settlement He is a member of the bar of the State of New York (1999) as well as the United States District Courts for the Southern and Eastern Distracts of New York (1999)
TIMOTHY A. DeLANGE received his B A from the University of California, Riverside in 1994 and his J D from the University of San Diego School of Law in 1997 He was the 1994 recipient of the American Jurisprudence award in Contracts Prior to joining the firm, Mr DeLange practiced complex litigation at Brobeck, Phleger & Harrison LLP He is admitted to bar of the State of California (1997), the U .S District Court for the Southern District of California (1997) and the U S District Court for the Central District of California (2001) Mr DeLange practices out of the firm's California offic e
ALICIA M. DUFF received her B A, cum laude, in 1994 from the University of Massachusetts at Amherst, where she was a member of the University Honors Program She received her J D , magna cum laude, in 1997 from the Suffolk University Law School where she served on the Editorial Board of the Suffolk University Law Review as Articles Editor and authored several articles for the Law Review Prior to joining the firm, Ms Duff served as a law clerk to the j ustices of the Superior Court of Massachusetts , practiced general litigation and prosecuted securities class actions in Boston, Massachusetts She is admi tted to the bars of the States of Massachusetts ( 1997) and New York (2001), the U S District Court for the District of Massachusetts ( 1998) and U S Court of Appeals for the First Circuit (2000) Ms Duff practices out of the firm 's California office.
JENNIFER L. EDLIND received her B A , magna cum laude, from Cedarville University in 1995 where she was selected by the faculty as Student of the Year and was the recipient of the President's Trophy for leadership and scholarship . She received her J D from Brooklyn Law School in 1999 where she was Production Editor of the Brooklyn Law Review and a member of the Moot Court Honor Society After law school, Ms Edlind worked as a litigation associate at Robinson Silverman Pearce Aronsohn & Berman LLP in New York Immediately prior to joining the firm, she clerked for the Honorable Richard M Berman, United States District Judge for the Southern District of New York She is a member of the Federal Bar Council Inn of Court Together with firm partners Max Berger, Sean Coffey and Steven Singer, Ms Edlind is currently on the team responsible for prosecuting the In re WorldCom, Inc
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Securities Litigation She is admitted to the bar of the State of New York (2000) and the U S District Courts for the Eastern and Southern Districts of New York (2000)
JOSEPH A. FONTI received his B A from New York University College of Arts and Science, cum laude, in 1996 He received his J D from New York University School of Law in 1999 where he was active in Marden Moot Court Competition and a Student Senator-at-Large of the NYU Senate Prior to joining the firm, Mr Fonti was a litigation associate at Sullivan & Cromwell in New York Over the past several years, he has represented victims of domestic violence in affi liation with inMotron, an organization that provides pro bono legal se rvices to indigent women He is admitted to practice in the State of New York (2000) and the U S District Courts for the Southern and Eastern Districts of New York (2001 )
PATRICIA S. GILLANE received her B A , cum laude, from Columbia University in 1985 and her J D from Brooklyn Law School in 1989, where she was an editor of the Brooklyn Law Review Ms Gillane is the author of the "One Moment in Time The Second Circui t Ponders Choreographic Photography as a Copyright Infringement Horgan vs MacMillan "She is part of the team responsible for successfully prosecuted In re Bennett Funding Group Litigation, which arose out of the largest Ponzi scheme in history . Over $150 million has already been recovered for the class as the matter continues to be prosecuted against several remaining defendants She is a member of the Association of the Bar of the City of New York, where she was a member of the Professional Responsibility Committee from 1996 until 1999 and is also a member of the American Bar Association Ms Gillane is a member of the bar of the State of New York (1990) as well as the U S. District Courts for the Southern and Eastern Districts of New York (1990).
BEATA GOCYK-FARBER received her B A , summa cum laude, from Adelphi University in 1994 and her J D , summa cum laude, from the Benjamin N Cardozo School of Law in 1997 where she was a member of the Cardozo Law Review and the Order of the Coif Prior to receiving her degree at Adelphi, Ms Gocyk-Farber was awarded the Scholarship for Academic Excellence at Jagiellonian University in Cracow, Poland . At Cardozo she was a Balkin Scholar and the recipient of the West Publishing Award for Academic Excellence She authored "Patenting Medical Procedures In Search of a Compromise Between Ethics and Economics" for the Law Review in 1997 Prior to joining BLB&G in 2001, Ms Gocyk-Farber was an associate with Cleary Gottlieb Steen & Hamilton She is a member of the International Law Section of the American Bar Association and is admitted to practice in the State of New York (1998).
HANNAH E. GREENWALD received her B A, cum laude, from Cornell University in 1995, and received her J D from the Dickinson School of Law of The Pennsylvania State University, where she was a member of the Woolsack Honor Society, in 1998 While at Dickinson, Ms Greenwald was a Comments Editor of the Dickinson Law Review She was also the recipient of the D Arthur Magaziner Human Services Award, awarded to the senior who has demonstrated good character, sound academic performance, high ethical standards, fidelity to the highest goals of the profession and commitment to selfless human service Before joining BLB&G, Ms Greenwald was a prosecutor in the Insurance and Unemployment Fraud Division of the Massachusetts Attorney General's office Prior to that, she was an Assistant Distric t
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Attorney in the Middlesex County (Massachusetts) District Attorney's office from 1998 to 2000 Ms Greenwald is admitted to practice in States of Massachusetts (1998) and New York (2002)
ANDREW M. GSCHWIND graduated from Duke University in 1990, summa cum laude, where he was a Phi Beta Kappa scholar Mr Gschwind was selected to study abroad at Oxford University during the 1988-1989 academic year, and he graduated, with Honors, in Philosophy He received his J D from the University of California, Boalt Hall School of Law in 1996, where he was a member of the California Law Review and received an award for Best Oral Argument in Moot Court While clerking for the Hon Joseph T Sneed of the Ninth Circuit Court of Appeals during the Summer of 1994, Mr Gschwind edited and revised Judge Sneed's book on the Fourteenth Amendment, Footprints On the Rocks of the Mountain As a litigation associate with Goodwin, Procter & Hoar LLC he was selected to participate in the Boston Bar Advocacy Program, representing several indigent defendants pro bono in criminal cases in state court He is a member of the American Bar Association, the Federal Bar Council, the New York State and New York City Bar Associations and the National Association of Consume r Advocates Mr Gschwind is currently part of the team prosecuting McCall v Scott, the Columbia/HCA Healthcare Corporation Derivative Litigation arising from the largest healthcare fraud in history He is a member of the bars of the states of New York (1996), Massachusetts (1996 - retired status), the United States District Court for the District of Massachusetts (1997) and the Southern District of New York (2001),
AVI JOSEFSON received his B A , cum laude, from Brandeis University in 1997 and his J D , Dean's List, from Northwestern University in 2000 At Northwestern, Mr Josefson represented indigent juvenile and adult clients in various courts and was awarded the Justice Stevens Public Interest Fellowship (1999) and the Public Interest Law Initiative Fellowship (2000) He is a co-author of several articles including "Top 10 Considerations When Seeking Insurance Recovery for E-Commerce and Internet Claims," which he wrote for the 19th Annual ABA Mid-year Meeting of Committee on Corporate Counsel Materials, as well as "Political and Currency Risk Insurance" and "It's Not a Small World After All Meeting the Challenge of Global Risks" which he wrote for the Manufacturers Alliance Risk Management Councils I & II He is admitted to practice in the state of Illinois (2000)
ERIC T. KANEFSKY received his B A in 1999 from The George Washington University and his J D ., cum laude, from Temple University in 2002, where he was Associate Research Editor of the Temple Law Review While at Temple, Eric served as a student law clerk to The Honorable Bruce W Kauffman, United States District Judge for the Eastern District of Pennsylvania and The Honorable James R Melmson, Chief Magistrate Judge for the Eastern District of Pennsylvania After law school, Mr Kanefsky was a litigation associate in the White Collar and Government Enforcement Group at Ballard Spahr Andrews & Ingersoll LLP in Philadelphia He is admitted to the bars of the State of Pennsylvania (2002), New Jersey (2002), the U S District Court for the Eastern District of Pennsylvania (2003) and the U S District Court for the District of New Jersey (2003 )
JOHN A. KEHOE received a B A from DePaul University in 1986 and a Master's degree in Public Administration from the University of Vermont in 1994 where he was vice president of the Public Administration Student's Association He received his J D , magna cum
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laude, from Syracuse University College of Law in 1997 where he was an Associate Editor of the Syracuse Law Review, an Associate Member of the Moot Court Board, and an alternate member on the National Appellate Team Prior to joining the firm, Mr Kehoe had extensive securities litigation experience as an associate at Clifford Chance US LLP, where he also had a prominent role representing a pharmaceutical manufacturer in In re Vitamin Antitrust Litigation Prior to law school, he worked as a police officer in Burlington and Brattleboro, Vermont and served as the lead investigator in over 1000 felony and misdemeanor complaints Mr Kehoe is a member of the team prosecuting the In re Bristol Myers Squibb Securities Litigation He is admitted to the bars of the State of New York (1999) and the U S District Court for the Southern District of New York (1999)
KEVIN B . MARTIN received his B A , magna cum laude, in 1995 from Emory University where he was Phi Beta Kappa and Dean's List all semesters He received his J D in 1998 from the New York University School of Law, where he was a member of the Federal Defender Clinic Prior to joining the firm, he prosecuted federal securities matters as Senior Counsel in the United States Securities and Exchange Commission's Division of Enforcement (New York office) His practice at the SEC involved the investigation and litigation of accounting irregularities, insider trading, market manipulation, fraudulent public offerings, corporate record keeping and reporting violations He prosecuted commercial litigation as a Litigation Associate at Altschuler Grossmann Stein & Kahan before has tenure at the SEC Among other matters, Mr Martin is currently a member of the teams prosecuting the In re Symbol Technologies, Inc Securities Litigation, Teachers Retirement System of Louisiana, et al v ACLN Limited, et al and In re Cable & Wireless, PLC Securities Litigation on behalf of several institutional investor clients . He is admitted to the bars of the State of California (1999) and the U S District Court, Central District of California (1999 )
EITAN MISULOYIN received his B .S from Boston University's School of Management in 1997 . He then completed Hofstra University's joint-degree program in three years, receiving his M B A , With Distinction, and his J.D , Dean's List, in 2001 He is the author of "The Group Legal Plan Revolution Bright Horizon or Dark Future9" for the Hofstra Labor & Employment Law Journal Mr Misulovin is a Series 7 and Series 63 licensed securities dealer and is fluent in English, Russian and Hebrew He is a member of the bars of the States of New Jersey (2001) and New York (2002) and is admitted to practice in the U S District Courts for the District of New Jersey (2001) and the Southern and Eastern Districts of New York (2002 )
BLAIR A. NICHOLAS has focused his practice on the litigation of securities and consumer class actions and has represented sophisticated institutional investors in the prosecution of significant securities fraud actions Mr Nicholas recently served on the trial team that prosecuted Rainforest Cafe, Inc v State of Wisconsin Investment Board, et al, a shareholders' dissenter rights action litigated in the state court of Minnesota and brought on behalf of firm clients, the State of Wisconsin Investment Board , Central Florida Investment s Inc , and 70 other former investors in the Rainforest Cafe, Inc Mr Nicholas also recently served on the litigation team that represented the Policemen and Firemen Retirement System of the City of Detroit in In re Legato Securities Litigation , which settled for $85 million, as well as the litigation team that represented the Louisiana School Employees ' Retirement System in In re Finova Group Inc Securities Litigation , which settled for $42 million Mr Nicholas was also a
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member of the litigation team that prosecuted In re Informix Securities Litigation, which settled for $142 million Mr Nicholas authored "Reforming the Reform Act and Restoring Investor Confidence in the Securities Markets," which was published in the Securities Reform Act Litigation Reporter (Vol 13, No 4, July 2002) Mr Nicholas is an active member of the State Bar of California, the Federal Bar Association, the San Diego County Bar Association, the Association of Business Trial Lawyers of San Diego and the Consumer Attorneys of San Diego Mr Nicholas also serves as a member of the American Bar Association's Securities Litigation Committee and served as co-editor of the ABA's Securities News Mr Nicholas received a B A in Economics from the University of California, Santa Barbara, where he was a member of the Golden Key National Honor Society, and a J D from the University of San Diego School of Law At the University of San Diego School of Law, Mr Nicholas served as Lead Articles Editor of the San Diego Law Review He practices out of the firm's California office He is admitted to the bar of the State of California (1995), to the Ninth Circuit Court of Appeal (1996) and to the United States District Courts for the Southern, Central and Northern Districts of California (1996) and the District of Arizona (1996) Mr Nicholas practices in the firm's California office
NIKI L. O'NEEL received her B A from the University of Oregon in 1994 Ms O'Neel received her J D from the University of Oregon School of Law in 1997 where she was a member of the Order of the Coif and a Managing Editor of the Oregon Law Review, for which she wrote "Rooney v Kulongoski, Limiting the Principle of Separation of Powers?" She served as judicial law clerk to the Honorable Chief Judge Michael R Hogan of the United States District Court for the District of Oregon from 1998 to 2001 where she received the Distinguished Servic e Recognition in September 2001 Before joining BLB&G, Ms O'Neel represented both plaintiffs and defendants in commercial and employment litigation, practicing in both Hawaii and California Ms O'Neel is a member of the Federal Bar Committee of the San Diego County Bar Association She is admitted to the bar of the States of Hawaii (1997) and California (2001) and practices out of the firm's California Office.
GERALD H. SILK received his B S in Economics from the Wharton School of Business, University of Pennsylvania in 1991, and a J D , cum laude, from Brooklyn Law School in 1995 where he was a member of the Moot Court Honor Society In 1995-96, Mr Silk served as a law clerk to the Hon Steven M . Gold, U S M J , in the United States District Court for the Eastern District of New York Prior to joining the firm, Mr Silk was an associate in the Business and Securities Litigation Department at Weil, Gotshal & Manges LLP, where he was primarily involved in defending securities cases and counseling boards of directors on corporate governance matters Since joining the firm in 1998, Mr Silk has represented numerous public pension funds and other institutional investors on matters involving the federal and state securities laws, accountants' liability and the fiduciary duties of corporate officials Mr Silk also lectures to institutional investors at conferences throughout the country and has written several articles on developments under the securities laws He is a member of the bar of the State of New York (1996) as well as the U S. District Courts for the Southern and Eastern Districts of New York (1997)
DAVID R. STICKNEY received his B A from the University of California at Davis in 1993 and his J D from the University of Cincinnati College of Law in 1996, where he was a
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Jacob B Cox scholar He served as lead articles editor of the University of Cincinnati Law Review and authored "Throwing Away `Flow Control' Effective Solid Waste Management Succumbs to the Dormant Commerce Clause C & A Carbone, Inc v Town of Clarkstown, 114 S Ct 2004 (1994)" During 1996-1997, Mr Stickney served as law clerk to the Honorable Bailey Brown of the U S Court of Appeals for the Sixth Circuit He was the principal associate responsible for prosecuting BFA Liquidation Trust v Arthur Andersen LLP which resulted in a settlement of $217 million -- the largest settlement ever by Andersen and the second largest by a public accounting firm in history Mr Stickeny's professional affiliations include the American Bar Association and the Association of Business Trial Lawyers He is a member of the bars of the State of California, the U S Court of Appeals for the Sixth Circuit, and the U S District Courts for the Northern, Southern, and Central Districts of Ca lifornia Mr. Stickney practices in the California office
STEPHEN W. TOUNTAS received his B A from Union College in 2000 and his J D from Washington University School of Law in 2003 where he was a Scholar in Law While at Washington University, he was Editor-in-Chief of the Washington University Journal of Law and Policy, as well as a Finalist in the annual Environmental Moot Court competitio n Additionally, Mr Tountas worked as Research Assistant to Dean Joel Seligman, one of the country's foremost experts on securities law, for whom he performed extensive research to update the most recent two volumes of Loss & Seligman on Securities Regulation Mr Tounta s is the author of "Carnivore Is the Regulation of Wireless Technology a Legally Viable Option to Curtail the Growth of Cybercrime," published in 1 I Wash U J L & Pol'y 351 In recognition of this Note, the faculty selected him to receive the Scribe's Award, presented annually to a student who authors an exemplary Note of outstanding publishable qualit y
VICTORIA O. WILHEIM received her B A from California State University at Long Beach in 1992 and her J D from Southwestern University School of Law in 1996, where she was a member of the Moot Court Honors program Ms Wilhelm prosecutes securities an d discrimination class actions on behalf of the firm's clients She is a member of the bars of the states of California (1996) and New York (1999 )
ANDREW I. ZLOTNIK received his B A from the University of Virginia in 1997 and his J D. from the University of San Diego Law School in 2002 Mr Zlotmk has worked as a law clerk for the firm since the summer of 2000 and joined the firm as a full time associate i n September 2002 . Along with firm partner Robert Gans, he co-authored "Bad Cases Mean Bad Law (For Plaintiffs)- Compaq and the Heightened Adequacy Standard Under Rule 23" for the Practicing Law Institute's Accountants' Liability - After Enron conference . Pnor to starting law school Mr Zlotruk worked as an organizer for the United Food and Commercial Workers International Union, and was a director of field operations for Proposition MM, a local school bond initiative which raised $15 billion to repair San Diego city schools He practices out of the firm's California office
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