On February 21, 2012, Judge Stanley R. Chesler of the United States District Court for the District of New Jersey appointed Faruqi & Faruqi, LLP to serve as Interim Class Counsel in Dzielak v. Whirlpool Corporation, et al., Case No. 12-CIV-0089 (SRC)(MAS), to represent a proposed nationwide class of persons who purchased mislabeled Maytag brand washing machines from Whirlpool Company, Lowe’s Companies, Inc. and Sears Holdings Corporation.

The lawsuit alleges that Whirlpool, Lowe’s and Sears misrepresented the energy efficiency of certain washing machines by promoting them as ENERGY STAR-qualified and labeling them with the ENERGY STAR logo. In fact, the washing machines do not meet the ENERGY STAR standards for energy efficiency and consume significantly more energy than the label states.

For further inquiries regarding this matter, please contact Antonio Vozzolo at avozzolo@faruqilaw.com or (212) 983-9330.

By Evan Weinberger

Law360, New York (January 31, 2012, 1:22 PM ET) -- An Eastman Kodak Co. employee on Friday launched a purported class action alleging the bankrupt photography icon's top executives and directors allowed employee benefit plans to invest in the company's stock even as it careened toward its Chapter 11 filing.

In a complaint filed in federal court in Rochester, N.Y., Kodak employee Mark Gedek alleged that the company's President and CEO Antonio M. Perez, Chief Financial Officer Antoinette P. McCorvey, several other top executives and the entire board of directors had breached their fiduciary duties to workers by allowing the Eastman Kodak Employees’ Savings And Investment Plan and the Kodak Employee Stock Ownership Plan to purchase company stock even as they knew it was not a prudent investment.

“Their fiduciary duties notwithstanding, defendants failed to protect the plans’ participants’ retirement savings from being imprudently invested in company stock, and as a result, the plans, and ultimately their participants, suffered losses,” the complaint said. “A prudent fiduciary facing similar circumstances would not have stood idly by as the plans lost tens of millions of dollars.”

Kodak, a onetime photography giant, filed for Chapter 11 bankruptcy protection Jan. 19 after failing to sell some of its digital patents and stem the ballooning losses that have long plagued the trailblazer. The move came after Kodak's ongoing struggle to right itself in the face of intense competition from new technologies.

The company had been refashioning itself since at least 2008, focusing more on its digital and commercial offerings and winnowing its film and consumer products.

According to the complaint, Perez, McCorvey and the other defendants were in breach of their fiduciary duties under the Employee Retirement Income Security Act because they continued to purchase Kodak stock even as the company's share price, and revenues, plummeted.

Kodak's stock has lost 99 percent of its value since 1999, the complaint said.

The stock, once valued at more than $80 per share, was hovering around the $1 mark as of November 2011. Once a component of the Dow Jones Industrial Average and traded on the New York Stock Exchange, Kodak shares began trading on the over-the-counter pink sheets in January, just before the bankruptcy filing, the complaint said.

The collapsing stock price did not stop fiduciaries of the two employee benefit plans from investing in the company stock. As of Dec. 30, 2010, the plans held more than $30.2 million in Kodak stock, the complaint said.

The company's executives and directors held more than 4.2 million shares, or well over 1 percent, of the total employee take of Kodak stock, representing a potential conflict of interest, the complaint said.

The complaint lists a proposed class period ranging from Jan. 1, 2010, to Jan. 27, 2011, the date the complaint was filed.

Kodak said the complaint was "without merit."

"We will defend vigorously against it," said company spokesman Christopher K. Veronda.

Counsel for the plaintiffs could not immediately be reached for comment.

Gedek and the purported class is represented by Nadeem Faruqi, Jacob A. Goldberg, Gerald D. Wells III and Robert Gray of Faruqi & Faruqi LLP.

The case is Gedek v. Perez et al., case number 6:12-cv-06051, in the U.S. District Court for the Western District of New York.

--Additional reporting by Hilary Russ. Editing by Kat Laskowski.

On January 18, 2012, Judge Marilyn L. Huff of the United States District Court for the Southern District of California appointed Faruqi & Faruqi, LLP to serve as Interim Class Counsel in Bates v. Kashi Co., et al., Case No. 11-CV-1967-H (BGS) to represent a proposed nationwide class of purchasers of Kashi products that were labeled as “all natural,” yet contained artificial and synthetic ingredients.

For further inquiries regarding this matter, please contact Vahn Alexander at valexander@faruqilaw.com or (424) 256-2884.

On January 3, 2012, Judge Stanley R. Chesler of the United States District Court for the District of New Jersey appointed Faruqi & Faruqi, LLP to serve as Interim Class Counsel in Avram v. Samsung Electronics America, Inc., et al., Case No. 11-CIV-6973 (SRC)(MAS), to represent a proposed nationwide class of persons who purchased mislabeled refrigerators from Samsung Electronics America, Inc. and Lowe's Companies, Inc.

The lawsuit alleges that Samsung and Lowe's misrepresented the energy efficiency of certain refrigerators by promoting them as ENERGY STAR-qualified and labeling them with the ENERGY STAR logo. In fact, the refrigerators do not meet the ENERGY STAR standards for energy efficiency and consume significantly more energy than the label states.

For further inquiries regarding this matter, please contact Antonio Vozzolo at avozzolo@faruqilaw.com or (212) 983-9330.

By Lance Duroni

Law360, Wilmington (December 20, 2011, 9:32 PM ET) -- A Morton's Restaurant Group Inc. shareholder launched a class action Monday in Delaware challenging restaurant magnate Tilman Fertitta's $117 million bid for the steakhouse chain, claiming the deal shortchanges investors.

Fertitta, the owner of Houston-based restaurant and hospitality giant Landry's Restaurants Inc., announced Friday that Morton's board had agreed to the $6.90-per-share deal, which boasts a 34 percent premium.

But Morton's shareholder Lon Myers calls the price "grossly unfair and inadequate" in a complaint filed in Delaware court, claiming Morton's board members breached their fiduciary duty to shareholders by signing off on the deal.

The offer neglects to factor in synergies created through the merger and the company's generally rosy financial prospects, according to the suit.

"[W]hile Fertitta will benefit from cost savings and synergies in the proposed transaction, the Morton's shareholders are left without adequate consideration," Myers said.

To support his claim that the deal undervalues Morton's, the plaintiff cites revenue increases at the company of 5 to 10 percent for each quarter of 2011 over the same quarters in 2010, along with one independent Wall Street analysis that suggested a $9-per-share price target for Morton's.

"The proposed transaction is wrongful, unfair and harmful to Morton's public shareholders because they will not be able to share equitably in the true value of the company," Myers said.

The suit also takes issue with various provisions in the merger agreement that allegedly discourage competing offers and set the deal in stone, including a so-called "top-up" option allowing Fertitta dodge a shareholder vote on the deal by purchasing shares to reach the 90 percent threshold necessary to complete the merger.

Private equity fund Castle Harlan Partners III LP, which owns roughly 28 percent of the Morton's outstanding shares, has entered into an agreement to tender its shares into the offer and vote in favor of the merger.  The fund's CEO John Castle is also a Morton's director and a defendant in the suit.

The plaintiff is seeking an injunction barring the deal, along with unspecified damages.

The complaint comes on the heels of a settlement last week in a similar class action in the same court over Fertitta's proposed purchase of McCormick & Schmick's Seafood Restaurant. McCormick agreed to disclose additional information on the deal to shareholders in return for the claims being dropped, according to court documents.

Chicago-based Morton's owns 77 restaurants throughout the U.S. and one in China.  Fertitta's acquisition of the chain is expected to close in February.

Myers is represented by James P. McEvilly and Juan E. Monteverde of Faruqi & Faruqi LLP.

Counsel information for the defendants was not immediately available.

The case is Lon Myers v. Morton's Restaurant Group Inc. et al., case number 7122, in the Delaware Court of Chancery.

--Additional reporting by Sindhu Sundar. Editing by Elizabeth Bowen.

Law360, Chicago (December 01, 2011, 4:09 PM ET) -- Wisconsin's business judgment rule does not protect Ladish Co. Inc.'s directors from shareholder class claims that they failed to disclose certain information regarding the company's $778 million sale to Allegheny Technologies Inc., a plaintiff's attorney told the Seventh Circuit on Thursday.

Juan Monteverde of Faruqi & Faruqi LLP asked a three-judge panel to revive Ladish shareholder Irene Dixon's putative class action against the metal components maker and its board of directors, arguing that the Wisconsin rule is designed to prevent interference in a business' day-to-day operations but not to relieve directors of liability for breaching their duty of candor when seeking shareholder approval for mergers.

The business judgment rule is not an applicable defense for disclosure, Monteverde argued.

The plaintiff's attorney is challenging the dismissal of Dixon's suit alleging the board allowed the company to be sold too cheaply in spite of its improving financial health, and that it failed to properly provide shareholders with information when seeking their approval for the deal.

A Wisconsin federal judge tossed the suit in March, finding that the board's decision was protected by Wisconsin's business judgment rule, which demands that courts presume that board members are acting in good faith unless proven otherwise.

The district court also ruled that Dixon's claims of breach of fiduciary duty and violation of securities disclosure laws did not have enough specific allegations to pass muster.

On appeal, Dixon is arguing that the Wisconsin rule applies to decisions about the management of a corporation's business, but not to a director's disclosures aimed at inducing shareholder approval of a potential merger.

The rule therefore does not protect the Ladish board from claims that it misstated or omitted material information in the documents they provided to the company's shareholders when they sought approval for the sale to Allegheny, the plaintiff said in her brief.

If it did, directors would have a license to lie to shareholders, the brief said.

On Thursday, Monteverde told the Seventh Circuit panel that public disclosures are essential in mergers because they help determine the market value of a company.

Ladish's directors, however, left out information explaining why they were abandoning their growth plan and selling the company instead, how they selected Ladish's financial adviser and whether that adviser had any conflicts of interest, and why they decided against negotiating with another interested bidder, Monteverde said.

Taking the podium for the defendants, Andrew Wronski of Foley & Lardner LLP argued that the district court properly applied the business judgment rule and that Dixon had failed to even allege that the purportedly missing information was material.

To allow shareholders like Dixon to bring her claims without showing any materially misleading disclosures would lead to endless interference by the courts in companies' proxy statements, the attorney said.

In addition, her amended complaint did not allege any misrepresentations, factual inaccuracies or complete omissions, but instead claimed that topics that were discussed by the Ladish proxy were not sufficiently fleshed out, the defense attorney said.

Wronski further argued that Dixon never properly specified what additional information was needed, and said that she is no longer seeking any relief that can be granted since the merger closed in May.

On that latter point, Circuit Judge Frank H. Easterbrook stepped in to tell Wronski that the Seventh Circuit has rejected the doctrine of equitable mootness.

Ladish and Allegheny first announced their deal in November 2010, and under the terms of the deal Ladish shareholders received $24 in cash and 0.4556 of a share of Allegheny common stock for each share of the target company's common stock, according to the defendants' appellate brief.

The deal was valued at roughly $778 million when it was announced, but by closing the transaction was worth approximately $883 million to Ladish shareholders, the brief said.

Circuit Judges Frank H. Easterbrook and Richard D. Cudahy and District Judge Tanya Walton Pratt sat on the panel for the Seventh Circuit.

Dixon is represented by Juan Monteverde of Faruqi & Faruqi LLP.

The defendants are represented by Andrew Wronski of Foley & Lardner LLP.

The case is Irene Dixon v. Ladish Co. Inc. et al., case number 11-01976, in the U.S. Court of Appeals for the Seventh Circuit.

--Additional reporting by Richard Vanderford. Editing by Andrew Park.

On November 23, 2011, Judge Charles P. Kocoras of the United States District Court for the Northern District of Illinois denied defendant Michaels Stores, Inc.’s (“Michaels Stores”) motion to dismiss the consolidated class action lawsuit in In re: Michaels Stores Pin Pad Litigation, Case No. 1:11-cv-03350.  Judge Kocoras ruled that plaintiffs sufficiently pled claims for breach of implied contract and violations of the Illinois Consumer Fraud and Deceptive Practices Act, and the Illinois Personal Information Protection Act. 

Plaintiffs allege Michaels Stores failed to adequately protect their financial information and failed to adequately notify customers of a widespread data breach.  This breach resulted in unauthorized withdrawals from customers’ bank accounts. 

For further inquiries regarding this matter, please contact:

Antonio Vozzolo, Esq.
Chris Marlborough, Esq.
Faruqi & Faruqi, LLP
369 Lexington Avenue, 10th Floor
New York, NY 10017
Telephone: (877) 247-4292 or (212) 983-9330
avozzolo@faruqilaw.com
cmarlborough@faruqilaw.com

On November 2, 2011, Judge William P. Dimitrouleas of the United States District Court for the Southern District of Florida appointed Faruqi & Faruqi, LLP to serve as Interim Class Counsel in Stiepleman v. Oreck Corporation, Case No. 11-61861 to represent a proposed nationwide class of purchasers of Oreck air purifiers.

The lawsuit alleges Oreck deceptively advertised the Oreck XL Professional, Oreck ProShield and Oreck ProShield Plus air purifiers were scientifically proven to substantially reduce risk of the flu and other illnesses caused by bacteria, virus, mold and allergens.

For further inquiries regarding this matter, please contact Antonio Vozzolo at avozzolo@faruqilaw.com or (212) 983-9330.

Faruqi & Faruqi, LLP was appointed sole lead counsel for the class in Anghel v. Ebix, Inc. et al., C.A. No. 1:11-cv-02400-RWS in the United States District Court for the Northern District of Georgia, Atlanta Division.

For further inquiries regarding this matter, please contact Antonio Vozzolo: avozzolo@faruqilaw.com, (212) 983-9330 or Jacob A. Goldberg: jgoldberg@faruqilaw.com, (215) 277-5770.

Faruqi & Faruqi, LLP was appointed sole lead counsel for the class in Ricker v. Zoo Entertainment, Inc. et al., C.A. No. 1:11-cv-00490-SAS-KLL in the United States District Court for the Southern District of Ohio.

For further inquiries regarding this matter, please contact Antonio Vozzolo: avozzolo@faruqilaw.com, (212) 983-9330 or Jacob A. Goldberg: jgoldberg@faruqilaw.com, (215) 277-5770.