/raid1/www/Hosts/bankrupt/CAR_Public/030905.mbx
C L A S S A C T I O N R E P O R T E R
Friday, September 5, 2003, Vol. 5, No. 176
Headlines
AMERICAN SKANDIA: NY Court Dismisses Securities Fraud Lawsuit
ASIANIC INC.: Starts Meat Product Recall For Undeclared Allergen
CEI ENTERPRISES: Recalls 88 lbs of Mislabeled Pork Sausage
DENTSPLY INTERNATIONAL: DE Court Refutes DOJ Antitrust Charges
DWYER GROUP: Shareholders Launch DE Suit Over Riverside Merger
EXIDE TECHNOLOGIES: LA Court Dismisses Firm's Employee From Suit
FIELD PACKING: Recalls Beef, Pastrami Products For Undercooking
FOUNDRY NETWORKS: CA Court Dismisses Securities Fraud Lawsuit
GLS CAPITAL: New Philadelphia Law Could Affect Taxpayers Lawsuit
HEARTLAND ADVISORS: Faces SEC Charges Over 2000 Bond Re-Pricing
HMO LITIGATION: Insurer Cigna Expected To Settle Massive Lawsuit
HMO LITIGATION: TennCare Managers Hope To Save Health Program
KING POWER: Fairness Hearing Set For Securities Suit Settlement
LEASECOMM CORPORATION: Court To Hear Dismissal For Consumer Suit
LEASECOMM CORPORATION: Enters Consent Judgment to Settle CA Suit
LEASECOMM CORPORATION: Asks For Dismissal of Consumer Fraud Suit
LEVEL 3: IL Court Grants Preliminary Approval to Suit Settlement
METRIC PARTNERS: Status Conference Continued to March 2004 in CA
MICROFINANCIAL INC.: NY Court To Decide on RICO Suit Dismissal
MICROFINANCIAL INC.: Appeals AL Court's Refusal to Dismiss Suit
NHP RETIREMENT: Briefing For DE Suit Dismissal Motion Completed
NOVA SCOTIA: Man 'Hooked' On Video Lottery To Commence Lawsuit
PARLUX FRAGRANCES: DE Shareholders Sue Over Quality King Offer
PENN TREATY: Reaches Agreement To Settle Securities Suit in PA
ROXY TRADING: Recalls Dried Guava Slice For Undeclared Sulfites
SKYLARK MEATS: Recalls Beef Patties For E. coli Contamination
THERAGENICS CORPORATION: Discovery Finished in GA Stock Lawsuit
WELLMAN INC.: JPMDL Transfer Polyester Antitrust Suits to NC
WELLMAN INC.: Faces 38 Lawsuits in Various State, Federal Courts
WELLMAN INC.: Faces Polyester Antitrust Suits in Canadian Courts
*Law Firms Hit Employers Who Push Stock Through Employee Plans
Asbestos Alert
ASBESTOS LITIGATION: Asbestos Suits Continue to Haunt Alfa Laval
ASBESTOS LITIGATION: AFC Sets Aside $290M in Asbestos Reserves
ASBESTOS LITIGATION: Crown Cork Reveals Asbestos Related Claims
ASBESTOS LITIGATION: S. African Victims Hope in Asbestos Trust
ASBESTOS LITIGATION: Halliburton Eyes Asbestos Settlement Delays
ASBESTOS LITIGATION: Hanson Plans Asbestos Reserves Till 2011
ASBESTOS LITIGATION: OC Battles Tobacco Firms on Asbestos Claims
ASBESTOS LITIGATION: Many People Label Asbestos Bill A Failure
ASBESTOS ALERT: Bucyrus International Bares Asbestos Litigation
ASBESTOS ALERT: Olin Corp. Reveals Asbestos-Related Liabilities
New Securities Fraud Cases
FIRSTENERGY CORPORATION: Spector Roseman Files OH Stock Lawsuit
QUEST SOFTWARE: Wolf Haldenstein Lodges Securities Suit in CA
SUREBEAM CORPORATION: Schiffrin & Barroway Files Suit in S.D. CA
*********
AMERICAN SKANDIA: NY Court Dismisses Securities Fraud Lawsuit
-------------------------------------------------------------
The United States District Court for the Southern District of
New York granted American Skandia Life Assurance Corporation's
motion to dismiss the nationwide class action filed against it.
The complaint alleges that the Company and certain of its
affiliates violated federal securities laws in marketing
variable annuities and seeks injunctive relief and compensatory
damages in unspecified amounts. In July 2003, the court granted
the Company's motion to dismiss the complaint with prejudice.
The time to appeal has not expired.
ASIANIC INC.: Starts Meat Product Recall For Undeclared Allergen
----------------------------------------------------------------
Asianic Inc. is voluntarily recalling an undetermined amount of
meat products that contain an undeclared ingredient, sodium
bisulfite, a known allergen, the US Department of Agriculture's
Food Safety and Inspection Service announced today.
The products subject to recall are 3 to 9 lb. boxes of:
(1) "Asianic Inc., SHRIMP WRAPPED WITH PANCETTA (RAW),
SECURED WITH A TOOTH PICK, 100 Pieces, Keep Frozen,
Serve Hot, Ready to Cook;"
(2) "Asianic Inc., SHRIMP AND PORK SPRING ROLL, Flavored
with Fish Sauce, 100 Pieces, Keep Frozen, Heat to
Serve;"
(3) "Asianic Inc., CHICKEN AND SHRIMP POTSTICKER (CRABMEAT,
PORK FAT ADDED), CHICKEN, SHRIMP AND CRABMEAT DUMPLING,
100 Pieces, Keep Frozen, Heat to Serve;"
(4) "Asianic Inc., SHRIMP AND CHICKEN POTSTICKER, SHRIMP
AND CHICKEN DUMPLING, PORK FAT ADDED, 100 Pieces, Keep
Frozen, Heat to Serve;"
(5) "Asianic Inc., SPRING ROLL WITH SHRIMP, CHICKEN AND
CRABMEAT, 60 Pieces, Keep Frozen, Heat to Serve;"
(6) "Asianic Inc., COOKED SHRIMP WRAP WITH PROSCIUTTO HAM
AND CREAM CHEESE, Keep Refrigerated, Serve Cold;"
(7) "Asianic Inc. MINI EGG ROLL WITH HAM, CORNED BEEF,
SHRIMP AND VEGETABLES, 100 Pieces, Keep Frozen, Fry to
Serve."
The products being recalled bear the establishment code "EST.
21648" inside the USDA seal of inspection. The products were
distributed to hotels, restaurants and other institutions in
Chicago. All products produced before August 14, 2003 are
subject to the recall. Following that date, the label was
corrected.
FSIS has received no reports of illnesses associated with
consumption of these products. For more details, contact
Charles Mok, company president, by Phone: (708) 445-1500.
CEI ENTERPRISES: Recalls 88 lbs of Mislabeled Pork Sausage
----------------------------------------------------------
CEI Enterprises Inc. is voluntarily recalling approximately 88
pounds of pork sausage because of mislabeling, the U.S.
Department of Agriculture's Food Safety and Inspection Service
announced.
The sausage product contains chicken, but it is not declared on
the product label. The products being recalled are
approximately 1 ¬ lb. Vacuum-sealed packages of "CROWN EAGLE
INTERNATIONAL, HUNTER'S SAUSAGE, Product of Canada." The
Canadian establishment number "332" is inside the mark of
inspection. Each product also contains a sticker with a use by
date of "03 SE 21."
The products were produced on August 14, 2003 and distributed to
a retail store in Brooklyn, New York. The problem was
discovered through a FSIS laboratory test.
For more details, contact Alec Preisman, company CEO, by Phone:
(718) 788-3555.
DENTSPLY INTERNATIONAL: DE Court Refutes DOJ Antitrust Charges
--------------------------------------------------------------
The United States District Court in Wilmington, Delaware issued
a decision finding that the Dentsply International, Inc. has not
violated the antitrust laws as asserted by the United States
Department of Justice.
In June 1995, the Antitrust Division of the United States
Department of Justice initiated an antitrust investigation
regarding the policies and conduct undertaken by the Company's
Trubyte Division with respect to the distribution of artificial
teeth and related products.
On January 5, 1999, the Department of Justice filed a complaint
against the Company, alleging that the Company's tooth
distribution practices violate the antitrust laws and seeking an
order for the Company to discontinue its practices.
Three follow on private class actions on behalf of dentists,
laboratories and denture patients in seventeen states,
respectively, who purchased Trubyte teeth or products containing
Trubyte teeth, were filed and transferred to the US District
Court in Wilmington, Delaware. The class action filed on behalf
of the dentists has been dismissed by the plaintiffs. The
private party suits seek damages in an unspecified amount.
The court has granted the Company's motion on the lack of
standing of the laboratory and patient class actions to pursue
damage claims. Four private party class actions on behalf of
indirect purchasers were filed in California state court. These
cases are based on allegations similar to those in the
Department of Justice case. In response to the Company's
motion, these cases have been consolidated in one Judicial
District in Los Angeles. A similar private party action has
been filed in Florida.
The government has thirty days to file an appeal from the
entering of the District Judge's decision.
DWYER GROUP: Shareholders Launch DE Suit Over Riverside Merger
--------------------------------------------------------------
Dwyer Group, Inc. and certain of its current directors face a
class action filed in the Court of Chancery of the State of
Delaware for New Castle County, in relation to its proposed
merger with The Riverside Company, a private equity firm.
The complaint alleges that the directors breached their
fiduciary duties to the plaintiff. The plaintiff seeks to have
the action maintained as a class action, to have the defendants
enjoined from proceeding with or closing the proposed
transaction and to recover unspecified costs of the action.
The class is alleged to include all public stockholders of the
Company, excluding the defendants and certain members of senior
management. The plaintiff has served the defendants with
discovery requests and the Company has turned over certain of
the information requested.
EXIDE TECHNOLOGIES: LA Court Dismisses Firm's Employee From Suit
----------------------------------------------------------------
The United States District Court for the Western District of
Louisiana dismissed Exide Technologies, Inc.'s supervisory
employee as a defendant in the lawsuit by two employees of
Ducote Wrecking & Demolition, an independent contractor
performing multiple maintenance projects at the Company's Baton
Rouge, Louisiana facility.
The plaintiffs allege that while they were engaged in work at
the Company's facility, they were intentionally exposed to and
poisoned by lead, acid, and other heavy metals. Plaintiffs
named the Company's insurance carriers and supervisory employee
as defendants, along with Ducote.
Plaintiffs filed a motion to remand, which was denied by the
court in a January 2003 decision. In the same January 2003
decision, the court dismissed the Company's supervisory employee
and the independent contractor defendant from the litigation.
The court also has denied plaintiffs' motion for class
certification.
FIELD PACKING: Recalls Beef, Pastrami Products For Undercooking
---------------------------------------------------------------
Field Packing Company is voluntarily recalling approximately
7,000 pounds of roast beef and pastrami products because of
undercooking, the US Department of Agriculture's Food Safety and
Inspection Service announced.
The products being recalled are:
(1) "Mosey's Deli Roast Beef." Included on each label is
the production code, "10767F" and the sell by date,
"Oct 12 03." The products are packaged in boxes
weighing approximately 4 lbs. These products were
produced on August 7, 2003, and shipped to food
service distributors in Pennsylvania and Florida;
(2) "Mosey's Deli, Cooked Beef Round, Pastrami, And Ten
Percent Water." Included on each label is the
production code, "10676" and the sell by date, "Sep 20
03." The products are packaged in boxes weighing
approximately 12 lbs. These products were produced on
July 18, 2003, and shipped to food service distributors
in Florida, Massachusetts, New Jersey and New York;
(3) "Mosey's Cooked Beef Round, Pastrami." Included on each
label is the production code, "10773F" and the sell by
date, "Nov 06 03." The products are packaged in boxes
weighing approximately 6 lbs. These products were
produced on August 8, 2003 and shipped to a food
service distributor in Massachusetts.
All of the products subject to recall also bear the
establishment code "EST. 7467" inside the USDA mark of
inspection. FSIS has received no reports of illnesses
associated with consumption of these products.
For more details, contact Karen Durand, company vice president
for marketing by Phone: (859) 344-3721 or Vicki Payne, consumer
affairs representative by Phone: (800) 925-3663.
FOUNDRY NETWORKS: CA Court Dismisses Securities Fraud Lawsuit
-------------------------------------------------------------
The United States District Court for the Northern District of
California dismissed the shareholder class action suit filed in
January 2001 against Foundry Networks, Inc. and certain of its
directors and officers. The dismissal is without leave to
amend.
"We are very pleased that the court has dismissed this case,"
said Bobby Johnson, president and CEO of Foundry Networks. "From
the outset, we maintained that this suit lacked merit and that
we would defend against it vigorously."
Foundry Networks and its directors and officers are represented
in the lawsuit by the law firm of Gray Cary Ware & Freidenrich
LLP.
For more information, contact Jill Shanks of Foundry Networks by
Phone: 1-408-941-7190, or by E-mail: jshanks@foundrynet.com.
GLS CAPITAL: New Philadelphia Law Could Affect Taxpayers Lawsuit
----------------------------------------------------------------
Pennsylvania legislature signed a bill that could affect the
class action filed against GLS Capital, Inc. (GLS), together
with the County of Allegheny, Pennsylvania in the Commonwealth
Court of Pennsylvania, the appellate court of the state of
Pennsylvania.
Plaintiffs were two local businesses seeking status to represent
as a class, delinquent taxpayers in Allegheny County whose
delinquent tax liens had been assigned to GLS. Plaintiffs
challenged the right of Allegheny County and GLS to collect
certain interest, costs and expenses related to delinquent
property tax receivables in Allegheny County, and whether the
County had the right to assign the delinquent property tax
receivables to GLS and therefore employ procedures for
collection enjoyed by Allegheny County under state statute.
This lawsuit was related to the purchase by GLS of delinquent
property tax receivables from Allegheny County in 1997, 1998,
and 1999. In July 2001, the Commonwealth Court issued a ruling
that addressed, among other things:
(1) the right of GLS to charge to the delinquent taxpayer a
rate of interest of 12% per annum versus 10% per annum
on the collection of its delinquent property tax
receivables;
(2) the charging of a full month's interest on a partial
month's delinquency;
(3) the charging of attorney's fees to the delinquent
taxpayer for the collection of such tax receivables;
and
(4) the charging to the delinquent taxpayer of certain
other fees and costs
The Commonwealth Court in its opinion remanded for further
consideration to the lower trial court items (1), (2) and (4)
above, and ruled that neither Allegheny County nor GLS had the
right to charge attorney's fees to the delinquent taxpayer
related to the collection of such tax receivables.
The Commonwealth Court further ruled that Allegheny County could
assign its rights in the delinquent property tax receivables to
GLS, and that plaintiffs could maintain equitable class in the
action. In October 2001, GLS, along with Allegheny County,
filed an Application for Extraordinary Jurisdiction with the
Supreme Court of Pennsylvania, Western District appealing
certain aspects of the Commonwealth Court's ruling.
In March 2003, the Supreme Court issued its opinion as follows:
(i) the Supreme Court determined that GLS can charge
delinquent taxpayers a rate of 12% per annum;
(ii) the Supreme Court remanded back to the lower trial
court the charging of a full month's interest on a
partial month's delinquency;
(iii) the Supreme Court revised the Commonwealth Court's
ruling regarding recouping attorney fees for
collection of the receivables indicating that the
recoupment of fees requires a judicial review of
collection procedures used in each case; and
(iv) the Supreme Court upheld the Commonwealth Court's
ruling that GLS can charge certain fees and costs,
while remanding back to the lower trial court for
consideration the facts of each individual case.
Finally, the Supreme Court remanded to the lower trial court to
determine if the remaining claims can be resolved as a class
action. No hearing date has been set for the issues remanded
back to the lower trial court.
In August 2003, the Pennsylvania legislature signed a bill
amending and clarifying certain provisions of the Pennsylvania
statute governing GLS' right to the collection of certain
interest, costs and expenses. The bill is expected to be signed
into law. The law is retroactive to 1996, and amends and
clarifies that as to items (ii)-(iv) noted above by the Supreme
Court, that GLS can charge a full month's interest on a partial
month's delinquency, that GLS can charge the taxpayer for legal
fees, and that GLS can charge certain fees and costs to the
taxpayer at redemption.
HEARTLAND ADVISORS: Faces SEC Charges Over 2000 Bond Re-Pricing
---------------------------------------------------------------
Federal securities regulators who have been investigating the
October 2000 re-pricing of bond funds by Hearland Advisors Inc.
are ready to recommend charges to the US Securities and Exchange
Commission (SEC) in Washington against the Milwaukee mutual fund
company for securities law violations, The Milwaukee Journal
Sentinel reports.
Heartland disclosed the pending charges last week in an update
to its mutual fund prospectus. It did not provide any details
about who was being charged or what the potential charges might
be. The filing said the affected parties are cooperating with
the SEC. The investigation stems from an earlier set of events
in 2000, and the subsequent settlement of a class action with
Heartland's investors.
Thousands of investors lost millions of dollars when Heartland
marked down the net asset value of its High-Yield Municipal Bond
Fund by 69 percent and its Short Duration High-Yield Municipal
Fund by 44 percent. The SEC later froze the funds' assets and
put them under the control of a court-appointed receiver. The
SEC then began investigating whether Heartland failed to
properly value the assets in the bond funds shortly after it
took the markdowns.
In July 2003, Heartland settled a class-action lawsuit with its
investors over the markdown for $14 million, and later settled
lawsuits by at least four other parties who opted out of the
class action settlement.
The SEC's Chicago office has been handling the Heartland
investigation. The way the process works, the Chicago office
already would have informed appropriate persons at Heartland
that it is recommending charges against them. Those parties
would have had the opportunity to respond to the proposed
charges.
The Chicago staff then took its proposed charges and the
parties' responses - with the staff's recommendation to settle
or litigate - to the five SEC commissioners in Washington. "The
staff has indicated they are going to recommend proceedings
against Heartland, which could result in a settlement or
litigation, unless the company is successful in convincing the
commissioners, over the staff's recommendations, not to
proceed," said Lionel E. Pashkoff, an attorney at the Washington
law firm of Proskauer Rose LLP, who specializes in SEC
enforcement matters and was a SEC enforcement attorney himself.
HMO LITIGATION: Insurer Cigna Expected To Settle Massive Lawsuit
----------------------------------------------------------------
For a second and presumably final time, health-insurer Cigna is
expected to settle a massive class action brought by 700,000
physicians for an announced value of about $500 million, a
source close to the case said, according to a report by The
Miami Herald.
The preliminary agreement is scheduled to be presented in Miami
this week before US District Court Judge Federico Moreno and is
expected to be similar to an agreement worked out in May with
Aetna that had an announced value of $470 million. That deal
was praised by officials of the American Medical Association,
which said it would allow doctors to spend more time with their
patients.
Doctors and many healthcare experts have repeatedly claimed that
insurers' slowness in handling or denying claims has wreaked
havoc with the healthcare industry. A similar class action,
brought on behalf of patients in HMO plans, died when Judge
Moreno rejected an application for class-action status.
Cigna attempted to settle part of the class action with the
physicians for an announced $50 million, working with a
different set of physicians' attorneys and a federal judge in
southern Illinois. After a heated legal battle, that agreement
was transferred to Judge Moreno's court, and Harley Tropin, co-
lead counsel for the physicians, and other lawyers representing
the doctors involved in the Miami case renegotiated the southern
Illinois deal with an arbitrator. The remaining insurance
companies vowed to fight on.
On September 11, the Eleventh Circuit Court of Appeals is
scheduled to hear oral arguments from the insurers' attorneys on
why Judge Moreno's class certification of the physicians'
lawsuit should be overturned.
The Cigna agreement is expected to have no cap on how many re-
filed claims will be paid to physicians who file such papers.
If Cigna denies them, then a third party panel would reconsider
them.
HMO LITIGATION: TennCare Managers Hope To Save Health Program
-------------------------------------------------------------
While state officials and TennCare advocates say the tentative
settlement of four class actions is a key step in saving the
health care program, both sides also have said the state now has
to deliver on its promises - something it has had trouble doing
in the past, Associated Press Newswires reports.
The settlements in the four lawsuits, reached last month,
require the state to provide a timely appeal process when
prescription drugs are denied, and create a re-enrollment
process that does not cut anyone eligible for TennCare.
In its nine years of existence, TennCare has been unable to
comply with several federal court orders regarding prescription
drugs and enrollee eligibility. "Not only did we not comply,
but there was never anything in place that would cause
compliance to happen," Governor Philip Bredesen told the
Chattanooga Times Free Press.
However, Director Manny Martins said the TennCare Bureau "does
not have a choice" this time. "If we don't make these things
work, if we do not correctly implement a preferred drug list and
if we do not correctly deliver services to member, then we are
not going to exist," he said.
Gordon Bonnyman, lead attorney for TennCare enrollees, said he
believes TennCare can succeed with better management. If it
can't, he said he will be back in federal court, even though it
could mean the end of Tenncare and the expanded health care
services it provides to 1.3 million poor, disabled and otherwise
uninsured Tennessee citizens. "If they mess with our enrollees,
there will be a day of reckoning," Mr. Bonnyman said. "I would
liken it to mutually assured destruction in the Cold War.
Either side had the ability to destroy the other."
Mr. Bonnyman and the state negotiated settlement for four class
actions that have dogged the $7.1 billion TennCare program for
years: the Grier, Rosen, Newbury and John B. cases. The
agreements still must be approved by the federal judges
overseeing these cases.
Mr. Bonnyman said the Newbury and John B. cases are easily
resolved. The deal with health screenings for children and
funding for home- and community-based care for the elderly,
respectively. The state has pledged to continue screening and
health care services for children on Tenncare. There will be a
new effort to shift TennCare funds away from traditional nursing
home care toward less restrictive, home-based care.
Governor Bredesen, Director Martins of the Tenncare Bureau and
Mr. Bonnyman, attorney for the class-action plaintiffs, all
agree that Grier and Rosen are the more complicated and costly
settlements. However, the three men say the lawsuits can be
resolved without further litigation.
Under the Grier consent decree of 1999, TennCare enrollees are
given a 14-day supply of a prescription that has been denied,
while an appeal is processed. Under last week's agreements, the
14-day supply is reduced to three days. The state has until
December 31, 2005, to show it can process appeals in three days.
Mr. Martins said pharmaceutical drug use is a key driver of
TennCare costs, which are rising about 22 percent annually on
expenditures of $1.8 billion. With Grier suspended, TennCare
could save at least $l00 million a year in state dollars by
implementing a preferred drug list that will emphasize the use
of cheaper generic drugs and leverage the state's buying power
with pharmaceutical companies to increase discounts and rebates.
The 1998 Rosen case accused the state of unfairly cutting
190,000 Medicaid-ineligible enrollees from TennCare through a
faulty reverification process. A federal judge ordered the
dropped enrollees returned to the rolls. The new settlement
vacates the lawsuit, which could have cost TennCare another $200
million, but gives the enrollees one year to reapply for
TennCare and show they are eligible.
Mr. Martins and Mr. Bonnyman said a key component in the success
or failure of the TennCare reforms will be their shared interest
in keeping the program viable for Tennessee's poorest and
sickest citizens.
Mr. Bonnyman said the original design of the program, which
included the needy, who were not always the most critical of the
needy, was sound for "a host of reasons." However, he
acknowledged that in order to keep TennCare alive, we "have
moved a long way away from that design." Nonetheless, Mr.
Bonnyman said he believed the new program is viable and will
work.
KING POWER: Fairness Hearing Set For Securities Suit Settlement
---------------------------------------------------------------
Fairness hearing for the settlement proposed by King Power
International Group Co. Ltd. is set for September 15,2003 in the
State District Court in Clark County, Nevada.
On November 1, 2001, the Company filed a preliminary proxy
statement for purposes of calling a meeting of shareholders to
vote on a Plan of Merger which would result in all of the
outstanding shares of the Company being acquired by a newly
formed corporation to be owned by the shareholders presently
comprising the Company's management.
In August and September 2002, three separate class actions were
filed against the Company and its directors alleging, among
other things, that the directors of the Company had breached
their fiduciary duties in pursuing the proposed merger
transaction in which the Company would be taken private by
certain shareholders and in allegedly failing to obtain the
highest price per share.
On May 16, 2003, the Company entered into a stipulation of
settlement with the plaintiffs, which is subject to the approval
of the court. The stipulation of settlement provides for
purchase price of $3.27 per share for the minority interest
shares plus a settlement fund of $1.7 million, less certain
related expenses and the representative plaintiffs' attorney
fees, will be distributed to the class members.
On June 18, 2003, the Company filed a preliminary information
statement, which was amended on August 12, 2003, as an amendment
of the preliminary proxy statement. No shareholders' meeting
will be required because the controlling shareholders hold
enough stock to assure approval of the merger.
LEASECOMM CORPORATION: Court To Hear Dismissal For Consumer Suit
----------------------------------------------------------------
The Massachusetts Superior Court is set to hear Leasecomm
Corporation's motion to dismiss a purported class action was
filed against it and one of its dealers in September 2003.
The class sought to be certified is a nationwide class
(excluding certain residents of the State of Texas) who signed
identical or substantially similar lease agreements with
Leasecomm covering the same product. The complaint asserts
claims for:
(1) declaratory relief,
(2) rescission,
(3) civil conspiracy,
(4) usury,
(5) breach of fiduciary duty, and
(6) violation of Massachusetts General Laws Chapter 93A,
Section 11
The claims concern the validity, enforceability, and alleged
unconscionability of agreements provided through the dealer,
including a Leasecomm lease, to acquire on line credit card
processing services. The complaint seeks rescission of the
lease agreements with Leasecomm, restitution, multiple damages
and attorneys fees under Chapter 93A, and injunctive relief.
LEASECOMM CORPORATION: Enters Consent Judgment to Settle CA Suit
----------------------------------------------------------------
Leasecomm Corporation is participating in a consent judgment to
settle the amended suit filed against it in the Ventura County
Superior Court in California. The suit also names Roma Computer
Solutions, Inc., and/or Maro Securities, Inc., and others as
defendants.
The complaint asserts two claims, one for violation of the
California Business Professions Code Section 17500 (false
advertising), and the other for violation of the California
Business and Professions Code Section 17200 (unfair or unlawful
acts or practices). The claims arise from the marketing and
selling activities of other defendants. The complaint seeks to
have Leasecomm held liable for the acts of other defendants,
alleging that Leasecomm directly participated in those acts and
received proceeds from the assignment of lease contracts as a
result of those acts.
LEASECOMM CORPORATION: Asks For Dismissal of Consumer Fraud Suit
----------------------------------------------------------------
Leasecomm Corporation asked the Massachusetts State Court to
dismiss a class action filed against it and:
(1) Cardservice International,
(2) Linkpoint International and
(3) Clear Commerce Corporation
The suit alleges that the lease, financed through Leasecomm,
gave the right to use certain computer software manufactured,
distributed and sold by the other defendants. The plaintiff
does not allege that Leasecomm failed to provide the lease
financing contemplated by the Leasecomm Lease, rather the
Plaintiff alleges that the software failed to operate as he
believed it would.
The plaintiff has sued for a declaration that would allow him to
rescind his contract, to recover money paid in the course of the
transaction and to recover damages allegedly caused by
unspecified deceptive trade practices. The plaintiff asserts
his claims "on behalf of himself and all others similarly
situated."
The Company denies all of the plaintiff's allegations. It is
expected that the court will soon hold a hearing on the motion
to dismiss. The court has not yet addressed the plaintiff's
class certification allegations.
LEVEL 3: IL Court Grants Preliminary Approval to Suit Settlement
----------------------------------------------------------------
The United States District Court for the Southern District of
Illinois preliminarily approved the settlement of the multi-
state class actions against Level 3 Communications, LLC and its
parent Level 3 Communications, Inc.
These actions involve the Company's right to install its fiber
optic cable network in easements and right-of-ways crossing the
plaintiffs' land. In general, the Company obtained the rights
to construct its network from railroads, utilities, and others,
and is installing its network along the rights-of-way so
granted. Plaintiffs in the purported class actions assert that
they are the owners of lands over which the Company's fiber
optic cable network passes, and that the railroads, utilities,
and others who granted the Company the right to construct and
maintain its network did not have the legal ability to do so.
The plaintiff's efforts to seek class action status for this
suit have been denied. The complaint seeks damages on theories
of trespass, unjust enrichment and slander of title and
property, as well as punitive damages.
On July 25, 2003, the court entered an order preliminarily
approving a settlement agreement which will resolve all claims
against the Company arising out of the Company's location of
fiber optic cable and related telecommunications facilities that
the Company owns within railroad rights of way throughout the
United States. In connection with the court's Order
preliminarily approving the settlement, the court entered an
order enjoining the parties in all pending federal and state
railroad rights of way class action litigation involving the
Company from further pursuing those pending actions at this
time.
Under the terms of the settlement agreement, landowners who own
property adjacent to the railroad rights of way in which the
Company placed its fiber optic cable and related facilities may
submit claims and receive specified compensation. The Company
is unable to quantify the ultimate amount of payments to be made
pursuant to the settlement until if and when the settlement
receives final approval and all appeals have been exhausted; and
the claims process has been completed.
METRIC PARTNERS: Status Conference Continued to March 2004 in CA
----------------------------------------------------------------
Status conference in the class action against Metric Partners
Grout Suite Investors, LP has been continued to February 6,2004.
The suit is pending in the Superior Court of California for San
Francisco County against the Company, Metric Realty, SSR Realty
Advisors, Inc. (SSR) and certain of SSR's affiliates and current
and former employees and a class of all limited partners of the
Partnership (LPs). The suit alleges, among other things, that
the SSR Parties fraudulently caused the plaintiff GP Credit Co.,
LLC (GP) to distribute $16.8 million to the LPs.
GP, which claims to have purchased a claim owned by NLC, is
demanding general and punitive damages against the Company and
the SSR Parties and damages from the LPs with regard to the
portion of this $16.8 million distribution received by each LP.
Process was served on all non-LP defendants in March and April
2002 and answers have been filed on behalf of all non-LP
defendants.
MICROFINANCIAL INC.: NY Court To Decide on RICO Suit Dismissal
--------------------------------------------------------------
The United States District Court for the Southern District of
New York has yet to decide on Leasecomm Corporation's motion to
dismiss the suit filed against it by approximately 170 present
and former lessees asserting individual claims. The complaint
contains claims for:
(1) violation of the Racketeer Influenced and Corrupt
Organizations Act (RICO) (18 U.S.C. Section 1964),
(2) fraud,
(3) unfair and deceptive acts and practices,
(4) unlawful franchise offerings, and
(5) intentional infliction of mental anguish
The claims purportedly arise from Leasecomm's dealer
relationships with Themeware, E-Commerce Exchange, Cardservice
International, Inc., and Online Exchange for the leasing of
websites and virtual terminals. The complaint asserts that the
Company is responsible for the conduct of its dealers in trade
shows, infomercials and web page advertisements, seminars,
direct mail, telemarketing, all which are alleged to constitute
unfair and deceptive acts and practices.
Further, the complaint asserts that Leasecomm's lease contracts
as well as its collection practices and late fees are
unconscionable. The complaint seeks restitution, compensatory
and treble damages, and injunctive relief. The Company filed a
motion to dismiss the complaint on January 31, 2003. Briefing
has been completed.
MICROFINANCIAL INC.: Appeals AL Court's Refusal to Dismiss Suit
---------------------------------------------------------------
Microfinancial, Inc. appealed the Bullock County Court in
Alabama's refusal to dismiss a class action filed against it,
Leasecomm Corporation and another entity known as Galaxy Mall,
Inc. alleging:
(1) breach of contract;
(2) Fraud, Suppression and Deceit;
(3) Unjust Enrichment;
(4) Conspiracy;
(5) Conversion;
(6) Theft by Deception; and
(7) violation of Alabama Usury Laws
The complaint was filed on behalf of persons and entities in the
State of Alabama who allegedly were induced to purchase services
and/or goods from any of the defendants named in the complaint.
On March 31, 2003 the trial court entered an Order denying the
Company's motion to dismiss. An appeal of the order was filed
with the Alabama Supreme Court on May 12, 2003.
NHP RETIREMENT: Briefing For DE Suit Dismissal Motion Completed
---------------------------------------------------------------
Briefing has been completed in the NHP Retirement Housing
Partners I Limited Partnership's motion to dismiss the class
action filed on behalf of certain holders of its Pension Notes,
in the Delaware Court of Chancery. The suit also names as
defendants the General Partner, Capital Realty Group Senior
Housing, Inc. (CRGSH).
The complaint alleges that the General Partner breached its
fiduciary duty because it:
(1) failed to initiate a lawsuit against, among others, the
former General Partner and its principals in connection
with the sale of four properties by the Partnership in
September 1998;
(2) failed to disclose material information and promised to
make certain distributions when it solicited consents
from the Pension Note holders in 2001 to facilitate the
sale of the Partnership's fifth property, the
Amberleigh, which sale occurred in December 2001; and
(3) failed to disclose material information in connection
with obtaining releases from the Pension Note holders
in 2002.
The suit seeks a judgment against the Partnership for failing to
pay the full amount of the principal and interest owed on the
Pension Notes on December 21, 2001, the maturity date of the
Pension Notes.
On February 10, 2003, the defendants moved to dismiss the
amended complaint or, alternatively, for summary judgment. The
matter is likely to be submitted to the Court shortly for
decision. Previously, on October 15, 2002, plaintiff filed a
motion for class certification, which plaintiff is pursuing at
the present time.
NOVA SCOTIA: Man 'Hooked' On Video Lottery To Commence Lawsuit
--------------------------------------------------------------
Fifty-three-year-old Bernie Walsh funneled more than $50,000
into video lottery terminals (VLTs) for more than six years,
hooked on their hypnotic cycle and the possibility of a big
payout. Meanwhile, as the money slipped away, so did his wife
and children, his dignity and self-respect. However, Mr. Walsh
has kicked the habit and has set out to organize and launch a
class action against the Nova Scotia government, The Globe and
Mail reports.
Mr. Walsh's lawsuit will be one of a growing number of lawsuits
aimed at provincial governments and their lucrative gambling
operations. For instance, the Globe and Mail reported recently
that Lisa Dickert and her husband, Steven, had filed a $1
million lawsuit against the Ontario Lottery and Gaming
Corporation for not keeping Mrs. Dickert out of two casinos
after she signed a self-exclusion order.
Mr. Walsh's lawyer, Richard Murtha, said Mr. Walsh's lawsuit
will seek monetary compensation for harm the video lottery
terminals caused Mr. Walsh and others like him. Mr. Walsh, a
former Canada Post contractor, wants every VLT in the province
yanked. Five years ago, he formed Video Online Terminators
Society, which is circulating a petition summoning fellow VLT
addicts to join the lawsuit.
Recently, the Nova Scotia Gaming Corporation announced that
gamblers dumped $575.8 million into video lottery terminals in
2001-2002. This statistic prompted Conservative backbencher
Mark Parent to ask his government to study the social cost of
the province's 3,234 video lottery terminals.
Nova Scotia's medical examiner found links to gambling in 10
suicides - 6.3 percent of the province's total - from January
2001 to September 2002. In addition, the Health Department said
that for 97 percent of Nova Scotia's estimated 15,000 problem
gamblers, VLT's are the bet of choice.
A recent University of Manitoba study suggested that problem
gamblers cost the government about $56,000 each in such expenses
as lost wages and health care, and Mr. Parent believes the costs
may eclipse the revenues.
PARLUX FRAGRANCES: DE Shareholders Sue Over Quality King Offer
--------------------------------------------------------------
Parlux Fragrances, Inc. and all of its board of directors
(except Mr. David Stone) face a shareholder's class action,
filed in the Delaware Court of Chancery by Judy Altman,
purporting to be on behalf of the Company's public stockholders.
The complaint seeks to enjoin the defendants from consummating
the tender offer from Quality King Distributors, Inc. and Ilia
Lekach, the Company's Chairman and Chief Executive Officer, to
form a new entity to acquire all of the Company's outstanding
shares of common stock at a price of $4.00 per share in cash,
which was a premium of approximately 60% over the closing price
of the common stock of $2.50 on that day the offer was made.
The suit seeks to have the acquisition rescinded if it is
consummated. In addition, the complaint seeks unspecified
damages, plus the fees, costs and the disbursements of the
plaintiff's attorneys. The defendants are currently scheduled
to file a written response to the complaint on August 23, 2003.
The Company and the named defendants have engaged Delaware
counsel to fight the action. They believe that the Complaint is
without merit. The Tender Offer Proposal, which precipitated
the Complaint, has been withdrawn.
PENN TREATY: Reaches Agreement To Settle Securities Suit in PA
--------------------------------------------------------------
Penn Treaty American Corporation reached an agreement to settle
the consolidated amended class action filed against it and
certain of its key executive officers in the United States
District Court for the Eastern District of Pennsylvania by
its shareholders, on behalf of similarly situated shareholders
who purchased shares of the Company's common stock from July 23,
2000 through and including March 29, 2001.
The consolidated complaint seeks damages in an unspecified
amount for losses allegedly incurred as a result of
misstatements and omissions allegedly contained in the Company's
periodic reports filed with the SEC, certain press releases
issued by the Company, and in other statements made by the
Company's officials.
The alleged misstatements and omissions relate, among other
matters, to the statutory capital and surplus position of its
largest subsidiary, Penn Treaty North America. On July 1, 2002,
the defendants filed an answer to the complaint, denying all
liability. Plaintiffs filed a motion for class certification on
August 15, 2002, which is currently pending.
On February 26, 2003, the parties reached an agreement in
principle to settle the litigation for $2,300, to be paid
entirely by the Company's directors' and officers' liability
insurance carrier. The settlement remains subject to
documentation and court approval.
ROXY TRADING: Recalls Dried Guava Slice For Undeclared Sulfites
---------------------------------------------------------------
Roxy Trading Inc. is recalling Dried Guava Slice in 434 pound
cardboard boxes because the product contains undeclared
sulfites. People who have severe sensitivity to sulfites run
the risk of serious or life threatening allergic reactions if
they consume this product. No illnesses have been reported to
date in connection with this product.
The Dried Guava Slice, a product of Thailand, was distributed in
uncoded, 44 pound cardboard boxes (4 - 11 pound plastic bags
inside each box) nationwide.
The recall was initiated after it was discovered through routine
sampling, by NYS Department of Agriculture and Markets food
inspectors, that the product containing sulfites, was
distributed in packaging that did not declare the presence of
sulfites. Consumption of 10 milligrams of sulfites per serving
has been reported to elicit severe sensitive individuals upon
ingesting 10 milligrams or more of sulfites. Analysis of the
Dried Guava Slice revealed that it contained 23.6 milligrams per
serving.
For more details, contact the Company by Phone: (626) 610-1388.
SKYLARK MEATS: Recalls Beef Patties For E. coli Contamination
-------------------------------------------------------------
Skylark Meats, Inc., is voluntarily recalling approximately 220
pounds of frozen ground beef patties that may be contaminated
with E. coli O157:H7, the US Department of Agriculture's Food
Safety and Inspection Service announced.
The ground beef products being recalled are 10 lb. boxes of
"Ground Beef Patties 4/1, 80/20, 121300, 40 ct 10.0 lbs.,
SKYLARK MEATS INC." Each label bears the USDA establishment
number "EST. 4215" inside the USDA mark of inspection.
A portion of the product listed above has been re-wrapped in
various size packages that are labeled: "GROUND BEEF PATTIES,
NOT TO EXCEED 20% FAT, Guaranteed QUALITY." Each label also has
the sell by date, "Aug. 31, 03." The ground beef was produced
on August 19, 2003 and distributed to retail stores in Nebraska.
E. coli O157:H7 is a potentially deadly bacteria that can cause
bloody diarrhea and dehydration. The very young, seniors and
persons with compromised immune systems are the most susceptible
to foodborne illness.
FSIS has received no reports of illnesses associated with
consumption of this product.
For more details, contact Dominic V. Driano, vice president and
general counsel, by Phone: 507-238-4201.
THERAGENICS CORPORATION: Discovery Finished in GA Stock Lawsuit
---------------------------------------------------------------
Discovery has been completed in the consolidated securities
class action filed against Theragenics Corporation and certain
of its officers and directors in the United States District
court for the Northern District of Georgia.
The suit alleges violations of the federal securities laws,
including Sections 10(b), 20(a) and Rule 10b-5 of the Securities
and Exchange Act of 1934, as amended. The complaint, as
amended, purports to represent a class of investors who
purchased or sold securities during the time period from January
29, 1998 to January 11, 1999.
The amended complaint generally alleges that the defendants made
certain misrepresentations and omissions in connection with the
performance of the Company during the class period and seeks
unspecified damages.
On May 14, 1999 a stockholder of the Company filed a derivative
complaint in the Delaware Court of Chancery purportedly on
behalf of the Company, alleging that certain directors breached
their fiduciary duties by engaging in the conduct that is
alleged in the consolidated federal class action complaint. The
derivative action has been stayed by the agreement of the
parties.
On July 19, 2000, the court granted the Company's motion to
dismiss the consolidated federal suit for failure to state a
claim against the Company, and granted the plaintiffs leave to
amend their complaint. On August 21, 2000, the plaintiffs filed
a second amended complaint and on March 30, 2001, the Court
denied the defendant's motion to dismiss the plaintiffs' second
amended complaint. The court also denied the Company's motion
for reconsideration. Subsequently, the court certified the
class and the parties commenced discovery.
Discovery in the case is now complete, with the exception
of one expert witness deposition. Management believes these
charges are without merit and is opposing the litigation
vigorously; however, given the nature and stage of the
proceedings, the ultimate outcome of the litigation cannot be
determined at this time.
WELLMAN INC.: JPMDL Transfer Polyester Antitrust Suits to NC
------------------------------------------------------------
The Judicial Panel on Multidistrict Litigation transferred all
federal polyester staple fiber antitrust cases against Wellman,
Inc. and certain other companies to the United States for the
Western District of North Carolina.
The Company and others have been named as defendants in twenty-
eight federal actions brought by direct purchasers of polyester
staple fiber for alleged violation of US antitrust laws. In
each lawsuit, the plaintiffs allege that the defendants engaged
in a conspiracy to fix the price of polyester staple fiber in
violation of the Sherman Antitrust Act.
In nineteen of the cases, the plaintiff purports to represent a
class of all persons who directly purchased polyester staple
fiber and were similarly affected by such alleged conduct. Nine
of the cases are brought by plaintiffs who do not purport to
represent a class. All of the federal plaintiffs seek damages
of unspecified amounts, attorney's fees and costs and
unspecified relief. In addition, certain of the actions claim
restitution, injunction against alleged illegal conduct and
other equitable relief.
The federal suits were originally filed in the US District
Courts for:
(1) the Middle District of Alabama,
(2) the Northern District of California,
(3) the District of New Jersey,
(4) the Middle District of North Carolina,
(5) the Western District of North Carolina and
(6) the District of South Carolina
WELLMAN INC.: Faces 38 Lawsuits in Various State, Federal Courts
----------------------------------------------------------------
Wellman, Inc. faces thirty-eight purported class actions
alleging violations of federal antitrust laws, state antitrust
or unfair competition laws and certain state consumer protection
acts have been filed in one federal court and various state
courts on behalf of purported classes of indirect purchasers of
polyester staple fiber products.
In each lawsuit, the plaintiffs allege that the defendants
engaged in a conspiracy to fix prices of polyester staple fiber
products. In addition, certain of the actions claim
restitution, injunction against alleged illegal conduct and
other equitable relief.
One indirect purchaser case is pending in the US District Court
for the Western District of North Carolina and is subject to the
order issued by the Judicial Panel on Multidistrict Litigation
for coordination or consolidation with the other federal cases.
The rest of the indirect purchaser cases were filed in Arizona,
California, the District of Columbia, Florida, Kansas,
Massachusetts, Michigan, New Mexico, North Carolina, South
Dakota, Tennessee, West Virginia and Wisconsin.
The case filed in West Virginia was removed to federal court and
subsequently remanded to the Circuit Court of Hancock County,
West Virginia. The case filed in Wisconsin was removed to
federal court and subsequently remanded to the Circuit Court for
Dane County, Wisconsin. In all of these cases, the plaintiffs
seek damages of unspecified amounts, attorney's fees and costs
and unspecified relief.
WELLMAN INC.: Faces Polyester Antitrust Suits in Canadian Courts
----------------------------------------------------------------
Wellman, Inc. and certain other companies were named in an
action filed in the Superior Court of Justice for Ontario,
Canada, by a plaintiff purporting to represent a class of direct
and indirect purchasers of polyester staple fiber.
This complaint asserts claims under Canadian law. It contains
three counts that ask for compensatory damages of CDN50 million
each. The extent to which these three counts are duplicative
and overlapping is unclear. The complaint also contains one
count asking for punitive damages of CDN$10 million.
Additionally, the Company and certain other companies were also
named in an action filed in the Supreme Court of British
Columbia, Canada, by a plaintiff purporting to represent a class
of direct and indirect purchasers of polyester staple fiber.
This complaint also asserts claims under Canadian law and
requests compensatory, punitive and special damages, but does
not allege a specific dollar amount in damages.
*Law Firms Hit Employers Who Push Stock Through Employee Plans
--------------------------------------------------------------
Class action law firms, after Enron, have been attacking
employee retirement plans that are heavy with company stock,
alleging the employers are pushing company stock on the
retirement savers, but they are hiding material problems, the
Times Union reports. The lawsuits number in the dozens at the
moment, but they give promise of changing how the 401 (k) plans
work.
"Everyone is paying attention," said Robin Credico, a senior
consultant in Washington for benefits adviser Watson Wyatt
Worldwide.
Recent surveys show corporations are less inclined to rely
solely on company stock for the making of matching
contributions, or to insist that savers hold those company
shares no matter what. The companies are more inclined to teach
retirement savers the danger of relying too heavily on a single
asset, such as company stock.
They also are preparing for the worst. In a survey conducted
last year by Temple University, Professor Jack VanDerhei, a
majority of benefits administrators said they would expect to
see 401 (k) plans scaled back in the face of restrictive or
increased legislation. "I would virtually guarantee there will
be some companies that find it less attractive" to offer
retirement plans, Professor VanDerhei said.
Profit-starved companies already are cutting back. El Paso
Corporation, Charles Schwab & Co. and Textron Inc. suspended or
trimmed matching contributions this year, joining a trend
starting by General Motors Corporation in 2001.
The Enron scandal looms larger, still, than do the plan
cutbacks, however. The US Department of Labor filed a brief
supporting aspects of a class action filed last year on behalf
of Enron employees who were taken in by the company's accounting
schemes and lost millions of dollars in their pension plans.
Many lost all their money. Financial planners say Enron
illustrates the danger of building a retirement plan based on
company stock.
As a result of the Enron revelations, the US House of
Representatives passed a pension reform act in May, that would
limit restrictions on sales, or "lockups," to stock held three
years or less; or, alternatively, to stock held by employees
with less than three years of seniority. The same bill also
would relax "self-dealing" rules to allow the financial
intermediaries that administer 401(k) accounts to give advice to
plan participants.
Plan sponsors are dubious about rules governing sales or
diversification, said Lynn Dudley, general counsel of the
American Benefits Council, a trade group representing major
corporate employers. "You could pass all of those rules about
diversification, and it would not have helped the Enron
employees, because people there were told something that was not
true," said Ms. Dudley.
Enron workers held 58 percent of their assets in Enron stock.
Many workers loaded up on the stock because the investment was
wildly successful, until the scandal broke in late 2001. Rules
barred employees from selling, while top executives unloaded
their shares.
Temple's Professor Vanderhei is skeptical of the proposed
legislative changes, because he does not think employees are
going to shift that much, simply because the restrictions are
taken away.
Asbestos Alert
ASBESTOS LITIGATION: Asbestos Suits Continue to Haunt Alfa Laval
----------------------------------------------------------------
Alfa Laval reports that during the second quarter 2003 the
company has been named as co-defendant in an additional 27
lawsuits with a total of about 2,700 plaintiffs and 15 lawsuits
have been resolved. Alfa Laval has resolved a total of 52
lawsuits. The 98% of the increase in plaintiffs is related to
multiple plaintiffs lawsuits filed in Mississippi during 2002.
After thorough investigations Alfa Laval continues to believe
that potential claims in connection with asbestos related
lawsuits against Alfa Laval Inc will be covered by insurance
policies. Furthermore, primary insurance policies issued in
favor of Alfa Laval Inc. provide for coverage of its defense
costs.
Based on current information and Alfa Laval's understanding of
these lawsuits, Alfa Laval continues to believe that these
lawsuits will not have a material adverse effect on the
company's financial condition or results of operation.
ASBESTOS LITIGATION: AFC Sets Aside $290M in Asbestos Reserves
--------------------------------------------------------------
American Financial Corporation reports as of June 30, 2003, the
aggregate net reserve held by its insurance company subsidiaries
for asbestos claims was $290 million.
AFG explains that its insurance company subsidiaries and
American Premier Underwriters, Inc. are parties to litigation
and receive claims asserting alleged injuries and damages from
asbestos and other hazardous and toxic substances and workplace
hazards and have established loss accruals for such potential
liabilities.
The ultimate loss for these claims may vary materially from
amounts currently recorded as the conditions surrounding
resolution of these claims continue to change. AFG is unable to
predict the precise nature of the relief that may be granted in
any lawsuits or the effect that future cases may have on its
business, operations, profitability or financial condition. In
2002 and 2001, AFG increased its property and casualty reserves
relating to prior year's asbestos by $49 million.
ASBESTOS LITIGATION: Crown Cork Reveals Asbestos Related Claims
----------------------------------------------------------------
Crown Cork & Seal Company, Inc. reports in its latest filing
with the Securities and Exchange Commission that its accrual for
pending and future asbestos-related claims was $233 million and
Crown Cork & Seal Company, Inc. estimates that its range of
potential liability for pending and future asbestos claims that
are probable and estimable is between $233 million and $472
million as of June 30, 2003.
Crown Cork & Seal Company, Inc. made cash payments of $94
million and $118 million. $114 million and $30 million in 2000,
2001, 2002 and the first six months of 2003, respectively, for
asbestos-related claims and it expects to make additional
asbestos-related cash payments of approximately $40 million in
2003, of which about $24 million will be for committed
settlements.
The payments made have reduced and any such future payments will
reduce the cash flow available to Crown Cork & Seal Company,
Inc. for its business operations and debt payments. Asbestos-
related pay-outs and defense costs may be significantly higher
than those estimated by Crown Cork & Seal Company, Inc. because
the outcome of this type of litigation is subject to a number of
assumptions and uncertainties, such as the number or size of
asbestos-related claims or settlements, the number of
financially viable responsible parties, the extent to which a
Pennsylvania statute relating to asbestos liability is upheld
and/or applied by courts in states other than Pennsylvania, the
potential impact of any pending or future asbestos-related
litigation.
Crown Cork & Seal Company, Inc. is a leading worldwide producer
of consumer packaging. Its product portfolio consists of
aerosol cans, food and beverage cans, paint cans, plastic
bottles and other containers, and a variety of metal and plastic
caps, crowns, and closures.
ASBESTOS LITIGATION: S. African Victims Hope in Asbestos Trust
--------------------------------------------------------------
The long wait is over for those who suffer from asbestos-related
diseases and their families. The Asbestos Relief Trust, worth
more than R400,000,000, has been established with Gefco, Msauli
and Gencor. Gencor provides the lion's share of R378,000,000.
According to Business Report, a news agency in South Africa, the
life of the trust had been set as 25 years, during which time
the trustees would be bound by the terms of the Trust Deed,
which was finalized as part of the settlement process and
provides the operational framework for the trustees.
The trustees of the Asbestos Relief Trust are John Doidge
(chairman), Jan de Bruin (nominated by Gencor), Piet van Zyl
(nominated by Gefco), Dr Sophia Kisting (nominated to represent
the claimants), and Crosby Moni (nominated by the National Union
of Mineworkers).
According to Mr. Doidge, the first priority of the trust, in
accordance with the Trust Deed, was to attempt to establish the
present and future potential claims against it throughout its
25-year lifetime.
"Some sufferers may only develop symptoms in years to come and
the trustees are mandated to take all reasonable steps to ensure
that all claimants are treated fairly and that current sufferers
are not preferred over future sufferers. We are operating with
a finite amount of money, and as yet we have no clear estimate
of how many people are affected," Mr. Doidge said.
The process of assessing the potential scope of claims was
expected to take six months, during which time Mr. Doidge said
that, unfortunately, the trustees would not be able to make
payments to sufferers of asbestosis. However, advance payments
would be made to sufferers of mesothelioma, a terminal form of
cancer induced by asbestos. "The trustees are extremely anxious
to ensure that the suffering of those with mesothelioma is
alleviated at least from an economic perspective as a matter of
urgency," he said.
The trustees were also focusing their energies on establishing
an infrastructure that would make it easy for qualifying
claimants to lodge claims against the trust. As part of this,
Mr. Doidge said the trustees were exploring the possibility of
appointing accredited agents, such as attorneys, to assist
claimants with processing their claims.
According to Dr. Sophia Kisting from the School of Public Health
at the University of Cape Town, the majority of current
claimants still have to go through a medical evaluation process
in keeping with the requirements laid down in the Trust Deed.
Dr. Kisting said that two levels of medical panels were being
established to evaluate claims, using both private practitioners
and public hospitals, and linked up with the Medical Bureau of
Occupational Diseases.
"In order to be fair to both current and future sufferers, we
need to ensure that a rigorous medical process is in place," she
said.
Again in keeping with the requirements of the Trust Deed, the
trustees were establishing a panel of medical practitioners who
would be briefed on the medical requirements for compensation.
Sufferers would in the first instance be evaluated by members of
this panel, after which the diagnosis would be confirmed by a
panel of specialists in occupational health according to
international standards.
To qualify for payment, claimants must be suffering from an
asbestos-related disease which has a disability associated with
it and must have worked for one of the mines associated with one
of the three mining companies, or have been exposed to asbestos
on those mines.
Finally, Mr. Doidge stressed that the trustees were eager to
ensure that sufferers were appropriately compensated, and said
that the trust would go some way to assisting claimants, to the
point of contributing to transport and claim costs if necessary.
He said that potential claimants could address queries to Aaron
Roup of Maitland Trust in Johannesburg, which has been appointed
to administer the trust, on 011-884-1841, or any one of the
trustees.
ASBESTOS LITIGATION: Halliburton Eyes Asbestos Settlement Delays
----------------------------------------------------------------
Houston-based oil company, Halliburton Co. said it sees delays
in settling asbestos and silica lawsuits. Halliburton said it
is close to an agreement on the trust distribution procedure,
the plan of reorganization and the disclosure statement
incorporating and describing the procedures and plan, according
to Houston Business Journal.
Remaining conditions to a Chapter 11 filing include completion
of definitive financing arrangements, approval of the plan of
reorganization by at least 75 percent of known present asbestos
claimants and Halliburton board approval.
Halliburton said the settlement might surpass $2.78 billion due
to the rise in the estimated number of current asbestos claims.
If the settlement does exceed $2.78 billion, the company said it
would need to decide whether to propose to adjust the settlement
matrices to reduce the overall amounts, or increase the amounts
it would be willing to pay to resolve its asbestos and silica
liabilities.
If the settlement conditions are met, Halliburton expects to be
able to make the pre-packaged Chapter 11 filing of DII
Industries and Kellogg Brown & Root and some of their
subsidiaries with United States operations in October.
Halliburton expects definitive financing arrangements to be in
place prior to any Chapter 11 filing.
ASBESTOS LITIGATION: Hanson Plans Asbestos Reserves Till 2011
-------------------------------------------------------------
Hanson estimates that the gross liability for the cost of
resolving current and probable future asbestos claims against
its US subsidiaries until June 30, 2011 will be about $320
million including defense costs, but before tax benefit and not
discounted to present value.
According to its latest filing with the Securities and Exchange
Commission, at June 30, 2003, net provisions totaling around
$225 million were in place to cover these estimated costs, after
taking into account expected insurance recoveries of around $95
million. In establishing the provisions, assumptions have been
made as to the number, disease mix and location of future
claims, trends in dismissal rates, settlement and defense costs,
resolution of all existing claims and time scale of resolution
of new claims five years after receipt, and the continued
solvency of co-defendants.
In light of the significant uncertainty associated with asbestos
claims, there can be no guarantee that the assumptions used to
estimate the provisions for the cost of resolving asbestos
claims until June 30, 2011 will be an accurate prediction of the
actual costs that may be incurred and as a result the provisions
will be subject to potential revision from time to time as
additional information becomes available and developments occur.
Most of the subsidiaries involved with asbestos claims have
separate arrangements with their insurance carriers regarding
the defense and settlement of asbestos claims, the terms of
which vary for each such subsidiary. These insurance
arrangements have resulted in the insurance companies having met
substantially all of the amounts such subsidiaries have paid to
date in settlements and defense costs. Hanson assumes that the
amounts received from its insurers will decline significantly
over time.
The Hanson Directors do not believe that adequate information
currently exists to allow it to estimate reasonably the amount
of liability and costs associated with asbestos claims that its
relevant US subsidiaries expect to resolve after June 30, 2011,
even though the Hanson Directors expect that claims will
continue to be asserted against its subsidiaries, the resolution
of which will take place after June 30, 2011.
As well as US asbestos claims, Hanson's existing and former
subsidiaries are subject from time to time to bodily injury and
property damage claims and lawsuits, both on an individual and
class action basis, either directly or as a result of indemnity
obligations. Such claims and lawsuits relate primarily to former
US chemical products and coal by-products and operations, in
particular those relating to the wood treating and coal tar
derivative industries, products and operations which are
unrelated to Hanson's present business and activities. In such
cases where one of Hanson's subsidiaries is involved, there are
often several potential defendants named in the claim or
lawsuit.
ASBESTOS LITIGATION: OC Battles Tobacco Firms on Asbestos Claims
----------------------------------------------------------------
The Mississippi Supreme Court will hear arguments on October 1
on Owens Corning's claim that it should be reimbursed by tobacco
companies for asbestos-related injury claims, according to a
report from The Clarion-Ledger.
Jefferson County Circuit Judge Lamar Pickard dismissed Owens
Corning's lawsuit in May 2001. Judge Pickard agreed with a
special master appointed to the case that Owens Corning's claim
was prohibited by the "remoteness doctrine," a legal principle
under which the company's claims would be deemed secondary, and
not direct, injuries.
Asbestos companies have blamed cigarette smoking for thousands
of workers' injuries costing them millions of dollars in
damages. Companies that previously manufactured products
containing asbestos, including Owens Corning, have gone into
bankruptcy after paying injury claims. Toledo, Ohio-based Owens
Corning filed for bankruptcy protection in 2000 because of
rising costs from asbestos lawsuits.
At the time, Owens Corning estimated it had paid or agreed to
pay $5 billion in asbestos lawsuit claims. The supplier of
building and industrial material said it faced about $2 billion
more in asbestos payouts even though it stopped selling
insulation that contained asbestos more than 25 years ago. The
company has paid money to 440,000 people who said asbestos made
them ill.
Owens Corning has claimed that tobacco use, not exposure to
asbestos, was the cause of the personal injuries to workers.
The company also claimed that failure to warn asbestos workers
who smoked of the increased risk of developing lung cancer
caused it to pay more lung cancer and individual claims.
Asbestos, which can cause health problems when inhaled, is a
white flaky substance widely used during the 1940s and 1950s for
insulation and in shipbuilding.
R.J. Reynolds and Brown & Williamson Tobacco Corporation are
among several tobacco manufacturers named as defendants.
ASBESTOS LITIGATION: Many People Label Asbestos Bill A Failure
--------------------------------------------------------------
Many people see the asbestos bill authored by a Utah Republican
senator as a failure.
David Austern, general counsel to the Manville Trust, testified
at recent Capitol Hill hearings examining how to compensate
asbestos victims -- while curbing the hundreds of thousands of
asbestos lawsuits that have choked courts and driven 67
companies into bankruptcy.
The Manville-Trust was set up in the 1980s to pay people
sickened by asbestos after asbestos maker Johns-Manville Corp
filed for bankruptcy.
According to a Reuters report, Utah Republican Hatch's bill
passed the Senate Judiciary Committee on a near party-line vote
in July. It would end the right of asbestos victims to sue,
while requiring business and insurers to fund a trust of up to
$153 billion to pay claims. The bill was scarcely out of
committee before support eroded among Republicans, who
questioned whether insurers were being asked to pay too much of
the cost.
Democratic support was thin already, as organized labor
complained the planned payouts to asbestos victims were too low
and corporations facing asbestos liabilities, like Halliburton
Co., were getting too much of a break.
With Congress returning to town this week, the measure has not
been scheduled for Senate floor time and may have a hard time
getting it without compromise among the warring parties --
business, insurance, labor and trial lawyers.
Some are talking tough. "We are not negotiating. That would
imply that we thought the bill could be fixed, which we do not
think," Julie Rochman of the American Insurance Association
declared.
Hatch's proposal would split trust fund costs equally between up
to 8,500 industrial companies facing asbestos litigation and
about a dozen insurers, an allocation insurers consider unfair.
However, Patrick Hanlon, a Washington attorney representing the
Asbestos Alliance, a coalition led by the National Association
of Manufacturers, said he detected "quite a bit of commitment"
to doing something on the issue.
"We will be trying to find a middle position . I'm still
confident that that place is there, but I don't know where it
is," Mr. Hanlon said.
Jonathan Hiatt, general counsel for the AFL-CIO labor
federation, said he was uncertain about whether a bill could
pass this year. "If the business and insurance community is
determined to get a bill like the one coming out of committee,
I'd be pessimistic. But if they are willing to make it more fair
to victims, I still think there's a chance," he said.
Congress has tried before. In 1977, Fenwick, a Republican
representative from New Jersey, proposed a federally
administered fund to pay asbestos victims. In the 1980s,
Colorado Democrat Hart said the asbestos industry and the
government should share the costs of compensating victims. In
2000, an attempt was made to set medical criteria for awards.
All those efforts failed.
Sen. Arlen Specter is now trying to barter a compromise. At the
Pennsylvania Republican's request, US Appeals Court Judge Edward
Becker has been hosting meetings of interested parties. "I hope
a deal is made," said the Manville Trust's Austern. "I just
don't think it's going to happen."
ASBESTOS ALERT: Bucyrus International Bares Asbestos Litigation
---------------------------------------------------------------
Bucyrus International, Inc. reports that it has been named as a
co-defendant in 286 personal injury liability asbestos cases,
involving approximately 1,400 plaintiffs, which are pending in
various state courts.
According to its latest filing with the Securities and Exchange
Commission, insurance carriers have accepted or are expected to
accept the defense of such cases. These cases are in
preliminary stages and the Company does not believe that costs
associated with these matters will have a material effect on the
Company's financial position, results of operations or cash
flows, although no assurance to that effect can be given.
COMPANY PROFILE
Bucyrus International, Inc.
1100 Milwaukee Ave.
South Milwaukee, WI 53172-0500
Fax: 414-768-4474
http://www.bucyrus.com
Bucyrus International (formerly Bucyrus-Erie Co.) makes large
excavation machinery used for surface mining. Its products,
which include walking draglines, electric mining shovels, and
blast-hole drills, are used for mining coal, gold, iron ore, and
other minerals. Bucyrus markets primarily to large companies and
quasi-governmental agencies operating in South America and
Australia, Canada, China, India, South Africa, and the US. The
company also provides replacement parts and services to the
surface mining industry. American Industrial Partners Capital
Fund II owns Bucyrus.
ASBESTOS ALERT: Olin Corp. Reveals Asbestos-Related Liabilities
---------------------------------------------------------------
Olin Corporation reports that the company and its subsidiaries
are defendants in asbestos-related litigations, among others.
In its latest filing with the Securities and Exchange
Commission, Olin did not discuss its asbestos-related lawsuits
in detail.
Olin believes that none of these legal actions will materially
adversely affect its financial position. In light of the
inherent uncertainties of the litigation concerning alleged
exposures, it cannot at this time determine the financial
impact, if any, on its results of operations.
COMPANY PROFILE
Olin Corporation (NYSE: OLN)
501 Merritt Seven
Norwalk, CT 06856-4500 (Map)
Phone: 203-750-3000
Fax: 203-750-3292
http://www.olin.com
Employees : 6,200
Revenue : $1,301,000,000
Net Income : $(31,000,000)
Assets : $1,424,000,000
Liabilities : $1,193,000,000
(As of December 31, 2002)
Description: The Company's Olin Brass segment (about half of
sales) makes copper and copper alloy sheets, strips, clad metal
(Posit-Bond, including coin metals popular with the US Mint),
foil (Copperbond), and stainless-steel strips. The segment's
customers are primarily in the auto, housing, electronics, and
telecommunications industries. Olin's Chlor Alkali Products
division (25% of sales) manufactures chemicals used to make
bleach, water purification and swimming pool chemicals, pulp and
paper processing agents, and polyvinyl chloride (PVC) plastics.
Olin also makes Winchester-brand ammunition. US customers
account for more than 95% of Olin's sales.
New Securities Fraud Cases
FIRSTENERGY CORPORATION: Spector Roseman Files OH Stock Lawsuit
---------------------------------------------------------------
Spector, Roseman & Kodroff, PC initiated a securities class
action in the United States District Court for the Northern
District of Ohio, on behalf of purchasers of the common stock of
FirstEnergy Corporation (NYSE:FE) between April 24, 2002 through
August 5, 2003, inclusive.
The complaint alleges that defendants violated the federal
securities laws by issuing materially false and misleading
statements contained in press releases and filings with the
Securities and Exchange Commission during the class period.
Specifically, the complaint alleges that defendants failed to
disclose and misrepresented the following adverse facts:
(1) that the Company materially overstated its earnings,
revenues, net income, and earnings per share;
(2) that the Company had improperly accounted for costs
incurred in connection with the deregulation of certain
of its businesses by employing an inappropriately long
amortization schedule, thereby understating costs and
materially and artificially inflating earnings during
the Class Period;
(3) that the Company had materially overvalued certain
leased power generation facilities that were carried as
assets on the Company's balance sheet; and
(4) that the value of the Company's net income and
financial results were materially overstated at all
relevant times.
On August 5, 2003, the Company reported that it would have to
restate its financial results for fiscal year 2002 and the first
quarter of 2003 due to its improper accounting for its annual
amortization expenses and for above-market leases.
For more details, contact Robert M. Roseman by Phone:
(888) 844-5862 or visit the firm's Website:
http://www.srk-law.com
QUEST SOFTWARE: Wolf Haldenstein Lodges Securities Suit in CA
-------------------------------------------------------------
Wolf Haldenstein Adler Freeman & Herz LLP initiated a securities
class action in the United States District Court for the Central
District of California, on behalf of all persons who purchased
the securities of Quest Software, Inc. (Nasdaq: QSFT) between
April 30, 2002 and July 23, 2003, inclusive, against the Company
and certain officers and directors of the Company.
The complaint alleges that defendants made false and misleading
statements during the class period because they failed to
disclose and misrepresented several material unfavorable facts
which were then known to defendants or irresponsibly disregarded
by them, as follows:
(1) Quest had materially overstated its earnings, net
income, revenues, and earnings per share;
(2) the Company deferred revenue and fixed asset balances
of their foreign subsidiaries in violation of Generally
Accepted Accounting Principles;
(3) Quest could not determine the true financial condition
of the Company because defendants lacked sufficient
internal controls; and
(4) because of the aforementioned Quest had materially
overstated the value of its net income and financial
results during the Class Period.
On July 23, 2003, following the close of the market, the Company
announced that it realized that a computational error in its
internal consolidation system had occurred, causing deferred
revenue and fixed asset balances of foreign subsidiaries to be
incorrectly reported. On July 24, 2003, shares of Quest
decreased 18.07 percent to close at $8.84 per share.
For more details, contact Fred Taylor Isquith, George Peters, or
Derek Behnke by Mail: 270 Madison Avenue, New York, New York
10016, by Phone: (800) 575-0735 by E-mail: classmember@whafh.com
or visit the firm's Website: http://www.whafh.com. All e-mail
correspondence should make reference to Quest.
SUREBEAM CORPORATION: Schiffrin & Barroway Files Suit in S.D. CA
----------------------------------------------------------------
Schiffrin & Barroway, LLP initiated a securities class action in
the United States District Court for the Southern District of
California on behalf of all purchasers of the publicly traded
securities of SureBeam Corporation (NasdaqNM:SUREE) from March
16, 2001 through August 25, 2003, inclusive.
The complaint alleges that defendants violated Sections 10(b)
and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5
promulgated thereunder, by issuing a series of material
misrepresentations to the market between March 16, 2001 and
August 25, 2003, thereby artificially inflating the price of
SureBeam's publicly traded securities.
The complaint alleges the statements were materially false and
misleading because they failed to disclose and/or misrepresented
the following adverse facts, among others:
(1) that the Company was improperly recognizing revenue in
violation of GAAP;
(2) that the Company's improper revenue recognition was
done through its recognition of revenue from non-
affiliated parties when the Company knew that such
parties could not pay and for which SureBeam would
forgive those receivables;
(3) that the Company lacked adequate internal controls and
was therefore unable to ascertain the true financial
condition of the Company; and
(4) that as a result, the values of the Company's earnings,
net income and earnings per share were materially
overstated at all relevant times.
The class period begins on March 16, 2001, after SureBeam
successfully launched an Initial Public Offering (IPO), wherein
it obtained net proceeds of $60 million. Prior to the IPO, on
March 15, 2001, the Company issued its prospectus, which
contained alleged misrepresentations regarding SureBeam's
revenue recognition. The truth began to emerge on June 10,
2003, when SureBeam filed a current report with the SEC on Form
8-K, and disclosed that it was terminating KPMG LLP as its
independent auditor and that it was naming Deloitte & Touche LLP
as its new auditor.
Moreover, the Company issued a press release on July 30, 2003,
announcing that it was going to delay the release of its second
quarter earnings from the planned date of July 31, 2003 until
August 12, 2003. On August 12, 2003, the Company announced that
it was going to further delay the release of its second quarter
earnings until after the Company's Form 10-Q for the second
quarter had been filed.
SureBeam's accounting difficulties continued, and on August 21,
2003, the Company announced that it was dismissing Deloitte &
Touche due to issues that had not been resolved to the auditor's
satisfaction. Specifically, Deloitte & Touche was not satisfied
with certain aspects of the Company's revenue recognition
policies and certain contracts entered into in 2000 and
affecting subsequent periods.
The Class Period ends on August 25, 2003. On that date, SureBeam
shocked the investing public when it announced that the Company
would now trade under the ticker symbol ``SUREE'' because it had
missed the deadline to file its Form 10-Q in accordance with
NASDAQ Marketplace Rule 4310(c)(14).
Investor reaction was swift and negative, with SureBeam stock
falling from a close of $1.82 on Friday, August 22, 2003, to a
close of $1.59 on Monday, August 25, 2003, or a single-day
decline of more than 12% on a very high trade volume.
For more details, contact Marc A. Topaz or Stuart L. Berman by
Mail: Three Bala Plaza East, Suite 400, Bala Cynwyd, PA 19004 by
Phone: 1-888-299-7706 (toll free) or 1-610-667-7706 or by E-
mail: info@sbclasslaw.com
*********
A list of Meetings, Conferences and Seminars appears in each
Wednesday's edition of the Class Action Reporter. Submissions
via e-mail to carconf@beard.com are encouraged.
Each Friday's edition of the CAR includes a section featuring
news on asbestos-related litigation and profiles of target
asbestos defendants that, according to independent researches,
collectively face billions of dollars in asbestos-related
liabilities. The Asbestos Defendant Profiles is backed by an
online database created to respond to custom searches. Go to
http://litigationdatasource.com/asbestos_defendant_profiles.html
*********
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, Judith Cruz,
Aurora Fatima Antonio and Lyndsey Resnick, Editors.
Copyright 2003. 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
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Information contained herein is obtained from sources believed
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