/raid1/www/Hosts/bankrupt/CAR_Public/050805.mbx
C L A S S A C T I O N R E P O R T E R
Friday, August 5, 2005, Vol. 7, No. 154
Headlines
AMERICAN HONDA: Recalls 85,154 Mini Vans Due to Injury Hazard
AMERICAN INTERCONTINENTAL: IL Court Refuses To Certify Wage Suit
A.T. CROSS: RI Court Approves $1.5M Securities Suit Settlement
CALIFORNIA: Girl Files Claim V. Strip-Searches at Juvenile Hall
CALIFORNIA: SEC Settles Claims Over "Prime Bank" Ponzi Scheme
CANADA: ANF Chief to File Suit Over Residential Schools Policy
CAREER EDUCATION: Asks IL Court To Dismiss Amended Stock Lawsuit
CAREER EDUCATION: CA Court Orders Antitrust Suits Coordinated
CAREER EDUCATION: Deceptive Trade Suit Moved To FL State Court
CAREER EDUCATION: Discovery Proceeds in CA Consumer Fraud Suit
CAREER EDUCATION: MBC Program Participants Launch FL Fraud Suit
CAROLINA LIQUID: Faces CA Privacy Suit For Misappropriating Data
CMS ENERGY CORPORATION: Settlement Hearing Set August 26, 2005
COCA-COLA CO.: Shareholders Launch Securities Fraud Suit in GA
COCA-COLA CO.: Shareholders File Securities Lawsuit in N.D. GA
COCA-COLA CO.: Pension Plan Participants File GA ERISA Lawsuits
CREE INC.: CA Court Dismisses Consolidated Suit With Prejudice
DISTRICT OF COLUMBIA: Ex-Inmate Lodges Suit Over Delayed Release
EATON VANCE: NY Court Dismisses Mutual Funds Fraud Litigation
GANNETT CO.: ERISA Violations Lawsuit Still Pending in CO Court
H&R BLOCK: Working To Resolve Consumer Lawsuits V. RAL Program
H&R BLOCK: Discovery Proceeds in IL Peace-of-Mind Program Suit
HEALTHSOUTH CORPORATION: Final Judgment Entered Against Officer
HSBC FINANCE: Named in CT Credit Card Interchange Fees Lawsuit
HSBC FINANCE: Discovery Proceeds in IL Securities Fraud Suits
HSBC FINANCE: IL Court Affirms Shareholder Lawsuit Dismissal
KINDER MORGAN: CT Court Grants Final Approval To Suit Settlement
KINDER MORGAN: Plaintiffs Withdraw Class Claims in TX Lawsuit
MARVEL ENTERPRISES: Court Reverses Suit Settlement Disapproval
MCKESSON CORPORATION: Customers File MA AWP Price Antitrust Suit
NEWMONT MINING: Shareholders Launch Securities Fraud Suits in CO
OLDACH WINDOW: CO Claimants Sought For $22.5M Lawsuit Settlement
OM GROUP INC.: Lawsuit Settlement Hearing Set September 8, 2005
QWEST COMMUNICATIONS: Prosecutor Seeks Suspension of Lawsuits
SAGE GROUP: Minority Shareholders Mull Suit V. Firm, Directors
SEARS ROEBUCK: IL Court Allows Disabilities Lawsuit to Proceed
SOLUTIA INC.: Plaintiffs Launch Amended ERISA Lawsuit in S.D. NY
TIME WARNER: Securities Fraud Litigation Settled For $2.5B in NY
UNITEDHEALTH GROUP: Doctors File Anticompetitive Practices Suit
VISX INC.: Reaches Settlement For CA Shareholder Fraud Lawsuit
Asbestos Alert
ASBESTOS LITIGATION: Rangers Probe Australian Asbestos Dumpsite
ASBESTOS LITIGATION: Rohm & Haas Named as Peripheral Defendant
ASBESTOS LITIGATION: American Standard Resolves 29,820 Claims
ASBESTOS LITIGATION: Union Supports Launch of UK Victims' Group
ASBESTOS LITIGATION: US Widow's Win Over Hardie Sets Precedent
ASBESTOS LITIGATION: MSHA Monitors AK Quarry Site for Hazards
ASBESTOS LITIGATION: TN Senator Seeks Approval of US$140Bil Fund
ASBESTOS LITIGATION: Japan Gov't to Cover Non-employees Expenses
ASBESTOS LITIGATION: Northrop Grumman Says Most Claims Dismissed
ASBESTOS LITIGATION: Metaldyne Says Claims May Arise from TriMas
ASBESTOS LITIGATION: Hearing for Approval of Congoleum Plan Set
ASBESTOS LITIGATION: Federal-Mogul Posts US$11.6Mil Loss in 2Q05
ASBESTOS LITIGATION: Georgia-Pacific Corp's Profit Drops in 2Q05
ASBESTOS LITIGATION: Hardie Expects Claims to be Worth AUD1.685B
ASBESTOS LITIGATION: GM Seeks Over US$1Bil in Suit Against R&SA
ASBESTOS LITIGATION: Rockwell Automation Held in Various Claims
ASBESTOS LITIGATION: Maremont Corp. Defends Against 69,600 Suits
ASBESTOS LITIGATION: PolyOne Posts US$2Mil Reserves for Claims
ASBESTOS LITIGATION: Aussie Council Bares Plan to Develop Policy
ASBESTOS LITIGATION: USGS Study Reveals Asbestos in 22 MD Sites
ASBESTOS LITIGATION: Widow Wins GBP7,000 Indemnity from UK Govt.
ASBESTOS LITIGATION: PA Senator Specter Decided Against Subpoena
ASBESTOS LITIGATION: US Steel Corp. Defends 480 Active Lawsuits
ASBESTOS LITIGATION: Albany Int'l. Defends 24,452 Injury Claims
ASBESTOS LITIGATION: Dana Corp. Confronts 115,000 Active Claims
ASBESTOS LITIGATION: Corning Inc. Reaches Temporary Settlement
ASBESTOS LITIGATION: Bticino-SpA Employees Seeking Litigation
ASBESTOS LITIGATION: Risks Fuel Safety Measures Demand in Japan
ASBESTOS LITIGATION: Coca-Cola Contests Aqua-Chem Inc.'s Claims
ASBESTOS LITIGATION: Japan Agency Neglected Asbestos Monitoring
ASBESTOS LITIGATION: OneBeacon Study Discerns Increase in Losses
ASBESTOS LITIGATION: CNA Posts Drop in Asbestos Claim Reserves
ASBESTOS LITIGATION: PPG Industries Faces 116,000 Injury Claims
ASBESTOS LITIGATION: ABB Ltd Posts a 42% Profit Jump in 2Q05
ASBESTOS LITIGATION: Japan Govt. to Assess Asbestos Situation
ASBESTOS LITIGATION: EPA to Evaluate New Asbestos Control Method
New Securities Fraud Cases
AMAZON INC.: Klayman & Toskes Reminds Parties of Opt Out Cut-Off
COGENT COMMUNICATIONS: Firms Files Securities Fraud Suit in DC
OCA INC.: Abraham Fruchter Offers Updates on LA Securities Suit
PRESTIGE BRAND: Lerach Coughlin Files Securities Suit in S.D. NY
PRESTIGE BRAND: Schatz & Nobel Files Securities Fraud Suit in NY
*********
AMERICAN HONDA: Recalls 85,154 Mini Vans Due to Injury Hazard
-------------------------------------------------------------
American Honda Motor Co. in cooperation with the National
Highway Traffic Safety Administration's Office of Defects
Investigation (ODI) is voluntarily recalling about 85,154 units
of 2005 Honda / Odyssey mini vans due to crash hazard. NHTSA
CAMPAIGN ID Number: 05V344000.
According to the ODI, on certain vans, the frontal air bag
system has two external impact sensors. Some sensors were
insufficiently sealed during manufacturing. If water enters a
sensor, corrosion can occur. Corroded sensors could short
circuit internally. If sensors fail, the SRS warning lamp on the
instrument panel will turn on an remain illuminated. Front
impact sensor failure could cause a delay in, or loss of,
frontal airbag deployment, which can increase the risk of injury
in a frontal crash.
As a remedy, dealers will replace the front impact sensors.
For more details, contact Honda, Phone: 1-800-999-1009 OR the
NHTSA Auto Safety Hotline: 1-888-327-4236 or 1-800-424-9153, Web
site: http://www.safecar.gov.
AMERICAN INTERCONTINENTAL: IL Court Refuses To Certify Wage Suit
----------------------------------------------------------------
The Circuit Court of Cook County, Illinois, Chancery Division
refused to grant class certification for the lawsuit filed
against American InterContinental University Online (AIU
Online), styled "Finnigan, et. al. v. American InterContinental
University Online." Three former admissions advisors of AIU
Online filed the suit on behalf of current and former admissions
advisors of AIU Online who were purportedly similarly denied
overtime pay from 2002 to present.
The Company filed an answer denying the material allegations of
this complaint and denying the existence of a class. On June
17, 2005, the Court denied plaintiffs' motion for class
certification and held that the three named plaintiffs may
proceed with their suit, but they must do so on an individual
basis, rather than on behalf of a class.
The suit is styled "Jane Finnigan, et al. v. American
InterContinental University Online, case no. 2003-CH-18335,"
filed in the Circuit Court for Cook County, Illinois, Chancery
Division, under Judge Deborah M. Dooling. Representing Ms.
Finnigan is Robin B. Potter, 111 E. Wacker Drive, Chicago IL
60601, Phone: (312) 861-1800. Representing the Company is
Katten Muchin Zavis Rosenman, 575 Madison Avenue New York, NEW
YORK 10022, Phone: 212-940-7100.
A.T. CROSS: RI Court Approves $1.5M Securities Suit Settlement
--------------------------------------------------------------
The United States District Court for the District of Rhode
Island granted preliminary approval of an agreement to settle
the securities class action litigation pending against A.T.
Cross Company (Amex: ATX) and certain present and former
officers and directors.
The class action litigation was commenced on behalf of persons
and entities who bought shares of A.T. Cross common stock
between September 17, 1997 and April 22, 1999. Under the terms
of the proposed settlement, the class action litigation will be
dismissed in exchange for an aggregate cash payment of $1.5
million. The settlement payment will be funded entirely by the
Company's insurance carriers and will therefore have no impact
to the Company's P&L. The settlement remains subject to the
satisfaction of various conditions, including final approval by
the U.S. District Court for the District of Rhode Island
following notice to members of the class.
The Company and the individual defendants consistently have
maintained that the claims asserted in the class action
litigation were without merit, and vigorously have contested
those claims. The terms of the settlement expressly provide that
the Company and the individual defendants deny any liability or
wrongdoing.
"We have agreed to settle this lawsuit in order to remove any
further distractions from the pursuit of the Company's core
business objectives and exciting market opportunities," said
Tina Benik, A.T. Cross Company's General Counsel. "We were fully
prepared to see the matter through to a successful defendants'
verdict. Nevertheless, because all jury trials involve an
element of uncertainly, the Company determined that this
settlement afforded an opportunity to resolve the matter at a
contained cost for the Company and the individual defendants
while removing the risk, however slight, of an unpredictable
outcome."
For more details, contact Kevin F. Mahoney, Vice President,
Finance and Chief Financial Officer, Phone: +1-401-335-8470, Web
site: http://www.cross.com.
CALIFORNIA: Girl Files Claim V. Strip-Searches at Juvenile Hall
---------------------------------------------------------------
A 17-year-old girl filed a claim against Contra Costa County
alleging that probation officers at Juvenile Hall violated state
and federal law by strip-searching her repeatedly, The Contra
Costa Times reports.
According to the girl's attorney, Andrew Schwartz, the claim is
a precursor to her becoming part of a federal lawsuit filed in
June by a teenage boy who also says he was illegally strip-
searched at the same facility. Mr. Schwartz told The Contra
Costa Times that he will seek class action status for the
federal suit filed on behalf of the boy, and the girl will be
the second plaintiff.
Mr. Schwartz told The Contra Costa Times that Pinole police
arrested the girl on May 25 on suspicion of receiving stolen
property. Subsequently, the claim alleges that she was brought
to Juvenile Hall, where the staff conducted "visual body cavity
searches," which are searches without probing equipment, on her
at least five times. The claim also alleges that officers strip-
searched the girl when she returned from court hearings, after
visits with her family and attorney, and again after a judge
ordered her released.
Mr. Schwartz works with Sacramento-based attorney Mark Merin to
file similar suits throughout the state, including San
Francisco, Marin and San Mateo counties. Mr. Merin won a $15
million settlement against Sacramento County last year in a
class action suit that alleged the county jail conducted illegal
strip-searches between 2000 and 2003. The attorneys are also
representing a Los Angeles County woman who is suing the county
in federal court, saying she was a victim of illegal strip-
searches in County Jail in Martinez.
Describing repeated searches, Mr. Schwartz The Contra Costa
Times, "It's egregious." He goes on to say, "The probation
department had a blanket policy to strip-search everybody before
they returned to the (housing) unit."
However, Lionel Chatman, chief county probation officer, told
The Contra Costa Times that staff members see juveniles in the
nude only when the juveniles are processed into the facility and
during showers. He also pointed out that medical professionals
sometimes inspect juveniles for health reasons. He adds, "I have
yet to witness any (staff members) giving a cavity search."
Under California law most strip-searches of juveniles arrested
on suspicion of misdemeanors are prohibited. Authorities may
search suspected felons, like the girl, if they have a
"reasonable suspicion" that the search will produce drugs or
weapons. The girl's claim though alleges that the staff
searched her without any such suspicion. The claim also alleges
that the staff violated the girl's right against unreasonable
search and seizure. Since she is a juvenile The Contra Costa
Times cannot reveal the identity of the girl.
Mr. Chatman also told The Contra Costa Times that the Juvenile
Hall staff members conduct clothing searches after the young
inmates meet with visitors, but not strip-searches. He explains
that Officers supervise each meeting to make sure weapons and
drugs stay out of the facility. He also adds, "If they have been
supervised, why would we be doing a strip-search?" He stated
though that he could not comment on the girl's specific claim
because he had not seen it.
CALIFORNIA: SEC Settles Claims Over "Prime Bank" Ponzi Scheme
-------------------------------------------------------------
The Securities and Exchange Commission settled its claims
against two Southern California companies and their principals
with their consent to court orders permanently enjoining them
from future securities fraud and securities registration
violations. All four defendants - Robert A. Coberly, Jr., 37,
of Westlake Village, Curtis Somoza, 37, of Beverly Hills, RC
Investment Corporation of Westlake Village, and Pinnacle
Investment Corporation of Westlake Village - consented to entry
of the judgments without admitting or denying the Commission's
allegations. As part of the settlement, the Honorable George H.
King, United States District Judge for the Central District of
California, ordered Mr. Coberly and Mr. Somoza to each pay civil
penalties in the amount of $40,000. The defendants had
previously paid back all of the investors who had been defrauded
by the defendants' scheme.
The complaint in this case, filed on September 7, 2004, alleges
that, from September 2002 to May 2003, the defendants offered
and sold $6.7 million worth of notes to at least fifty investors
nationwide, claiming that the funds would be used to finance a
purported trading program that would buy and sell high-grade AA
and AAA-rated bank notes, which is a common form of "prime bank"
instrument. One form of a "prime bank" scheme involves a
supposed bank-trading program where investor funds are
purportedly used to trade high-grade bank notes. In fact, such
bank notes do not exist and are used to defraud investors. In
this case, the complaint also alleges that the defendants
represented that investors would receive a "guaranteed" 120% per
year return. The complaint further alleges that, contrary to
their representations, the defendants instead operated a Ponzi
scheme and used $3.11 million in new investor funds to pay
existing investors. The complaint alleges that the defendants
misappropriated another $2.61 million in investor funds to
support their lavish lifestyles, such as down payments on two
luxury homes in Southern California and weekends at posh
resorts, and to finance other business ventures. In addition,
the complaint alleges that, contrary to the defendants'
representations, there was no bank note trading program.
The judgments, entered July 26 and 28, 2005, permanently enjoin
the defendants from committing future violations of the
securities registration and antifraud provisions of the federal
securities laws, Sections 5(a), 5(c), and 17(a) of the
Securities Act of 1933, Section 10(b) of the Securities Exchange
Act of 1934, and Rule 10b-5 thereunder. The action is styled,
SEC v. RC Investment Corporation, Pinnacle Investment
Corporation, Robert A. Coberly, Jr., and Curtis D. Somoza No.
CV-04-7400 GHK, Ex, C.D. Cal., (LR- 19321).
CANADA: ANF Chief to File Suit Over Residential Schools Policy
--------------------------------------------------------------
Assembly of First Nations National Chief Phil Fontaine recently
stated that he and the AFN are launching a class action lawsuit
against the Government of Canada for the residential schools
legacy. The claim, to be filed soon, states that the residential
schools policy and schools caused "irreparable harm and damage"
to First Nations' "culture, language, way of life, family,
community and social structures".
AFN National Chief Phil Fontaine stated: "The AFN, as the
national organization representing all First Nations citizens,
including survivors and descendants, is uniquely situated to
deal with this issue in a way that no other group can. Other
residential schools class actions have been certified or are
making their way through the courts, but the AFN class provides
for a more comprehensive process, as it deals with loss of
language and culture and not only specific acts of physical or
sexual abuse, and also includes truth and reconciliation
mechanisms and other collective remedies that will benefit all
First Nations. We want to ensure the Government of Canada
provides fair and just resolution for the abuse we endured in
the schools and the assault on our cultures that took place
under the residential schools policy."
The AFN claim identifies four classes of survivors: First
Nations, Survivor, Deceased and Family Class. Phil Fontaine is
named as the representative plaintiff for the First Nations
Class and Survivor Class.
"Because of our lack of formal legal status, we have only been
participating in a consulting capacity in these discussions,"
stated the National Chief. "However, this matter is far too
important for us not to have a full seat at the table that will
ensure not only that our voices are heard on an equal basis with
all other parties, but that our consent will be required for any
agreement that is reached."
"We will continue to work with the federal representative, Mr.
Justice Frank Iacobucci, on this important matter and we have
the full confidence he is operating in good faith," said
National Chief Fontaine. "Our action is not an attempt to impede
the process, but rather a means to ensure that we are able to
fully participate in the process, more effectively settle this
to the benefit of all residential schools survivors and all
First Nations citizens affected by the residential schools, and
to ensure that all options remain open for them. The Accord has
provided a political vehicle to move forward, but a legal
vehicle is required to finalize the process with the AFN in a
central and representative role, which this action now
provides."
Former Supreme Court Justice Frank Iacobucci was appointed
federal representative under an Accord signed by the AFN and
Deputy Prime Minister Anne McLellan on May 30th. That Accord set
up a process in which the federal representative would work with
all parties involved in residential schools resolution and
litigation to come up with a better process to resolve the
legacy of the schools. The federal representative is to provide
recommendations to the government on a new approach by or before
March 31 of 2006.
"We would rather negotiate than litigate, but we feel compelled
to exercise all our options," said National Chief Fontaine.
"Each day we lose another survivor. Each day someone passes on
without having achieved any sense of justice or healing or
redress. Each day, First Nations from all walks of life in all
parts of the country deal with the loss of language, cultural
breakdown and inter-generational effects of the schools. We want
to ensure that Canada and First Nations bring closure to this
tragic chapter in our shared history."
There are approximately 87,000 residential schools survivors
still alive in Canada. The average age of survivors is 57 years
old. The government has an "Alternative Dispute Resolution"
process in place, but at the current pace it will take 53 years
to settle all claims, at a cost to Canadian taxpayers of $2.3
billion dollars in administrative and legal expenses alone. The
AFN has set-out a fair, cost efficient and timely approach to
resolve the legacy of the Indian Residential Schools in its
November 2004 Report on Canada's Dispute Resolution Plan to
Compensate for Abuses in Indian Residential Schools. The report
is available on the AFN website.
The Assembly of First Nations is the national organization
representing First Nations citizens in Canada.
For more details, contact Don Kelly, AFN Communications
Director, Phone: (613) 241-6789, ext. 320 or (613) 292-2787 OR
Ian McLeod, AFN Bilingual Communications Officer, Phone:
(613) 241-6789, ext. 336 or (613) 859-4335 OR Nancy Pine,
Communications Advisor, Office of the National Chief, Phone:
(613) 241-6789, ext. 243 or (613) 298-6382.
CAREER EDUCATION: Asks IL Court To Dismiss Amended Stock Lawsuit
----------------------------------------------------------------
Career Education Corporation asked the United States District
Court for the Northern District of Illinois to dismiss the
second amended class action filed gaisnt it and two of its
executive officers, John M. Larson and Patrick K.Pesch.
Between December 9, 2003, and February 5, 2004, six purported
class action lawsuits were filed on behalf of certain purchasers
of the Company's common stock. The complaints allege that in
violation of Section 10(b) of the Securities Exchange Act of
1934 and Rule 10b-5 promulgated thereunder, the defendants made
certain material misrepresentations and failed to disclose
certain material facts about the condition of the Company's
business and prospects during the putative class periods,
causing the respective plaintiffs to purchase shares of the
Company's common stock at artificially inflated prices. The
plaintiffs further claim that Mr. Larson and Mr. Pesch are
liable as control persons under Section 20(a) of the Act. The
plaintiffs ask for unspecified amounts in damages, interest, and
costs, as well as ancillary relief. Five of these lawsuits were
found to be related to the first filed lawsuit, captioned
"Taubenfeld v. Career Education Corporation et. al. (No. 03 CV
8884)," and were reassigned to the same judge.
On March 19, 2004, the court ordered these six cases to be
consolidated and appointed Thomas Schroeder as lead plaintiff.
On April 6, 2004, the court appointed the firm of Goodkind
Labaton Rudoff & Sucharow LLP, which represents Mr. Schroeder,
as lead counsel. On June 17, 2004, plaintiffs filed a
consolidated amended complaint, which the Company moved to
dismiss on July 30, 2004. On February 11, 2005, the Company`s
motion to dismiss was granted, without prejudice. On April 1,
2005, plaintiffs filed a second amended complaint, which the
Company moved to dismiss on May 20, 2005. Plaintiffs filed their
response brief on July 8, 2005, and the Company's reply brief is
due August 8, 2005. In addition, the court has issued an order
changing the caption of this matter to "In re Career Education
Corporation Securities Litigation."
The suit is styled "In re Career Education Corporation
Securities Litigation, case no. 1:03-cv-08884," filed in the
United States District Court for the Northern District of
Illinois, under Judge Joan Humphrey Lefkow. Representing the
Company are Karl Richard Barnickol, Mary Ellen Hennessy, Joni S.
Jacobsen, David H. Kistenbroker, Katten Muchin Zavis Rosenman,
525 West Monroe Street Suite 1600 Chicago, Il 60661-3693 Phone:
(312) 902-5200. Representing the plaintiffs are:
(1) Anthony F. Fata and Marvin Alan Miller, Miller Faucher
and Cafferty, LLP 30 North LaSalle Street Suite 3200
Chicago, IL 60602 Phone: (312) 782-4880;
(2) Joshua Lifshitz, Bull & Lifshitz, LLP 18 East 41st
Street New York, NY 10017 Phone: (212) 213-6222
(3) Andrei V. Rado, Steven G. Schulman, Peter Seidman,
Milberg Weiss Bershad & Schulman LLP One Pennsylvania
Plaza 49th Floor New York, NY 10119-0165 Phone:
(212)594-5300
CAREER EDUCATION: CA Court Orders Antitrust Suits Coordinated
-------------------------------------------------------------
The Superior Court of the State of California, Los Angeles
County ordered coordinated two related class actions filed
against Career Education Corporation, alleging violations of the
state's unfair competition act.
On July 19, 2004, an amended complaint captioned "Outten, et.
al., v. Career Education Corporation, et. al.," was filed
against the Company and American InterContinental University
(AIU). On October 6, 2004, plaintiffs filed a second amended
complaint, which added individuals who are current and former
employees of AIU. The second amended complaint alleges that AIU
violated the California unfair competition law, the California
Consumer Legal Remedies Act, and the California Education Code,
and engaged in common law consumer fraud by allegedly misleading
potential students regarding AIU's placement, retention, and
matriculation rates, and engaging in financial aid and admission
improprieties. The suit appears to have been brought on behalf
of all current and prior attendees of AIU residing in
California. The plaintiffs, on behalf of the putative class,
seek unspecified damages, interest, and costs, as well as
injunctive relief. On March 10, 2005, the Company filed an
answer to the second amended complaint as well as a cross-
complaint. The parties are currently engaged in discovery. On
July 16, 2005, plaintiffs agreed to dismiss individual defendant
Swinhart, a former employee of AIU. On June 24, 2005, the court
ruled that this action was related to another action captioned
"Thurston v. Brooks College."
On March 21, 2005, a purported class action complaint captioned
"Thurston v. Brooks College, et. al.," was filed in the Superior
Court for the State of California, County of Los Angeles,
against one of the Company's subsidiaries, Brooks College. The
complaint was purportedly filed on behalf of all current and
former attendees of Brooks College. The complaint alleges that
Brooks College violated the California Business and
Professionals Code and Consumer Legal Remedies Act by allegedly
misleading potential students regarding Brooks College's
admission criteria, transferability of credits, and retention
and placement statistics and by engaging in false and misleading
advertising. Plaintiffs seek injunctive relief, compensatory,
punitive and exemplary damages, attorneys' fees, and other
relief the court deems appropriate. By joint stipulation, this
action was transferred to Los Angeles Superior Court. On June
24, 2005, the court ruled that this action was related to the
"Outten" case.
CAREER EDUCATION: Deceptive Trade Suit Moved To FL State Court
--------------------------------------------------------------
Parties in the class action filed against Career Education
Corporation, styled "Viles v. Ultrasound Technical Services,
Inc., et. al.," agreed to transfer the suit to the Miami-Dade
County Circuit Court in Florida. The suit also names as
defendant the Company's subsidiary Ultrasound Technical
Services, Inc., currently known as Sanford Brown Institute
(UDS).
The suit was filed on October 13, 2004 on behalf of all persons
who attended UDS' Diagnostic Medical Sonography Program or
Cardiovascular Technology Program in the State of Florida at any
time during the period of October 12, 2000, to the present. The
complaint alleges that UDS violated the Florida Trade and
Deceptive Practices Act by misrepresenting placement rates,
potential salaries, and accreditation, falsifying clinical
training records, failing to properly supervise students,
failing to provide competent faculty and proper equipment, and
admitting more students than UDS had room to properly educate.
On April 7, 2005, defendants filed motions to compel arbitration
and transfer venue to Miami-Dade County, Florida.
CAREER EDUCATION: Discovery Proceeds in CA Consumer Fraud Suit
--------------------------------------------------------------
Discovery is proceeding in relation to class certification for
the lawsuit filed against Career Education Corporation in the
Superior Court of the State of California, County of Santa
Barbara, styled "Nilsen v. Career Education Corporation, et.
al."
The suit was filed on February 4, 2005 against the Company and
one of its subsidiaries, Brooks Institute of Photography (BIP).
The action was purportedly brought on behalf of all individuals
who attended BIP from February 4, 2001, to the present. The
complaint alleges that BIP violated the California Education
Code, Consumer Legal Remedies Act, and California unfair
competition law by allegedly misleading potential students
regarding BIP's placement rates and by engaging in false and
misleading advertising. The plaintiffs seek injunctive relief,
disgorgement profits, punitive damages, interest, and attorneys'
fees and costs.
On April 11, 2005, the Company filed a demurrer (a request to
the court to dismiss) to all causes of action in the complaint.
That hearing is scheduled for August 2, 2005. The parties are
currently engaged in discovery related solely to the issue of
class certification.
CAREER EDUCATION: MBC Program Participants Launch FL Fraud Suit
---------------------------------------------------------------
Career Education Corporation faces a class action filed in the
Hillsborough County Court in Florida, styled "Benoit, et al. v.
Career Education Corporation, et. al." The suit also names as
defendants Ultrasound Technical Services, Inc. (UDS)
The action is purportedly brought on behalf of all persons who
have been enrolled in the Medical Billing and Coding Program
("MBC program") at the Tampa campus of UDS in the last four
years. The complaint alleges that the defendants breached
enrollment contracts with the plaintiffs and other class members
and violated the Florida Deceptive and Unfair Trade Practices
Act by, among other things:
(1) failing to properly train students,
(2) failing to offer and require sufficient hours of course
work,
(3) failing to provide properly trained instructors,
(4) failing to provide appropriate curriculum consistent
with the represented degree,
(5) failing to award the represented degree,
(6) failing to provide adequate career placement services,
and
(7) misrepresenting that they would provide such services
The complaint also alleges that the defendants "padded" the MBC
program curriculum to charge greater tuition, purportedly in
violation of the Act. Plaintiffs seek actual damages,
attorneys' fees and costs, and other relief as the court deems
appropriate.
CAROLINA LIQUID: Faces CA Privacy Suit For Misappropriating Data
----------------------------------------------------------------
Carolina Liquid Chemistries, a privately held, FDA approved,
clinical diagnostic company located in Brea, California, faces a
complaint filed in the Orange County Superior Court by Clinical
Data, Inc., which alleges that Carolina misappropriated
information of a confidential nature belonging to Clinical Data.
Carolina states that Clinical Data initially approached it with
regard to these allegations in early July 2005. Despite repeated
requests, according to Carolina's president, Phil Shugart,
Clinical Data refused to provide specific details but instead
demanded in writing that, in order to avoid litigation, Carolina
must enter into an agreement that would bind the companies to do
business with each other for the next seventeen years and
guarantee payments by Carolina to Clinical Data of at least $5.1
million.
Carolina commenced its own investigation into the claims and
believes that, in fact, the confidentiality of information
proprietary to Carolina's products, and not those of Clinical
Data, Inc., may have been compromised in this matter.
Carolina contends that it made strategic business decisions over
the past two years that have made them a legitimate competitor
of Clinical Data, Inc. Carolina believes it was more than a
coincidence that the filing of the lawsuit and accompanying
press release occurred at the same time as the opening day of
the AACC. The AACC is the largest Clinical Chemistry tradeshow
in the United States. Carolina had chosen this event to feature
a competitive blood chemistry analyzer along with a state of the
art laboratory automation system. Laboratory automation systems
are becoming the new industry standard, and Carolina notes that
Clinical Data does not possess this technology.
For more details, contact Timothy E. Cary of Cary & Dollar, LLP,
for Carolina Liquid Chemistries, Phone: 714-854-1541, E-mail:
tcary@carydollarlaw.com.
CMS ENERGY CORPORATION: Settlement Hearing Set August 26, 2005
--------------------------------------------------------------
The Circuit Court for the County of Jackson, State of Michigan,
will hold a fairness hearing for the proposed settlement in the
matter: Andrew Clotz, et al. v. CMS Energy Corporation, et al.,
Case No. 03-06483-CK, which was filed on behalf all current
shareholders of CMS.
The Hearing will be held on August 26, 2005, at 3:00 p.m.,
before the Honorable Edward J. Grant, Circuit Court of Jackson
County, State of Michigan, 312 South Jackson St., Jackson, MI,
49201.
For more details, contact Richard S. Schiffrin of Schiffrin &
Barroway, LLP, Phone: (610) 667-7706, Fax: (610) 667-7056 OR
Robert B. Weiser of The Weiser Law Frim, P.C., Phone:
(610) 225-2677, Fax: (610) 225-2678 OR Eric Landau of McDermott
Will & Emery, LLP, Phone: (949) 851-0633, Fax: (949) 851-9348 OR
Julio C. Mazzoli of CMS Energy Corporation, Phone:
(517) 768-7321, Fax: (517) 788-8011.
COCA-COLA CO.: Shareholders Launch Securities Fraud Suit in GA
--------------------------------------------------------------
The Coca-Cola Company and its former chairman of the board and
chief executive officer Douglas N. Daft face a class action
filed in the United States District Court for the Northern
District of Georgia, styled "Selbst v. The Coca-Cola Company and
Douglas N. Daft."
The suit alleges violations of antifraud provisions of the
securities laws on behalf of persons who purchased Company stock
between January 30, 2003 and September 15, 2004 and were damaged
thereby. The complaint alleges, among other things, that during
the class period the Company and Mr. Daft made false and
misleading statements concerning the financial condition of the
Company and its business outlook, strategy, business model and
relationship with key bottlers in internal corporate memoranda,
analysts' conference calls, press releases and SEC filings. The
plaintiffs, on behalf of the putative class, seek compensatory
damages in an amount to be proved at trial, extraordinary,
equitable and/or injunctive relief as permitted by law to assure
that the class has an effective remedy, award of reasonable
costs and expenses, including counsel and expert fees, and such
other further relief as the Court may deem just and proper.
The suit is styled "Selbst v. The Coca-Cola Company et al., case
no. 1:05-cv-01226-RWS," filed in the United States District
Court for the Northern District of Georgia, under Judge Richard
W. Story. Representing the plaintiffs are David Andrew Bain,
Martin D. Chitwood of Chitwood Harley Harnes, LLP, 1230
Peachtree Street, N.E., 2300 Promenade II, Atlanta, GA 30309,
Phone: 404-873-3900, E-mail: dab@classlaw.com or
mdc@classlaw.com; and Dennis J. Herman, William S. Lerach, Scott
H. Saham, Steven W. Pepich, and David A. Thorpe Lerach Couglin
Stoia Geller Rudman & Robbins, 401 B Street, Suite 1600, San
Diego, CA 92101-4297, Phone: 619-231-1058 or E-mail:
stevep@lerachlaw.com. Representing the Company is Dan Shamus
McDevitt of King & Spalding, 191 Peachtree Street, N.E.,
Atlanta, GA 30303-1763 Phone: 404-572-4600, E-mail:
dmcdevitt@kslaw.com.
COCA-COLA CO.: Shareholders File Securities Lawsuit in N.D. GA
--------------------------------------------------------------
The Coca-Cola Company faces a class action filed in the United
States District Court for the Northern District of Georgia,
styled "Amalgamated Bank, et al. v. The Coca-Cola Company, et
al."
The suit also names as defendants Douglas N. Daft, E. Neville
Isdell, Steven J. Heyer and Gary P. Fayard and alleges
violations of antifraud provisions of the federal securities
laws. The purported class consists of persons, except the
defendants, who purchased Company stock between January 30, 2003
and September 15, 2004 and were damagedthereby. The complaint
alleges, among other things, that during the class period the
defendants made false and misleading statements about:
(1) the Company's new business strategy/model,
(2) the Company's execution of its new business
strategy/model,
(3) the state of the Company's critical bottler
relationships,
(4) the Company's North American business,
(5) the Company's European operations, with a particular
emphasis on Germany,
(6) the Company's marketing and introduction of new
products, particularly Coca-Cola C2, and
(h) the Company's forecast for growth going forward
The plaintiffs claim that as a result of these allegedly false
and misleading statements, the price of the Company stock
increased dramatically during the purported class period. The
complaint also alleges that in September and November 2004, the
Company and E. Neville Isdell acknowledged that the Company's
performance had been below expectations, that various corrective
actions were needed, that the Company was lowering its
forecasts, and that there would be no quick fixes. In addition,
the complaint alleges that the charge announced by the Company
in November 2004 should have been taken early in 2003 and that,
as a result, the Company's financial statements were materially
misstated during 2003 and the first three quarters of 2004. The
plaintiffs, on behalf of the putative class, seek compensatory
damages in an amount to be proved at trial, extraordinary,
equitable and/or injunctive relief as permitted by law to assure
that the class has an effective remedy, award of reasonable
costs and expenses, including counsel and expert fees, and such
other further relief as the Court may deem just and proper.
The suit is styled "Amalgamated Bank et al v. The Coca-Cola
Company et al, case no. 1:05-cv-01801-RWS," filed in the United
States District Court for the Northern District of Georgia,
under Judge Richard W. Story. Representing the plaintiffs are
Martin D. Chitwood, James M. Evangelista, Stuart Jay Guber of
Chitwood Harley Harnes, LLP, 1230 Peachtree Street, N.E., 2300
Promenade II, Atlanta, GA 30309, Phone: 404-873-3900, Fax:
404-876-4476, E-mail: mdc@classlaw.com,
jevangelista@chitwoodlaw.com, SGuber@chitwoodlaw.com.
COCA-COLA CO.: Pension Plan Participants File GA ERISA Lawsuits
---------------------------------------------------------------
The Coca-Cola Co. faces three similar putative class action
lawsuits filed in the United States District Court for the
Northern District of Georgia, alleging breach of fiduciary
duties under the Employee Retirement Income Security Act of 1974
(ERISA) by the Company, certain current and former executive
officers, and the Company's benefits committee. The suits are
styled:
(1) Pedraza v. The Coca-Cola Company, et al.,
(2) Shamery, et al. v. The Coca-Cola Company, et al.
(3) Jackson v. The Coca-Cola Company, et al.
The suit was filed on behalf of the Company's Thrift &
Investment Plan and persons who were participants in or
beneficiaries of the Plan between May 13, 1997 and April 18,
2005 and whose accounts included investments in Company stock.
The complaints allege that, among other things, the defendants
failed to exercise the required care, skill, prudence and
diligence in managing the Plan and its assets, take steps to
eliminate or reduce the amount of Company stock in the Plan,
adequately diversify the Plan's investments in Company stock,
appoint qualified administrators and properly monitor their and
the Plan's performance and disclose accurate information about
the Company. The plaintiffs, on behalf of the putative class,
seek, among other things, declaratory relief, damages for Plan
losses and lost profits, imposition of constructive trust as a
remedy for unjust enrichment, injunctive relief, costs and
attorneys' fees, equitable restitution and other appropriate
equitable and monetary relief.
CREE INC.: CA Court Dismisses Consolidated Suit With Prejudice
--------------------------------------------------------------
The United States District Court for the Middle District of
North Carolina dismissed "in its entirety with prejudice" the
consolidated class action complaint previously pending Cree,
Inc. (Nasdaq: CREE) and certain of its current and former
directors and officers.
The Court's dismissal applies to all of the plaintiffs and all
of their claims that were still pending from the actions
originally filed in 2003. "We are very pleased that Cree has
been vindicated by the Court, as we have maintained all along
that these allegations were without merit," stated Chuck
Swoboda, Cree's Chairman and CEO.
For more details, contact Raiford Garrabrant, Director, Investor
Relations of Cree, Inc., Phone: +1-919-313-5397, Fax:
+1-919-313-5615, E-mail: raiford_garrabrant@cree.com.
DISTRICT OF COLUMBIA: Ex-Inmate Lodges Suit Over Delayed Release
----------------------------------------------------------------
Gregory Holloway, a former D.C. Jail inmate launched a class
action lawsuit against the city, which claims that he and fellow
prisoners were kept locked up longer than a judge intended
because of mismanagement and sloppy record keeping by the
Department of Corrections, The Washington Examiner reports.
Court documents show that Mr. Holloway, 53, was arrested in 2003
on cocaine distribution charges, and on August 25 of that year a
Superior Court judge ordered that he be transferred to a halfway
house. However, Mr. Holloway said that he remained in a jail
cell until September 19, when he finally was relocated.
According to the lawsuit, which was filed Friday in U.S.
District Court in Washington, "The Department of Corrections has
a long and documented history of holding inmates in the D.C.
Jail ... after a judge has ordered their placement in a halfway
house."
The suit suggests hundreds of the city's nearly 2,700 jail
inmates remained jailed by mistake for days or even weeks when
they should have been at a halfway house, where they are
permitted to leave the facility to work or obtain substance
abuse treatment. The suit also contends that delays happen
because the jail lacks an effective system "to process inmates,"
because employees are "poorly trained, supervised and
disciplined" and because they process commitment orders "in
their own sweet time."
EATON VANCE: NY Court Dismisses Mutual Funds Fraud Litigation
-------------------------------------------------------------
The United States District Court for the Southern District of
New York dismissed the class action filed against Eaton Vance
Corporation, captioned In Re Eaton Vance Mutual Funds Fee
Litigation. The suit was filed against Eaton Vance Corp.; Eaton
Vance Management; Boston Management and Research; Eaton Vance,
Inc.; Eaton Vance Distributors, Inc.; Lloyd George Investment
Management (Bermuda) Limited; Orbimed Advisors LLC; Lloyd George
Investment Management (B.V.I.) Limited; nine current or past
trustees of 81 Eaton Vance funds named as nominal defendants
(the "Funds"); and twelve current or past officers and portfolio
managers of the Funds.
The plaintiffs were seven alleged shareholders of four of the 81
Funds. The Lawsuit, a purported class action, alleged violations
of the Investment Company Act of 1940, the Investment Advisers
Act of 1940, New York law and the common law, and breaches of
fiduciary duties to the Funds and their shareholders.
On July 29, 2005, the Court issued an Opinion and Order
dismissing the Lawsuit in its entirety and rejecting the
plaintiffs' request to amend their complaint.
Eaton Vance Corp. is a Boston-based investment management firm
whose stock trades on the New York Stock Exchange under the
symbol EV.
GANNETT CO.: ERISA Violations Lawsuit Still Pending in CO Court
---------------------------------------------------------------
Gannett Co., Inc. continues to face a class action filed in the
United States District Court for the District of Colorado,
alleging violations of the Employee Retirement Income Security
Act (ERISA).
On December 31, 2003, two employees of the Company's television
station KUSA in Denver filed the suit against the Company and
the Gannett Retirement Plan (Plan) on behalf of themselves and
other similarly situated individuals who participated in the
Plan after January 1, 1998, the date that certain amendments to
the Plan took effect.
The plaintiffs allege, among other things, that the current
pension plan formula adopted in that amendment violated the age
discrimination accrual provisions of the ERISA. The plaintiffs
seek to have their post-1997 benefits recalculated and seek
other equitable relief.
H&R BLOCK: Working To Resolve Consumer Lawsuits V. RAL Program
--------------------------------------------------------------
H&R Block, Inc. is working to resolve litigation filed against
it throughout the country, regarding its refund anticipation
loan (RAL) programs. Plaintiffs in the RAL Cases have alleged,
among other things:
(1) that disclosures in the RAL applications were
inadequate, misleading and untimely;
(2) that the RAL interest rates were usurious and
unconscionable;
(3) that the Company did not disclose that it would receive
part of the finance charges paid by the customer for
such loans;
(4) that Company breached state laws on credit service
organizations;
(5) that the Company committed a breach of contract, unjust
enrichment, unfair and deceptive acts or practices and
violations of the Racketeer Influenced and Corrupt
Organizations Act, the Fair Debt Collection Practices
Act; and
(6) that the company owed, and breached, a fiduciary duty
to its customers in connection with the RAL program.
In many of the RAL Cases, the plaintiffs seek to proceed on
behalf of a class of similarly situated RAL customers, and in
certain instances the courts have allowed the cases to proceed
as class actions. In other cases, courts have held that
plaintiffs must pursue their claims on an individual basis, and
may not proceed as a class action. The amounts claimed in the
RAL Cases have been very substantial in some instances.
The Company has successfully defended against numerous RAL
Cases, although several of the RAL Cases are still pending. Of
the RAL Cases that are no longer pending, some were dismissed on
the Company's motions for dismissal or summary judgment and
others were dismissed voluntarily by the plaintiffs after denial
of class certification. Other cases were settled, with one
settlement resulting in a pretax expense of $43.5 million in
fiscal year 2003.
A suit, styled "Lynne A. Carnegie, et al. v. Household
International, Inc., H&R Block, Inc., et al., (formerly Joel E.
Zawikowski, et al. v. Beneficial National Bank, H&R Block, Inc.,
Block Financial Corporation, et al.), Case No. 98 C 2178," is
still pending in the United States District Court for the
Northern District of Illinois, Eastern Division. In March 2004,
the court either dismissed or decertified all of the plaintiffs'
claims other than part of one count alleging violations of the
racketeering and conspiracy provisions of the Racketeer
Influenced and Corrupt Organizations Act. On May 9, 2005, the
parties agreed to a settlement, subject to court approval. The
settlement agreement provided for the defendants to pay $110
million in cash and $250 million face value in freely
transferable rebate coupons and all persons who applied for and
obtained a RAL through an H&R Block office or certain lenders
from January 1, 1987 through April 29, 2005 (the "Carnegie
Settlement Class") to release all claims against the Company
regarding RALs or certain services provided in connection with
RALs. The settlement agreement also specified required business
practices, procedures, disclosures and forms for use in making
RALs and barred members of the Carnegie Settlement Class from
commencing any other claims or actions against us regarding RALs
made pursuant to such practices, procedures, disclosures and
forms. On May 26, 2005, the court denied approval of the
proposed settlement. This class action case is scheduled to go
to trial on October 17, 2005.
Another suit, styled "Sandra J. Basile, et al. v. H&R Block,
Inc., et al, April Term 1992 Civil Action No. 3246," is pending
in the Court of Common Pleas, First Judicial District of
Pennsylvania, Philadelphia County, instituted on April 23, 1993.
The court decertified the class on December 31, 2003.
Plaintiffs appealed the de-certification, and the Pennsylvania
appellate court denied the plaintiff's appeal. The Pennsylvania
appellate court subsequently granted plaintiff's motion for "en
banc" review of its earlier denial of plaintiff's appeal. Re-
argument is expected to occur in September 2005.
Another suit, styled "Levon and Geral Mitchell, et al. v. H&R
Block and Ruth R. Wren, Case No.CV-95-2067," was filed in the
Circuit Court of Mobile County, Alabama, on June 13, 1995.
Plaintiffs' motion for class certification was granted, and
defendants appealed the certification. The appeal is pending
before the Alabama Supreme Court.
Another suit, styled "Deandra D. Cummins, et al. v. H&R Block,
Inc., et al., Case No. 03-C-134," was filed in the Circuit Court
of Kanawha County, West Virginia, on January 22, 2003. This
class action case is scheduled to go to trial on October 17,
2005.
Another suit, styled "Lynn Becker v. H&R Block, Case No. CV-
2004-03-1680, was filed in the Court of Common Pleas, Summit
County, Ohio, on April 15, 2004. The case was removed to
federal court, and plaintiffs moved to remand the case back to
state court. The case currently is stayed pending the U.S.
District Court's ruling on plaintiff's motion to remand and
defendant's motion to compel arbitration.
Another suit, styled "Joyce Green, et al. v. H&R Block, Inc.,
Block Financial Corporation, et al., Case No. 97195023," was
filed in the Circuit Court for Baltimore City, Maryland, on July
14, 1997. This case is awaiting trial. No trial date has been
set.
H&R BLOCK: Discovery Proceeds in IL Peace-of-Mind Program Suit
--------------------------------------------------------------
Discovery is proceeding in the class action filed against H&R
Block, Inc. in the Circuit Court of Madison County, Illinois,
styled "Lorie J. Marshall, et al. v. H&R Block Tax Services,
Inc., et al., Civil Action 2003L000004."
The court granted the suit class certification on August 27,
2003. Plaintiffs' claims consist of five counts relating to the
peace-of-mind (POM) program under which the applicable tax
return preparation subsidiary assumes liability for additional
tax assessments attributable to tax return preparation error.
The plaintiffs allege that the sale of POM guarantees
constitutes:
(1) statutory fraud by selling insurance without a license,
(2) an unfair trade practice, by omission and by "cramming"
(i.e., charging customers for the guarantee even though
they did not request it or want it), and
(3) a breach of fiduciary duty
In August 2003, the court certified the plaintiff classes
consisting of all persons who from January 1, 1997 to final
judgment:
(i) were charged a separate fee for POM by "H&R Block" or a
defendant "H&R Block" class member;
(ii) reside in certain class states and were charged a
separate fee for POM by "H&R Block" or a defendant "H&R
Block class member" not licensed to sell insurance; and
(iii) had an unsolicited charge for POM posted to their bills
by "H&R Block" or a defendant H&R Block class member.
Persons who received the POM guarantee through an H&R Block
Premium office and persons who reside in Alabama are excluded
from the plaintiff class. The court also certified a defendant
class consisting of any entity with names that include "H&R
Block" or "HRB," or are otherwise affiliated or associated with
H&R Block Tax Services, Inc., and that sold or sells the POM
product. The trial court subsequently denied the defendants'
motion to certify class certification issues for interlocutory
appeal. Discovery is proceeding. No trial date has been set.
There is one other putative class action pending against the
Company in Texas that involves the Peace of Mind guarantee. This
case is being tried before the same judge that presided over the
Texas RAL Settlement and involves the same plaintiffs attorneys
that are involved in the Marshall litigation in Illinois and
substantially similar allegations. No class has been certified
in this case.
HEALTHSOUTH CORPORATION: Final Judgment Entered Against Officer
---------------------------------------------------------------
The Honorable Virginia Emerson Hopkins, U. S. District Judge for
the Northern District of Alabama entered a Final Judgment as to
defendant Cathy C. Edwards, a vice president of HealthSouth
Corporation.
The Final Judgment enjoined Ms. Edwards from further violations
of Section 17(a) of the Securities Act of 1933, Sections 10(b)
and 13(b)(5) of the Securities Exchange Act of 1934 and Rules
10b-5, 13b2-1 and 13b2-2 thereunder, and from aiding and
abetting violations of Section 17(a) of the Securities Act,
Sections 10(b), 13(a), 13(b)(2)(A) and 13(b)(2)(B) of the
Exchange Act and Rules 10b-5, 12b-20, 13a-1 and 13a-13
thereunder. Ms. Edwards was not ordered to pay a civil penalty
based on her sworn representations in her Statement of Financial
Condition. Ms. Edwards was also permanently barred from serving
as an officer or director of a public company. Ms. Edwards
consented to the entry of the judgment without admitting or
denying any of the allegations of the Commission's complaint.
The Securities and Exchange Commission's complaint alleged that
Ms. Edwards made false accounting entries to inflate reported
operating results to enable HealthSouth to meet or exceed Wall
Street earnings expectations. The action is styled, SEC v.
Kenneth K. Livesay, et al., United States District Court for the
Northern District of Alabama, Civil Action No. CV-03-HS-0758-S,
(LR-19322).
HSBC FINANCE: Named in CT Credit Card Interchange Fees Lawsuit
--------------------------------------------------------------
HSBC Finance Corporation and two of its affiliates were named as
defendants in the class action filed against several credit card
and financial institutions in the United States District Court
for the District of Connecticut, styled "Photos Etc.
Corporation, et al. v. VISA U.S.A. Inc., et al., case no.
305CV1007."
This purported class action also named as defendants VISA,
MasterCard and a number of alleged members of those
associations. The case seeks certification of a class of retail
merchants that operate commercial businesses throughout the
United States and alleges the defendants engage in an anti-
competitive conspiracy to fix the level of "interchange fees"
charged by the associations.
The suit, styled "Photos Etc Corp et al v. Visa USA Inc et al,
case no. 3:05-cv-01007-WWE," filed in the United States District
Court for the District of Connecticut under Judge Warren W.
Eginton. Representing the plaintiffs are Richard A. Bieder,
William M. Bloss, Michael P. Koskoff, Antonio Ponvert III,
Koskoff, Koskoff & Bieder, P.C., 350 Fairfield Ave., Bridgeport,
CT 06604, Phone: 203-336-4421, Fax: 203-368-3244, E-mail:
rbieder@koskoff.com, bbloss@koskoff.com, mkoskoff@koskoff.com,
aponvert@koskoff.com. Representing the Company is Frank J.
Silvestri, Jr., Levett Rockwood, 33 Riverside Ave., PO Box 5116
Westport, CT 06881, Phone: 203-222-0885, Fax: 203-226-8025, E-
mail: fsilvestri@levettrockwood.com.
HSBC FINANCE: Discovery Proceeds in IL Securities Fraud Suits
-------------------------------------------------------------
Discovery is proceeding in the consolidated securities class
action filed against HSBC Finance Corporation and its directors
in the United States District Court for the Northern District of
Illinois, alleging violations of securities laws.
In August 2002, the Company restated previously reported
consolidated financial statements. The restatement related to
certain MasterCard and Visa co-branding and affinity credit card
relationships and a third party marketing agreement, which were
entered into between 1992 and 1999. All were part of the
Company's Credit Card Services segment. In consultation with
its prior auditors, Arthur Andersen LLP, the Company treated
payments made in connection with these agreements as prepaid
assets and amortized them in accordance with the underlying
economics of the agreements. The Company's current auditor,
KPMG LLP, advised it that, in its view, these payments should
have either been charged against earnings at the time they were
made or amortized over a shorter period of time. The
restatement resulted in a $155.8 million, after-tax, retroactive
reduction to retained earnings at December 31, 1998. As a
result of the restatement, and other corporate events,
including, e.g., the 2002 settlement with 50 states and the
District of Columbia relating to real estate lending practices,
the Company, and its directors, certain officers and former
auditors, have been involved in various legal proceedings, some
of which purport to be class actions.
A number of these actions allege violations of federal
securities laws, were filed between August and October 2002, and
seek to recover damages in respect of allegedly false and
misleading statements about our common stock. These legal
actions have been consolidated into a single purported class
action, "Jaffe v. Household International, Inc., et al. No. 02 C
5893." A consolidated and amended complaint was filed on March
7, 2003.
On December 3, 2004, the court signed the parties' stipulation
to certify a class with respect to the claims brought under
Sections 10 and 20 of the Securities Exchange Act of 1934. The
parties stipulated that plaintiffs will not seek to certify a
class with respect to the claims brought under Sections 11 and
15 of the Securities Act of 1933 in this action or otherwise.
The amended complaint purports to assert claims under the
federal securities laws, on behalf of all persons who purchased
or otherwise acquired Company securities between October 23,
1997 and October 11, 2002, arising out of alleged false and
misleading statements in connection with the company's sales and
lending practices, the 2002 state settlement agreement referred
to above, the restatement and the HSBC merger. The amended
complaint, which also names as defendants Arthur Andersen LLP,
Goldman, Sachs& Co., and Merrill Lynch, Pierce, Fenner & Smith,
Inc., fails to specify the amount of damages sought.
In May 2003, the Company, and other defendants, filed a motion
to dismiss the complaint. On March 19, 2004, the Court granted
in part, and denied in part the defendants' motion to dismiss
the complaint. The Court dismissed all claims against Merrill
Lynch, Pierce, Fenner & Smith, Inc. and Goldman Sachs & Co. The
Court also dismissed certain claims alleging strict liability
for alleged misrepresentation of material facts based on statute
of limitations grounds. The claims that remain against some or
all of the defendants essentially allege the defendants
knowingly made a false statement of a material fact in
conjunction with the purchase or sale of securities, that the
plaintiffs justifiably relied on such statement, the false
statement(s) caused the plaintiffs' damages, and that some or
all of the defendants should be liable for those alleged
statements. The Court has ordered that all factual discovery
must be completed by January 13, 2006 and expert witness
discovery must be completed by July 24, 2006.
HSBC FINANCE: IL Court Affirms Shareholder Lawsuit Dismissal
------------------------------------------------------------
The Illinois Appeals Court affirmed the dismissal of a class
action filed against HSBC Finance Corporation in the Chancery
Division of the Circuit Court of Cook County, Illinois, styled
"West Virginia Laborers Pension Trust Fund v. Caspersen, et al.,
case number 03CH10808."
This purported class action also named as defendants the
directors of Beneficial Corporation at the time of the 1998
merger of Beneficial Corporation into a subsidiary of HSBC
Finance Corporation, and claimed that those directors' due
diligence of HSBC Finance Corporation at the time they
considered the merger was inadequate. The Complaint claimed
that as a result of some of the securities law and other
violations alleged in the "Jaffe" case, the Company's common
shares lost value.
Pursuant to the merger agreement with Beneficial Corporation,
the Company assumed the defense of this litigation. In
September 2003, the defendants filed a motion to dismiss which
was granted on June 15, 2004 based upon a lack of personal
jurisdiction over the defendants. The plaintiffs appealed that
decision. On May 11, 2005, the appellate court affirmed the
trial court's ruling. The time for any further appeals has
expired.
In addition, on June 30, 2004, a case entitled, "Employer-
Teamsters Local Nos. 175 505 Pension Trust Fund v. Caspersen, et
al.," was filed in the Superior Court of New Jersey, Law
Division, Somerset County as Case Number L9479-04. Other than
the change in plaintiff, the suit is substantially identical to
the above suit, and is brought by the same principal law firm
that brought that suit. The defendants' motion to dismiss was
granted on February 10, 2005 and the plaintiffs have appealed
that ruling.
KINDER MORGAN: CT Court Grants Final Approval To Suit Settlement
----------------------------------------------------------------
The United States District Court for the District of Colorado
granted final approval to the settlement of the class action
filed against Kinder Morgan, Inc., styled "Lamb v. Kinder
Morgan, Inc., et al., Civil Action No. 00-M-516," (formerly
"Adams v. Kinder Morgan, Inc., et al.")
The case was originally filed on March 8, 2000 and is a
purported class action. As of this date no class has been
certified. Plaintiffs seek compensatory damages against all
defendants jointly and severally, together with interest,
attorney fees and expenses. The plaintiffs brought claims
alleging securities fraud under Sections 10(b) and 20(a) of the
Securities Exchange Act of 1934 on behalf of all people who
purchased the common stock of Kinder Morgan during the class
period from October 30, 1997 to June 21, 1999. The class period
occurred prior to the installation of our current management
team in October 1999. The complaint centers on allegations of
misleading statements concerning operations of the Bushton
Processing Plant and certain contracts, as well as allegations
of overstatement of income in violation of accounting principles
generally accepted in the United States of America during the
class period.
On February 23, 2001, the federal district court dismissed
several claims raised by the plaintiff, with prejudice, and
dismissed the remaining claims, without prejudice. On April 27,
2001, the Adams plaintiffs filed their second amended complaint.
On March 29, 2002, the federal district court dismissed the
Adams plaintiffs' second amended complaint with prejudice. On
May 2, 2002, the Adams plaintiffs appealed the dismissal to the
10th Circuit Court of Appeals. In a published decision, on
August 11, 2003, the 10th Circuit Court of Appeals reversed the
district court's dismissal, but upheld the dismissal of Mr.
Kinder, the Company's Chairman and Chief Executive Officer, from
this action. The mandate from the 10th Circuit Court of Appeals
was issued on October 17, 2003.
Briefing regarding class certification is complete and a
decision is pending. Merits discovery commenced on June 7,
2004. The Court granted Mr. Adams' motion to withdraw as a lead
plaintiff. As a result, the case is now styled as "Lamb v.
Kinder Morgan, Inc., et al."
The parties reached a settlement in principle of this matter and
have signed a Memorandum of Understanding. The settlement
documents were preliminarily approved by the Court on February
23, 2005. On May 20, 2005, the Court entered an order giving
final approval to the settlement.
KINDER MORGAN: Plaintiffs Withdraw Class Claims in TX Lawsuit
-------------------------------------------------------------
The 100th Judicial District Court in Carson City, Texas
dismissed the class claims in the lawsuit filed against a Kinder
Morgan, Inc. subsidiary, styled "Darrell Sargent d/b/a Double D
Production v. Parker & Parsley Gas Processing Co., American
Processing, L.P. and Cesell B. Cheatham, et al., Cause No. 878."
The plaintiff filed a purported class action suit in 1999 and
amended its petition in late 2002 to assert claims on behalf of
over 1,000 producers who process gas through as many as ten gas
processing plants formerly owned by American Processing, L.P.
("American Processing"), a former wholly owned subsidiary of the
Company, in Carson and Gray counties and other surrounding Texas
counties. The plaintiff claims that American Processing (and
subsequently, ONEOK, which purchased American Processing from us
in 2000) improperly allocated liquids and gas proceeds to the
producers. In particular, among other claims, the plaintiff
challenges the methods and assumptions used at the plants to
allocate liquids and gas proceeds among the producers and
processors. The petition asserts claims for breach of contract
and Natural Resources Code violations relating to the period
from 1994 to the present. The plaintiff alleged generally in the
petition that damages are "not to exceed $200 million" plus
attorneys fees, costs and interest.
The defendants filed a counterclaim for overpayments made to
producers. Pioneer Natural Resources USA, Inc., formerly known
as Parker & Parsley Gas Processing Company ("Parker & Parsley"),
is a co-defendant. Parker & Parsley claimed indemnity from
American Processing based on its sale of assets to American
Processing on October 4, 1995. The Company accepted indemnity
and defense subject to a reservation of rights pending
resolution of the suit. The plaintiff also named ONEOK as a
defendant. The Company and ONEOK are defending the case
pursuant to an agreement whereby ONEOK is responsible for any
damages that may be attributable to the period following ONEOK's
acquisition of American Processing from the Company in 2000.
On January 21, 2003, Benson-McCown & Company (Benson-McCown),
another producer who sold gas to American Processing and ONEOK,
filed a "Plea in Intervention" in which it essentially
duplicated the plaintiff's claims and also asserted the right to
bring a class action and serve as one of the class
representatives. Defendants denied Benson-McCown's claim and
filed a counterclaim for overpayments made to Benson-McCown over
the years.
On January 14, 2005, Defendants filed a motion to deny class
certification. Subsequently, the plaintiffs agreed to dismiss
and withdraw their class claims. An Agreed Order Dismissing all
class claims, with prejudice, was entered by the Court on
January 19, 2005. The case is proceeding on the named-
plaintiffs' individual claims, with no class action being
asserted.
MARVEL ENTERPRISES: Court Reverses Suit Settlement Disapproval
--------------------------------------------------------------
The New York Appeals Court reversed the refusal of the state
court to approve the settlement of the class action filed againt
Marvel Enterprises, Inc., styled "Brian Hibbs, d/b/a Comix
Experience v. Marvel."
Mr. Hibbs filed the suit on May 6, 2002, in New York State
Supreme Court, County of New York, alleging that the Company
breached its own Terms of Sale Agreement to comic book retailers
and resellers, breached its obligation of good faith and fair
dealing, fraudulently induced plaintiff and other members of the
purported class to buy comics and unjustly enriched itself. Mr.
Hibbs sought certification of the putative class and his
designation as its representative, compensatory damages of $8
million on each cause of action and punitive damages in an
amount to be determined at trial.
The parties have reached a proposed settlement in which the
retailers and resellers would receive a credit to their account
with the Company's exclusive distributor, depending on their
prior purchases of certain comic book issues. The parties
tendered that settlement to the Court for approval, but it was
rejected on technical grounds. On June 21, 2005, the Appellate
Division reversed the trial court, holding that its rejection of
the settlement was an abuse of its discretion. The action has
been reassigned to a new judge and the parties have resubmitted
the proposed settlement for approval.
MCKESSON CORPORATION: Customers File MA AWP Price Antitrust Suit
----------------------------------------------------------------
McKesson Corporation faces a purported civil class action
complaint filed in the United States District Court, District of
Massachusetts, styled "New England Carpenters Health Benefits
Fund et al. v. First DataBank, Inc. and McKesson Corporation,
Civil Action No.05-11148."
The suit alleges that commencing in late 2001 and early 2002 and
continuing to the present day, the Company and co-defendant
First DataBank have effectuated increases in the "Average
Wholesale Price" of certain branded drugs, which alleged conduct
resulted in higher drug reimbursement payments by plaintiffs and
others similarly situated. The complaint purports to state
claims based on the federal Racketeer Influenced and Corrupt
Organizations Act, violations of the California Business and
Professions Code and California Consumers Legal Remedies Act,
and for negligent misrepresentation. The plaintiffs seek
injunctive relief, as well as compensatory and punitive damages,
attorneys' fees and costs.
NEWMONT MINING: Shareholders Launch Securities Fraud Suits in CO
----------------------------------------------------------------
Newmont Mining Corporation faces several securities class
actions filed in the United States District Court for the
District of Colorado on behalf of purchasers of the Company's
common stock between July 28,2004 and April 26,2005.
On June 8, 2005, UFCW Local 880 & Retail Food Employers Joint
Pension Fund filed a putative class action against the Company
and Wayne W. Murdy, Pierre Lassonde and Bruce D. Hansen.
Substantially similar purported class actions were filed in the
same court on June 15, 2005 by John S. Chapman and on June 20,
2005 by Zoe Myerson. Each of these complaints alleges, among
other things, that the Company and the individual defendants
violated certain antifraud provisions of the federal securities
laws by failing to disclose alleged operating deficiencies. The
complaints seek unspecified monetary damages and other relief.
The first identified complaint in the litigation is styled "UFCW
Local 880 - Retail Food Employers Joint Pension, et al. v.
Newmont Mining Corporation, et al.," filed in the United States
District Court in Colorado. The plaintiff firms in this
litigation are:
(1) Charles J. Piven, World Trade Center-Baltimore,401 East
Pratt Suite 2525, Baltimore, MD, 21202, Phone:
410.332.0030, E-mail: pivenlaw@erols.com
(2) Glancy Binkow & Goldberg LLP (NY), 1501 Broadway, Suite
1416, New York, NY, 10036, Phone: (917) 510-000, Fax:
(646) 366-089, E-mail: info@glancylaw.com
(3) Lerach Coughlin Stoia Geller Rudman & Robbins
(Melville), 200 Broadhollow, Suite 406, Melville, NY,
11747, Phone: 631.367.7100, Fax: 631.367.1173, E-mail:
info@lerachlaw.com
(4) Schatz & Nobel, P.C., 330 Main Street, Hartford, CT,
06106, Phone: 800.797.5499, Fax: 860.493.6290, E-mail:
sn06106@AOL.com
(5) Scott & Scott LLC, P.O. Box 192, 108 Norwich Avenue,
Colchester, CT, 06415, Phone: 860.537.5537, Fax:
860.537.4432, E-mail: scottlaw@scott-scott.com
OLDACH WINDOW: CO Claimants Sought For $22.5M Lawsuit Settlement
----------------------------------------------------------------
A statewide hunt is underway for thousands of eligible Colorado
homeowners/claimants in a $22.5 million settlement involving
wood-framed windows built by Oldach Window Corporation, a now-
defunct Colorado Springs manufacturer, The Rocky Mountain News
reports.
After nearly six years of litigation, a Douglas County judge
recently signed off on the last of four back-to-back settlements
resolving product defect claims against Oldach and several of
the firm's vendors. The total settlement package - $32.5
million before deducting 25 percent for plaintiff attorney fees
and additional administrative costs applies only to the
manufacture, sale and installation of Oldach Tiltmaster 2000 and
Casement 2010 windows in Colorado.
Founded in 1954, Oldach declared bankruptcy in 1999 just months
after the Greenwood Village law firm Vanatta Sullan Sandgrund
filed the complaint on behalf of a group of Douglas County
homeowners.
According lead counsel Scott Sullan, "I called this case Mission
Impossible. We were suing a company that was bankrupt, with no
assets and an insurance policy that excluded window coverage. So
we were very pleased to bring it around to this kind of
settlement."
The suit alleged the wood-framed windows, installed throughout
the Front Range in the 1990s, used a sealant and other materials
that failed to hold up to Colorado's extreme climate. Later
certified as a state class action for Colorado homeowners only,
the suit claimed that the Oldach defendants were liable for
damages, including replacement costs.
Mr. Sullan told The Rocky Mountain News that the windows were
used in more than 12,000 Colorado homes and possibly as many as
20,000. He pointed out, "We don't know the exact number of homes
is the straight answer," and added, "But our best estimate is
there were at least 12,100."
In researching the case, Mr. Sullan told The Rocky Mountain News
that his legal team was hampered by missing invoices and a trail
of documents that led researchers to a large cache of still-
incomplete records in a factory attic in Nebraska. "This was a
monumental battle that went on for five years all over the
country," he states.
District Judge Paul King has appointed Colorado Management &
Associates of Littleton to administer the claims process. The
earliest payout to eligible claimants, according to a company
spokesman, isn't expected until late this year.
However, to date, roughly 1,200 formal claims have been received
with thousands more expected before a December 20 deadline, said
Bill Peterson, head of Colorado Management. Details are spelled
out on the Web site http://www.coloradomanagement.com.Mr.
Peterson told The Rocky Mountain News, "It's going great for the
claimants. They are going to get some money back - to the tune
of $22 million."
He also adds that it's conceivable that some homeowners will
qualify for a maximum payout of $60,000, based partly on the
number of Oldach windows claimed and their dimensions, as well
as the total number of eligible claimants. Legal notices of the
settlement have been placed in Colorado newspapers, and "claims
continue to be filed every day," he said. He added homeowners
will be considered eligible for a claim based on the presence of
Oldach windows in their homes and not necessarily their
condition. He also said, "What we've created is a pool of money,
and all of it will be paid out."
OM GROUP INC.: Lawsuit Settlement Hearing Set September 8, 2005
---------------------------------------------------------------
The United States District Court for the Northern District of
Ohio, Eastern Division will hold a fairness hearing for the
proposed settlement in the matter: In re OM Group, Inc.
Securities Litigation, Lead Docket no. 1:02 CV 2163, filed one
behalf of all persons or entities who purchased the firm's
common stock from January 27, 2000 through and including October
30, 2002.
The hearing will be held before the Honorable Donald C. Nugent,
in the United States District Court for the Northern District of
Ohio, Eastern Division, Carl B. Stokes United States Courthouse,
801 West Superior Ave., Cleveland, OH, 44114 at 9:00 a.m., on
September 8, 2005.
For more details, contact In re OM Group, Inc. Securities
Litigation, Claims Administrator, c/o The Garden City Group,
Inc., P.O. Box 9000 #6330, Merrick, NY, 11566-9000, Phone: 800-
295-9204, Web site: http://www.gradencitygroup.comOR Daniel L.
Berger, Esq., Chad Johnson, Esq. or Hannah E. Greenwald, Esq. of
Bernstein Litowitz Berger & Grossman, LLP, Phone: 800-380-8496,
Web site: http://www.blbglaw.com.
QWEST COMMUNICATIONS: Prosecutor Seeks Suspension of Lawsuits
-------------------------------------------------------------
Arguing that pending lawsuits could jeopardize a criminal
investigation, U.S. Attorney William Leone is asking a federal
district court to suspend class action suits against former
Qwest Communications International Inc. Chief Executive Joseph
Nacchio, The Reuters.com reports.
In a federal court filing, Mr. Leone stated that Mr. Nacchio,
billionaire Qwest Chairman Philip Anschutz and more than two
dozen former executives "possess core knowledge about the
central subject of the government's investigation." He further
stated in the filing, "Permitting civil discovery to go forward
may result in the premature disclosure of sensitive information
that is important to the (government's) criminal case
investigation."
Though Mr. Leone asked the judge to suspend investor lawsuits
against Mr. Nacchio and other former Qwest executives while the
criminal probe is underway, he did not disclose whether Mr.
Nacchio or the others were targets of the probe.
The Denver-based phone company fraudulently reported about $3
billion in revenue while excluding $231 million in expenses,
according to Securities and Exchange Commission lawsuits filed
in March against Mr. Nacchio and other former executives. In
court filings though, Mr. Nacchio denied any wrongdoing.
The SEC also alleges that some of the defendants personally
profited from selling stocks based on the artificial value of
the company.
Court documents revealed that once the restated revenue figures
reflecting the company's actual worth were released, scores of
shareholders -- including several large pension funds -- sued
Qwest and its executives, claiming investors lost millions of
dollars in the scheme.
SAGE GROUP: Minority Shareholders Mull Suit V. Firm, Directors
--------------------------------------------------------------
In a probable landmark lawsuit, minority shareholders of Sage
Group are considering a class action suit against the directors
of the company, The Business Day reports.
Attorney Richard Spoor, who represented claimants in the
successful asbestos class action against Gencor in 2002, is
assessing the merits of a class action suit on behalf of the
Sage Group's minority shareholders.
Currently, Mr. Spoor is working with a Washington-based class
action law firm on the planned suit, whose claims would be
against Sage directors, particularly Sage Group founder Louis
Shill, in their personal capacities.
Spearheading the action is Theo Botha, shareholder activist and
holder of one Sage share, who claims, "They failed to fully
disclose large and mounting losses in the Sage Group's US
operation between 1998 and 2002, by which time Sage Life USA had
run up huge losses." He goes on to state, "In 1998 the market
capitalization of the Sage Group was R3.9bn. By 2002 it had sunk
to R302m." That loss of value lies at the heart of the lawsuit
against directors and the company secretary of the group for the
years ending 1999, 2000, 2001 and 2002.
The substance of the claim is set out in a letter from Mr. Botha
to Mr. Shill. Mr. Botha stated in that letter, "exorbitant and
reckless dividends were paid out and disclosure requirements, in
terms of JSE rules and regulations, were not met."
SEARS ROEBUCK: IL Court Allows Disabilities Lawsuit to Proceed
--------------------------------------------------------------
U.S. District Court in Chicago is allowing a class action
lawsuit to proceed against Sears, Roebuck & Co. by employees
alleging discrimination against disabled workers, The
WebIndia123.com reports.
The ruling, which was recently revealed by the U.S. Equal
Employment Opportunity Commission, presses a claim that Sears
failed to reasonably accommodate disabled employees. In a press
release, the EEOC stated that at issue is a company policy
placing a one-year limit on worker's compensation and medical-
disability leave. The suit's named plaintiff is John Bava, who
contended that he was dismissed from his job as a service
technician after he was injured in a fall on the job in April
2001.
Federal Judge Wayne R. Anderson denied a motion by the giant
retailer to dismiss the suit filed under the Americans With
Disabilities Act.
Sears, Roebuck & Co. was acquired by Kmart holdings in an $11-
billion deal finalized in March and the company is now known as
Sears Holdings Corporation.
SOLUTIA INC.: Plaintiffs Launch Amended ERISA Lawsuit in S.D. NY
----------------------------------------------------------------
Plaintiffs filed an amended class action against Solutia, Inc.'s
former officers and employees and its Employee Benefits Plans
Committee and Pension and Savings Funds Committee in the United
States District Court for the Southern District of New York,
styled "Dickerson v. Feldman, et al."
The suit was initially filed on October 7, 2004 against a number
of defendants. The Company was not named as a defendant. The
action alleges breach of fiduciary duty under the Employee
Retirement Income Security Act of 1974 ("ERISA") and seeks to
recover alleged losses in the Solutia Inc. Savings and
Investment Plan ("SIP Plan") arising from the alleged imprudent
investment of SIP Plan assets in the Company's common stock
during the period from December 16, 1998 through the date the
action was filed. The investment is alleged to have been
imprudent because of the Company's legacy environmental and
litigation liabilities. The action seeks monetary payment to
the SIP Plan to compensate for the losses resulting from the
alleged breach of fiduciary duties, as well as injunctive and
other appropriate equitable relief, reasonable attorney's fees
and expenses, costs and interest.
In addition, the plaintiff in this action filed a proof of claim
for $269 against the Company in the U.S. Bankruptcy Court for
the Southern District of New York. The plaintiff then sought to
withdraw the reference of his ERISA claim from the bankruptcy
court to the district court so that the proof of claim and the
class action could be considered together by the district court.
On March 11, 2005 the district court denied without prejudice
plaintiff's motion to withdraw the reference.
In May 2005, the plaintiffs filed an amended and then a second
amended complaint. Although the ERISA violations alleged are
very similar to those asserted in the original complaint, the
second amended complaint added new allegations largely similar
to those made in In Re Solutia Securities Litigation. This
second amended complaint also adds twelve new defendants,
including former and current directors and officers of the
Company. The directors are alleged to have breached their
fiduciary duties under ERISA by failing to monitor the plan's
fiduciaries, and by failing to recognize that the fiduciaries
were not themselves properly managing the plan.
TIME WARNER: Securities Fraud Litigation Settled For $2.5B in NY
----------------------------------------------------------------
A $2.5 billion dollar settlement of the Time Warner Securities
Fraud litigation was reached between the Lead Plaintiff's
Counsel, Heins Mills & Olson, P.L.C. of Minneapolis, and the
defendants.
In addition, $150 million recovered by the Department of Justice
will be distributed to class members, and, subject to consent
from the SEC, $300 million recovered by that agency may also be
distributed to class members.
The settlement is among the top five securities fraud class
action settlements ever and is the second largest in history
paid by an issuer of securities and its auditor. Defendant Time
Warner is to pay $2.4 billion and its auditor, Ernst & Young, is
to pay $100 million. The settlement will benefit millions of
shareholders who purchased or acquired AOL and Time Warner
securities between January 27, 1999 and August 27, 2002.
The parties will seek preliminary approval of the settlement by
the U.S. District Court for the Southern District of New York,
Hon. Shirley Wohl Kram, in September.
The lawsuit has been prosecuted since September 2002. The Court
appointed Heins Mills & Olson, P.L.C. in January 2003 as Lead
Plaintiff's counsel to represent a class of AOL and Time Warner
shareholders that includes millions of individuals and entities.
Defendants include AOL and Time Warner, certain of their
executives and Ernst & Young. Lead Plaintiff, appointed by the
Court, is the Minnesota State Board of Investment.
"We believe this settlement is not only a significant recovery
for stockholders, but also demonstrates the important role of
securities fraud litigation in maintaining integrity in capital
markets. We look forward to presenting the settlement for the
Court's approval," said Samuel D. Heins, of Heins Mills & Olson,
P.L.C.
For more details, contact Samuel D. Heins of Heins Mills &
Olson, P.L.C., Phone: +1-612-338-4605, E-mail:
sheins@heinsmills.com.
UNITEDHEALTH GROUP: Doctors File Anticompetitive Practices Suit
---------------------------------------------------------------
Four Connecticut doctors launched a lawsuit against Minnetonka,
Minnesota-based UnitedHealth Group and Oxford Health Plans,
which merged last year in a deal worth about $4.9 billion,
accusing one them of anticompetitive practices to force them
into a substandard health insurance network, The Associated
Press reports.
Filed in Bridgeport Superior Court against, the doctors' suit
contends that the company is requiring them to accept an
inferior plan offered by Oxford if they wish to remain in
United's network. According to the doctors, the Oxford plan pays
lower fees to doctors and involves long waits on phones and
difficulty getting approval for medical procedures.
The lawsuit states, "In short, Oxford and United are using the
combined economic muscle created by their recent merger to
extract significant financial concessions from physicians and to
impose Herculean administrative burdens upon them. Indeed, if
Oxford and United are not stopped in their tracks now, it will
only be a matter of time before they carry out the next step of
their master plan to impose unreasonably low fee schedules upon
physicians throughout the state regardless of the health plan in
which they participate as medical providers."
Maria Shydlo, a spokeswoman for Oxford, told The Associated
Press that she could not comment on pending litigation, however
she pointed out that the company has consulted with regulators
regarding the matter. She also said, "We believe the network
integration is appropriate."
Ms. Shydlo defended the network integration by saying that the
merger offers doctors more access to patients and provides
patients with access to a broader network of doctors. She added
that the company has not had many complaints about its approval
process.
Oxford, based in Trumbull, provided health insurance services
for approximately 1.5 million people, mostly in New York City,
northern New Jersey and southern Connecticut. UnitedHealth
served about 20.2 million customers across the nation.
The lawsuit was filed by Fairfield County doctors Donald J.
Austrian, Francis A. Garofolo, Kenneth A. Miller, and Evangelos
D. Xistris and seeks class action status on behalf of hundreds
and possibly thousands of doctors. They are seeking monetary
damage and an order that would prevent the company from
requiring the doctors to accept both networks as a package. In
addition, the doctors also want the company to keep approval
offices open at all times and reduce hold times to 10 minutes.
According to the suit, most doctors cannot afford to replace
their United patient base, and are "railroaded" into becoming an
Oxford provider. It also pointed out that the practice has been
banned in seven states, Arkansas, Florida, Indiana, Kentucky,
Maryland, Massachusetts and Virginia. The doctors even contend
in their suit that the U.S. Department of Justice and the
American Medical Association has also challenged the practice.
Also, the contends that forcing doctors into the Oxford plan
means they have less time to spend with their patients. It
stated, "Oxford's administrative hurdles often caused Dr.
Austrian's patients undue pain and suffering while they waited
for their insurance company to approve necessary medications
that they could not otherwise afford."
VISX INC.: Reaches Settlement For CA Shareholder Fraud Lawsuit
--------------------------------------------------------------
VISX, Inc. reached a settlement for the consolidated class
action filed against it and its board of directors in the
Superior Court of the State of California, County of Santa
Clara, styled "William Kinchy vs. VISX, Incorporated, et al.,
Case No. 104CV030447."
On November 12, 2004, two putative class action lawsuits were
filed, captioned "William Kinchy vs. VISX, Incorporated, et al.,
Case No. 104CV030447" and "Douglas Shearer vs. VISX,
Incorporated, et al., Case No. 104CV030452." On January 27,
2005, the court ordered the two cases consolidated under the
Kinchy case.
On January 28, 2005, Mr. Kinchy filed an amended complaint that
alleges, among other things, that the Company's board of
directors and certain executive officers breached their
fiduciary duties of loyalty and due care by approving the merger
agreement with Advanced Medical Optics, Inc. and the merger
contemplated by the merger agreement without undertaking
sufficient efforts to obtain the best offer possible for
stockholders. The complaint further alleges that the
consideration to be paid in the merger is unfair and inadequate,
and that the defendants breached their fiduciary duties to care,
loyalty and candor to the Company from consummating the merger
and rights of rescission against the merger and any of the terms
of the merger agreement, as well as attorneys' fees and costs.
On March 14, 2005, the Company reached an agreement in principle
with plaintiff's counsel pursuant to which plaintiff will
release the defendants, as well as AMO and certain Company
agents and affiliates, from all claims that have been brought or
could have been brought under the state or federal law arising
out of or relating to the merger. The settlement agreement
remains subject to approval by the Superior Court of the State
of California for the County of Santa Clara. Under the
agreement in principle, the Company agreed to make certain
additional disclosures that were included in the joint proxy
statement/prospectus. In addition, the Company agreed that it
will not oppose a fee application by plaintiff's counsel of up
to $500,000.
Asbestos Alert
ASBESTOS LITIGATION: Rangers Probe Australian Asbestos Dumpsite
----------------------------------------------------------------
Council rangers continue to investigate what's possibly the
largest illegal asbestos dump in the region, the South Coast
Register reports.
Members of the public informed the rangers of the location of
the dump, which consisted of a large amount of corrugated
asbestos roofing panels, along a track near Erowal Bay. This
incident specially alarmed the Council rangers since asbestos
dumping fees at West Nowra Waste Depot have been reduced to the
same rate as mixed waste per ton. From AUD115 per ton, the cost
has gone down to AUD78 per ton.
The Council's manager of ranger services, Ray Spencer, said this
proves that people are still trying to dodge the processes
involved with dumping asbestos legally. He said that illegal
dumpers are aiming to avoid the trouble of having to wrap up the
asbestos waste and filing advance notice to the depot with
regards to when the waste will be brought to the site.
Mr. Spencer warned illegal dumpers of the presence of a
dedicated group known as the RID Squad, which is tasked with
looking for violators of the dumping law. He expressed optimism
that the incidence of illegal dumping would be reduced since the
public is increasingly becoming vigilant in giving the Council
information on these activities.
ASBESTOS LITIGATION: Rohm & Haas Named as Peripheral Defendant
----------------------------------------------------------------
Rohm and Haas Company (NYSE: ROH), a manufacturer of specialty
chemicals, disclosed in its latest filing to the Securities and
Exchange Commission that as a result of the bankruptcy of
asbestos producers, plaintiffs' attorneys are shifting their
focus on peripheral defendants, including the said Company,
which had asbestos on its premises.
The Company asserted that historically, these premises cases
have been dismissed or settled for small amounts because of the
minimal likelihood of exposure at its facilities. However, as
more asbestos producers are bankrupted, the demands against
companies with older manufacturing facilities of any type in the
United States, such as itself, are increasing. The Company has
reserved amounts for premises asbestos cases that it believes
are probable and estimable but it cannot reasonably estimate
what its asbestos costs will be if the current situation
deteriorates and there is no tort reform.
There are also pending lawsuits filed against one of its
acquisitions, Morton International, related to employee exposure
to asbestos at a manufacturing facility in Weeks Island,
Louisiana with additional lawsuits expected. The Company expects
that most of these cases will be dismissed because they are
barred under worker's compensation laws; however, cases
involving asbestos-caused malignancies may not be barred under
Louisiana law. Subsequent to the Morton acquisition, the Company
commissioned medical studies to estimate possible future claims
and recorded accruals based on the results.
Morton has also been sued in connection with asbestos-related
matters in the former Friction Division of the former Thiokol
Corporation, which merged with Morton in 1982. Settlement
amounts to date have been minimal and many cases have closed
with no payment. The Company estimates that all costs associated
with future Friction Division claims, including defense costs,
will be well below its insurance limits.
Headquartered in Philadelphia, PA, Rohm and Haas has 150
manufacturing and research sites located around the world. Sales
take place in more than 100 countries and total more than US$6
billion annually. In 1999 Rohm and Haas acquired Morton
International, maker of specialty chemicals and famous Morton
Salt.
ASBESTOS LITIGATION: American Standard Resolves 29,820 Claims
-------------------------------------------------------------
American Standard Companies Inc. (NYSE: ASD) revealed that from
receiving its first asbestos claim more than 20 years ago until
June 30, 2005, the Company has resolved 29,820 claims. The total
amount of all settlements paid by the Company and its insurance
carriers is about US$59.6 million, for an average payment per
claim of US$1,998.
Over the years, the Piscataway, NJ-based Company has been named
as a defendant in numerous lawsuits alleging various asbestos-
related personal injury claims arising primarily from sales of
boilers and railroad brake shoes. In these lawsuits, the
Company, a maker of air-conditioning systems, plumbing products,
and automotive braking systems, is usually named as one of a
large group of defendants, often in excess of 100 companies.
Many of these lawsuits involve multiple claimants, do not
specifically identify the injury or disease for which damages
are sought and do not allege a connection between any Company
product and a claimed injury or disease. As a result, numerous
lawsuits have been placed and may remain on inactive or deferred
dockets, which some jurisdictions have established.
In the fourth quarter of 2004, the Company retained Dr. Francine
F. Rabinovitz of Hamilton, Rabinovitz & Alschuler, Inc. to
assist it in calculating an estimate of the Company's total
liability for pending and unasserted potential future asbestos-
related claims. HR&A calculated a total estimated liability for
the Company to resolve all pending and unasserted potential
future claims through 2055, which is its reasonable best
estimate of the time it will take to resolve asbestos-related
claims, of US$699 million. This amount is on a pre-tax basis,
not discounted for the time-value of money, and excludes legal
fees.
As of June 30, 2005, the Company has a receivable for probable
asbestos-related insurance recoveries of US$364.6 million. This
represents amounts due to the Company for previously settled and
paid claims and the probable reimbursements relating to its
estimated liability for pending and future claims.
The Company is in litigation against certain carriers whose
policies it believes provide coverage for pending claims. The
insurance carriers named in this suit are challenging the
Company's right to recovery.
The aggregate amount of the stated limits in insurance policies
available to the Company for asbestos-related claims, acquired
over many years and from many different carriers, is
substantial, significantly exceeding the projected liability
against the Company. However, limitations in that coverage,
primarily due to gaps in coverage, deductibles associated with
the policies and settlements for less than the full coverage
limits with carriers in insolvency proceedings and carriers with
questionable credit-worthiness are expected to result in the
projected total liability to claimants and related expenses
exceeding the probable insurance recovery. The Company settled
with most of the insolvent carriers and carriers with poor
credit quality whose policies it believes provide coverage for
pending and projected future claims. A total of 85% of the
remaining recorded insurance recovery receivable is with
carriers rated A or better by AM Best.
In February 2005, the Company reached agreement with Equitas,
the London-based entity responsible for certain pre-1993 Lloyd's
of London policies in its insurance coverage, in the amount of
US$84.5 million. During the first half of 2005, US$13.2 million
of this was received by the Company to cover asbestos and
environmental costs, and US$71.3 million remains in a trust
expiring January 3, 2007.
If, during the trust period, there is federal legislation that
takes asbestos claims out of the courts and requires Equitas to
make a duplicate payment to the asbestos trust, the remaining
balance in the trust less some allowance to the Company for
claims settlements that may be made or have been made in the
period January 1, 2005 through January 3, 2008, will be used by
Equitas for the legislative payment. If there is no such
legislation by January 3, 2007, the balance of funds in the
trust, including accrued interest, will be disbursed to the
Company.
Because claims are frequently filed and settled in large groups,
the amount and timing of settlements, as well as the number of
open claims, can fluctuate significantly from period to period.
This is demonstrated by the fact that about 40% of all claims
filed against the Company were filed in a 20-plus year period
prior to 2002, about 40% were filed in the 16-month period from
January 2002 through April 2003, and the remaining 20% were
spread relatively evenly over the next 26 months through June
2005.
Corporate and other expenses in the second quarter of 2005
decreased US$12.3 million to US$49.9 million from US$62.2
million in the second quarter of 2004 due principally to
increased pension expense during 2004 of about US$7.0 million,
realized foreign exchange transaction gains of about US$3.4
million and lower asbestos indemnity expenses of about US$3.2
million.
ASBESTOS LITIGATION: Union Supports Launch of UK Victims' Group
---------------------------------------------------------------
Aiming to support the increasing number of asbestos claimants
from the area, a Northeast support group is launched to
coordinate better access to benefits and legal advice.
The Tyne and Wear Asbestos Support Group (TWASG), based in
Newcastle, aims to provide information, advice and support to
potential claimants. The trade union-backed group will also
campaign on health and safety, particularly to ensure employers
are enforcing safety rules on the management of asbestos.
John Kelly, a GMB union official and member of the TWASG, said
that there were 932 deaths from the asbestos-related cancer
mesothelioma in the Tyne and Wear area between 1981 and 2000,
translating to a higher-than-average 49 deaths per year.
Nick Brown, MP for Newcastle East and Wallsend, said, "The
launch of the asbestos support group is timely. There is so much
that still needs to be done."
Various illnesses from asbestos exposure have afflicted
thousands of workers in the shipbuilding, engineering,
construction and energy industries. About 12,000 people have
died from asbestos poisoning since 2002, and experts believe
that by 2015, 10,000 people a year will die from these diseases,
which include asbestosis, lung cancer and mesothelioma.
ASBESTOS LITIGATION: US Widow's Win Over Hardie Sets Precedent
--------------------------------------------------------------
Setting a precedent to similar and possibly much larger claims,
James Hardie Industries' compensation trust paid US$250,000 to
the widow of a former employee of Industrial Building Materials
Inc., a California-based Company which distributed asbestos
building products imported from Hardie between the 1960s to the
1980s. The case marks the first successful asbestos disease
claim against Hardie outside Australia and New Zealand.
Hardie's former asbestos building products subsidiary made the
US$250,000 payout to settle a suit for the wrongful death of Don
Lee Henderson, who died in 2002 of the asbestos-linked cancer
mesothelioma. The closest link yet established between Hardie's
asbestos exports to the US and asbestos disease involves IBMI,
because confidential documents have revealed Hardie privately
admitted it could be liable for lawsuits involving the company.
In a company memo, Hardie's then litigation counsel, Wayne
Attrill, said Hardie's Australian asbestos subsidiary had
exported asbestos products to IBMI, and could be liable.
Mr. Henderson's family had won a US$11 million (AUD14 million)
verdict against Eternit, another former asbestos producer whose
products were sold by IBMI. But the family never received the
money because the Belgian company's US subsidiary went into
bankruptcy.
Families of James Berry and Ronald Brown, who died of the same
disease after working with Hardie products at the Californian
distributor, also have cases before the courts in which Hardie
is a defendant. Hardie has been named in 75 asbestos disease
cases since 1999 in the San Francisco jurisdiction alone, with
several cases pending.
As previously reported on the February 25, 2005 edition of the
Class Action Reporter, Hardie spokesman James Rickards had said
the few lawsuits filed in the US were against the legally
separate compensation trust. The California Superior Court lists
James Hardie Building Products Inc, and other Hardie
subsidiaries in the US, as defendants in the wrongful death case
filed in July 1997 for Ronald Brown, who worked at IBMI from
1964 to 1976.
ASBESTOS LITIGATION: MSHA Monitors AK Quarry Site for Hazards
-------------------------------------------------------------
Federal regulators are checking if a health risk exists at the
Stabler's Point Rock Quarry after tests this month show elevated
levels of asbestos, Juneau Empire reports. Located across Auke
Bay, the quarry contained 3% to 5% tremolite, the most dangerous
form of asbestos, according to laboratory tests supplied by a
Juneau contractor.
The federal Mine Safety and Health Administration, which is
responsible for the regulation of rock quarries, would have
final test results in a few weeks, said Rorie Watt, Juneau's
chief capital improvement project engineer. The airborne levels
of asbestos in the quarry may not pose a health risk, he added.
Chris DeWitt, supervisor of Juneau's John Rishel Mineral
Information Center, told Mr. Watt in a memo that based on his
visual inspection, the quarry's total asbestos amount could be
"far less than one percent of the rock."
Timothy Miller, manager of Miller Construction, claimed that the
quarry is the most competent rock source in Juneau. He hopes
the new quarry test results come back safe otherwise it will
harm a lot of Juneau projects.
Coogan Development wanted to use Stabler's Point rock for a
Bartlett Regional Hospital project but owner Wayne Coogan said
he worries about exposing his workers. An Anchorage field
inspector for the Mine Health and Safety Administration equipped
the work crew with air monitors.
About 10% to 20% of the rock goes to private contractors and the
rest for state and city projects. Around half a dozen to a
dozen Juneau contractors use the quarry during the summertime,
according to city engineers. The Stabler's Point quarry, open
for commercial use since 2002, is currently one of Juneau's
major sources of rock for construction projects, producing about
50,000 to 75,000 tons per year.
ASBESTOS LITIGATION: TN Senator Seeks Approval of US$140Bil Fund
----------------------------------------------------------------
Senate Majority Leader Bill Frist expresses intent to validate
the creation of a US$140 billion Asbestos Victims' Compensation
Fund this autumn, Reuters reports.
According to the bill proposed by Senators Arlen Specter and
Patrick Leahy, victims claim indemnity from a US$140 billion
fund to be financed by companies and their insurers facing the
suits. The Senate's Judiciary Committee approved in May the
bill to create the Fund. However, Mr. Frist, a Tennessee
Republican, did not bring the issue to the Senate floor citing
concerns about the Democrat and Republican parties' support.
Republican critics are wary about the fund's solvency and if it
would stop all asbestos lawsuits, while Democrats questioned if
it treats victims fairly.
Asbestos was used for fireproofing and insulation until the
1970s. Its fibers have been linked to cancer, and personal
injury claims bankrupted dozens of US companies.
ASBESTOS LITIGATION: Japan Gov't to Cover Non-employees Expenses
----------------------------------------------------------------
A special law that seeks to establish compensation to cover
medical expenses from asbestos-related diseases of family
members of employees working at plants and nearby residents will
soon be drafted, according to the heads of seven Japanese
ministries and agencies, The Yomiuri Shimbun reports.
At a press conference last week, Chief Cabinet Secretary
Hiroyuki Hosoda revealed that he hopes the government will reach
a conclusion on the law by mid-September. The Health, Labor and
Welfare Ministry released the names of about 250 companies and
offices of which 532 employees, including former workers, were
recognized as being entitled to receive workers' compensation
between April 1999 and March 2005. They are among 849 people who
have received compensation so far. Aside from the drafting of
this law, these groups also disclosed comprehensive measures
meant to deal with the issue of asbestos-linked diseases
plaguing an ever increasing number of people.
Between August and mid-October, the ministry will ensure that
buildings with products containing asbestos be demolished in
compliance with labor standards. Inspectors would have to
confirm that work is carried out according to an ordinance aimed
at preventing the dispersal of asbestos. The ordinance came into
effect last month. The ministry will also conduct nationwide
research into the use of asbestos at social welfare facilities,
such as hospitals, special nursing homes for the elderly and
day-care centers. It plans to ban as soon as possible the use of
products containing asbestos, which the law still permits in
exceptional cases.
The Construction and Transport Ministry has launched a field
survey with the health ministry in which it will survey 560,000
building firms across the nation about whether any of their
workers have died from asbestos-related illnesses. The
Education, Science and Technology Ministry will release its
findings in mid-November after it concludes its examination of
the use of asbestos at 147,000 establishments, including public
cultural facilities and independent administrative agencies
affiliated to the ministry, in addition to school facilities.
Maritime Self-Defense Force engineers who were engaged in vessel
repair and maintenance work and former Japanese workers at the
U.S. Yokosuka Naval Base in Kanagawa Prefecture also have been
recognized as qualifying for workers' compensation after
developing black lung disease linked to asbestos exposure.
Consequently, the Defense Agency decided to establish an inquiry
counter to provide information and medical checkup services to
MSDF personnel and employees of U.S. military bases.
ASBESTOS LITIGATION: Northrop Grumman Says Most Claims Dismissed
----------------------------------------------------------------
Shipbuilder and defense contractor Northrop Grumman Corporation
(NYSE: NOC) is a defendant in lawsuits alleging personal injury
as a result of exposure to asbestos integrated into its premises
and certain historical products.
The Los Angeles, CA-based Company said that many of these claims
have been dismissed with no payment and the remaining resolved
claims have involved amounts that were not material either
individually or in the aggregate.
Based upon the information available, the company does not
believe that the resolution of any of these various claims and
legal proceedings will have a material adverse effect on its
financial position, results of operations, or cash flows.
ASBESTOS LITIGATION: Metaldyne Says Claims May Arise from TriMas
----------------------------------------------------------------
Metal company Metaldyne Corp. revealed in its latest filing to
the Securities and Exchange Commission that in the ordinary
course of its business, contractual disputes over warranties
could also arise.
In the past five years or more, the Plymouth, MI-based Company
has not been required to make any material payments in respect
of warranty claims. In addition, claims may be asserted against
it with respect to former businesses disposed of by the Company,
whether or not it is legally responsible or entitled to
contractual indemnification.
In June 2002, the Company divested its controlling interest in
TriMas. Certain of TriMas' subsidiaries have historical
contingent and other liabilities, including liabilities
associated with their former manufacture of asbestos containing
gaskets, for which the Company is indemnified. In the event of
financial difficulty at one of its former businesses or
otherwise, claims may be made against it and, to the extent
arising from a TriMas business, TriMas may not be in a position
to meet its indemnification obligations.
TriMas Corp., a Bloomfield Hills, Mich.-based manufacturer of
engineered products, operated as an independent company
beginning in 1987, but was acquired in 1998 by Metaldyne Corp.
(then known as MascoTech Inc.). In November 2000, Matladyne was
acquired by an investor group led by Heartland Industrial
Partners, which later spun the company out on its own.
ASBESTOS LITIGATION: Hearing for Approval of Congoleum Plan Set
----------------------------------------------------------------
Congoleum Corporation has filed a modified plan of
reorganization and disclosure statement with the Bankruptcy
Court to incorporate certain technical modifications to the plan
filed in June 2005. A hearing to consider approval of the
disclosure statement is scheduled for July 28, 2005, after which
Congoleum expects to commence soliciting acceptances from
certain claimant creditors affected by these modifications.
Congoleum also recently requested Bankruptcy Court approval for
a settlement agreement with certain underwriters at Lloyd's,
London. This agreement, if approved, will bring total insurance
settlements to date to US$139 million. A hearing has been
scheduled for August 8, 2005 for the Bankruptcy Court to
consider approving the settlement. Under the terms of the
settlement, the certain underwriters will pay US$19,950,000 into
an escrow account. The escrow agent will transfer the funds to
the trust for asbestos claimants to be formed by Congoleum's
plan once the plan goes effective and the Court approves the
payment.
Congoleum expects to book a charge of US$15.5 million as part of
its second quarter results to increase its reserves to the
levels that the Company now anticipates will now be needed to
complete confirmation of this latest plan.
Roger S. Marcus, Chairman of the Board, commented, "We are very
pleased to be moving ahead with the new plan. Based on the
expected timing of the remaining steps, we are optimistic that
we could emerge from bankruptcy sometime in the first quarter of
2006."
Mr. Marcus continued, "Unfortunately, the insurers' opposition
to virtually every single step we have taken to date has
prolonged the process and greatly inflated the cost of an
already expensive undertaking. Our second quarter results will
be negatively affected by the expense of these delays and the
intense litigation underway. On a positive note, the progress we
are making with insurance settlements is encouraging.
"Not only is this latest agreement a favorable development, but
we are also seeing momentum build in other negotiations. I am
optimistic about further settlements in the near future, adding
to the significant assets already available for current and
future claimants when our plan is confirmed. With each
settlement we face one less adversary in putting this all behind
us."
On December 31, 2003, Congoleum Corporation filed a voluntary
petition with the United States Bankruptcy Court for the
District of New Jersey seeking relief under Chapter 11 of the
United States Bankruptcy Code as a means to resolve claims
asserted against it related to the use of asbestos in its
products decades ago.
Congoleum Corporation, a 55% owned subsidiary of American
Biltrite Inc., is a manufacturer of resilient flooring, serving
both residential and commercial markets.
ASBESTOS LITIGATION: Federal-Mogul Posts US$11.6Mil Loss in 2Q05
----------------------------------------------------------------
Auto-parts supplier Federal-Mogul Corp. recorded a net loss of
US$11.6 million, or 13 cents per share, for the second quarter
ended June 30, 2005, compared to a loss of US$9 million, or 11
cents per share, in the same period a year earlier.
Net sales for the Southfield, MI-based Company rose to US$1.67
billion in the quarter from US$1.57 billion in the year-ago
period. New business from automakers and replacement-parts
suppliers boosted revenues, but that was offset by higher costs
for steel and other raw materials, as well as rising pension
expenses, Federal-Mogul said.
Federal-Mogul has been in financial turmoil for five years. The
company, which last posted an annual profit in 1999, filed for
bankruptcy in October 2001 after mounting costs from lawsuits
related to claims of asbestos exposure. Except for the effect
of foreign currency, the Company has not adjusted its estimate
of the asbestos liability since September 30, 2001.
While the Company believes that the liability recorded was
appropriate as of October 1, 2001 for anticipated losses arising
from asbestos-related claims against the T&N Companies through
2012, it is the Company's view that, as a result of the
restructuring proceedings, there is even greater uncertainty in
estimating the timing and amount of future asbestos liability
and related insurance recovery for pending and future claims.
In 1996, T&N Ltd. purchased for itself and its then defined
global subsidiaries a GBP500 million layer of insurance which
will be triggered should the aggregate costs of claims made or
brought after June 30, 1996, where the exposure occurred prior
to that date, exceed GBP690 million. During 2000, the Company
concluded that the aggregate cost of the claims filed after June
30, 1996 would exceed the trigger point and recorded an
insurance recoverable asset under the T&N policy of US$577
million. As of June 30, 2005, the recorded insurance recoverable
was US$644 million.
ASBESTOS LITIGATION: Georgia-Pacific Corp's Profit Drops in 2Q05
----------------------------------------------------------------
Forest products maker Georgia-Pacific Corp. (NYSE: GP) reported
second quarter 2005 net income of US$194 million (73 cents
diluted earnings per share) compared with net income of US$220
million (84 cents diluted earnings per share) in second quarter
2004.
Inflated higher raw material and energy costs, plus charges
related to debt extinguishment, a mine closure and a bond
investigation by the Internal Revenue Service, all helped
contribute to the Atlanta, GA-based Company's drop in profit in
the second quarter.
The results for the second quarter of 2005 include a US$13
million charge from the early extinguishment of debt; an US$11
million charge to establish a liability reserve related to an
IRS challenge of the tax-exempt status of several series of
bonds issued to finance construction of solid waste recycling
and disposal facilities at certain company mills; and a US$4
million charge (for closure of the Caledonia, Ontario, gypsum
mine and other closure costs. The company also recorded a
pretax charge of US$3 million (US$2 million after tax) for
reduction of its asbestos insurance receivables. The charge
related to the negotiated settlement of a receivable from a
single insurer.
Georgia-Pacific's net sales were US$4.8 billion for the second
quarter 2005, compared with US$5.2 billion for the second
quarter 2004. Excluding sales from the building products
distribution business, which was sold in May 2004, net sales for
the second quarter 2005 increased US$56 million, compared with
second quarter 2004. While building products sales were strong
in the quarter, they were down from the record levels
experienced in the second quarter of 2004. This decline was
more than offset by higher sales in its North America consumer
products segment resulting from price increases realized in 2004
and 2005.
Net sales for the first six months of 2005 were US$9.4 billion,
compared with US$10.4 billion in the same period a year ago.
Excluding sales from the building products distribution
business, which was sold in May 2004, net sales for the first
six months of 2005 increased US$332 million, or 4 percent,
compared with the first six months of 2004.
For the first six months of 2005, Georgia-Pacific reported net
income of US$399 million (US$1.51 diluted earnings per share),
compared with US$367 million (US$1.40 diluted earnings per
share) in the same period of 2004. For the first six months of
2005, the company reported net income excluding unusual items of
US$421 million (US$1.60 diluted earnings per share), compared
with US$402 million (US$1.53 diluted earnings per share) in the
same period of 2004. Total debt was US$8.5 billion at the end
of the second quarter, down US$230 million versus the first
quarter of this year.
A.D. "Pete" Correll, CEO and chairman of Georgia-Pacific said,
"We remain on track to achieve significant cost improvements and
reach our North America consumer products operating profit goal
by the end of 2006."
ASBESTOS LITIGATION: Hardie Expects Claims to be Worth AUD1.685B
----------------------------------------------------------------
From updated actuarial studies of potential asbestos-related
liabilities, James Hardie Industries Inc. projected that the
discounted value of the central estimate for claims against the
liable entities was about AUD1.536 billion (US$1.059 billion)
and AUD1.685 billion (US$1.302 billion) as of June 30, 2004 and
March 31, 2005, respectively.
According to the latest filing it submitted to the U.S.
Securities and Exchange Commission, the undiscounted value of
the central estimate of the asbestos liabilities of Amaca and
Amaba as determined by KPMG Actuaries was about AUD3.586 billion
(US$2.471 billion) as of June 30, 2004 and AUD3.604 billion
(US$2.784 billion) as of March 31, 2005. Actual liabilities of
those companies for such claims could vary from the central
estimate, which is calculated in accordance with Australian
Actuarial Standards.
As of March 31, 2005, KPMG Actuaries' undiscounted central
estimate of asbestos-related liabilities was AUD3.604 billion.
This undiscounted central estimate is net of expected insurance
recoveries of AUD453.0 million after making a general credit
risk allowance for bad debt of insurance carriers and an
allowance for AUD49.8 million of "by claim" or subrogation
recoveries from other third parties.
In February 2001, ABN 60, formerly known as James Hardie
Industries Limited, established the Medical Research and
Compensation Foundation by gifting AUD3.0 million (US$1.7
million) in cash and transferring ownership of Amaca and Amaba
to the Foundation. The Foundation is a special purpose
charitable foundation established to fund medical and scientific
research into asbestos-related diseases. Amaca and Amaba were
Australian companies, which had manufactured and marketed
asbestos-related products prior to 1987.
On March 31, 2003, the Company transferred control of ABN 60 to
a newly established company named ABN 60 Foundation Pty Ltd.,
which was established to be the sole shareholder of ABN 60 and
to ensure that ABN 60 meets payment obligations to the
Foundation owed under the terms of a deed of covenant and
indemnity.
Up to the date of the establishment of the foundation, Amaca and
Amaba incurred costs of asbestos-related litigation and
settlements. Because Amaca, Amaba and ABN 60 are no longer a
part of the Company, and all relevant claims against ABN 60 had
been successfully defended, no provision for asbestos-related
claims was established in the Company's consolidated financial
statements at March 31, 2005 and 2004. It is possible that the
Company could become subject to suits for damages for personal
injury or death in connection with the former manufacture or
sale of asbestos products that are or may be filed against
Amaca, Amaba or ABN 60. However, the ability of any claimants to
initiate or pursue such suits may be restricted or removed by
legislation which the New South Wales Government has agreed to
contemplate following the Company's entry into a Heads of
Agreement.
On December 21, 2004, the Company announced that it had entered
into a non-binding Heads of Agreement with the NSW Government
and the representatives which is expected to form the basis of a
proposed binding agreement to establish and fund a special
purpose fund to provide funding on a long-term basis for
asbestos-related injury and death claims.
As of March 31, 2005, Hardie faced 712 pending claims in
Australia and one claim in the United States, according to
information provided by KPMG Actuaries. As of March 31, 2004,
Hardie had 687 claims in Australia and 5 claims in the United
States.
On April 15, 2005, the Company extended the coverage of the fund
to permit members of the Baryugil community in Australia to
receive compensation funding for proven and valid claims against
a former subsidiary, Asbestos Mines Pty Ltd. The Company's
proposal to provide funding with respect to claims against
Asbestos Mines is not limited to the time period to which the
claim arose, including the period after James Hardie sold the
former subsidiary.
ASBESTOS LITIGATION: GM Seeks Over US$1Bil in Suit Against R&SA
----------------------------------------------------------------
Car manufacturer General Motors is seeking over US$1 billion or
GBP568 million in damages in its legal action over asbestos-
related claims against Royal & SunAlliance, the UK insurance
group.
As previously reported in the February 4, 2005 edition of the
Class Action Reporter, GM names Royal & Sun, the parent company,
as well as its US subsidiaries in the lawsuit against British
insurer Royal & SunAlliance Insurance Group P.L.C., charging the
insurer with dodging millions of dollars in asbestos-related
claims brought against GM. In addition, GM charges that RSA left
the American entities with insufficient funds to meet
obligations to policyholders for asbestos-related exposures and
other long-tail liabilities when RSA withdrew from the U.S.
commercial insurance market in 2003. RSA that year sold the
renewal rights of large parts of its U.S. commercial business to
Travelers Property Casualty Corp. unit Travelers Indemnity Co.,
which did not assume any RSA liabilities.
GM alleges that R&SA has failed to pay it for defending alleged
personal injury claims linked to asbestos. Property damage
claims linked with environmental pollution are also part of the
dispute.
For almost two years, the British insurer and the US carmaker
have been locked in a legal dispute. The conflict centers on
insurance policies issued by R&SA's American insurance
businesses to GM between 1954 and 1971. R&SA alleges that
policies were declared "null and void" under a controversial
agreement in 1972. GM has gained an affidavit from Charles
Bates, a senior partner at Bates White, an economic consultancy.
It says, "GM's coverage claim against Royal . . . exceeds the
Royal US defendants' ability to pay."
Central to the dispute is an agreement known as "Endorsement
15," which was drawn up in early 1972. From 1972, GM's insurance
arrangement with R&SA was moved from policies on an "occurrence"
basis to "claims-made" policies. Occurrence policies are
effectively open contracts - a claim can be made at any time in
the future, so long as the event leading to the claim took place
during the period covered by the insurance policy. Contracts for
claims-made policies are typically for one year and a company is
only insured for claims if they were reported during the
policy's 12-month period.
R&SA argues that the move to claims-made policies included an
understanding to terminate all the earlier occurrence policies
from 1954 to 1971. On that basis, it argues, GM does not have a
case. It also points to a separate agreement where the two sides
later agreed to set up a US$164 million or GBP93 million run-off
fund to cover earlier claims that had yet to be settled - a
clear indication, in its view, that the earlier policies had
been scrapped.
Despite the numerous affidavits and documents, there is no clear
statement of what was understood by the agreement in early 1972.
GM's case rests on establishing that R&SA's US business was
effectively an "alter ego" of the UK parent company. In short,
that there was improper intervention and that corporate
governance standards were compromised at the US subsidiaries.
The case will be held in an Oakland County circuit court in
Michigan, where state law is said to be less strict on this
issue than in Delaware. If GM succeeds in proving that the UK
parent insurance company is liable, it could lead to a wave of
legal claims from other US litigants.
ASBESTOS LITIGATION: Rockwell Automation Held in Various Claims
----------------------------------------------------------------
Rockwell Automation, Inc. (NYSE: ROK) is a defendant in lawsuits
alleging personal injury as a result of asbestos exposure used
in certain components of its products years ago. The bulk of
the complaints do not identify any of the Company's products or
specify which of these claimants were exposed to asbestos
attributable to its products.
The Company has been dismissed from the vast majority of these
claims with no payment to claimants. It has maintained insurance
coverage that covers indemnity and defense costs, over and above
self-insured retentions, for most of these claims.
On February 12, 2004, the Milwaukee, WI-based Company initiated
litigation in the Milwaukee County Circuit Court to enforce the
insurance policies against Nationwide Indemnity Company and
Kemper Insurance, the insurance carriers that provided liability
insurance coverage to its former subsidiary Allen-Bradley. As a
result, the insurance carriers paid a total of US$15.9 million
for past defense and indemnity costs, and agreed to pay for the
substantial majority of future defense and indemnity costs for
Allen-Bradley asbestos claims, subject to policy limits. If
either carrier becomes insolvent, Rockwell may be required to
refund the amounts it has collected and will continue to collect
in the applicable preference period prior to the insolvency and
its share of future defense and indemnity costs may rise.
The uncertainties of asbestos litigation and the long-term
solvency of the Company's insurance carriers make it difficult
to predict accurately the ultimate outcome of such claims and is
increased by the possibility of adverse rulings or new
legislation affecting asbestos claim litigation or the
settlement process.
The Company does not believe these lawsuits will have a material
adverse effect on its financial condition.
ASBESTOS LITIGATION: Maremont Corp. Defends Against 69,600 Suits
----------------------------------------------------------------
Maremont Corporation, an ArvinMeritor, Inc. subsidiary acquired
in 1986, is a defendant in personal injury lawsuits from
exposure to asbestos-containing products. Maremont had about
69,600 and 74,000 pending asbestos-related claims at June 30,
2005 and September 30, 2004, respectively.
Maremont manufactured friction products containing asbestos from
1953 through 1977. Maremont claimed to having insurance that
reimburses a substantial portion of the costs incurred defending
against asbestos-related claims and any indemnity paid on those
claims. Management believes that existing insurance coverage is
adequate to cover substantially all costs relating to pending
asbestos-related claims.
ArvinMeritor believes its litigation strategy reduced the
average indemnity cost per claim. The decline in pending claims
and related liability since September 30, 2004 reflects the
settlement of 8,500 claims in one jurisdiction and lower defense
costs. Billings to insurance companies for indemnity and defense
costs of resolved cases were US$8 million and US$9 million in
the nine months ended June 30, 2005, and 2004, respectively.
The Center for Claims Resolution handled the resolution and
processing of asbestos claims on behalf of its members until its
dissolution in February 1, 2001. Since then, Maremont handled
asbestos related claims through its own defense counsel. There
were US$1 million in billings to insurance companies related to
committed settlements in the nine months ended June 30, 2004.
Several former members of the CCR have filed for bankruptcy
protection, and these members have failed to pay certain
financial obligations with respect to settlements that were
reached while they were CCR members. Maremont is subject to
claims for payment of a portion of these defaulted member
shares. Maremont and its insurers are currently engaged in legal
proceedings to determine whether existing insurance coverage
should reimburse any potential liability related to this issue.
There were no payments by the company related to shortfall and
other in the nine months ended June 30, 2005. Payments related
to the shortfall and other were US$2 million in the nine months
ended June 30, 2004.
ArvinMeritor, Inc. (NYSE:ARM) is a Troy, MI-based Company that
manufactures components for commercial vehicles. Maremont
Corporation is a division of ArvinMeritor Light Vehicle
Aftermarket, a global automotive aftersales group providing
exhaust, filter, and ride control products to its customers.
ASBESTOS LITIGATION: PolyOne Posts US$2Mil Reserves for Claims
--------------------------------------------------------------
PolyOne Corporation posted a total of about US$2 million
reserves as of June 30, 2005 for asbestos-related claims. The
Company defends itself against suits involving multiple
claimants and defendants for alleged asbestos exposure by
workers and contractors and their families at plants or ships
owned by the Company or operated by its predecessors.
The Company believes the probability is remote that losses in
excess of the amounts it accrued could be material to its
financial condition, results of operations or cash flows. This
belief is based upon its ongoing assessment of the strengths and
weaknesses of the specific claims and its defenses and insurance
coverages available with respect to these claims, as well as the
probability and expected magnitude of reasonably anticipated
future asbestos-related claims.
The Company's assessment includes: whether the pleadings allege
exposure to asbestos, asbestos-containing products or premises
exposure; the severity of the plaintiffs' alleged injuries from
exposure to asbestos or asbestos-containing products and the
length and certainty of exposure on our premises, to the extent
disclosed in the pleadings or identified through discovery;
whether the named defendant related to us manufactured or sold
asbestos-containing products; the outcomes of cases recently
resolved; and the historical pattern of the number of claims.
PolyOne Corporation (NYSE:POL) is an Avon Lake, OH-based Company
that is one of North America's largest plastics compounders and
resins distributors.
ASBESTOS LITIGATION: Aussie Council Bares Plan to Develop Policy
----------------------------------------------------------------
A workshop organized by the Goulburn Mulwaree Council disclosed
a plan to develop an asbestos management policy on affected
demolition and renovation sites, reports the Goulburn Post.
Councilor Ken Sullivan raised concerns about the asbestos
handling at the Supertex complex site in North Goulburn. Mr.
Sullivan commended the 40-strong attendance comprised mostly of
local builders and council representatives from Boorowa,
Queanbeyan, Yass and Crookwell. He added that the Council had a
broader responsibility to educate builders and handymen about
the common occurrence of asbestos in the area.
The workshop focused on the roles and responsibilities of
contractors, councils and work cover in dealing with asbestos.
Goulburn Mayor Paul Stephenson said, council staff would quickly
be able to develop policies on asbestos handling to be approved
by councilors and added the policies would outline areas of
responsibility for those involved in asbestos removal.
ASBESTOS LITIGATION: USGS Study Reveals Asbestos in 22 MD Sites
---------------------------------------------------------------
A United States Geological Survey study reveals that 22 Maryland
sites, including former mines and quarries, possibly contain
naturally occurring asbestos, the Associated Press reports.
According to the USGS report, federal geologists identified a
total of 324 locations in 15 East Coast states. The number of
potentially hazardous sites in the 15 states surveyed range from
a low of one in Connecticut to 28 in Virginia, 37 in New Jersey,
41 in Pennsylvania and 52 in Georgia.
The Maryland sites are spread from Harford County in the north
to Montgomery County in the south, with the largest number in
and around Baltimore County.
The sites are not dangerous to people living near them, says
Richard McIntire, a spokesman for the state Department of the
Environment. However, federal geologists and physicians assert
that state and local agencies must inspect the sites for
exposure risk when Mr. McIntire said his agency doesn't examine
the sites.
Maryland's sole actively worked quarry, the Rockville Crushed
Stone Co. quarry in Montgomery County is regulated by the state,
McIntire said, and watched by the county.
Tom Sinks, acting director of the National Center for
Environmental Health/Agency for Toxic Substances and Disease
Registry, said the USGS report, "tells us where asbestos has
been found in the past. It does not tell us if asbestos is still
present in these locations or if people are being exposed to
asbestos fibers at these sites.
Naturally occurring asbestos isn't a health risk if it's not
disturbed, says the federal Agency for Toxic Substances and
Diseases Registry. But "weather processes" and activities like
yard work, running, hiking or bicycling on unpaved surfaces with
asbestos can release potentially dangerous fibers in the air.
ASBESTOS LITIGATION: Widow Wins GBP7,000 Indemnity from UK Govt.
----------------------------------------------------------------
After a red tape dispute, Rachel Chaple, a 76-year old pensioner
from Norwich, received from the Government the amount of more
than GBP7,000 as compensation for her husband's death from
asbestos-related disease, the Norwich Evening News reports.
Mrs. Chaple was unable to claim compensation from the Government
under the Pneumoconiosis Etc. Workers' Compensation Act 1979 as
her husband, Alan, did not apply for Disability Allowance during
his life. Mr. Chaple underwent chemotherapy sessions for 18
months after his diagnosis before he passed away on March 8 last
year at the age of 74.
An earlier story about Mrs. Chaple's situation by the Evening
News prompted government officials to send her a check amounting
to GBP3,122.60, that turned out to be the Disability Allowance
here husband could have applied for. Another check worth
GBP4,360.00 followed.
Mrs. Chaple said her aim in seeking compensation was to force
someone to take responsibility. She said Mr. Chaple had not
applied for Disability Allowance during his life, as he was
unwell and added the Government should force employers to have
insurance and asbestos mining must stop.
The Evening News launched its Asbestos Action Campaign in 1997
to outlaw the use of white asbestos after the death of Norwich
factory worker Malcolm Gardiner.
ASBESTOS LITIGATION: PA Senator Specter Decided Against Subpoena
----------------------------------------------------------------
Senator Arlen Specter, A Pennsylvania Republican and the
chairman of the Senate Judiciary Committee, said he decided
against seeking to subpoena companies facing asbestos lawsuits
and backing off the action for the second time in a month,
Reuters reports.
Sen. Specter denied threatening companies with the subpoena to
press them into giving information about how they would finance
a proposed US$140 billion Asbestos Victims' Compensation Fund.
He announced to the committee's assembled staff that he and the
panel's ranking Democrat, Senator Patrick Leahy of Vermont,
would ask the committee for authority to subpoena the data from
companies.
Financing is one of the thornier issues Sen. Specter and Sen.
Leahy need to resolve as they try to gain support for their
legislation to create an asbestos compensation fund. However,
they did not mention the subpoena at the committee meeting.
Approved by the Judiciary Committee, Sen. Specter and Sen.
Leahy's bill would halt the lawsuits. Instead, victims and
families would be indemnified by the US$140 billion fund to be
financed by companies and their insurers facing the suits.
Many companies are reluctant to say how it would affect them.
They argue that if the information becomes public before the
bill is passed, it could subject them to more asbestos lawsuits.
ASBESTOS LITIGATION: US Steel Corp. Defends 480 Active Lawsuits
---------------------------------------------------------------
United States Steel Corporation (NYSE:X) defends about 480
active cases involving about 8,300 plaintiffs. As of December
31, 2004, the Company defended in about 500 active cases
involving approximately 11,000 plaintiffs.
More than 7,900, about 96%, of these claims are currently
pending in jurisdictions which permit filings with massive
numbers of plaintiffs. The Company is currently a defendant in
cases in which a total of about 160 plaintiffs claim they suffer
from mesothelioma. The potential for damages against defendants
may be greater in cases in which the plaintiffs can prove
mesothelioma.
These claims against the Company fall into three major groups:
(1) Claims made under certain federal and general maritime
laws by employees of the Great Lakes Fleet or
Intercoastal Fleet, former operations of US Steel;
(2) Claims made by persons who allegedly were exposed to
asbestos at US Steel facilities (referred to as
"premises claims"); and
(3) Claims made by industrial workers allegedly exposed to
products formerly manufactured by U. S. Steel.
In many cases in which claims are asserted against the Company,
the plaintiffs are unable to establish any causal relationship
to the Company, its products or premises.
Pittsburgh, PA-based United States Steel Corporation is the
nation's #2 integrated steel maker with mills in several states
and the Slovak Republic. The company primarily serves customers
in the automotive, construction, petrochemical, and steel
service center industries.
ASBESTOS LITIGATION: Albany Int'l. Defends 24,452 Injury Claims
----------------------------------------------------------------
Albany International Corporation (NYSE:AIN) defends against
24,452 claims as of July 22, 2005 as compared to 25,679 claims
in April 22, 2005. These suits allege various diseases based on
alleged asbestos exposure to products manufactured by Albany.
About 19,166 of the claims pending against the Company are filed
in various counties in Mississippi, of which 10,424 such claims
are included in only five proceedings.
As the result of a 2004 ruling of the Mississippi Supreme Court,
county courts throughout the State began to issue orders
severing the individual claims of plaintiffs in mass joinder
asbestos cases. Once severed, the courts require the plaintiffs
to file amended complaints which include detailed information
regarding their allegations of asbestos exposure, and have begun
to dismiss or transfer improperly filed cases.
The Company expects that only a portion of these remaining
claimants will be able to demonstrate time spent in a paper mill
to which it supplied asbestos-containing products during a
period in which its asbestos-containing products were used.
The Company's insurer, Liberty Mutual, defended each case. As
of July 22, 2005, the Company resolved, by settlement or
dismissal, 13,491 claims, and reached tentative agreement to
resolve an additional 4,563 claims. The total cost of resolving
all 18,054 such claims was US$6,081,000. The Company's insurance
carrier paid US$6,046,000 or 99% of the amount. The Company has
more than US$130 million in confirmed insurance coverage that
should be available with respect to current and future asbestos
claims, as well as additional insurance coverage that it should
be able to access.
Brandon Drying Fabrics, Inc., a subsidiary of Geschmay Corp. and
a separate defendant in most cases, defends 9,549 claims as of
July 22, 2005. This compares with 9,670 claims as of April 22,
2005. The Company acquired Geschmay Corp. in 1999. As of July
22, 2005, Brandon resolved, by settlement or dismissal, 7,077
claims for a total of US$152,499. Brandon's insurance carriers
initially agreed to pay 88.2% of the total indemnification and
defense costs related to these proceedings. The remaining 11.8%
of the costs had been borne directly by Brandon. During 2004,
Brandon's insurance carriers agreed to cover 100% of
indemnification and defense costs, subject to policy limits and
the standard reservation of rights, and to reimburse Brandon for
all indemnity and defense costs paid directly by Brandon related
to these proceedings.
In some cases, the Company is named both as a direct defendant
and as the "successor in interest" to Mount Vernon Mills due to
its acquisition of certain Mount Vernon assets in 1993. Some
plaintiffs allege injury caused by asbestos-containing products
alleged to have been sold by Mount Vernon years before
acquisition. Mount Vernon is obligated to indemnify the Company
against any liability arising out of such products. The Company
denies any liability for products sold by Mount Vernon prior to
the acquisition of the Mount Vernon assets. The Company has
successfully moved for dismissal in a number of actions.
ASBESTOS LITIGATION: Dana Corp. Confronts 115,000 Active Claims
----------------------------------------------------------------
Dana Corporation (NYSE:DCN), a Toledo, OH-based auto parts
manufacturer, faces 115,000 active pending asbestos liability
claims in June 30, 2005, compared to 116,000 in December 31,
2004, according to its latest filing submitted to the Securities
and Exchange Commission.
The Company accrued US$143 million for indemnity and defense
costs for these claims at June 30, 2005, compared to US$139
million in December 31, 2004. The amounts are based on the
Company's assumptions and estimates about the values of the
claims and the likelihood of recoveries against it derived from
its historical experience and current information.
In June 30, 2005, the Company recorded US$41 million as an asset
for probable recovery from its insurers for pending claims,
compared to US$118 million in December 31, 2004. The Company's
2nd quarter receipt of the final payment under its settlement
agreement with some of its carriers in December 2004 resulted in
the reduction of the asset.
Our remaining insurance agreements, along with the proceeds from
this insurance settlement, provide significant resources for the
payment of anticipated defense and indemnity costs for pending
claims, as well as claims that may be filed against us in the
future.
ASBESTOS LITIGATION: Corning Inc. Reaches Temporary Settlement
--------------------------------------------------------------
Corning Incorporated (NYSE: GLW) revealed that negotiations with
the representatives of asbestos claimants have produced a
tentative settlement. However, certain cases may still be
litigated and the final approval of the tentative settlement is
still subject to a number of uncertainties.
The Corning, NY-based Company was previously named as a
defendant in numerous lawsuits against Pittsburgh Corning
Corporation and several other defendants involving claims
alleging personal injury from exposure to asbestos.
Total charges of US$437 million have been incurred through June
30, 2005. Despite this, additional charges are possible due to
potential fluctuation in the price of their common stock, other
adjustments in the proposed settlement and other litigation
factors. Corning's management cannot provide assurances that the
ultimate outcome of the litigation or other resolution of these
claims will not be materially different from the amount recorded
to date.
The Company further states that final approval of a global
settlement through the PCC bankruptcy process may impact the
results of Corning's operations for the period in which the
costs are recognized.
ASBESTOS LITIGATION: Bticino-SpA Employees Seeking Litigation
-------------------------------------------------------------
Legrand Holding SA, France-based manufacturer and distributor of
electrical supplies, disclosed in its latest filing to the
Securities and Exchange Commission that it might incur liability
and costs in connection with potential claims relating to
asbestos.
In the second half of 2001, about 180 current and former
employees of Bticino SpA, the Company's primary Italian
subsidiary, filed two class actions and three individual suits
against the Italian social security agency for early retirement
payments alleging asbestos exposure during the manufacture of
products at the Company's Torre del Greco facility.
Pursuant to Italian law, if the employees prove long-term (at
least 10 years) asbestos exposure, they may be entitled to
retire early and could receive higher retirement payments over
the course of their retirement, which the social security agency
could seek to recover from the Group. Management believes the
risk of loss to the Group is remote.
Bticino, a lighting and electrical Company that specializes in
innovative and contemporary design in its products, has been a
part of Legrand Holding SA since 1989, with a number of plants
and production facilities in Italy and abroad.
ASBESTOS LITIGATION: Risks Fuel Safety Measures Demand in Japan
---------------------------------------------------------------
Continually surfacing asbestos-related news and releases in
Japan spark a demand for products and services to control the
health risks linked to the substance, the Mainichi Daily News
reports.
Kikusui Chemical Industries Co., a company specializing in
underground materials and building finishing work, set up 24
consultation centers nationwide to answer asbestos-related
queries. Sacos Corp. a machinery rental firm, teamed up with
construction firm Tobishima Corp. to develop equipment to
decrease chemical dust.
Major mask producer Kyoken Ltd. increased supplies due to the
certainty that industrial mask demand would rise. Hardware
store operator Homac noted a surge in demand for home-use
products, creating sales of JPY4 million a month, a 40% increase
compared to 2004 figures.
Numerous Japanese companies admitted to worker deaths related to
asbestos at factories, as well as their families and people
living in the vicinities.
New government regulations, which require traders to work to
prevent asbestos damage, reportedly had an effect.
Japan Demolition Contractors Association predicts that
demolition of buildings constructed using asbestos during
Japan's high economic growth period will peak in the coming
years and continue for the next two decades.
ASBESTOS LITIGATION: Coca-Cola Contests Aqua-Chem Inc.'s Claims
---------------------------------------------------------------
Coca-Cola Company (NYSE:KO), a leading soft drink manufacturer,
is disputing former subsidiary Aqua-Chem, Inc.'s allegations
that the Company is responsible for asbestos litigation when
Aqua-Chem was part of the Company.
In September 2002, Aqua-Chem demanded from the Company about
US$10 million reimbursement for litigation expenses incurred
over the past 18 years and also demanded the Company's
acknowledgement of continuing obligation for future liabilities
and expenses excluded from coverage under applicable insurance
or for which there is no insurance.
The Company believes it has substantial legal and factual
defenses to Aqua-Chem's claims. The parties entered into
litigation to resolve this dispute, which was stayed by
agreement of the parties pending the outcome of litigation filed
in Wisconsin by certain insurers of Aqua-Chem.
Five plaintiff insurance companies filed a declaratory judgment
action against Aqua-Chem, the Company and 16 defendant insurance
companies seeking a determination of the parties' rights and
liabilities under policies issued by the insurers. That
litigation remains pending, and the Company believes it has
substantial legal and factual defenses to the insurers' claims.
Aqua-Chem and the Company have reached a settlement agreement
with five of the insurers in the Wisconsin insurance coverage
litigation.
Aqua-Chem and the Company will continue to battle their claims
for coverage against the 16 other insurers that are parties to
the Wisconsin insurance coverage case. The Company also believes
Aqua-Chem has substantial insurance coverage to pay Aqua-Chem's
asbestos claimants.
From 1970 to 1981, the Atlanta, GA-based Company owned Aqua-Chem
in which a division manufactured certain boilers that contained
gaskets that Aqua-Chem purchased from outside suppliers. Aqua-
Chem received its first asbestos-related lawsuit several years
after being sold by the Company.
ASBESTOS LITIGATION: Japan Agency Neglected Asbestos Monitoring
---------------------------------------------------------------
Despite fears of health risks, the Environment Agency,
predecessor of Japan's Environment Ministry, failed to measure
aerial asbestos fiber particle concentration near asbestos-
processing factories between 1979 and 1986, the Yomiuri Shimbun
reports.
For two years starting in 1977, the Agency conducted research in
14 factories. It resumed research in 1987 when the use of
asbestos in schools buildings gained attention as a possible
health risk.
In 1980, the Agency's study team urged that research near
asbestos-processing factories should be done promptly because
residents had inhaled large amounts of asbestos. However, the
Agency conducted research in residential and industrial areas
rather than near asbestos-processing factories, citing that it
was more important to compare concentrations over a broad range
of environments.
Measurements between 1981 and 1983 showed no remarkable
difference in concentration by region. The figures were between
0.1 and 10 asbestos fiber particles per liter of air.
In 1989, the Agency introduced asbestos regulations by revising
the Air Pollution Control Law.
ASBESTOS LITIGATION: OneBeacon Study Discerns Increase in Losses
----------------------------------------------------------------
In a June 2005 Asbestos & Environmental exposure study, White
Mountains Insurance Group Ltd. (NYSE:WTM) subsidiary, OneBeacon
Insurance Group LLC increased its estimate of incurred losses
ceded to NICO by US$353 million (US$841 million gross) to US$2.1
billion, which is within the US$2.5 billion coverage provided by
the NICO Cover.
The increase in the estimate of incurred A&E losses was mainly
driven by raised projections for asbestos claims, and for mass
torts other than asbestos and environmental, partially offset by
reduced projections of ultimate hazardous waste losses.
The ratio of reserves net of Third Party Recoverables for A&E
losses at June 30, 2005 to trailing three-year average paid loss
and allocated LAE (known in the industry as the "survival
ratio") is 21.6 years including the remaining available
protection under the NICO Cover.
OneBeacon estimates that the range of reasonable outcomes around
its best estimate is US$1.7 billion to US$2.4 billion, as
compared to a range of US$1.5 billion to US$2.4 billion from its
prior study conducted in 2003. About US$743 million of the
estimated US$2.1 billion of incurred losses have been paid by
NICO through June 30, 2005.
OneBeacon cannot reasonably estimate at the present time loss
reserve additions arising from any such future unfavorable
developments and cannot be sure that allocated loss reserves,
plus the remaining capacity under the NICO Cover, will be
sufficient to cover additional liability arising from any such
unfavorable developments.
ASBESTOS LITIGATION: CNA Posts Drop in Asbestos Claim Reserves
--------------------------------------------------------------
As of June 30, 2005 and December 31, 2004, CNA Financial
Corporation (NYSE:CNA) carried about US$1,620.0 million and
US$1,686.0 million of claim and claim adjustment expense
reserves, net of reinsurance recoverables, for reported and
unreported asbestos claims.
The Chicago, IL-based insurance Company recorded US$7.0 million
and US$40.0 million of unfavorable asbestos-related net claim
and claim adjustment expense reserve development for the six
months ended June 30, 2005 and 2004. The Company paid asbestos-
related claims, net of reinsurance recoveries, of US$73.0
million and US$66.0 million for the six months ended June 30,
2005 and 2004.
A recent court ruling by the United States Court of Appeals for
the Fourth Circuit supported certain of the Company's positions
with respect to coverage for "non-products" claims. However,
adverse developments with respect to such matters could have a
material adverse effect on its results of operations and/or
equity.
It is difficult to predict the ultimate size of any of the
claims for coverage purportedly not subject to aggregate limits
or predict to what extent the attempts to assert "non-products"
claims outside the products liability aggregate will succeed.
ASBESTOS LITIGATION: PPG Industries Faces 116,000 Injury Claims
---------------------------------------------------------------
As of June 30, 2005, PPG Industries Inc. (NYSE:PPG) was one of
many defendants in numerous asbestos-related lawsuits involving
about 116,000 claims, in the recent 10-Q filing submitted to the
Securities and Exchange Commission.
For over thirty years, the Company has been a defendant in
lawsuits involving claims alleging personal injury from asbestos
exposure. Most of the Company's potential exposure relates to
allegations by plaintiffs that it should be liable for injuries
involving asbestos-containing thermal insulation products
manufactured and distributed by Pittsburgh Corning Corporation.
PPG and Corning Incorporated are equal shareholders of PC. The
Company has denied responsibility for, and has defended, all
claims for any injuries caused by PC products.
PPG Industries Inc. is a Pittsburgh, PA-based Company that is a
global supplier of coatings, glass, fiberglass and chemicals.
The Company has about 50 production facilities in the United
States and about 108 worldwide, including subsidiaries, joint
ventures and equity affiliates.
ASBESTOS LITIGATION: ABB Ltd Posts a 42% Profit Jump in 2Q05
------------------------------------------------------------
Despite litigation costs and restructuring of transformer
activities, Swiss-Swedish engineering giant ABB Ltd noted a 42%
surge in net profits, the Associated Press reports.
Non-asbestos related litigation costs worth US$65 million and
revamping costs for ABB's transformer business worth US$66
million burdened its second-quarter net profit, company
representatives said.
"We had another quarter of strong operational performance,
building on the momentum we saw at the beginning of the year,"
said Fred Kindle, ABB Chief Executive. "Our focus remains on
improving our business execution quickly and lifting operational
efficiency even further," he added.
Concerning the company's asbestos litigation in the United
States, Mr. Kindle said a final settlement could possibly be
reached this year. Two courts still need to approve the
company's US$1.43 billion settlement of more than 100,000
asbestos lawsuits.
The Company earned US$126 million between April and June, up
from US$89 million in 2004. Sales rose nearly 10% to US$5.7
billion as demand for power equipment in the United States and
Europe increased.
In June, ABB had lowered the 2005 target for its operating
margin - profits expressed as percentage of sales - after
announcing a four-year restructuring plan for its transformer
business.
ASBESTOS LITIGATION: Japan Govt. to Assess Asbestos Situation
-------------------------------------------------------------
Chief Cabinet Secretary Hiroyuki Hosoda said the Japanese
government is set to investigate the growing number of asbestos
contamination cases in recent weeks, the Japan Times discloses.
The government recognized about 405 people as having died from
asbestos-related diseases in the last five years through March.
"We need to investigate how extensive the damage is and how many
people have been affected," Mr. Hosoda said, adding the
government was committed to conducting an objective inquiry
instead of finding excuses for what happened.
The government will present a response to the issue by September
and also will address the prevention of further contamination as
old buildings are demolished and ways to implement a complete
asbestos ban are devised, Mr. Hosoda said.
Prime Minister Junichiro Koizumi said the government would take
action to prevent more people from getting sick and urged close
coordination between ministries and agencies.
Asbestos is a mineral fiber that when broken down into dust is
easily inhaled. The material was used in insulation and roof
tiling beginning in the 1910s.
ASBESTOS LITIGATION: EPA to Evaluate New Asbestos Control Method
----------------------------------------------------------------
The Environmental Protection Agency said that it would begin
testing its proposed "alternative asbestos control method" as a
prelude to revise federal rules for treating the cancer-causing
substance, the Washington Post reports.
Using two isolated one-story buildings in Fort Chaffee,
Arkansas, EPA officials will douse the buildings' interiors with
treated water to prevent asbestos spread and then demolish them,
while monitoring the water runoff.
Environmentalists and some EPA officials questioned the test,
noting that residents of Fort Worth and St. Louis have resisted
an earlier version of this new demolition approach citing that
it posed a potential public health risk.
In May, a senior EPA official wrote a report saying the agency
"cannot concur" with the assessment by Lambert-St. Louis
International Airport officials that their method "of wet
asbestos demolition can be considered a safe and effective means
of handling asbestos and preventing unsafe asbestos exposures to
the public or the environment."
Mark Hansen, an EPA hazardous-waste enforcement official said
the new approach the agency is set to use is "far superior" to
the method proposed for St. Louis and Fort Worth, and could cut
demolition costs 30 to 60 percent.
Current measures in asbestos control and abatement include
containing the asbestos with plastic sheets and sucking the air
out of the building before removing and placing it into plastic
bags, after which it goes to a hazardous-waste site.
New Securities Fraud Cases
AMAZON INC.: Klayman & Toskes Reminds Parties of Opt Out Cut-Off
----------------------------------------------------------------
The Securities Arbitration Law Firm of Klayman & Toskes, P.A.
("K&T"), representing numerous aggrieved investors throughout
the nation, encourages all Morgan Stanley Dean Witter (NYSE:
MWD) and Credit Suisse First Boston (NYSE: CSR) customers who
purchased Amazon.com, Inc. (Nasdaq: AMZN) common stock between
October 29, 1998 and October 23, 2001 to explore their legal
options as potential class members of the current class action
lawsuit filed against Amazon.com, Inc. and both of its financial
advisors/underwriters, Morgan Stanley Dean Witter and Credit
Suisse First Boston, Master File No. C-01-0358-L, now pending in
Seattle, Washington.
The firm reminds all parties that if they do not wish to
participate in the class action lawsuit and/or would like to
consider pursuing an individual securities arbitration claim as
an alternative means to recovering their financial losses, the
deadline to opt out of the class action suit is August 5, 2005.
According to securities law experts, empirical evidence shows
that when an investor suffers losses in larger amounts, usually
in excess of $100,000, an individual dispute resolution process,
such as an arbitration claim filed before the New York Stock
Exchange or the National Association of Securities Dealers, is
the best means of recovering losses suffered. Hence, K&T would
like to remind all eligible class members of the lawsuit against
Amazon.com, Inc. and its other defendants that despite market
capitalization losses in excess of $10 billion, the class action
settlement only plans to allocate $25 million to eligible class
members. Thus, according to K&T, investors who suffered large
and substantial losses may achieve an overall higher recovery
rate by proceeding with an individual dispute resolution
process, rather than depending on a recovery from the class
action settlement.
Consequently, in light of these findings, K&T strongly urges all
Morgan Stanley Dean Witter and Credit Suisse First Boston
customers who purchased Amazon.com, Inc. during the relevant
time period to consider bringing suit against their individual
broker/dealer as an alternative means of recovering their
financial losses. Accordingly, since both Morgan Stanley Dean
Witter and Credit Suisse First Boston acted as the financial
advisors/underwriters of Amazon.com, Inc. during the class
period, both brokerage firms may be held accountable for the
severe financial losses suffered by their customers.
For more details, contact Lawrence L. Klayman of Klayman &
Toskes, Phone: 1-888-997-9956, E-mail: info@nasd-law.com, Web
site: http://www.nasd-law.com/contact.html.
COGENT COMMUNICATIONS: Firms Files Securities Fraud Suit in DC
--------------------------------------------------------------
The law firms of Vianale & Vianale LLP and King Pagano Harrison
initiated a securities fraud class action lawsuit on behalf of
purchasers of the securities of Cogent Communications Group,
Inc. ("Cogent") (AMEX: COI) between February 14, 2005 and June
7, 2005, inclusive.
The action (case no. 05-cv-01562) is pending before Judge
Richard J. Leon in the United States District Court for the
District of Columbia against Cogent and company executives David
Schaeffer and Thaddeus G. Weed.
According to the complaint, defendants failed to publicly
disclose that Cogent intended to sell shares of Cogent common
stock in a secondary public offering at a materially reduced
price from the stock's then-current market price. Defendants
knew or recklessly disregarded that the sale of Cogent common
stock at a material discount to its trading price would cause a
steep decline in the market price of its shares held by
plaintiff and other class members. After Cogent announced that
it would sell 10,000,000 shares of its stock at $6.00 a share,
the stock price fell 29.4%.
For more details, contact Kenneth J. Vianale, Esq. or Julie Prag
Vianale, Esq. of Vianale & Vianale, LLP, 2499 Glades Road, Suite
112, Boca Raton, FL, 33431, Phone: (561) 392-4750 or
888-657-9960, Web site: http://www.vianalelaw.comOR Keith J.
Harrison, Esq. of of King Pagano Harrison, 1730 Pennsylvania
Ave., N.W. Suite 900, Washington, D.C., 20006, Phone:
(202) 371-6800, Web site: http://www.kph.com.
OCA INC.: Abraham Fruchter Offers Updates on LA Securities Suit
---------------------------------------------------------------
The law firm of Abraham Fruchter & Twersky LLP, which commenced
a class action lawsuit in the United States District Court for
the Eastern District of Louisiana on behalf of purchasers of
OCA, Inc. ("OCA" or "the Company") (NYSE: OCA) common stock,
expanded class period for the suit, which now begins on November
12, 2003, and ends June 7, 2005 (the "Class Period"). The firm
also reminds parties that Lead Plaintiff Deadline is on August
8, 2005.
The complaint charges OCA and certain of its officers and
directors with violations of the Securities Exchange Act of
1934. The Company provides business services to orthodontic and
pediatric dental practices in the United States. The company
provides affiliated practices with a range of operational,
purchasing, financial, marketing, administrative, and other
business services, as well as capital and proprietary
information systems.
The Complaint alleges that, throughout the Class Period,
defendants issued numerous positive statements and filed
quarterly reports with the Securities and Exchange Commission,
which described the Company's financial performance. The
expanded Class Period now begins on November 12, 2003, the day
OCA issued a press release announcing its financial results for
the third quarter and nine months ended September 30, 2003.
As alleged in the Complaint, these statements were materially
false and misleading because they failed to disclose and/or
misrepresented the following adverse facts, among others:
(1) that defendants had engaged in improper accounting
practices. OCA has now admitted that its prior
financial reports are materially false and misleading
as it announced that it is going to restate its results
for the first three quarters of 2004 and potentially
prior periods;
(2) that certain journal entries in the Company's general
ledger were improperly recorded;
(3) that certain data provided to the Company's independent
accounting firm had been improperly changed;
(4) that the Company lacked adequate internal controls and
was therefore unable to ascertain its true financial
condition; and
(5) that as a result of the foregoing, the values of the
Company's patient receivables and patient revenue were
materially overstated at all relevant times.
On June 7, 2005, the Company shocked the market when it issued a
press release announcing that it was further delaying the filing
of its annual report, that it intended to restate its quarterly
financial statements for 2004 and that it had placed the
Company's Chief Operating Officer, Bartholomew E. Palmisano Jr.,
on administrative leave. Specifically, the Company admitted
that, among other things, it had materially overstated its
patient receivables and patient revenue for the first three
quarters of 2004. Following this announcement, shares of the
Company's stock fell $1.53 per share, or almost 38%, to close at
$2.50 per share, on unusually heavy trading volume.
For more details, contact Jack G. Fruchter of Abraham Fruchter &
Twersky LLP, Phone: 800/440-8986 or 212/279-5050, E-mail:
jfruchter@aftlaw.com.
PRESTIGE BRAND: Lerach Coughlin Files Securities Suit in S.D. NY
----------------------------------------------------------------
The law firm of Lerach Coughlin Stoia Geller Rudman & Robbins
LLP initiated a class action lawsuit in the United States
District Court for the Southern District of New York on behalf
of all persons who purchased Prestige Brand Holdings, Inc.
("Prestige") (NYSE:PBH) securities pursuant and/or traceable to
the Company's initial public offering on or about February 9,
2005 (the "IPO") through July 28, 2005 (the "Class").
The complaint charges Prestige, certain of its officers and
directors, and other insiders with violations of the Securities
Act of 1933. Prestige describes itself as a seller of "well-
recognized, brand name over-the-counter drug, household cleaning
and personal care products." The complaint also names as
defendants Merrill Lynch, Pierce, Fenner & Smith Incorporated,
Goldman, Sachs & Co and J.P. Morgan Securities Inc., the lead or
co-lead underwriters of the IPO.
The complaint alleges that the prospectus (the "Prospectus")
filed with the Securities and Exchange Commission ("SEC") in
connection with the initial public offering of Prestige common
stock, which took place on or about February 9, 2005 (the
"IPO"), was materially false and misleading. The Prospectus,
which forms part of the Registration Statement, became effective
on or about February 9, 2005, and 32,200,000 shares of Prestige
common stock were sold to the public, thereby raising
approximately $515 million. Of the $515 million raised,
approximately $67 million went to certain selling shareholders.
Specifically, the complaint alleges that the Prospectus was
materially false and misleading because it failed to disclose
and misrepresented the following adverse facts, among others:
(1) that demand for the Company's products was declining
and certain brands, including Compound W products were
failing to maintain their market position and/or
initial product sales levels;
(2) that the Company was planning to withdrawal several
products from the market, including Comet-brand
housecleaning products that had proved unsuccessful,
thus further eroding the Company's revenues and market
share; and
(3) as a result of the foregoing, Defendants' statements
and opinions concerning the Company's sales, earnings,
profitability and future prospects were lacking in
reasonable basis.
On July 27, 2005, after the market close, Prestige announced its
financial results for the quarter ended June 30, 2005. The
Company reported that it experienced sales declines in each of
its three business segments: OTC medicines, Household Cleaning
products and Personal Care products. The Company also lowered
its earning guidance for the remainder of fiscal 2005. In
response to this announcement, the price of Prestige common
stock declined to a low of $10.10 during trading on July 28,
2005, before closing for the day at $11.90 per share, a 40% one-
day decline, on extremely heavy volume of more than 14 million
shares. The July 28, 2005 closing price represented a 25%
decline form the $16.00 per share offering price just five
months before.
For more details, contact Samuel H. Rudman or David A. Rosenfeld
of Lerach Coughlin, Phone: 800/449-4900 or 619/231-1058, E-mail:
wsl@lerachlaw.com, Web site:
http://www.lerachlaw.com/cases/prestige/.
PRESTIGE BRAND: Schatz & Nobel Files Securities Fraud Suit in NY
----------------------------------------------------------------
The law firm of Schatz & Nobel, P.C. initiated a lawsuit seeking
class action status 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 Prestige Brand
Holdings, Inc. (NYSE: PBH) ("Prestige") traceable to the
Company's initial public offering on or about February 9, 2005
(the "IPO") through July 28, 2005 inclusive, (the "Class
Period").
The Complaint alleges that Prestige, certain of its officers and
directors and other insiders, violated federal securities laws
by issuing misleading public statements. Specifically, the
prospectus (the "Prospectus") filed with the SEC in connection
with the IPO of Prestige common stock, was materially false and
misleading. The complaint alleges that the Prospectus failed to
disclose the following:
(1) that demand for the Company's products was declining
and certain brands, including Compound W products were
failing to maintain their market position and/or
initial product sales levels;
(2) that Prestige was planning to withdrawal several
products from the market, including Comet-brand
housecleaning products that had proved unsuccessful,
thus further eroding the Company's revenues and market
share; and
(3) as a result of the foregoing, Defendants' statements
and opinions concerning the Company's sales, earnings,
profitability and future prospects were lacking in
reasonable basis.
On July 27, 2005, Prestige announced its financial results for
the quarter ended June 30, 2005. Prestige reported sales
declines in each of its three business segments. The Company
also lowered its earning guidance for the remainder of fiscal
2005. On this news, the price of Prestige stock fell to close at
$11.90 per share on July 28, 2005, a decline of over 40% from
the previous day's close.
For more details, contact Wayne T. Boulton or Nancy Kulesa,
Phone: (800) 797-5499, E-mail: sn06106@aol.com, Web site:
http://www.snlaw.net.
*********
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