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C L A S S A C T I O N R E P O R T E R
Friday, September 10, 2004, Vol. 6, No. 180
Headlines
AMERICAN BANKNOTE: SEC Settle Fraud Charges V. Current, Ex-CFO
AMERITECH: Judge Approves $12.4 Settlement, Bars CUB
ATLAS COLD: Completes Recapitalization With $250M Loan Package
C & G AIRCRAFT: TX Residents Lodge Suit Over August 26 Explosion
COLE NATIONAL: Shareholders Commence Lawsuit V. Luxottica Offer
IDAHO: A.G. Wasden Forges Tobacco Settlement With Rite-Aid
JAPAN: Consumer Groups Joining to Fight Fraud, Unfair Trade
MARYLAND: Indian Acres Residents, County Settles Civil Lawsuit
MICHIGAN: A.G. Cox Reaches Tobacco Settlement With Rite Aid
OHIO: Residents File Suit V. Man Over Illegal Pay Phone Scheme
PRIMUS TELECOMMUNICATIONS: Inks $400,000 Settlement of FCC Probe
REYNOLDS & REYNOLDS: More Lawsuits Filed Over Share Price Plunge
UNITED STATES: House Panel Approves Fines For Frivolous Lawsuits
Asbestos Alert
ASBESTOS LITIGATION: New York Library Staff Fearful of Asbestos
ASBESTOS LITIGATION: "Clean Air Act" Violator Dies in CA Prison
ASBESTOS LITIGATION: EPA Cites PA Contractor Sargent Enterprises
ASBESTOS LITIGATION: Parker Drilling Co. Faces Lawsuits in MS
ASBESTOS LITIGATION: Ohio Appeals Court Allows Reform to Proceed
ASBESTOS LITIGATION: IL Park Refuses to Display Asbestos Tips
ASBESTOS LITIGATION: No Asbestos Found in Debris of CA Theater
ASBESTOS LITIGATION: Asbestos Warehouse Going Up in Turner, ME
ASBESTOS LITIGATION: NE Businessman Faces Penalty for Asbestos
ASBESTOS LITIGATION: AU Union Seeks Mandatory Home Safety Checks
ASBESTOS LITIGATION: EPA Finds Asbestos Hazard in Juneau, AK
ASBESTOS LITIGATION: Ameren Corp. Puts Up US$20M for IL Deal
ASBESTOS LITIGATION: CRH Public Ltd Faces More Asbestos Lawsuits
ASBESTOS LITIGATION: Ill. Beach Park Workers Seek Medical Tests
ASBESTOS LITIGATION: Pfizer Sets US$430M For Asbestos Claims
ASBESTOS LITIGATION: Union Buys Hardie Shares to Attend Meeting
ASBESTOS LITIGATION: PA Court Reinstates Smoker's Asbestos Claim
ASBESTOS LITIGATION: SG Cowen Calls Pfizer Deal A "Big Victory"
ASBESTOS LITIGATION: Pfizer Settlement Clears Asbestos Lawsuits
ASBESTOS LITIGATION: AU Insurers Monitoring James Hardie Cases
ASBESTOS LITIGATION: Hardie Faces Impending Shareholder Revolt
ASBESTOS LITIGATION: Cuddy Recognized as UK Demolition Expert
ASBESTOS LITIGATION: Asbestos Protest Campaign at the AFL Finals
ASBESTOS LITIGATION: Aviation Asbestos Blamed for Worker's Death
ASBESTOS LITIGATION: Top Union Official Down with Asbestosis
ASBESTOS LITIGATION: 9/11 Illnesses May Not Appear for Decades
ASBESTOS ALERT: EPA Probes Asbestos-Removal of Container Co.
ASBESTOS ALERT: Nottingham Dyers Fined Due To Asbestos Exposure
New Securities Fraud Cases
BAXTER INTERNATIONAL: Bernstein Liebhard Lodges Stock Suit in IL
BAXTER INTERNATIONAL: Much Shelist Lodges Securities Suit in IL
BELO CORPORATION: Federman & Sherwood Lodges TX Securities Suit
CNL HOTELS: Schiffrin & Barroway Lodges FL Securities Fraud Suit
FERRO CORPORATION: Marc Henzel Lodges Securities Suit in N.D. OH
FIRST VIRTUAL: Milberg Weiss Lodges Securities Fraud Suit in CA
FLIGHT SAFETY: Marc Henzel Lodges Securities Fraud Lawsuit in CT
IMPAC MEDICAL: Lerach Coughlin Files Securities Fraud Suit in CA
INTEGRATED ELECTRICAL: Federman & Sherwood Lodges TX Stock Suit
INTRABIOTICS PHARMACEUTICALS: Marc Henzel Files Stock Suit in CA
INVISION TECHNOLOGIES: Marc Henzel Lodges Securities Suit in NY
KONGZHONG CORPORATION: Schiffrin & Barroway Lodges Lawsuit in CA
KHONGZONG CORPORATION: Marc Henzel Lodges Securities Suit in NY
LATTICE SEMICONDUCTOR: Goodkind Labaton Files OR Securities Suit
LATTICE SEMICONDUCTOR: Schatz & Nobel Lodges NY Securities Suit
NETOPIA INC: Stull Stull Lodges Securities Fraud Suit in N.D. CA
RED HAT: Scott + Scott Files Securities Fraud Lawsuit in E.D. NC
TECO ENERGY: Stull Stull Lodges Securities Fraud Suit in M.D. FL
ZIX CORPORATION: Lasky & Rifkind Lodges Securities Lawsuit in TX
*********
AMERICAN BANKNOTE: SEC Settle Fraud Charges V. Current, Ex-CFO
--------------------------------------------------------------
The Securities and Exchange Commission instituted and
simultaneously settled an administrative cease-and-desist
proceeding and filed a settled civil penalty action against
Patrick Gentile, American Banknote Corporation's (ABN) current
Chief Financial Officer (CFO) and former corporate controller,
and John Gorman, ABN's former CFO.
The Commission found that Gentile and Gorman overstated ABN's
fiscal year 1996 revenue and net income by causing American Bank
Note Holographics (ABNH), a then wholly-owned subsidiary of ABN,
to improperly record revenue on two "bill and hold" transactions
which Gentile and Gorman knew, or should have known, had not
been entered into on or before Dec. 31, 1996, and did not comply
with generally accepted accounting principles. ABN reported the
overstated revenue and income on the financial statements that
were included in ABN's Annual Report on Form 10-K for its fiscal
years ended Dec. 31, 1996, and Dec. 31, 1997.
The Commission further found that Gentile and Gorman made
statements in the offer or sale of securities, which they knew,
or should have known, were materially false or misleading. As
participants in the preparation and review of ABNH's
registration statement filed with the Commission in connection
with its July 1998 initial public offering, they knew, or
should have known, that the registration statement contained
materially false and misleading financial information for ABNH's
fiscal year 1996 as it reported revenue and net income for the
two improperly recorded "bill and hold" transactions.
Without admitting or denying the findings in the Commission's
Order, Gentile and Gorman each agreed to the entry of a cease-
and-desist order requiring them to cease-and- desist from
committing and/or causing any violation, and any future
violation, of the antifraud, periodic reporting, record keeping,
and internal controls provisions of the federal securities laws,
Sections 17(a)(2) and 17(a)(3) of the Securities Act of 1933
(Securities Act) and Sections 13(a), 13(b)(2)(A) and 13(b)(2)(B)
of the Securities Exchange Act of 1934 (Exchange Act) and
Exchange Act Rules 12b-20 and 13a-1. In a related civil action
Gentile and Gorman, without admitting or denying the allegations
in the civil complaint, each consented to pay a civil penalty of
$25,000.
AMERITECH: Judge Approves $12.4 Settlement, Bars CUB
----------------------------------------------------
Madison County Circuit Judge Nicholas G. Byron approved a $12.4
million class action settlement on behalf of customers against
Ameritech's SimpliFive rate program, the St. Louis Post-Dispatch
reports.
Under the settlement trial lawyers are set to receive $1.9
million in attorney's fees. However, the Citizens Utility Board
(CUB), the Chicago-based nonprofit group set up by the state to
serve as an advocacy group for Illinois utility customers, which
originally complained about Ameritech's SimpliFive rate program
and who had sought $250,000 in fees got nothing out of it.
Meanwhile, Illinois customers who lost money on the SimpliFive
plan are entitled to $25 refunds.
In June, the Citizens Utility Board succeeded in postponing the
settlement by arguing that customers would receive almost next
to nothing, since the claims form was complicated and included
wording about perjury. The settlement was revised to change
those matters.
The CUB's attorney, Richard C. Balough, of Chicago argued in the
Wednesday settlement hearing, "The only reason CUB has asked for
$250,000 is so that it will go into a fund for consumers to use
in future cases. This was not money that was going to pay
lawyers."
St. Louis attorney Stephen Tillery, of the class action firm of
Korein Tillery, opposed the Citizens Utility Board's request,
arguing that the board had no legal standing in court. He
further points out that the Citizens Utility Board is not a
lawyer and therefore cannot represent consumers.
Judge Byron sided with Mr. Tillery, but lamented that the
consumer group was cut out of the deal that the court would have
appreciated some sort of stipend for CUB.
The CUB filed the initial complaint in 2000 against Ameritech
with the Illinois Commerce Commission and won that case in 2001,
but the commission ruled that the CUB had no authority to make
Ameritech refund money. Two months later Mr. Tillery's firm
filed the class action case against SBC Illinois-owned Ameritech
and eventually settled with Korein Tillery.
After the hearing, Martin Cohen, executive director of the
Citizens Utility Board, said he was disappointed that his group
came away empty-handed, but he reiterated that the outcome of
this case wouldn't dissuade his group from objecting again to
future settlements that they think are unfair.
ATLAS COLD: Completes Recapitalization With $250M Loan Package
--------------------------------------------------------------
Atlas Cold Storage Income Trust completed a vital
recapitalization, as it arranged a $250 million loan package
with Brascan Bridge Lending Fund, Inc., a unit of Brascan Asset
Management, the Canadian Press reports.
Last September, the trust suspended quarterly distributions,
after it discovered irregularities in its financial reporting.
The trust also re-stated 2-1/2 years of results. As a result,
the Ontario Securities Commission since charged former CEO
Patrick Gouveia and two other former executives with filing
misleading financial statements.
Shareholders also filed class action suits on behalf of
investors claiming more than $350 million in Canadian Court, on
behalf of all persons in Canada who purchased or acquired Trust
units in the period of August 11, 2000 to August 29, 2003 and
held them at the close of business on August 29, 2003, except
for certain excepted persons. The suit also names as defendants
certain former directors and officers of Atlas Holdings, certain
current and former trustees of the Trust, the Trust's auditors,
and the lead underwriter of various public equity offerings of
Trust units between 2001 and 2002, an earlier Class Action
Reporter story (June 10,2004) story states.
The Company said that the loan's annual borrowing cost is about
9.25 per cent and the loan commitment is for three years, during
which time Atlas has the right to repay at any time, the
Canadian Press reports. "Atlas now has the financial stability
and operational flexibility to execute its business plan and
work toward the eventual resumption of cash distributions,"
Canada's largest operator of cold-storage warehouses stated.
However, it added that its trustees "have determined that cash
distributions will remain suspended until Atlas's financial
position and performance are such that it is capable of making
and sustaining distributions appropriate for a business trust."
"After careful consideration of a number of proposals from
various financial institutions and investor groups, we are
pleased to accept this refinancing package from BBLF," Chief
Executive Officer David Williamson said, according to the
Canadian Press.
The Brascan package "offers Atlas the greatest amount of
financial stability and operational flexibility at a competitive
cost," he added. "This resolves Atlas's recapitalization needs
without issuing equity when Atlas is in a period of transition,"
he said.
C & G AIRCRAFT: TX Residents Lodge Suit Over August 26 Explosion
----------------------------------------------------------------
Residents of Ferris, Texas initiated a lawsuit seeking class
action certification in Ellis County District Clerk's Office
against the C & G Aircraft Inc. in relation to an explosion that
occurred August 26 at the company's location in downtown Ferris,
the Waxahachie Daily Light reports.
The suit was brought on behalf of all residents of the city, who
were exposed to dangerous chemicals and those forced from their
homes that day, "as a result of C & G's illegal and highly
dangerous receipt, storage, possession and use of controlled
chemicals and materials," the lawsuit further alleges. The suit
also contends that the company violated local, state and federal
laws by secretly receiving, storing, possessing and using ultra-
hazardous chemicals at its location "only a few feet away from
Plaintiffs' and the Putative Class' residential neighborhood."
The filing, which seeks temporary, preliminary and permanent
injunctive relief, restraining and enjoining C & G and all those
in active concert therewith from receiving, storing, possessing
and using controlled chemicals and materials at its premises in
Ferris, Texas came less than a week after an explosion occurred
at the aircraft parts manufacturing plant, located at 205 N.
Main St. in downtown Ferris. The August 26 incident sent 11
people - one of whom later died - to the hospital and forced the
evacuation of about 800 people over a multiple-block area,
officials reported at the time.
The lawsuit asserts strict liability on the part of the company
and says that its actions constitute nuisance, negligence, gross
negligence and trespass and seeks damages for mental anguish,
pain and suffering, medical expenses, partial or permanent
disability, loss of income, damages for the loss of use and
trespass, and partial or permanent injury or disfigurement from
the time of the incident to the time of trial and also extending
into the future.
Attorney Thomas M. Corea of Dallas-based Corea Firm, PLLC, filed
the action, which has been assigned to the 40th Judicial
District Court.
COLE NATIONAL: Shareholders Commence Lawsuit V. Luxottica Offer
---------------------------------------------------------------
Cole National Corporation, its directors and Luxottica Group
S.p.A. face a shareholder class action, alleging that the
individual defendants breached their fiduciary duties as
directors and/or officers to the Company.
The suit alleges the defendants caused the Company to enter into
an agreement to be acquired by Luxottica for $22.50 per share
"without having exposed the Company to the marketplace through
fair and open negotiations with all potential bidders and/or an
active market check or open auction for sale of the company."
The complaint seeks preliminary and permanent injunctive relief
against the merger, rescission of the merger if it is
consummated, and/or damages and other associated relief.
IDAHO: A.G. Wasden Forges Tobacco Settlement With Rite-Aid
----------------------------------------------------------
Rite Aid stores in Idaho and across the nation have agreed to
implement new policies and business practices to prevent the
sale of tobacco products to minors in their stores, Attorney
General Lawrence Wasden said in a statement.
Attorney General Wasden joined attorneys general from 20 other
states and the District of Columbia in the settlement agreement.
"Rite Aid has joined a growing number of responsible retailers
who are actively working to prevent tobacco sales to youth,"
Attorney General Wasden, Co-Chair of the National Association of
Attorneys General Tobacco Committee, said. "This voluntary
agreement is another significant step toward reducing illegal
tobacco use by minors."
The Rite Aid "Assurance of Voluntary Compliance" is the most
recent agreement produced by an ongoing, multi-state enforcement
effort. The enforcement effort, focusing on retailers that have
high rates of sales to minors, seeks to secure agreements to
adopt procedures to prevent sales to underage youth. State
attorneys general have also reached agreements that apply to all
Walgreens and Wal-Mart stores and to all gas stations operating
under the Exxon, Mobil, BP, and Amoco brand names in their
states.
The agreement requires Rite Aid to:
(1) Train employees on state and local laws and company
policies regarding tobacco sales to minors, including
explaining the health-related reasons for laws that
restrict youth access to tobacco.
(2) Check the ID of any person purchasing tobacco products
when the person appears to be under age 27, and only
accept currently valid government-issued photo
identification as proof of age.
(3) Use cash registers programmed to prompt ID checks on all
tobacco sales.
(4) Hire an independent entity to conduct random compliance
checks of over 10% of all Rite Aid stores in the
participating states every six months.
(5) Prohibit self-service displays of tobacco products, the
use of vending machines to sell tobacco products, the
sale of cigarette look-alike products, and the
distribution of free samples on store property.
(6) Prohibit the sale of smoking paraphernalia to minors.
The attorneys general recognize that youth access to tobacco
products ranks among the most serious public health problems.
Studies show that more than 80 percent of adult smokers began
smoking before the age of 18. Research indicates that every day
in the United States, more than 2,000 people under the age of 18
begin smoking and that one-third of those persons will
eventually die from a tobacco-related disease.
JAPAN: Consumer Groups Joining to Fight Fraud, Unfair Trade
------------------------------------------------------------
Three major consumer associations in Japan are planning to
jointly set up a new organization, to prepare for legislation
allowing consumer groups to file lawsuits on behalf of victims
of illegal business practices, the organizations' officials
said, according to the Daily Yomiuri.
The Social Policy Council, the prime minister's advisory panel,
is discussing class action legislation, as many Japanese
consumers hesitate to take action against illegal business
practices, because compensation received can be relatively small
and might be less than the cost of a lawsuit.
The new law will prevent firms from exploiting consumers and is
expected to prevent abuses. The bill is likely to be submitted
early next year.
The new organization, which will play a major role in such
lawsuits, will be chaired by former Fair Trade Commission
Chairman Yasuchika Negoro, the officials told the Daily Yomiuri.
The new organization will be founded by the Japan Consumer's
Association, the Nippon Association of Consumer Specialists and
the Japanese Consumer's Cooperative Union, as well as lawyers
and other legal experts. The inaugural meeting will be held on
September 17 in Tokyo, and the new group will apply for status
as a nonprofit organization, the officials said.
MARYLAND: Indian Acres Residents, County Settles Civil Lawsuit
--------------------------------------------------------------
As part of a settlement reached by lawyers representing the
residents and county government, the residents of Indian Acres
will be allowed to stay in their homes for 20 more years before
the county requires them to abide by its seasonal-living
requirements for campgrounds, the Cecil Whig reports.
According to Elkton-based attorney Michael Smigiel, who
represented the residents in the lawsuit filed two years ago,
"No one got everything that they wanted, but 20 years for my
clients to stay in their home and petition the county to allow
them to stay longer is an acceptable solution, in my opinion."
County Attorney Dwight Thomey said he will ask the court to
certify the case as a class action lawsuit - a move he said
would automatically cover all property owners in Indian Acres
under the same terms of the settlement.
The controversy over who can live in the Indian Acres community
and for how many days out of the year began in May 2002 when the
county's zoning administrator sent letters to property owners in
Indian Acres telling them they were violating the county's
zoning ordinance regarding campgrounds, which limits residents
to a maximum of 100 days use of their property in a calendar
year. Residents were also told that they had 60 days to adhere
to that regulation or they would be evicted.
However, Judge Dexter Thompson signed a restraining order
preventing the county from enforcing the violations order until
the civil suit could be resolved.
Mr. Smigiel and the residents of Indian Acres argued that the
community does not qualify under the county's legal definition
of a campground, since the residents of Indian Acres can
purchase individual lots, called "funsteads." Mr. Smigiel
further argued that the community was approved and platted
before Cecil County adopted its first subdivision regulations
and that the county has since issued occupancy permits for the
homes in Indian Acres without informing property owners of the
seasonal requirements.
After the settlement was approved Mr. Smigiel told the Cecil
Whig that his clients were ecstatic about the settlement even
though some of homeowners weren't represented in the lawsuit."
MICHIGAN: A.G. Cox Reaches Tobacco Settlement With Rite Aid
-----------------------------------------------------------
Michigan Attorney General Mike Cox reached an agreement with the
Rite Aid drug store chain to reduce the sale of tobacco products
to children in Rite Aid stores in Michigan. Rite Aid has 3380
retail outlets nationally, about 300 of which are in Michigan.
"It has been a crime in Michigan to sell cigarettes to children
for almost 100 years. Yet, children too young attempt to legally
purchase cigarettes and are still able to make a buy in many
neighborhoods across this State. I compliment Rite Aid for
stepping up to the plate," said AG Cox in a statement. "By
entering into this legally enforceable agreement, Rite Aid is
committing to help law enforcement officials protect the health
of our children and make it harder for minors to buy cigarettes
in Michigan."
The Rite Aid "Assurance of Voluntary Compliance" is another link
in the chain of tobacco agreements to protect the public health
produced by multi-state enforcement efforts. AG Cox has also
reached legally enforceable agreements that apply to all
Walgreens and Wal-Mart stores and to all gas stations operating
under the Exxon, Mobil, ARCO, BP, and Amoco brand names. Over
1500 retail stores in Michigan are now subject to assurances
under the Consumer Protection Act that have been filed in Ingham
County Circuit Court and are covered by these agreements.
Agreements of this type are important because much of retailing
has become large-scale. Customers may not be personally known
to the clerks who serve them and many young people who are below
the minimum age to purchase tobacco products appear to be older
than their actual age, the Atty. General said in a statement.
This agreement requires that Rite Aid:
(1) Train employees on state and local laws and company
policies regarding tobacco sales to minors, including
explaining the health-related reasons for laws that
restrict youth access to tobacco.
(2) Ensure that all employees who are involved in the sale
of tobacco products will receive comprehensive initial
training and periodic continuing training.
(3) Check the ID of any person purchasing tobacco products
when the person appears to be under age 27, and
accepting only valid government- issued photo
identification as proof of age.
(4) Use cash registers programmed to prompt ID checks on
all tobacco sales.
(5) Hire an independent third-party to conduct random
compliance checks of over 10% of all Rite Aid stores in
the participating states every six months.
(6) Prohibit self-service displays of cigarettes, chewing
tobacco, and snuff, the use of vending machines to sell
tobacco products, the sale of cigarette look-alike
products, and the distribution of free samples on store
property.
(7) Prohibit the sale of smoking paraphernalia to minors.
The Attorney General has long recognized that youth access to
tobacco products ranks among the most serious public health
problems. Studies show that more than 80 percent of adult
smokers began smoking before the age of 18. Research indicates
that every day in the United States, more than 2,000 people
under the age of 18 begin smoking and that one-third of those
persons will one day die from a tobacco-related disease. Young
people are particularly susceptible to the hazards of tobacco,
often showing signs of addiction after smoking only a few
cigarettes.
The 22 participating states to the Rite Aid assurance are the
States where Rite Aid stores are located: AZ, CA, CT, GA, ID,
KY, LA, ME, MD, MI, MS, NJ, NY, OH, OR, PA, TN, UT, VT, and WA.
The District of Columbia is also participating.
As part of the settlement, Michigan will receive about $15,000
to reimburse the taxpayers for the time and expense of the
negotiations. Michigan provided a member of the multi- state
negotiating team.
OHIO: Residents File Suit V. Man Over Illegal Pay Phone Scheme
--------------------------------------------------------------
An Ohio man faces a class action after he convinced many people
to invest in an illegal pay phone scam, NewsNet5.com reports.
Carmen Civiello allegedly earned more than $600,000 in three
months convincing people to invest in the pay phone plan, which
federal agents call a "ponzi scheme." Hundreds of people in
Ohio lost money, but there may be more across the country.
A Summit County, Ohio Court has ordered Mr. Civiello to pay one
of his victims $100,000 in punitive damages, reported
NewsChannel5 chief investigator Duane Pohlman. Mr. Civiello,
who also uses his former-radio name, Todd T. Taylor, convinced
Mildred Cunningham to invest her life savings - $35,000 - in the
pay phone plan. The next month, the company went bankrupt.
"He knew he could talk me into anything," Ms. Cunningham told
NewsNet5.
"I think the jury saw what happened in this case and said,
'Enough was enough. It's not right,'" said John Chapman,
Cunningham's lawyer.
PRIMUS TELECOMMUNICATIONS: Inks $400,000 Settlement of FCC Probe
----------------------------------------------------------------
Primus Telecommunications Group, Inc. (Nasdaq: PRTL) blamed
Indian company Spanco Telesystems & Solutions, Ltd., a company
it hired to handle telephone sales, for its telemarketing
troubles, Light Reading reports.
The Federal Communications Commission (FCC) probed the up-and-
coming player in the VOIP market as it allegedly called
consumers who were registered in the national do-not-call
database. The FCC began its investigation on December 17 after
receiving numerous consumer complaints. The FCC probe revolved
around Primus division International Consumer Marketing, which
used telemarketing to sign up 40 percent of its long-distance
customers. The carrier finally agreed this week to settle the
investigation for $400,000, and to adopt tougher training
policies for its customer representatives.
Spokeswoman Gerry Simone says these sales represent only about 2
percent of Primus's total revenues, according to Light Reading.
She blames the alleged violations of the do-not-call rules on
Spanco Telesystems & Solutions Ltd. in India, a company Primus
hired last year to solicit prospective customers for its long-
distance telephone service. She says Primus severed its contract
with Spanco the following day and no longer uses telemarketing
in the United States.
Primus, like other long-distance telephone providers, is leaning
on VOIP to stay afloat in an increasingly competitive market. A
big chunk of Primus's revenues has come from selling cheap long-
distance services, especially for international calling.
A class action suit was filed against Primus last month for
misleading investors about the company's financial prospects.
The suit claims that Primus was forced to accelerate its
investment in VOIP because of declining sales in long-distance
services.
REYNOLDS & REYNOLDS: More Lawsuits Filed Over Share Price Plunge
----------------------------------------------------------------
The Reynolds and Reynolds Company faces three more class action
lawsuits, bringing the total suits filed against the company
over the June plunge in the it's share price to six, the Dayton
Daily News reports.
One of the latest law firms to sue the Company is Smith & Smith
LLP of Bensalem, Pennsylvania, which filed its class action in
U.S. District Court in Dayton, Ohio.
According to the law firm the suit was filed on behalf of
shareholders who purchased Reynolds common stock between Jan.
22, 2003 and June 24, 2004.
The suit alleges that Reynolds violated federal securities laws
by issuing a series of misrepresentations to investors during
that period which artificially inflated the price of Reynolds'
shares.
Aside from Smith & Smith, the law firms of Lasky & Rifkind,
Ltd.; Schatz & Nobel, P.C.; Schiffrin & Barroway, LLP; Charles
J. Piven, P.A. and Brian M. Felgoise, P.C, have filed also
similar actions.
In response to these developments Reynolds and Reynolds thru its
spokesman, Paul Guthrie stated that the suits lack merit.
UNITED STATES: House Panel Approves Fines For Frivolous Lawsuits
----------------------------------------------------------------
The Republican-dominated House Judiciary Committee of the U.S.
House of Representatives approved a bill that fines lawyers who
file frivolous lawsuits, Reuters reports.
Passed on an 18-10 party line vote, the bill, which is the
latest in a string of Republican attempts at cracking down on
lawsuit excesses would be on the floor of the chamber next week.
However, Democrats who opposed the Republican-backed bill
charged that it was a cynical political move intended to
highlight lawsuit abuses during a national election campaign
that features a trial lawyer, Sen. John Edwards of North
Carolina, as the Democratic vice presidential candidate.
Authored by Texas Republican Rep. Lamar Smith, the bill would
restore mandatory fines for lawsuits deemed by judges to be
frivolous and in violation of federal rules of civil procedure
with the penalty usually being the cost of defending the
frivolous claim.
Supporters of the bill recalled that Bush, in his speech at the
recent Republican convention, declared, "We must protect small
business owners and workers from the explosion of frivolous
lawsuits that threaten jobs across America."
However opponents noted the Judicial Conference of the United
States, the federal judiciary's policymaking group, pointed out
to the committee that the same approach had been tried in 1983
that spawned a "cottage industry" in attorneys' motions and
counter-motions before it was eventually repealed in 1993.
Other critics also expressed there agreement to the, but
objected to another part of the bill limiting "forum-shopping"
by plaintiffs looking for the best court in which to file a case
stating that the provisions would kill the bill in the Senate.
The committee also adopted an amendment mandating a one-year
suspension of a law license after a lawyer has filed three or
more frivolous lawsuits in the same federal court.
Asbestos Alert
ASBESTOS LITIGATION: New York Library Staff Fearful of Asbestos
---------------------------------------------------------------
Some Mt. Vernon Public Library employees are hesitant to report
to work after contractors found asbestos while doing repairs on
the roof. This restoration work has long been overdue since
leaks forced the library to close repeatedly over the years.
The employees said they were fearful of the health risks since
asbestos can cause serious lung damage that could result in
death.
"Who wants to come into a building where asbestos is being
removed?" said Gary Newman, president of the library workers'
union, Westchester Local 860 of the Civil Service Employees
Association.
Library director Rodney Lee said the board considered closing
the facility but decided against it after considering many
factors.
"We have assurances that the building is safe and all the
asbestos is on the outside, but I understand why the staff is
concerned," Mr. Lee said.
Mayor Ernest Davis downplayed the concerns and said the
employees' fears are unfounded. "It does not make any sense if
you look at the situation logically." The asbestos has been
there for 30 years and he believes that the work will not affect
conditions inside the building.
Alan Ramdass, project manager for Ace Restoration Services, said
his company is following all state laws, and independent
monitors are surveying the area during the abatement. It is
estimated that the removal would be done within a week.
ASBESTOS LITIGATION: "Clean Air Act" Violator Dies in CA Prison
---------------------------------------------------------------
The Albany building owner prosecuted for violating asbestos-
removal rules passed away in a federal prison last August 31
while removing floor tiles. Jo R.R. McCulloch had been looking
forward to his release this November 15 after serving most of
his one-year sentence.
Cynthia Hilliard, McCulloch's fianc‚e, said that he died in
solitary confinement in a 10-by-14-foot concrete cell inside a
"special housing unit," a disciplinary section. He reportedly
suffered from diabetes and glaucoma but received no special
considerations inside the prison.
Mr. McCulloch had pleaded guilty to a violation of the federal
Clean Air Act over the asbestos matter. Judge James Redden
sentenced him to what he said was the lowest sentence allowed by
federal guidelines: one year and a day. On January 5, Mr.
McCulloch reported to the prison in Taft, in Kern County, near
Bakersfield.
Mr. McCulloch had been remodeling a one-story building he owned
at 860 Burkhart St. when an inspector from the Department of
Environmental Quality advised him to stop. The inspector had
heard reports that his flooring contractor was removing and
discarding floor tile that had not been tested for asbestos.
"I am a hard-headed Irishman and I get upset when you start
threatening me," McCulloch told the Democrat-Herald in 2000.
Ms. Hilliard said an autopsy would be done to determine the
cause of death.
ASBESTOS LITIGATION: EPA Cites PA Contractor Sargent Enterprises
----------------------------------------------------------------
The U.S. Environmental Protection Agency has cited Sargent
Enterprises, Inc., an asbestos removal contractor in Jim Thorpe,
Pennsylvania, for failing to provide timely advance notice of
asbestos abatement projects in two public schools in Bucks
County, Pa. They are Pfaff Elementary School in Quakertown and
Palisades High School in Kintnersville.
EPA spokeswoman Donna Heron said the Clean Air Act provides that
contractors notify EPA at least ten working days before the
start of a demolition or renovation projects. This allows EPA to
inspect asbestos projects and, if necessary, halt or correct
improper work practices that might cause asbestos emissions
threatening worker safety or public health.
The company gave nine working days' notice of its job at
Palisades in June 2003 and five for Pfaff, in the Quakertown
Community School District, in November 2003, according to the
EPA.
EPA was notified on June 10, 2003 that it would begin the
Palisades High School asbestos abatement on June 23, 2003. When
an EPA inspector visited the site on June 24, 2003, he learned
that the work actually began three days earlier, on June 20,
2003.
"We haven't done anything wrong. I am quite certain that we gave
them notification in a timely fashion," said company owner Brian
Sargent. He said this citation is likely a "misinterpretation"
by the EPA.
"This is the first time the company has been cited by the EPA.
Investigators did not find any problems with Sargent's work at
the schools," Ms. Heron said.
Sargent Inc. will contest the citation before the US$4,620 fine
is collected.
ASBESTOS LITIGATION: Parker Drilling Co. Faces Lawsuits in MS
-------------------------------------------------------------
About 284 persons claiming that they were employed by some of
Parker Drilling Co.'s subsidiaries between 1965 and 1986 filed
several complaints in the Circuit Courts of the State of
Mississippi.
The company's subsidiaries and other drilling contractors
allegedly used asbestos-containing products in offshore drilling
operations, land based drilling operations and in drilling
structures, drilling rigs, vessels and other equipment and
assert claims based on, among other things, negligence and
strict liability, and under the Jones Act.
The Houston-based oil drilling and services company says that
the claimants are seeking an unspecified amount of compensatory
and punitive damages.
A recent decision of the Mississippi Supreme Court seeks to
require these claimants to be specific in naming the defendant
including the time, period and location of asbestos exposure. As
yet, the company has not had the opportunity to investigate the
claims as these complaints have only been recently filed.
With the sparse information available at this time, the company
is not expecting these lawsuits to adversely affect its
finances. However, it recognizes that there can be no assurance
as to the ultimate outcome of these lawsuits.
ASBESTOS LITIGATION: Ohio Appeals Court Allows Reform to Proceed
----------------------------------------------------------------
An Ohio appeals court has at least temporarily refused to block
implementation of the state's new asbestos litigation reform
law.
The law, which took effect on the last week of August, is the
first state law that requires plaintiffs in asbestos liability
cases to meet specific medical criteria before their claims can
proceed to trial.
A group of plaintiffs attempted to stop the law from going into
effect as scheduled, claiming that it violated the state
constitution, and sued a state district court to prevent
implementation of the law. Ohio's 8th District Court of Appeals,
however, ruled that the law could go into effect as scheduled.
The court has given both sides until September 20 to present
further briefs in the case, with responses due by October 12.
ASBESTOS LITIGATION: IL Park Refuses to Display Asbestos Tips
-------------------------------------------------------------
The Department of Natural Resources barred the display of a
pamphlet containing information on how to minimize asbestos risk
on Illinois Beach State Park's office, hotel and other areas.
Dunesland Preservation Society, an environmental group, wanted
to make fliers available after potentially dangerous asbestos
was detected near North Point Marina last month.
Agency spokesman Joe Bauer justified the decision not to display
it on the basis that Dunesland had not followed rules pertaining
to public demonstrations, though Dunesland was not seeking any
sort of public demonstration.
Dunesland President Paul Kakuris responded. "It's not a
demonstration. All we're doing is asking them, not us, to put
those fliers in the park's display cases."
Park Supt. Robert Grosso said the environmental groups didn't
have to obtain the type of permit DNR is requiring of Dunesland.
ASBESTOS LITIGATION: No Asbestos Found in Debris of CA Theater
--------------------------------------------------------------
Building officials confirmed that the debris that fell on
moviegoers when the ceiling at a Mill Valley theater collapsed
did not contain asbestos.
An estimated 25-by-25-foot section of the ceiling in one of the
two theaters at CineArts fell shortly after 5 p.m. August 16,
raining plaster and lath on the audience. Three people were
taken to Marin General Hospital for observation and 27 others
were treated at the scene for minor injuries, including scrapes
and dust inhalation.
The city investigated the cause of the collapse and a report by
City Building Official Thomas Ahrens suggested several factors
may have contributed to the ceiling failure including the type
of nails used, a leak from a few years ago and activity on the
catwalk located near the theater ceiling.
Mr. Ahrens determined there was "no structural failure
whatsoever." The theater, managed by Century Theatres, hired a
team of structural engineers to investigate the cause and had
tests done to determine whether building materials contained
asbestos fibers.
"The plaster and insulation were clean on asbestos, however the
paint contained lead. It was minimal exposure, only harmful if
you ate it," said Mr. Ahrens.
The theater was originally built in 1929. Officials said the
ceiling may not be the original one but was likely installed in
the 1940s because it contained metal lath, a material not used
in earlier years. The city had already granted a demolition
permit.
ASBESTOS LITIGATION: Asbestos Warehouse Going Up in Turner, ME
--------------------------------------------------------------
A 60- by 100-foot building will soon occupy the Route 4 site and
will be leased to a contractor specializing in major renovation
work and asbestos removal from both private and public
facilities.
The name of the contractor is not yet available but the business
is expected to have about 10 employees. Construction materials
will be stored in the building, however only short-term storage
of asbestos will be allowed under the town's approval, which was
given in July.
Tom Dubois of Maine-Land Development Consultants Inc. said that
Loxley Properties of Cumberland-Foreside purchased the property.
At this time, the completion date on the building is not yet
known.
ASBESTOS LITIGATION: NE Businessman Faces Penalty for Asbestos
--------------------------------------------------------------
Bill Ward, a Valentine businessman, is facing fines of up to
US$10,000 per day for ignoring orders by state environmental
officials to dispose of asbestos-laden debris properly.
As state environmental laws require that asbestos be removed by
a licensed entity, the State Health Department received
complaints that Mr. Ward had been demolishing a commercial
building along U.S. Highway 20 and hauling the debris through
town since last month.
Having secured a court order, inspectors with the State
Department of Environmental Quality and State Health and Human
Services System investigated the property on August 25. Mr. Ward
allegedly assaulted one inspector and was arrested promptly by
the sheriff's deputies at the scene.
State officials confirmed that the debris contained asbestos in
levels that exceeded lawful limits. Nebraska Attorney General's
Office obtained a temporary injunction against Ward to halt his
removal of the debris.
Cherry County Attorney Eric Scott sought for the appointment of
a special prosecutor since he is facing a conflict of interest,
as Mr. Ward is a former Cherry County commissioner.
Assistant Attorney General Jodi Fenner said the enforcement
action demonstrated that even in a rural county, her office's
environmental unit could respond quickly to a threat to public
health.
Ms. Fenner said Ward has since agreed to hire a licensed
asbestos removal firm and keep the debris wet, as required,
until it is removed.
ASBESTOS LITIGATION: AU Union Seeks Mandatory Home Safety Checks
----------------------------------------------------------------
The Australian Manufacturing Workers Union (AMWU) is strongly
urging all state and territory governments to address the issue
of this potentially fatal material in homes.
State secretary Andrew Dettmer says these inspections would
identify the presence and condition of the asbestos in homes, as
he believes that there is no safe level of exposure to asbestos.
The union's Queensland branch is asking the Beattie Government
to introduce an "Asbestos Inspection Certificate" for all home
sales and renovations. The union says up to two-thirds of
Queensland homes built since World War II contain asbestos
products, usually in cement sheeting.
National President Julius Roe says a national standardized
approach is needed.
"That is a very low cost but very effective way of actually
improving safety and reducing the incidents of asbestos-related
cancer into the future," Mr. Roe said.
ASBESTOS LITIGATION: EPA Finds Asbestos Hazard in Juneau, AK
------------------------------------------------------------
The Environmental Protection Agency has determined that the
asbestos fibers from the debris of a demolished building in
Juneau pose a health hazard. More tests are being conducted to
measure the amount of asbestos.
The 108-year-old commercial building burned on August 15. The
EPA considers the building owner and the demolition crew liable
for failing to notify the agency of the pending demolition.
Michael Bussell, director of the Office of Compliance and
Enforcement in Seattle, says that notification is required by
law.
John Pavitt, EPA air compliance inspector, reported that the
rubble is being kept wet to prevent a persistent hazard.
ASBESTOS LITIGATION: Ameren Corp. Puts Up US$20M for IL Deal
------------------------------------------------------------
Under a compromise agreement with the Illinois Commerce
Commission, Ameren Corp. will contribute US$20 million to help
cover future asbestos liabilities of electric utility Illinois
Power Co.
The ratepayers will shoulder the remainder of Illinois Power's
asbestos liabilities, a product of its former ownership of coal-
fired power plants now held by Dynegy Inc., says an ICC
spokesman.
St. Louis-based Ameren earlier preferred that ratepayers cover
all of the future asbestos costs and had made that a condition
of the Illinois Power deal.
This agreement is expected to act within weeks on Ameren's
proposed $2.3-billion purchase of Illinois Power.
An Ameren spokesman refused to comment.
ASBESTOS LITIGATION: CRH Public Ltd Faces More Asbestos Lawsuits
----------------------------------------------------------------
As of August 27 this year, CRH Public Ltd. Co. is facing a total
of 316 cases from claims of personal injury as a result of
asbestos exposure through products manufactured by companies
belonging to the Distribution Group prior to ownership by CRH.
In September 2002, the number of asbestos cases only reached a
total of 251. Since then, 83 new claims have been submitted and
18 have been dismissed.
CRH says that they believe that the outcome of these claims will
not have a material impact on the company.
ASBESTOS LITIGATION: Ill. Beach Park Workers Seek Medical Tests
---------------------------------------------------------------
Workers at Illinois Beach State Park filed a grievance against
the state Department of Natural Resources, claiming breach of
health and safety provisions in a union contract. The grievance
seeks medical testing for all affected park employees and more
thorough examinations to be conducted to determine the extent of
asbestos contamination on park property.
The American Federation of State, County and Municipal Employees
local, representing 15 park technicians, rangers and other
workers took action against the state department after last
month's incident when employees were tasked to isolate
potentially dangerous asbestos debris found at the beach. A
state contractor later disposed of the material. However,
testing confirmed the presence of microscopic airborne asbestos
particles in the area where they worked.
Safety questions were raised before in an August 2003 letter
signed by environmental health specialists from the Illinois
Department of Public Health and the federal Department of Health
and Human Services' agency for Toxic Substances and Disease
Registry.
The letter was addressed to William E. Muno, Midwest director of
the U.S. Environmental Protection Agency's Superfund division.
Workers supposedly did not face a health hazard but cautioned
that those employees "involved in the clean-up activity would be
advised to wear appropriate personal protection." No special
protective gear was provided to workers charged with cleaning up
asbestos along the park's beaches.
State public health officials have announced that no public
health risk remains and has since then reopened the park.
"Why are they telling us this is OK? We're out there 365 days a
year. Why do you say it's safe when you have to put out signs
that say, 'Danger asbestos.' It's sending a mixed message here,"
one employee said.
ASBESTOS LITIGATION: Pfizer Sets US$430M For Asbestos Claims
------------------------------------------------------------
Pfizer Inc. has agreed to pay $430 million to settle claims
against its subsidiary, Quigley Co, related to the asbestos
exposure caused by the subsidiary's insulation products. Pfizer
and its subsidiary were named, along with several other
defendants, in 171,611 lawsuits claiming personal injury caused
by exposure to asbestos, silica or mixed dust.
Quigley was acquired by Pfizer in 1968 and sold small amounts of
products containing asbestos until the early 1970s.
The companies have taken these measures:
(1) Reorganization Plan: Quigley will file a Chapter 11
reorganization plan in the U.S. Bankruptcy Court for
the Southern District of New York that must be approved
by the court and confirmed by a vote of 75 percent of
the claimants.
(2) Establishment of Trust: The reorganization plan will
establish a trust for the payment of all remaining
pending claims as well as any future claims alleging
injury from exposure to Quigley products. Pfizer will
contribute US$405 million to the Trust over 40 years as
well as about US$100 million in insurance. Pfizer will
also forgive a US$30 million loan to Quigley.
(3) Permanent injunction: If approved by the court, the
reorganization plan will result in a permanent
injunction directing all future claims alleging
personal injury from exposure to Quigley products to
the Trust.
"The steps ... will establish a responsible and orderly process
for the fair payment of these claims, while at the same time
minimizing the costs, risks, and distractions of litigation that
has spanned several decades," said Jeff Kindler, Executive Vice
President and General Counsel of Pfizer.
ASBESTOS LITIGATION: Union Buys Hardie Shares to Attend Meeting
---------------------------------------------------------------
Representatives from the construction and manufacturing unions
have purchased James Hardie shares to enable them to infiltrate
the company's Annual General Meeting at Amsterdam this September
17. These new shareholders will be demanding for chief executive
Peter McDonald's resignation and will vote against a resolution
to accept the company's accounts for the last financial year.
"We want to bring it to the attention of the James Hardie
shareholders that the company deliberately sold asbestos when
they knew it was a problem and they're trying to get out of
their obligations now," said Lindsay Fraser, a representative of
the Construction, Forestry, Mining and Energy Union.
Three crucial events are slated to happen this month: a
shareholders information meeting in Sydney on September 15; the
company's AGM in the Netherlands two days later; and the
delivery to the NSW Government on September 21 of the findings
of the special commission of inquiry into Hardie's underfunding
of its asbestos liabilities.
NSW Premier Bob Carr indicated he might yield to pressure from
unions and other Labor states to reject Hardie's conditional
offer to provide more funds for asbestos victims if his
Government abolishes their common law right to sue and
establishes a statutory scheme.
Mr. Carr for the first time said Hardie had "deceived" all
parties including himself when it set up its foundation for
future asbestos disease claims in 2001, and that he was "very
skeptical" of any commitment the company might make now.
One of the union's would-be proposals at the AGM includes a
resolution asking the company to call an extraordinary general
meeting to deal with the asbestos issue as soon as the outcome
of the NSW inquiry is known.
ASBESTOS LITIGATION: PA Court Reinstates Smoker's Asbestos Claim
----------------------------------------------------------------
Reversing a Philadelphia court's dismissal of an asbestos claim
brought by a longtime smoker, a Pennsylvania Superior Court
panel has pointed out that an asbestos plaintiff may establish a
prima facie case by presenting evidence of exposure and of
breathlessness that impairs daily activities.
In Nybeck v. Union Carbide Corp., 63-year-old Richard Nybeck,
who claimed that he had been regularly exposed to asbestos
during his career as a boiler technician in the U.S. Navy, had
submitted to the trial court a medical report stating that while
his chronic obstructive lung disease had most likely been caused
by his cigarette smoking, his exposure to asbestos substantially
contributed to his breathing difficulties upon exertion.
Plaintiffs' attorney Richard Myers of Paul Reich & Myers said
that the opinion could influence the way cases with similar fact
patterns are handled in Philadelphia's Complex Litigation
Center.
In granting Union Carbide's motion, PA Common Pleas Judge Norman
Ackerman relied on the Superior Court's 2003 decision in Quate
v. American Standard Inc., in which the court had ruled that a
plaintiff who suffers from a non-asbestos-related condition that
typically involves symptoms consistent with those of asbestos
exposure cannot establish a causal link between his symptoms and
his asbestos exposure, according to the opinion.
On appeal, Mr. Nybeck cited the court's January decision in
Cauthorn v. Owens-Corning Fiberglas Corp. That case involved a
man with a number of serious medical conditions who had also
been a smoker for several decades; ultimately, the court held
that Mr. Cauthorn's shortness of breath was due in part to his
inhalation of asbestos and that his asbestos-related injuries
harmed his daily lifestyle.
"What Johnson said is that where asbestos exposure is a factual
cause of day-to-day impairment of life activities, the plaintiff
has proven a prima facie case," Mr. Myers said. "I think that's
extremely helpful in that now, the standard is quite clear."
In the past, according to Mr. Myers, some asbestos cases filed
in Philadelphia by plaintiffs who had also smoked had been
dismissed, while others had made it to trial.
"I think that more cases will wind up going to trial," Mr. Myers
said.
ASBESTOS LITIGATION: SG Cowen Calls Pfizer Deal A "Big Victory"
---------------------------------------------------------------
SG Cowen considers Pfizer's US$430 million asbestos settlement,
a "big victory" for the pharmaceuticals giant.
The deal, which must still be approved by the courts and
confirmed by 75% of claimants, will settle lawsuits filed
against Pfizer and its Quigley Co. subsidiary for injuries
allegedly caused by asbestos insulation products. The proposed
settlement also requires Pfizer to establish a US$505 million
trust to settle remaining and future claims.
The cost of the settlement, which does not include lawsuits
related to its American Optical unit, is nonetheless
"substantially lower than our US$1.2 billion to US$14 billion
forecast," said SG Cowen. Shares of Pfizer were last trading up
9 cents at US$32.64.
ASBESTOS LITIGATION: Pfizer Settlement Clears Asbestos Lawsuits
---------------------------------------------------------------
Pfizer Inc.'s settlement agreement, which would involve putting
Quigley in Chapter 11 protection, is the latest in which a
company involved in asbestos litigation decides to settle with
plaintiffs lawyers and then file for bankruptcy.
ABB Ltd., Congoleum Corp. and Halliburton Co. have used similar
prepackaged asbestos bankruptcies in an effort to end the influx
of injury claims for good.
Asbestos lawyers who represent a small group of plaintiffs
suffering with cancer have characteristically opposed asbestos
settlements; especially those reached in prepackaged cases,
complaining that a huge bulk of the money goes to claimants
without real illnesses.
Elizabeth Magner, a lawyer who represents 17 such law firms,
said the views of her clients vary.
Steven Kazan, one of the 17 plaintiffs firms Magner represents,
said he supports the Pfizer plan because most of the US$535
million in the asbestos trust will be used to compensate
plaintiffs with cancer.
He noted that the settlement trust is set up to pay out
US$100,000 to cancer claimants but only US$250 to plaintiffs
diagnosed with asbestosis but without any lung impairment.
Hamed Khorsand, an analyst at Los Angeles money management firm
BWS Financial, believes that Pfizer struck a deal now because it
could use the prospect of asbestos reform legislation to its
advantage.
The legislation would create a global trust fund financed by
companies and insurers to compensate all future asbestos
personal-injury claims. The fund would pay plaintiffs at a far
lower rate than the deals their lawyers can get through
litigation.
Mr. Khorsand said asbestos reform legislation could pass before
the elections in November, because the bill's supporters and its
opponents differ by only US$5 billion on the amount of
contributions that should be made to the fund.
Mr. Kazan, however, said the prospect of legislation did not
affect Pfizer's decision.
"The reality is that Pfizer, through its counsel, approached us.
Just like for any other company, having certainty is of great
value," held Mr. Kazan.
ASBESTOS LITIGATION: AU Insurers Monitoring James Hardie Cases
--------------------------------------------------------------
The Australian insurance industry is keeping a close eye on the
asbestos controversy surrounding James Hardie Inc.
KPMG, a leading provider of assurance, tax and legal, and
financial advisory services, released a study indicating that
the country's nine biggest general insurers have sharply
increased annual after-tax profits to an aggregate of AUD2.5
million. Insurers have been reinforcing their provisioning for
future asbestos-related claims.
KPMG's insurance partner Andries Terblanche says they have taken
this opportunity to reevaluate how asbestos is now regarded in
this country.
"Australia has learned a lot of lessons on the behavior of
asbestos and how it matures. It is now in a better position to
project the sort of future run-off on asbestos than what it was
prior to the James Hardie analysis."
KPMG says the total cost of Australian asbestos liabilities
could exceed AUD8 billion.
ASBESTOS LITIGATION: Hardie Faces Impending Shareholder Revolt
--------------------------------------------------------------
The likelihood of a shareholder revolt at the James Hardie
Annual General Meeting increases as a leading corporate
governance adviser is recommending that institutional investors
not accept the company's annual accounts.
Corporate Governance International has advised its clients to
abstain from voting or outright reject the accounts because they
do not allow for potentially billions of dollars in asbestos
disease liabilities. It further warns that while Hardie's
directors have produced "outstanding" operating results, their
handling of the company's asbestos liabilities may work out to
be "destructive of shareholder value."
CGI says the company's severing of its asbestos liabilities has
substantially damaged the company's goodwill and may work out to
be substantially more destructive of shareholder value than if
the restructure had not been implemented.
The advice is contained in a confidential report to clients,
which include major superannuation groups and fund managers.
Hardie's actuaries have identified a shortfall in the trust of
AUD1.5 billion, and the company has made a conditional offer to
put up an unspecified amount of further funds. Its accounts for
the March financial year do not include a figure for contingent
liability for asbestos claims.
CGI's advice adds, "those issues combine to raise the question
whether the financial position reflected in the FY2004 accounts
is 'reliable'".
Rob Prugue, chief executive of Lazard Asset Management
Australia, which owns 5.3% of James Hardie, said his group was
consulting carefully with the investors whose funds it held
about the vote.
ASBESTOS LITIGATION: Cuddy Recognized as UK Demolition Expert
-------------------------------------------------------------
The Cuddy group is building on its position as the biggest
demolition and asbestos removal contractor in the UK with
another high-profile contract to demolish the Sketty Flats in
Swansea.
The Cuddy Group was recently named the 12th biggest demolition
contractor in the world, by trade publication, Demolition and
Recycling International. Brothers Mike and John Cuddy started
the business in 1985 and today it employs more than 250 people
from its base at Llandarcy in Neath Port Talbot.
The company has four divisions but demolition and asbestos
removal has become the core of the business. A number of
significant decommissioning contracts in Wales have given Cuddy
strong experience to build on, as it tenders for new work across
the UK and abroad.
The demolition industry has seen increasing regulation in recent
years and the group has responded to this environment by
investing heavily in staff training. The company has also
invested in new equipment and facilities to keep it ahead of the
latest regulatory changes.
Mike Cuddy boasts of purchasing an asbestos transfer station
about two years ago, a device that allows them to take waste 24
hours a day. They remain to be the only company that operates
that equipment in West Wales.
While the company is able to deal with hazardous waste, the vast
majority of demolition waste, such as steel and rubble, is
recycled.
John Cuddy said that one of the group's internal audits computed
that only 0.4% of the demolition waste the company produced by
weight went to landfill.
"If you do the work on site and discipline your men and work to
recycle and invest in plant and equipment you can hit the
targets for 2015 now. They are looking for 80 to 85% recycled in
10 years and we are way ahead," said John Cuddy.
"Clients are waking up to the fact that they have a
responsibility under the contract - it is not just a case of
driving the price down, they must allow the contract a
sufficient margin to properly undertake the work."
ASBESTOS LITIGATION: Asbestos Protest Campaign at the AFL Finals
----------------------------------------------------------------
MCG builders will take a campaign to force James Hardie to
compensate asbestos victims to the Australian Football League
finals.
The workers will be putting up a 10-meter banner in the
construction site near the scoreboard exclaiming, "Asbestos
kills.make James Hardie pay!" The AFL has previously refused to
publish the same advertisement at the AFL's match day magazine
due to its political content.
The campaign comes after James Hardie admitted the AUD293
million it had set aside to compensate victims of asbestos-
related diseases was AUD1.2 billion short.
Unions and asbestos disease support groups launched the campaign
in Victoria on the steps of Parliament House.
Victoria's Attorney-General Rob Hulls said: "It's a damned
disgrace that a company like James Hardie has shown such callous
disregard for loyal workers, for innocent workers and their
tragic plight."
Victorian Trades Hall Council secretary Leigh Hubbard said
10,000 Victorians were expected to die from asbestos-related
diseases by 2020.
At the launch 500 yellow flowers -- one for every person
expected to get an asbestos-related disease this year -- were
strewn on Parliament's steps.
ASBESTOS LITIGATION: Aviation Asbestos Blamed for Worker's Death
----------------------------------------------------------------
Frederick Nesbitt, aged 74, died from malignant mesothelioma,
after being exposed to asbestos in the aviation industry for
most of his life.
He worked in the aviation industry for more than 40 years,
including ML Aviation in White Waltham near Maidenhead, from
1968 until 1979. He was also a training officer at British
Aerospace in Bracknell, before working as a lab technician at
Bracknell and Wokingham College for the five years until he
retired.
He was diagnosed in January 2002 and after a two-year battle
with cancer, died last May 26 at the Sue Ryder Cancer Care Home.
Mr. Nesbitt had been a patient at the Tudor House Surgery in
Wokingham for 12 years. Dr. Charles Gallagher confirmed in a
letter to the coroner that he had developed a chest infection in
2001 and X-rays the following year showed an abnormality in Mr.
Nesbitt's right lung. He was then referred to Dr. Chris Davies
at the Battle Hospital in Reading where a biopsy revealed the
extent of the cancer and further tests showed evidence of
asbestos exposure.
East Berkshire coroner Peter Bedford concluded: "Ninety-nine per
cent of people who die from malignant mesothelioma are known to
have been exposed to asbestos. I am happily satisfied with the
balance of probabilities that Mr. Nesbitt did die of this
industrial disease."
ASBESTOS LITIGATION: Top Union Official Down with Asbestosis
------------------------------------------------------------
After being diagnosed with asbestosis, Rick Williams, the head
of Puget Sound Naval Shipyard's largest labor union will be out
of work for two months.
Mr. Williams, the president of the Bremerton Metal Trades
Council, is suffering from asbestosis, an incurable breathing
disorder caused by years of inhaling asbestos fibers.
A 26-year shipyard employee, he underwent exploratory surgery on
his lungs, where two spots were discovered. He began working at
the shipyard in 1978, removing asbestos primarily from ships. At
that time, the only breathing protection available to workers
was paper masks.
For the past couple of months, Williams has been exhibiting the
terrible signs of asbestosis, difficulty with breathing and
weight loss. He also said he has significant scarring on his
lung tissue, which hinders normal contraction and expansion of
the lungs.
"One day, you're able to breathe real good and do everything you
want to do; and now, you're confined to sitting and walking and
not much else," stated Mr. Williams.
Williams' exposure came over about a 15-year period when the
Navy began removing the product from its ships, where it was
used to insulate piping and other areas.
He said hearing loss and asbestos-related illnesses are the top
two claims his labor organization handles.
Bill Buettgenbach, vice president of the Bremerton Metal Trades
Council, will serve as acting president during Williams' hiatus.
The labor organization represents thousands of mostly blue-
collar workers at PSNS.
ASBESTOS LITIGATION: 9/11 Illnesses May Not Appear for Decades
--------------------------------------------------------------
Experts told Congress that the six health screening programs
established to monitor those who labored or lived near ground
zero would not be able to detect serious, long-term illnesses.
None of the programs are funded beyond 2009, a timeframe that
would exclude cancers as a result of exposure.
The two most common conditions found so far are lung damage and
post-traumatic stress disorder. It could take decades to detect
all the health problems resulting from the September 11, 2001,
terrorist attack and subsequent cleanup around New York's World
Trade Center.
"In this witches' brew of airborne materials found at and near
ground zero were a number of carcinogens, including asbestos and
the ... cancer-causing chemicals in tobacco smoke," said Dr.
Stephen Levin, the head of Mt. Sinai Medical Center 9/11 health
screening program.
Rep. Christopher Shays, R-Connecticut, chairman of the House
Government Reform Committee's national security panel, compared
the health problems to soldiers who smoked heavily during
wartime, but didn't show signs of lung cancer until decades
later.
While Rep. Jerrold Nadler accused federal agencies of not doing
enough testing and cleaning up, the Department of Health and
Human Services doesn't even have a basic estimate of the number
of victims. Rep. Carolyn Maloney says, "How many people are
still suffering or still sick?"
"I'm not sure anyone could give you an exact figure," answered
Dr. John Howard, director of the National Institute for
Occupational Safety and Health.
New estimates expected later this week could provide a better
sense of the scope of September 11-related health problems.
ASBESTOS ALERT: EPA Probes Asbestos-Removal of Container Co.
------------------------------------------------------------
On June 24, 2004 upon the initiation of the U.S. Environmental
Protection Agency, the Consolidated Container Co. received a
document production subpoena regarding its removal of asbestos-
containing materials.
Consequently, Louisville-Jefferson County Air Pollution Control
District requested the packaging and container manufacturer
company for information on the same incident.
Some employees were conducting a partial renovation sometime
2003 at the company's property in Louisville, Kentucky. They
removed around 300 lineal feet of thermal piping insulation.
However, these employees had already been identified and
informed of the potential for exposure to asbestos. No such
exposure has been confirmed and no claims alleged.
In March 2004, independent environmental consultants conducted
voluntary air monitoring and reported that airborne fiber
concentrations were less than 0.002 fibers/cc and that,
according to the consultant, there is no exposure to airborne
fibers.
The company says that they are absorbed in investigating this
matter and in preparing the response to the subpoena. Certainly,
they cannot state that they can predict the outcome of this
investigation or that of the case proceedings. However, they do
not expect that this matter will have a substantial effect on
their operations or financial condition.
COMPANY PROFILE
Consolidated Container Co.
3101 Towercreek Parkway, Ste. 300
Atlanta, GA 30339
Phone: (678) 742-4600
http://www.www.cccllc.com
Employees : 4,130
Annual Sales :$ 746,500,000.00
Net Income :$ 318,200,000.00
(As of December 31, 2002)
Description:
The company is one of the largest manufacturers of rigid plastic
containers in the US. It markets its products to the consumer,
agricultural, and industrial chemical industries. It makes
containers for a variety of products, including water, milk,
ketchup, salsa, soap, motor oil, antifreeze, insect repellent,
fertilizers, and medical supplies.
ASBESTOS ALERT: Nottingham Dyers Fined Due To Asbestos Exposure
---------------------------------------------------------------
District Judge Mervyn Harris imposed a fine of GBD2,000 and
costs worth GBD1,136 to Nottingham Dyers Ltd. for inadvertently
exposing their staff to asbestos for almost two weeks.
Eleven people, who were in the immediate vicinity, were exposed
to the dangerous material after debris from a demolished
partition wall was uncovered at the Basford textile factory.
Company chiefs initially dismissed the idea when an employee
asked whether the debris could possibly contain asbestos. A week
later, experts were called in to determine if asbestos was
present and the samples turned up positive.
Health and Safety inspector Lorna Robertson said, "There was no
adequate assessment of risk to check whether the wall contained
electricity cables, piping or asbestos."
Director John Watson had contacted the Health and Safety
Executive. The area was closed while contractors removed the
asbestos. The firm admitted not carrying out an adequate risk
assessment of the work, and failing to give employees adequate
information and advice on dealing with asbestos.
Judge Harris said, "This isn't a case where the company has put
profit before people. Everything that could be done to put the
problem right has been done."
After the case Mr. Watson said the company regretted the
incident. "We've put an asbestos management plan in place, as we
are required to by law. This will ensure no further inadvertent
exposures can occur."
Jackie Terry, 55, of Bulwell, who has worked at the factory for
seven years, said "I was frightened when I found out. But it was
just an accident, a genuine mistake and the company has dealt
with it very well."
Company Profile:
Nottingham Dyers Limited
Barlock Road, Basford, Nottingham NG6 0FG
Tel: (0115) 978 2262
Fax: (0115) 942 3719
New Securities Fraud Cases
BAXTER INTERNATIONAL: Bernstein Liebhard Lodges Stock Suit in IL
----------------------------------------------------------------
The law firm of Bernstein Liebhard & Lifshitz, LLP initiated a
securities class action lawsuit in the United States District
Court for the Northern District of Illinois on behalf of all
persons who purchased or acquired securities of Baxter
International, Inc. (NYSE: BAX) ("Baxter" or the "Company")
between April 19, 2001 through July 21, 2004, inclusive (the
"Class Period"), seeking to pursue remedies under the Securities
Exchange Act of 1934 (the "Exchange Act").
The complaint charges Baxter, Robert Parkinson, Jr., Harry M.
Jansen Kraemer, Jr., Brian Anderson, and John Greisch with
violations of the Securities Exchange Act of 1934. More
specifically, the complaint alleges that during the Class Period
defendants issued false and misleading statements concerning its
business and financial condition. Specifically, defendants
failed to disclose and misrepresented the following material
adverse facts, which were known to defendants or recklessly
disregarded by them:
(1) that the Company's financial results during the Class
Period were materially overstated;
(2) that the overstatement occurred because the Company
improperly and "incorrectly" recognized $40 million in
revenues and maintained inadequate and "incorrect"
provisions for bad debts relating to its Brazilian
operations;
(3) that as a result of this, the Company's financial
results were in violation of Generally Accepted
Accounting Principles ("GAAP");
(4) that the Company lacked adequate internal controls; and
(5) that as a result of the above, the Company's financial
results, including its net income figures, were
materially and artificially inflated at all relevant
times.
On July 22, 2004, Baxter announced that it planned to restate
its financial results for the years 2001 through 2003, and for
the first quarter of 2004. The restatement was primarily the
result of incorrect revenue recognition and inadequate
provisions for bad debts in Brazil during that period, which
would result in a decrease in net income over the restatement
period by an amount expected to be no more than $40 million, or
$0.07 per diluted share. The restatement was expected to result
in adjustments to sales over the period of an amount not more
than $70 million, representing less than 0.5 percent of sales in
any year. News of this shocked the market. Shares of Baxter fell
$1.48 per share, or 4.59 percent, to close at $30.79 per share
on unusually heavy trading volume.
For more details, contact Shareholder Relations Department -
Bernstein Liebhard & Lifshitz, LLP by Mail: 10 East 40th Street,
New York, NY 10016 by Phone: (800) 217-1522 or (212) 779-1414 or
by E-mail: BAX@bernlieb.com
BAXTER INTERNATIONAL: Much Shelist Lodges Securities Suit in IL
---------------------------------------------------------------
The law firm of Much Shelist Freed Denenberg Ament & Rubenstein,
P.C. initiated a lawsuit against Baxter International, Inc,
("Baxter" or the "Company") (NYSE:BAX) and certain of its
officers and directors, in the United States District Court for
the Northern District of Illinois. The shareholder lawsuit is on
behalf of all persons and entities who purchased the securities
of Baxter International, Inc. between April 19, 2001 and July
21, 2004, inclusive ("Class Period").
The Complaint alleges that Baxter, along with certain of its
officers and directors, violated the federal securities laws by
issuing a series of materially false and misleading statements
to the market. These misstatements have had the effect of
artificially inflating the market price of Baxter's securities.
Specifically, the complaint alleges that defendants failed to
disclose and misrepresented the following material adverse facts
which were known to defendants or recklessly disregarded by
them:
(1) that the Company's financial results during the Class
Period were materially overstated;
(2) that the overstatement occurred because the Company
improperly recognized $40 million in revenues and
maintained inadequate provisions for bad debts relating
to its Brazilian operations;
(3) that as a result of this, the Company's financial
results were in violation of Generally Accepted
Accounting Principles ("GAAP");
(4) that the Company lacked adequate internal controls; and
(5) that as a result of the above, the Company's financial
results, including its net income figures, were
materially and artificially inflated at all relevant
times.
On July 22, 2004, Baxter announced that it planned to restate
its financial results for the years 2001 through 2003, and for
the first quarter of 2004. The restatement was primarily the
result of incorrect revenue recognition and inadequate
provisions for bad debts in Brazil during that period, which
would result in a decrease in net income over the restatement
period by an amount expected to be no more than $40 million, or
$0.07 per diluted share. News of this shocked the market. Shares
of Baxter fell $1.48 per share, or 4.59 percent, to close at
$30.79 per share on unusually heavy trading volume.
For more details, contact Carol V. Gilden or Conor R. Crowley of
Much Shelist Freed Denenberg Ament & Rubenstein, P.C., by Phone:
1-800-470-6824 or by E-mail: investorhelp@muchshelist.com
BELO CORPORATION: Federman & Sherwood Lodges TX Securities Suit
---------------------------------------------------------------
The law firm of Federman & Sherwood initiated a class action
lawsuit in the United States District Court for the Northern
District of Texas against Belo Corporation (NYSE: BLC).
The complaint alleges violations of federal securities laws,
Sections 10(b) and 20(a) of the Securities Exchange Act of 1934
and Rule 10b-5, including allegations of issuing a series of
material misrepresentations to the market which had the effect
of artificially inflating the market price. The complaint
further alleges that during the Class Period, Belo intentionally
overstated the circulation of its flagship newspaper, The Dallas
Morning News, in order to obtain higher payments from the
newspapers' advertisers. The class period is from May 12, 2003
through August 6, 2004.
For more details, contact William B. Federman of FEDERMAN &
SHERWOOD by Mail: 120 N. Robinson, Suite 2720, Oklahoma City, OK
73102 by Phone: (405) 235-1560 by Fax: (405) 239-2112 by E-mail:
wfederman@aol.com or visit their Web site:
http://www.federmanlaw.com
CNL HOTELS: Schiffrin & Barroway Lodges FL Securities Fraud Suit
----------------------------------------------------------------
The law firm of Schiffrin & Barroway, LLP initiated a class
action lawsuit in the United States District Court for the
Middle District of Florida on behalf of a class of all person
who were entitled to vote on the proxy statement filed with the
SEC by CNL Hospitality Properties, Inc. ("CNL" or the "Company")
dated May 7, 2004, who suffered harm as a result of the actions
complained of herein and a class of all persons who purchased or
otherwise acquired CNL securities pursuant to the CNL's
Prospectuses and Registration Statements, between August 16,
2001 and August 16, 2004, inclusive (the "Class Period").
The complaint charges CNL and its officers and directors with
violations of Sections 11, 12(a) and 15 of the Securities Act of
1933 and Sections 14(a) and 20(a) of the Securities Exchange Act
of 1934. The complaint alleges that CNL was organized pursuant
to the laws of the State of Maryland on June 12, 1996. The
Company was formed primarily to acquire properties (the
"Properties") located across the United States to be leased for
generally five to 20 years, plus renewal options generally for
up to an additional 20 years on a "triple-net" basis, which
means that the tenants generally are responsible for repairs,
maintenance, property taxes, utilities and insurance. Third
party tenants are operators of selected national and regional
limited service, extended stay and full service hotel chains
(the "Hotel Chains"). In 2001, the Company began operating
Properties using independent third party managers, as permitted
by the REIT Modernization Act of 1999. It was expected that the
Company would move from triple-net lease activities to owning
and operating Properties using third parties to manage the
Properties' day-to-day operations. In a Form S-3 filed with the
SEC on April 30, 2004, CNL announced that it was going to engage
in a firm commitment underwritten offering of additional common
shares and preferred shares (the "Underwritten Offering") and to
list those common shares and preferred share together with the
existing outstanding common shares, on the New York Stock
Exchange ("NYSE") ("Listing"). In connection with the possible
Listing and Underwritten Offering, CNL sought shareholder
approval, via a Proxy filed with the SEC on May 7, 2004, to
become a self-advised REIT through the merge of CNL Hospitality
Corp. (the "Advisor") into a wholly owned subsidiary of CNL
("Merger").
The complaint further alleges that the Company failed to
disclose and misrepresented the following material adverse
facts, which were known to defendants or recklessly disregarded
by them:
(1) that the Company's reported earnings and cash were
materially inflated and in violation of Generally
Accepted Accounting Principles;
(2) that as a result of this, the Company's offering price
of $10 per share, was materially inflated and
unsupportable by the Company's financial results;
(3) that since 2001, cash from CNL's operations had
represented a decreasing percentage of the funds used
to pay dividends to its shareholders; and
(4) that as result of this, the Company's Underwritten
Offering was overpriced and unsupportable by CNL's
projections.
On July 30, 2004, GreenStreet Advisors, Inc. ("GreenStreet")
issued a report that stated: "It is no wonder that these
entities [such as CNL] seek out retail investors, as most
institutional investors would more thoroughly scrutinize the
value of the shares." Shortly after the GreenStreet report, CNL,
on August 3, 2004, cancelled the Underwritten Offering. This
decision also postponed the Merger for which it had received
shareholder approval on July 30, 2004, and the Listing.
For more details, contact Marc A. Topaz, Esq. or Darren J.
Check, Esq. of Schiffrin & Barroway, LLP by Phone:
1-888-299-7706 or 1-610-667-7706 by E-mail: info@sbclasslaw.com
FERRO CORPORATION: Marc Henzel Lodges Securities Suit in N.D. OH
----------------------------------------------------------------
The Law Offices of Marc S. Henzel initiated a securities class
action in the United States District Court for the District of
Northern District of Ohio on behalf of purchasers of Ferro
Corporation (NYSE: FOE) securities during the period between
October 28, 2003 and July 22, 2004.
The complaint charges Ferro and certain of its officers and
directors with violations of the Securities Exchange Act of
1934. Ferro is a major international producer of performance
materials sold to a broad range of manufacturers serving diverse
markets throughout the world.
According to the complaint, on July 22, 2004, defendants
revealed that the Company was slashing earnings expectations for
the second quarter of fiscal 2004 by more than 70% based upon an
internal review, purportedly conducted in conjunction with
Ferro's closing its books for the quarter, which unearthed a
multi-million dollar overstatement of earnings resulting from
certain unspecified accounting manipulations. Upon this news,
the price of Ferro shares fell by more than 16% to close at
$20.68 per share.
The complaint alleges that defendants knew but concealed from
the investing public, that:
(1) Ferro's polymer additives business was not profitable
and was incurring greater losses than had been
reported;
(2) that Ferro's efforts to raise the prices of its polymer
additives to products to offset increasing "raw
materials" costs had been ineffective, further eroding
the Company's revenues and profits;
(3) that the Company's purportedly improving cost controls,
especially regarding the Company's polymer additives
business, was, in fact, the product of accounting
manipulations that deferred and/or materially
understated the true operating costs of the business
from Ferro's public investors the increasing losses the
Company was actually incurring from its polymer
additive business; and
(4) that the Company's disclosure controls and procedures
were wholly ineffective contrary to defendants Ortino's
and Gannon's representations to investors.
For more details, contact Marc S. Henzel, Mail: 273 Montgomery
Ave., Suite 202, Bala Cynwyd, PA 19004 by Phone: 610-660-8000 or
888-643-6735 by Fax: 610-660-8080 or by E-Mail:
mhenzel182@aol.com.
FIRST VIRTUAL: Milberg Weiss Lodges Securities Fraud Suit in CA
---------------------------------------------------------------
The law firm of Milberg Weiss Bershad & Schulman LLP initiated a
class action lawsuit on behalf of purchasers of the securities
of First Virtual Communications, Inc. ("First Virtual" or the
"Company") (PNK:FVCC) between March 29, 2004 and August 23,
2004, inclusive (the "Class Period"), seeking to pursue remedies
under the Securities Exchange Act of 1934 (the "Exchange Act").
The action, Case No. 04-CV-3585, is pending before the Honorable
Fern M. Smith, in the United States District Court for the
Northern District of California, against defendants First
Virtual, Jonathan Morgan (President and CEO), and Truman Cole
(CFO and VP). According to the complaint, defendants violated
sections 10(b) and 20(a) of the Exchange Act, and Rule 10b-5, by
issuing a series of material misrepresentations to the market
during the Class Period.
The complaint alleges that defendants engaged in a "pump and
dump" scheme that enabled Company insiders to profit at the
expense of class members by selling over a million shares of
their personally held First Virtual securities at artificially
inflated prices. Specifically, defendants issued materially
false and misleading statements about the Company's financial
condition and sales of its real-time rich media communications
software and services and specialized networking hardware
equipment worldwide, and a contract to provide the United States
Air Force with the Company's proprietary Click to MeetTM web
communications infrastructure and solutions. In reaction to
these statements, the price of First Virtual stock skyrocketed
161% between February 5, 2004 and April 6, 2004, allowing
certain Company insiders to sell over 1.98 million shares of
their personally held First Virtual stock for proceeds of more
than $8.5 million.
On April 30, 2004, the truth about the Company's financial
condition began to emerge. On that day, defendants announced
that the Company's audit committee had commenced an
investigation into certain irregular sales transactions, and
that until the review was completed, the Company would not be
able to release its first-quarter earnings or file its Form 10-Q
with the SEC. In reaction to this news, the price of First
Virtual stock fell 37% from its previous day's closing price. As
a result of its failure to comply with the SEC's filing
requirements, First Virtual's securities were subject to
delistment from the Nasdaq SmallCap market. On August 5, 2004,
defendants announced that the Company had received a letter from
Nasdaq, which granted the Company a conditional temporary
extension to file its first quarter 2004 report. On August 17,
2004, defendants disclosed that
(1) the Company could not meet the conditions of its
temporary filing extension;
(2) the Company had incurred $2.1 million in expenses
directly related to the investigation;
(3) the Company was in danger of defaulting on a $3.0
million credit facility agreement; and
(4) based on the Company's profit and loss projections for
the remainder of 2004, its stockholder equity would
fall below Nasdaq's listing requirements.
On August 24, 2004, before the market opened, defendants
disclosed that the Company's request for an extension to comply
with Nasdaq's listing and filing requirements had been denied,
and that the Company's securities would be delisted from the
Nasdaq SmallCap at the commencement of trading on August 25,
2004. In reaction to that news, the price of First Virtual stock
fell 47 percent from its previous trading day's closing price,
to close at $0.37 per share.
For more details, contact Steven G. Schulman, Peter E. Seidman
or Andrei V. Rado by Mail: One Pennsylvania Plaza, 49th fl., New
York, NY 10119-0165 by Phone: (800) 320-5081 by E-mail:
sfeerick@milbergweiss.com or visit their Web site:
http://www.milbergweiss.com
FLIGHT SAFETY: Marc Henzel Lodges Securities Fraud Lawsuit in CT
----------------------------------------------------------------
The Law Offices of Marc S. Henzel initiated a securities class
action in the United States District Court for the District of
Connecticut on behalf of purchasers of Flight Safety
Technologies, Inc. (AMEX: FLT) publicly traded securities during
the period between January 14, 2003 and July 16, 2004, inclusive
against defendants Flight Safety and certain of its officers and
directors.
The complaint charges that Flight Safety and certain of its
officers and directors violated Sections 10(b) and 20(a) of the
Securities and Exchange Act of 1934, and state common laws by
making a series of materially false and misleading statements
concerning the SOCRATES Wake Vortex Detector.
For more details, contact Marc S. Henzel, Mail: 273 Montgomery
Ave., Suite 202, Bala Cynwyd, PA 19004 by Phone: 610-660-8000 or
888-643-6735 by Fax: 610-660-8080 or by E-Mail:
mhenzel182@aol.com
IMPAC MEDICAL: Lerach Coughlin Files Securities Fraud Suit in CA
----------------------------------------------------------------
The law firm of Lerach Coughlin Stoia Geller Rudman & Robbins
LLP initiated a class action on behalf of an institutional
investor, in the United States District Court for the Northern
District of California on behalf of purchasers of IMPAC Medical
Systems, Inc. ("IMPAC") (NASDAQ:IMPCE) publicly traded
securities during the period between November 20, 2002 and May
13, 2004 (the "Class Period").
The complaint charges IMPAC and certain of its officers and
directors with violations of the Securities Exchange Act of
1934. IMPAC provides information technology systems for cancer
care.
The complaint alleges that during the Class Period, defendants
caused IMPAC's shares to trade at artificially inflated levels
through the issuance of false and misleading statements about
demand for and order bookings and false financial statements. As
a result of this inflation, IMPAC was able to complete two
public offerings of 4.5 million shares, raising total proceeds
of $77.9 million. On March 1, 2004, the Company announced that
it intended to restate its financial statements for fiscal years
2003-2003. Then, on May 13, 2004, IMPAC announced disappointing
second quarter of fiscal year 2004 results, and reduced its
outlook for fiscal 2004. On this news, IMPAC's stock collapsed
to $14.62 per share, compared to the prior day's close of
$24.85. Later, on June 4, 2004, the Company filed an 8-K with
the SEC which stated that the Company had dismissed
PricewaterhouseCoopers LLP as the Company's registered public
accounting firm and, on August 17, 2004, IMPAC announced the
resignation of the Company's independent auditor, Deloitte &
Touche LLP "due to a disagreement with management concerning its
application of Statement of Position (SOP) 97-2, "Software
Revenue Recognition," with respect to the timing of its
recognition of certain revenues in its restated financial
statements for the fiscal years ended September 30, 2001 through
2003 filed in April 2004." The Company's stock has dropped even
farther to the $12 per share range.
For more details, contact William Lerach or Darren Robbins of
Lerach Coughlin by Phone: 800/449-4900 by E-mail:
wsl@lerachlaw.com or visit their Web site:
http://www.lerachlaw.com/cases/impac/
INTEGRATED ELECTRICAL: Federman & Sherwood Lodges TX Stock Suit
---------------------------------------------------------------
The law firm of Federman & Sherwood initiated a class action
lawsuit in the United States District Court for the Southern
District of Texas against Integrated Electrical Services, Inc.
(NYSE: IES).
The complaint alleges violations of federal securities laws,
Sections 10(b) and 20(a) of the Securities Exchange Act of 1934
and Rule 10b-5, including allegations of issuing a series of
material misrepresentations to the market which had the effect
of artificially inflating the market price. The complaint
further alleges that the Company failed to appropriately adjust
for actual costs in a series of large contracts, inappropriately
accounting for general and administrative costs. The class
period is from November 10, 2003 through August 13, 2004,
inclusive.
For more details, contact William B. Federman of FEDERMAN &
SHERWOOD by Mail: 120 N. Robinson, Suite 2720, Oklahoma City, OK
73102 by Phone: (405) 235-1560 by Fax: (405) 239-2112 by E-mail:
wfederman@aol.com or visit their Web site:
http://www.federmanlaw.com
INTRABIOTICS PHARMACEUTICALS: Marc Henzel Files Stock Suit in CA
----------------------------------------------------------------
The Law Offices of Marc S. Henzel initiated a securities class
action in the United States District Court for the Northern
District of California on behalf of all persons who purchased
the publicly traded securities of IntraBiotics Pharmaceuticals,
Inc. (Nasdaq: IBPI) between September 5, 2003 and June 22, 2004
inclusive.
Also included are all those who acquired IntraBiotics' shares in
its offerings on October 10, 2003 and May 5, 2004. Present and
former employees who purchased stock through IntraBiotics'
Retirement Savings Plans are also included.
The Complaint alleges that IntraBiotics, a biopharmaceutical
company, and certain of its officers and directors issued
materially false statements concerning the Company's drug
iseganan. Specifically, defendants failed to disclose:
(1) that iseganan was not safe and well-tolerated at
therapeutically relevant doses when administered to the
oral cavity;
(2) that the drug caused a higher rate of ventilator -
associated pneumonia ("VAP") and mortality as compared
to placebo;
(3) that despite knowing and/or recklessly disregarding the
aforementioned facts, the defendants nevertheless
raised capital through offerings of its common stock in
order to portray to the market that iseganan was a
viable marketable product that was on the "fast track"
to FDA approval; and
(4) that as a result of the above, the defendants
statements concerning iseganan were lacking in any
reasonable basis.
On June 23, 2004, the Company announced that an independent data
monitoring committee recommended to IntraBiotics that it
discontinue its pivotal trial of iseganan for the prevention of
VAP based on an interim analysis of the data. On this news,
IntraBiotics fell $9.45 per share or 69%, to close at $4.23 per
share.
For more details, contact Marc S. Henzel, Mail: 273 Montgomery
Ave., Suite 202, Bala Cynwyd, PA 19004 by Phone: 610-660-8000 or
888-643-6735 by Fax: 610-660-8080 or by E-Mail:
mhenzel182@aol.com.
INVISION TECHNOLOGIES: Marc Henzel Lodges Securities Suit in NY
---------------------------------------------------------------
The Law Offices of Marc S. Henzel initiated a securities class
action in the United States District Court for the Southern
District of New York on behalf of all purchaser s of the common
stock of InVision Technologies Inc. (Nasdaq: INVN) from March
15, 2004 through July 30, 2004 inclusive.
The complaint charges InVision, Giovanni Lanzara, Sergio
Magistri, and Ross Mulholland with violations of the Securities
Exchange Act of 1934. More specifically, the Complaint alleges
that the Company failed to disclose and misrepresented the
following material adverse facts which were known to defendants
or recklessly disregarded by them:
(1) that the Company's foreign distributors were engaging
in questionable and potentially illegal activities;
(2) that its foreign distributors made improper payments in
connection with foreign sales activities, which were in
violation of the Foreign Corrupt Practices Act;
(3) that InVision improperly accounted for the funds used
in these payments; and
(4) that as a result, InVision's improper accounting for
such payments allowed InVision to enter into a
definitive merger agreement with General Electric
Company.
On July 30, 2004, InVision announced that it had met with the
Department of Justice and the SEC concerning its voluntary
disclosure of an internal investigation of certain possible
offers of improper payments by distributors in connection with
foreign sales activities. The news shocked the market. Shares of
InVision fell $6.39 or 12.87 percent per share, on August 2,
2004, to close at $6.39 per share.
For more details, contact Marc S. Henzel, Mail: 273 Montgomery
Ave., Suite 202, Bala Cynwyd, PA 19004 by Phone: 610-660-8000 or
888-643-6735 by Fax: 610-660-8080 or by E-Mail:
mhenzel182@aol.com.
KONGZHONG CORPORATION: Schiffrin & Barroway Lodges Lawsuit in CA
----------------------------------------------------------------
The law firm of Schiffrin & Barroway, LLP initiated a class
action lawsuit in the United States District Court for the
Southern District of New York on behalf of all securities
purchasers of the KongZhong Corporation (Nasdaq: KONG)
("KongZhong" or the "Company") from July 9, 2004 through August
17, 2004, inclusive (the "Class Period").
The complaint charges KongZhong, Yunfan Zhou, Nick Yang, and
Richard Wei with violations of Sections 11, 12(a) and 15 of the
Securities Act of 1933. More specifically, the Complaint alleges
that the Company failed to disclose and misrepresented the
following material adverse facts, which were known to defendants
or recklessly disregarded by them:
(1) that one of KongZhong's interactive voice response
("IVR") services in early June 2004 contained
inappropriate content, which was in violation of the
Company's various agreements with China Mobile;
(2) that this violation of the Company's agreement with
China Mobile caused the Company to incur sanctions and
penalties; and
(3) that, as a result of the foregoing, the Company's
relationship with China Mobile was negatively impacted
because China Mobile suspended the approval of the
Company's applications.
On August 18, 2004, KongZhong issued a press release announcing
that it had been notified by China Mobile of a sanction imposed
on the Company. News of this shocked the market. KongZhong's
ADRs fell $1.061 per share, or 16.6 percent, to close at $5.329
per share on August 18, 2004.
For more details, contact Marc A. Topaz, Esq. or Darren J.
Check, Esq. of Schiffrin & Barroway, LLP by Phone:
1-888-299-7706 or 1-610-667-7706 by E-mail: info@sbclasslaw.com
KHONGZONG CORPORATION: Marc Henzel Lodges Securities Suit in NY
---------------------------------------------------------------
The Law Offices of Marc S. Henzel initiated a securities class
action in the United States District Court for the Southern
District of New York on behalf of purchasers of KongZhong
Corporation (NASDAQ: KONG) American Depositary Shares ("ADSs")
during the period between July 9, 2004 and August 17, 2004.
The complaint charges KongZhong and certain of its officers and
directors with violations of Sections 11, 12 and 15 of the
Securities Act of 1933. KongZhong describes itself as "the
leading provider of advanced second generation, or 2.5G,
wireless interactive entertainment, media and community
services, in terms of revenue, to customers of China Mobile
Communications Corporation, or China Mobile, which has the
largest mobile subscriber base in the world."
The complaint alleges that the prospectus (the "Prospectus")
filed with the SEC in connection with the initial public
offering of KongZhong common stock, which took place on or about
July 9, 2004 (the "IPO"), was materially false and misleading.
The Prospectus, which forms part of the Registration Statement,
became effective on or about July 9, 2004, and 10,000,000 of
KongZhong's ADSs (with each ADS representing 40 ordinary shares)
were sold to the public, thereby raising approximately $100
million. Of the $100 million raised, approximately $ 20 million
went to certain selling shareholders.
Specifically, the complaint alleges that the Prospectus was
materially false and misleading because they failed to disclose
and misrepresented the following adverse facts, among others:
(1) that in early June 2004 the Company had carried
inappropriate content on its interactive voice response
(IVR) service, which was in violation of the Company's
agreement with China Mobile;
(2) that in response to the Company's violation of its
agreements with China Mobile, the Company would be
subject to sanctions that could materially impact or
alter its business going forward; and
(3) as a result of the foregoing, the Company's
relationship with China Mobile would be negatively
impacted.
On August 9, 2004, KongZhong issued a press release announcing
its financial results for the second quarter of 2004, the period
ending June 30, 2004. The Company reported earnings of $0.19 per
ADS. Then, on August 18, 2004, KongZhong issued a press release
announcing that it had been notified by China Mobile of a
sanction imposed on the Company. In addition to suspending the
Company's new applications for new products, according to the
press release, China Mobile also suspended the approval of the
Company's applications, if any, to operate in new platforms
until June 30, 2005. In response to this announcement, the price
of KongZhong ADSs declined to $5.59 per ADS.
For more details, contact Marc S. Henzel, Mail: 273 Montgomery
Ave., Suite 202, Bala Cynwyd, PA 19004 by Phone: 610-660-8000 or
888-643-6735 by Fax: 610-660-8080 or by E-Mail:
mhenzel182@aol.com.
LATTICE SEMICONDUCTOR: Goodkind Labaton Files OR Securities Suit
----------------------------------------------------------------
The law firm of Goodkind Labaton Rudoff & Sucharow LLP initiated
a class action lawsuit in the United States District Court for
the Southern District of Oregon, on behalf of persons who
purchased or otherwise acquired publicly traded securities of
Lattice Semiconductor Corp. ("Lattice" or the "Company")
(Nasdaq:LSCC) between April 22, 2003 and April 19, 2004,
inclusive, (the "Class Period"). The lawsuit was filed against
Lattice and Cyrus Y. Tsui and Stephen A. Skaggs ("Defendants").
The complaint alleges that Defendants violated Sections 10(b)
and 20(a) of the Securities Act of 1934 and Rule 10b-5
promulgated thereunder. Specifically, the complaint alleges that
in knowing or reckless disregard of the truth and/or as part of
their ongoing efforts to continue the illusion of Lattice's
growth in the semiconductor industry, Defendants issued and or
participated in the issuance of materially false and misleading
statements and financial information. More specifically, the
complaint alleges that during the Class Period Defendants:
(1) materially understated its accounts payable balance;
(2) overstated earnings by a material amount;
(3) falsely represented that the Company's financial
results during the Class Period had complied with
Generally Accepted Accounting Principles ("GAAP").
Beginning on January 22, 2004, Lattice began to issue press
releases indicating that it had potentially overstated its
deferred income account. Shares began to tumble in reaction to
the news, falling from $12.36 on January 22, 2004 to close at
$11.73 the following day. Shares traded as low as $10 the
following week. Then on March 18, 2004, Lattice issued a press
release indicating that it anticipated restating its first,
second and third quarters of its 2003 financial statements as it
had likely overstated the Company's Deferred Income Account, an
account that represents the Company's judgment as to the
potential gross margin on inventory held by the Company's
distributors. On March 24, 2004, Lattice finally released its
financial results for the fourth quarter and year ended December
31, 2003. The restatement reduced 2003 revenue by approximately
7% over the nine-month period and increased the Company's net
loss by an additional $9 million. In its March 24, 2004 press
release the Company attributed the restatement to "inappropriate
accounting entries made, by an individual in the Company's
finance department and deficiencies in the design and operation
of internal accounting controls related to the deferred income
account." Shares of Lattice continued to sink, falling to $8.95
on April 19, 2004 when it finally amended its Form 10-Q,
representing a decline of approximately 27.5% since the
overstatement was first announced.
For more details, contact Christopher Keller, Esq. by Phone:
800-321-0476 or visit their Web site:
http://www.glrs.com/index.cfm/hurl/SectionID=96/getGlobalID=2374
4
LATTICE SEMICONDUCTOR: Schatz & Nobel Lodges NY Securities Suit
---------------------------------------------------------------
The law firm of Schatz & Nobel, P.C. initiated a lawsuit seeking
class action status has been filed in the United States District
Court for the Southern District of New York on behalf of all
persons who purchased the publicly traded securities of Lattice
Semiconductor Corp. (NasdaqNM: LSCC) ("Lattice Semiconductor")
between April 22, 2003 and April 19, 2004 (the "Class Period").
The Complaint alleges that Lattice Semiconductor issued
materially false and misleading financial information,
understating its accounts payable balance and overstating
earnings. On March 18, 2004, Lattice Semiconductor disclosed
that it anticipated restating its first, second and third
quarter 2003 financial statements as it had overstated its
Deferred Income Account. On March 24, 2004, Lattice
Semiconductor released financial results for the fourth quarter
and year end December 31, 2003, restating previously reported
2003 revenue by approximately 7% and increasing its net loss by
$9 million.
For more details, contact Wayne T. Boulton by Phone:
(800) 797-5499 by E-mail: sn06106@aol.com or visit their Web
site: http://www.snlaw.net
NETOPIA INC: Stull Stull Lodges Securities Fraud Suit in N.D. CA
----------------------------------------------------------------
The law firm Stull, Stull & Brody initiated a class action
lawsuit in the United States District Court for the Northern
District of California, on behalf of all persons who purchased
the publicly traded securities of Netopia, Inc. ("Netopia")
(NASDAQ:NTPAE) between November 6, 2003 and July 6, 2004,
inclusive (the "Class Period") against Netopia, Alan B. Lefkof
and William D. Baker.
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 knowingly or recklessly issuing a
series of material misrepresentations concerning Netopia's
earnings, product costs, and sales to its largest customer to
the market between November 6, 2003 and July 6, 2004, thereby
artificially inflating the price of Netopia stock. Moreover,
Defendants and employees of Netopia profited handsomely from
those misrepresentations, selling over $9 million of Netopia
stock during the Class Period. Netopia is a company that, among
other things, develops, markets and supports broadband and
wireless (Wi-Fi) products and services, as well as produces
server software products that enable remote support and
centralized management of installed broadband gateways.
For more details, contact Tzivia Brody, Esq. of Stull, Stull &
Brody by Mail: 6 East 45th Street, New York, NY 10017 by Phone:
1-800-337-4983 by Fax 212/490-2022 by E-mail: SSBNY@aol.com or
visit their Web site: http://www.ssbny.com
RED HAT: Scott + Scott Files Securities Fraud Lawsuit in E.D. NC
----------------------------------------------------------------
The law firm of Scott + Scott, LLC initiated a class action
lawsuit in the United States District Court for the Eastern
District of North Carolina against Red Hat, Inc. ("Red Hat" or
the "Company") (Nasdaq: RHAT), Matthew Szulik, Kevin B. Thompson
and Timothy J. Buckley, on behalf of common stock purchasers
during the period between June 19, 2001 and July 13, 2004 (the
"Class Period"), inclusive.
The Complaint alleges that during the Class Period defendants
issued a series of materially false and misleading statements to
the market in violation of the federal securities laws. More
specifically, on July 13, 2004, defendants revealed they were
restating financial results for fiscal years ended February
2004, 2003 and 2002 as well as its unaudited financial statement
for its fiscal first quarter ended May 31, 2004 as a result of
the change in the way they recognized revenue from subscription
contracts, noting that they would now be recognizing revenue
from subscriptions on a daily basis rather than on a monthly
basis. Additionally, Red Hat announced that the Securities and
Exchange Commission is conducting a review of one of its annual
reports. On this news, Red Hat's stock price fell from a closing
price of $20.35 per share on July 12, 2004 to an intra-day low
of $15.62 per share on July 13, 2004. During the class period,
the stock traded over $28 dollars.
For more details, contact Scott + Scott by Phone: 800/404-7770
or 860/537-3818 (EDT) or 800/332-2259 or 619/233-4565 (PDT) by
Fax: 619/233-0508 by E-mail: nrothstein@scott-scott.com or visit
their Web site: http://www.scott-scott.com
TECO ENERGY: Stull Stull Lodges Securities Fraud Suit in M.D. FL
----------------------------------------------------------------
The law firm of Stull, Stull & Brody initiated a class action
lawsuit in the United States District Court for the Middle
District of Florida, on behalf of all persons who purchased the
securities of TECO Energy, Inc. ("TECO") (NYSE:TE) between
October 30, 2001 and February 4, 2003, inclusive (the "Class
Period"), including anyone who purchased in the October 10, 2002
or June 5, 2002 equity offerings or the January 10, 2002, May 8,
2002 or January 10, 2002 debt offerings, against TECO, Robert D.
Fagan and Gordon L. Gillette.
The complaint alleges that, during the Class Period, TECO
concealed problems with several independent power plant
construction ventures for which it would ultimately be fully
responsible, including the exposure to the demise of Enron
Corporation and the vulnerability of the its large cash
dividend, causing TECO shares to trade at artificially inflated
levels. The individual defendants sold over $4.2 million of
their own stock and raised over $792 million selling equity
securities in the capital markets.
Through a series of events in late 2002 and early 2003, several
large projects and their liabilities were "put" to TECO, moving
hundreds of millions of dollars of off-balance sheet debt onto
TECO's balance sheet, resulting in TECO taking over a billion
dollars in impairment charges and causing the price of its
common stock to fall from a Class Period high of over $28 per
share on April 23, 2002, to below $13 per share on February 4,
2003.
For more details, contact Tzivia Brody, Esq. of Stull, Stull &
Brody by Mail: 6 East 45th Street, New York, NY 10017 by Phone:
1-800-337-4983 by Fax 212/490-2022 by E-mail: SSBNY@aol.com or
visit their Web site: http://www.ssbny.com
ZIX CORPORATION: Lasky & Rifkind Lodges Securities Lawsuit in TX
----------------------------------------------------------------
The law firm of Lasky & Rifkind, Ltd. initiated a lawsuit in the
United States District Court for the Northern District of Texas,
on behalf of persons who purchased or otherwise acquired
publicly traded securities of Zix Corporation ("Zix" or the
"Company") (NASDAQ:ZIXI) between October 30, 2003 and May 4,
2004, inclusive, (the "Class Period"). The lawsuit was filed
against Zix and certain officers and directors ("Defendants").
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. Specifically, the complaint alleges that
during the Class Period, Defendants disseminated materially
false and misleading statements about its business and future
prospects. More specifically, Defendants concealed during the
Class Period that it was experiencing sluggish physician
adoption rates to its e-prescribing service, that it was not
even close to achieving its guidance of 1,000 deployed active
doctors by the end of Q4 2003, that its claim that it had 4,000
physician deployments already in place was false as it had not
surveyed physician sites to determine their wireless needs.
On May 2, 2004, Zix announced that its results for Q1 2004 would
generate a larger than expected loss. In reaction to the news,
shares of Zix fell nearly 50% in the following trading sessions
to eventually trade below $7 per share.
For more details, contact Lasky & Rifkind, Ltd. by Phone:
(800) 495-1868 or by E-mail: investorrelations@laskyrifkind.com
*********
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news on asbestos-related litigation and profiles of target
asbestos defendants that, according to independent researches,
collectively face billions of dollars in asbestos-related
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*********
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Class Action Reporter is a daily newsletter, co-published by
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Resnick, Editors.
Copyright 2004. All rights reserved. ISSN 1525-2272.
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