VanStar Corporation - Securities Class Action

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_______________
Copyright (c) 2001
Stanford Law School

VanStar Corporation Summary: According to the Notice of Settlement for the state action, on July 29, 1999, the Honorable Martin J. Jenkins granted plaintiffs' request for voluntary dismissal of the federal action without prejudice. The State Action and the Federal Action are collectively referred to herein as the "Litigation." The settlement fund for the Litigation consists of $5.0 million in case plus accrued interest.

The suit was originally filed on July 3, 1997, in Superior Court of the State of California. A trust claiming to have purchased shares of the Common Stock filed the suit entitled David T. O'Neal Trust, Dated 4/1/77, v. Vanstar Corporation, et al., Consolidated Case No. CV767266. On January 21, 1998, the same plaintiff, along with another plaintiff claiming to have purchased shares of Common Stock, filed suit in the United States District Court for the Northern District of California, making allegations virtually identical to those in the earlier suit.

The complaint charges VanStar, which sells computer products and services to corporate customers, and certain of its officers, directors and its investment bankers with violations of the California Corporations, Civil and Business & Professions Codes. The complaint alleges that VanStar, its controlling shareholders, insiders and investment bankers misrepresented VanStar's business and prospects, enabling defendants to take VanStar public, at $10 per share, raising $74.7 million for VanStar, to reduce VanStar's debt burden and simultaneously create a trading market in VanStar stock so that when defendants drove VanStar stock toward its Class Period high of $29-3/4 per share, certain VanStar insiders could sell off over 665,000 shares of their VanStar stock at as high as $25.88 per share, for about $15 million, to sell securities convertible into its common stock to raise an additional $200 million to further reduce its debt burden and to issue (sell) an additional 1.3 million shares of its stock to make three acquisitions, all in just nine months.

But, then in late January 1997, when defendants revealed weak demand for VanStar's computer products, VanStar's impaired competitive position, the slowing growth of its services business, its failure to complete the development or implementation of its NOVA system and that its inability to control its rapidly escalating overhead expenses would result in sharply declining earnings per share and diminished prospects for future EPS growth, VanStar's stock declined to $6-1/2 per share.

INDUSTRY CLASSIFICATION:
SIC Code: 7371
Sector: Technology
Industry: Computer Services

COMPANY/ISSUER NAME:	VanStar Corporation
COMPANY/ISSUER TICKER:	VST
COMPANY WEBSITE:	http://www.vanstar.com

FIRST IDENTIFIED COMPLAINT IN THE DATABASE

O'Neal Trust, et al. v. VanStar Corp., et al.

COURT: N.D. California	DOCKET NUMBER: 98-CV-216
JUDGE NAME: The Honorable Martin J. Jenkins
DATE FILED: 01/21/1998	SOURCE: Business Wires
CLASS PERIOD START: 03/11/1996	CLASS PERIOD END: 01/23/1997
TYPE OF COMPLAINT: Unamended/Unconsolidated
PLAINTIFF FIRMS IN THIS OR SIMILAR CASE:
Bernstein Liebhard & Lifshitz LLP (New York, NY) 10 E. 40th Street, 22nd Floor, New York, NY, 10016 (voice) 800.217.1522, (fax) , info@bernlieb.com Milberg Weiss Bershad Hynes & Lerach LLP (San Diego, CA) 600 West Broadway, 1800 One America Plaza, San Diego, CA, 92101 (voice) 800.449.4900, (fax) , support@milberg.com _____________________________________________ TOTAL NUMBER OF PLAINTIFF FIRMS: 2

DOCUMENTS FOR THE FIRST IDENTIFIED COMPLAINT
David T. O'Neal Trust v. VanStar Corp., et al
Type: Complaint		Date on the document: 01/28/1998

REFERENCE COMPLAINT

O'Neal Trust, et al. v. VanStar Corp., et al.

COURT: N.D. California	DOCKET NUMBER: 98-CV-216
JUDGE NAME: Hon. Martin J. Jenkins
DATE FILED: 03/11/1999	SOURCE: Business Wires
CLASS PERIOD START: 3/11/1996	CLASS PERIOD END: 3/14/1997
TYPE OF COMPLAINT: Second Amended
PLAINTIFF FIRMS NAMED IN COMPLAINT:
Bernstein Liebhard & Lifshitz LLP (New York, NY) 10 E. 40th Street, 22nd Floor, New York, NY, 10016 (voice) 800.217.1522, (fax) , info@bernlieb.com Law Offices of Steven E. Cauley, P.A. Suite 210, Cypress Plaza. 2200 N. Rodney Parham Road, Little Rock, AR, 72212 (voice) 501.312.8500, (fax) 501.312.8505, cauleypa@aol.com Milberg Weiss Bershad Hynes & Lerach LLP (San Diego, CA) 600 West Broadway, 1800 One America Plaza, San Diego, CA, 92101 (voice) 800.449.4900, (fax) , support@milberg.com _____________________________________________ TOTAL NUMBER OF PLAINTIFF FIRMS: 3

DOCUMENTS FOR THE REFERENCE COMPLAINT
Amended Complaint for Violation of the Securities Exchange Act of 1934
Type: Complaint		Date on the document: 03/13/1998
Declaration of Alison M. Tattersall in Support of Plaintiffs' Notice of Motion and Motion, and Memorandum of Points and Authorities in Support of Plaintiffs' Motion
Type: Declaration		Date on the document: 03/23/1998
Plaintiffs' Notice of Motion and Motion, and Memorandum of Points and Authorities in Support of Plaintiffs' Motion To Be Appointed Lead Plaintiffs
Type: Notice		Date on the document: 03/23/1998
Reply Memorandum in Support of Plaintiffs' Motion To Be Appointed Lead Plaintiffs Pursuant to Section 21D(A)(3)(B) of the Securities Exchange Act of 1934
Type: Motion		Date on the document: 04/14/1998
Defendants' Motion To Dismiss Plaintiffs' Amended Complaint
Type: Motion		Date on the document: 07/06/1998
Declaration of Alison M. Tattersall in Support of Plaintiffs' Opposition to Defendants' Motion To Dismiss Plaintiffs' Amended Complaint
Type: Declaration		Date on the document: 09/4/1998
Plaintiffs' Memorandum of Points and Authorities in Support of Opposition to Defendants' Motion To Dismiss Plaintiffs' Amended Complaint
Type: Motion		Date on the document: 09/04/1998
Plaintiffs' Notice of Counter-Motion and Counter-Motion To Strike Exhibits Submitted in Support of Defendants' Motion To Dismiss Plaintiffs' Amended Complaint
Type: Notice		Date on the document: 09/04/1998
Defendants' Reply Memorandum of Points and Authorities in Support of Motion To Dismiss Plaintiffs' Amended Complaint
Type: Motion		Date on the document: 10/19/1998
Memorandum of Points and Authorities in Opposition to Plaintiffs' Motion To Strike Exhibits Submitted in Support of Defendants' Motion To Dismiss
Type: Motion		Date on the document: 10/23/1998
Plaintiffs' Reply Memorandum of Points and Authorities in Support of Plaintiffs' Counter-Motion To Strike Exhibits Submitted in Support of Defendants' Motion
Type: Order		Date on the document: 10/28/1998
Plaintiffs' Supplemental Submission of Authority Pursuant to Local Rule 7-3(e)
Type: Other		Date on the document: 10/28/1998
Plaintiffs' Second Supplemental Submission of Authority Pursuant to Local Rule 7-3(e)
Type: Other		Date on the document: 11/25/1998
Motion To Preserve and Enforce the Mandatory Discovery Stay
Type: Motion		Date on the document: 12/15/1998
Order Granting Defendants' Motion to Dismiss Amended Complaint
Type: Order		Date on the document: 12/22/1998
Declaration of Karen L. Thomas in Support of Plaintiffs' Opposition to Defendants' Motion To Preserve and Enforce the Mandatory Discovery Stay
Type: Declaration		Date on the document: 12/31/1998
Plaintiffs' Opposition to Defendants' Motion To Preserve and Enforce the Mandatory Discovery Stay
Type: Motion		Date on the document: 01/05/1999
Second Amended Complaint for Violation of the Securities Exchange Act of 1934
Type: Complaint		Date on the document: 03/11/1999
Notice of Motion and Motion To Dismiss Second Amended Complaint
Type: Notice		Date on the document: 04/16/1999
CIVIL DOCKET FOR CASE #: 98-CV-216
Type: Docket		Date on the document: 04/21/1999
Litigants
Type: Other		Date on the document: 04/23/1999
U.S. District Court Civil Docket
Type: Docket		Date on the document: 12/05/2001

OTHER DOCUMENTS
Complaint for Damages Based Upon: (1) Violation of Cal. Corp. Code §§25400 and 25500; (2) Violation of Cal. Civ. Code §§1709-1710
Case Name and/or Number: David T. O'Neal Trust v. VanStar Corp., et al
Type: Complaint		Date on the document: 07/10/1997
Notice Of Pendency And Proposed Settlement Of Class Action
Case Name and/or Number: O'Neal Trust, et al. v. VanStar Corp., et al.
Type: Notice		Date on the document: 07/30/2001

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