The following are descriptions of cases that have been handled by DONOVAN SEARLES.

Williams v. Empire Funding, et al. Cendant Securities Litigation Harris v. Greentree Financial Rockefeller Center Properties Securities Litigation Lemelledo v. Beneficial Management Corp. of America Advanta Securities Litigation USA Detergents Securities Litigation Other Securities Litigation Cases Pending

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Williams vs. Empire Funding, et al.
Donovan Searles is one of the lead counsel in this home improvement financing class action filed on behalf of consumers deceived by a two-contract sales and financing scheme allegedly perpetrated by a now defunct Pittsburgh-based contractor and a national subprime lender headquartered in Austin, Texas.  According to the Complaint, which is filed in the United States District Court for the Eastern District of Pennsylvania, the defendants engaged in a plan, scheme and common course of conduct to market home improvement goods and services as well as financing in a manner that circumvented the consumers' right to rescind the transactions and misrepresented the services and financing as sponsored by a government program.  The Complaint further alleges that the work performed on customers' homes was uniformly deficient, incomplete or not performed in a workmanlike manner as promised.  In addition, consumers were subjected to harassing debt collection tactics and unlawful debt collection letters.  On behalf of herself and over 300 class members, plaintiff seeks an order declaring that consumers may now rescind the transactions, may void the loans and the secondary mortgages on their homes, obtain compensatory and treble damages and other legal and equitable relief.  Plaintiff's motion for certification of the class has been fully briefed and is now pending before the Court.

Cendant Securities Litigation
Donovan Searles is one of several firms that have filed a securities class action in the United States District Court for the District of New Jersey on behalf of purchasers of the common stock of Cendant Corp. ("Cendant") who purchased shares of Cendant or its predecessors, CUC International, Inc. or HFS, Inc. between May 28, 1997 and April 15, 1998, inclusive.
The Complaint charges Cendant and certain of its officers and directors with violations of the federal securities laws and alleges that defendants issued false and misleading financial statements because the Company materially misstated its revenues and expenses, among other things, thereby materially misstating its earnings.The Complaint charges Cendant and certain officers and directors of the Company during the relevant time period with violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 for misrepresenting material information concerning Cendant’s financial condition and earnings throughout the Class Period.

Cendant, a direct marketing Company, was formed by the $14 billion merger of HFS Inc. and CUC on December 17, 1997.  On April 15, 1998 Cendant stunned the investing public by disclosing that it had discovered "accounting irregularities" at certain former CUC divisions which are part of Cendant’s Alliance Marketing Division.  The Company said it would be restating its annual and quarterly net income and earnings per share for 1997 and was also investigating further "accounting irregularities" at CUC for fiscal years 1995 and 1996.  The effect on 1997 results is expected to be a reduction to net income of approximately $100 to $115 million and earnings per share by about 11 to 13 cents, respectively.

On the release of these revelations the price of Cendant common stock dropped dramatically, falling over 50% from $35.625 to $17.50 on extraordinarily heavy volume.  Prior to the shocking disclosures described above, defendants Walter A. Forbes and Henry R. Silverman sold 2 million shares of their own stock at prices as high as $38.25 to reap proceeds of over $72,804,000.  The complaint alleges, inter alia, that during the Class Period, defendants engaged in a course of conduct that was designed to, and did:

1. deceive the investing public, including plaintiff and other members of the Class concerning:
   1. Cendant’s earnings per share for fiscal years 1995, 1996 and 1997;
   2. the Company’s overstatement of its earnings through the utilization of improper accounting procedures in violation of Generally Accepted Accounting Principles ("GAAP");
   3. the Company’s overstatement of earnings in violation of GAAP resulting in the material misstatements of the Company’s earnings per share in fiscal years 1995, 1996 and 1997;
2. artificially inflate the market price of Cendant’s common stock during the Class Period;
3. cause plaintiff and other members of the Class to purchase Cendant’s common stock at inflated prices and
4. allow defendants to avail of their knowledge of the misstatements and the stock’s artificially inflated price during the Class Period to sell 2 million shares of their own stock for proceeds of over $72,804,000.

HARRIS v. GREENTREE FINANCIAL
In this consumer class action alleging unfair and deceptive home improvement sales and financing practices, Donovan Searles has taken the lead in attacking as unfair and unconscionable a one-sided arbitration clause included on the back of the uniform loan financing contracts used by Greentree Financial. In July 1997, Michael Donovan argued on behalf of the consumers in the case in opposition to defendants’ motion to enforce the arbitration clause. On December 19, 1997, the United States District Court for the Eastern District of Pennsylvania agreed with the plaintiffs and found the arbitration clause to be unconscionable and unenforceable. Defendants have since appealed that ruling. In addition, on January 18, 19 and 20, 1998, The Philadelphia Inquirer ran a series of investigative reports on its front page detailing many of the problems, scams and unlawful practices in the Title I loan program, some of which were first reported by the plaintiffs’ class action complaint in this case. Donovan Searles is handling similar claims on behalf of consumers against other financial institutions.

Rockefeller Center Properties Securities Litigation
As co-lead counsel in this multimillion dollar class action alleging violations of the securities laws in connection with a freeze-out merger of the public shareholders of this REIT, Donovan Searles took the lead in preparing plaintiffs' opposition to defendants' motion to dismiss. The opposition brief was filed with the U.S. District Court for the District of Delaware, where the consolidated case is pending, on July 9, 1997. Among other things, plaintiffs allege that defendants misrepresented the fairness of an $8.00 per share buyout approved by the REIT's shareholders after a proxy solicitation that culminated in a March 25, 1996 special meeting at which a majority of the publicly held shares were voted in favor of the buyout. In connection with the proxy solicitation, plaintiffs allege that defendants misrepresented and omitted to state material facts bearing on whether the stockholders should approve the proposed Buyout and whether the $8.00 per share offer was, in fact, fair to the stockholders in light of the value, prospects, assets and planned transactions for the landmark Rockefeller Center. Among the most significant facts omitted by defendants was the planned sale of about 20 percent of the Property to one of the major tenants of Rockefeller Center, the National Broadcasting Company ("NBC") and its parent, General Electric Co. ("GE"), for $440 million, implying a value for the entire Rockefeller Center of approximately $2.2 billion. That sale was formalized just twenty eight (28) days after a majority of RCPI's public shareholders had accepted the strong recommendations of defendants and voted to accept the $8.00 per share, which, in striking contrast, implied a value for Rockefeller Center of only $1.2 billion.

The principal claims in the case are that defendants misrepresented the fairness of the Buyout by (i) failing to disclose the planned sale of the NBC lease hold to GE/NBC; (ii) misrepresenting the possibility that such a sale would or could occur within two years after the Buyout; (iii)telling half-truths about an alternative to the Buyout in which RCPI would have more than enough cash to own and operate Rockefeller Center on its own; (iv) misrepresenting the viability of the alternative to the Buyout, a rights offering to raise $200 million for RCPI; (v) omitting any disclosure of the ownership, control, value and adverse interests in the development rights; and (vi) misrepresenting the likely cash flow of RCPI by failing to disclose expected rent increases from new, Class A tenants at Rockefeller Center.

Among the issues addressed in plaintiffs' opposition brief are whether defendants' alleged omissions and misstatements were "material" to the RCPI shareholders whose proxies defendants had solicited; whether defendants had a duty to fully and accurately disclose the facts and plans plaintiffs contend were omitted or misstated during the proxy solicitation; whether defendants acted with knowledge or recklessness in omitting or misstating the important facts; and whether certain of the background and contextual facts contained in plaintiffs' amended complaint are relevant to the subject matter of the claims and, therefore, may not be stricken from the complaint.

To assist the Court in analyzing the claims, plaintiffs included with their brief a Timeline, reproduced below, illustrating the more significant events relating to plaintiffs' claims.

Lemelledo v. Beneficial Management Corp. of America
New Jersey Supreme Court decision, 150 N.J. 255, 696 A.2d 546 (N.J. 1997).
New Jersey Supreme Court holds that New Jersey Consumer Fraud Act Applies to even "highly regulated" industries such as banking and insurance. In a landmark decision for consumers, the New Jersey Supreme Court has held that the state's consumer protection laws apply to even "highly regulated" industries, such as banking and insurance. The unanimous, 24 page decision was issued in a class action charging Beneficial Consumer Discount Company, a subsidiary of Beneficial Finance, with illegally "packing" high-interest rate consumer loans with unwanted, unrequested and unnecessary insurance products such as credit life insurance, credit disability insurance and credit property insurance, Lemelledo v. Beneficial Management Corp. of America, No. A-107-96.  The decision appears to reverse a trend in the lower state and federal courts in New Jersey that had exempted certain companies, particularly insurance companies and utilities, from many claims of deception by consumers.

The ruling came in a case brought by Jeanne C. Lemelledo in 1994 on behalf of herself and all other Beneficial customers who had been tricked into paying for credit insurance products included with their loans from Beneficial. Ms. Lemelledo alleged that Beneficial's practice of pre-completing the loan forms so as to include the unwanted and unrequested insurance created the impression that such insurance was required in order for the consumer to obtain the loan. She also alleged that Beneficial receives undisclosed "kickbacks" or commissions from selling the insurance, but nevertheless charges consumers amounts which do not reflect the actual amounts paid for the insurance. Beneficial contended that it was immune from Ms. Lemelledo's Consumer Fraud Act claims because it was regulated by the state's insurance and banking departments. The trial court agreed with Beneficial and dismissed those claims. On appeal, however, New Jersey's intermediate appellate court reversed the trial court and reinstated the claims. The Supreme Court affirmed that decision. Michael D. Donovan argued the case for Ms. Lemelledo before the Supreme Court.

Advanta Securities Litigation
Donovan Searles is one of several law firms representing plaintiffs in a federal securities class action filed against this financial services and credit card holding company. The first-filed case, captioned Poppel v. Advanta Corp, et al., No. 97- 4343, is pending before Judge Ronald L. Buckwalter of the U.S. District Court for the Eastern District of Philadelphia. Among other things, plaintiffs allege that defendants omitted to state the known impact of a change in accounting method adopted by Advanta in the third quarter of 1996. Although that change enabled Advanta to continue the appearance of increasing earnings and return on equity ratios in 1996, defendants allegedly knew, but failed to disclose, that the change would also result in a reported loss for the first quarter of 1997. On March 17, 1997, Advanta shocked the market by reporting its first quarterly loss in the last 23 quarters. As a result, its stock price plummeted, causing substantial damages to all investors who had purchased Advanta stock since approximately September 16, 1996, which is the beginning of the alleged class period, according to the Complaint. The Complaint also alleges that in December 1996, several of Advanta's top management sold significant amounts of their personal holdings of Advanta stock while in possession of material, nonpublic information concerning the probable impact in the first quarter of 1997 of the change in accounting for bankrupt credit card accounts.

USA Detergents Securities Litigation
Donovan Searles is one of several law firms representing investors in a securities class action against this distribution company headquartered in New Jersey. The several cases have been consolidated before Judge Maryanne Trump-Barry of the United States District Court for the District of New Jersey (Newark Vicinage). According to several of the Complaints, defendants misrepresented the financial condition and results of operations of USA Detergents, the impact of which was the fraudulent inflation of the market price for the company's publicly traded stock. When the true facts were disclosed, the stock price dropped precipitously, causing substantial losses to persons who purchased shares between August 7, 1996 and February 5, 1997, the alleged class period.

SECURITIES LITIGATION MONITORING SERVICES
Donovan Searles, LLC has announced that it will provide Securities Litigation Monitoring Services to institutional and individual investors. The new services are an outgrowth of the Securities Litigation Reform Act of 1995, which was intended in part to encourage more participation in securities class actions by institutional investors and large shareholders. Donovan Searles has developed an informational kit and proposal that details the need for and the nature of the services it will provide to such investors. The informational package and proposal are available my mail, free of charge and without obligation to any investor who sends an SASE to Donovan Searles.