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/raid1/www/Hosts/bankrupt/CAR_Public/030207.mbx C L A S S A C T I O N R E P O R T E R Friday, February 7, 2003, Vol. 5, No. 27 Headlines CANADA: Plaintiffs Move For Certification of Lawsuit For Disabled Kids ENRON CORPORATION: Former Trader Admits To Wire Fraud In Energy Crises INDIANA: County Commissioners Vote To Stop $25 Inmate Fee Due To Suit INDONESIA: State-Owned Forest Company Blamed For West Java Landslides INSURANCE COMPANIES: Chubb Chief Pushes For Group To Defend V. Lawsuits ISM CANADA: Privacy Suit To Proceed Despite Recovery Of Hard Disk Drive MICHIGAN: Appeals Court Grants Certification To Warren Residents' Suit NEW YORK: Protesters File Complaint Seeking Permission For March To UN SIMS TRADING: HK Court Orders HK$15,000 Fine Due To Pollution of River SLAVERY REPARATIONS: Landmark Lawsuits To Be Heard in IL Federal Court SPIEGEL INC.: CFO James Cannataro Resigns, In Wake of Securities Probe TRAK INC.: Voluntarily Recalls Snowshoe Bindings Due To Injury Hazard TYSON FOODS: Trial Begins in Lawsuit Over Hiring of Illegal Immigrants UWATEC AG: Voluntarily Recalls 390 Computers Due To Calculating Defect VIRGINIA: "Titanic" Salvage Firm Puts Off Special Shareholders' Meeting WALT DISNEY: CA Federal Court Orders Securities Lawsuits Consolidated Asbestos Alert ASBESTOS LITIGATION: European Insurers Urged to Come Clean on Asbestos ASBESTOS LITIGATION: Lawyer's Group Confronts Asbestos Lawsuit Limits ASBESTOS LITIGATION: Asbestos Plaintiffs Now Suing Smaller Companies ASBESTOS LITIGATION: Dow Chemical Increases Asbestos Reserves to $2.2B ASBESTOS LITIGATION: Federal-Mogul Corp. to File Reorganization Plan ASBESTOS LITIGATION: Asbestos Claimants Accept Gencor Settlement Offer ASBESTOS LITIGATION: Honeywell's Asbestos Settlement May Be Copied ASBESTOS LITIGATION: Asbestos Lawyers Now Train Their Sights On Lonmin ASBESTOS LITIGATION: Travelers Reports Another Asbestos Suit in Hawaii ASBESTOS ALERT: Conoco Inc. Not Liable for "Slight" Asbestos Exposure ASBESTOS ALERT: JT Thorpe Co. Battles 80T in Asbestos-Related Claims ASBESTOS ALERT: Manitowoc Downplays Asbestos-Related Lawsuits ASBESTOS ALERT: Watts Faces Asbestos-Related Lawsuits in MS, NJ Courts New Securities Fraud Cases CABLE & WIRELESS: Fruchter & Twersky Commences Securities Lawsuit in NY COSI INC.: Paskowitz & Associates Commences Securities Suit in S.D. NY MERILL LYNCH: Kaplan Fox Commences Securities Fraud Lawsuit in S.D. NY VERITAS SOFTWARE: Green & Jigarjian Files Securities Lawsuit in N.D. CA ********* CANADA: Plaintiffs Move For Certification of Lawsuit For Disabled Kids ---------------------------------------------------------------------- Arguments for the US$100 million class action filed against the Ontario government on behalf of families of severely disabled children will be presented in the Ontario Superior Court this week, canoe.ca reports. The suit was filed on behalf of 2,000 Ontario families, because the province failed to provide support for disabled children such as respite care and group homes. The suit says such services are mandated under provincial law. However, the government cut social services funding in 1997, leaving the families to fend for themselves. Families should not have to surrender their severely disabled children to the government to provide them with proper care, lawyers for the plaintiffs argue. "People shouldn't be told to abandon their children at hospitals and have to give up custody," Anne Lacarde, the lead plaintiff in the suit, told canoe.ca. Ms. Lacarde almost lost custody of her son, now 13, a few years ago when she was told the only way he could receive treatment for his rare neurological disorder was to sign over custody to the Children's Aid Society. A highly public battle with the province enabled Ms. Lacarde to keep her son, although he lives in a group home. However, a spokeswoman for Brenda Elliott, minister of community, family and children's services, told canoe.ca no parent in the province has had to relinquish custody of a child for special-needs care for at least two years. "The ministry spends over half a billion dollars (annually) on services for special-needs children," said Christine Bujold. "Parents don't have to give up custody of their children to receive these services." Superior Court Justice Maurice Cullity will hear arguments for certifying Ms. Lacarde's suit as a class action this week. ENRON CORPORATION: Former Trader Admits To Wire Fraud In Energy Crises ---------------------------------------------------------------------- One of Enron Corporation's former top traders pleaded guilty to conspiracy to commit wire fraud in connection with the energy trader's schemes to manipulate prices in California's energy market, the US Attorney's office said, according to a Reuters report. Trader Jeffrey Richter, 33, admitted having conspired to "game" energy prices during California's 2000-2001 energy crises. He is the second high-level Enron trader to admit to the conspiracy, the first being Timothy Belden. Mr. Belden, Enron's former top West Coast energy trader, pleaded guilty in October to conspiring to wire fraud. Mr. Belden has agreed to assist in the ongoing investigation, as part of his deal. "This is the second top Enron trader who has now admitted that Enron's manipulation of the California energy markets was illegal," said US Attorney Kevin Ryan said in announcing the guilty plea, Reuters stated. Prosecutors also warned their investigation into the manipulation of California's energy market would continue. Mr. Richter also pleaded guilty to making false statements to the FBI and the US Attorney's Office during their continuing investigation into Enron's fraudulent trading practices, the statement said. California Senator Dianne Feinstein said Richter's guilty plea was further proof of fraudulent practices in California's energy market. Ms. Feinstein told Reuters she and several other US senators planned on proposing legislation next week that would raise the Federal Energy Regulatory Commission's ability to "ferret out and penalize those who practice fraud and manipulation." Mr. Richter supervised Enron's West Power Division, responsible for trading in California's short-term power market before the Houston- based energy giant filed for bankruptcy in December 2001. Richter, who reported to Belden in Enron's Portland, Oregon office, faces a maximum penalty on each of the two counts of five years imprisonment and up to a $250,000 fine, Reuters states. He was released Tuesday after posting a $500,000 bond. During the winter of 2000-2001, California encountered a severe energy shortage. The crisis plunged the state into blackouts, bankrupted the state's biggest public utility and forced Gov. Gray Davis to declare an emergency. In the meantime, Enron racked up huge profits. The Company collapsed a year later over accounting scandals. California energy officials have alleged that the schemes initiated by the traders, named "Get Shorty" and "Load Shifty" exacerbated a severe energy shortage during the winter of 2000-01. Short-term power prices rose tenfold while the state's grid operators scrambled to keep the lights on. Mr. Richter admitted he was part of the Enron team of traders behind such the now-infamous schemes, which exploited anomalies in California's badly flawed energy market. Under the "Load Shift" strategy, Enron traders allegedly filed false power delivery schedules aimed at boosting prices by creating the appearance of "congestion" on California's high voltage transmission lines, Reuters reports. Enron profited from the phony schedules by offering to drop or revise deliveries, a move that entitled them to compensation from the state when the grid operators thought congestion threatened to overwhelm the transmission system, the U.S. attorney's office said. Under the "Get Shorty" scheme, Enron traders fabricated and sold emergency back-up power to California, received payment, then canceled the schedules and covered their commitments by buying power at a lower price in a neighboring market. INDIANA: County Commissioners Vote To Stop $25 Inmate Fee Due To Suit --------------------------------------------------------------------- Martinsville County, Indiana commissioners have stopped collecting a $25 fee from inmates booked into the jail in the wake of a lawsuit claiming the fee is illegal, the Indianapolis Star reports. On the advice of County Attorney Pete Foley, the commissioners voted this week to discontinue collecting the book-in fee until the federal court action is settled. New Albany attorney Bart M. Betteau filed the suit in the US District Court for Southern Indiana, on behalf of Michael G. Simmons, 41, of Martinsville. Mr. Simmons was arrested on August 19 on charges including reckless driving, driving while suspended and fleeing a police officer. His wife paid the $25 fee. The charges are still pending. The suit seeks a refund of the $25 to Mr. Simmons and also a refund of all the fees collected from other inmates since the county began collecting the fee about 10 months ago. Mr. Betteau told the Indianapolis Star that the fee is unconstitutional because it violates a defendant's right to due process. "When the government takes something from you, they have to do it in a way that gives you notice and the opportunity for a hearing," Mr. Betteau said. The book-in fees are collected in cash, from commissary funds or bond money posted by inmates, he added. "The sheriffs have the authority to waive the fee for someone who can't pay, but if you ask them to give you a written list of the criteria to determine someone is indigent, they can't do it," he said. Bartholomew, Clark, Clay, Hendricks, Morgan and Vigo counties have adopted some version of the fee. The Morgan commissioners approved it in April. The Sheriff's Department expected to take in about $75,000 a year to help offset prisoners' medical care. Sheriff Robert Garner said this week the account has about $20,000, the Indianapolis Star reports. INDONESIA: State-Owned Forest Company Blamed For West Java Landslides --------------------------------------------------------------------- State-owned forestry company PT Perhutani has increasingly come under fire for its failure to stop the rampant deforestation blamed for the recent deadly landslides that killed more than 30 people in West Java, the Jakarta Post reports. An alliance of non-governmental organizations (NGOs) is planning to launch a class action. West Java Governor, R. Nuriana, has officially reprimanded the Perhutani office responsible for the management of forests in the province, including the forest on Mount Mandalawangi. On January 28 mud and rocks came flowing down, burying dozens of houses in the regency of Garut, leaving at least 21 people dead. Three days later, 10 villagers died when a landslide swept over their homes in the adjacent regency of Kuningan. "Since before the implementation of regional autonomy," said the Governor, "the central government, through Perhutani, has been the sole manager of forests in West Java, which have been damaged (by deforestation)," he said. However, a spokesman for Perhutani, shifted the blame to locals, who, he said, looted the forests and converted them into farmland. "Several times we demanded firm action against the forest settlers, but the legal authorities did nothing," said the Perhutani spokesman, Dachlan Sudrajat. In addition, the state-owned forestry company is facing a class action from an alliance of NGOs. The head of the West Java forestry office, Edi Supriadi, accused the state-owned Perhutani of failing to maintain the ecological balance in the province. "It (Perhutani) should not just want to make a profit by selling logs from the forests, but should also manage the forests properly along with the locals. It should not allow the forests to be looted and in the end blame the villagers for deforestation," said Mr. Supriadi. The local forestry office said that in 20 years the amount of forests in West Java and the adjacent province of Bantan has fallen from 1,774, 186 hectares to 1,000,186 hectares, due to the continued development of industrial areas and housing settlements. INSURANCE COMPANIES: Chubb Chief Pushes For Group To Defend V. Lawsuits ----------------------------------------------------------------------- To help prevent the directors' and officers' liability insurance marketplace from eroding, an insurance executive urged his industry to work together against a pattern of egregious class action securities lawsuits. Speaking before members of the Professional Liability Underwriting Society, John J. Degnan, vice chairman of The Chubb Corporation, called on the insurance industry to establish an Institute for Securities Class Action Defense. The institute would help "confront and reverse a very troubling pattern of abusive, outrageously aggressive and, in some cases, downright dishonest conduct on the part of the plaintiffs' bar in class action securities litigation," Mr. Degnan said. "It troubles me, frankly, to watch the plaintiffs' bar cloak itself in the robes of protectors of the public's interest in good corporate governance, while it almost methodically settles case after case for the limits of available insurance in a well documented process that advances the financial interests of the advocates to a far greater degree than it does of the shareholders," he added. While such litigation has caused D&O loss costs to rise, leading to higher D&O insurance rates, narrower coverage terms and conditions, and larger deductibles, Mr. Degnan warned that such short-term marketplace benefits for insurers may be outweighed by serious long-term consequences. "For those of us who want to be in this business for the long haul, there needs to be a focus on bringing costs down and ensuring that rates are reasonable so that the coverages we provide continue to represent a rational buying decision," he said. "We should not replicate the circumstances of the mid-1980s when casualty markets withdrew capacity and spawned the Bermuda insurance industry. Make no mistake: Our insured companies and their directors and officers will find over time an efficient mechanism for transferring risk." By establishing a defense institute, Mr. Degnan suggested the insurance industry could fight back against a small number of law firms that have been able to "drive strategy and public relations in a concerted manner" against the more diverse interests of insurers, their customers and defense lawyers. To support his proposal, he pointed to the success the industry has had when it has collectively resisted "truly unjust--even specious--theories of coverage or of liability" involving tobacco, repetitive stress and electromagnetic fields and when it created an initiative addressing environmental liability concerns. To be funded initially by insurers, agents and brokers with an interest in the D&O business, the Institute for Class Action Defense would be "devoted exclusively toward advancing the successful defense of all securities class action litigation," Mr. Degnan said. Its activities would include: (1) facilitating the archiving and dissemination of information about litigation theories, settlement approaches, Rule 11 findings and unreported decisions; (2) creating a proprietary databank of pleadings and briefs, expert reports, deposition transcripts, published research, publicly available discovery, plaintiffs damage theories and Daubert motions pertaining to such theories. (The databank may have valuable loss control benefits for directors and officers.); (3) submitting amicus briefs on issues that may impact securities litigation; (4) acting as a public information source that provides the defense perspective on securities class actions; (5) creating a repository of cost containment devices, a listing of defense firms, defense experts and litigation management firms; and (6) considering reinsurance or capital markets solutions to reduce the risk taken by an insurer and insured customer that have a resolve to avoid capitulation. ISM CANADA: Privacy Suit To Proceed Despite Recovery Of Hard Disk Drive ----------------------------------------------------------------------- The class action filed against ISM Canada over the theft of a hard drive containing about a million personal records will proceed, despite the Regina police's recovery of the drive. The loss of the hard drive containing records from Saskatchewan government employees and customers of Canada's largest mutual funds company is considered Canada's biggest privacy disaster. Investigators showed off the 30-gigabyte Western Digital internal drive at a press conference Wednesday and tried to reassure clients whose data it contained that the information probably wasn't copied or sold. Regina police described it as a petty crime by an employee with no interest in the valuable data, the Globe and Mail reports. The employee has already been arrested, and will face a charge of theft under $5,000 in court. However, investigators acknowledged that it's impossible to know what happened to the data. "We can determine if somebody accessed the drive but to confirm if something was copied from the drive? No," Detective- Sergeant Gerry Novak, of the Regina Integrated Technological Crime Unit, told the Globe and Mail. "We are satisfied at this point that that information has not been used unlawfully," said Regina police Detective-Inspector Garry Hoedel. The class action seeks damages from the Company as well as the Saskatchewan government, Investors Group Financial Services, the Workers' Compensation Board and Co-operators Life Insurance Co. All had client data on the hard drive. Tony Merchant, the lawyer heading the suit, had said damages could run into the "tens of millions of dollars and beyond." Mr. Merchant told the Globe and Mail that finding the hard drive doesn't quash the lawsuit, it just limits the damages. The Saskatchewan government has also indicated it is looking into legal action, but the minister responsible said the province will likely continue to do business with ISM after the issue has been resolved. MICHIGAN: Appeals Court Grants Certification To Warren Residents' Suit ---------------------------------------------------------------------- Michigan's Court of Appeals reversed a lower court's decision denying class certification to a lawsuit filed by several Warren residents over the silver maple trees planted by the city on public easements between the sidewalks and the street curb in front of the resident's homes, the Associated Press reports. The suit alleges that as the trees matured, the roots began to destroy the residents' properties. Among the damage alleged by the plaintiffs were: (1) the roots obstructed sewer pipes which resulted in raw sewage and water backups into their homes; (2) the roots lifted the concrete sidewalk blocks which made the paths uneven and dangerous; and (3) the roots destroyed lawns and killed grass and vegetation The Macomb County Circuit Court in August 2000 denied certification to the suit. In the unanimous decision released Wednesday, the Court of Appeals said "granting class certification here would promote the convenient administration of justice." The appellate court remanded the case back to the trial court, AP states. The city has taken some measures to help residents, including established a cost-sharing plan for sidewalk replacement and formation of a Sidewalk and Tree Board of Review. NEW YORK: Protesters File Complaint Seeking Permission For March To UN ---------------------------------------------------------------------- The City of New York faces a lawsuit filed by groups opposing the impending war with Iraq, alleging the City is violating First Amendment rights by denying permission for a rally and march past the United Nations next week, the Associated Press reports. The United for Peace and Justice coalition plans a huge anti-war march and rally on February 15. They say the march past the United Nations is essential because the organization is responsible for monitoring activity in Iraq. The City has offered to let the demonstrators use a plaza across the street for a stationary rally. The suit seeks a judge's order that a permit allowing a parade of 50,000 to 100,000 people. Chris Dunn, a staff attorney for the New York Civil Liberties Union, who filed the lawsuit for the anti-war group, said the city refuses to permit a parade under any circumstances, citing concerns over congestion and related issues. The court papers note the city routinely issues permits for large-scale marches in midtown Manhattan, including the St. Patrick's Day parade and the Thanksgiving Day parade, AP reports. A message left with city attorneys wasn't immediately returned, AP said. SIMS TRADING: HK Court Orders HK$15,000 Fine Due To Pollution of River ---------------------------------------------------------------------- Food importer Sims Trading was ordered by a Hong Kong High Court to pay a HK$15,000 (US$1,923) fine for polluting the Shing Mun River with a mayonnaise salad dressing that spilled from a dropped carton, the Associated Press reports. The dressing was full of highly concentrated organic matters that could have "bleached the river completely," Environmental Protection Department official Chiu Tak-lun was quoted by local media as saying. The Company was convicted last year but appealed, saying the spilled dressing was slippery and could have created a hazard in the work place if it had not been washed away immediately, company spokeswoman Annie Chu told AP. A High Court judge rejected the company's argument in June and ordered Sims to pay up. The judge had said that instead of spraying the dressing with water, which flushed it into the nearby Shing Mun River, Sims workers could have covered up the mess with sand or wiped it away with cloth after the spill, AP states. Sims Trading won't contest the court's judgment and has revised its procedures for handling discharge, Ms. Chu told AP. The case came to light on Tuesday in a report on Hong Kong's 771 pollution convictions in 2002. Environmental Protection Department spokeswoman Natalia Leung declined immediate comment to The Associated Press. SLAVERY REPARATIONS: Landmark Lawsuits To Be Heard in IL Federal Court ---------------------------------------------------------------------- The historic slavery reparations class actions, brought on behalf of 35 million Africans in the United States, have been consolidated and will be litigated before US District Court Judge Charles R. Norgle Sr. in Chicago, SFBayview.com reports. The suits name as defendants: (1) Aetna Casualty, (2) Fleet Boston Financial Corporation, (3) CSX Corporation, (4) Lloyds of London, (5) Lehman Brothers, (6) Norfolk Southern, (7) Westpoint Stevens, (8) RJ Reynolds Tobacco, (9) Williamson, (10) Liggett Group Inc., (11) Loews Corporation, (12) Brown Brothers Harriman, (13) New York Life Insurance and (14) Union Pacific The suit was filed on behalf of people who have ancestral ties to enslaved Africans in New York, New Jersey, Virginia, North Carolina, South Carolina, Mississippi, Louisiana and Texas. The suit, commenced in March 2002, is the first legal challenge against businesses they said benefited from slavery. Plaintiffs are asking for an independent panel of historians and seeking reimbursement and damages. Plaintiffs' lawyers include Edward Fagan, who helped Holocaust survivors bring highly publicized suits against Swiss banks, and German companies that used forced and slave labor in World War II, an earlier Class Action Reporter story states. Lead attorney Roger Wareham announced, "The lawsuits targeting several corporations that profited from the Trans-Atlantic Slave Trade will be vigorously litigated by our Corporate Restitution Team (CRT). We are working in tandem with the growing national reparations movement to secure compensation for the gross exploitation of the labor of African people - labor that built these corporations into the multi billion dollar industries they are today." Viola Plummer, a veteran human rights activist and leader in the reparations movement, citing Judge Norgle's record, told SFBayview.com, "His blatant disregard for justice in a number of cases raises many red flags for us." Those concerns are well founded. Judge Norgle has a reputation among attorneys for unduly deferring to prosecutors. In 1999, his handling of an extortion and fraud case, convicting former Chicago Treasurer Miriam Santos, was rife with egregious judicial blunders. The 7th US Circuit Court of Appeals overturned her conviction, citing "the sheer number of errors that crept into the trial (that) could have biased the jury," SFBayview.com reports Undaunted, Ms. Plummer told SFBayview.com, "We are crystal clear that the courts do not determine the parameters of our struggle. Reparations for Africans are an international issue, and the battle will be waged in many spheres. Our people, conscious and mobilized in the streets, will exact reparations on the local, national and international level. It is a matter of necessity." SPIEGEL INC.: CFO James Cannataro Resigns, In Wake of Securities Probe ---------------------------------------------------------------------- Spiegel, Inc.'s Executive Vice President and Chief Financial Officer James R. Cannataro resigned Wednesday, complicating the uncertainty at the Company, which faces a United States Securities and Exchange Commission probe due to its late filing of financial reports, DM News reports. The Company submitted its 10-K report for the 2001 fiscal year late, saying financial problems "raise substantial doubt about the company's ability to continue as a going concern for a reasonable period of time." Several securities class actions are being readied against the Company, purporting to be on behalf of purchasers of the Company's stock from April 24,2001 to April 19,2002. The suits all allege the Company issued false and misleading statements about its business and financial condition. Spokeswoman Debbie Koopman minimized the late filing, telling DM News, "We filed a 10-K, and within it is the auditor's opinion. That's typical accounting language. We've been working to get our loan agreements renegotiated. If you file your financials without that in place, you will get that type of language. There were no surprises." Still, the filing reveals challenges facing the company, including that it has been unable to negotiate a new credit facility with lending institutions or obtain an amended settlement agreement with MBIA Insurance Corp., which insures payments, DM News reports. 300 Spiegel employees were laid off from call centers in Bothell, WA, and Hampton, VA, last month. Some of the layoffs were related to a slowdown in sales after the holidays and an increase in use of the company's online shopping sites. "(The lawsuit has) been out there for some time," Ms. Koopman told DM News. "The 10-K mentions four shareholder lawsuits pending against the firm, all containing the same allegations. The company believes they lack merit and intends to defend against them vigorously." TRAK INC.: Voluntarily Recalls Snowshoe Bindings Due To Injury Hazard --------------------------------------------------------------------- Trak Inc., doing business as Karhu, Inc. is cooperating with the US Consumer Product Safety Commission (CPSC) by voluntarily recalling about 420 snowshoe bindings. Screws and other hardware used to keep the bindings intact are too short, causing the binding to separate from the shoe. This poses a fall hazard to consumers. CPSC and Trak Inc. are not aware of any injuries involving these bindings. This recall is being conducted to prevent the possibility of injury. This recall involves bindings sold on the "Karhu Meta Sweeper" and "Karhu Morph Sweeper" snowshoes. The orange, hybrid snowshoe Meta is 120 cm and has blue universal bindings. The blue Morph Sweeper is 130 cm with blue universal bindings. The snowshoes are high back, with a front toe strap and a pivot point. Skiboards.com web site, LL Bean, Cabela's, Erehwon Mountain Outfitters, and Vail Bicycle stores sold these snowshoes nationwide during November 2002 for about $250. For more details, contact Trak Inc. by Phone: (888) 288-2668 between 9 am and 5 pm ET Monday through Friday or visit the firm's Website: http://www.karhu.com. TYSON FOODS: Trial Begins in Lawsuit Over Hiring of Illegal Immigrants ---------------------------------------------------------------------- Trial in the class action against Tyson Foods, Inc. over its practice of hiring illegal immigrants for its poultry processing plants, has begun in North Carolina federal court, the Associated Press reports. Besides the company, other defendants are: (1) Gerald Lankford, 63, of North Wilkesboro, NC, a former human relations manager, (2) Robert Hash, 49, of Greenwood, Arkansas, and (3) Keith Snyder, 42, of Bella Vista, Arkansas Federal prosecutors told jurors Wednesday that "corporate greed" motivated Tyson Foods Inc. to hire illegal immigrants at its poultry processing plants and high-ranking executives did nothing to stop it. Assistant US Attorney John McCoon began laying out the government's case in his opening statement, saying prosecutors will clearly show the nation's largest meat company conspired from 1992 to 2001 to hire illegal immigrants from Mexico and Central America. The Company sought these employees "who would work for low wages and never complain - no matter how much they were exploited - because they were illegal aliens," Mr. McCoon said. He added that some Company executives encouraged the practice because it allowed the company to pad its bottom line. "This trial is about corporate greed," Mr. McCoon said. The Company, which was to present its opening statements after McCoon concluded, has denied the government charges and rejected efforts to settle the case. The trial is expected to last up to two months. The jury was seated Tuesday, AP states. UWATEC AG: Voluntarily Recalls 390 Computers Due To Calculating Defect ---------------------------------------------------------------------- UWATEC AG is cooperating with the United States Consumer Product Safety Commission (CPSC) by voluntarily recalling about 390 dive computers manufactured in 1995 and sold under the model name Aladin Air X NitrOx. Software in the dive computers may inaccurately calculate desaturation times, resulting in possible decompression sickness. The Company has received five reports of decompression sickness allegedly associated with the use of the 1995 dive computers. This recall involves Aladin Air X NitrOx dive computers manufactured in 1995. The manufacture date is located on the back of the dive computer, in the lower right hand corner. The date code reads the number of the month followed by a decimal point and the year, for example, "01.95." The dive computers are blue and black with the words "Aladin" and "NitrOx" printed across the front. Aladin Air X NitrOx dive computers with date codes other than "95" are not included in this recall. Scuba diving stores sold the dive computers nationwide from July 1995 through March 1996 for between $950 and $1,200. For more details, contact the Company by Phone: (800) 806-0640 anytime or visit the firm's Website: http://www.uwatec.com VIRGINIA: "Titanic" Salvage Firm Puts Off Special Shareholders' Meeting ----------------------------------------------------------------------- The company that salvaged the Titanic shipwreck postponed a special shareholders' meeting at which it was expected to give up its salvage rights, The Virginian-Pilot and The Ledger-Star (Norfolk, VA) reports. R.M.S. Titanic Inc. (Titanic Inc.) said it cannot meet with shareholders as scheduled on Wednesday, because the Securities and Exchange Commission (SEC) is still studying the company's latest proxy statement, according to filings with Norfolk's Federal Court and the SEC. Last year, SEC notified Titanic Inc.'s biggest stockholder that it is preparing civil charges against the company or its leaders. In its latest quarterly report, filed January 22, the Atlanta-based company said it lost nearly $1.5 million during the past nine months and is consulting bankruptcy lawyers. The Company began salvaging the Titanic in 1987, soon after discovery of the shipwreck. The company was awarded sole salvage rights by Norfolk's federal court in 1994. Norfolk judges have supervised the salvage work ever since. Since a hostile takeover in 1999, the company has faced economic and legal turmoil. It has spent more than $550,000 on lawyers during the past year, and expects greater legal expenses during the next six months, the quarterly report said. RMS Titanic faces several expensive actions: (1) a stockholder is suing the company, on behalf of all the stockholders, alleging fraud and self-dealing, in a class action pending in Norfolk's federal court; (2) a lawsuit is pending in Florida between the company and its former vice president, G. Michael Harris, who led the last salvage expedition in 2000, and was fired during the voyage. The trial is scheduled for April; (3) a group of stockholders is likely to sue the company to prevent it from relinquishing its salvage rights. That challenge likely would be filed in Norfolk. (4) the company faces possible civil charges from the SEC, which has been investigating it for two years. The investigation stems from the 1999 takeover by a group of entertainment executives. At the time of the takeover the company's stock sold for $3.50 a share. It closed last Friday at 10 cents a share. In November, a New York judge ordered the company to pay legal fees and sanctions for suing stockholders who criticized the company on the Internet. The judge has not yet set the amount of that fine. Meanwhile, the fate of 6,000 artifacts recovered from the ocean floor around the Titanic remains uncertain. A Richmond, Virginia, appeals court ruled last year that R.M.S. Titanic does not own the artifacts but is merely their caretaker. The company now must apply for a salvage award, compensation for salvage work, from the Norfolk court. The amount of that award, where the money would come from and who ultimately would own the artifacts, remains unknown. WALT DISNEY: CA Federal Court Orders Securities Lawsuits Consolidated --------------------------------------------------------------------- The United States District Court for the Central District of California ordered the securities class actions pending against Walt Disney Corporation to be consolidated. The suit also names as defendants the Company's Chief Executive Officer and its Chief Financial Officer, and was filed on behalf of purchasers of the Company's common stock between August 15, 1997 and May 15, 2002. Several suits were initially filed, alleging that the defendants violated federal securities laws by not disclosing the pendency and potential implications of the Stephen Slesinger, Inc. lawsuit described above prior to the Company's filing of its quarterly report on Form 10- Q in May 2002. The plaintiffs claim that this alleged nondisclosure constituted a fraud on the market that artificially inflated the Company's stock price, and contend that a decline in the stock price resulted from the May 2002 disclosure. The plaintiffs seek compensatory damages and/or rescission for themselves and all members of their defined class. Several of the plaintiffs filed motions asking the court to appoint lead plaintiffs and counsel, and to consolidate the related actions into a single case. On December 10, 2002, the motion to consolidate the cases was granted, but the motions to appoint lead plaintiffs and counsel were denied. On December 16, 2002, the plaintiffs filed another motion proposing new candidates to serve as lead plaintiffs, and for appointment of lead counsel. Asbestos Alert ASBESTOS LITIGATION: European Insurers Urged to Come Clean on Asbestos ---------------------------------------------------------------------- Europe's beleaguered insurers and re-insurers must give shareholders better information about their asbestos exposures or risk seeing their share values being cut further, investment bank Fox-Pitt, Kelton says. These companies, whose share prices have recently been pummeled because of fears over their financial strength created by tumbling equity values, have failed to reassure shareholders about their exposure to claims from both American and European workers over asbestos, analyst William Hawkins said. He said the quality of disclosure they have provided so far on US claims, that could total $200,000,000,000 (125,000,000,000 pounds), is "limited and patchy and . inadequate for the potential size of the issue." Given the size of the European industry's exposure to the problem and the threat that further charges to pay rising claims poses to future profits, Mr. Hawkins said he expected European firms should at least match the level of disclosure provided by American rivals. If they don't, analysts could be forced to cut the valuations on their shares even further, he said. He said the recent actions by US insurers show that companies with large asbestos exposures should have doubled their reserves in the past two years to take account of new claims for compensation. While firms such as Munich Re, Allianz and Royal & Sun, have recently boosted their US asbestos reserves substantially, Zurich Financial has set aside less than rivals, while Swiss Re has done nothing since boosting its reserves in 1994-1995, Mr. Hawkins said. Apart from the massive asbestos problem in America, there is the potential for substantial asbestos-related litigation in Europe as well, Mr. Hawkins said. However, European insurers and re-insurers have not taken this prospect seriously enough. "'Don't worry it's not an issue' no longer satisfies when a stock is coming out of its second year of negligible profits," he added. Companies should explain to shareholders what the situation is in Europe and why they are so confident it will not follow the American precedent, he said. ASBESTOS LITIGATION: Lawyer's Group Confronts Asbestos Lawsuit Limits --------------------------------------------------------------------- The nation's largest lawyers' group is jumping into the debate over multibillion-dollar asbestos lawsuits and, in an unusual move, may endorse efforts to limit who can sue. A plan to be debated at the American Bar Association's winter meeting in Seattle would put the 400,000-member organization on the same side as big business groups the ABA often opposes. ABA President-elect Dennis Archer said massive asbestos lawsuits have become a problem and the association should not remain on the sidelines as Congress considers limits on them later this year. Courts are overwhelmed with claims by people who have been exposed to cancer- causing asbestos but are not sick yet, Mr. Archer said, and the people who are really ill "are dying before they have their day in court." The ABA plan would not bar suits from people with cancer. It restricts lawsuits to those with asbestos-related pulmonary disease and defines what the medical standard is. The proposal opens a deeply personal debate among lawyers. Many defense and plaintiffs' lawyers have made huge amounts of money from the suits. About 600,000 asbestos-related lawsuits are in courts around the country, and thousands more are being filed each year. Under the proposal approved by an ABA commission, 90 percent of those cases would be barred, critics say. Mary Alexander, president of the Association of Trial Lawyers of America, said in a letter to Mr. Archer that it would be a "tragic mistake" for the ABA to limit access to courts for people who otherwise would have a jury determine if they were ill and deserved compensation. Opponents will try to defeat the plan when the ABA's policy-making board takes it up. Asbestos victims may travel to Seattle to share personal accounts of their illnesses. Roger Sullivan, who represents people in Libby, Montana, a town plagued by asbestos problems related to a former vermiculite mine, said the ABA proposal excludes people who are ill but don't have cancer. "Real people who are already suffering would have their misery compounded," he said. The ABA debate comes with a backdrop of economic woes caused by asbestos lawsuits. More than 60 companies have sought bankruptcy protection since 2000 because of asbestos exposure claims and large settlements. A study by the Rand Institute for Civil Justice said the suits could cost businesses more than $200,000,000,000. "It is somewhat surprising the ABA, which almost always sleeps in the same bed as the trial lawyers association, is strongly considering a proposal that would significantly reduce asbestos litigation," said Lester Brickman, a professor at the Cardozo School of Law in New York. Mr. Brickman said the ABA, despite the controversy, belongs in the debate over asbestos and should use its lobbying muscle to ensure that people who are really ill win compensation. The asbestos plan is being shepherded by Mr. Archer, who becomes the ABA's first black president this summer. Mr. Archer, the former Detroit mayor, said he was distressed as a city leader to see asbestos lawsuits force companies into bankruptcy, hurting entire communities. Those bankruptcies dry up help for people with legitimate claims, he said. While he works for a law firm that has represented defendants in asbestos cases, Mr. Archer said he has not personally been involved in asbestos litigation. ASBESTOS LITIGATION: Asbestos Plaintiffs Now Suing Smaller Companies -------------------------------------------------------------------- A year ago, Robert Arkell, general counsel of Longview Fibre Co., was puzzled to learn the paper maker was the target of an asbestos lawsuit. He knew the company had never made anything containing asbestos. It must be a mistake, he thought, but he was wrong. Because Longview used a product that contained asbestos in one of its paper plants, it was swept up in a new wave of asbestos lawsuits targeting thousands of companies with seemingly remote connections to the deadly fireproofing and insulating mineral. By the end of the year, the company was facing about 600 lawsuits. "We were taken by surprise, and we continue to be surprised," Arkell says. Now, with most of the original asbestos miners and asbestos-using product makers under bankruptcy-court protection, plaintiffs' attorneys are turning to companies once considered too small to sue. Many of the smaller fry lack resources to defend thousands of lawsuits or pay huge verdicts. The companies do have one thing in common - plentiful insurance. As a result, lawsuits are piling up against consultants, engineering firms, plant owners, and maintenance and construction contractors, all of whom are being blamed for workers' exposure to asbestos. Recent research at Rand Corporation shows that more than 8,000 companies now are named as defendants in asbestos litigation. The newest wave of claims is hitting a range of companies, from Exxon Mobil Corp. and Dow Chemical Co. to smaller companies such as WS Bellows Construction Corporation, a commercial office builder in Houston. "It has very little to do with whether anybody knowingly did anything wrong," says Bellows Vice President Jim Stevens. "It's more about who has deep pockets." Plaintiffs' lawyers in search of potential clients have conducted mass X-ray screenings across the country. Workers whose lungs show the scarring that can indicate asbestos-related disease often are recruited for new lawsuits, even though most aren't suffering ill effects at the time of filing. About 200,000 claims in the US are pending, each typically naming dozens of companies as defendants. As of 2000, about $54,000,000,000 had been paid to asbestos claimants, a Rand Institute of Civil Justice report said. With smaller companies, plaintiffs' lawyers are eyeing defendants' insurance coverage for "premises" or "operations" claims, which cover injuries occurring on the insured party's property. Consultants, engineers, construction contractors and any company that ever operated those plants can be sued. A recent suit against 73 defendants cited claims against any company that ever "manufactured, sold, designed, supplied, distributed, mined, milled, relabeled, resold, processed, applied or installed" asbestos- containing materials. About 35 of the defendants were contractors or operators who didn't use asbestos directly. The surge in premises claims is leading to more legal battles between insurance companies and their policyholders. Kirk Liddell, president and chief executive of Irex Inc., says his insurance companies are "fighting us at every corner." Randy Maniloff, a Philadelphia attorney with a firm that represents insurers in asbestos cases, says, "The real change that is taking place on the asbestos landscape is an all-out effort by plaintiffs and policyholders to find ways to increase the insurance industry's share of the total asbestos bill." ASBESTOS LITIGATION: Dow Chemical Increases Asbestos Reserves to $2.2B ---------------------------------------------------------------------- Chief Executive Officer William Stavropoulos increased the reserves of Dow Chemical Co. for asbestos claims to $2,200,000,000 accounting for $522,000,000 of the fourth-quarter loss. Dow inherited thousands of asbestos lawsuits when it purchased Union Carbide Corporation for about $10,000,000,000 two years ago. Dow took a charge of $828,000,000 to cover asbestos losses and said the charge plus high energy costs led to a fourth quarter net loss of $809,000,000, or 89 cents per share, compared with a net loss of $37,000,000, or 4 cents per share, one year ago. Quarterly revenue totaled $6,910,000,000. Dow Chemical Co., the largest U.S. chemical maker, said it will cut up to 4,000 jobs this year. "They knew the asbestos was there but they didn't do adequate due diligence," said James Halloran, who helps manage about $24,000,000,000 at National City Wealth Management Services, which holds 3.05 million Dow shares. "A lot of companies got caught by surprise with how active the attorneys have been with asbestos lawsuits. It appears Dow is trying to make a good-faith effort to record their potential liability." Asbestos, a combination of minerals used until the 1980s as a fire retardant, has been tied to cancer and respiratory diseases. Many of the claims against Union Carbide involve allegations of exposure to asbestos on the job. ASBESTOS LITIGATION: Federal-Mogul Corp. to File Reorganization Plan -------------------------------------------------------------------- Federal-Mogul Corporation announced that it plans to file a reorganization plan in early March to emerge from Chapter 11 Bankruptcy protection. The announcement came on the heels of news that Federal- Mogul intends to acquire most of Honeywell's Bendix friction materials business in exchange for taking on all current and future Bendix liability in asbestos lawsuits. The deal hinges on a bankruptcy court issuing a permanent injunction shielding Honeywell from those claims. Bendix makes brakes and brake linings that once included asbestos. Southfield-based Federal-Mogul, which makes engine bearings, pistons and other automotive components, filed for bankruptcy in 2001 because of asbestos litigation expenses and slumping sales. The reorganization plan will convert all claims from creditors and asbestos claimants into equity in the reorganized company, according to a statement issued by Federal-Mogul. Specifically, 49.9 percent of the new common stock will be distributed to noteholders, the company said. The rest will be distributed to a trust that will benefit current and future asbestos claimants. Federal-Mogul Chairman and Chief Executive Frank Macher said the plan "will eliminate over $2,500,000,000 of interest-bearing indebtedness, remove the taint of asbestos liabilities from the company and give customers, suppliers and other stakeholders the confidence they need in the long-term health and success of Federal-Mogul." Completion of the Bendix acquisition is subject to regulatory approvals, and the deal will not be finalized until Federal-Mogul emerges from bankruptcy. As part of the Bendix deal, Federal-Mogul will assume all current and future asbestos liabilities for Bendix. Federal-Mogul would receive the entire Bendix business except for plants in Cleveland, Tenn., and Elberton, Ga. Honeywell will keep operating them for up to two years, providing their products exclusively to Federal-Mogul, said Kimberly Welch, a Federal-Mogul spokeswoman. No cash will change hands, she said, but Honeywell will give Federal- Mogul about $2,000,000,000 worth of insurance against asbestos claims. "We expect these insurance provisions to cover the vast majority of Bendix claims," she said. ASBESTOS LITIGATION: Asbestos Claimants Accept Gencor Settlement Offer ---------------------------------------------------------------------- South African asbestos claimants have accepted in principle mining group Gencor's revised settlement offer, according to Gencor and the claimants' lawyers. Gencor said the claimants had met the deadline imposed by it for the acceptance of the final amount, R460,000,000, which Gencor offered to pay them without any admission of liability. "Consensus has been reached as to how this amount will be allocated to settle both the English and South African litigation," Gencor said in a statement. Attorneys for the claimants, Ntuli Noble & Spoor Inc, formally notified Gencor's attorneys that they had accepted the company's offer in total. However, they warned that although significant progress had been made between the parties in December last year, important issues remained to be discussed and agreed on. "A settlement is therefore by no means certain, but the attorneys for the claimants are cautiously optimistic," the law firm stated. Gencor said earlier in the day that the deadline was set to end delays in the negotiations, which it said were slowing the unbundling of its stake in Impala Platinum. It said that while all parties had agreed to the total amount due to potential claimants in December 2002, Gencor had revised the total offer marginally to accommodate the disagreements among lawyers for the claimants. Lawyers first stepped in to prevent the unbundling of Gencor when an out-of-court settlement between them and British mining house Cape plc came undone. Gencor was then targeted as it had taken over many of Cape plc's South African assets when the Britons disinvested from the country in 1979. The parties will resume discussions with a view to negotiating the remaining terms of a proposed settlement agreement. Gencor said that should the negotiations be successful and a settlement agreement concluded it would pave the way for Gencor's unbundling to continue. The unbundling timetable will be subject to and in accordance with JSE Securities Exchange regulations. About 7500 claimants are seeking compensation from the Gencor for ailments they contracted while working on or living near asbestos mines. ASBESTOS LITIGATION: Honeywell's Asbestos Settlement May Be Copied ------------------------------------------------------------------ Honeywell International's deal to escape asbestos exposure by selling its Bendix unit to a company in Chapter 11 is a creative use of bankruptcy law that could be repeated by others, legal experts said. The Company posted a $1,470,000,000 US loss in its fourth quarter as it took $2,830,000,000 in charges for restructuring, asset writedowns and potential resolution of many asbestos-related claims. Federal-Mogul, will take on the Bendix brake pads business, which has about $1,000,000,000 in annual sales, solely in exchange for assuming its asbestos liabilities. The acquisition sets off a process where Honeywell can receive a court order barring any more claims against it related to its ownership of Bendix. Such a move is potentially the first where a debtor made an acquisition with asbestos liabilities and helped the seller. "When the debtor makes an acquisition, everything else flows," said David Berkin, attorney at Kirkland & Ellis in Chicago. "Depending on their circumstance, other companies would be interested in this structure." That situation depends on finding a willing buyer and seller, with an asset that brings value to the group in Chapter 11. These liabilities are then added to Federal-Mogul's existing pot of asbestos claims, which are paid for by a trust set up in bankruptcy reorganization. Emerging from bankruptcy, Federal-Mogul is protected from future claims, and by extension Honeywell would receive the same treatment. Federal-Mogul's deal was reviewed by its bankruptcy court judge and received considerable support from its creditor committees. It plans to emerge from Chapter 11 this year with the asbestos claimants owning 50.1 per cent of its new shares in a trust to pay out liabilities. "This is a good deal for everybody concerned. It makes sense for the claimants. It makes sense for Federal-Mogul. And it makes sense for us, and common sense is likely to prevail," David Cote, Honeywell's chief executive, said. "Honeywell, a major maker of aerospace and automotive products and engineered materials, still could be liable for asbestos- related claims over products made by another division it sold in 1986." "Any mention of the word asbestos with any company drops the stock because of the many bankruptcies" big asbestos cases have caused, said aerospace analyst Paul Nisbet of JSA Research in Newport, R.I. "Getting rid of (the Bendix liability) was a necessity if the stock was to do well in the future." He added it probably will take several months to complete the deal. Many otherwise healthy companies face significant asbestos exposure through units, but cannot, or will not take the whole group into bankruptcy. Recent studies estimate nearly 60 companies are in bankruptcy protection due to asbestos claims, while asbestos-related litigation costs could reach $275,000,000,000. Honeywell recently struck another settlement for its Narco unit, following settlements by ABB, Halliburton and Sealed Air. One person close to negotiations in those deals said no one wanted bankruptcies and "the sound rational approach is to make compensation available now". For example, ABB would have been litigated for at least 10 years in 12 different countries without a settlement. ASBESTOS LITIGATION: Asbestos Lawyers Now Train Their Sights On Lonmin ---------------------------------------------------------------------- Lawyers for South African asbestos victims plan to turn their attention to British-based Lonmin after a settlement agreement has been reached with Gencor. Richard Spoor, one of the lawyers representing 37 former employees of asbestos miners in the Johannesburg High Court litigation against Gencor, said that it was "time other mining companies come to the table". Speaking during a break in negotiations with Gencor, where lawyers were thrashing out the final settlement with the mining company, Mr. Spoor said "We have done research into the matter and they (Lonmin) can expect a call from us as soon as we have finished here." According to Mr. Spoor, his firm, Ntuli, Noble & Spoor, is already in consultation with Swiss lawyers about legal action against Eternit, which owned Kuruman Cape Blue Asbestos and Danielskuil Cape Blue Asbestos. He confirmed that Lonmin, formerly Lonrho, was targeted because Lonrho owned shares in Duiker Exploration from 1975 until 2000. Duiker Exploration owned two small asbestos mines at the time. Xstrata bought the company, now called Duiker Mining in March last year from Swiss company Glencor. Ian Farmer, director of Lonmin, said the news had "caught him by surprise". Xstrata confirmed that they did not have any interest in Duiker Exploration when it was mining asbestos. Xstrata originally expressed an interest in Gencor's stake in Impala, but Gencor's involvement in asbestos claims is believed to have put a damper on that plan. There was also some speculation that Xstrata was eyeing Lonmin, but the latest allegations could put paid to any such plans. Lawyers representing asbestos victims last year acted against Gencor in the Johannesburg High Court, calling for an interdict to block the distribution to shareholders of the 46% stake in Impala Platinum. It was argued that Gencor was liable for the actions of a subsidiary because it had access to environmental assessment reports. ASBESTOS LITIGATION: Travelers Reports Another Asbestos Suit in Hawaii ---------------------------------------------------------------------- Travelers Property Casualty Corp. (NYSE:TAPa) said it was notified that actions have been filed in Hawaii alleging the company participated in an effort to "inappropriately induce plaintiffs to accept low settlement amounts" in connection with asbestos-related claims against a policyholder, according to information in an 8-K filing with the US Securities and Exchange Commission. The plaintiffs in the Hawaii action seek damages that include punitive ones, the filing said. Travelers said it hasn't formally been served in the action and hasn't evaluated the action, and whether a temporary restraining order already in place is applicable. ASBESTOS ALERT: Conoco Inc. Not Liable for "Slight" Asbestos Exposure --------------------------------------------------------------------- The Louisiana Supreme Court, which has a reputation for being among the more liberal courts, reversed that trend by deciding not to allow emotional-distress and punitive-damage awards for "slight" exposure to asbestos to four families who were exposed to asbestos-laden topsoil bought from a Conoco Inc. contractor (Jimmy and Brenda Bonnette, et al. v. Conoco Inc., et al., No. 01-C-2767, La. Sup.), said an attorney with the Coalition for Asbestos Justice. In a 6-1 ruling the state high court vacated $472,000 in damages awarded by the Calcasieu Parish District Court to nine adults and three children for mental anguish, risk of contracting an asbestos-related disease and punitive damages. The Supreme Court upheld nearly $15,000 in damages for diminution of property because of the asbestos contamination. The opinion was written by Justice Catherine D. Kimball and joined by Justices Pascal F. Calogero Jr., Jeffery P. Victory, Chet D. Traylor, John L. Weimer and ad hoc Justice Walter F. Marcus Jr. Justice Bernette J. Johnson dissented, writing that in addition to the property claims, the fear of cancer, mental anguish and punitive damages awards should be affirmed. If the court had allowed this award, it would have, in effect, added Louisiana to the list of "judicial hell holes" for asbestos litigation that includes Mississippi, Texas and New York. The court found no evidence that the plaintiffs currently have cancer or any other asbestos-related condition, and it overturned an appeals court decision to award four families damages for increased risk of contracting asbestos-related disease, emotional distress and punitive damages. Among the other important aspects of the Louisiana Supreme Court's decision is that courts do look at decisions in other states. While those decisions aren't binding, they can be influential. The Louisiana court was among the first to award damages to pay for medical monitoring of people who weren't sick--for the rest of their lives. The court did repeatedly use the word "slight" in its opinion for not allowing recovery, which does leave the door open for cases alleging "substantial" exposure, so this is not a "slam dunk case," he said. The case of Bonnette vs. Conoco Inc. arose out of the delivery topsoil to families in Westlake, Louisiana in the mid-1990s from Conoco dirt contractor Daigle Brothers Inc. The topsoil was removed from a housing demolition project on property near a Conoco refinery and, after testing, showed levels of asbestos. Plaintiffs filed a class action against Conoco alleging an increased risk of contracting an asbestos- related cancer and emotional distress, and they sought punitive damages in addition to property-damage claims. A trial of four families' claims resulted in each adult plaintiff receiving $10,000 for the increased risk of developing cancer. Awards to each of three minor children were fixed at $20,000 for mental anguish and $20,000 for the increased risk of developing cancer. Each plaintiff also was awarded $7,500 in punitive damages. The Third Circuit Louisiana Court of Appeal affirmed the award on Sept. 12, 2001. COMPANY PROFILE ConocoPhillips (NYSE: COP) 600 N. Dairy Ashford Houston, TX 77079 Phone: 281-293-1000 Fax: 281-293-1440 http://www.conocophillips.com Employees : 38,700 Revenue : $24,050,000,000 Net Income : $1,661,000,000 Assets : $35,217,000,000 Liabilities : $20,877,000,000 (As of December 31, 2001) Description: Conoco Inc. is now half of ConocoPhillips after a merger in 2002 with Phillips Petroleum. ConocoPhillips is the third-largest integrated oil and gas company in the US, behind Exxon Mobil and ChevronTexaco. The company has net proved reserves of 8.7 billion barrels of oil equivalent and a refining capacity of 2.6 million barrels per day. It sells fuel at more than 17,000 outlets in the US under the 76, Circle K, Conoco, and Phillips 66 brands. To gain regulators' blessing for the merger, the company agreed to sell refineries and marketing networks in Colorado and Utah. Outside the US, ConocoPhillips has operations in nearly 50 countries. ASBESTOS ALERT: JT Thorpe Co Battles 80T in Asbestos-Related Claims ------------------------------------------------------------------- JT Thorpe Company has filed for Chapter 11 bankruptcy protection so it can continue to operate while it deals with more than 80,000 claims alleging asbestos-related bodily injury. US Bankruptcy Court Judge Karen Brown oversaw a hearing for the Houston-based industrial contractor's plan of reorganization. In its voluntary petition for Chapter 11 protection, JT Thorpe listed more than $100,000,000 in assets and $100,000,000 in debt. As part of the plan, asbestos claims of qualified pre-existing settlement claimants will be paid before other asbestos claims. Other asbestos claims will be paid on a first-in-first-out basis, according to the plan. The Claims Review Procedure will give priority in processing to exigent claims, of which all living claimants filing a mesothelioma claim are automatically considered. The company said that reorganizing itself under Chapter 11 provides the only legal process that can resolve the asbestos lawsuits. The company hopes to emerge from bankruptcy before the end of the year. JT Thorpe stated that although it installed, maintained and sold insulation or refractory lining products - many of which contained asbestos - it maintains that it never made the products. The asbestos-based litigation has led JT Thorpe and its insurers to pay more than $110,000,000 in settlements and legal defense costs. COMPANY PROFILE J T Thorpe Company 6833 Kirbyville Avenue Houston, TX 77033 Revenues : $18,914,928 Net Income : $78,566 Assets : $7,629,783 Liabilities : $7,537,590 (As of December 31, 2001) BANKRUPTCY HIGHLIGHTS Chapter 11 Petition Date : October 1, 2002 Case Number : 02-41487 Court : Southern District of Texas Judge : Judge Karen K. Brown Counsel : William A. (Trey)Wood, III, Esq. Bracewell & Patterson, L.L.P. 711 Louisiana St., Suite 2900 Houston, TX 77002-2781 Trustee : Diane Livingstone Office of the U.S. Trustee 515 Rusk, Houston, TX 77002 Description: J T Thorpe Company has operated as a specialty contractor engaged in sale, installation, maintenance, repair removal and handling of refractory and acid masonry linings and related products in industrial settings. During the period of it operation, J T Thorpe Company (and at various times subsidiaries, incorporated in Texas, and a division operating under the name Thorpe Insulation Company; and a division operating under the name Thorpe Products Company) also engaged in the sale, fabrication, installation, maintenance, repair removal or handling of thermal insulations, primarily in connection with industrial applications. ASBESTOS ALERT: Manitowoc Downplays Asbestos-Related Lawsuits -------------------------------------------------------------- The Manitowoc Company, Inc. (NYSE: MTW) is involved in legal actions involving asbestos-related claims in which it is one of numerous defendants. After taking into consideration legal counsel's evaluation of such actions, and the liabilities accrued with respect to such matters, in the opinion of management, ultimate resolution is not expected to have a material adverse effect on the consolidated financial statements of the company. COMPANY PROFILE The Manitowoc Company, Inc. (NYSE: MTW) 500 S. 16th St. Manitowoc, WI 54221-0066 Phone: 920-684-4410 Fax: 920-683-8129 http://www.manitowoc.com Employees : 6,120 Revenue : $1,116,600,000 Net Income : $45,600,000 Assets : $1,080,800,000 Liabilities : $817,000,000 (As of December 31, 2001) Description: Manitowoc Company makes ice-making, beverage-dispensing, and refrigeration products, as well as cranes and other material- handling equipment. Its ice-making and beverage-dispensing machines serve the restaurant, hospitality, and convenience store markets. Manitowoc sells its crawler cranes, tower cranes, boom trucks, and related equipment to companies in the construction and mining industries. The company, which began at the turn of the 20th century as a shipbuilder, also operates shipyards that build, service, and repair commercial and military vessels. ASBESTOS ALERT: Watts Faces Asbestos-Related Lawsuits in MS, NJ Courts ---------------------------------------------------------------------- Watts Industries, Inc. (NYSE: WTS) is a defendant in about 55 actions filed in Mississippi and New Jersey state courts alleging injury or death as a result of exposure to asbestos. These filings typically name multiple defendants and are filed on behalf of many plaintiffs. They do not identify any products of the Company as a source of asbestos exposure. Based on the facts presently known to it, the Company does not believe this litigation will have a material adverse effect on its liquidity, financial condition or results of operations. COMPANY PROFILE Watts Industries, Inc. (NYSE: WTS) 815 Chestnut St. North Andover, MA 01845-6098 Phone: 978-688-1811 Fax: 978-688-5841 http://www.wattsind.com Employees : 3,899 Revenue : $548,900,000 Net Income : $26,600,000 Assets : $520,500,000 Liabilities : $271,200,000 (As of December 31, 2001) Description: Products of include Watts Industries, Inc. (NYSE: WTS) ball valves, safety relief valves, pressure regulators, float valves, and drainage products. The company sells most of its valves for use in plumbing, heating, water-quality, and water-flow control equipment. Watts Industries markets primarily through commissioned businesses that sell to plumbing and heating wholesalers, do-it-yourself markets, and distributors. Director Tim Horne and his family control the company. New Securities Fraud Cases CABLE & WIRELESS: Fruchter & Twersky Commences Securities Lawsuit in NY ----------------------------------------------------------------------- Fruchter & Twersky LLP and Abraham & Associates initiated a securities class action on behalf of purchasers of publicly traded securities of Cable & Wireless PLC (NYSE: CWP) between the period of August 6, 1999 and December 6, 2002, inclusive against the Company and certain of its officers and directors, in the United States District Court in New York. The Company announced, in an August 6, 1999 press release that it had agreed to sell One 2 One, a British based mobile telecommunications operator, to Deutsche Telekom. The announced terms of the agreement detailed that Deutsche Telekom would pay 6.9 billion pounds sterling in cash for 100% of the equity ownership interest in One 2 One. Additionally, Deutsche Telekom would provide for the repayment of 237 million pounds of shareholder loans, and would assume nearly 1.5 billion pounds of third-party debt. The complaint alleges that those statements were materially false and misleading because they failed to reveal that an essential term of the One 2 One deal was a 1.5 billion pounds tax indemnification clause agreed to by Cable, and specifically, a trigger clause, involving a future downgrade of Cable's long-term debt rating below a predetermined level, which would trigger a 1.5 billion pounds cash commitment on behalf of Cable. Moody's investment service announced on December 6, 2002, that it would downgrade the long-term debt rating of Cable from Baa1 to Baa2. The Company then surprised the market in a press release that same day revealing that, as a result of the downgrade, the aforementioned "ratings trigger" was activated. The announcement resulted in a 40 percent decline in the price of Cable's ADRs, from a closing price of $3.90 per ADR on December 6, 2002, to a close at $2.33 per ADR on December 9, 2002, on uncommonly high trading volume. The Company filed a Form 6-K with the SEC on December 9, 2002 including a statement concerning the tax indemnification "ratings trigger" clause. For more details, contact Jack G. Fruchter by Mail: One Pennsylvania Plaza, 19th Floor, New York, New York 10119, by Phone: (212) 279-5050 or (800) 440-8986, by Fax: (212) 279-3655, or by E-mail: Fruchter@FruchterTwersky.com. COSI INC.: Paskowitz & Associates Commences Securities Suit in S.D. NY ---------------------------------------------------------------------- Paskowitz & Associates initiated a securities class action on behalf of purchasers of the common stock of Cosi, Inc. (NASDAQ: COSI: news) between November 21, 2002 and February 3, 2003, inclusive, in the United States District Court, Southern District of New York. The named defendants are the Company, former CEO Andy Stenzler, and the members of Cosi's Board of Directors who signed the Registration Statement for Cosi's November 21, 2002 initial public offering. Also named as a defendant is the lead underwriter for that offering, William Blair & Co., LLC. The suit alleges that defendants violated Section 11 of the Securities Act of 1933 by issuing a false and misleading Registration Statement and Prospectus in connection with Cosi's initial public offering of 5.5 million shares at $7 per share on November 21, 2002. The prospectus represented that the proceeds of the offering were anticipated to be sufficient to fund the Company's fast growth business plan for at least two years, allowing Cosi to open between 53 and 59 new company-owned specialty sandwich shops in 2003. Just ten weeks after the offering, on February 3, 2003, Cosi shocked the market by announcing the immediate resignation of CEO and co- founder Andy Stenzler from his position, that Cosi would lay off personnel, that it would open just 10 new stores in 2003, and that it would immediately reverse its touted company-owned stores business model to one involving turning the business over to franchisees. The suit alleges that, at the time of the initial public offering, Cosi's business plan had already failed, and that the proceeds raised in the offering were far less than anticipated, and less than were needed to fund even the Company's short term needs, let alone its ambitious business plan for 24 months. The suit alleges that the defendants failed to exercise reasonable due diligence to ensure that the Prospectus disclosed all material facts. In reaction to this unexpected bad news, Cosi shares fell significantly, closing at $2.80 per share on February 4, 2003, down $1.67 or almost 40% in just two trading days. For more details, contact Laurence D. Paskowitz by Phone: 800/705-9529 or by E-mail: classattorney@aol.com MERILL LYNCH: Kaplan Fox Commences Securities Fraud Lawsuit in S.D. NY ---------------------------------------------------------------------- Kaplan Fox & Kilsheimer LLP initiated a securities class action against Merrill Lynch & Co., Inc., and Internet stock analyst and First Vice President of Merrill Lynch, Henry Blodget, in the United States District Court for the Southern District of New York on behalf of all persons or entities who purchased the common stock of Homestore.com (NASDAQ: HOMS) between September 8, 1999 and September 21, 2001 inclusive. The complaint alleges that defendants violated the federal securities laws by issuing analyst reports regarding Homestore that recommended the purchase of Homestore common stock and which set price targets for Homestore common stock, without any reasonable factual basis. Furthermore, when issuing their Homestore analyst reports, the defendants failed to disclose significant, material conflicts of interest which they had, in light of their use of Mr. Blodget's reputation and his Homestore analyst reports, to obtain investment banking business for Merrill Lynch. Furthermore, in issuing their Homestore analyst reports, in which they were recommending the purchase of Homestore common stock, the Defendants failed to disclose material, non-public, adverse information which they possessed about Homestore. Throughout the class period, the defendants maintained a "BUY/BUY" or "ACCUMULATE/BUY" recommendation on Homestore in order to obtain lucrative financial deals for Merrill Lynch. As a result of defendants' false and misleading analyst reports, Homestore common stock traded at artificially inflated levels during the class period. For more details, contact Frederic S. Fox, Donald R. Hall by Mail: 805 Third Avenue, 22nd Floor, New York, NY 10022 by Phone: (800) 290-1952 or (212) 687-1980 by Fax: (212) 687-7714 by E-mail address: mail@kaplanfox.com or visit the firm's Website: http://www.kaplanfox.com VERITAS SOFTWARE: Green & Jigarjian Files Securities Lawsuit in N.D. CA ----------------------------------------------------------------------- Green & Jigarjian LLP initiated a securities class action in the United States District Court for the Northern District of California, on behalf of purchasers of VERITAS Software Corporation (Nasdaq:VRTS) publicly traded securities during the period between January 24, 2001 and January 16, 2003, inclusive. The complaint charges the Company and certain of its officers and directors with issuing false and misleading statements concerning its business and financial condition. Specifically, the complaint alleges that: (1) the Company lacked sufficient internal controls and therefore was unable to understand its true financial standing; (2) the Company had improperly accounted its transaction with AOL Time Warner; (3) the Company's improper treatment of its transactions and revenue recognition policies resulted in material overstatement of revenue and income at all relevant times. The complaint also alleges that the scheme deceived the investing public regarding Veritas's business, operations and management and inflated the intrinsic value of the Company's shares. On January 17, 2003, the Company announced the restatement of its 2000, 2001 and 2002 financial statements as a result of its improper accounting for transactions with AOL Time Warner. The release stated in part: "(t)he transactions involved a $50 million software purchase by AOL and a $20 million advertising services purchase from AOL." For more details, contact Robert S. Green by Phone: 415/477-6700 by E- mail: gj@classcounsel.com or visit the firm's Website: http://www.classcounsel.com ********* S U B S C R I P T I O N I N F O R M A T I O N Class Action Reporter is a daily newsletter, co-published by Bankruptcy Creditors' Service, Inc., Trenton, New Jersey, and Beard Group, Inc., Washington, D.C. Enid Sterling, Aurora Fatima Antonio and Lyndsey Resnick, Editors. Copyright 2002. All rights reserved. ISSN 1525-2272. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re- mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. 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