/raid1/www/Hosts/bankrupt/CAR_Public/070227.mbx
C L A S S A C T I O N R E P O R T E R
Tuesday, February 27, 2007, Vol. 9, No. 41
Headlines
ANALOG DEVICES: Seeks Dismissal of Mass. ERISA Violations Suit
BIOGEN IDEC: Seeks Dismissal of Mass. Securities Fraud Lawsuit
CASTLE PRODUCE: Recalls Cantaloupes for Salmonella Contamination
CISCO SYSTEMS: Calif. Court Okays $91.75M Securities Suit Deal
CISCO SYSTEMS: Breach of Fiduciary Duty Suit by Investor Junked
COCA-COLA: Discovery in Ga. Securities Suit to End March 23
COCA-COLA: Ga. Court Dismisses Suits Alleging ERISA Violations
COCA-COLA: "Selbst" Plaintiffs Opt Not to File Amended Complaint
CRIMZON ROSE: Recalls Children's Jewelry on High Lead Content
DELAWARE: Court Certifies Class in Death Row Inmate's Lawsuit
FEDEX CORP: Continues to Face "Clausnitzer" Age Bias Lawsuit
FEDEX CORP: "Holowecki" Age Bias Suit Trial Expected June, July
GRAINLESS BAKER: Recalls Bread for Undeclared Dairy Content
G. WILLI-FOOD: Faces Two More Fraud Suits Over Product Content
ILLINOIS: Court Gives Final Approval to "Dupuy" Suit Settlement
KEYSPAN CORP: No Ruling Yet on Settlement of Suit Over Merger
KEYSPAN CORP: Seeks Dismissal of Bay Shore Gas Plant Lawsuit
KOPPERS INC: Somerville Suit Plaintiffs Voluntarily Dismiss Case
LABOR READY: July Trial Set in Gender Bias Suit by Employees
LABOR READY: Settles Owen Labor Suit; Enters Discovery in Recio
LABOR READY: Accused of Violating Labor Laws in California
M&A GLOBAL: Recalls Gel Candles After Burn Injury Reports
NORTHROP GRUMMAN: Faces New ERISA Violations Lawsuit in Calif.
NORTHROP GRUMMAN: Still Faces ERISA Violations Lawsuit in Calif.
PACER INTERNATIONAL: August Trial Set in Owner-Operators' Suit
QUALIFIED EXCHANGE: Faces Calif. Suit Over $80M Escrow Accounts
RAYTHEON CO: Court Approves $5.5M Settlement in Mass. ERISA Suit
TENFOLD CORP: Appeals Court Vacates Certification in IPO Suit
TEXTRON INC: R.I. Court Approves Shareholder Suit Settlement
TYCO INTERNATIONAL: Faces Mo. Antitrust Suit Over Catheters
VINTAGE FOOD: Recalls Elmas Apricots for Undeclared Sulfites
New Securities Fraud Cases
NEW CENTURY: Green Welling Files Securities Fraud Suit in Calif.
NOVASTAR FINANCIAL: Klafter & Olsen Files Securities Fraud Suit
*********
ANALOG DEVICES: Seeks Dismissal of Mass. ERISA Violations Suit
-------------------------------------------------------------
Analog Devices, Inc. seeks for the dismissal of a purported
class action in the U.S. District Court for the District of
Massachusetts, alleging violations of the Employee Retirement
Income Security Act (ERISA).
On Oct. 13, 2006, a purported class action complaint was filed
on behalf of participants in the company's Investment
Partnership Plan from Oct. 5, 2000 to the present.
The complaint named as defendants the company, certain officers
and directors, and the company's Investment Partnership Plan
Administration Committee.
The complaint alleges purported violations of federal law in
connection with the company's option granting practices during
the years 1998, 1999, 2000, and 2001, including breaches of
fiduciary duties owed to participants and beneficiaries of the
company's Investment Partnership Plan under ERISA.
The complaint seeks unspecified monetary damages, as well as
equitable and injunctive relief.
On Nov. 22, 2006, the company and the individual defendants
filed motions to dismiss the complaint. On Jan. 8, 2007, the
Plaintiff filed memoranda in opposition.
On Jan. 22, 2007, the company and the individual defendants
filed further memoranda in support of the motions to dismiss,
according to company's Feb. 21 Form 10-Q filing with the U.S.
Securities and Exchange Commission for the quarterly period
ended Feb. 3.
The suit is "Bendaoud v. Hodgson et al., Case No. 1:06-cv-11873-
NG," filed in the U.S. District Court for the District of
Massachusetts under Judge Nancy Gertner.
Representing plaintiffs are Theodore M. Hess-Mahan and Thomas G.
Shapiro both of Shapiro Haber & Urmy LLP, 53 State Street,
Boston, MA 02108, Phone: 617-439-3939, Fax: 617-439-0134, E-
mail: ted@shulaw.com or tshapiro@shulaw.com.
BIOGEN IDEC: Seeks Dismissal of Mass. Securities Fraud Lawsuit
----------------------------------------------------------------
Biogen Idec, Inc. is seeking the dismissal of a purported
securities fraud class action filed against it in the U.S.
District Court for the District of Massachusetts.
On March 2, 2005, the company, along with William H. Rastetter,
former executive chairman, and James C. Mullen, chief executive
officer, were named as defendants in a purported class action,
captioned, "Brown v. Biogen Idec Inc., et al.," filed in the
U.S. District Court for the District of Massachusetts.
The complaint alleges violations of Sections 10(b) and 20(a) of
the U.S. Securities Exchange Act of 1934 and Rule 10b-5
promulgated thereunder.
The action is purportedly brought on behalf of all purchasers of
the company's publicly-traded securities between Feb. 18, 2004
and Feb. 25, 2005.
The plaintiff alleges that the defendants made materially false
and misleading statements regarding potentially serious side
effects of TYSABRI in order to gain accelerated approval from
the U.S. Food and Drug Administration for the product's
distribution and sale.
The plaintiff alleges that these materially false and misleading
statements harmed the purported class by artificially inflating
the company's stock price during the purported class period and
that company insiders benefited personally from the inflated
price by selling the company's stock. The plaintiff seeks
unspecified damages, as well as interest, costs and attorneys'
fees.
Substantially similar actions were also filed:
-- "Grill v. Biogen Idec Inc., et al." and
-- "Lobel v. Biogen Idec Inc., et al.,"
Other purported class representatives brought the suits on March
10, 2005 and April 21, 2005, respectively, in the same court.
Those actions have been consolidated with the Brown case.
On Oct. 13, 2006, the plaintiffs filed an amended consolidated
complaint, which, among other amendments to the allegations,
adds as defendants:
-- Peter N. Kellogg, chief financial officer;
-- William R. Rohn, former chief operating officer;
-- Burt A. Adelman, executive vice president of Portfolio
Strategy; and
-- Thomas J. Bucknum, former general counsel.
On Nov. 15, 2006, the company and all the other defendants who
had been served as of that date filed a motion to dismiss the
amended consolidated complaint.
Plaintiffs' opposition to the company's motion to dismiss was
filed on Dec. 18, 2006, according to company's Feb. 21 Form 10-K
filing with the U.S. Securities and Exchange Commission for the
fiscal year ended Dec. 31, 2006.
The suit is "Brown v. Biogen Idec Inc., et al., Case No. 1:05-
cv-10400-RCL," filed in the U.S. District Court for the District
of Massachusetts under Judge Reginald C. Lindsay.
Representing the plaintiffs are Shannon L. Hopkins and Mario
Alba Jr. of Milberg Weiss Bershad & Schulman LLP, One
Pennsylvania Plaza, 49th Floor, New York, NY 10119, Phone: 646-
733-5768, Fax: 212-273-4445, E-mail: shopkins@milbergweiss.com;
and David Pastor of Gilman and Pastor, LLP, 60 State Street,
37th Floor, Boston, MA 02109, Phone: 617-742-9700, Fax: 617-742-
9701, E-mail: dpastor@gilmanpastor.com.
Representing the company is James R. Carroll of Skadden, Arps,
Slate, Meagher & Flom, One Beacon Street, 31st Floor, Boston, MA
02108, Phone: 617-573-4800, Fax: 617-573-4822, E-mail:
jcarroll@skadden.com.
CASTLE PRODUCE: Recalls Cantaloupes for Salmonella Contamination
----------------------------------------------------------------
Castle Produce, a subsidiary of Tropical Produce, Inc., a
wholesale importer of fresh fruit and vegetables is recalling
cantaloupes in California due to potential health concerns.
Some cantaloupes delivered on or after Feb. 16, 2007 have tested
positive for Salmonella, although no illnesses have been
reported.
Persons infected with salmonella may experience a variety of
symptoms and illnesses. According to the U.S. Food and Drug
Administration, healthy persons infected with salmonella often
experience fever, diarrhea (which may be bloody), nausea,
vomiting and abdominal pain. In rare circumstances, infection
with Salmonella can result in more severe illnesses and
potentially can be fatal.
Approximately 2,560 cartons of cantaloupes were distributed to
wholesalers in Los Angeles and San Francisco for distribution in
the Western U.S. The cantaloupes have a light green color skin
on the exterior, with orange flesh. The cantaloupes were
distributed for sale in bulk in cardboard cartons, with 9, 12 or
15 cantaloupes to a carton.
The recalled cartons are natural brown cardboard with
"Tropifresh de Costa Rica" in green and orange lettering. They
have a 13-digit number on a white tag pasted to the carton; the
10th digit is a 2 or a 3.
The recall is a result of a U.S. Food and Drug Administration
test with a positive detection of salmonella bacteria.
Consumers who have uneaten cantaloupe purchased in the Western
U.S., on or after Feb. 16, 2007, may contact their retail store
to see if the product is the recalled brand.
CISCO SYSTEMS: Calif. Court Okays $91.75M Securities Suit Deal
--------------------------------------------------------------
The U.S. District Court for the Northern District of California
approved a $91.75 million settlement of a consolidated
shareholder class action filed against Cisco Systems, Inc.,
certain of its current and former directors and officers.
Beginning on April 20, 2001, a number of purported shareholder
class actions were filed in the U.S. District Court for the
Northern District of California against the company and certain
of its officers and directors.
The lawsuits were consolidated, and the consolidated action was
purportedly brought on behalf of those who purchased the
company's publicly traded securities during an alleged class
period of November 10, 1999 through Feb. 6, 2001.
On Aug. 18, 2006, the company announced an agreement to resolve
the litigation. Pursuant to that agreement, liability insurers
paid $91.75 million to the plaintiffs in resolution of all
claims against the company and its officers and directors.
The settlement was approved by the Court on December 5, 2006.
Plaintiffs had alleged that defendants made false and misleading
statements, purported to assert claims for violations of the
federal securities laws, and sought unspecified compensatory
damages and other relief. The company and the individual
defendants continue to deny all allegations in the lawsuit.
The suit is "In re: Cisco Systems, Inc., Securities Litigation,
et al., Case No. 5:01-cv-20418-JW," filed in the U.S. District
Court for the Northern District of California under Judge James
Ware with referral to Judge Patricia V. Trumbull.
Counsel for the class is Spencer Burkholz, lead lawyer for
Lerach, Coughlin, Stoia, Gellar, Rudman and Robbins LLP; On the
Net: http://www.lerachlaw.com.
Representing the defendants are Alice L. Jensen of Fenwick &
West, LLP, 275 Battery Street, San Francisco, CA 94111, Phone:
(415) 875-2300, Fax: (415) 281-1350, E-mail:
ajensen@fenwick.com.
CISCO SYSTEMS: Breach of Fiduciary Duty Suit by Investor Junked
---------------------------------------------------------------
The plaintiff in a derivative suit that includes class claims
against Cisco Systems Inc. did not appeal the dismissal of the
suit by the Superior Court of California, County of Santa Clara.
On Feb. 16, 2005, a purported shareholder derivative lawsuit was
filed in the Superior Court of California, County of Santa
Clara, against various of the company's officers and directors
and naming the company as a nominal defendant.
In July 2006, the Superior Court dismissed all claims and gave
plaintiff until October 2006 in which to file an amended
complaint, if plaintiff chose to do so.
Pursuant to an agreement between the parties, plaintiff has
elected not to amend its complaint or file an appeal challenging
the Superior Court's order.
The lawsuit had included derivative and class claims for breach
of fiduciary duty, unjust enrichment, constructive trust and
violations of the California Corporations Code, based upon
allegations of wrongdoing in connection with option grants and
compensation to officers and directors, the timing of option
grants, and the company's share repurchase plan, and sought
unspecified compensation and other damages, rescission of
options and other relief.
COCA-COLA: Discovery in Ga. Securities Suit to End March 23
-----------------------------------------------------------
Discovery in the consolidated securities fraud class action
pending in the U.S. District Court for the Northern District of
Georgia against The Coca-Cola Co. will end on March 23, 2007.
On Oct. 27, 2000, a class action, "Carpenters Health & Welfare
Fund of Philadelphia & Vicinity v. The Coca-Cola Co., et al.,"
was filed against the company, alleging that the company, M.
Douglas Ivester, Jack L. Stahl and James E. Chestnut violated
antifraud provisions of the federal securities laws by making
misrepresentations or material omissions relating to the
company's financial condition and prospects in late 1999 and
early 2000.
A second, largely identical lawsuit, "Gaetan LaValla v. The
Coca-Cola Co., et al.," was also filed in the same court on Nov.
9, 2000.
The complaints, which was brought seeking an unspecified amount
of damages, allege that the company and the individual named
officers:
-- forced certain Coca-Cola system bottlers to accept
"excessive, unwanted and unneeded" sales of concentrate
during the third and fourth quarters of 1999, thus
creating a misleading sense of improvement in the
company's performance in those quarters;
-- failed to write down the value of impaired assets in
Russia, Japan and elsewhere on a timely basis, again
resulting in the presentation of misleading interim
financial results in the third and fourth quarters of
1999; and
-- misrepresented the reasons for Mr. Ivester's departure
from the company and then misleadingly reassured the
financial community that there would be no changes in
the company's core business strategy or financial
outlook following that departure.
On Jan. 8, 2001, the U.S. District Court for the Northern
District of Georgia entered an order consolidating the two cases
for all purposes as, "Carpenters Health & Welfare Fund of
Philadelphia & Vicinity v. The Coca-Cola Co., et al." The court
also ordered the plaintiffs to file a consolidated amended
complaint.
On July 25, 2001, the plaintiffs filed a consolidated amended
complaint, which largely repeated the allegations made in the
original complaints and added Douglas N. Daft as an additional
defendant.
On Sept. 25, 2001, the defendants filed a motion to dismiss all
counts of the consolidated amended complaint. On Aug. 20, 2002,
the court granted in part and denied in part the defendants'
motion to dismiss.
The court also granted the plaintiffs' motion for leave to amend
the complaint. On Sept. 4, 2002, the defendants filed a motion
for partial reconsideration of the court's Aug. 20, 2002 ruling.
The court denied the motion on April 15, 2003.
On June 2, 2003, the plaintiffs filed an amended consolidated
complaint. The defendants moved to dismiss the amended
complaint on June 30, 2003.
On March 31, 2004, the court granted in part and denied in part
the defendants' motion to dismiss the amended complaint. In its
order, the court dismissed a number of the plaintiffs'
allegations, including the claim that the company made knowingly
false statements to financial analysts. The court permitted the
remainder of the allegations to proceed to discovery.
The court denied the plaintiffs' request for leave to further
amend and re-plead their complaint. Discovery commenced on May
14, 2004, and is ongoing.
The discovery cutoff is March 23, 2007, according to the
company's Feb. 21 Form 10-K filing with the U.S. Securities and
Exchange Commission for the fiscal year ended Dec. 31, 2006.
The suit is "Carpenters Health &, et al. v. Coca-Cola Co., et
al., Case No. 1:00-cv-02838-WBH," filed in the U.S. District
Court for the Northern District of Georgia under Judge Willis B.
Hunt, Jr.
Representing the plaintiffs are:
(1) David Andrew Bain of Chitwood Harley Harnes, LLP, 1230
Peachtree Street, N.E., 2300 Promenade II, Atlanta, GA
30309, Phone: 404-873-3900, E-mail: dab@classlaw.com;
and
(2) Mary K. Blasy of Lerach Coughlin Stoia Geller Rudman &
Robbins, 655 W. Broadway, Suite 1900, San Diego, CA
92101-4297, Phone: 619-231-1058, E-mail:
maryb@lerachlaw.com.
Representing the company:
(i) Robert L. Dell Angelo of Munger Tolles & Olson, 355
South Grand Avenue, Thirty-Fifth Floor, Los Angeles, CA
90071, Phone: 213-683-9100; and
(ii) Jeffrey S. Cashdan of King & Spalding, 191 Peachtree
Street, N.E., Atlanta, GA 30303-1763, Phone: 404-572-
4600, E-mail: jcashdan@kslaw.com.
COCA-COLA: Ga. Court Dismisses Suits Alleging ERISA Violations
--------------------------------------------------------------
The U.S. District Court for the Northern District of Georgia
dismissed with prejudice the remaining claim in class actions
alleging that The Coca-Cola Co., certain of its current and
former executive officers and its benefits committee violated
the Employee Retirement Income Security Act.
During May, June and July 2005, participants in the company's
Thrift & Investment Plan filed in the U.S. District Court for
the Northern District of Georgia three similar putative class
actions, styled:
-- "Pedraza v. The Coca-Cola Co., et al.,"
-- "Shamery, et al. v. The Coca-Cola Co., et al.," and
-- "Jackson v. The Coca-Cola Co., et al."
The suits allege breach of fiduciary duties under the ERISA by
the company, certain current and former executive officers, and
the company's benefits committee.
The purported class in each of these cases consists of the Plan
and persons who were participants in or beneficiaries of the
Plan between May 13, 1997 and April 18, 2005 and whose accounts
included investments in company stock.
The complaints allege that, among other things, the defendants
failed to exercise the required care, skill, prudence and
diligence in managing the Plan and its assets, take steps to
eliminate or reduce the amount of company stock in the Plan,
adequately diversify the Plan's investments in company stock,
appoint qualified administrators and properly monitor their and
the Plan's performance and disclose accurate information about
the company.
Plaintiffs, on behalf of the putative class, seek, among other
things, declaratory relief, damages for Plan losses and lost
profits, imposition of constructive trust as a remedy for unjust
enrichment, injunctive relief, costs and attorneys' fees,
equitable restitution and other appropriate equitable and
monetary relief.
By order of the court, an amended complaint was filed in the
Jackson case on Sept. 16, 2005. The amended complaint
supplements the detailed allegations of the original complaint
and names specific individual defendants who served on the
Benefits Committee.
Identical amended complaints were also filed in Pedraza and
Shamrey. In each of the three cases, the plaintiff voluntarily
dismissed three individual defendants. The company filed
motions to dismiss all claims in each case.
On Sept. 29, 2006, the court dismissed all but one claim against
the Benefits Committee and its members. The court ordered
plaintiffs to replead the remaining claim against the Benefits
Committee with specificity within 20 days.
On Nov. 14, 2006, the court entered a stipulation and order to
dismiss the remaining claim with prejudice thereby concluding
this matter, according to its Feb. 21 Form 10-K filing with the
U.S. Securities and Exchange Commission for the fiscal year
ended Dec. 31, 2006.
COCA-COLA: "Selbst" Plaintiffs Opt Not to File Amended Complaint
----------------------------------------------------------------
Plaintiffs in the securities fraud class action, "Selbst v. The
Coca-Cola Co., et al.," have advised the court that it will not
seek to file a second amended complaint thereby concluding the
matter.
On May 9, 2005, a putative class action, styled "Selbst v. The
Coca-Cola Co. and Douglas N. Daft," was filed in the U.S.
District Court for the Northern District of Georgia alleging
violations of antifraud provisions of the securities laws by the
company and Mr. Daft, former chairman of the board and chief
executive officer of the company.
The purported class consists of persons, except the defendants,
who purchased company stock between Jan. 30, 2003 and Sept. 15,
2004 and were damaged thereby.
The complaint alleges, among other things, that during the class
period the company and Mr. Daft made false and misleading
statements concerning the financial condition of the company and
its business outlook, strategy, business model and relationship
with key bottlers in internal corporate memoranda,
analysts' conference calls, press releases and U.S. Securities
and Exchange Commission filings.
The plaintiffs, on behalf of the putative class, seek
compensatory damages in an amount to be proved at trial,
extraordinary, equitable and/or injunctive relief as permitted
by law to assure that the class has an effective remedy, award
of reasonable costs and expenses, including counsel and expert
fees, and such other further relief as the Court may deem just
and proper.
On July 8, 2005, a putative class action, styled "Amalgamated
Bank, et al. v. The Coca-Cola Co., et al." was filed in the U.S.
District Court for the Northern District of Georgia against:
-- the company,
-- Douglas N. Daft,
-- E. Neville Isdell,
-- Steven J. Heyer, and
-- Gary P. Fayard.
The suit is alleging violations of antifraud provisions of the
federal securities laws. The purported class consists of
persons, except the defendants, who purchased company stock
between Jan. 30, 2003 and Sept. 15, 2004 and were damaged
thereby.
The complaint alleges, among other things, that during the class
period the defendants made false and misleading statements
about:
-- the company's new business strategy/model;
-- the company's execution of its new business
strategy/model;
-- the state of the company's critical bottler
relationships;
-- the company's North American business;
-- the company's European operations, with a particular
emphasis on Germany;
-- the company's marketing and introduction of new
products, particularly Coca-Cola C2; and
-- the company's forecast for growth going forward.
The plaintiffs claim that as a result of these allegedly false
and misleading statements, the price of the company stock
increased dramatically during the purported class period.
The complaint also alleges that in September and November 2004,
the company and E. Neville Isdell acknowledged that the
company's performance had been below expectations, that various
corrective actions were needed, that the company was lowering
its forecasts, and that there would be no quick fixes.
In addition, the complaint alleges that the charge announced by
the company in November 2004 should have been taken early in
2003 and that, as a result, the company's financial statements
were materially misstated during 2003 and the first three
quarters of 2004.
Plaintiffs, on behalf of the putative class, seek compensatory
damages in an amount to be proved at trial, extraordinary,
equitable and/or injunctive relief as permitted by law to assure
that the class has an effective remedy, award of reasonable
costs and expenses, including counsel and expert fees, and such
other further relief as the Court may deem just and proper.
In September 2005, the plaintiff filed an amended consolidated
complaint providing, among other things, additional details
concerning the original complaint's allegations about
disclosures regarding the company's operations in Germany.
On November 21, 2005, the company and the individual parties
filed a motion to dismiss the amended and consolidated
complaint. The plaintiffs filed their response to that motion
on Jan. 27, 2006.
On Sept. 29, 2006, the court entered its order granting the
company's motion to dismiss the amended complaint in its
entirety and granted the plaintiffs 20 days from its date of
entry within which to seek leave to file a second amended
complaint to attempt to correct deficiencies noted therein.
On Oct. 23, 2006, plaintiffs advised the court that they would
not seek leave to file a second amended complaint thereby
concluding this matter, according to the company's Feb. 21 Form
10-K filing with the U.S. Securities and Exchange Commission for
the fiscal year ended Dec. 31, 2006.
The suit is "Selbst v. The Coca-Cola Co., et al., Case No. 1:05-
cv-01226-RWS," filed in the U.S. District Court for the Northern
District of Georgia under Judge Richard W. Story.
Representing the plaintiffs are:
(1) David Andrew Bain of Chitwood Harley Harnes, LLP, 1230
Peachtree Street, N.E., 2300 Promenade II, Atlanta, GA
30309, Phone: 404-873-3900, E-mail: dab@classlaw.com;
and
(2) James A. Caputo of Lerach Coughlin Stoia Geller Rudman
& Robbins, 655 W. Broadway, Suite 1900, San Diego, CA
92101-4297, Phone: 619-231-1058.
Representing the defendants are:
(i) Jeffrey S. Cashdan of King & Spalding, 191 Peachtree
Street, N.E., Atlanta, GA 30303-1763, Phone: 404-572-
4600, E-mail: jcashdan@kslaw.com; and
(ii) Paul R. Bessette of Akin, Gump, Strauss, Hauer & Feld,
LLP, Suite 2100, 300 West 6th Street, Austin, TX 78701,
Phone: 512-499-6250.
CRIMZON ROSE: Recalls Children's Jewelry on High Lead Content
-------------------------------------------------------------
Crimzon Rose Accessories, of North Providence, Rhode Island, in
cooperation with the U.S. Consumer Product Safety Commission, is
recalling about 6,000 children's "Kidsite" necklace and earring
sets.
The company said the recalled jewelry contains high levels of
lead. Lead is toxic if ingested by young children and can cause
adverse health effects. No injuries have been reported.
The children's necklace and earring sets have birthstones made
of plastic gemstones in various colors. The pendants on the
necklaces are shaped like flowers on a silver-colored chain.
The matching pierced earrings have round birthstones. The month
of the birthstone and "Kidsite" are printed on the front of the
products' packaging. Kmart is printed on the back.
These recalled children's accessories were manufactured in China
and are sold exclusively at Kmart stores nationwide from October
2001 through December 2006 for about $5.
Picture of recalled children's necklace and earring sets:
http://www.cpsc.gov/cpscpub/prerel/prhtml07/07113.jpg
Consumers are advised to immediately take the recalled product
away from children and return it to any Kmart store to receive
one of three free children's jewelry sets.
For additional information, contact Kmart at (800) 659-7026
between 9 a.m. and 5 p.m. CT, Monday through Friday, or visit
http://www.kmart.com.
DELAWARE: Court Certifies Class in Death Row Inmate's Lawsuit
-------------------------------------------------------------
The U.S. District Court for the District of Delaware granted
class-action status to a civil case that raises constitutional
questions about how the state's death penalty is carried out,
The Associated Press reports.
In an eight-page opinion, Judge Sue L. Robinson basically
included all state inmates facing the death penalty into a suit,
which charges that lethal injection is unconstitutionally cruel
and unusual.
In effect, Judge Robinson's decision puts all executions on
hold, though the state had not scheduled one since a May 2006
stay of execution for convicted ax murderer Robert W. Jackson,
III, the plaintiff in the civil case. That stay now applies to
the other 15 inmates facing execution.
The May ruling effectively blocked further executions, since the
defense for any condemned inmate would need only to join the
suit to stop it from being carried out.
The state had opposed class-action status, arguing attorneys
were able to contact each death row inmate to get them to join
the lawsuit.
A September bench trial is now scheduled before Judge Robinson.
Judge Robinson granted the case class-action status so as to
conserve court resources and guarantee a consistent outcome for
all inmates.
Case Background
Mr. Jackson's lawsuit, which was filed on May 8, 2006, questions
the chemicals used in lethal injections -- supposed to be nearly
instantaneous -- and the training of people who carry them out
(Class Action Reporter, July 28, 2006).
Specifically, the suit questions whether lethal injection is
truly quick and a humane way to die. It alleges that some
prisoners actually die a slow, lingering death by suffocation.
Mr. Jackson, 33, was convicted and sentenced to death for the
1992 ax murder of 47-year-old Elizabeth Girardi during a
burglary of her Hockessin home.
His suit placed an indefinite and unofficial hold on state's
death penalty, including his May 19 execution.
The events in Delaware have been expected since a U.S. Supreme
Court ruling in June that allowed inmates to raise
constitutional questions about lethal injection in federal
court.
Mr. Jackson's lawsuit was filed less than two weeks before his
scheduled execution. At that time, Judge Robinson issued a
preliminary injunction blocking Mr. Jackson's execution, pending
the June 2006 ruling by the U.S. Supreme Court.
The suit is "Jackson v. Taylor et al., Case No. 1:06-cv-00300-
SLR," filed in the U.S. District Court for the District of
Delaware under Judge Sue L. Robinson.
Representing the plaintiffs is Michael Wiseman, Federal
Community Defender for the Eastern District of Pennsylvania,
Capital Habeas Unit, Federal Court Division, Defender
Association of Philadelphia, Curtis Center, Suite 545 West, 601
Walnut Street, Philadelphia, PA 19106, US, Phone: (215) 928-
0520, Fax: (215) 928-0825, E-mail: Michael_Wiseman@fd.org.
Representing the defendants is Loren C. Meyers, Department of
Justice, State of Delaware, 820 N. French Street, 8th Floor,
Carvel Office Building, Wilmington, DE 19801, Phone: (302) 577-
8500, E-mail: loren.meyers@state.de.us.
FEDEX CORP: Continues to Face "Clausnitzer" Age Bias Lawsuit
------------------------------------------------------------
FedEx Corp. remains a defendant in a suit filed in the U.S.
District Court for Central California in December 2005 alleging
that FedEx Express discriminates against couriers above 40 years
old in violation of the Age Discrimination in Employment Act.
The plaintiffs in a suit filed in behalf of Ronald Clausnitzer
are seeking class certification for couriers who have faced
inequal evaluation practices that discriminate against older
couriers since 1994.
The case alleges that the company engages in discriminatory
practices regarding its older employees. Further, the lawsuit
claims that the company discriminates against couriers over 40
years old, especially if they have over ten years' seniority, by
taking away their routes and setting unrealistic performance
targets.
Earlier, FedEx employee Caroline O' Brien, joined the suit filed
against FedEx claiming that programs adopted by FedEx in 1994,
the "Best Practices Pays" and "Minimal Acceptable Performance
Standards" were designed to force older couriers to quit before
they reached 55 years of age.
According to the complaint, the company gave supervisors lists
of older couriers to target for increased supervision,
discipline, and harassment.
The lawsuit also states that FedEx has been charged with age
discrimination numerous times.
The suit is "Ronald Clausnitzer et al v. Federal Express
Corporation et al., Case No. 8:05-cv-01269-DOC-AN," filed in the
U.S. District Court for the Central District of California under
Judge David O. Carter, with referral to Judge Arthur Nakazato.
Representing plaintiffs are:
(1) David L. Rose, Henry P. Gassner and Terri Nicole
Marcus, all of Rose and Rose, 1320 19th Street, North,
West, Suite 601, Washington, DC 20036, Phone: 202-331-
8555 or 202-331-0363; and
(2) Matthew Frederick Archbold and David Douglas Deason,
both of Deason and Archbold, 3300 Irvine Avenue, Suite
245, Newport Beach, CA 92660, Phone: 949-794-9560, Fax:
949-794-9517.
Representing defendants are David S. Wilson, III and Christopher
J. Yost, both of Federal Express Corporation, 2601 Main Street,
Suite 340, Irvine, CA 92614, Phone: 949-862-4656 or 949-862-
4558, E-mail: dswilson@fedex.com; and Edward J. Efkeman of
Federal Express Corporation - Legal Department, 3620 Hacks Cross
Road, Building B, Third Floor, Memphis, TN 38125, Phone: 901-
434-8555.
FEDEX CORP: "Holowecki" Age Bias Suit Trial Expected June, July
---------------------------------------------------------------
The U.S. District Court for the Southern District of New York is
expected to set by June 11, 2007 a trial date in the case
"Holowecki, et al. v. Federal Express, Case No. 1:02-cv-03355-
JSR." On that date, the judge is expected to set a trial date
for early June or July.
The suit is based upon Federal Express' violations of the Age
Discrimination in Employment Act. It claims the company engages
in discriminatory practices regarding its older employees.
Further, the lawsuit claims that the company discriminates
against couriers over 40 years old, especially if they have over
ten years' seniority, by taking away their routes and setting
unrealistic performance targets.
The suit was thrown out of the district court for technical
procedural reasons but the Court of Appeals agreed with the
plaintiffs and the law firm that those technical reasons were
not grounds for dismissing the case.
Earlier, the 2nd Circuit Court of Appeals threw the case back to
the U.S. District Court for the Southern District of New York.
Regarding the people who are not yet parties, any courier who
was over the age of 40 while employed by FedEx and who served as
a courier for 10 years or more, has a right to become a
plaintiff, which is likely to expire as of March 31, 2007,
although it is possible that it will extend a few weeks after
that.
In the meantime, each courier has a right to opt in by filling
an "Opt-In" form.
To date more than 30 plaintiffs are involved in the suit.
The suit is "Holowecki, et al. v. Federal Express, Case No.
1:02-cv-03355-JSR," filed in the U.S. District Court for the
Southern District of New York under Judge Jed S. Rakoff.
Representing plaintiffs are David L. Rose, Linda Y. Sroufe and
David M. Wachtel, all of Rose & Rose, P.C., 1320 19th Street
Northwest, Suite 601, Washington, DC 20036, Phone: (202) 331-
8555.
GRAINLESS BAKER: Recalls Bread for Undeclared Dairy Content
-----------------------------------------------------------
The Grainless Baker of 297 Bidwell Hill Rd., Lake Ariel,
Pennsylvania 18436, is recalling Gluten and Casein Free Sandwich
Bread because it may contain undeclared milk protein ingredient.
People who have allergies to a milk protein may run the risk of
serious life-threatening allergic reactions if they consume this
product.
The recalled Gluten and Casein Free Sandwich Bread is packaged
in an uncoded 18 oz. plastic bag and it was sold in New York,
New Jersey, Connecticut and Pennsylvania.
The recall was initiated after routine sampling by New York
State Department of Agriculture and Markets Food Inspectors and
subsequent analysis of the product by Food Laboratory personnel
revealed the presence of a milk protein on the label.
One illness has been reported to date in connection with this
problem.
Consumers who have purchased Gluten and Casein Free Sandwich
Bread should return it to the place of purchase. Consumers with
questions may contact the company at 570-689-9694.
G. WILLI-FOOD: Faces Two More Fraud Suits Over Product Content
--------------------------------------------------------------
G. Willi-Food International Ltd. (NASDAQ: WILC) announced that
two additional purported class actions have been filed against
the company.
The complaints allege that the company misled its customers by
reducing the content in its tuna containers, and then charging
its customers the same price as before.
The complaints claim damages of approximately $1.07 million, in
the case of one claim, and approximately $0.93 million in the
case of the second claim. Half of the alleged damages of each
claim relate to return of the overcharge and the other half for
additional compensation.
The company believes that the complaints are without merits and
intends to vigorously defend against the litigations.
For more information on the suits, contact Chen Shlein - CFO of
G. Willi Food International Ltd., +972-8-932-2233, E-mail:
chen@willi-food.co.il; or Christopher Chu of The Global
Consulting Group, Phone: +1-646-284-9426, E-mail:
cchu@hfgcg.com, Web site: http://www.willi-food.co.il.
ILLINOIS: Court Gives Final Approval to "Dupuy" Suit Settlement
---------------------------------------------------------------
The U.S. District Court for the Northern District of Illinois
gave final approval to the settlement of a class action against
the state's Department of Children and Family Services and
certain other officials, The Chicago Tribune reports.
The suit, "Dupuy, et al. v. McDonald," was filed back in June
17, 1997. It was between DCFS and child-care professionals
accused of abuse or neglect.
The settlement, reached in 2003 and largely in effect since
then, gives more rights to those under investigation by DCFS and
provides more checks against the agency's power.
In a recent hearing, Judge Rebecca Pallmeyer gave final approval
to the agreement. Under the settlement, the DCFS is called to
consider all available evidence in its investigations of child
abuse or neglect. Also, if requested, administrators must hold
teleconferences with child-care workers who are under
investigation for abuse or neglect, before drawing any
conclusion.
Where the agency finds credible evidence of abuse or neglect,
child-care workers have the right to a quick appeal and a final
decision within 35 days.
The state also said it would give subjects of investigations
more complete disclosure of their file information during an
investigation, as well as a summary of findings afterward.
Under the settlement, a court-appointed compliance monitor will
report every six months on how the settlement is being carried
out.
The suit is "Dupuy, et al. v. McDonald, Case No. 1:97-cv-04199,"
filed in the U.S. District Court for the Northern District of
Illinois under Judge Rebecca R. Pallmeyer.
Representing the plaintiffs is Diane L. Redleaf, The Redleaf Law
Firm, 1325 South Wabash Avenue, Suite 100, Chicago, IL 60605,
Phone: (312) 356-4302, Fax: 356-3203, E-mail:
dredleaf@redleaflawyer.com.
Representing the defendants is Barbara Lynn Greenspan, Attorney
General's Office, 100 West Randolph Street, Suite 4-600,
Chicago, IL 60601, Phone: (312) 814-7087, E-mail:
barbara.greenspan@illinois.gov.
KEYSPAN CORP: No Ruling Yet on Settlement of Suit Over Merger
-------------------------------------------------------------
The New York State Supreme Court for the County of Kings has yet
to approve a proposed settlement of a purported class action
that alleges breach of fiduciary duties by KeySpan Corp.
directors when they agreed to merge the company with National
Grid plc.
The suit was filed on March 20, 2006 against the company and
certain of its directors.
The suit alleges that the merger consideration, which the
company's stockholders will receive in connection with the
proposed merger transaction, is inadequate and unfair, since the
transaction value of $42.00 for each share of the company's
common stock does not provide its stockholders with a meaningful
premium over the market price of the common stock.
On April 19, 2006, the company moved to dismiss the complaint
for failure to state a cause of action upon which relief can be
granted.
On May 26, 2006, the plaintiff served an amended complaint
adding National Grid as a defendant. The amended complaint
alleged that National Grid aided and abetted the alleged breach
of fiduciary duties and added claims of inadequate disclosure
with respect to KeySpan's preliminary proxy materials.
In June 2006, the parties agreed in principle to settle the
case, the terms of which provide for, among other things, the
inclusion of additional disclosures in the company's 2006 Annual
Meeting Proxy Statement concerning the background and principle
events leading to execution of the merger agreement, as well as
the payment of plaintiff's counsel fees of up to $350,000
following closing of the transaction.
In October 2006, definitive settlement documents were executed
by the parties and submitted to the court. The settlement
remains subject to a number of conditions, including court
approval following notice to shareholders.
The company reported no development in the matter at its Feb. 22
Form 10-K filing with the U.S. Securities and Exchange
Commission for the fiscal year ended Dec. 31, 2006.
KeySpan Corp. on the Net: http://www.keyspanenergy.com.
KEYSPAN CORP: Seeks Dismissal of Bay Shore Gas Plant Lawsuit
------------------------------------------------------------
KeySpan Corp. seeks the dismissal of a purported class action
alleging damages resulting from contamination associated with
the company's operations of the former manufactured gas plant in
Bay Shore, New York.
The suit was filed on July 12, 2006. On Sept. 6, 2006, the
company filed a motion to dismiss the matter, which is pending.
The company reported no development in the matter at its Feb. 22
Form 10-K filing with the U.S. Securities and Exchange
Commission for the fiscal year ended Dec. 31, 2006.
KeySpan Corp. on the Net: http://www.keyspanenergy.com.
KOPPERS INC: Somerville Suit Plaintiffs Voluntarily Dismiss Case
----------------------------------------------------------------
Plaintiffs in a case filed against Koppers Inc. and several
others in relation to the company's Somerville, Texas wood
treatment plant have voluntarily dismissed their complaints.
In June 2005, the company along with other defendants, including
the Burlington Northern Santa Fe Railway Co., Monsanto Co., Dow
Chemical Co. and Vulcan Materials Co., was served with a
putative class action complaint.
Plaintiffs claimed that several classes of past and present
property owners and residents in the Somerville, Texas area --
allegedly numbering in excess of 2,500 -- suffered unspecified
property damage and risk of personal injury as a result of
exposure to various chemicals used at the Somerville, Texas wood
treatment plant that is currently owned by the company.
On December 23, 2005, plaintiffs filed an amended complaint
dropping their class action allegations and identifying 602
individual plaintiffs.
The amended complaint sought to recover compensatory and
punitive damages in excess of the jurisdictional limits of the
court for, among other things, bodily injuries, pain and mental
anguish, emotional distress, medical monitoring, medical
expenses, lost wages, loss of consortium and property
devaluation.
In November 2006, the plaintiffs voluntarily dismissed these
cases, according to Koppers Holdings Inc.'s Feb. 22 Form 10-K
filing with the U.S. Securities and Exchange Commission for the
fiscal year ended Dec. 31, 2006.
The suit is "Davis, et al. v. Koppers Industries I, et al., Case
No. 05-CV-464," filed in the U.S. District Court Western
District of Texas under Judge Sam Sparks.
Representing the plaintiffs are:
(1) Grover G. Hankins, The Hankins Law Firm PLLC, 616 W.
Main St., League City, TX 77573, Phone: (281) 316-9551;
(2) Dwight E. Jefferson, Dwight E. Jefferson, PLLC, 12
Greenway Plaza, Suite 1100, Houston, TX 77046, Phone:
(713) 993-0399; and
(3) Bernard Smalley, Anapol Schwartz Weiss Cohan, Feldman &
Smalley, 1900 Delancey Place, Philadelphia, PA 19103,
Phone: (215) 735-3894.
Representing the company are:
(i) Michael R. Klatt and Susan E. Burnett of Clark, Thomas,
& Winters, P.O. Box 1148, Austin, TX 78767, Phone:
(512) 472-8800; and
(ii) Brent R. Austin, Robert L. Shuftan, Leonard S.
Kurfirst, and Paul K. Freeburn of Wildman, Harrold,
Allen & Dixon, LLP, 225 West Wacker Drive, Suite 2800,
Chicago, IL 60606, Phone: 312-201-2000.
LABOR READY: July Trial Set in Gender Bias Suit by Employees
------------------------------------------------------------
A July 2007 trial is set for a sex discrimination suit filed in
California State Court, Los Angeles County by temporary
employees and job applicants of Labor Ready Inc.
On July 29, 2002, Marisol Balanderan and 55 other plaintiffs
filed an action against the company and one of the company's
customers in California State Court, Los Angeles County. The
plaintiffs are temporary employees and job applicants who seek
unquantified compensatory and punitive damages based on
allegations that they were subjected to discrimination in
dispatch to jobs on the basis of their female gender, throughout
a period from September 2001 through January 2002.
They also seek certification of a class of similarly situated
temporary employees. This matter is still in the discovery
phase. A trial date has been scheduled for July of 2007.
LABOR READY: Settles Owen Labor Suit; Enters Discovery in Recio
---------------------------------------------------------------
Labor Ready Inc. has now resolved one of several class actions
filed against it by employees. On December 13, 2006, parties in
the suit entered into a settlement agreement which resolved all
of Debbie Owen's outstanding claims against the company.
On Feb. 6, 2003, Scott Romer and Shawna Clark, both former Labor
Ready employees, filed an action against the company in
California State Court, Los Angeles County. The plaintiffs
allege that they were wrongfully exempted from overtime pay
during their employment. They seek unquantified compensatory
damages and certification of a class of similarly situated
employees.
On Jan. 6, 2004, Patricia Huntley and Brandon McCall filed a
complaint in intervention and have been included as plaintiffs
in this lawsuit. This matter has been consolidated with a
lawsuit filed on July 16, 2003 by Alecia Recio, Elizabeth
Esquivel, Debbie Owen and Barry Selbts, each a current or former
Labor Ready employee.
The suit was jointly filed in U.S. District Court for the
Central District of California, alleging failure to pay overtime
under state and federal law and seeking unspecified damages and
certification of a class of similarly situated employees.
On Sept. 23, 2003, the court dismissed the case for improper
venue. On Oct. 1, 2003, Recio re-filed her case in California
State Court, Los Angeles County, seeking similar relief on
behalf of Labor Ready employees employed in the State of
California.
On December 14, 2006 the Court denied the company's motion to
transfer venue to the U.S. District Court for the Western
District of Washington. This matter is currently in the
discovery phase.
On Oct. 21, 2003, Owen re-filed her case in the U.S. District
Court for the Western District of Washington, seeking similar
relief on behalf of Labor Ready employees employed in all states
except California.
On December 30, 2003, Patricia Huntley filed an action in the
U.S. District Court for the Western District of Washington
seeking similar relief on behalf of Labor Ready employees
employed in all states except California, and consolidated her
claims with those of Owen. Subsequently, Ms. Huntley died and
she was removed as a class representative. On December 1, 2006,
the Court precluded Ms. Owen from pursuing her claims on behalf
of a class.
On December 13, 2006, the parties entered into a settlement
agreement which resolved all of Ms. Owens' outstanding claims.
The Owen matter is now resolved.
LABOR READY: Accused of Violating Labor Laws in California
----------------------------------------------------------
Patricia Tennyson, a temporary employee, filed an action in
California State Court, Ventura County on December 15, 2006,
alleging that the company failed to pay her all hours worked.
The plaintiff further alleges that the company engaged in unfair
business practices in California. The plaintiff is seeking
unspecified damages and certification of a class of similarly
situated employees.
M&A GLOBAL: Recalls Gel Candles After Burn Injury Reports
---------------------------------------------------------
M&A Global Technologies Inc., doing business as Spa at Home, of
Tallahassee, Florida, in cooperation with the U.S. Consumer
Product Safety Commission, is recalling about 1,700 gel candles.
The company said the candles can have excessive flame height,
posing a fire and burn hazard to consumers.
M&A Global Technologies has received seven reports of flames
coming in contact with nearby combustibles resulting in minor
fires, smoke and soot damage. There have been four reports of
burn injuries to consumer's hands.
This recall involves Everlasting Jelly candles. Models include:
-- Champagne Glass with Heart, Model #502;
-- Large Oval Bowl with Sand & Shells, Model #109-XL;
-- Tumbler with Sand & Shells, Model #101-S;
-- Round Shape with Curly Top and Red Roses, Model #506;
-- Round Shape with Penguins, Model #604;
-- Tumbler with Blue Roses & Leaves, Model #805-11; and
-- Round Shape with Two Butterflies, Model #806-8.
The candles were sold in clear glass containers of various sizes
with a smaller glass of gel in the middle of the candle.
These recalled gel candles were manufactured in the U.S. and are
being sold at Spa at Home stores and Spaathome.com nationwide
from October 2003 through December2003 and October 2005 through
December 2005 for between $9 and $50.
Pictures of recalled gel candles:
http://www.cpsc.gov/cpscpub/prerel/prhtml07/07111a.jpg
http://www.cpsc.gov/cpscpub/prerel/prhtml07/07111b.jpg
http://www.cpsc.gov/cpscpub/prerel/prhtml07/07111c.jpg
http://www.cpsc.gov/cpscpub/prerel/prhtml07/07111d.jpg
http://www.cpsc.gov/cpscpub/prerel/prhtml07/07111e.jpg
http://www.cpsc.gov/cpscpub/prerel/prhtml07/07111f.jpg
http://www.cpsc.gov/cpscpub/prerel/prhtml07/07111g.jpg
Consumers are advised to immediately stop using the candles and
contact M&A Global Technologies for instructions on returning
the product.
For additional information, contact M & A Global Technologies at
(866) 224-8811 between 9 a.m. and 5 p.m. ET Monday through
Friday.
NORTHROP GRUMMAN: Faces New ERISA Violations Lawsuit in Calif.
--------------------------------------------------------------
Northrop Grumman Corp. is a defendant in a purported class
action, "Heidecker v. Northrop Grumman Corp., et al." which
alleges violations of Employee Retirement Income Security Act.
On Jan. 3, 2007, a class action was filed in the U.S. District
Court for the Central District of California, against the
company, certain of its administrative and Board committees,
certain members of its board of directors, and certain company
officers and employees.
The lawsuit alleges two alternative counts of fiduciary duty
breaches under ERISA with respect to the investment and
administrative management of the Northrop Grumman Savings Plan,
including allegations of excessive, hidden and/or otherwise
improper fee and expense charges.
Among other things, the lawsuit seeks unspecified damages,
removal of individuals acting as fiduciaries to such plans,
payment of attorney fees and costs, and an accounting.
NORTHROP GRUMMAN: Still Faces ERISA Violations Lawsuit in Calif.
----------------------------------------------------------------
Northrop Grumman Corp. remains a defendant in the purported
class action, "Waldbuesser, et al. v. Northrop Grumman Corp., et
al.," which accuses the company of mismanaging workers' 401(k)
plans, according to the company's Feb. 21 Form 10-K filing with
the U.S. Securities and Exchange Commission for the fiscal year
ended Dec. 31, 2006.
On Sept. 28, 2006, various individual plaintiffs filed the class
action in U.S. District Court for the Central District of
California, against the company, certain of its administrative
and board committees, all members of the company's board of
directors, and certain company officers and employees.
The lawsuit alleges two alternative counts of fiduciary duty
breaches under the Employee Retirement Income Security Act of
1974 with respect to alleged excessive, hidden and/or otherwise
improper fee and expense charges to the Northrop Grumman Savings
Plan and the Northrop Grumman Financial Security and Savings
Plan (each of which are 401(k) plans).
Among other things, the lawsuit seeks unspecified damages,
removal of individuals acting as fiduciaries to such plans,
payment of attorney fees and costs, and an accounting.
Specifically, the 45-page complaint accuses the corporation, its
savings plan administrative committee, its investment committee
and 16 individuals of "breach of fiduciary duty," (Class Action
Reporter, Oct. 10, 2006).
It specifically stated that the plan sponsor is accused of
failing to fulfill its fiduciary duty to make certain that the
401(k) plan operates with appropriate expenses.
According to the suit, the most certain means of increasing the
return on employees' 401(k) savings is to reduce the fees and
expenses employees pay from their 401(k) accounts. It also
stated that unlike generalized market fluctuations, employers
could control these fees and expenses with federal law requiring
them to do so.
The suit is also alleging that the plan is filled with "shadow
index funds" that are collecting the much higher fees of managed
funds. In effect, according to the suit, workers are paying for
something -- active management -- but not getting it. And that,
the suit asserts, is where the company and its executives have
breached their fiduciary duty.
According to the lawsuit, all of the company's nine fund
offerings that claim active management have scored as shadow
index funds over the last six years.
As a consequence, the suit contends, corporate management may
have set employees up to pay two or three times as much in fees
as management's fiduciary duty would dictate.
The suit is "Waldbuesser, et al. v. Northrop Grumman Corp., et
al., Case No. 2:06-cv-06213-R-JC," filed in the U.S. District
Court for the Central District of California under Judge Manuel
L. Real with referral to Judge Jacqueline Chooljian.
For more details, contact Mary L. Perry and Jerome J. Schlichter
of Schlichter Bogard and denton, 100 South Fourth Street, Suite
900, St Louis, MO 63102, Phone: 314-621-6115, E-mail:
mperry@uselaws.com and jschlichter@uselaws.com.
PACER INTERNATIONAL: August Trial Set in Owner-Operators' Suit
--------------------------------------------------------------
The Renteria case filed against two subsidiaries of Pacer
International Inc. on behalf of a class of owner-operators is
currently in the discovery phase, with a trial presently set for
August 2007.
Two of the company's subsidiaries engaged in local cartage and
harbor drayage operations, Interstate Consolidation, Inc., which
was subsequently merged into Pacer Cartage, Inc., and Intermodal
Container Service, Inc., were named defendants in a class action
filed in July 1997 in the State of California, Los Angeles
Superior Court, Central District (the Albillo case).
The suit alleges, among other things, breach of fiduciary duty,
unfair business practices, conversion and money had and received
in connection with monies (including insurance premium costs)
allegedly wrongfully deducted from truck drivers' earnings.
The plaintiffs and defendants entered into a Judge Pro Tempore
Submission Agreement in October 1998, pursuant to which they
waived their rights to a jury trial, stipulated to a certified
class, and agreed to a minimum judgment of $250,000 and a
maximum judgment of $1.75 million.
In August 2000, the trial court ruled in the company's
subsidiaries' favor on all issues except one, namely that in
1998 the company's subsidiaries failed to issue to the owner-
operators new certificates of insurance disclosing a change in
the subsidiaries' liability insurance retention amount, and
ordered that restitution of $488,978 be paid for this omission.
Plaintiffs' counsel then appealed all issues except one (the
independent contractor status of the drivers), and the
subsidiaries appealed the insurance retention disclosure issue.
In December 2003, the appellate court affirmed the trial court's
decision as to all but one issue, reversed the trial court's
decision that the owner-operators could be charged for the
workers compensation insurance coverage that they voluntarily
elected to obtain through the company's subsidiaries (a case of
first impression in California), and remanded back to the trial
court the question of whether the collection of workers
compensation insurance charges from the owner-operators violated
California's Business and Professions Code and, if so, to
determine an appropriate remedy.
The company's subsidiaries sought review at the California
Supreme Court of this workers compensation issue, and the
plaintiffs sought review only of whether the company's
subsidiaries' providing insurance for the owner-operators
constituted engaging in the insurance business without a license
under California law. In March 2004, the Supreme Court of
California denied both parties' petitions for appeal, thus
ending all further appellate review.
As a result, the company had successfully defended and prevailed
over the plaintiffs' challenges to the company's subsidiaries'
core operating practices, establishing that:
-- the owner-operators were independent contractors and not
employees of the company's subsidiaries; and
-- the company's subsidiaries may charge the owner-
operators for liability insurance coverage purchased by
the company's subsidiaries.
Following the California Supreme Court's decision, the only
remaining issue was whether the company's subsidiaries'
collection of workers compensation insurance charges from the
owner-operators violated California's Business and Professions
Code and, if so, what restitution, if any, should be paid to the
owner-operator class.
This issue was remanded back to the same trial court that heard
the original case in 1998.
During the second quarter of 2005, the company engaged in
earnest discussions with the plaintiffs in an attempt to
structure a potential settlement of the case within the original
$1.75 million cap but on a claims-made basis that would return
to the company any settlement funds not claimed by members of
the plaintiff class.
The company believed that the ongoing cost of litigating the
final issue in the case (including defending appeals that the
plaintiffs' counsel had assured would occur if the company were
to prevail in the remand trial) would exceed the net liability
to the company of a final settlement on a claims-made basis
within the cap of $1.75 million.
During the second quarter, the company reached an agreement in
principle with the plaintiffs to settle the litigation on a
claims-made basis within the cap of $1.75 million. Based on the
settlement agreement, the company increased its reserve to the
full amount of the $1.75 million cap at the end of the second
quarter. In the first quarter of 2006, the court granted final
approval to the settlement.
The claims process, payment calculations and final settlement
payments were concluded in the second quarter of 2006, with the
company retaining approximately $560,000 in unclaimed funds.
"Renteria" Class Action
The same law firm that brought the Albillo case filed a separate
class action against the company's same subsidiaries in March
2003 in the same jurisdiction on behalf of a class of owner-
operators (the "Renteria" class action) not included in the
Albillo class.
Each of the claims in the Renteria case, which had been stayed
pending full and final disposition of the remaining issue in
Albillo, mirror claims in Albillo, specifically that the
company's subsidiaries' providing insurance for their owner-
operators constitutes engaging in the insurance business without
a license in violation of California law and that charging the
putative class of owner-operators in Renteria for workers
compensation insurance that they elected to obtain through the
company's subsidiaries violated California's Business and
Professions Code.
The company believes that the final disposition in the company's
favor of the insurance issue in Albillo precludes the plaintiffs
from re-litigating this issue in Renteria, and the company have
filed a motion for summary adjudication on this issue, which
will be heard by the court in March 2007.
The Renteria case is currently in the discovery phase,
with a trial presently set for August 2007.
QUALIFIED EXCHANGE: Faces Calif. Suit Over $80M Escrow Accounts
---------------------------------------------------------------
Qualified Exchange Services is a defendant in a purported class
action filed in the Santa Barbara County Superior Court in
California by the local law firm of Hollister & Brace, Martha
Sadler of The Santa Barbara Independent reports.
The suit was filed on Feb. 16. It alleges that the company,
along with an affiliated company in Nevada, "misappropriated,
stole, embezzled, and converted" more than $80 million from
escrow accounts within the past year.
The primary plaintiffs in the suit are Jon and Marie Sorrell,
who deposited some $720,000 in trust with Qualified Exchange
late last year. In late January, though, Qualified Exchange
reportedly told them that the money was "no longer available."
Since then, according to the suit, plaintiffs have been told
that Qualified Exchange is out of business. Calls to Qualified
Exchange were answered by a recording, but not returned.
One of the chief defendants named in the lawsuit is Donald
McGhan and his son James whose Delaware company Capital Reef
Management Corp. bought Qualified Exchange from founders Kyleen
Dawson and Megan Amsler in October 2006.
After selling Qualified Exchange, the two founders remained as
employees of their former business. Three months later, they
reported to the U.S. Federal Bureau of Investigation that some
of their clients' funds were missing.
The two were also named as defendants in the suit. Although
Craig Grenet, a legal representative for the two former founders
said the incident hurt them and that they were also victims just
like the plaintiffs in the case.
However, plaintiffs' attorney Robert Brace, disagreed, accusing
the two founders being negligent for failing to protect his
clients' money.
Another defendant in the case is Dean Koch, who was the chief
financial officer of Southwest Exchange, Inc. of Nevada, where
Donald McGhan served as chairman of the board of directors, a
company that became an affiliate of QES as a result of the sale
to Capital Reef.
According to Mr. Brace's estimates of those claiming to have
lost funds, about 10 Santa Barbara-area residents are missing a
total of about $10 million in assets entrusted to Qualified
Exchange.
For more details, contact Hollister & Brace, 1126 Santa Barbara
Street, Suite #201, P.O. Box 630, Santa Barbara, CA 93102,
Phone: (805) 963-6711, Fax: (805) 965-0329, E-Mail:
hblaw@hbsb.com, Web site: http://www.hbsb.com.
RAYTHEON CO: Court Approves $5.5M Settlement in Mass. ERISA Suit
----------------------------------------------------------------
The U.S. District Court for the District of Massachusetts has
approved the settlement of a consolidated class action against
Raytheon Co. that alleges violations of the Employee Retirement
Income Security Act.
In May 2003, two purported class actions were filed on behalf of
participants in the company's savings and investment plans that
invested in the company's stock between Aug. 19, 1999 and May
27, 2003.
These actions are:
-- "Benjamin Wall v. Raytheon Co. et al. (Civil Action
No. 03-10940-RGS)," and
-- "Joseph I. Duggan, III v. Raytheon Co. et al.
(Civil Action No. 03-10995-RGS)."
The two class actions were brought pursuant to ERISA. Both are
substantially similar and have been consolidated into a single
action as, "Wall v. Raytheon Co. et al., Case No. 1:03-cv-10940-
RGS."
In April 2004, a second consolidated amended complaint was filed
on behalf of participants and beneficiaries in the company's
savings and investment plans that invested in company common
stock since Oct. 7, 1998.
The Second Consolidated Amended ERISA Complaint alleges that the
company, its Pension and Investment Group, and its Investment
Committee breached ERISA fiduciary duties by failing to:
-- prudently and loyally manage plan assets;
-- monitor the Pension and Investment Group and the
Investment Committee and provide them with accurate
information;
-- provide complete and accurate information to plan
participants and beneficiaries; and
-- avoid conflicts of interest.
In October 2004, the defendants filed a motion to dismiss the
Second Consolidated Amended ERISA Complaint. In September 2005,
the court heard the motion to dismiss but declined to decide the
motion subject to a trial on a statue of limitations issue,
which was scheduled for June 2006.
In mediation with a federal magistrate in May 2006, the parties
reached a tentative settlement. On June 23, 2006, a proposed
settlement agreement was presented to the court for approval.
The settlement agreement required the company to pay $5.5
million, with part of that amount payable directly to the
company's savings and investment plans, part payable directly to
certain participants and beneficiaries and part payable for
expenses.
The company would also pay plaintiffs' attorney fees of $1.4
million, as determined by a federal magistrate in September
2006. It recorded a charge of $7 million to other expense in
the three months ended June 25, 2006 in connection with the
tentative settlement.
Under the proposed settlement, the class for purposes of
settlement would consist of any person who was a participant or
beneficiary at any time between Oct. 7, 1998 and April 30, 2006,
and whose plan accounts included investments in the Raytheon
Common Stock Fund. The court has stayed any proceedings in
light of the proposed settlement.
On Feb. 6, 2007, the Court approved the settlement agreement.
If no appeal or request for reconsideration of the court's Feb.
6, 2007 orders is requested within 30 days, those orders will
become final.
The suit is "Wall v. Raytheon Co. et al., Case No. 1:03-cv-
10940-RGS," filed in the U.S. District Court fort the District
of Massachusetts under Judge Richard G. Stearns.
Representing the plaintiffs are:
(1) Edward W. Ciolko and Mark K. Gyandoh of Schiffrin &
Barroway, LLP, Three Bala Plaza East, Suite 400, Bala
Cynwyd, PA 19004, Phone: 610-667-7706, Fax: 610-667-
7056, E-mail: eciolko@sbclasslaw.com; and
mgyandoh@sbclasslaw.com; and
(2) Peter H. LeVan, Jr. of Hangley Aronchick Segal &
Pudlin, One Logan Square, 27th Floor, Philadephia, PA
19103-6933, US, Phone: 215-496-7071, Fax: 215-585-0300,
E-mail: plevan@hangley.com.
Representing the defendants are:
(i) Rebecca Ruby Anzidei and James P. Gillespie of Kirkland
& Ellis, LLP, Suite 1200, 655 Fifteenth St., N.W.
Washington, DC 20005, Phone: 202-879-5046 and 202-879-
5000, Fax: 202-879-5200, E-mail: ranzidei@kirkland.com
and jgillespie@kirkland.com; and
(ii) James F. Kavanaugh, Jr. of Conn, Kavanaugh, Rosenthal,
Peisch & Ford, LLP, Ten Post Office Square Boston, MA
02109, Phone: 617-482-8200, Fax: 617-482-6444, E-mail:
jkavanaugh@ckrpf.com.
TENFOLD CORP: Appeals Court Vacates Certification in IPO Suit
-------------------------------------------------------------
Plaintiffs in a securities fraud suit filed against Tenfold
Corp. in the U.S. District Court for the Southern District of
New York filed a petition for rehearing en banc by the U.S.
Court of Appeals for the 2nd Circuit after the court issued an
opinion vacating certification of a litigation class in a
portion of the case.
On Nov. 6, 2001, a class action complaint alleging violations of
the federal securities laws was filed in the U.S. District Court
for the Southern District of New York naming as defendants
TenFold, certain of the company's officers and directors, and
certain underwriters of the company's initial public offering.
An amended complaint was filed on April 24, 2002. TenFold and
certain of the company's officers and directors are named in the
suit pursuant to Section 11 of the U.S. Securities Act of 1933
and Section 10(b) of the U.S. Securities Exchange Act 1934 on
the basis of an alleged failure to disclose the underwriters'
alleged compensation and manipulative practices.
Similar complaints have been filed against over 300 other
issuers that have had initial public offerings since 1998. The
individual officer and director defendants entered into tolling
agreements and, pursuant to a Court Order dated Oct. 9, 2002,
were dismissed from the litigation without prejudice.
On Feb. 19, 2003, the court granted a Motion to Dismiss the Rule
10b-5 claims against 116 defendants, including TenFold. On June
27, 2003, the company's board of directors approved a proposed
partial settlement with the plaintiffs in this matter.
The settlement would provide, among other things, a release of
TenFold and of the individual defendants for the alleged
wrongful conduct in the amended complaint. The company agreed
to undertake other responsibilities under the partial
settlement, including agreeing to assign away, not assert, or
release certain potential claims the company may have against
the company's underwriters.
In June 2004, a motion for preliminary approval of the
settlement was filed with the court. The underwriters filed a
memorandum with the court opposing preliminary approval of the
settlement. The court granted preliminary approval of the
settlement on Feb. 15, 2005, subject to certain modifications.
On Aug. 31, 2005, the court issued a preliminary order further
approving the modifications to the settlement and certifying the
settlement classes. The court also appointed the Notice
Administrator for the settlement and ordered that notice of the
settlement be distributed to all settlement class members
beginning on November 15, 2005.
A settlement fairness hearing was held on April 24, 2006,
however, no ruling has been issued yet by the court. On
December 5, 2006, the U.S. Court of Appeals for the 2nd Circuit
issued an opinion vacating the District Court's certification of
a litigation class in that portion of the case between the
plaintiffs and the underwriter defendants.
Because the 2nd Circuit's opinion was directed to the class
certified by the District Court for the plaintiffs' litigation
against the underwriter defendants, the opinion's effect on the
class certified by the District Court for the company's
settlement is unclear.
On Jan. 5, 2007, plaintiffs filed a petition for rehearing en
banc by the Second Circuit.
The suit is "In re Tenfold Corp. Initial Public Offering
Securities Litigation," related to "In re Initial Public
Offering Securities Litigation, 21 MC 92 (SAS) (S.D.N.Y.),"
filed in the U.S. District Court for the Southern District of
New York under Judge Shira Scheindlin.
The plaintiff firms in this litigation are:
(1) Bernstein Liebhard & Lifshitz LLP (New York, NY), 10 E.
40th Street, 22nd Floor, New York, NY, 10016, Phone:
800.217.1522, E-mail: info@bernlieb.com;
(2) Milberg Weiss Bershad Hynes & Lerach, LLP (New York,
NY), One Pennsylvania Plaza, New York, NY, 10119-1065,
Phone: 212.594.5300;
(3) Schiffrin & Barroway, LLP, 3 Bala Plaza E, Bala Cynwyd,
PA, 19004, Phone: 610.667.7706, Fax: 610.667.7056, E-
mail: info@sbclasslaw.com;
(4) Sirota & Sirota, LLP, 110 Wall Street 21st Floor, New
York, NY, 10005, Phone: 888.759.2990, Fax:
212.425.9093, E-mail: Info@SirotaLaw.com;
(5) Stull, Stull & Brody (New York), 6 East 45th Street,
New York, NY, 10017, Phone: 310.209.2468, Fax:
310.209.2087, E-mail: SSBNY@aol.com; and
(6) Wolf, Haldenstein, Adler, Freeman & Herz LLP, 270
Madison Avenue, New York, NY, 10016, Phone:
212.545.4600, Fax; 212.686.0114, e-mail:
newyork@whafh.com.
For more details, visit http://www.iposecuritieslitigation.com/.
TEXTRON INC: R.I. Court Approves Shareholder Suit Settlement
------------------------------------------------------------
The U.S. District Court for the District of Rhode Island gave
final approval to the settlement of a consolidated amended class
action filed against Textron, Inc., certain of its present and
former officers and wholly owned subsidiary, Bell Helicopter
Textron Inc.
In 2002, two identical lawsuits purporting to be class actions
were filed in the U.S. District Court in Rhode Island by Textron
shareholders suing on their own behalf and on behalf of a
purported class of Textron shareholders.
A consolidated amended complaint later alleged that the
defendants failed to make certain accounting adjustments in
response to alleged problems with Bell Helicopter's V-22 and H-1
programs and that the company failed to timely write down
certain assets of its OmniQuip Textron unit. The complaint
sought unspecified compensatory damages.
On June 15, 2004, the court ruled that the plaintiffs could not
maintain the claims that were based on allegations relating to
the H-1 program or to OmniQuip, and also ruled that all claims
against one of the individual defendants should be dismissed.
The court certified the class of shareholders on May 11, 2005.
All claims in the litigation were subsequently settled for a
cash amount to be paid by Textron's insurer. The court
preliminarily approved the settlement on Jan. 31, 2006.
The settlement received final approval of the court on Dec. 13,
2006, and the matter has been concluded, according to the
company's Feb. 21 Form 10-K filing with the U.S. Securities and
Exchange Commission for the fiscal year ended Dec. 30, 2006.
The suit is "Rosen, et al. v. Textron, Inc., et al., Case No.
1:02-cv-00190-S," filed in the U.S. District Court for the
District of Rhode Island under Judge William E. Smith.
Representing the plaintiffs are:
(1) Michael I. Behn of Behn & Wyetzner, Chartered, 55 W.
Wacker Drive, Suite 950, Chicago, IL 60601, Phone: 312-
629-0000, Fax: 312-327-0266; and
(2) William M. Kolb of Law Offices of William M. Kolb, LLC,
1 Ship Street, Providence, RI 02903, Phone: 490-8297,
Fax: 490-8299.
Representing the defendants are:
(i) Mitchell A. Karlan and Anthony J. Mahajan of Gibson,
Dunn & Crutcher, LLP, 200 Park Ave., 47 Floor, New
York, NY 10166-0193, Phone: 212 351-4000, Fax: 351-
4035; and
(ii) John A. Tarantino of Adler Pollock & Sheehan, P.C., One
Citizens Plaza, 8th Floor, Providence, RI 02903, Phone:
274-7200, Fax: 351-4607.
TYCO INTERNATIONAL: Faces Mo. Antitrust Suit Over Catheters
-----------------------------------------------------------
An antitrust class action filed in the U.S. District Court for
the Eastern District of Missouri claims conspiracy by several
companies to monopolize the market on urological catheter
products, the Courthouse News Service reports.
Named defendants in the suit are:
-- C.R. Bard, Inc.
-- Tyco International (U.S.), Inc. and
-- Tyco Health Care Group
The suit is filed on behalf of all persons or entities,
including hospitals and other healthcare providers, in the U.S.
who directly purchased Urological Catheters produced, promoted,
sold, marketed and/or distributed by one or more of the
defendants, from Jan. 1, 2002 through the present.
Named plaintiff Southeast Missouri Hospital says the companies
use exclusionary compliance discounts, sole-source exclusive
dealing contracts and bundled discounts and rebates to restrict
and eliminate competition and charge inflated prices.
As a result of defendants' unlawful conduct, plaintiff and the
class allegedly paid prices for Urological Catheters that were
artificially inflated, and were foreclosed from the opportunity
to purchase more effective and innovatively advanced Urological
Catheters.
Plaintiff seeks to recover damages for itself and on behalf of
direct purchasers of Urological Catheters, as well as recurring
injunctive relief from these ongoing violations of federal
antitrust laws.
Questions of law and fact common to the class include:
(a) Whether the Defendants engaged in a contract,
combination or conspiracy among themselves to fix,
raise, maintain or stabilize the prices of, or allocate
the market for Urological Catheters;
(b) Whether the Defendants and their co-conspirators were
participants in the contracts, combinations or
conspiracies alleged herein;
(c) Whether the Defendants and their co-conspirators
engaged in conduct that violated Sections 1 and 2 of
the Sherman Act and Section 4 of the Clayton Act;
(d) Whether the Defendants and their co-conspirators
engaged in unlawful, unfair or deceptive contracts,
combinations or conspiracies among themselves, express
or implied, to fix, raise, maintain, or stabilize
prices of Urological Catheters sold in and/or
distributed in the U.S.;
(f) Whether the anticompetitive conduct of the Defendants
caused prices of Urological Catheters to be
artificially inflated to non-competitive levels;
(g) Whether the Defendants unjustly enriched themselves as
a result of their inequitable conduct at the expense of
the Class members;
(h) Whether Plaintiff and the Class are entitled to
injunctive relief;
(i) Whether Plaintiff and other Class members were injured
by the conduct of Defendants and, if so, the
appropriate class-wide measure of damages
(j) What is the scope of the relative market for Urological
Catheters; and
(k) Whether Defendants have market power in the Urological
Catheter.
Plaintiff, on behalf of itself and the class, respectfully
prays:
(1) that this action may be maintained as a class action
pursuant to Rule 23 of the Federal Rules of Civil
Procedure, that Plaintiff's counsel be appointed Class
counsel, and that reasonable notice of this action be
given to the Class;
(2) that the acts alleged herein be adjudged and decreed to
be unlawful restraints of trade in violation of
Sections 1 and 2 of the Sherman Act and Section 3 of
the Clayton Act;
(3) that the Class recover treble the damages determined to
have been sustained by them, and that joint and several
judgments be entered against Defendants in favor of the
Class;
(4) that Defendants be enjoined from entering into the
unlawful agreements discussed above;
(5) that the Class be granted the costs and expenses of
suit, including reasonable attorneys' fees as provided
by law; and
(6) that the Class be granted such other and further relief
as may be determined to be just, equitable and proper
by the Court.
A copy of the complaint is available free of charge at:
http://ResearchArchives.com/t/s?1a58
The suit is "Southeast Missouri Hospital v. C.R. Bard, Inc. et
al., Case No. 1:07-cv-00031-TCM," filed in the U.S. District
Court for the Eastern District of Missouri under Judge Thomas C.
Mummert, III.
Representing plaintiffs is J. Michael Ponder of Cook and
Barkett, 715 N. Clark Street, P.O. Box 1180, Cape Girardeau, MO
63702-1180, Phone: 573-335-6651, Fax: 573-335-6182, E-mail:
mike@semotriallawyers.com.
VINTAGE FOOD: Recalls Elmas Apricots for Undeclared Sulfites
------------------------------------------------------------
Vintage Food Corp., of Brooklyn, New York 11232, is recalling
Elmas Brand Apricots because it may contain undeclared sulfites.
People who have severe sensitivity to sulfites run the risk of
serious or life-threatening allergic reactions if they consume
this product.
The recalled Elmas Brand Apricots are packed in 250 g. and 400
g., styrofoam packages with the code best before: Dec. 31, 2007
were sold in New York, New Jersey and Connecticut.
The recall was initiated after routine sampling by New York
State Department of Agriculture and Markets Food Inspectors and
subsequent analysis of the product by Food Laboratory personnel
revealed the presence of sulfites in packages of Elmas Brand
Apricots which did not declare sulfites on the label. The
consumption of 10 milligrams of sulfites per serving has been
reported to elicit severe reactions in some asthmatics.
Anaphylactic shock could occur in certain sulfite sensitive
individuals upon ingesting 10 milligrams or more of sulfites.
No illnesses have been reported to date in connection with this
problem.
Consumers who have purchased Elmas Brand Apricots should return
it to the place of purchase. Consumers with questions may
contact the company at 1-718-965-1854.
New Securities Fraud Cases
NEW CENTURY: Green Welling Files Securities Fraud Suit in Calif.
----------------------------------------------------------------
Green Welling LLP announces that it filed a class action in the
U.S. District Court for the Central District of California
against New Century Financial Corp. (NEW) and certain of its
officers and directors, on behalf of all persons or entities who
purchased the common stock of New Century Financial during the
period between May 4, 2006 and Feb. 7, 2007, inclusive.
Lead plaintiff filing is until April 10, 2007.
New Century Financial is a real estate investment trust (REIT)
and one of the nation's largest mortgage finance companies,
providing mortgage products to borrowers nationwide through its
operating subsidiaries.
The complaint alleges that during the Class Period, New Century
Financial and certain of its officers and directors violated
Sections 10(b) and 20(a) of the U.S. Securities Exchange Act of
1934 by issuing materially false and misleading statements and
concealing materially adverse facts regarding the Company's
business and financial results, causing the investing public to
purchase New Century Financial securities at artificially
inflated prices.
More specifically, the complaint alleges that New Century
Financial improperly accounted for loan repurchase losses when
it knew of, or recklessly disregarded, a surge in borrower
payment defaults in 2006. Defendants' improper accounting of
its loan repurchases violated generally accepted accounting
principles (GAAP) regarding the company's allowance for loan
repurchase losses.
In addition, the complaint alleges that defendants concealed
materially adverse facts from the investing public, including
that the company lacked requisite internal controls, resulting
in material misstatements in the company's financial statements
and press releases.
A Feb. 7, 2007 New Century Financial press release announced
that the Company would restate its consolidated financial
results for the quarters ended March 31, June 30, and September
20, 2006 to correct errors in its application of GAAP regarding
the Company's allowance for loan repurchase losses. New Century
stated that it expected the impact of the restatement to result
in a reduction on net earnings for each of the first three
quarters of 2006. On this news, shares of New Century Financial
fell 35%, to $19.58 on the New York Stock Exchange.
Plaintiff seeks to recover damages on behalf of all persons who
purchased New Century Financial common stock during the Class
Period.
Green Welling LLP on the Net: http://www.classcounsel.com.
Contact Robert S. Green, Phone: 415-477-6700, Fax: 415-477-6710,
E-mail: gw@classcounsel.com.
NOVASTAR FINANCIAL: Klafter & Olsen Files Securities Fraud Suit
---------------------------------------------------------------
Klafter & Olsen LLP has been retained to commence a securities
fraud class action against NovaStar Financial Inc. NFI and
certain of its officers in the U.S. District Court for the
Western District of Missouri on behalf of investors who
purchased the publicly traded securities of NovaStar during the
period from May 4, 2006 through Feb. 20, 2007.
Lead plaintiff filing deadline is April 24, 2007.
On Feb. 20, 2007, after the markets closed, NovaStar announced a
loss for the fourth quarter 2006. Furthermore, the company
stated that it expected to have little or no taxable income
through 2011. One analyst called the Company's announcement a
"bombshell." On this news, NovaStar's stock fell more than 42%
the next day to close at $10.10 per share on February 21, 2007
on extraordinary volume of 22.5 million shares, more than 11
times the average three-month volume.
The claims against the defendants assert that during the Class
Period the defendants issued materially false and misleading
statements regarding the Company's business and financial
results. As a result of those false and misleading statements,
NovaStar stock traded at artificially inflated prices during the
Class Period, reaching a high of $37.59 per share in May 2006.
Allegedly, the true facts, which were concealed from the
investing public, were that:
(i) the company lacked requisite internal controls,
particularly with respect to loan delinquencies and, as
a result, the company's projections and reported
results issued during the Class Period were materially
false and misleading;
(ii) the company's financial statements were materially
misstated due to its failure to properly account for
its allowance for loan losses;
(iii) given the deterioration and the increased volatility in
the subprime market, the company would be forced to
tighten its underwriting guidelines which would have a
direct material negative impact on its loan production
going forward; and
(iv) given the increased volatility in the lending market,
the company had no reasonable basis to make projections
about its ability to maintain its Real Estate
Investment Trust (REIT) taxable income, which drives
dividends, and potentially even its very status as a
REIT.
Klafter & Olsen LLP on the Net: http://www.klafterolsen.com,
Phone: 202/261-3553.
*********
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, Ma. Cristina Canson, and Janice
Mendoza, Editors.
Copyright 2007. All rights reserved. ISSN 1525-2272.
This material is copyrighted and any commercial use, resale or
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Information contained herein is obtained from sources believed
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The CAR subscription rate is $575 for six months delivered via
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