/raid1/www/Hosts/bankrupt/CAR_Public/060519.mbx
C L A S S A C T I O N R E P O R T E R
Friday, May 19, 2006, Vol. 8, No. 99
Headlines
APOLLO GROUP: Continues to Face Consolidated Stock Suit in Ariz.
APOLLO GROUP: Calif. Court Set May Hearing to Certify "Sanders"
AT&T CORP: Loses Bid to Ban Public from Wiretapping Suit Trial
AT&T INC: Tex. Lawyers Sue to Uphold Customers' Privacy Rights
AXA EQUITABLE: Faces N.Y. Suit for Classifying Minors as Smokers
BC FERRY: Daughters of Victim in Ship's Sinking File Lawsuit
CANADA: Prisoner Launches $31.5M Lawsuit Over Right to Vote
CIGNA: Subscribers' ERISA Lawsuit to Proceed in New Jersey Court
E.I. DUPONT: Costa Rican Farmers Awarded $113M in Benlate Suit
HALLIBURTON CO: Special Counsel Sought for Tex. Securities Suit
KB HOME: Court Invalidates Mandatory Binding Arbitration Clauses
KPNQWEST N.V.: Parent Settles Dutch Stock Fraud Suit for $11M
LANDAMERICA FINANCIAL: Judge Approves $27.5M Deal in Mich. Suit
NORTEL NETWORKS: Attempts to Settle U.S., Canadian Stock Suits
NORTEL NETWORKS: Continues to Face Tenn. ERISA Violations Suit
NUTRAQUEST INC: Paying $34M for Ephedra Suits in Bankruptcy Plan
QUOVADX INC: Offers $3.3M to Settle Special Situations Fund Case
QUOVADX INC: Settlement Reached for "Heller" Stock Suit in Colo.
REMEC INC: Continues to Face Securities Fraud Lawsuit in Calif.
REMEC INC: Discovery Ongoing in Calif. Labor Violations Lawsuit
RENT-A-CENTER INC: Wash. Court Approves Labor Lawsuit Settlement
SHARPER IMAGE: Faces Calif., Fla., Md. Ionic Breeze Quadra Suits
SMART & FINAL: Calif. Court Approves Labor Lawsuit Settlement
SOLUTIA INC: Indirect Rubber Chemical Purchasers Nix Tenn. Suit
SOLUTIA INC: Pension Plan Still Faces ERISA Fraud Suits in Ill.
SOLUTIA INC: Plaintiff Appeals N.Y. ERISA Fraud Suit's Dismissal
SPECTRUM LABORATORY: Launches Nationwide Recall of Tacrolimus
SPORTSMAN'S GUIDE: Investors File Lawsuit Over Proposed Disposal
WOODWARD GOVERNOR: Continues to Face Ill. Racial Bias Lawsuit
XCEL ENERGY: Faces Suit in Miss. Over Carbon Dioxide Emissions
XEROX CORP: Enters into Mediation to Resolve N.Y. Title VII Suit
XEROX CORP: Conn. Court Delays Class Ruling for ERISA Fraud Suit
Asbestos Alert
ASBESTOS LITIGATION: Dow Chemical Has $1.366B Liabilities in 1Q
ASBESTOS LITIGATION: Halliburton Collects Less Receivables in 1Q
ASBESTOS LITIGATION: ArvinMeritor's Liabilities Drop 6% to $15M
ASBESTOS LITIGATION: Maremont Corp.'s Claims Decrease to 61,100
ASBESTOS LITIGATION: Maremont Corp. Estimates Liability at $47M
ASBESTOS LITIGATION: Union Pacific's Liability Totals $309M
ASBESTOS LITIGATION: El Paso to Settle $225T for Handling Breach
ASBESTOS LITIGATION: Mirant Corp Pays $0.5M for Pepco Settlement
ASBESTOS LITIGATION: Suits v. MeadWestvaco Surge to 300 in 1Q06
ASBESTOS LITIGATION: Ingersoll-Rand Uses $6.8M for Claims in 1Q
ASBESTOS LITIGATION: Crown Cork Receives About 1.5T Claims in 1Q
ASBESTOS LITIGATION: One Suit Remains Against RJR Tobacco, B&W
ASBESTOS LITIGATION: BNS Holding Has 289 Active Claims as of May
ASBESTOS LITIGATION: Chubb Corp. Posts $1.102B Reserves in 1Q06
ASBESTOS LITIGATION: KWELM Puts in $1.8M to Goodrich Settlement
ASBESTOS LITIGATION: NL Ind. Sues Insurers for Claim Obligations
ASBESTOS LITIGATION: ACE Ltd. Allocates $3.598B for Claims in 1Q
ASBESTOS LITIGATION: Court Dismisses 158 Suits v. Belden CDT Inc
ASBESTOS LITIGATION: Standard Motor's Liability Drops to $24.52M
ASBESTOS LITIGATION: IDEX Corp., Units Face Suits in 26 States
ASBESTOS LITIGATION: United Industrial Corp Has $20M Receivables
ASBESTOS LITIGATION: CONSOL Unit Faces 25,507 Claims in 5 States
ASBESTOS LITIGATION: PepsiAmericas Sees Cooper Suit Ruling in 2Q
ASBESTOS LITIGATION: PepsiAmericas Records $11.1Mil Receivables
ASBESTOS LITIGATION: Midwest Generation Records $66.3M Liability
ASBESTOS LITIGATION: Harsco Records 27,166 Pending Suits in 1Q06
ASBESTOS LITIGATION: Claimants Approve Quigley Co Reorganization
ASBESTOS LITIGATION: Albany Int'l. Carries 20,726 Injury Claims
ASBESTOS LITIGATION: Albany Affiliate Acknowledges 9,753 Claims
ASBESTOS LITIGATION: Claimants to Own 22% Owens Corning Shares
ASBESTOS LITIGATION: Hardie Allocates $716M for Compensation
ASBESTOS LITIGATION: 8 Locals to Sue Japanese Gov't. for JPY220M
ASBESTOS LITIGATION: Alimta Offers Relief to S. Africa Sufferers
ASBESTOS LITIGATION: Allis-Chalmers' Trust Addresses Claims
New Securities Fraud Cases
ASTEA INT'L: Yourman Alexander Files Pa. Securities Fraud Suit
COMVERSE TECHNOLOGY: Yourman Alexander Files Stock Suit in N.Y.
DISCOVERY LABORATORIES: Chimicles & Tikellis Files Stock Lawsuit
ESCALA GROUP: Berman DeValerio Files N.Y. Securities Fraud Suit
ESCALA GROUP: Federman & Sherwood Files Securities Suit in N.Y.
HOME DEPOT: Weiss & Lurie Files Securities Fraud Lawsuit in Ga.
H&R BLOCK: Scott + Scott Files Securities Fraud Lawsuit in N.Y.
MERGE TECHNOLOGIES: Lead Plaintiff Filing Deadline Set May 22
PAINCARE HOLDINGS: Lead Plaintiffs Filing Deadline Set May 19
XM SATELLITE: Kantrowitz, Goldhamer Files D.C. Securities Suit
XM SATELLITE: Stull, Stull Files Securities Fraud Suit in D.C.
*********
APOLLO GROUP: Continues to Face Consolidated Stock Suit in Ariz.
----------------------------------------------------------------
The U.S. District Court for the District of Arizona denied
Apollo Group, Inc.'s motion to dismiss the consolidated
securities class action filed against it and certain of its
officers on behalf of purchasers of the company's stock between
Mar. 12, 2004 and Sept. 14, 2004.
On Oct. 12, 2004, a complaint captioned, "Sekuk Global
Enterprises et al. v. Apollo Group, Inc., et al., Case No. CV
04-2147 PHX NVW," was filed in the U.S. District Court for the
District of Arizona.
Another class action complaint, "Christopher Carmona, et al. v.
Apollo Group, Inc., et al., Case No. CV 04-2204 PHX EHC," making
similar allegations was filed on or about Oct. 18, 2004 in the
U.S. District Court for the District of Arizona.
A third class action complaint, "Jack B. McBride, et al. v.
Apollo Group, Inc., et al., Case No. CV 04-2334 PHX LOA," which
made similar allegations was filed on or about Oct. 28, 2004 in
the U.S. District Court for the District of Arizona.
The court consolidated the three pending complaints and the
newly named lead plaintiff filed a consolidated complaint on May
16, 2005. Lead plaintiff purports to represent a class of the
company's shareholders who acquired their shares between Feb.
27, 2004 and Sept. 14, 2004, and seeks monetary damages in
unspecified amounts.
The suit alleges violations of Sections 10(b) and 20(a) of the
Securities Exchange Act of 1934, and Rule 10b-5 promulgated
under the Exchange Act, by the company for their issuance of
allegedly materially false and misleading statements in
connection with their failure to publicly disclose the contents
of the U.S. Department of Education's program review report.
A motion to dismiss the consolidated class action complaint was
filed on Jun. 15, 2005, on behalf of Apollo Group, Inc. and the
individual named defendants. The Court denied the motion to
dismiss on Oct. 18, 2005.
The consolidated action is "In Re: Apollo Group, Inc. Securities
Litigation, Case No. 04-CV-02147," filed in the U.S. District
Court for the District of Arizona under Judge James A. Teilborg.
Plaintiff firms named in the complaint are:
(1) Lerach Coughlin Stoia Geller Rudman & Robbin, (San
Francisco), 100 Pine Street, Suite 2600, San Francisco,
CA, 94111, Phone: 415.288.4545, Fax: 415.288.4534, E-
mail: info@lerachlaw.com;
(2) Milberg Weiss Bershad & Schulman, LLP, (New York), One
Pennsylvania Plaza, 49th Floor, New York, NY, 10119,
Phone: 212.594.5300, Fax: 212.868.1229, E-mail:
info@milbergweiss.com;
(3) Mitchell Law Offices, PC, Anchor Centre One, 2201 E.
Camelback Rd., Ste. 122B, Phoenix, AZ, 85016, Phone:
(602) 468-1411;
(4) Robbins Umeda & Fink, LLP, 1010 Second Avenue, Suite
2360, San Diego, CA, 92101, Phone: 800-350-6003, E-
mail: info@ruflaw.com; and
(5) Shockman Law Office, PC, 8170 N. 86th Pl., Ste. 102,
Scottsdale, AZ, 85258, Phone: 480-596-1986, Fax: 480-
596-2689, E-mail: RShock@aol.com.
APOLLO GROUP: Calif. Court Set May Hearing to Certify "Sanders"
---------------------------------------------------------------
The Superior Court of the state of California for the County of
Solano is set to hear plaintiffs' motion for class certification
on the recently transferred action against Apollo Group, Inc.,
styled, "Bryan Sanders, et al. v. University of Phoenix, Inc.,
et al."
On or about Sept. 26, 2003, a class action complaint, " Bryan
Sanders, et al. v. University of Phoenix, Inc., et al., Case No.
03CC00430," was filed in the Superior Court of the state of
California for the County of Orange.
The plaintiff, a former academic advisor with University of
Phoenix, filed the class action on behalf of himself and current
and former academic advisors employed by the company in the
state of California.
The suit seeks certification as a class, monetary damages in
unspecified amounts, and injunctive relief. It alleges that
during the plaintiff's employment, he and other academic
advisors worked in excess of 8 hours per day or 40 hours per
week, and contends that the company failed to pay overtime.
On Jun. 6, 2005, the court granted plaintiffs' motion to remove
Bryan Sanders as the named plaintiff and replace him with Deryl
Clark and Romero Ontiveros. Plaintiff's counsel advised
defendants and the court that Mr. Ontiveros no longer intends to
serve as named plaintiff.
Five status conferences have occurred and the parties are now in
the process of discovery. The court has granted defendants'
motion to transfer venue to the Superior Court of the State of
California for the County of Solano.
A management conference was set April 2006, and the plaintiff's
motion to certify the class will be heard by the court in May
2006.
AT&T CORP: Loses Bid to Ban Public from Wiretapping Suit Trial
--------------------------------------------------------------
U.S. District Judge Vaughnn Walker rejected on May 17 a request
for a closed-door hearing of a lawsuit alleging AT&T Corp.
illegally handed over its customers' telephone and Internet
records and communications to the National Security Agency,
reports say.
AT&T wanted only attorneys and not the public in the courtroom
to protect trade secrets. But Judge Walker said that "carefully
dealing with questions about trade secrets in an open courtroom
'is not unprecedented,'" the CNET News.com reports.
The judge also ruled that a set of internal AT&T documents
supporting Electronic Frontier Foundation's allegations in the
suit filed in January may be used in the case. He instructed
the company to work with EFF on redacting portions of the sealed
documents so that part of it can be publicly disclosed. It also
ordered EFF's attorneys not to "disclose these documents to any
party."
The evidence, which was filed under seal with the court, is
composed of three documents given to EFF by former AT&T
technician Mark Klein. It appears to describe a secret room
established in AT&T's main switching centers through which
Internet and voice traffic flows, giving NSA full access to the
company's networks. Reportedly, these can be found in switching
centers in San Francisco, Los Angeles, Seattle and San Jose,
California. The data collection started after the Sept. 11,
2001 terrorist attacks.
The judge will hear arguments from both parties should they fail
to reach an agreement as to which parts of the documents may be
made public by a Thursday deadline.
Meanwhile, the judge declined to hear motions by EFF to issue a
preliminary injunction against the alleged data collection until
after he considers whether to dismiss the case. The judge set a
hearing for motions from both of them on Jun. 23.
The suit is "Hepting, et al. v. AT&T Corp., et al., case no.
3:06-cv-00672-VRW," filed in the U.S. District Court for the
Northern District of California under Judge Vaughn R. Walker.
Representing the plaintiffs are:
(1) Cindy Ann Cohn of Electronic Frontier Foundation, 454
Shotwell Street, San Francisco, CA 94110, Phone: 415-
436-9333 x 108, Fax: (415) 436-9993, E-mail:
cindy@eff.org; and
(2) Jeff D. Friedman of Lerach Coughlin Stoia Geller Rudman
& Robbins, LLP, 100 Pine Street, Suite 2600, San
Francisco, CA 94111, Phone: 415-288-4545, Fax: 415-288-
4534, E-mail: JFriedman@lerachlaw.com.
Representing the defendant are: Bruce A. Ericson and Jacob R.
Sorensen of Pillsbury Winthrop Shaw Pittman, LLP, 50 Fremont
St., Post Office Box 7880, San Francisco, CA 94120-7880, Phone:
(415) 983-1000, Fax: (415) 983-1200, E-mail:
bruce.ericson@pillsburylaw.com and
jake.sorensen@pillsburylaw.com.
For more details, visit, http://www.eff.org/legal/cases/att/.
AT&T INC: Tex. Lawyers Sue to Uphold Customers' Privacy Rights
--------------------------------------------------------------
A group of local attorneys in Texas filed a class action against
AT&T Inc. over its alleged cooperation with the U.S.
government's wiretapping operation, Kristv.com reports.
The suit -- the first in Texas -- was filed in Corpus Christi on
behalf of local customers. It is similar to several suits filed
against the company around the country. The suits accused the
government of monitoring calls made by Americans after the Sept.
11, 2001 terrorist attack.
"We're dealing with people here in South Texas who are AT&T
subscribers who have had their phone records illegally given to
the federal government," said plaintiff attorney Mikal Watts.
For more information, contact Mr. Watts of Watts Law Firm,
L.L.P. -- http://www.wattslawfirm.com-- Tower II Building, 14th
Floor, 555 North Carancahua Street, Corpus Christi, Texas 78478-
0801 (Nueces Co.), Phone: 361-887-0500, Fax: 361-887-0055.
AXA EQUITABLE: Faces N.Y. Suit for Classifying Minors as Smokers
----------------------------------------------------------------
The law firms of Hanly Conroy Bierstein Sheridan Fisher & Hayes
LLP and Beasley Allen Crow Methvin Portis & Miles PC initiated a
class action in the U.S. District Court for the Southern
District of New York on behalf of policyholders who bought life
policies for their juvenile children from Axa Equitable Life,
part of the Axa Financial Inc. segment of Axa, the BestWire
reports.
The lead plaintiff is Larry E. Richards, a Vincent, Ohio
resident who owns two adjustable life plan policies bought in
1985 and 1994 to cover each of two children at the time.
The complaint doesn't give a range of dates for the proposed
class of plaintiffs.
According to the complaint, Axa Equitable Life harmed the
policyholders who bought coverage for their juvenile children by
classifying all of those children as smokers, under a "juvenile
smoker rate scheme."
The complaint alleges that even though the policy applications
for minors stated the covered individuals were nonsmokers,
Equitable routinely charged rates, and paid lower interest and
dividends, as if the covered individuals were smokers. The
complaint also alleges that Equitable withheld that rate scheme
from the policyholders.
Plaintiffs' attorneys are seeking compensatory and punitive
damages; imposition of a constructive trust and an "appropriate"
claims-resolution facility to administer payments to members of
the class; and litigation costs to be paid by Equitable.
The suit is " Richards et al. v. AXA Equitable Life Insurance
Company, Case No. 1:06-cv-03744-PAC," filed in the U.S. District
Court for the Southern District of New York under Judge Paul A.
Crotty.
Representing the plaintiffs are:
(1) Andrea B. Bierstein of Hanly Conroy Bierstein Sheridan
Fisher & Hayes, LLP, 112 Madison Avenue 7th Floor, New
York, NY 10016, Phone: (212) 784-6403, Fax: (212) 784-
6400, E-mail: abierstein@hanlyconroy.com;
(2) Jayne Conroy of Hanly Conroy Bierstein Sheridan Fisher
& Hayes, LLP 112 Madison Avenue 7th Floor, New York,
NY 10016, Phone: (212) 784-6402, Fax: (212) 784-6400,
E-mail: jconroy@hanlyconroy.com;
(3) Paul J. Hanly, Jr. of Hanly Conroy Bierstein & Sheridan
LLP, 112 Madison Avenue 7th Floor, New York, NY 10016,
Phone: 212-784-6401, Fax: 212-784-6420, E-mail:
phanly@hanlyconroy.com.
BC FERRY: Daughters of Victim in Ship's Sinking File Lawsuit
------------------------------------------------------------
Canada's BC Ferry Services Inc. is facing a suit filed by two
adolescent daughters of a man who is presumed dead in the recent
sinking of the Queen of the North, the National Post reports.
The maternal grandparents of 15-year old Brittni Lee and 12-
year-old Morgan Taylor and the co-executors of Gerald Foisy's
estate filed the suit in B.C. Supreme Court on May 11. The case
did not cite figures, but claims, among others, damages plus the
cost of bringing the suit and interest on those amounts. It is
also asking the court to declare the suit a class action on
behalf of all paying passengers aboard the ship.
Mr. Foisy and his companion Shirley Rosette are believed to have
died when the Queen of the North sank on Mar. 22 after plowing
into Gil Island. The other 99 passengers and crew safely
evacuated the ship, but the two was unable to get off. They are
presumed drowned. The suit accuses the BC Ferries' crew of
negligence.
Mr. Foisey's children live in Penticton British Columbia with
their mother Lana Foisy.
The plaintiffs' lawyer is Peter Ritchie of 1300-355 Burrard St.
Vancouver, British Columbia (Vancouver Co.).
CANADA: Prisoner Launches $31.5M Lawsuit Over Right to Vote
-----------------------------------------------------------
An inmate in an Ottawa prison is filing a lawsuit against the
Ontario government and Elections Canada for his failure to vote
in the 2004 federal election, the Ottawa Citizen reports.
Kebba Jobateh filed his suit in Ontario Superior Court. He
alleges that he and other inmates in a wing of the Central East
Correctional Center in Lindsay, Ontario were unable to register
for voting because of actions by guards and because Elections
Canada failed to assist them. He is asking $1.5 million in
damages for himself and $30 million for a trust fund to educate
inmates about their rights.
Mr. Jobateh's counsel, Ottawa human rights lawyer Kristie
McComb, estimates there are at least 50 prisoners who had
experiences similar to his client. A Superior Court judge will
begin hearing the suit in August to determine whether the case
should be certified as class action.
Mr. Jobateh is serving time in prison for the attempted murder
of his wife in 2003.
For more information, contact Ms. McComb at 43 Florence Street,
Ottawa, Ontario K2P 0W6 (City of Ottawa).
CIGNA: Subscribers' ERISA Lawsuit to Proceed in New Jersey Court
----------------------------------------------------------------
The Judicial Panel on Multidistrict Litigation (JPML) has
decided to allow a pending case against CIGNA to proceed before
the Honorable Faith S. Hochberg of the U.S. District Court for
the District of New Jersey, where it was filed, rather than
before the Southern District of Florida, where a current
multidistrict litigation (MDL) has been proceeding against a
number of managed care companies.
The lawsuit was filed by Pomerantz Haudek Block Grossman & Gross
LLP on behalf of CIGNA subscribers, alleging that CIGNA has
violated its obligations under the Employee Retirement Income
Security Act (ERISA) by improperly reducing payments for
services received from providers who are out-of-network (ONET),
or who do not participate in CIGNA's network of providers,
based, among other things, on a flawed method for determining
whether ONET charges were "reasonable and customary" (sometimes
referred to as "usual, customary and reasonable" or "UCR").
According to the complaint, one of the named plaintiffs had
suffered nearly complete facial paralysis during birth, and, as
an adult, was able to locate a specialist doctor with the
expertise to perform the necessary surgery to restore proper
functioning to her facial muscles and to repair nerve damage.
The doctor, who was one of the few physicians in the world with
the training and experience necessary to perform the complicated
microsurgery, obtained preauthorization for the procedure and
successfully performed it with the aid of an assistant surgeon.
CIGNA, however, paid less than half of the billed charges,
claiming, among other things, that the bills were in excess of
"prevailing charges" for the relevant services, or, in other
words, were not "reasonable and customary." The plaintiff was
therefore left financially responsible for the unpaid portion of
the medically necessary services.
Plaintiffs allege that CIGNA uses inappropriate policies to
reduce reimbursements for ONET services, including relying on an
invalid database for making coverage determinations. They seek
full reimbursement based on the billed charges. They also seek
to represent a class of all CIGNA subscribers who have received
reduced benefits due to CIGNA's ONET reimbursement policies.
The Pomerantz firm filed the action as a related case to two
pending litigations it had previously filed against Health Net,
Inc. and certain of its health care subsidiaries, alleging
similar ERISA violations. Judge Hochberg certified a national
class of Health Net subscribers in August 2004, which holding is
currently on appeal to the Third Circuit Court of Appeals.
After the case was filed in New Jersey, CIGNA moved to transfer
it to Florida, claiming that it was related to cases pending
there. However, the Honorable Federico A. Moreno, who is
overseeing those cases, found that the CIGNA UCR litigation was
unrelated to the matters before him, holding that "there is
virtually no overlap between the causes of action in the MDL
cases and the causes of action" in the CIGNA UCR case, and
entered a suggestion of remand. The JPML ordered the case be
remanded to Judge Hochberg.
As a result of the finding of the JPML, the plaintiffs will
proceed to litigate their claims against CIGNA on behalf of its
subscribers.
For more information, contact D. Brian Hufford of the Pomerantz
firm (http://www.pomlaw.com),E-mail: dbhufford@pomlaw.com,
Phone: 888.476.6529 or 888.4-POMLAW (toll free).
E.I. DUPONT: Costa Rican Farmers Awarded $113M in Benlate Suit
--------------------------------------------------------------
Lead counsel Don Russo of Don Russo, P.A., and lawyers with
Holland & Hart obtained an award of $113,486,100 million on
behalf of 27 Costa Rican leatherleaf fern farmers in a lawsuit
against E.I. DuPont de Nemours & Co.
The dispute brought against DuPont proved that its fungicide,
Benlate(R), permanently damaged the farmers' crops of
leatherleaf fern. Plaintiffs' attorneys worked with the
country's leading agronomists and biologists and invested $8.5
million in their investigation into the true cause of crop
damage. The new scientific evidence discovered and presented in
this case may initiate a new round of cases against DuPont.
"We worked diligently for five years to prove that Benlate
permanently damaged the crops on which it is used," said Don
Russo.
"While DuPont presented a smorgasbord of possible explanations
for the plant distortions, not one held up in light of the new
scientific evidence we were able to provide. It was exceedingly
clear that this product destroyed the livelihood of these 27
farmers. For the first time in more than 15 years since Benlate
was sold, science has finally explained why Benlate is so
damaging to crops -- and not just in the year it is applied, but
for the entire life cycle of the plants treated with it."
In a statement, the law firm said that this new scientific
evidence showed that permanent crop damage was sustained when
Benlate was applied to crops and absorbed by the plants' cells,
which subsequently killed all natural microbes within the
plants. This allowed other bacteria to persistently dominate in
the crops and caused visible distortions in the plants. These
distortions in the fern's leaves made them unfit for use in
floral arrangements and therefore unfit for sale, effectively
closing down the farms that produced them.
In addition, plaintiffs' attorneys successfully argued that the
court should try the case in the U.S. due to the company's
significant South Florida presence, setting a precedent for
farmers in foreign countries to initiate future lawsuits against
the company in U.S. courts.
The case was tried in the 11th Judicial Circuit Court of Florida
with Judge Amy Steele Donner presiding.
For more information, contact Don Russo, P.A., Miami Thorp &
Company Gabrielle Garcia or Laura Pellegrini, Phone: 305-446-
2700, E-mail: ggarcia@thorpco.com or lpellegrini@thorpco.com.
HALLIBURTON CO: Special Counsel Sought for Tex. Securities Suit
---------------------------------------------------------------
The Archdiocese of Milwaukee Supporting Fund, Inc. (AMS Fund)
recently requested that Neil Rothstein, on leave of absence from
Scott + Scott, LLC, the law firm, serving as lead counsel in the
Halliburton Co. securities fraud class action (Case No. 3:02-CV-
1152-M), be named Special Counsel to the lead plaintiff.
Due to his significant development and activity in this
litigation, which is pending in the U.S. District Court for the
District of Northern Texas, Mr. Rothstein will ensure that the
lead plaintiff continues to control and direct this litigation
to maintain his fiduciary duty to all plaintiffs in the
purported class.
Mr. Rothstein is the founder and chief managing officer of the
Worldwide Tree Group. The group consists of Truth in Corporate
Justice LLC, and its subsidiaries, the Global Governance Center
LLC, and Class in Action LLC. Additionally, the group contains
Worldwide Tree Multimedia LLC.
Mr. Rothstein with full support of the firm took this leave from
Scott + Scott, LLC. Mr. Rothstein assumed the same role as
Special Counsel on behalf of AMS in the Enron securities
litigation, where AMS is the representative plaintiff for the
debt bondholders and where AMS has taken an active role at the
request of the lead plaintiff.
Recently, Halliburton and certain individual defendants filed a
motion to dismiss, a major part of which was denied by the
court. This is a remarkable case, as the AMS Fund blocked a
previously announced $6 million settlement and had the other
lead attorneys and plaintiffs removed from their leadership
positions -- with some withdrawing voluntarily prior to their
potential dismissal, a regulatory filing stated. Pursuant to
the court order, an updated complaint has been filed.
The suit is "The Archdiocese of Milwaukee Supporting Fund, Inc.,
et al. v. Halliburton Company, et al., Case No. 3:02-cv-01152,"
filed in the U.S. District Court for the Northern District of
Texas under Judge Barbara M. G. Lynn. Representing the
plaintiffs are:
(1) Richard S. Schiffrin of Schiffrin & Barroway - Radnor,
280 King of Prussia Rd, Radnor, PA 19087, Phone: 610-
667-7706, Fax: 610/667-7056;
(2) Marc R. Stanley, Stanley Mandel & Iola, 3100 Monticello
Ave, Suite 750, Dallas, TX 75205, Phone: 214/443-4301,
Fax: 214/443-0358, E-mail: mstanley@smi-law.com; and
(3) Thomas Burt, Wolf Haldenstein Adler Freeman & Herz, 270
Madison Ave, Ninth Floor, New York, NY 10016, Phone:
212/545-4600.
Representing the company is Thomas E Bilek of Hoeffner & Bilek,
1000 Louisiana St, Suite 1302, Houston, TX 77002, Phone:
713/227-7720, Fax: 713/227-9404, E-mail: tbilek@hb-legal.com.
For more details, contact Neil Rothstein of Worldwide Tree Group
-- http://www.halliburtonsecuritieslitigation.com,
http://www.worldwidetree.org-- Phone: +1-619-251-0887, E-mail:
nrothstein@worldwidetree.org.
KB HOME: Court Invalidates Mandatory Binding Arbitration Clauses
----------------------------------------------------------------
Laredo District Court Judge Solomon Casseb has approved the
class action settlement that prohibits KB Home from forcing
homeowners to accept mandatory binding arbitration, Consumer
Affairs.com reports.
The settlement means KB Home could no longer require any past,
present or future customers to consent to mandatory binding
arbitration in the settlement of warranty claims. Customers may
now bring construction defect suits in a court of law. The
settlement applies to all homes in San Antonio, the Rio Grande
Valley, Austin, Houston, Dallas and Fort Worth built after Jan.
1, 1996.
KB Home was already fined for inserting mandatory binding
arbitration clauses in its contracts and warranties.
The lead plaintiff in the case is Laredo truck driver Timothy D.
Pruitt.
The suit is "Pruitt v. Kaufman and Broad, et al., Case No. 5:03-
cv-00021," filed in the U.S. District Court for the Southern
District of Texas under Judge Keith P. Ellison. Representing
the plaintiffs is Alice Oliver-Parrott, Burrow and Parrott, 1301
McKinney Ste 3500, Houston, TX 77010-3092, Phone: 713-222-6333,
Fax: 713-650-6333.
Representing the defendant is Michael A Shaunessy, Shaunessy
Burnett & Greenberg, 98 San Jacinto Blvd, Suite 1400 Austin, TX
78701, Phone: 512-542-9600, Fax: 512-542-9610.
KPNQWEST N.V.: Parent Settles Dutch Stock Fraud Suit for $11M
-------------------------------------------------------------
Qwest Communications International, Inc. recently agreed to pay
$11 million to settle a class action over its failed European
joint venture KPNQwest N.V., according to Rocky Mountain News.
Dutch KPNQwest filed for bankruptcy in May 2002.
KPNQwest shareholders filed the suit in October 2002 accusing
the company and its executives of engaging in a scheme to
artificially inflate KPNQwest revenue and stock. Defendants in
the suit include former Chief Executive Joe Nachhio, former
Qwest Chief Financial Officer Robert Woodruff and former chief
legal officer Drake Tempest.
Under the settlement, Qwest will pay KPNQwest investors $5.5
million in cash and $5.5 million of stock, recent regulator and
court filings show. The deal settles claims against all
defendants except Royal KPN, Qwest's partner in the venture.
The agreement is still subject to court approval.
Qwest is also facing a suit filed by two Dutch trustees in
KPNQwest bankruptcy case in June 2004 in New Jersey federal
court. The case makes allegations under the Racketeer
Influenced and Corrupt Organizations Act. This is in addition
to at least two other lawsuits pending against Qwest in relation
to the KPNQwest venture: that of the Appaloosa Investment
Partnership and Palomino Fund, and of co-trustees of the R.M.
Grand Revocable Living Trust.
The suit is "Taft v. Ackermans, Case No. 1:02cv7951," filed in
the U.S. District Court for the Southern District of New York,
under Judge Peter K. Leisure with referral to Frank Maas.
Representing the plaintiffs are:
(1) Ira M. Press and Mark Booker of Kirby, McInerney &
Squire, LLP, 830 Third Avenue, 10TH Floor, New York, NY
10022 USA, Phone: (212) 317-2300;
(2) Jacob A. Goldberg, Schiffrin & Barroway, LLP, Three
Bala Plaza East, Suite 400, Bala Cynwyd, PA 19004, USA,
Phone: (610) 667-7706; and
(3) Lionel Z. Glancy and Robert M. Zabb, Glancy, Binkow &
Goldberg, LLP, 1801 Avenue of the Stars, Suite 311, Los
Angeles, CA 90067, USA, Phone: (310) 201-9150.
Representing the company are Barry Howard Goldstein, O'Melveny &
Myers LLP, Seven Times Square, New York, NY 10036, USA, Phone:
212-326-2000, Fax: 212-326-2061, E-mail: Bgoldstein@omm.com; and
Matthew W. Close, O'Melveny & Myers LLP, 400 S Hope Street, Los
Angeles, CA 90071, USA, Phone: (213) 430-6000.
LANDAMERICA FINANCIAL: Judge Approves $27.5M Deal in Mich. Suit
---------------------------------------------------------------
U.S. District Judge Avern Cohn approved on May 17 a $27.5
million settlement of a class action filed by Michigan
homeowners against subsidiaries of LandAmerica Financial Group,
Inc.
The class action was filed in 2000 on behalf of four Detroit-
area residents who alleged the defendants overcharged new
homeowners for title insurance between December 1998 and July
2005. The companies in the settlement are Chicago Title
Insurance Co. of Missouri, Transnation Title Insurance Co. of
Arizona, First American Title Insurance Co. of California and
Lawyer's Title Insurance Corp. of Virginia, according to Inman
News.
Checks averaging $345 will be sent to homeowners around July if
no one appeals the decision, plaintiffs' lawyer Patrick Bruetsch
of Birmingham, Michigan, told the Detroit Free Press. No
objection has yet been filed. Mr. Bruetsch said the class has
been notified of the settlement earlier this year. Tentative
settlement on the case was reached in February.
The suit alleged that the company's rate for an owner's title
insurance policy, charged in accordance with rates for new
construction filed with the Insurance Bureau of the State of
Michigan, were less than the rate paid by the lender for a
simultaneously issued lender's title insurance policy. It also
alleged that the lower rate paid by the builder/developer for
the owner's policy involved an illegal kickback for a referral
and an illegal splitting of fees in violation of the Real Estate
Settlement Procedures Act (Class Action Reporter, Mar. 31,
2006).
The suit is "Jergess v. Transnation Title, et al., Case No.
2:00-cv-72124-AC," filed in the U.S. District Court for the
Eastern District of Michigan under Judge Avern Cohn.
Representing the plaintiffs are:
(1) Jeffrey A. Yellen, 37000 Grand River Avenue, Suite 300,
Farmington Hills, MI 48335, Phone: 248-473-0001, E-
mail: jeffyellen@ntlmj.com;
(2) Patrick J. Bruetsch, Bruetsch Assoc., 401 S. Old
Woodward Avenue, Suite 400, Birmingham, MI 48009,
Phone: 248-646-1114, E-mail: pbruetsch@aol.com; and
(3) Timothy K. McConaghy, Hardy, Lewis, 401 S. Old Woodward
Avenue, Suite 400, Birmingham, MI 48009-6629, Phone:
248-645-0800, E-mail: tkm@hardylewis.com.
Representing the company is Francis R. Ortiz of Dickinson
Wright, 500 Woodward Avenue, Suite 4000, Detroit, MI 48226-3425,
Phone: 313-223-3500, E-mail: fortiz@dickinson-wright.com.
NORTEL NETWORKS: Attempts to Settle U.S., Canadian Stock Suits
--------------------------------------------------------------
Nortel Networks Corp. is working to settle several securities
class actions pending against it in both federal courts in the
Unites States as well as courts in Canada.
Subsequent to the Feb. 15, 2001 announcement in which Nortel
Networks provided revised guidance for financial performance for
the 2001 fiscal year and the first quarter of 2001, the company
and certain of its then current officers and directors were
named as defendants in more than 25 purported class actions.
These lawsuits in the U.S. District Courts for the Eastern
District of New York, the Southern District of New York and the
District of New Jersey and in courts in the provinces of
Ontario, Quebec and British Columbia in Canada, on behalf of
shareholders who acquired Nortel Networks Corp. securities as
early as Oct. 24, 2000 and as late as Feb. 15, 2001, allege,
among other things, violations of U.S. federal and Canadian
provincial securities laws. These matters also have been the
subject of review by Canadian and U.S. securities regulatory
authorities.
On May 11, 2001, the defendants filed motions to dismiss and/or
stay in connection with the three proceedings in Quebec
primarily based on the factual allegations lacking substantial
connection to Quebec and the inclusion of shareholders resident
in Quebec in the class claimed in the Ontario lawsuit.
The plaintiffs in two of these proceedings in Quebec obtained
court approval for discontinuances of their proceedings on Jan.
17, 2002. The motion to dismiss and/or stay the third
proceeding (the Quebec I Action) was heard on Nov. 6, 2001 and
the court deferred any determination on the motion to the judge
who will hear the application for authorization to commence a
class proceeding.
On Dec. 6, 2001, the defendants filed a motion seeking leave to
appeal that decision. The motion for leave to appeal was
dismissed on Mar. 11, 2002.
On Oct. 16, 2001, an order in the U.S. District Court for the
Southern District of New York was filed consolidating 25 of the
related U.S. class actions into a single case, appointing class
plaintiffs and counsel for such plaintiffs (the Nortel I Class
Action). The plaintiffs served a consolidated amended complaint
on Jan. 18, 2002.
On Dec. 17, 2001, the defendants in the British Columbia action
served notice of a motion requesting the court to decline
jurisdiction and to stay all proceedings on the grounds that
British Columbia is an inappropriate forum. The motion has been
adjourned at the plaintiffs' request to a future date to be set
by the parties.
On Apr. 1, 2002, the company filed a motion to dismiss the
Nortel I Class Action on the ground that it failed to state a
cause of action under U.S. federal securities laws. On Jan. 3,
2003, the District Court denied the motion to dismiss the
consolidated amended complaint for the Nortel I Class Action.
The plaintiffs served a motion for class certification on Mar.
21, 2003. On May 30, 2003, the defendants served an opposition
to the motion for class certification. Plaintiffs' reply was
served on Aug. 1, 2003. The district court held oral arguments
on Sept. 3, 2003 and issued an order granting class
certification on Sept. 5, 2003.
On Sept. 23, 2003, the defendants filed a motion in the U.S.
Court of Appeals for the Second Circuit for permission to appeal
the class certification decision. The plaintiffs' opposition to
the motion was filed on Oct. 2, 2003.
On Nov. 24, 2003, the U.S. Court of Appeals for the Second
Circuit denied the motion. On Mar. 10, 2004, the district court
approved the form of notice to the class, which was published
and mailed.
On Jul. 17, 2002, a purported class action (the Ontario Claim)
was filed in the Ontario Superior Court of Justice, Commercial
List, naming Nortel Networks, certain of its current and former
officers and directors and its auditors as defendants. The
factual allegations in the Ontario Claim are substantially
similar to the allegations in the Nortel I Class Action.
The Ontario Claim is on behalf of all Canadian residents who
purchased Nortel Networks Corp. securities, including options on
Nortel Networks Corp. securities, between Oct. 24, 2000 and Feb.
15, 2001. The plaintiffs claim damages of CA$5 billion, plus
punitive damages in the amount of CA$1 billion, prejudgment and
postjudgment interest and costs of the action.
On Sept. 23, 2003, the court issued an order allowing the
plaintiffs to proceed to amend the Ontario Claim and requiring
that the plaintiffs serve class certification materials by Dec.
15, 2003. On Sept. 24, 2003, the plaintiffs filed a notice of
discontinuance of the original action filed in Ontario.
On Dec. 12, 2003, plaintiffs' counsel requested an extension of
time to Jan. 21, 2004 to deliver class certification materials.
On Jan. 21, 2004, plaintiffs' counsel advised the court that the
two representative plaintiffs in the action no longer wished to
proceed, but counsel was prepared to deliver draft certification
materials pending the replacement of the representative
plaintiffs.
On Feb. 19, 2004, the plaintiffs' counsel advised the court of a
potential new representative plaintiff. On Feb. 26, 2004, the
defendants requested the court to direct the plaintiffs' counsel
to bring a motion to permit the withdrawal of the current
representative plaintiffs and to substitute the proposed
representative plaintiff.
On Jun. 8, 2004, the court signed an order allowing a Second
Fresh as Amended Statement of Claim that substituted one new
representative plaintiff, but did not change the substance of
the prior claim.
Subsequent to the Mar. 10, 2004 announcement in which Nortel
Networks indicated it was likely that it would need to revise
its previously announced unaudited results for the year ended
Dec. 31, 2003, and the results reported in certain of its
quarterly reports for 2003, and to restate its previously filed
financial results for one or more earlier periods, Nortel
Networks and certain of its then current and former officers and
directors were named as defendants in 27 purported class
actions.
These lawsuits in the U.S. District Court for the Southern
District of New York on behalf of shareholders who acquired
Nortel Networks securities as early as Feb. 16, 2001 and as late
as May 15, 2004, allege, among other things, violations of U.S.
federal securities laws. These matters are also the subjects of
investigations by Canadian and U.S. securities regulatory and
criminal investigative authorities.
On Jun. 30, 2004, the Court signed Orders consolidating the 27
class actions (the Nortel II Class Action) and appointing the
lead plaintiffs and lead counsel. The plaintiffs filed a
consolidated class action complaint on Sept. 10, 2004, alleging
a class period of Apr. 24, 2003 through and including Apr. 27,
2004. On Nov. 5, 2004, Nortel Networks and the Audit Committee
Defendants filed a motion to dismiss the consolidated class
action complaint.
On Jan. 18, 2005, the lead plaintiffs, Nortel Networks and the
Audit Committee Defendants reached an agreement in which Nortel
Networks would withdraw its motion to dismiss and plaintiffs
would dismiss Count II of the complaint, which asserts a claim
against the Audit Committee Defendants.
On May 13, 2005, the plaintiffs filed a motion for class
certification. On Sept. 16, 2005, lead plaintiffs filed an
amended consolidated class action complaint that rejoined the
previously dismissed Audit Committee Defendants as parties to
the action. On Mar. 16, 2006, the plaintiffs withdrew their
motion for class certification.
On Jul. 28, 2004, Nortel Networks and certain of their current
and former officers and directors, were named as defendants in a
purported class proceeding in the Ontario Superior Court of
Justice on behalf of shareholders who acquired Nortel Networks
Corp. securities as early as Nov. 12, 2002 and as late as Jul.
28, 2004 (the Ontario I Action).
This lawsuit alleges, among other things, breaches of trust and
fiduciary duty, oppressive conduct and misappropriation of
corporate assets and trust property in respect of the payment of
cash bonuses to executives, officers and employees in 2003 and
2004 under the Nortel Return to Profitability bonus program and
seeks damages of Canadian $250 million and an order under the
Canada Business Corp.'s Act directing that an investigation be
made respecting these bonus payments.
On Feb. 16, 2005, a motion for authorization to institute a
class action on behalf of residents of Quebec, who purchased
Nortel securities between Jan. 29, 2004 and Mar. 15, 2004, was
filed in the Quebec Superior Court naming Nortel Networks as a
defendant (the Quebec II Action). The motion alleges that
Nortel Networks made misrepresentations about 2003 financial
results.
On Mar. 9, 2005, Nortel Networks and certain of its current and
former officers and directors and its auditors were named as
defendants in a purported class action proceeding filed in the
Ontario Superior Court of Justice, Commercial List, on behalf of
all Canadian residents who purchased Nortel Networks Corp.
securities from Apr. 24, 2003 to Apr. 27, 2004 (the Ontario II
Action).
This lawsuit alleges, among other things, negligence,
misrepresentations, oppressive conduct, insider trading and
violations of Canadian corporation and competition laws in
connection with Nortel Networks' 2003 financial results and
seeks damages of CA$3 billion, plus punitive damages in the
amount of CA$1 billion, prejudgment and post judgment interest
and costs of the action.
On Sept. 30, 2005, Nortel Networks announced that a mediator had
been jointly appointed by the two U.S. District Court Judges
presiding over the Nortel I Class Action and the Nortel II Class
Action to oversee settlement negotiations between Nortel
Networks and the lead plaintiffs in these two actions. The
appointment of the mediator was pursuant to a request by Nortel
Networks and the lead plaintiffs for the courts' assistance to
facilitate the possibility of achieving a global settlement
regarding these actions.
The settlement discussions before the mediator are confidential
and non-binding on the parties without prejudice to their
respective positions in the litigation. The mediator, U.S.
District Court Judge the Honorable Robert W. Sweet, is not
presiding over either of these actions.
On Feb. 8, 2006, Nortel Networks announced that, as a result of
this mediation process, Nortel Networks and the lead plaintiffs
in the Nortel I Class Action and the Nortel II Class Action have
reached an agreement in principle to settle these lawsuits.
The proposed class action settlement would be part of, and is
conditioned on, Nortel Networks reaching a global settlement
encompassing all pending shareholder class actions and proposed
shareholder class actions commenced against Nortel Networks and
certain other defendants following Nortel Networks' announcement
of revised financial guidance during 2001, and Nortel Networks'
revision of its 2003 financial results and restatement of other
prior periods, including, without limitation, the Nortel I Class
Action, the Nortel II Class Action, the Ontario Claim, the
Quebec I Action, the British Columbia Action, the Ontario I
Action, the Quebec II Action and the Ontario II Action.
The Proposed Class Action Settlement is also conditional on
Nortel Networks and the lead plaintiffs' reaching agreement on
corporate governance related matters and the resolution of
insurance related issues.
On Mar. 17, 2006 Nortel announced that it and the lead
plaintiffs had reached such an agreement with Nortel's insurers
to certain indemnification obligations. Nortel believes that
these indemnification obligations would be unlikely to
materially increase its total cash payment obligations under the
proposed Class Action Settlement.
The insurance payments would not reduce the amounts payable by
Nortel as noted below. Nortel also agreed to certain corporate
governance enhancements, including the codification of certain
of its current governance practices in its Board of Directors
written mandate and the inclusion in its annual proxy circular
and proxy statement of a report on certain of its governance
practices.
Proposed Class Action Settlement
Under the terms of the proposed global settlement contemplated
by the proposed class action settlement, Nortel Networks would:
-- make a payment of $575 million in cash;
-- issue 628,667,750 of Nortel Networks Corp. common shares
(representing 14.5% of Nortel Networks' equity as of
Feb. 7, 2006); and
-- contribute one-half of any recovery in Nortel Networks'
existing litigation against Messrs. Frank Dunn, Douglas
Beatty and Michael Gollogly, Nortel Networks' former
senior officers who were terminated for cause in April
2004, seeking the return of payments made to them under
Nortel Networks' bonus plan in 2003.
In the event of a share consolidation of Nortel Networks Corp.
common shares, the number of Nortel Networks Corp. common shares
to be issued pursuant to the proposed class action settlement
would be adjusted accordingly.
The total settlement amount would include all plaintiffs' court-
approved attorneys' fees. As a result of the Proposed Class
Action Settlement, Nortel Networks has established a litigation
reserve and recorded a charge to its full-year 2005 financial
results of $2,474 million, $575 million of which relates to the
proposed cash portion of the proposed class action settlement,
while $1,899 million relates to the proposed equity component
and will be adjusted in future quarters based on the fair value
of the Nortel Networks Corp. common shares issuable until the
finalization of the settlement.
Any change to the terms of the proposed class action settlement
would likely result in an adjustment to the litigation reserve.
Nortel Networks expects to fund its cash contribution to the
settlement, if finalized, out of its then available cash
balances.
Nortel Networks and the lead plaintiffs in the Nortel I Class
Action and the Nortel II Class Action are continuing discussions
towards a definitive settlement agreement based on the Proposed
Class Action Settlement.
NORTEL NETWORKS: Continues to Face Tenn. ERISA Violations Suit
--------------------------------------------------------------
Nortel Networks Corp. continues to face a consolidated class
action in the U.S. District Court for the Middle District of
Tennessee alleging violations of the Employee Retirement Income
Security Act (ERISA).
Initially, a purported class action was filed in the U.S.
District Court for the Middle District of Tennessee on Dec. 21,
2001. The suit was filed on behalf of participants and
beneficiaries of the Nortel Long-Term Investment Plan at any
time during the period of Mar. 7, 2000 through the filing date,
and who made or maintained Plan investments in Nortel Networks
Corp. common shares, under ERISA for Plan-wide relief.
The suit alleges, among others, material misrepresentations and
omissions to induce Plan participants to continue to invest in
and maintain investments in Nortel Networks common shares in the
Plan.
A second purported class action, on behalf of the Plan and Plan
participants for whose individual accounts the Plan purchased
Nortel Networks Corp. common shares during the period from Oct.
27, 2000 to Feb. 15, 2001 and making similar allegations, was
filed in the same court on Mar. 12, 2002.
A third purported class action, on behalf of persons who are or
were Plan participants or beneficiaries at any time since Mar.
1, 1999 to the filing date and making similar allegations, was
filed in the same court on Mar. 21, 2002.
The first and second purported class actions were consolidated
by a new purported class action complaint, filed on May 15, 2002
in the same court and making similar allegations, on behalf of
Plan participants and beneficiaries who directed the Plan to
purchase or hold shares of certain funds, which held primarily
Nortel Networks Corp. common shares, during the period from Mar.
7, 2000 through Dec. 21, 2001.
On Sept. 24, 2002, plaintiffs in the consolidated action filed a
motion to consolidate all the actions and to transfer them to
the U.S. District Court for the Southern District of New York.
The plaintiffs then filed a motion to withdraw the pending
motion to consolidate and transfer. The withdrawal was granted
by the district court on Dec. 30, 2002.
A fourth purported class action, on behalf of the plan and plan
participants for whose individual accounts the plan held Nortel
Networks Corp. common shares during the period from Mar. 7, 2000
through Mar. 31, 2001 and making similar allegations, was filed
in the U.S. District Court for the Southern District of New York
on Mar. 12, 2003.
On Mar. 18, 2003, plaintiffs in the fourth purported class
action filed a motion with the Judicial Panel on Multi District
Litigation to transfer all the actions to the U.S. District
Court for the Southern District of New York for coordinated or
consolidated proceedings pursuant to 28 U.S.C. section 1407.
On Jun. 24, 2003, the Judicial Panel on Multi District
Litigation issued a transfer order transferring the Southern
District of New York action to the U.S. District Court for the
Middle District of Tennessee (the Consolidated ERISA Action).
On Sept. 12, 2003, the plaintiffs in all the actions filed a
consolidated class action complaint. On Oct. 28, 2003, the
defendants filed a motion to dismiss the complaint and a motion
to stay discovery pending disposition of the motion to dismiss.
On Mar. 30, 2004, the plaintiffs filed a motion for
certification of a class consisting of participants in, or
beneficiaries of, the plan who held shares of the Nortel Stock
Fund from Mar. 7, 2000 through Mar. 31, 2001.
On Apr. 27, 2004, the court granted the defendants' motion to
stay discovery pending resolution of defendants' motion to
dismiss.
On Jun. 15, 2004, the plaintiffs filed a first amended
consolidated class action complaint that added additional
current and former officers and employees as defendants and
expanded the purported class period to extend from Mar. 7, 2000
through to Jun. 15, 2004.
On Jun. 17, 2005, the plaintiffs filed a second amended
consolidated class action complaint that added additional
current and former directors, officers and employees as
defendants and alleged breach of fiduciary duty on behalf of the
plan and as a purported class action on behalf of participants
and beneficiaries of the Plan who held shares of the Nortel
Networks Stock Fund during the period from Mar. 7, 2000 through
Jun. 17, 2005.
On Jul. 8, 2005, the defendants filed a renewed motion to
dismiss plaintiffs' second amended class action complaint. On
Jul. 29, 2005, plaintiffs filed an opposition to the motion, and
defendants filed a reply memorandum on Aug. 12, 2005.
On Mar. 30, 2006, the defendants filed an additional motion to
dismiss raising the jurisdictional challenge that all former
plan participants, including one of the named plaintiffs, lack
standing to assert a claim under ERISA. On Apr. 17, 2006,
plaintiffs filed a motion to strike this motion to dismiss.
On May 18, 2004, a purported class action was filed in the U.S.
District Court for the Middle District of Tennessee on behalf of
individuals who were participants and beneficiaries of the plan
at any time during the period of Dec. 23, 2003 through the
filing date and who made or maintained plan investments in
Nortel Networks Corp. common shares, under the ERISA for Plan-
wide relief and alleging, among other things, breaches of
fiduciary duty.
On Sept. 3, 2004, the Court signed a stipulated order
consolidating this action with the Consolidated ERISA Action
described above.
On Jun. 16, 2004, a second purported class action on behalf of
the Plan and Plan participants for whose individual accounts the
Plan purchased Nortel Networks Corp. common shares during the
period from Oct. 24, 2000 to Jun. 16, 2004, and making similar
allegations, was filed in the U.S. District Court for the
Southern District of New York.
On Aug. 6, 2004, the Judicial Panel on Multi District Litigation
issued a conditional transfer order to transfer this action to
the U.S. District Court for the Middle District of Tennessee for
coordinated or consolidated proceedings pursuant to 28 U.S.C.
section 1407 with the Consolidated ERISA Action described above.
On Aug. 20, 2004, plaintiffs filed a notice of opposition to the
conditional transfer order with the Judicial Panel. On Dec. 6,
2004, the Judicial Panel denied the opposition and ordered the
action transferred to the U.S. District Court for the Middle
District of Tennessee for coordinated or consolidated
proceedings with the Consolidated ERISA Action described above.
On Jan. 3, 2005, this action was received in the U.S. District
Court for the Middle District of Tennessee and consolidated with
the Consolidated ERISA Action described above.
The suit is "In re Nortel Networks Corp. 'ERISA' Litigation,
3:03-md-01537," filed in the U.S. District Court for the
District of Tennessee under Judge John T. Nixon with referral to
Judge Juliet Griffin. Representing the plaintiffs are:
(1) Laurie B. Ashton of Keller Rohrback, P.L.C., 3101 N.
Central Avenue, Suite 900, Phoenix, AZ 85012, Phone:
(602) 248-0088;
(2) George Edward Barrett of Barrett, Johnston & Parsley,
217 Second Avenue, N. Nashville, TN 37201, Phone: (615)
244-2202, E-mail: gbarrett@barrettjohnston.com;
(3) Paul Kent Bramlett of Bramlett Law Offices, P.O. Box
150734, Nashville, TN 37215-0734, Phone: (615) 248-
2828, Fax: (615) 254-4116, E-mail: pknashlaw@aol.com;
(4) Clifton David Briley of Briley Law Group, PLLC, 511
Union Street, Suite 1610, Nashville, TN 37219, Phone:
(615) 986-2684, E-mail: david@brileylaw.com;
(5) Todd S. Collins of Berger & Montague, P.C., 1622 Locust
Street, Philadelphia, PA 19103, Phone: (215) 875-3040,
Fax: (215) 875-5715, E-mail: tcollins@bm.net;
(6) Kenneth A. Elan of The Law Office of Kenneth A. Elan,
217 Broadway, Suite 606, New York, NY 10007, Phone:
(212) 619-0261.
(7) Robert Izard of Schatz & Nobel, 1 Corporate Center,
Suite 1700, Hartford, CT 06103-3202, Phone: (860) 493-
6292, E-mail: firm@snlaw.net; and
(8) Edwin J. Mills of Stull, Stull & Brody, Six East 45th
Street, New York, NY 10017, Phone: (212) 687-7230, Fax:
(212) 490-2022, E-mail: ssbny@aol.com.
Representing the defendants are:
(i) Aubrey B. Harwell, Jr. and Gerald David Neenan of Neal
& Harwell, 150 Fourth Avenue, N. 2000 First Union
Tower, Nashville, TN 37219-2498, Phone: (615) 244-1713,
E-mail: aharwell@nealharwell.com and
gneenan@nealharwell.com; and
(ii) Stuart J. Baskin and Tai H. Park of Shearman &
Sterling, 599 Lexington Avenue, New York, NY 10022-
6069, Phone: (212) 848-4000.
NUTRAQUEST INC: Paying $34M for Ephedra Suits in Bankruptcy Plan
----------------------------------------------------------------
The bankruptcy plan submitted by New Jersey diet pill maker
Nutraquest Inc., which had been known as Cytodyne Technologies,
will help fund a $34.3 million settlement for consumers or their
survivors who claimed injuries from Nutraquest's ephedra-based
products, the Star-Ledger reports. It also said it will pay
$23.9 million to resolve two class actions and claims by
California authorities regarding charges of false advertising.
Under the agreement, which will settle 138 injury claims,
Nutraquest will contribute up to $4.35 million. Retailers that
sold the pills and other defendants will cover the balance. The
federal government banned ephedra in April 2004.
Nutraquest filed for Chapter 11 bankruptcy protection in U.S.
Bankruptcy Court in Trenton, New Jersey in 2003. It attributed
the filing to the lawsuits filed against it, over its product
Xenadrine RFA-1, which contains ephedra, an herbal stimulant
that critics claim causes heart-related problems by increasing
blood pressure in some users (Class Action Reporter, Oct. 24,
2003).
In recent developments, lawyers for several of the groups who
sued Nutraquest is objecting to Nutraquest's proposed plan,
claiming it is incomplete, links settlements in an all-or-
nothing stance and grants blanket immunity to company owner
Robert Chinery, according to the KFMB. In court filings, the
company asked for another 60 days, until Aug. 8, to modify its
reorganization plan.
The suit is "Bechler v. Cytodyne Technologies, Inc. et al., Case
No. 3:04-cv-01130-GEB," filed in the U.S. District Court for the
District of New Jersey under Judge Garrett E. Brown.
Representing the plaintiffs is Steven I. Adler Cole, Schotz,
Meisel, Forman & Leonart, PA, 25 Main Street, PO Box 800,
Hackensack, NJ, 07602-0800, Phone: (201) 489-3000, E-mail:
sadler@coleschotz.com
Representing the defendants are:
(1) Anthony M. Gruspo of Gibbons, del Deo Dolan,
Griffinger, Vecchione, One Riverfront Plaza, Newark, NJ
07102-5496, Phone: (973) 596-4500, E-mail:
agruppuso@gibbonslaw.com;
(2) Thomas Kane of Dechert LLP, Princeton Pike Corporate
Center, P.O. Box 5218, Princeton, NJ 08543-5218, Phone:
(609) 620-3200, E-mail: thomas.kane@dechert.com;
(3) Simon Kimmelman of Sterns & Weinwroth, PC, 50 West
State Street, Suite 1400, P.O. BOX 1298 Trenton, NJ
08607-1298, Phone: (609) 392-2100, Fax: (609) 393-7956,
E-mail: skimmelman@sternslaw.com;
(4) Michelle Hart Yeary of Dechert LLP, P.O. BOX 5218
Princeton, NJ 08543-5218, Phone: (609) 620-3200, E-
mail: michelle.yeary@dechert.com.
QUOVADX INC: Offers $3.3M to Settle Special Situations Fund Case
----------------------------------------------------------------
Quovadx, Inc. offered to pay in a recent preliminary settlement
negotiations, $3,300,000 to plaintiffs in the securities class
action "Special Situations Fund III, L.P., et al. v. Quovadx,
Inc., et al., Case No. 1:04-cv-01006-RPM."
On May 17, 2004, a purported class action complaint, "Henderson
v. Quovadx, Inc. et al., Case No. 04-M-1006 (OES)," was filed in
the U.S. District Court for the District of Colorado against
Quovadx, Inc., its now-former chief executive officer, its now-
former chief financial officer and its board of directors.
The complaint alleged violations of Section 11 and Section 15 of
the Securities Act of 1933, as amended, purportedly on behalf of
all former stockholders of Rogue Wave Software, Inc. who
acquired Quovadx common stock in connection with the company's
exchange offer effective Dec. 19, 2003.
The claims are based upon the same theories and allegations as
asserted in the Section 10(b) class action against the company
styled, "Heller v. Quovadx, Inc., et al., Case No. 1:04-cv-
00665-RPM." The court denied plaintiff's motion to consolidate
this Section 11 action with those Section 10(b) cases.
On Jul. 14, 2004, the company and outside director defendants
filed an answer to the complaint, denying allegations of
wrongdoing and asserting various affirmative defenses. On Oct.
4, 2004, the company's former CEO and CFO filed an answer to the
complaint, denying allegations of wrongdoing and asserting
various affirmative defenses.
On Jun. 29, 2005, the court appointed the Special Situations
Fund III, L.P. (SSF), and three other related funds as lead
plaintiffs. On Jul. 26, 2005, Plaintiffs filed an amended
complaint "Special Situations Fund III, L.P., et al. v. Quovadx,
Inc., et al., Case No. 1:04-cv-01006-RPM."
The amended complaint asserts the same claims as those asserted
in the original complaint, and includes an additional allegation
that the Infotech revenue was falsely recognized as part of a
fraud to inflate Quovadx' stock price for the Rogue Wave
acquisition.
On Aug. 1, 2005, the court approved the appointment of SSF's
counsel as lead plaintiffs' counsel.
On Aug. 23, 2005, the company and outside director defendants
filed an answer to the amended complaint, denying allegations of
wrongdoing and asserting various affirmative defenses. On Aug.
25, 2005, the company's former CEO and CFO filed an answer to
the amended complaint, denying allegations of wrongdoing and
asserting various affirmative defenses.
On Dec. 1, 2005, plaintiffs filed a motion for partial summary
judgment on the issue of liability under Section 11. On Dec.
23, 2005, plaintiffs filed a motion to dismiss without prejudice
the individual defendants, and all defendants indicated to the
court they do not oppose this motion to dismiss the individual
defendants.
On Jan. 11, 2006, the company filed a statement of non-
opposition to plaintiffs' motion for partial summary judgment,
conceding that the subsequently restated third quarter 2003
financial statements incorporated by reference in the S-4
Registration Statement established prima facie liability for the
company to the plaintiff class under Section 11.
On Feb. 24, 2006, the court held a scheduling conference.
Pursuant to the court's instruction at that conference counsel
for both parties are in the process of agreeing upon a proposed
scheduling order, and preparing notice to the class members.
As part of preliminary settlement negotiations, on Mar. 16,
2006, the company made a formal offer to the plaintiffs to
settle the case for $3,300,000. Accordingly, the company
accrued this amount as an expense in its first quarter results
of operations.
The company believes that, if settlement negotiations continue,
$3,300,000 represents a reasonable estimate of minimum liability
for the company. It is possible the company's liability in a
negotiated settlement could materially exceed that amount. The
plaintiffs' current settlement demand is $13,500,000.
The suit is "Special Situations Fund III, L.P., et al. v.
Quovadx, Inc., et al., Case No. 1:04-cv-01006-RPM," filed in the
U.S. District Court in Colorado, under Judge Richard P. Matsch.
Representing the plaintiffs are Marcela A. Kirberger and Gavin
J. Rooney of Lowenstein Sandler, PC, 65 Livingston Avenue,
Roseland, NJ 07068, U.S.A, Phone: 973-597-2450, Fax: 973-597-
2451, E-mail: mkirberger@lowenstein.com or
grooney@lowenstein.com.
Representing the company are:
(1) John Alonzo Hutchings and Adam Philip Stapen of Dill,
Dill, Carr, Stonbraker & Hutchings, PC, 455 Sherman
Street #300, Denver, CO 80203, U.S.A, Phone: 303-777-
7373, Fax: 303-777-3823, E-mail:
jhutchings@dillanddill.com or astapen@dillanddill.com;
(2) Hugh Gottschalk and John Mark Vaught of Wheeler Trigg
Kennedy, LLP, 1801 California Street, #3600, Denver, CO
80202, U.S.A, Phone: 303-244-1858 and 303-244-1800,
Fax: 303-244-1879, E-mail: gottschalk@wtklaw.com and
vaught@wtklaw.com; and
(3) John Peter Stigi, III of Sheppard Mullin Richter &
Hampton, LLP, 333 South Hope Street, 48th Floor, Los
Angeles, CA 90071-1448, U.S.A, Phone: 213-620-1780,
Fax: 213-620-1398, E-mail: jstigi@sheppardmullin.com.
QUOVADX INC: Settlement Reached for "Heller" Stock Suit in Colo.
----------------------------------------------------------------
Quovadx, Inc. reached a settlement in the securities class
action "Heller v. Quovadx, Inc., et al., Case No. 1:04-cv-00665-
RPM" that is pending in the U.S. District Court for District of
Colorado.
On Mar. 18, 2004, a purported class action complaint "Smith v.
Quovadx, Inc., et al., Case No. 04-M-0509," was filed against
the company its former Chief Executive Officer and its former
Chief Financial Officer.
The complaint alleged violations of Section 10(b) and Section
20(a) of the Securities Exchange Act of 1934, as amended,
purportedly on behalf of all persons who purchased Quovadx
common stock from Oct. 22, 2003 through Mar. 15, 2004. The
claims were based upon allegations the company:
-- purportedly overstated its net income and earnings per
share during the class period;
-- purportedly recognized revenue from contracts between
the company and Infotech Networks Group (Infotech)
prematurely; and
-- purportedly lacked adequate internal controls and was
therefore unable to ascertain the financial condition
of the company.
The action sought damages against the defendants in an
unspecified amount. Thereafter, eight additional, nearly
identical class action complaints were filed in the same court
based on the same facts and allegations. Subsequently, all but
one of the actions, entitled, "Heller v. Quovadx, Inc., et al.,
Case No. 04-M-0665 (OES) (D. Colo.)," was dismissed.
On Jun. 10, 2004, the plaintiff in the Heller case filed a first
amended complaint, which asserts the same claims as those
asserted in the original complaint, and includes allegations
regarding the company's accounting for certain additional
transactions. On Sept. 8, 2004, the court approved the
appointment of David Heller as lead plaintiff.
On Sept. 29, 2004, the court denied defendants' motions to
dismiss the first amended complaint and approved the appointment
of Mr. Heller's counsel as lead plaintiff's counsel. On Oct.
14, 2004, the company and the other defendants filed answers to
the first amended complaint, denying allegations of wrongdoing
and asserting various affirmative defenses.
On Apr. 12, 2005, the court issued an order certifying as a
class all persons (except insiders) who purchased or otherwise
acquired Quovadx stock on the open market between Oct. 22, 2003
and Mar. 15, 2004. On Jan. 13, 2005, the court entered a
scheduling order in the case.
In November 2005, the court vacated the Jan. 13, 2005 scheduling
order, in anticipation that the court would enter a coordinated
scheduling order in conjunction with a scheduling order in
"Special Situations Fund III, L.P., et al. v. Quovadx, Inc., et
al., Case No. 1:04-cv-01006-RPM." A scheduling conference was
held on Feb. 24, 2006, at which the court further delayed
scheduling for thirty days to allow the parties time to complete
settlement negotiations. No trial date has been set.
On Dec. 13 and 14, 2005, a voluntary mediation was held among
plaintiffs in each of the Heller, Special Situations Fund and
derivative cases; the company; the individual director
defendants; the former officer defendants; and the various
director and officer insurance carriers.
As a result of the mediation and subsequent discussions, the
parties reached a preliminary understanding to settle the Heller
case and the derivative cases.
Additionally, the company reached an understanding with the
director and officer insurance carriers for a settlement under
the applicable policies. These understandings, including the
understanding with the insurance carriers and the former
officers, were contingent on material agreements among the
parties, which were not achieved until late in March 2006.
Final agreements among the various parties ultimately were
reached and the Memorandum of Understanding documenting the
settlement with the plaintiffs in the Heller case was executed
as of Apr. 4, 2006.
Under the terms of the settlement MOU, the plaintiffs will
receive $10.0 million in exchange for their release of the
company and the individual defendants, with prejudice, of all
claims under Sections 10b and 20(a) of the Securities and
Exchange Act of 1934.
As of Mar. 31, 2006, the company accrued $3.0 million as a
settlement expense. In April the company paid that sum, and its
insurance carriers paid $7.0 million, into a settlement fund
established by the lead plaintiff's counsel.
The agreement, which excludes claims made under Sections 11 and
15 of the Securities Act of 1933, is subject to approval by the
court and the company can terminate the agreement if more than a
certain percentage of class members opt out. The parties are
currently negotiating the Stipulation of Settlement, which will
be submitted to the court for approval and then to the
stockholders.
The suit is "Heller v. Quovadx, Inc., et al., Case No. 1:04-cv-
00665-RPM," filed in the U.S. District Court for the District of
Colorado, under Judge Richard P. Matsch. Representing the
plaintiffs are:
(1) Dennis Jeremy Herman, Jeffrey W. Lawrence and Ex Kano
S. Sams of Lerach Coughlin Stoia Geller Rudman &
Robbins, LLP-SF CA, 100 Pine Street #2600, San
Francisco, CA 94111, U.S.A, Phone: 415-288-4545, Fax:
415-288-4534, E-mail: dherman@lerachlaw.com,
jeffreyl@lerachlaw.com, exkanos@lerachlaw.com; and
(2) Kip Brian Shuman of Dyer & Shuman, LLP, 801 East 17th
Avenue, Denver, CO 80218-1417, U.S.A, Phone: 303-861-
3003, Fax: 303-830-6920, E-mail:
KShuman@DyerShuman.com.
Representing the company are:
(i) John Alonzo Hutchings and Adam Philip Stapen of Dill,
Dill, Carr, Stonbraker & Hutchings, PC, 455 Sherman
Street #300, Denver, CO 80203, U.S.A, Phone: 303-777-
7373, Fax: 303-777-3823, E-mail:
jhutchings@dillanddill.com or astapen@dillanddill.com;
and
(ii) John Peter Stigi, III of Sheppard Mullin Richter &
Hampton, LLP, 333 South Hope Street, 48th Floor, Los
Angeles, CA 90071-1448, U.S.A, Phone: 213-620-1780,
Fax: 213-620-1398, E-mail: jstigi@sheppardmullin.com.
REMEC INC: Continues to Face Securities Fraud Lawsuit in Calif.
---------------------------------------------------------------
Plaintiffs filed a third amended complaint in the consolidated
securities class action filed against REMEC, Inc. in California.
On Sept. 29, 2004, three class actions were filed against the
company and certain former officers in the U.S. District Court
for the Southern District of California alleging violations of
federal securities laws between Sept. 8, 2003 and Sept. 8, 2004.
On Jan. 18, 2005, the law firm of Milberg Weiss Bershad &
Schulman, LLP, was appointed Lead Counsel and its client was
appointed Lead Plaintiff.
On Mar. 10, 2005, Milberg Weiss filed a consolidated and amended
complaint. The complaint asserted, among other things, that
during the class period, the Defendants made false and
misleading statements and failed to disclose material
information regarding the company's financial condition and
performance, operations, earnings and business prospects.
The complaint sought unspecified damages and legal expenses. On
Apr. 19, 2005, the company filed a motion to dismiss the
complaint, which was granted on Aug. 17, 2005, with leave to
amend.
Plaintiffs filed a consolidated second amended complaint on or
about Sept. 16, 2005. On Oct. 28, 2005, the company filed a
motion to dismiss the consolidated second amended complaint,
which was granted by the Court on Feb. 14, 2006, with leave to
amend.
On Mar. 23, 2006, plaintiffs filed a third amended complaint,
which is under review by the company.
The suit is "In re: REMEC Inc. Securities Litigation, Case No.
04-CV-1948," filed in the U.S. District Court for the Southern
District of California under Judge Jeffrey T. Miller.
Representing the plaintiffs are:
(1) Jeff S. Westerman of Milberg Weiss Bershad & Schulman,
LLP, 355 South Grand Avenue, Suite 4170, Los Angeles,
CA 90071, Phone: (213) 617-1200, Fax: (213) 617-1975;
(2) David W. Mitchell of Lerach Coughlin Stoia Geller
Rudman & Robbins, LLP, 655 West Broadway, Suite 1900,
San Diego, California 92101-4297, (San Diego Co.),
Phone: 619-231-1058 and 800-449-4900, Fax: 619-231-
7423, Web site: http://www.lerachlaw.com;and
(3) Blake Muir Harper of Hulett Harper Stewart, LLP, 550
West C. Street, Suite 1600, San Diego, CA 92101, Phone:
(619) 338-1133, Fax: (619) 338-1139.
Representing the defendants is Robert W. Brownlie of DLA Piper
Rudnick Gray Cary, US, LLP, 401 "B" Street, Suite 1700, San
Diego, California 92101, (San Diego Co.), Phone: (619) 699-2700
and Phone: 858-638-6886, Fax: 858-677-1401, Web site:
http://www.dlapiper.com.
REMEC INC: Discovery Ongoing in Calif. Labor Violations Lawsuit
---------------------------------------------------------------
REMEC, Inc. is defendant in a purported class action in
California, alleging that the company mischaracterized employees
engaged in certain purchasing functions, and failed to provide
meal and rest periods as required by state law.
The suit was filed on Nov. 28, 2005 by Peter Zanni, a former
employee of the company. The complaint seeks unspecified amount
of damages.
The company filed its answer to the complaint on Dec. 29, 2005,
denying the allegations. Discovery recently commenced and is
continuing.
RENT-A-CENTER INC: Wash. Court Approves Labor Lawsuit Settlement
----------------------------------------------------------------
The Superior Court of Yakima County, Washington, gave final
approval to the putative countywide class action "Madrigal et
al. v. Rent-A-Center, Inc.," which alleges violations of the
wage and hour laws regarding overtime, lunch and work breaks,
and failure to pay wages due to employees.
On Jan. 13, 2006, the court preliminarily approved the class
settlement. The class consists of approximately 1,300 class
members, and notice of settlement has now been sent.
Objections to the settlement were due Mar. 15, 2006, and no
class members objected. The final approval hearing before the
court occurred on Apr. 21, 2006, and the court approved the
settlement and dismissed the case with prejudice.
The company anticipates funding the settlement in May 2006.
Accordingly, as of Mar. 31, 2006, it reserved approximately $1.3
million to fund the prospective settlement as well as its
attorneys' fees.
SHARPER IMAGE: Faces Calif., Fla., Md. Ionic Breeze Quadra Suits
----------------------------------------------------------------
Sharper Image Corp. is defendant in five purported class actions
alleging inaccurate advertising on behalf of the Ionic Breeze
Quadra, including its failure to perform as claimed.
The company strongly rejects these allegations. The actions are
filed on behalf of purchasers of the Ionic Breeze Quadra in the
state Courts of California (San Francisco) and Florida
(Jacksonville), as well as the U.S. District Courts of Maryland
and Florida (Miami).
Only the San Francisco action was certified for class
representation, a ruling that is on appeal by the company. The
Florida state court action is stayed pending resolution of the
ongoing San Francisco case. The Maryland and Florida federal
cases are in the initial stages of procedure.
The Maryland federal suit is "Cassi v. Sharper Image Corp., Case
No. 8:05-cv-01576-AW," filed in the U.S. District Court for the
District of Maryland under Judge Alexander Williams, Jr.
Representing the plaintiffs is Jon Dennis Pels of Pels Anderson
and Lee, LLC, 4833 Rugby Ave., Fourth Fl., Bethesda, MD 20814,
Phone: 13019865570, Fax: 13019865571, E-mail: jpels@pallaw.com;
Representing the defendant is Fred B. Goldberg of Spirer and
Goldberg, PC, 7101 Wisconsin Ave., Ste. 1201, Bethesda, MD
20814, Phone: 13016543300, Fax: 13016541109, E-mail:
fgoldberg@spirerandgoldberg.com.
SMART & FINAL: Calif. Court Approves Labor Lawsuit Settlement
-------------------------------------------------------------
The Orange County Superior Court of the state of California
granted final approval to the settlement of the class action
against Smart & Final, Inc.
In May 2001, the company was named as defendant in the suit
"Olivas vs. Smart & Final Inc." The plaintiff and another
former hourly store employee filed the suit, on their behalf and
on behalf of all hourly store employees in California, alleging
that the company failed to pay proper overtime, failed to pay
for all hours worked, failed to pay for certain meal and rest
periods, and failed to pay for other compensation. The action
seeks to be classified as a "class action" and seeks unspecified
monetary damages and statutory penalties thereon.
On Aug. 9, 2001, the company filed a general denial to these
claims and asserted numerous defenses. A hearing on plaintiff's
motion for class certification was heard and certification as to
nine sub-classes was granted on Jan. 22, 2004. The class
consists of approximately 13,200 current and former hourly store
employees in California and the suit covers the period May 1997
through January 2004. Discovery is now underway in the case.
In February 2005, the court ordered the parties to commence
mediation. In March 2005, the court set a trial date of Mar. 6,
2006. Mediations were held on Apr. 27, 2005, Jun. 6, 2005 and
Jul. 14, 2005 with no resolution to the matter reached. The
court ordered the parties to engage in further settlement
discussions.
In September 2005, the company reached an agreement in principle
to settle the lawsuit. On Nov. 4, 2005, the court granted
preliminary approval of the settlement.
The company recorded a pre-tax charge of $19.0 million in the
company's 2005 third quarter to account for the class member
wage and hour claims, attorney fees, and administrative expenses
of the settlement.
Based on the fairness hearing and final court approval of the
settlement on Feb. 16, 2006, the company reversed $4.3 million,
pre-tax, of the reserves in the company's fourth quarter 2005
which resulted in a full year 2005 pre-tax charge of $14.7
million. Based on the terms of the settlement, the company made
$15.0 million of settlement distribution payments in the first
fiscal quarter of 2006.
SOLUTIA INC: Indirect Rubber Chemical Purchasers Nix Tenn. Suit
---------------------------------------------------------------
Indirect purchasers of rubber chemicals that filed a purported
class action in the U.S. District Court for the Eastern District
of Tennessee against Solutia, Inc. and several other defendants
voluntarily dismissed their case without prejudice.
On Jan. 14, 2006, the company became aware of a newly filed case
"Pearman, Benson and Immerman v. Crompton Corp., Flexsys,
Solutia, et al.," which was purportedly filed on behalf of
consumers in 37 states of products produced with rubber
chemicals for the period 1994 through the present under the
Tennessee Trade Practices Act.
The company was initially named in the suit, but was voluntarily
dismissed without prejudice on Feb. 3, 2006. On Apr. 28, 2006,
Solutia received notice that this case was voluntarily
dismissed, without prejudice, by the plaintiffs.
The suit is "Pearman, et al. v. Crompton Corp., et al., Case No.
2:06-cv-00003," filed in the U.S. District Court for the Eastern
District of Tennessee under Judge J. Ronnie Greer with referral
to Judge Dennis H. Inman. Representing the plaintiffs is Gordon
Ball of Ball & Scott, 550 Main Avenue, 750 NationsBank Center,
Knoxville, TN 37902-2567, Phone: 865-525-7028, Fax: 865-525-
4679, E-mail: filings@ballandscott.com.
Representing the defendants are Joshua R. Denton and R. Dale
Grimes of Bass, Berry & Sims, (Nashville), 315 Deaderick Street,
Suite 2700, Nashville, TN 37238-0002, Phone: 615-742-7761 and
615-742-6200, Fax: 615-742-2790 and 615-742-2744, E-mail:
jdenton@bassberry.com and dgrimes@bassberry.com.
SOLUTIA INC: Pension Plan Still Faces ERISA Fraud Suits in Ill.
---------------------------------------------------------------
Solutia Inc. Employees' Pension Plan is defendant in purported
class actions pending in the U.S. District Court for the
Southern District of Illinois alleging violations of Employee
Retirement Income Security Act of 1974 (ERISA).
Since October 2005, participants in the Solutia Inc. Employees'
Pension Plan filed three cases alleging that the Pension Plan:
-- violates ERISA prohibitions on reducing rates of
benefit accrual based on age;
-- results in the impermissible forfeiture of accrued
benefits under ERISA;
-- violates ERISA's present value calculation rules for
determining lump sum distributions; and
-- violates the minimum accrual requirements of ERISA.
The cases were:
-- "Davis, et al. v. Solutia, Inc. Employees' Pension
Plan" (filed in the U.S. District Court for the
Southern District of Illinois, Case No. 3:05-CV-00736-
DRH & PMF);
-- "Scharringhausen, et al. v. Solutia, Inc. Employees'
Pension Plan, et al." (originally filed in the United
States District Court for the Eastern District of
Missouri, Case No. 4:05-CV-02210-HEA and later
voluntarily dismissed and re-filed in the United States
District Court for the Southern District of Illinois,
Case No. 3:06-CV-00099-DRH & PMF); and
-- "Juanita Hammond, et al. v. Solutia, Inc. Employees'
Pension Plan" (filed in the United States District
Court for the Southern District of Illinois, Case No.
3:06-000139-DRH & PMF).
None of Solutia Inc. and its 14 U.S. subsidiaries, and, except
for the Solutia Inc. Employee Benefits Plans Committee, which
was named in the Scharringhausen case, no individual or entity
other than the Pension Plan, has been named as a defendant in
any of these cases.
The plaintiffs in each of these cases sought to obtain
injunctive and other equitable relief, including money damages
awarded by the creation of a common fund, on behalf of
themselves and the nationwide putative class of similarly
situated current and former participants in the Pension Plan for
whose pension benefits the Pension Plan is responsible.
The Pension Plan, and in the case of the Scharringhausen case,
the Employee Benefits Plans Committee, moved to dismiss all
three actions for plaintiffs' failure to exhaust administrative
remedies and failure to join necessary and indispensable
parties.
The Scharringhausen plaintiffs moved to intervene in the Davis
action and to consolidate the Davis, Scharringhausen and Hammond
cases.
The Hammond plaintiff moved to consolidate the three cases and
the Pension Plan responded by agreeing that it should not be
required to defend itself against three cases.
The Davis plaintiffs intervened in the Scharringhausen and
Hammond cases and moved to stay or dismiss those later-filed
cases, rather than consolidating them with the Davis case.
The plaintiffs' counsel in the Davis, Scharringhausen and
Hammond cases each sought appointment as interim lead class
counsel. In response to these motions, on Apr. 24, 2006 the
Scharringhausen plaintiffs voluntarily dismissed their case.
The Davis action is "Davis, et al. v. Solutia, Inc. Employees'
Pension Plan, Case No. 3:05-cv-00736-DRH-PMF," filed in the U.S.
District Court for the Southern District of Illinois under Judge
David R. Herndon with referral to Judge Philip M. Frazier.
Representing the plaintiffs are:
(1) Matthew H. Armstrong and Jerome J. Schlichter of
Schlichter, Bogard, et al., Generally Admitted, Phone:
314-621-6115 and 618-632-3329, Fax: 314-621-7151, E-
mail: marmstrong@uselaws.com and
jschlichter@uselaws.com; and
(2) Christopher F. Cueto of Law Office of Christopher
Cueto, Ltd., Generally Admitted, 7110 West Main Street,
Belleville, IL 62223, Phone: 618-277-1554, E-mail:
ccueto@cuetolaw.com.
Representing the defendants are, Thomas P. Berra, Jr., Robert J.
Golterman, Neal F. Perryman and Theresa A. Phelps of Lewis,
Rice, et al., 500 North Broadway, Suite 2000, St. Louis, MO
63102-2147, Phone: 314-444-7600, E-mail: tberra@lewisrice.com,
rgolterman@lewisrice.com, Nperryman@lewisrice.com and
tphelps@lewisrice.com.
SOLUTIA INC: Plaintiff Appeals N.Y. ERISA Fraud Suit's Dismissal
----------------------------------------------------------------
The plaintiff in a purported class action against Solutia,
Inc.'s former officers and employees as well as its Employee
Benefits Plans Committee and Pension and Savings Funds Committee
is appealing the dismissal of his case in the U.S. Court of
Appeals for the Second Circuit.
The company was not named as a defendant in the suit, which was
filed on Oct. 7, 2004. The action alleges breach of fiduciary
duty under the Employee Retirement Income Security Act of 1974
(ERISA) and seeks to recover alleged losses to the Solutia Inc.
Savings and Investment Plan (SIP Plan) arising from the alleged
imprudent investment of SIP Plan assets in Solutia's common
stock from Dec. 16, 1998 to the date the action was filed.
The investment is alleged to have been imprudent because of the
company's legacy environmental and litigation liabilities and
because of Flexsys Group's alleged involvement in certain
litigation.
The action seeks monetary payment to the SIP Plan to make good
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 million against the company in the U.S. Bankruptcy
Court for the Southern District of New York.
The plaintiff now seeks to withdraw the reference of their ERISA
claim from the bankruptcy court to the district court so that
the proof of claim and the class action can be considered
together by the district court.
On Feb. 11, 2005, the company filed an objection to the motion
to withdraw the reference. On Mar. 11, 2005, the district court
denied without prejudice Dickerson's motion to withdraw the
reference.
The Dickerson plaintiffs subsequently amended their initial
complaint to add several current officers and directors of
Solutia as defendants.
On Jul. 5, 2005, the defendants filed motions to dismiss
Dickerson's amended complaint. The motions to dismiss are fully
briefed and are pending before the New York District Court.
Dickerson also filed an amended proof of claim in the amount of
$290 million against the company on Sept. 1, 2005, based on his
amended complaint.
In early September 2005, Dickerson filed an amended proof of
claim against Solutia increasing Dickerson's claim from $269 to
$290, based on his amended complaint. Dickerson also filed a
motion for class certification of his proof of claim.
On Mar. 30, 2006, the district court granted the defendants'
motion to dismiss on grounds that the Dickerson plaintiffs
lacked standing to sue and that the complaint failed to state a
claim on which relief may be granted.
The dismissal of Dickerson's cause of action resulted in
dismissal of the entire purported class action, including claims
asserted on behalf of the unnamed purported class members. On
Apr. 3, 2006 Dickerson filed an appeal of this dismissal with
the U.S. Court of Appeals for the Second Circuit.
The suit is styled, "Dickerson v. Feldman, et al., Case No.
1:04-cv-07935-LAP," filed in the U.S. District Court for the
Southern District of New York under Judge Loretta A. Preska.
Representing the plaintiffs is Ronen Sarraf of Sarraf Gentile,
LLP, 485 Seventh Avenue, New York, NY 10018, Phone: (212) 868-
3610, Fax: (212) 918-7967, E-mail: ronen@sarrafgentile.com.
Representing the defendants are Karen Mary Wahle and Robert M.
Stern of O'Melveny & Myers, LLP, 1625 Eye Street, NW Washington,
DC 20006, Phone: 202-383-5366 and 202-383-5328, Fax: 202-383-
5313 and 202-383-5396, E-mail: kwahle@omm.com and
rstern@omm.com.
SPECTRUM LABORATORY: Launches Nationwide Recall of Tacrolimus
-------------------------------------------------------------
Spectrum Laboratory Products, Inc., of Gardena, California, is
initiating a voluntary nationwide recall of the active
pharmaceutical ingredient (API) tacrolimus, an immunosuppressive
drug used to prevent rejection of transplanted solid organs such
as heart or kidney, after learning some lots are sub-potent.
Blood levels of tacrolimus in some patients were significantly
lower than would be expected based solely on the lower assay
results. The use of sub-potent tacrolimus in compounded drugs
for transplant recipients may lead to sub-therapeutic tacrolimus
blood levels and an unacceptably increased risk of solid organ
transplant rejection. At least one injury has been reported.
FDA has been apprised of this action.
Tacrolimus is identified as Catalog Number T3192. Recalled lots
include: TA1210, UD1060, UF0298, UL0964, VB0031.
This recall does not apply to tacrolimus marketed in finished
dosage form as Prograf (Astellas Pharma, U.S.) or to Prograf
oral capsules that have been used for compounding.
Tacrolimus API was distributed to pharmacies, one university (1
bottle), and one pharmacy distributor (2 bottles) for use in
compounding. It can be identified by catalog number T3192 and
the name "Tacrolimus" on the label.
Spectrum tacrolimus API has been used by pharmacies for
compounding purposes. Patients receiving tacrolimus for solid
organ transplant should not stop taking their medication, but
rather should check with their physician or pharmacist.
Pharmacies that have used the Spectrum tacrolimus API that is
being recalled are advised to stop using it and contact Spectrum
to make arrangements to return it.
Spectrum is notifying its distributors and customers by
telephone and recall letter and is arranging for return of all
recalled products.
Consumers with questions may contact Dawn Salazar at 1-800-791-
3210, Ext. 281.
Pharmacies are urged to examine their supplies for any of the
recalled tacrolimus API and immediately discontinue its use.
Patients and consumers who suspect that they have received
medications in any dosage form made from the five lot numbers of
tacrolimus that are being recalled should contact their pharmacy
or physician. Users should also notify the U.S. Food and Drug
Administration of any complaints or problems associated with
these products.
Any adverse reactions experienced with the use of this product
should also be reported to the FDA's MedWatch Program by phone
at 1-800-FDA-1088, by Fax at 1-800-FDA-0178, by mail at
MedWatch, HF-410, FDA, 5600 Fishers Lane, Rockville, MD 20852-
9787, or on the MedWatch website at http://www.fda.gov/medwatch.
SPORTSMAN'S GUIDE: Investors File Lawsuit Over Proposed Disposal
----------------------------------------------------------------
Sportsman's Guide Inc. and its top executive are facing a class
action in Dakota County, Minnesota over plans to sell the
company, the Minneapolis/St. Paul Business Journal reports.
Shareholders accused the defendants of violating their duty to
shareholders in negotiating the proposed sale of the company to
French retailer Pinault-Printemps-Redoute. They accused the
firm's executives of unjustly enriching themselves in the deal.
The transaction is valued at $265 million, according to the Star
Tribune. It is expected to close in the third quarter of fiscal
year 2006.
Based in South St. Paul, Minnesota -- Sportsman's Guide --
http://www.sportsmansguide.com-- operates as a multichannel
direct marketer of outdoor gear, general merchandise, and golf
equipment/accessories in the U.S. It operates in two segments,
The Sportsman's Guide and The Golf Warehouse.
WOODWARD GOVERNOR: Continues to Face Ill. Racial Bias Lawsuit
-------------------------------------------------------------
Woodward Governor Co. is defendant in a purported class action
filed in the U.S. District Court for the Northern District of
Illinois over allegations of racial discrimination.
About 86 current and former minority company employees brought
the suit, which was filed on May 8, 2003. Jennifer Soule of the
Chicago law firm Soule, Bradtke & Lambert is representing the
minority workers (Class Action Reporter, Dec. 22, 2005).
U.S. Magistrate Judge P. Michael Mahoney in Rockford is hearing
the class action against Woodward involving minority employees.
The suit is "Bell, et al. v. Woodward Gov Co, et al., case No.
3:03-cv-50190," filed in the U.S. District Court for Northern
District of Illinois, under Judge Philip G. Reinhard with
referral to Judge P. Michael Mahoney. Representing the
plaintiffs are:
(1) Jennifer Kay Soule of Soule, Bradtke & Lambert, 155 N.
Michigan Ave., 500 Chicago, IL 60601, Phone: (312) 616-
4422, Fax: (312) 616-4422, E-mail: jenksoule@aol.com;
and
(2) Robert D. Allison of Robert D. Allison & Associates,
122 S. Michigan Avenue, Ste. 1850, Chicago, IL 60603,
Phone: 427-4500, E-mail: rdalaw@ix.netcom.com.
Representing the defendant are:
(i) Thomas F. Hurka and Keenan Jakarta Saulter of Baker &
McKenzie, LLP, (Chicago), One Prudential Plaza, 130
East Randolph Drive, Suite 3500, Chicago, IL 60601,
Phone: (312) 861-8000 and (312) 861-8035, E-mail:
thomas.f.hurka@bakernet.com and
keenan.j.saulter@bakernet.com;
(ii) Dax Lopez, Nancy E. Rafuse and Daniel E. Turner of
Ashe, Rafuse & Hill, LLP, 1355 Peachtree Street, NE
Suite 500, Atlanta, GA 30309-3232, Phone: 404-253-6009
and 404-253-6000, E-mail: daxlopez@asherafuse.com and
danturner@asherafuse.com.
XCEL ENERGY: Faces Suit in Miss. Over Carbon Dioxide Emissions
--------------------------------------------------------------
Xcel Energy Inc. is defendant in a purported class action in the
U.S. District Court for the Southern District of Mississippi
over carbon dioxide emissions.
On Apr. 25, 2006 Xcel Energy received notice of the lawsuit,
which named as defendant more than 45 oil, chemical and utility
companies. The suit alleges that defendants' carbon dioxide
emissions "were a proximate and direct cause of the increase in
the destructive capacity of Hurricane Katrina."
Plaintiffs allege in support of their claim, several legal
theories, including negligence, and public and private nuisance
and seek damages related to the hurricane.
The suit is "Comer, et al. v. Nationwide Mutual Insurance
Company, et al., Case No. 1:05-cv-00436-LTS-RHW," filed in the
U.S. District Court for the Southern District of Mississippi
under Judge L. T. Senter, Jr. with referral to Judge Robert H.
Walker. Representing the plaintiffs are:
(1) Carlos A. Zelaya of Maples & Kirwan, LLC, 902 Julia
Street, New Orleans, LA 70113, US, Phone: 504/569-8732,
Fax: 504/525-6932;
(2) Stephen M. Wiles and Randall Allan Smith of Smith &
Fawer, 201 St. Charles Ave., Suite 3702, New Orleans,
LA 70170, Phone: 504/525-2200, Fax: 504/525-2205, E-
mail: smwiles@smithfawer.com and
rasmith3@bellsouth.net; and
(3) F. Gerald Maples F. Gerald Maples, PA, 902 Julia
Street, New Orleans, LA 70113, Phone: 504/569-8732, E-
mail: federal@geraldmaples.com.
XEROX CORP: Enters into Mediation to Resolve N.Y. Title VII Suit
----------------------------------------------------------------
Xerox Corp. and plaintiffs in the class action "Warren, et al.
v. Xerox Corp." are set to participate in a private mediation
session in mid-May 2006 in an effort to settle the case.
On Mar. 11, 2004, the U.S. District Court for the Eastern
District of New York entered an order certifying a nationwide
class of all black salespersons employed by Xerox from Feb. 1,
1997 to the present under Title VII of the Civil Rights Act of
1964, as amended, and the Civil Rights Act of 1871. Six black
sales representatives commenced the suit on May 9, 2001.
The plaintiffs allege that the company engaged in a pattern or
practice of race discrimination against them and other black
sales representatives by assigning them to less desirable sales
territories, denying them promotional opportunities, and paying
them less than their white counterparts.
Although the complaint does not specify the amount of damages
sought, plaintiffs do seek, on behalf of themselves and the
classes they seek to represent, front and back pay, compensatory
and punitive damages, and attorneys' fees.
Fact discovery recently concluded and expert reports were
exchanged. The parties are presently scheduled to participate
in private mediation in mid-May 2006.
The suit is "Warren, et al. v. Xerox Corp., Case No. 1:01-cv-
02909-JG-KAM," filed in the U.S. District Court for the Eastern
District of New York under Judge John Gleeson with referral to
Judge Kiyo A. Matsumoto. Representing the plaintiffs is Barry
Alan Weprin of Milberg, Weiss, Bershad, Hynes & Schulman, LLP,
One Pennsylvania Plaza, 48th floor, New York, NY 10119-0165,
Phone: (212) 946-9312, Fax: 212-868-1229, E-mail:
bweprin@milbergweiss.com.
Representing the defendant are Eugene D. Ulterino and Amy Laura
Ventry of Nixon Peabody, LLP, Phone: 585-263-1580 and (516) 832-
7500, Fax: 585-263-1600 and (516) 832-7555, E-mail:
eulterino@nixonpeabody.com and aventry@nixonpeabody.com.
XEROX CORP: Conn. Court Delays Class Ruling for ERISA Fraud Suit
----------------------------------------------------------------
The U.S. District Court for the District of Connecticut
postponed consideration of class certification pending
disposition of Xerox Corp.'s motion to dismiss the consolidated
class action "In Re Xerox Corp. ERISA Litigation" filed against
it.
On Jul. 1, 2002, a class action complaint "Patti v. Xerox Corp.
et al.," was filed, alleging violations of the Employee
Retirement Income Security Act (ERISA). Three additional class
actions -- Hopkins, Uebele and Saba -- were subsequently filed
in the same court making substantially similar claims (Class
Action Reporter, Feb. 28, 2006).
On Oct. 16, 2002, the four actions were consolidated as "In Re
Xerox Corp. ERISA Litigation." On Nov. 15, 2002, a consolidated
amended complaint was filed. A fifth class action (Wright) was
filed in the District of Columbia. It has been transferred to
Connecticut and consolidated with the other actions (Class
Action Reporter, Feb. 28, 2006)
The purported class includes all persons who invested or
maintained investments in the Xerox Stock Fund in the Xerox
401(k) Plans (either salaried or union) during the proposed
class period, May 12, 1997 through Nov. 15, 2002, and allegedly
exceeds 50,000 persons. The defendants include the company and
these individuals or groups of individuals during the proposed
class period:
-- Plan Administrator;
-- Board of Directors;
-- Fiduciary Investment Review Committee;
-- Joint Administrative Board;
-- Finance Committee of the Board of Directors; and
-- Treasurer.
The complaint claims that all the foregoing defendants were
fiduciaries of the Plan under ERISA and, as such, were obligated
to protect the Plan's assets and act in the interest of Plan
participants. The complaint alleges that the defendants failed
to do so and thereby breached their fiduciary duties (Class
Action Reporter, Feb. 28, 2006).
Specifically, plaintiffs claim that the defendants failed to
provide accurate and complete material information to
participants concerning company stock, including accounting
practices which allegedly artificially inflated the value of the
stock, and misled participants regarding the soundness of the
stock and the prudence of investing their retirement assets in
company stock (Class Action Reporter, Feb. 28, 2006).
Plaintiffs also claim that defendants failed to invest Plan
assets prudently, to monitor the other fiduciaries and to
disregard Plan directives they knew or should have known were
imprudent, and failed to avoid conflicts of interest (Class
Action Reporter, Feb. 28, 2006).
The complaint does not specify the amount of damages sought.
However, it asks that the losses to the Plan be restored, which
it describes as "millions of dollars." It also seeks other
legal and equitable relief, as appropriate, to remedy the
alleged breaches of fiduciary duty, as well as interest, costs
and attorneys' fees (Class Action Reporter, Feb. 28, 2006).
The company filed a motion to dismiss the complaint. The
plaintiffs subsequently filed a motion for class certification
and a motion to commence discovery. Defendants have opposed
both motions, contending that both are premature before there is
a decision on their motion to dismiss. In the fall of 2004, the
Court requested an updated briefing on the company's motion to
dismiss and update briefs were filed in December of that year
(Class Action Reporter, Feb. 28, 2006).
On Mar. 31, 2006, the court granted the company's motion to
postpone consideration of class certification pending
disposition of the company's motion to dismiss, and granted
plaintiffs motion to commence formal discovery.
The suit is "In Re Xerox Corp. ERISA Litigation, Case No. 3:02-
cv-01138-AWT," filed in the U.S. District Court in Connecticut
under Judge Alvin W. Thompson. Representing the plaintiffs are:
(1) Gary A. Gotto of Keller Rohrback, 3101 North Central
Avenue, Suite 900, Phoenix, Arizona 85012-2600, Phone:
602-230-6322, Fax: 602-248-2822, E-mail:
ggotto@kellerrohrback.com; and
(2) Charles R. Watkins of Susman & Watkins, Two First
National Plaza, Suite 600, Chicago, IL 60603, Phone:
312-346-3466, Fax: 312-346-2829, E-mail:
chuckwatkins@ameritech.net.
Representing the defendants are:
(i) William H. Boice of Kilpatrick Stockton, 1100 Peachtree
St., Ste. 2800, Atlanta, GA 30309-4530, Phone: 404-815-
6464, Fax: 404-541-3134, E-mail:
bboice@kilpatrickstockton.com; and
(ii) William J. Egan of Brown Raysman Millstein Felder &
Steiner, City Place II, 185 Asylum Street, 10th Floor,
Hartford, CT 06103, Phone: 860-275-6400, Fax: 860-275-
6410, E-mail: wegan@brownraysman.com.
Asbestos Alert
ASBESTOS LITIGATION: Dow Chemical Has $1.366B Liabilities in 1Q
---------------------------------------------------------------
The Dow Chemical Company's non-current asbestos related
liabilities for the 2006-1st quarter stood at US$1.366 billion
as opposed to US$1.384 billion in the 2005-4th quarter.
Its non-current asbestos-related receivables, for the 2006-1st
quarter, stood at US$797 million compared to US$818 million for
the 2005-4th quarter.
For the 2006-1st quarter, the Company's non-current asbestos
related liabilities stood at US$1.366 billion as opposed to
US$1.384 billion in the 2005-4th quarter.
Headquartered in Midland, Michigan, The Dow Chemical Co. makes
plastics, chemicals, hydrocarbons, herbicides, and pesticides.
Other Company products include polyethylene resins for
packaging, fibers, films, and performance chemicals like acrylic
acid.
ASBESTOS LITIGATION: Halliburton Collects Less Receivables in 1Q
----------------------------------------------------------------
Halliburton Co., for the three months ended Mar. 31, 2006,
collects US$81 million of asbestos and silica-related
receivables as opposed to US$1,023 million for the three months
ended Mar. 31, 2005, according to the Company's 10-Q Securities
and Exchange Commission report.
As of Mar. 31, 2006, the Company's insurance for asbestos and
silica-related liabilities, of which US$153 million is current,
stood at US$318 million.
Company subsidiaries, DII Industries and Kellogg Brown & Root,
defend against asbestos and silica lawsuits. In Dec. 31, 2004,
the Company resolved all open and future claims in the Chapter
11 proceedings of DII Industries, KBR, and the Company's other
affected subsidiaries when the reorganization plan became final
and non-appealable.
During 2004, the Company settled insurance disputes with all the
insurance firms for claims. In the terms of the settlements, the
Company would receive cash proceeds with an amount of about
US$1.5 billion and with a then present value of about US$1.4
billion for the Company's asbestos and silica insurance
receivables.
In the terms of the settlement agreements, the Company will
receive cash payments of the remaining amounts, totaling US$347
million at Mar. 31, 2006, in several installments through 2010.
A portion of the insurance coverage applicable to Worthington
Pump, a former DII Industries division, was alleged by Federal-
Mogul Corp. to be shared with them. During 2004, the Company
reached an agreement with Federal-Mogul, its insurance
companies, and a party sharing in the insurance coverage to
obtain their consent and support of a partitioning of the
insurance policies.
As part of the settlement, DII Industries agreed to pay US$46
million in three installment payments. In 2004, the Company
accrued US$44 million, which represented the present value of
the US$46 million to be paid. The first payment of US$16 million
was paid in January 2005, and the second payment of US$15
million was paid in January 2006. The third and final payment of
US$15 million will be made in January 2007.
DII Industries and Federal-Mogul agreed to share in recoveries
from insolvent London-based insurance firms. To the extent that
Federal-Mogul's recoveries from insolvent London-based insurance
firms received on or before Jan. 1, 2006 did not equal at least
US$4.5 million, DII Industries agreed to also pay to Federal-
Mogul the difference between their recoveries from the insolvent
London-based insurance companies and US$4.5 million. DII
Industries paid Federal-Mogul US$1.6 million in January 2006.
Headquartered in Houston, Texas, Halliburton Co.'s Kellogg Brown
& Root division provides construction, logistics, maintenance,
engineering, project management, security, and dockyard
services. Because of government contracts, Iraq accounts for
more sales than any other geographic region.
ASBESTOS LITIGATION: ArvinMeritor's Liabilities Drop 6% to $15M
----------------------------------------------------------------
ArvinMeritor Inc.'s current asbestos-related liabilities stood
at US$15 million at Mar. 31, 2006, compared to US$16 million at
Sept. 30, 2005.
Its current asbestos-related recoveries, as of Mar. 31, 2006 and
Sept. 30, 2005, stood at US$11 million and US$13 million,
respectively.
The Company's non-current asbestos related recoveries, as of
Mar. 31, 2006 and Sept. 30, 2005, stood at US$25 million and
US$22 million, respectively.
ArvinMeritor's non-current asbestos-related liabilities, as of
Mar. 31, 2006 and Sept. 30, 2005, stood at US$40 million and
US$38 million, respectively.
Headquartered in Troy, Michigan, ArvinMeritor Inc. makes
components for commercial vehicles, like axles, transmissions,
and clutches. The Company also makes components for light
vehicles, such as door, roof, exhaust, wheels, and suspension
systems.
ASBESTOS LITIGATION: Maremont Corp.'s Claims Decrease to 61,100
----------------------------------------------------------------
Pending asbestos-related claims against ArvinMeritor Inc.'s
subsidiary, Maremont Corporation, decreased from 61,700 claims
at Sept. 30, 2005 to 61,100 claims at Mar. 31, 2006.
At Dec. 31, 2005, Maremont had about 61,900 multi-defendant
asbestos-related claims. (Class Action Reporter, Feb. 3, 2006)
Acquired by ArvinMeritor in 1986, Maremont and other firms
defend against suits filed by individuals claiming injuries as a
result of asbestos-containing products exposure. In the cases
where actual injury has been alleged, very few claimants have
established that a Maremont product caused their injuries.
Plaintiffs' lawyers sue dozens or hundreds of defendants in
individual suits on behalf of hundreds or thousands of
claimants, seeking damages against all named defendants
irrespective of the disease or injury and irrespective of any
connection with a particular product.
Billings to insurance firms for indemnity and defense costs of
resolved cases were about US$2 million in the six months ended
Mar. 31, 2006 and US$4 million in the six months ended Mar. 31,
2005.
Headquartered in Troy, Michigan, ArvinMeritor Inc. makes
components for commercial vehicles, like axles, transmissions,
and clutches. The Company also makes components for light
vehicles, such as door, roof, exhaust, wheels, and suspension
systems.
ASBESTOS LITIGATION: Maremont Corp. Estimates Liability at $47M
---------------------------------------------------------------
ArvinMeritor Inc. subsidiary, Maremont Corporation, estimated
that, as of Mar. 31, 2006, the probable liability for pending
and future asbestos claims is US$47 million, according to
ArvinMeritor's 10-Q SEC report.
Maremont came up with the estimate with the help of consulting
firm, Bates White LLC. As of Sept. 30, 2005, Maremont's
asbestos-related reserves were at US$50 million.
As of Mar. 31, 2006 and Sept. 30, 2005, Maremont's asbestos-
related recoveries were at US$36 million and US$35 million,
respectively.
At the end of 2004 and through the 2005-3rd quarter, Maremont
established reserves for pending asbestos-related claims that
reflected internal estimates of its defense and indemnity costs.
In the 2005-4th quarter, Maremont hired Bates White to help
determine if it would be possible to estimate the cost of
resolving pending and future asbestos-related claims that have
been filed against Maremont, as well as the cost of Maremont's
share of committed but unpaid settlements entered into by the
Center for Claims Resolution.
Bates White advised Maremont that it would be able to determine
an estimate of probable costs to resolve pending and future
asbestos-related claims. Maremont engaged Bates White to update
the study as of Mar. 31, 2006.
Bates White provided an estimate of the reasonably possible
range of Maremont's obligation for asbestos personal injury
claims over the next three to four years of US$35 million to
US$54 million.
Headquartered in Troy, Michigan, ArvinMeritor Inc. makes
components for commercial vehicles, like axles, transmissions,
and clutches. The Company also makes components for light
vehicles, such as door, roof, exhaust, wheels, and suspension
systems.
ASBESTOS LITIGATION: Union Pacific's Liability Totals $309M
-----------------------------------------------------------
Union Pacific Corporation's asbestos-related liability, for the
three months ended Mar. 31, 2006, stood at US$309 million, of
which US$16 million is current.
For the three months ended Mar. 31, 2005, the Company's asbestos
liability stood at US$324 million, of which US$17 million was
current.
The Company defends against suits, in which former and current
employees allege exposure to asbestos-containing products. In
most cases, claimants do not have credible medical evidence of
physical impairment from the alleged exposure. Most claims filed
against the Company do not specify amounts of alleged damages.
The potential for asbestos exposure in the railroad industry
existed while steam locomotives were used. The railroad
industry, including subsidiary Union Pacific Railroad Co. and
its predecessors, phased out steam locomotives between 1955 and
1960.
However, asbestos-containing products were still made in the
building trade industry and were used in isolated component
parts on locomotives and railroad cars during the 1960s and
1970s.
By the early 1980s, makers of building materials and locomotive
component parts developed non-asbestos alternatives for their
products and ceased making asbestos-containing materials.
The Company has a legal obligation to properly dispose of
asbestos-containing materials. The estimated fair value of this
obligation is US$5 million at both Mar. 31, 2006 and Dec. 31,
2005.
Headquartered in Omaha, Nebraska, Union Pacific Corp.'s unit,
Union Pacific Railroad Co. transports coal, chemicals,
industrial products, and other freight over more than 32,000
route miles in 23 states in the western US.
ASBESTOS LITIGATION: El Paso to Settle $225T for Handling Breach
----------------------------------------------------------------
El Paso Corporation agrees in principle to settle US$225,000
with the Arizona Department of Environmental Quality for
asbestos handling violations.
In September 2005, the ADEQ issued a Notice of Violation for
alleged regulatory violations related to the Company's handling
of asbestos-containing coal tar enamel coating. The matter was
referred to the Office of the Attorney General for the State of
Arizona.
The ADEQ had initially proposed less than US$1 million as
penalty for the Company's asbestos and environmental breach.
(Class Action Reporter, Mar. 17, 2006)
Headquartered in Houston, Texas, El Paso Corporation is engaged
in gas transportation and storage, oil and gas exploration and
production, and gas gathering and processing. The Company has
interests in 55,500 miles of interstate pipeline.
ASBESTOS LITIGATION: Mirant Corp Pays $0.5M for Pepco Settlement
----------------------------------------------------------------
Pepco Holdings Inc., on Dec. 22, 2005, received US$0.5 million
in proceeds from Mirant Corporation in settlement of an asbestos
claim against the Mirant bankruptcy estate.
In 2000, Pepco sold its electricity generation assets to Mirant,
formerly Southern Energy, Inc. As part of the Asset Purchase and
Sale Agreement, Pepco entered into several ongoing contractual
arrangements with Mirant and certain of its subsidiaries. In
July 2003, Mirant and most of its subsidiaries filed for
bankruptcy in the US Bankruptcy Court for the Northern District
of Texas.
On Dec. 9, 2005, the Bankruptcy Court approved Mirant's Plan of
Reorganization and the Mirant business emerged from bankruptcy
on Jan. 3, 2006.
During 1993, Pepco was served with Amended Complaints filed in
the state Circuit Courts of Prince George's County, Baltimore
City and Baltimore County, Maryland in separate ongoing,
consolidated asbestos-related proceedings known as "In re:
Personal Injury Asbestos Case."
Under the theory of premises liability, plaintiffs argued that
Pepco did not provide a safe work environment for employees or
its contractors, who allegedly were exposed to asbestos while
working on Pepco's property. A total of about 448 individual
plaintiffs initially added Pepco to their complaints. It
appeared that each plaintiff sought US$2 million in compensatory
damages and US$4 million in punitive damages from each
defendant.
Since the initial filings in 1993, additional individual suits
have been filed against Pepco, and significant numbers of cases
have been dismissed. As a result of two motions to dismiss,
numerous hearings and meetings and one motion for summary
judgment, Pepco has had about 400 of these cases dismissed with
prejudice.
Headquartered in Washington, DC, Pepco Holdings Inc. distributes
electricity to more than 1.8 million customers and natural gas
to nearly 120,000 customers through its utility units. The
Company also has international energy interests.
ASBESTOS LITIGATION: Suits v. MeadWestvaco Surge to 300 in 1Q06
---------------------------------------------------------------
MeadWestvaco Corporation, as of Mar. 31, 2006, records about 300
asbestos-related lawsuits, which is an increase from 200 suits
as of Dec. 31, 2006.
The Company has been named a defendant in asbestos-related
personal injury litigation. Typically, these suits also name
many other corporate defendants. All of the claims against the
Company resolved to date have been concluded before trial,
either through dismissal or through settlement with payments to
the plaintiff that are not material to the Company.
At Mar. 31, 2006, the Company had recorded litigation
liabilities of about US$22 million, a significant portion of
which relates to asbestos.
Should the volume of litigation grow, it is possible that the
Company could incur significant costs resolving these cases.
Headquartered in Stamford, Connecticut, MeadWestvaco Corp. is
the result of a merger between Mead and Westvaco. The Company
has sold its Papers business to investment firm Cerberus Capital
Management for. MeadWestvaco's two largest divisions, Packaging
and Papers had accounted for about 80 percent of sales. The
Company owns about 1.2 million acres of timber.
ASBESTOS LITIGATION: Ingersoll-Rand Uses $6.8M for Claims in 1Q
---------------------------------------------------------------
Ingersoll-Rand Co. Ltd.'s total costs for settlement and defense
of asbestos claims after insurance recoveries and net of tax
were about US$6.8 million for the three-month period ended Mar.
31, 2006.
All asbestos-related claims resolved to date have been dismissed
or settled.
For the year ended Dec. 31, 2005, the Company had US$16.8
million total costs for settlement and defense of asbestos
claims, compared to US$16.5 million for the year ended Dec. 31,
2004. (Class Action Reporter, Mar. 3, 2006)
Certain wholly owned Company subsidiaries defend against
asbestos-related lawsuits in state and federal courts. In all of
the suits, other firms have also been named as defendants.
Most of those claims have been filed against IR-New Jersey, a
wholly owned Company unit. The suits allege injury caused by
exposure to asbestos contained in certain of IR-New Jersey's
products.
Although IR-New Jersey was neither a producer nor a manufacturer
of asbestos, some of its formerly made products used asbestos-
containing components, such as gaskets purchased from third-
party suppliers.
Headquartered in Hamilton, Bermuda, Ingersoll-Rand Co. Ltd.
makes refrigeration equipment used mostly in trucks and
supermarkets, locks and security systems, construction
equipment, industrial equipment, and heavy equipment and golf
carts.
ASBESTOS LITIGATION: Crown Cork Receives About 1.5T Claims in 1Q
----------------------------------------------------------------
Crown Holdings Inc. subsidiary Crown Cork & Seal Co. Inc.,
during the three months ended Mar. 31, 2006, receives about
1,500 new asbestos-related liability claims.
During the three months ended Mar. 31, 2006, Crown Cork settled
or dismissed about 400 claims for a total of US$1 million and
had about 80,000 claims outstanding at the end of the period.
As of Mar. 31, 2006, the Company's accrual for pending and
future asbestos-related claims was US$211 million. The Company
estimates that its probable and estimable liability for pending
and future asbestos-related claims would range between US$211
million and US$269 million.
The accrual balance of US$211 million includes US$129 million
for unasserted claims and US$5 million for committed settlements
that will be paid over time. The Company's accrual includes
estimates for probable costs for claims through the year 2014.
The upper end of the Company's estimated range of possible
asbestos costs of US$269 million includes claims beyond that
date.
Crown Cork defends against lawsuits filed in the US by persons
alleging bodily injury as a result of asbestos exposure. These
claims arose from the insulation operations of a US firm, the
majority of whose stock Crown Cork purchased in 1963. About 90
days after the stock purchase, this US firm sold its insulation
assets and later merged into Crown Cork.
Headquartered in Philadelphia, Pennsylvania, Crown Holdings
Inc.'s subsidiary, Crown Cork & Seal Co., produces consumer
packaging with products consisting of aerosol cans, food and
beverage cans, paint cans, plastic bottles and other containers,
and a variety of metal caps, crowns, and closures.
ASBESTOS LITIGATION: One Suit Remains Against RJR Tobacco, B&W
--------------------------------------------------------------
One asbestos-related lawsuit remains pending against RJR Tobacco
and Brown & Williamson, according to Reynolds American Inc.'s
10-Q Securities and Exchange Commission report.
In the suit, asbestos companies and asbestos-related trust funds
allege that they "overpaid" claims brought against them to the
extent that tobacco use, not asbestos exposure, was the cause of
the alleged personal injuries.
The suit, styled Fibreboard Corp. v. R. J. Reynolds Tobacco Co.,
is pending in state court in California. Motions to dismiss
those claims have been stayed indefinitely.
Headquartered in Winston-Salem, North Carolina, Reynolds
American Inc. was established when RJ Reynolds Tobacco Holdings
and Brown & Williamson merged in 2004. The Company trails the
Altria Group, the owner of Philip Morris, which steers nearly
half of the US tobacco market.
ASBESTOS LITIGATION: BNS Holding Has 289 Active Claims as of May
----------------------------------------------------------------
BNS Holding Co., as of May 1, 2006, records 289 known open and
active asbestos-related claims, according to the Company's 10-
QSB Securities and Exchange Commission report.
There were 275 known claims open and active as of Jan. 31, 2006.
However, some of the settled claims may be reopened. (Class
Action Reporter, Mar. 17, 2006)
The Company's BNS Co. subsidiary receives claims for toxic tort
injuries related to use of small internal seals that allegedly
contained asbestos and were used in small fluid pumps made by
BNS Co.'s former pump division, which was sold in 1992.
The Company is unable to identify the number and location of
fluid pumps made by BNS Co. and is unable to estimate the
aggregate number of unasserted claims, which might be filed in
the future. This product line was introduced in the late 1800s.
The materials alleged to contain asbestos were used for an
undetermined period of time ending in the late 1960s.
Since 1994, BNS Co. defends against a total of 635 known claims
(as of May 1, 2006) relating to these pumps. These claims
involve more than 100 other defendants. Fifty-four of those
claims were filed before Dec. 31, 2001. As of May 1, 2006, there
have been 35 more claims filed.
In 2002, 42 claims were settled for an aggregate of about
US$30,000 exclusive of attorney's fees. In 2003, three claims
were granted summary judgment, and one claim was dismissed and
closed. In 2004, eight claims were granted summary judgment and
were closed, 144 claims were dismissed, and seven claims were
settled for US$500 each.
In 2005, six claims were granted summary judgment and were
closed, 127 claims were dismissed and six were settled for
US$500 each. In October 2005, the Company and its insurers
settled two claims for an aggregate of US$150,000.
BNS Holding Inc. became a holding company for BNS Co. in
December 2004. BNS Co. was engaged in the metrology business and
the design, manufacture, and sale of precision measuring tools
and instruments, and manual and computer controlled measuring
machines. BNS Co. sold its remaining assets in June 2004. BNS
Holding is based in Middletown, Rhode Island.
ASBESTOS LITIGATION: Chubb Corp. Posts $1.102B Reserves in 1Q06
---------------------------------------------------------------
The Chubb Corporation's gross loss reserves related to asbestos
and toxic waste claims stood at US$1.102 billion as of Mar. 31,
2006. As of Dec. 31, 2005, the Company's gross loss reserves
stood at US$1.121 billion.
The Company's reinsurance recoverable related to asbestos and
toxic waste claims stood at US$50 million at Mar. 31, 2006 and
Dec. 31, 2005.
The Warren, NJ-based Company's net reserves related to asbestos
and toxic waste claims stood at US$1.052 billion and US$1.071
billion as of Mar. 31, 2006 and Dec. 31, 2005, respectively.
The Chubb Corp. is known for comprehensive homeowners insurance
for yacht owners. Chubb also offers property/casualty insurance
to companies. The Company's specialty commercial insurance
includes the lucrative executive risk business that offers
professional liability policies to executives.
ASBESTOS LITIGATION: KWELM Puts in $1.8M to Goodrich Settlement
---------------------------------------------------------------
London United Investments plc, or KWELM's insolvent fund
managers paid $1.8 million additional settlement distributions
to Goodrich Corp. during the three months ended Mar. 31, 2006,
following completion of the insolvent scheme of arrangement
process in the United Kingdom.
At Dec. 31, 2005, the Company had added $11.3 million to the
settlement.
The additional distribution was recorded as a deferred
settlement credit and will be used to offset asbestos and other
toxic tort claims in future periods. One final distribution may
be made depending on the final valuation of KWELM.
The Company and certain units defend against suits alleging
injury or death as a result of exposure to asbestos fibers in
products, or which may have been present in its facilities. A
number of these cases involve maritime claims, which have been
and are expected to continue to be dismissed by the court. These
actions relate to previously owned businesses.
The primary layer of insurance coverage for most of these claims
is provided by the Kemper Insurance Cos. Kemper has indicated
that, due to capital constraints and downgrades from various
rating agencies, it has ceased underwriting new business and now
focuses on administering policy commitments from prior years.
Kemper has also indicated that it is currently operating under a
"run-off" plan approved by the Illinois Department of Insurance.
A portion of the Company's primary and excess layers of general
liability insurance coverage for most of these claims was
provided by insurance subsidiaries of KWELM, which is insolvent
and in the process of distributing its assets and dissolving.
In September 2004, the Company entered into a settlement
agreement with KWELM pursuant to which the Company agreed to
give up its rights with respect to the KWELM insurance policies
in exchange for US$18.3 million, subject to increase under
certain circumstances.
Headquartered in Charlotte, North Carolina, Goodrich Corp.'s
Engine Systems unit makes aerostructures, engine and fuel
controls, fuel systems, pumps, and turbine components. The
Company's Airframe Systems makes aircraft wheels, brakes,
landing gear, and flight control and actuation systems.
Electronic Systems makes interior products, de-icing and
specialty systems, monitoring systems, lighting products,
avionics systems, telemetry systems, sensors, and recon systems.
ASBESTOS LITIGATION: NL Ind. Sues Insurers for Claim Obligations
----------------------------------------------------------------
NL Industries Inc., in April 2006, sues certain underwriters at
Lloyds, London and other former insurance firms for breaching
obligations for asbestos and lead paint claims, according to the
Company's 10-Q SEC report.
Case No. CC-06-04523-E captioned, "NL Industries, Inc. v.
American Re Insurance Company, et. al.," is pending at the
Dallas County Court at Law, Texas.
The suit asserts that the defendants have breached their
obligations to NL under such insurance policies with respect to
lead pigment and asbestos claims and seeking a declaratory
judgment of each defendant's obligations to NL under such
policies.
NL also defends against suits in various jurisdictions, alleging
personal injuries as a result of occupational exposure primarily
to products manufactured by formerly owned operations of NL
containing asbestos, silica and/or mixed dust. About 500 of
these cases remain pending, involving a total of about 10,600
plaintiffs and their spouses following the dismissal of about
1,500 claims of plaintiffs in March 2006.
Headquartered in Dallas, Texas, NL Industries Inc., operates
through its subsidiary, Kronos Worldwide. Kronos supplies
titanium dioxide (TiO2), which maximizes the whiteness, opacity,
and brightness of paints, plastics, paper, fibers, and ceramics.
Valhi Inc. owns about 83 percent of NL Industries.
ASBESTOS LITIGATION: ACE Ltd. Allocates $3.598B for Claims in 1Q
----------------------------------------------------------------
ACE Ltd.'s gross consolidated loss and allocated loss expense
reserves for asbestos-related exposures stood at US$3.598
billion for the period ended Mar. 31, 2006. The Company's net
reserves stood at US$1.732 billion for the period.
The Company's exposure to asbestos & environmental claims arises
out of liabilities acquired when the Company bought Westchester
Specialty in 1998 and CIGNA's P&C business in 1999, with the
larger exposure contained within the liabilities acquired in the
CIGNA transaction.
In 1996, prior to the Company's acquisition of the P&C business
of CIGNA, the Pennsylvania Insurance Commissioner approved a
plan to restructure INA Financial Corp. and its subsidiaries,
which included the division of Insurance Company of North
America into two separate corporations:
(1) An active insurance firm that retained the INA name and
continued to write P&C business and
(2) An inactive run-off firm now called Century Indemnity
Company.
As a result of the division, all A&E and certain other
liabilities of INA were allocated to Century and extinguished as
liabilities of INA.
As part of the Restructuring, the A&E liabilities of various US
affiliates of INA were reinsured to Century, and Century and
certain other run-off firms having A&E and other liabilities
were contributed to Brandywine Holdings Corp. As part of the
1999 acquisition of the P&C business of CIGNA, the Company
acquired Brandywine Holdings and its subsidiaries.
Headquartered in Hamilton, Bermuda, ACE Ltd., through its
subsidiaries, sells property and casualty insurance and
reinsurance in the US and about 50 other countries.
ASBESTOS LITIGATION: Court Dismisses 158 Suits v. Belden CDT Inc
----------------------------------------------------------------
A total of 158 asbestos-related claims were dismissed against
Belden CDT Inc. without a trial, of which seven claims sought
payment.
Some of these cases were dismissed without prejudice because the
claimants could not show injury, or could not show that injury
was from exposure to products of alleged Company predecessors.
The Company co-defends against lawsuits related to its
operations. These proceedings include personal injury cases, of
which the Company is aware of about 147 at May 1, 2006. Forty-
eight suits are scheduled for trial during 2006.
Electricians have filed these cases in New Jersey and
Pennsylvania, in which they seek compensatory, special and
punitive damages.
As of May 1, 2006, in 22 of these cases, plaintiffs allege only
damages in excess of some dollar amount. In 123 of these cases,
plaintiffs do not allege a specific monetary damage demand. As
to each of the other 2 cases, the plaintiffs generally allege
US$5.0 million in compensatory and US$5.0 million in punitive
damages.
In these cases, the claimant alleges injury from alleged
exposure to heat-resistant asbestos fiber, which was embedded or
encapsulated and lacquer-coated or covered by another material.
Exposure to the fiber would have occurred while stripping the
wire or cable that had such fiber. Stripping was done to repair
or to attach a connector to the wire or cable.
Alleged Company predecessors had a small number of products that
contained the fiber, but ceased production of such products more
than 15 years ago.
Headquartered in St. Louis, Missouri, Belden CDT Inc. makes
cable and wire products for use in the broadcasting, computer,
entertainment, instrumentation, networking, and
telecommunications industries.
ASBESTOS LITIGATION: Standard Motor's Liability Drops to $24.52M
----------------------------------------------------------------
Standard Motor Products Inc.'s accrued asbestos liability, as of
Mar. 31, 2006, stands at US$24,521,000, according to a Company
press release.
As of Dec. 31, 2005, the Company's accrued asbestos liability
stood at US$25,556,000.
Headquartered in Long Island City, New York, Standard Motor
Products Inc. manufactures engine management and air-
conditioning replacement parts for the automotive aftermarket.
Among the Company's customers are auto parts warehouse
distributors such as CARQUEST and NAPA and major auto parts
retailers such as Advance Auto Parts and AutoZone.
ASBESTOS LITIGATION: IDEX Corp., Units Face Suits in 26 States
--------------------------------------------------------------
IDEX Corporation and five of its subsidiaries continue to defend
against lawsuits in 26 states claiming various asbestos-related
personal injuries, allegedly as a result of exposure to products
made with asbestos-containing parts.
Such parts were acquired from third party suppliers, and were
not made by any of the subsidiaries.
Claims have been filed in Alabama, California, Connecticut,
Delaware, Georgia, Illinois, Louisiana, Maryland, Massachusetts,
Michigan, Minnesota, Mississippi, Missouri, Nevada, New Jersey,
New York, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island,
Texas, Utah, Virginia, Washington and Wyoming. The claims
resolved to date have been dismissed without payment.
To date, all of the Company's settlements and legal costs,
except for costs of coordination, administration, insurance
investigation and a portion of defense costs, have been covered
by insurance subject to applicable deductibles.
The balance has been settled for reasonable amounts. Only one
case has been tried, resulting in a verdict for the Company's
business unit.
Based in Northbrook, Illinois, IDEX Corp. makes pump products,
dispensing equipment, and other engineered products. Investment
firm Ariel Capital Management, Inc. owns 22 percent of the
Company.
ASBESTOS LITIGATION: United Industrial Corp Has $20M Receivables
----------------------------------------------------------------
United Industrial Corporation's insurance receivable for
asbestos litigation, at Mar. 31, 2006 and Dec. 31, 2005, stood
at US$20,186,000, according to a Company release.
The Company's accrual for asbestos obligations, at Mar. 31, 2006
and Dec. 31, 2005, stood at US$31,450,000.
Headquartered in Hunt Valley, Maryland, United Industrial Corp.,
through subsidiary AAI Corp., makes automatic test equipment for
avionics, electronic warfare test and training systems, training
simulators for combat systems and aircraft maintenance, and
unmanned aerial vehicle systems. The US military accounts most
of AAI's sales.
ASBESTOS LITIGATION: CONSOL Unit Faces 25,507 Claims in 5 States
----------------------------------------------------------------
CONSOL Energy Inc. subsidiary Fairmont Supply Co., in the 2006-
1st quarter, challenges about 25,507 asbestos claims in state
courts in Pennsylvania, Ohio, West Virginia, Maryland, and
Mississippi.
Fairmont faced about 26,300 asbestos claims in state courts in
Pennsylvania, Ohio, West Virginia, Maryland, New Jersey,
Michigan, and Mississippi. (Class Action Reporter, Mar. 24,
2006)
Because a small percentage of products made by third parties and
supplied by Fairmont in the past may have contained asbestos and
many of the pending claims are part of mass complaints filed by
plaintiffs against a hundred or more defendants, it has been
difficult for Fairmont to determine how many of the cases
involve valid claims or plaintiffs who were actually exposed to
asbestos-containing products supplied by Fairmont.
While Fairmont may be entitled to indemnity or contribution in
certain jurisdictions from manufacturers of identified products,
the availability of such indemnity or contribution is unclear at
this time and some of the manufacturers named as defendants in
these actions have sought protection from these claims under
bankruptcy laws.
For the three months ended Mar. 31, 2006 and the year ended Dec.
31, 2005, payments by Fairmont with respect to asbestos cases
have not been material.
Headquartered in Pittsburgh, Pennsylvania, CONSOL Energy Inc.
operates as a coal mining firm. The company has 4.5 billion tons
of proved and probable reserves, mainly in northern and central
Appalachia and the Illinois Basin. Allegheny Energy accounts for
about ten percent of CONSOL's sales.
ASBESTOS LITIGATION: PepsiAmericas Sees Cooper Suit Ruling in 2Q
----------------------------------------------------------------
PepsiAmericas Inc. expects a ruling to be handed down during the
2006-2nd quarter, on its motion to dismiss the suit filed by
Cooper Industries LLC on the grounds that Cooper lacks standing
to pursue its claims because it is not a beneficiary under the
trust.
On May 31, 2005, Cooper sued PepsiAmericas, Pneumo Abex LLC, and
a certain trustee involving a Trust and an insurance policy. The
suit, captioned Cooper Industries LLC v. PepsiAmericas Inc., et
al., Case No. 05 CH 09214 was filed in Cook County Circuit Court
in Illinois.
In 2002, as part of a program on environmental liabilities
related to former Whitman Corp. units, PepsiAmericas bought new
insurance coverage related to the sites previously owned and
operated or impacted by Pneumo Abex and its subsidiaries.
A trust, which was established in 2000 with the proceeds from an
insurance settlement, bought insurance coverage and funded
coverage for remedial and other costs related to the sites
previously owned and operated or impacted by Pneumo Abex and its
subsidiaries.
Cooper asserted that it was entitled to the US$34 million that
was in the Trust and that was spent to buy the policy. Cooper
claimed that Trust funds should not have been used for
environmental expenses and instead claimed that the monies
should have been used for underlying Pneumo Abex asbestos claims
indemnified by Cooper.
Cooper complained that PepsiAmericas deprived it of access to
money in the Trust because of the Trustee's decision to use
Trust money to buy the insurance policy.
PepsiAmericas has joined a motion by the Trustee to dismiss the
suit on the grounds that Cooper lacks standing to pursue its
claims because it is not a beneficiary under the Trust.
Pneumo Abex, LLC, the successor to PepsiAmericas' prior unit,
has moved to deny the claim. Pneumo Abex also has filed papers
and asserted that Cooper is not a beneficiary of the Trust and
that Cooper's claims lack merit.
Minneapolis, MN-based PepsiAmericas Inc., a Pepsi bottler behind
Pepsi Bottling Group, operates in 19 US states and holds about
20% of the US market for Pepsi products. The Company distributes
drinks in the Bahamas, Barbados, the Czech Republic, Hungary,
Jamaica, Poland, Puerto Rico, Slovakia, and Trinidad and Tobago.
PepsiCo owns about 41% of PepsiAmericas.
ASBESTOS LITIGATION: PepsiAmericas Records $11.1Mil Receivables
---------------------------------------------------------------
PepsiAmericas Inc. records other receivables of US$11.1 million
and US$11.4 million at the end of the 2006-1st quarter and at
the end of 2005-fiscal year, respectively for future probable
amounts to be received from insurance firms and other
responsible parties.
The Company has indemnification duties related to product
liability and toxic tort claims that might come out of a 1988
Pneumo Abex LLC agreement. Other firms not owned by or linked
with the Company also are responsible to Pneumo Abex for the
financial burden of all asbestos product liability claims filed
against Pneumo Abex after a certain date in 1998, except for
certain claims indemnified by the Company.
Minneapolis, MN-based PepsiAmericas Inc., a Pepsi bottler behind
Pepsi Bottling Group, operates in 19 US states and holds about
20% of the US market for Pepsi products. The Company distributes
drinks in the Bahamas, Barbados, the Czech Republic, Hungary,
Jamaica, Poland, Puerto Rico, Slovakia, and Trinidad and Tobago.
PepsiCo owns about 41% of PepsiAmericas.
ASBESTOS LITIGATION: Midwest Generation Records $66.3M Liability
----------------------------------------------------------------
Midwest Generation LLC, at Mar. 31, 2006, recorded a US$66.3
million liability for asbestos-related matters, according to the
Company's 10-Q SEC report.
At Mar. 31, 2006, Midwest Generation had about 176 asbestos-
related cases, for which it was potentially liable and that had
not been settled and dismissed.
On Feb. 20, 2003, Midwest Generation agreed with Commonwealth
Edison Co. and Exelon Generation Co. to resolve a dispute
regarding interpretation of its reimbursement obligation for
asbestos claims under the environmental indemnities set forth in
the Asset Sale Agreement.
Midwest Generation agreed to reimburse Commonwealth Edison and
Exelon Generation for 50 percent of specific existing asbestos
claims and expenses less recovery of insurance costs, and agreed
to share liabilities and expenses associated with future
asbestos-related claims as specified in the agreement.
Commonwealth Edison and Midwest Generation shared responsibility
for future asbestos-related claims based upon the number of
exposure sites that are Commonwealth Edison locations or Midwest
Generation locations.
The agreement has a five-year term with an automatic renewal
provision, which is subject to the right of either party to
terminate. Payments are made under this indemnity upon tender by
Commonwealth Edison of appropriate proof of liability for an
asbestos-related settlement, judgment, verdict, or expense.
Chicago, IL-based Midwest Generation LLC sells wholesale
electricity to Midwest markets. The power producer has a
generating capacity of more than 7,000 MW from its six coal-
fired power plants in Illinois. Midwest Generation is a unit of
Edison International's merchant energy business, Edison Mission
Energy.
ASBESTOS LITIGATION: Harsco Records 27,166 Pending Suits in 1Q06
----------------------------------------------------------------
Harsco Corporation, as of Mar. 31, 2006, had 27,166 pending
asbestos personal injury claims filed against it, of which
26,217 are pending in the New York Supreme Court and 602 are
pending in Mississippi state courts.
The remaining 347 claims are pending in various counties in
state courts and in certain Federal District Courts. The
complaints assert fewer damages than the New York cases or do
not state any amount claimed. As of Mar. 31, 2006, the Company
has been dismissed in 16,224 cases, by stipulation or summary
judgment before trial.
As of Dec. 31, 2005, Harsco noted 27,216 pending asbestos
personal injury claims filed against it, with 26,239 claims
pending in New York State and 622 claims pending in Mississippi
courts. (Class Action Reporter, Mar. 17, 2006)
The Company has never produced, made or processed asbestos
fibers. Any component within a Company product, which may have
contained asbestos, would have been bought from a supplier.
In the depositions taken of plaintiffs to date in the litigation
against the Company, plaintiffs have failed to identify any
Company products as the source of their asbestos exposure.
Most of the New York complaints contain a standard claim for
damages of US$20 million or US$25 million against about 90
defendants, regardless of the individual's alleged medical
condition, and without specifically identifying any Company
product as the source of plaintiff's asbestos exposure.
With respect to the Mississippi complaints, most contain a
standard claim for an unstated amount of damages against 240 to
270 defendants, without specifically identifying any Company
product as the source of plaintiff's alleged asbestos exposure.
As of Mar. 31, 2006, the Company has been listed as a defendant
in 255 Active or In Extremis asbestos cases in New York County.
Plaintiffs have challenged the Court's Order.
Headquartered in Camp Hill, Pennsylvania, Harsco Corp. offers
various services to metal producers and construction firms.
ASBESTOS LITIGATION: Claimants Approve Quigley Co Reorganization
----------------------------------------------------------------
Asbestos claimants, on May 3, 2006, approved the Plan of
Reorganization of Quigley Co. Inc., a Pfizer Inc. subsidiary,
that had been filed in the US Bankruptcy Court for the Southern
District of New York, according to Pfizer's 10-Q SEC report.
The Bankruptcy Court and the District Court must also approve
the reorganization plan.
If approved by the courts, the reorganization plan will resolve
all pending and future claims against Quigley and Pfizer in
which claimants allege personal injury from exposure to Quigley
products containing asbestos, silica or mixed dust.
Acquired by Pfizer in 1968, Quigley sold small amounts of
asbestos-containing products until the early 1970s. In September
2004, Pfizer and Quigley moved to resolve all pending and future
claims.
In September 2004, Quigley sought reorganization under Chapter
11 of the US Bankruptcy Code. In March 2005, Quigley filed a
reorganization plan that must be approved by both the Bankruptcy
Court and the US District Court after receipt of the vote of 75
percent of the claimants. (Class Action Reporter, Mar. 3, 2006)
New York, NY-based Pfizer, Inc. Pfizer makes prescription drugs
for specific infirmities. The Company's known products include
erectile dysfunction therapy Viagra, pain management drug
Celebrex, antidepressant Zoloft, and cholesterol-lowering
Lipitor. Subsidiaries in the Pfizer family include Warner-
Lambert, Parke-Davis, and Goedecke.
ASBESTOS LITIGATION: Albany Int'l. Carries 20,726 Injury Claims
---------------------------------------------------------------
Albany International Corporation, as of Apr. 21, 2006, defends
against 20,726 claims, which allege lung and other diseases from
exposure to asbestos-containing products made by Albany.
This compares with 20,023 such claims as of Feb. 10, 2006,
24,451 claims as of Dec. 31, 2005, 24,406 claims as of Oct. 21,
2005, 29,411 claims as of Dec. 31, 2004, and 28,838 claims as of
Dec. 31, 2003.
Albany produced asbestos-containing paper machine clothing
synthetic dryer fabrics sold from 1967 to 1976 and used in
certain paper mills. Such fabrics had a useful life of three to
12 months.
The suits involve claims against from 20 to over 200 defendants,
and the complaints usually fail to identify the plaintiffs' work
history or the nature of the plaintiffs' alleged exposure to
Albany's products.
As of Apr. 21, 2006, about 14,350 of the claims pending against
Albany are filed in Mississippi courts. This compares to 20,763
claims as of Apr. 22, 2005, 24,744 claims as of Apr. 23, 2004,
and about 24,630 claims as of May 2, 2003.
As of Apr. 21, 2006, the Company had resolved 18,622 claims, by
settlement or dismissal. The total cost of resolving all claims
was US$6.6 million. Of this amount, the Company's insurance
carrier paid US$6.5 million or 99 percent.
The Company has about 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.
Headquartered in Albany, New York, Albany International Corp.
makes paper machine clothing, which are custom-made fabric belts
that move paper stock through each phase of production. The
Company makes around 35 percent of the monofilament yarn used in
its paper machine clothing and relies on suppliers for the rest.
ASBESTOS LITIGATION: Albany Affiliate Acknowledges 9,753 Claims
---------------------------------------------------------------
Albany International Corporation's affiliate, Brandon Drying
Fabrics Inc., defends against 9,753 asbestos-related claims as
of Apr. 21, 2006. Brandon is named in many of the asbestos
cases, which Albany also challenges.
The Apr. 21, 2006 figure compares with 9,564 claims as of Feb.
10, 2006, 9,566 claims as of Dec. 31, 2005, 9,608 claims as of
Oct. 21, 2005, 9,985 claims as of Dec. 31, 2004, and 10,242
claims as of Dec. 31, 2003.
In 1999, Albany acquired Geschmay Corp., in which Brandon is a
wholly owned unit. In 1978, Brandon acquired certain assets from
textile maker Abney Mills.
Among the assets acquired were assets of Abney's wholly owned
subsidiary, Brandon Sales Inc., which had sold dryer fabrics
containing asbestos made by Abney. Although Brandon made and
sold dryer fabrics under its own name subsequent to the asset
purchase, none of the fabrics contained asbestos.
As of Apr. 21, 2006, Brandon has resolved 7,185 claims for a
total of US$152,499. Brandon's insurance carriers initially
agreed to pay 88.2 percent of the total indemnification and
defense costs related to these proceedings. The remaining 11.8
percent of the costs had been borne directly by Brandon.
In some of these cases, Albany is named both as a direct
defendant and as the "successor in interest" to Mount Vernon
Mills. The Company acquired certain Mount Vernon assets in 1993.
Plaintiffs allege injury caused by asbestos-containing products
alleged to have been sold by Mount Vernon years before the
acquisition. Mount Vernon is obligated to indemnify Albany
against any liability arising out of such products.
Albany denies any liability for products sold by Mount Vernon
prior to the acquisition of the Mount Vernon assets. Mount
Vernon has assumed the defense of these claims. On this basis,
Albany has moved for dismissal in a number of actions.
Headquartered in Albany, New York, Albany International Corp.
makes paper machine clothing, which are custom-made fabric belts
that move paper stock through each phase of production. The
Company makes around 35 percent of the monofilament yarn used in
its paper machine clothing and relies on suppliers for the rest.
ASBESTOS LITIGATION: Claimants to Own 22% Owens Corning Shares
--------------------------------------------------------------
As part of a deal reached by Owens Corning with its creditors,
trust funds to pay the Company's asbestos claimants will hold 22
percent of the Company's 131 million shares, The Toledo Blade
reports.
Laws state that asbestos trusts made to pay claims are granted
at least 51 percent of new stock issued by firms when they
emerge from Chapter 11.
Norman Pernick, an OC lawyer, said the Company will offer more
than half of its shares to the trusts. However, representatives
for asbestos claimants have indicated that they would prefer to
have a larger percentage of cash.
Instead, trusts set up by OC and its Fibreboard unit are to
receive US$4.3 billion in cash and 28.6 million shares of stock.
Chicago lawyer John Cooney, who heads OC's asbestos claimants
committee, said he supported the decision to place more of the
assets of the trusts into cash.
Owens Corning expects to emerge from Chapter 11 bankruptcy in
late October 2006.
ASBESTOS LITIGATION: Hardie Allocates $716M for Compensation
------------------------------------------------------------
Building materials manufacturer James Hardie Industries NV will
provide $715.6 million for asbestos compensation and admitted it
was considering relocating its base away from the Netherlands
for tax reasons, The Financial Times reports.
Hardie is awaiting the ruling from the Australian Tax Office on
the tax deductibility of the payouts before the funds can be
paid to sufferers.
The provision wiped out the Company's profits for the year to
Mar. 31, 2006, as Hardie posted an annual net loss of $506.7
million. Excluding the provision, Hardie's full-year operating
profit climbed 63 percent to $208.9 million, on revenues of
$1.49 billion.
The charge follows a deal signed last December among Hardie,
unions, and the New South Wales Government in which Hardie
agreed to set aside funds over the next 40 years to pay the
Company's asbestos victims.
Even though Hardie stopped using asbestos products in 1987,
actuaries have calculated that it might have to pay $2.2 billion
in compensation. Campaigners claim that the disease could affect
45,000 Australians by 2021 and expect many will sue Hardie.
In 2001, Hardie made the decision to move its headquarters to
the Netherlands. Hardie insisted that the change was made to
reduce its tax burden.
CEO Louis Gries told analysts that the Company was considering
moving its base, although he refused to be drawn on the
timetable or alternative locations.
Mr. Gries said that Hardie had saved $70 million since
incorporating in the Netherlands, but that the annual tax
advantages were shrinking as the proportion of the Company's
business in the US increased.
ASBESTOS LITIGATION: 8 Locals to Sue Japanese Gov't. for JPY220M
----------------------------------------------------------------
Eight southern Osaka Prefecture locals decide to sue Japan's
central government on May 26, seeking JPY220 million payout for
suffering caused by asbestos, The Yomiuri Shimbun reports.
The future plaintiffs say they have suffered due to the
government's failure to take measures to contain asbestos-
related health hazards. Each plaintiff is to seek payout of
between JPY22 million and JPY33 million.
Among the planned plaintiffs are 49-year-old Yoko Okada and
Kazuko Minami, whose father died of pneumoconiosis in February
2005.
Okada suffers from asbestosis due to a childhood spent living
near a factory, while Minami's father used to farm near an
asbestos-handling plant.
The eight are ineligible for payout under a new asbestos relief
law that came into effect in March because it provides aid only
to victims of mesothelioma and lung cancer caused by asbestos.
According to the eight individuals' claims, in southern Osaka
Prefecture, asbestos-related industries, such as spinning and
weaving, thrived for more than 100 years yet the government did
not regulate asbestos use for years.
ASBESTOS LITIGATION: Alimta Offers Relief to S. Africa Sufferers
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Used in clinical trials for 15 years, Alimta, a drug made by
pharmaceutical firm Eli Lilly, is commercially available to help
mesothelioma sufferers in South Africa, Mining Weekly reports.
Mesothelioma is a rare form of cancer of the lining of the lungs
and is caused by exposure to asbestos, a material that has been
widely used in many industrial products.
South Africa's asbestos mining industry began in the Northern
Cape and North West provinces in the 1880s. By the 1950s, South
Africa was producing 97 percent of the world's blue asbestos.
After discontinuation of mining and milling of asbestos in
Prieska in the late 1960s, Kuru-man became South Africa's main
producer of blue asbestos.
Although asbestos mining has now been discontinued, it is
expected that many more people will be diagnosed with the
disease in future.
Prior treatments of mesothelioma included surgery, radiation
therapy and chemotherapy but none of these proved to have
improved patients' chances of survival. The median survival
period of mesothelioma patients is six to eight months.
Random trials show that Alimta not only improves the survival
time of patients, but also relieves painful symptoms and
improves the quality of life of patients.
ASBESTOS LITIGATION: Allis-Chalmers' Trust Addresses Claims
-----------------------------------------------------------
Since Allis-Chalmers Energy Inc.'s 1988 federal bankruptcy
reorganization, the Company has been named in products liability
lawsuits from the manufacture of asbestos-containing products,
according to a Company S-1 SEC report.
In relation with the Company's bankruptcy, a special products
liability trust was made to address products liability claims.
The Company asserts that applicable bankruptcy law bars claims
against it, and that the products liability trust will continue
to be responsible for products liability claims.
Since 1988, no court has ruled that the Company is liable for
products claims. However, if the Company is held responsible for
product liability claims, it could suffer losses that could be
adverse to its operations.
The Company has not manufactured asbestos-containing products
since its 1988 reorganization.
COMPANY PROFILE
Allis-Chalmers Energy Inc.
5075 Westheimer, Suite 890
Houston, Texas 77056
Tel: (713) 369-0550
Description:
Allis-Chalmers is an oilfield services Company that provides
services and equipment to oil and natural gas exploration and
production firms in Texas, Louisiana, New Mexico, Colorado,
Oklahoma, Mississippi, Utah, Wyoming, the Gulf of Mexico, and
Mexico.
New Securities Fraud Cases
ASTEA INT'L: Yourman Alexander Files Pa. Securities Fraud Suit
--------------------------------------------------------------
Yourman Alexander & Parekh LLP initiated a lawsuit seeking
class- action status on behalf of shareholders who purchased or
otherwise acquired the securities of Astea International Inc.
(ATEA) from May 11, 2005 through Mar. 31, 2006, inclusive. The
matter is pending in the U.S. District Court for the Eastern
District of Pennsylvania.
The complaint alleges in part that defendants violated federal
securities laws by failing to present the true financial
condition of Astea. It is further alleged that defendants
committed these violations by issuing false and misleading
statements to the investing community concerning the company's
financial condition, and that by omitting to disclose the truth
about Astea's financial performance during the class period,
defendants artificially inflated the price of the company's
securities for their own personal gain.
It is also alleged that defendants failed to accurately account
for the company's software development costs in violation of
Generally Accepted Accounting Principles and that as a result,
the company overstated its earnings which lead to the
restatement of its financials for the quarter ending Sept. 30,
2005, and two previous quarters.
The complaint also alleges that as a result of the foregoing,
the company's stock fell 30% in a single day, from $16.50 to
$11.73 per share.
The deadline to move for appointment as Lead Plaintiff in the
case is on Jun. 5, 2006.
For more details, contact Vahn Alexander of Yourman Alexander &
Parekh LLP, 3601 Aviation Blvd., Suite 3000, Manhattan Beach,
California 90266, Phone: (800) 725-6020, E-mail:
valexander@yaplaw.com, Web site: http://www.yaplaw.com.
COMVERSE TECHNOLOGY: Yourman Alexander Files Stock Suit in N.Y.
---------------------------------------------------------------
Yourman Alexander & Parekh LLP, initiated a lawsuit seeking
class action status on behalf of shareholders who purchased or
otherwise acquired the securities of Comverse Technology, Inc.
(CMVT) from period Apr. 30, 2001 through Apr. 16, 2006,
inclusive. The matter is pending in the U.S. District Court for
the Eastern District of New York.
The complaint alleges in part that defendants violated federal
securities laws by failing to present the true financial
condition of Comverse. It is alleged that defendants committed
these violations by making false and misleading statements to
the investing community concerning the timing of stock option
grants made to key executives, and that this practice of
manipulating dates of stock option grants resulted in the
overstatement of Comverse's financial statements.
It is also alleged that as a result of the foregoing, Comverse
announced that it would restate its financial statements for the
first three quarters of fiscal 2006, for fiscal years 2001-2005,
and possibly for previous periods as well. It is further
alleged that as a result of these activities, Comverse shares
fell approximately 20% from $29.15 on Mar. 13, 2006, to $23.31
on Apr. 17, 2006.
Thus, the complaint claims that by omitting to disclose the
truth about Comverse's financial performance during the class
period, defendants artificially inflated the price of the
company's securities for their own personal gain.
The deadline to move for appointment as Lead Plaintiff in the
case is on Jun. 19, 2006.
For more details, contact Vahn Alexander of Yourman Alexander &
Parekh LLP, 3601 Aviation Blvd., Suite 3000, Manhattan Beach,
California 90266, Phone: (800) 725-6020, E-mail:
valexander@yaplaw.com, Web site: http://www.yaplaw.com.
DISCOVERY LABORATORIES: Chimicles & Tikellis Files Stock Lawsuit
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Chimicles & Tikellis LLP and Durant & Durant, LLP, commenced a
securities class action against Discovery Laboratories, Inc.
(DSCO), Robert J. Capetola, its chief executive officer, and
Christopher J. Schaber, its former chief operating oficer, in
the U.S. District Court for the Eastern District of
Pennsylvania.
The action, "DePace v. Discovery Laboratories, Inc., No. 06-
02045(SD)," was brought on behalf of all persons who purchased
common stock of Discovery Labs between Feb. 1, 2005 and Apr. 24,
2006. Excluded from the class are defendants, members of their
families, and the directors and officers of Discovery Labs and
its subsidiaries.
Discovery Labs is a development stage biotechnology company,
which is focused upon proprietary surfactant technology.
Surfactants are produced naturally in the lungs and are
essential for breathing.
The company's technology is intended to produce a precision-
engineered surfactant that is designed to closely mimic the
essential properties of natural human lung surfactant; this
technology is intended for use as surfactant replacement
therapies for respiratory diseases. The company's lead product,
Surfaxin(R) (lucinactant) was undergoing review by the U.S. Food
and Drug Administration as part of a new drug application as a
potential treatment to prevent respiratory distress syndrome in
infants. Surfaxin(R) was also under review by the European
Medicines Evaluation Agency for approval in Europe.
The amended complaint in the action alleges claims under
Sections 10(b) and 20(a) of the Securities Exchange Act of 1934
and Rule 10b-5 against Discovery Labs, Capetola and Schaber.
Specifically, the complaint alleges that the defendants issued a
series of press releases and U.S. Securities and Exchange
Commission filings that were false and misleading because they
falsely portrayed the company's capacity to manufacture
Surfaxin(R) in compliance with the FDA's current Good
Manufacturing Requirements, a requirement had to be met before
the FDA would grant approval to that product.
Throughout the class period, the defendants' public statements
indicated that they expected that approval of the new drug
application for Surfaxin(R) would occur in the near future.
Instead, on Apr. 24, 2006, the company announced that it faced
the potential of a significant delay in the approval process for
Surfaxin(R) because process validation batches manufactured for
its NDA had not met required stability criteria.
Stability relates to the ability of a pharmaceutical product to
be stored without degradation. Discovery Labs' common stock
swiftly reacted, closing substantially lower on Apr. 25, 2006 on
very high volume.
Interested parties may move the Court to serve as lead plaintiff
of the Class on or before Jun. 30, 2006.
For more details, contact James R. Malone, Jr. and Joseph G.
Sauder of Chimicles & Tikellis, LLP, Phone: +1-888-805-7848, E-
mail: jamesmalone@chimicles.com or josephsauder@chimicles.com,
Web site: http://www.chimicles.com.
ESCALA GROUP: Berman DeValerio Files N.Y. Securities Fraud Suit
---------------------------------------------------------------
Berman DeValerio Pease Tabacco Burt & Pucillo initiated a class
action in the U.S. District Court for the Southern District of
New York against Escala Group, Inc., accusing the company of
securities law violations.
The complaint, filed as 06-CIV-3740, seeks damages for
violations of federal securities laws on behalf of all investors
who acquired Escala securities from Sept. 5, 2003 through and
including May 8, 2006.
The lawsuit claims that Escala and a number of individual
defendants violated Sections 10(b) and 20(a) of the Securities
Exchange Act of 1934 (Exchange Act), 15 U.S.C. Sections 78j(b)
and 78t, and SEC Rule 10b-5, 17 C.F.R. Section 240.10b-5,
promulgated thereunder.
Escala is a New York City-based global collectibles merchant and
auction house network. On Sept. 28, 2005, Escala announced that
it had changed its name from Greg Manning Auctions, Inc., to
Escala Group, Inc. Prior to the name change, Escala traded on
the Nasdaq under the symbol GMAI.
According to the plaintiff's complaint, the defendants made
materially false and misleading statements, and/or omitted
material facts necessary to make those statements not
misleading, concerning Escala's financial results throughout the
class period.
Among other things, the defendants:
-- Claimed they were achieving record results, which were
actually achieved in part as a result of questionable
and potentially illegal activities of the company's
majority shareholder, Afinsa Bienes Tangibles, S.A.
(Afinsa) of Spain;
-- Failed to maintain adequate internal systems,
procedures, and controls such that the company's
officers and directors were able to allow these
questionable and potentially illegal activities to
continue; and
-- Did not prepare Escala's financial statements in
accordance with U.S. Generally Accepted Accounting
Principles or SEC regulations.
On May 9, 2006, news emerged that Spanish officials had raided
the Madrid offices of Escala and its majority shareholder,
Afinsa, concerning what Spanish authorities described as a
glorified pyramid scheme. Nine people have since been arrested
in Spain in relation to the scheme.
In reaction to this news, Escala's stock fell by approximately
85% on heavy trading over the next few days while news continued
to be released regarding the alleged pyramid scheme.
For more details, contact Jeffrey C. Block, Esq., Abigail R.
Romeo, Esq. and Allison K. Jones, Esq. of Berman DeValerio Pease
Tabacco Burt & Pucillo, One Liberty Square, Boston, MA 02109,
(800) 516-9926, law@bermanesq.com, Web site:
http://www.bermanesq.com/pdf/Escala-Cplt.pdf.
ESCALA GROUP: Federman & Sherwood Files Securities Suit in N.Y.
---------------------------------------------------------------
Federman & Sherwood initiated class action in the U.S. District
Court for the Southern District of New York against Escala
Group, Inc. (ESCL).
The complaint alleges violations of federal securities laws,
Sections 10(b) and 20(a) of the Securities Exchange Act of 1934
and Rule 10b-5, including allegations of issuing a series of
material misrepresentations to the market which had the effect
of artificially inflating the market price. The class period is
from Sept. 5, 2003 through May 8, 2006.
Interested parties may move the Court no later than Jul. 10,
2006, to serve as a lead plaintiff for the Class.
For more details, contact William B. Federman of Federman &
Sherwood, 120 N. Robinson, Suite 2720, Oklahoma City, OK 73102,
Phone: (405) 235-1560, Fax: (405) 239-2112, E-mail:
wfederman@aol.com, Web site: http://www.federmanlaw.com.
HOME DEPOT: Weiss & Lurie Files Securities Fraud Lawsuit in Ga.
---------------------------------------------------------------
Weiss & Lurie initiated a class action against Home Depot, Inc.
(HD) and certain of its officers and directors in the U.S.
District Court for the Northern District of Georgia, on behalf
of purchasers of Home Depot securities between May 29, 2001 and
Feb. 22, 2005.
The complaint alleges violations of Sections 10(b) and 20(a) of
the Securities Exchange Act of 1934 by the making of materially
false and misleading statements concerning Home Depot's
operations and financial condition which caused Home Depot's
securities to trade at artificially inflated prices during the
class period.
The complaint also alleges that throughout the class period, the
company deceived vendors and falsified Home Depot's financial
results through fraudulent return-to-vendor policies. More
specifically, it alleges that the defendants:
-- coerced Home Depot employees to fraudulently inflate
company charges to vendors to cover the cost of
defective and/or damaged merchandise; and
-- pressured suppliers who complained about excessive
chargebacks by threatening to reduce orders of their
products.
Interested parties may move the Court no later than Jul. 11,
2006, to serve as a lead plaintiff of the class.
For more details, contact James E. Tullman or Richard A.
Acocelli of Weiss & Lurie, The French Building, 551 Fifth
Avenue, Suite 1600, New York, New York 10176, Phone: (888) 593-
4771 or (212) 682-3025, E-mail: infony@weisslurie.com.
H&R BLOCK: Scott + Scott Files Securities Fraud Lawsuit in N.Y.
---------------------------------------------------------------
Scott + Scott, LLC initiated securities class action in the U.S.
District Court for the Southern District of New York against H&R
Block, Inc. and certain insiders.
On Mar. 23, 2006, Scott + Scott filed the complaint on behalf of
a class of investors who purchased HRB securities during the
period Feb. 24, 2004 through Mar. 14, 2006, inclusive. The
action alleges that defendants made numerous false and
misleading statements regarding the company's financial
statements that served to artificially inflate the price of the
company's securities to the detriment of those who invested in
HRB during the class period.
As early as July 2004, according to the lawsuit, defendants
assured investors that, except for minor non-material issues
with its accounting internal controls, the company's accounting
controls were effective. Yet, beginning in June 2005,
defendants showed the market that they were unable to maintain
effective internal controls to ensure accurate financial
accounting by repeatedly restating the company's previously
released financial statements.
First, on Jun. 8, 2005, H&R Block revealed that it would restate
its financial reports for its 2003 and 2004 fiscal years and the
first three quarters of its 2005 fiscal year, as a result of
numerous accounting errors amounting to tens of millions of
dollars.
Then, on Feb. 23, 2006, defendants again shocked investors with
the news that the company would restate its fiscal year 2006
quarterly financial statements and would further restate
financial statements for the 2004 and 2005 fiscal years.
The lawsuit also asserts that defendants concealed the company's
potential exposure to lawsuits stemming from the fraudulent
nature and operation of their investment products.
On Mar. 15, 2006, investors learned that defendants induced H&R
Block customers to open investment accounts, using a marketing
strategy that consistently misrepresented the benefits and
concealed the deficiencies of those accounts, when the New York
Attorney General filed a $250 million lawsuit illuminating
defendants' fraudulent marketing practices involving the
company's IRA products.
According to the investor class, the New York Attorney General's
charges, in combination with the company's prior corrective
disclosures, demonstrate defendants' pervasive pattern of
erroneous and misleading communications regarding the company's
products, financial statements and prospects.
For more details, contact David R. Scott of Scott + Scott, LLC,
Phone: 800/404-7770, E-mail: drscott@scott-scott.com, Web site:
http://www.scott-scott.com.
MERGE TECHNOLOGIES: Lead Plaintiff Filing Deadline Set May 22
-------------------------------------------------------------
Pomerantz Haudek Block Grossman & Gross, LLP reminds investors
of Merge Technologies Incorporated (MRGE) d/b/a Merge Healthcare
that May 22, 2006 is the deadline to ask the court for
appointment as lead plaintiff in a class action against the
company and certain of its officers.
The lawsuit was filed on behalf of purchasers of the common
stock of the company from Aug. 2, 2005 to Mar. 16, 2006,
inclusive. The complaint alleges violations of Section 10(b)
and Section 20(a) of the Exchange Act of 1934 and Rule 10b-5
promulgated thereunder.
Merge Technologies, based in Milwaukee, provides clinical
information systems integration solutions for healthcare
organizations.
The complaint alleges that defendants' class period
representations regarding the company were false and misleading
when made because the company lacked effective internal controls
in its financial reporting such that it was unable to properly
analyze and/or estimate Merge's future financial and operational
performance.
As a result of the company's improper accounting practices,
defendants' class period statements concerning Merge's financial
performance and prospects were materially false and misleading.
Specifically, on Feb. 24, 2006, Merge issued a press release
announcing that the company was delaying the release of its
fourth-quarter 2005 financial results, that the company expected
a substantial loss for the quarter and that it was reducing its
revenue guidance for the year.
Consequently, the company's common stock plummeted and closed at
$20.50. On Mar. 17, 2006, defendants disclosed the company's
true financial position and revealed that accounting
improprieties necessitated the delay of the company's completion
of its financial statements for the year ended Dec. 31, 2005.
Specifically, the company announced the "reason for the delay
relates to revenue recognition and tax accounting matters
relating to the merger of the company and Cedara Software Corp.
in June 2005."
In addition, the company announced that its management and Audit
Committee "concluded that its previously issued financial
statement for the quarters ended Jun. 30, 2005 and Sept. 30,
2005" should no longer be relied upon.
As a result of these revelations, the company's common stock
declined further and closed at $15.85. The complaint also
alleges that during the class period, with the company's stock
trading at artificially inflated prices, the company's insiders
sold 680,395 shares for gross proceeds of over $29 million.
For more details, contact Teresa L. Webb or Carolyn S. Moskowitz
of the Pomerantz Firm, Phone: (888) 476-6529, E-mail:
tlwebb@pomlaw.com and csmoskowitz@pomlaw.com, Web site:
http://www.pomerantzlaw.com.
PAINCARE HOLDINGS: Lead Plaintiffs Filing Deadline Set May 19
-------------------------------------------------------------
Scott + Scott, LLC reminds investors that interested parties
have no later than May 19, 2006 to move the U.S. District Court
for the Southern District of Florida for appointment as lead
plaintiff in a securities fraud action against PainCare Holdings
Inc. (PRZ) and certain officers. On Apr. 3, 2006, Scott +
Scott, LLC, filed the class action on behalf of PainCare
securities purchasers during the period Aug. 27, 2002 through
Mar. 15, 2006, inclusive.
According to the complaint, prior to and during the class
period, Defendants engaged in an aggressive growth strategy
through rapid acquisition of medical facilities and providers.
Unbeknownst to investors, however, Defendants were accounting
improperly for certain expenses associated with these
acquisitions in order to bolster the company's stock price to
facilitate these class period acquisitions.
As a result of this improper accounting, PainCare announced it
has lowered its previously announced 2006 earnings forecasts,
must delay its 2005 earnings release and will restate its
financial results for fiscal 2000 through 2004, and the first
three quarters of 2005.
The complaint also alleges that Defendants' false and misleading
financial guidance artificially inflated PainCare's share
prices, thereby harming investors who purchased their PainCare
shares during the class period.
For more details, contact Scott + Scott, LLC, Phone: (800) 404-
7770 and (860) 537-5537, E-mail: scottlaw@scott-scott.com.
XM SATELLITE: Kantrowitz, Goldhamer Files D.C. Securities Suit
--------------------------------------------------------------
Kantrowitz, Goldhamer & Graifman, P.C. initiated a class action
in the U.S. District Court for the District of Columbia on
behalf of a plaintiff and a proposed class of purchasers of
securities of XM Satellite Radio Holdings, Inc. (XMSR) against
XM Satellite and certain officers and directors for the class
period Jul. 28, 2005 through Feb. 16, 2006.
The complaint alleges that XM Satellite and certain officers and
directors violated Sections 10(b) and 20(a) of the Securities
Exchange Act of 1934 and Rule 10b-5 promulgated thereunder, by
making false and misleading statements and omissions which
misrepresented XM Satellite cost of acquiring new subscribers.
In fact, XM Satellite was forced to spend extraordinary sums in
the fourth quarter of 2005 in order to stay on track to achieve
its stated goal of 6 million subscribers at year's end. In
furtherance of this scheme, XM Satellite failed to disclose to
the market that these substantial costs in acquiring new
subscribers led to huge increases in XM Satellite's net losses.
Interested parties have no later than sixty days from May 3,
2006 to move the court to serve as lead plaintiff.
For more details, contact Gary S. Graifman, Esq. of Kantrowitz,
Goldhamer & Graifman, P.C., Phone: 1-800-660-7843 or 845/356-
2570, Web site: http://www.kgglaw.com.
XM SATELLITE: Stull, Stull Files Securities Fraud Suit in D.C.
--------------------------------------------------------------
Stull, Stull & Brody initiated a class action in the U.S.
District Court for the District of Columbia on behalf of a
plaintiff and a proposed class of purchasers of securities of XM
Satellite Radio Holdings, Inc. (NASDAQ: XMSR) against XM
Satellite and certain officers and directors for the class
period Jul. 28, 2005 through Feb. 16, 2006.
The complaint alleges that XM Satellite and certain officers and
directors violated Sections 10(b) and 20(a) of the Securities
Exchange Act of 1934 and Rule 10b-5 promulgated thereunder by
making false and misleading statements and omissions which
misrepresented XM Satellite's cost of acquiring new subscribers.
In fact, XM Satellite was forced to spend extraordinary sums in
the fourth quarter of 2005 in order to stay on track to achieve
its stated goal of 6 million subscribers at year's end. In
furtherance of this scheme, XM Satellite failed to disclose to
the market that these substantial costs in acquiring new
subscribers led to huge increases in XM Satellite's net losses.
Interested parties have no later than sixty days from May 3,
2006 to move the court to serve as lead plaintiff.
For more details, contact Howard T. Longman, Esq. of Stull,
Stull & Brody, Phone: 1-800-337-4983 and 845/371-4788, Fax:
212/490-2022, E-mail: SSBNY@aol.com, Web site:
http://www.ssbny.com.
*********
A list of Meetings, Conferences and Seminars appears in each
Wednesday's edition of the Class Action Reporter. Submissions
via e-mail to carconf@beard.com are encouraged.
Each Friday's edition of the CAR includes a section featuring
news on asbestos-related litigation and profiles of target
asbestos defendants that, according to independent researches,
collectively face billions of dollars in asbestos-related
liabilities.
*********
S U B S C R I P T I O N I N F O R M A T I O N
Class Action Reporter is a daily newsletter, co-published by
Bankruptcy Creditors' Service, Inc., Fairless Hills,
Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland
USA. Glenn Ruel Senorin, Maria Cristina Canson, and Janice
Mendoza, Editors.
Copyright 2006. All rights reserved. ISSN 1525-2272.
This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding, electronic
re-mailing and photocopying) is strictly prohibited without
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Information contained herein is obtained from sources believed
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