/raid1/www/Hosts/bankrupt/CAR

/raid1/www/Hosts/bankrupt/CAR_Public/111019.mbx C L A S S A C T I O N R E P O R T E R Wednesday, October 19, 2011, Vol. 13, No. 207 Headlines ALLIED HEALTHCARE: Signs MOU to Resolve Merger-Related Suits AMAG PHARMACEUTICALS: Injunction Bid in "Gaines" Suit Now Moot AUTHENTIDATE HOLDING: Securities Suit Deal Effective on Aug. 23 BANK OF AMERICA: Subprime Loan Suit Fails to Win Certification BAYER HEALTHCARE: Sued Over False Claims on Flea & Tick Products BLUFF CITY, TN: Faces Class Action Over Traffic Camera COMPUTER SCIENCES: Four Shareholder Class Actions Consolidated COVENTRY HEALTH CARE: Judge Rejects Class Action Settlement EATON CORP: Truck Transmission Antitrust Suit Can Proceed FERRELLGAS PARTNERS: Settles Propane Tank Class Action GENERAL MILLS: Faces Class Action Over Misleading Product Labels HENRY GORDY: Agrees to $1-Mil. Penalty Over Toy Dart Gun Sets MEDASSETS INC: Faces Data Theft Class Action in Illinois MLS REALCOMP: Supreme Court Ruling Won't Hit Class Action NEW YORK LAW SCHOOL: Disputes Class Action Over Job Rates NVIDIA: Judge Dismisses Securities Fraud Class Action SA HAJJ: May Face Class Action over Hajj Visa Scam SATYAM COMPUTER: Edinburgh Dragon Trust to Pursue Legal Action SIFY TECHNOLOGIES: Appeals From IPO Suit Settlement Order Pending STERLING CHEMICALS: 5th Cir. Flips Ruling in Retirees' Lawsuit WINDSTREAM CORP: Settles Class Action Over Paetec Merger ********* ALLIED HEALTHCARE: Signs MOU to Resolve Merger-Related Suits ------------------------------------------------------------ Allied Healthcare International Inc., in an October 13, 2011, Form 8-K filing with the U.S. Securities and Exchange Commission, disclosed that it entered into a memorandum of understanding regarding the settlement of certain litigation relating to the Agreement and Plan of Merger (the "Merger Agreement"), dated as of July 28, 2011, by and among the Company, Saga Group Limited, a corporation organized under the laws of England and Wales ("Parent") and AHL Acquisition Corp., a New York corporation and a wholly owned subsidiary of Parent ("Acquisition Sub"), providing for the merger (the "Merger") of Acquisition Sub with and into the Company. As previously disclosed on the Definitive Proxy Statement on Schedule 14A filed with the SEC by the Company on September 21, 2011 (the "Definitive Proxy Statement"), five substantially similar putative class action complaints were filed in the Supreme Court of the State of New York for the County of New York naming the Company, the members of the Company's board of directors, Saga, and Acquisition Sub as defendants. The complaints alleged that the members of the board of directors breached their fiduciary duties in negotiating and approving the merger agreement and in particular alleged that the merger consideration negotiated under the merger agreement is inadequate; that certain of the defendants have improper conflicts of interest by reason of the retention agreements with the Company's executive officers; and that the terms of the merger agreement improperly impose deal protection devices that will preclude competing offers. The complaints further alleged that the Company, Saga, and Acquisition Sub aided and abetted the members of the board in their alleged breaches of fiduciary duties. On August 31, 2011, amended complaints were filed in four of the cases. In the amended complaints the claims, relief sought, and defendants remained the same, but after having reviewed the preliminary proxy statement filed by the Company, the plaintiffs added details regarding information that they allege should be disclosed to Company shareholders for them to make a fully informed decision whether to vote in support of the proposed transaction. On September 2, 2011, the court consolidated all of the cases into one action identified as In Re Allied Healthcare International Inc. Shareholder Litigation, Index No. 652188/2011 (the "Action"). On October 12, 2011, the defendants entered into a memorandum of understanding ("MOU") with the plaintiffs providing for the settlement of all claims in the Action. Under the MOU, and subject to court approval and such confirmatory discovery as the parties may agree or as shall be ordered by the court, and definitive documentation, the plaintiffs and the putative class settle and release, against the named defendants and their affiliates and agents, all claims in the Action and any potential claim related to (i) the Merger and/or the Merger Agreement, or any amendment thereto; (ii) the adequacy of the consideration to be paid to the Company's shareholders in connection with the Merger; (iii) the fiduciary obligations of any of the defendants or other released parties in connection with Merger and/or the Merger Agreement, or any amendment thereto; (iv) the negotiations in connection and process leading to the Merger and/or the Merger Agreement, or any amendment thereto; and (v) the disclosures or disclosure obligations of any of the defendants or other released parties in connection with the Merger and/or the Merger Agreement. While the Company believes that no supplemental disclosure is required under applicable laws, in order to avoid the risk of the putative stockholder class actions delaying or adversely affecting the Merger and to minimize the expense of defending such actions, the Company has agreed, pursuant to the terms of the MOU, to make certain supplemental disclosures related to the proposed Merger. Subject to completion of certain confirmatory discovery, the MOU contemplates that the parties will enter into a stipulation of settlement. The stipulation of settlement will be subject to customary conditions, including court approval following notice to the Company's stockholders. In the event that the parties enter into a stipulation of settlement, a hearing will be scheduled at which the Supreme Court of New York will consider the fairness, reasonableness, and adequacy of the settlement. If the settlement is finally approved by the court, it will resolve and release all claims in all actions that were or could have been brought challenging any aspect of the proposed Merger, the Merger Agreement, and any disclosure made in connection therewith, pursuant to terms that will be disclosed to stockholders prior to final approval of the settlement. In addition, in connection with the settlement, the parties contemplate that plaintiffs' counsel will file a petition in the Supreme Court of New York for an award of attorneys' fees and expenses to be paid by the Company or its successor. The settlement, including the payment by the Company or any successor thereto of any such attorneys' fees, is also contingent upon, among other things, the Merger becoming effective under New York law. The Company says there can be no assurance that the Supreme Court of New York will approve the settlement contemplated by the MOU. In the event that the settlement is not approved and such conditions are not satisfied, the defendants will continue to vigorously defend against the allegations in the Action. AMAG PHARMACEUTICALS: Injunction Bid in "Gaines" Suit Now Moot -------------------------------------------------------------- Ira Gaines' motion for preliminary injunction is now moot after AMAG Pharmaceuticals, Inc. supplemented certain disclosures in its proxy statement/prospectus in an October 13, 2011, Form 8-K filing with the U.S. Securities and Exchange Commission. On September 20, 2011, plaintiff in the Ira Gaines v. Michael Narachi, et al. matter, pending in the Delaware Court of Chancery, filed a Verified Amended Class Action Complaint. This amended complaint generally alleges that the members of the AMAG Board breached their fiduciary duties in connection with the proposed merger with Allos Therapeutics, Inc., by: (i) failing to "shop" AMAG and maximize shareholder value; (ii) ignoring procedural safeguards in negotiating the proposed merger with Allos; (iii) negotiating an acquisition in which Allos shareholders will allegedly receive excess consideration and AMAG stockholders will suffer dilution; (iv) rejecting an allegedly superior buy-out proposal from MSMB Capital; and (v) disseminating a supposedly false and misleading proxy statement. This amended complaint seeks damages and injunctive relief, including to enjoin the acquisition of Allos by AMAG, and an award of attorneys' and other fees and costs, in addition to other relief. AMAG and Allos believe the plaintiffs' allegations lack merit and will contest them vigorously. On September 21, 2011, plaintiff Gaines filed a motion for expedited proceedings and a motion for preliminary injunction. Defendants opposed this motion on September 26, 2011, and a telephonic hearing was held with Vice-Chancellor Noble on September 27, 2011. On September 30, 2011, Vice-Chancellor Noble issued an order denying plaintiff's request for expedited proceedings. On October 3, 2011, plaintiff filed a motion for reconsideration of the September 30 order. Defendants opposed plaintiff's motion for reconsideration on October 5, 2011. On October 6, 2011, Vice- Chancellor Noble granted plaintiff's motion for reconsideration. In granting plaintiff's motion for reconsideration, the court scheduled a preliminary injunction hearing for October 17, 2011, to consider the sole issue as to whether the free cash flow projections used by Morgan Stanley in its discounted cash flow analysis should be disclosed. On October 11, 2011, plaintiff filed a motion for preliminary injunction. The sole request for relief the plaintiff sought was the disclosure of the free cash flow projections that Morgan Stanley utilized in connection with its discounted cash flow analysis. Because those projections have been disclosed in the Company's Form 8-K Filing, plaintiff's preliminary injunction motion, and request for relief thereunder, is now moot. AUTHENTIDATE HOLDING: Securities Suit Deal Effective on Aug. 23 --------------------------------------------------------------- Authentidate Holding Corp.'s settlement resolving a consolidated securities lawsuit became effective on August 23, 2011, according to the Company's October 13, 2011, Form 10-K filing with the U.S. Securities and Exchange Commission for the year ended June 30, 2011. Between June and August 2005, six purported shareholder class actions were filed in the United States District Court for the Southern District of New York (the "District Court") against the Company and certain of its current and former directors and former officers. Plaintiffs in those actions alleged that defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Sections 11 and 15 of the Securities Act of 1933. The securities law claims were based on the allegations that the Company failed to disclose that the Company's August 2002 agreement with the USPS contained certain performance metrics, and that the USPS could cancel the agreement if the Company did not meet these metrics; that the Company did not disclose complete and accurate information as to the Company's performance under, and efforts to renegotiate, the USPS agreement; and that when the Company did disclose that the USPS might cancel the agreement, the market price of the Company's stock declined. On October 5, 2005, the Court consolidated the class actions under the caption In re Authentidate Holding Corp. Securities Litigation., C.A. No. 05 Civ. 5323 (LTS), and appointed the Illinois State Board of Investment as lead plaintiff under the Private Securities Litigation Reform Act. The plaintiff filed an amended consolidated complaint on January 3, 2006, which asserted the same claims as the prior complaints and also alleged that Authentidate violated the federal securities laws by misrepresenting that it possessed certain patentable technology. On July 14, 2006, the District Court dismissed the amended complaint in its entirety; certain claims were dismissed with prejudice and plaintiff was given leave to replead those claims which were not dismissed with prejudice. In August 2006, plaintiff filed a second amended complaint, which did not assert any claims relating to the company's patents or under the Securities Act of 1933, but which otherwise was substantially similar to the prior complaint. The second amended complaint sought unspecified monetary damages. The company moved to dismiss the second amended complaint on November 13, 2006. On March 26, 2009, the District Court dismissed, with prejudice, the second amended complaint. The lead plaintiff filed an appeal. On March 12, 2010, the U.S. Court of Appeals for the Second Circuit issued an order affirming in part and vacating and remanding in part the March 26, 2009 order of dismissal. On December 23, 2010, the company and certain of its current and former directors and former officers entered into a settlement of the consolidated class actions with the lead plaintiff. As set forth more fully in the Stipulation of Settlement, upon final approval of the settlement by the District Court, among other things: (i) the class will consist of all persons who purchased the company's shares between July 16, 2004, and May 27, 2005; (ii) all claims of all class members (whether class, individual direct or derivatively) arising out of or related to the plaintiffs' allegations will be dismissed with prejudice and released; and (iii) a payment of $1.9 million will be made for the benefit of the settlement class, which will be funded by the company's insurance carrier. On February 2, 2011, the District Court entered an order that preliminarily approved the Stipulation of Settlement; preliminarily certified a settlement class of all persons who purchased the company's common stock between July 16, 2004, and May 27, 2005, inclusive; and scheduled a hearing for July 20, 2011, to determine whether to grant final approval of the settlement. The court granted final approval of the settlement and certification of the class at the hearing and the settlement was effective as of August 23, 2011. BANK OF AMERICA: Subprime Loan Suit Fails to Win Certification -------------------------------------------------------------- Heather Johnson at Courthouse News Service reports that a federal judge rejected class certification for more than 500,000 borrowers who say predatory lending schemes made them fall victim to "toxic" adjustable-rate or subprime-mortgage loans offered by Countrywide and Bank of America. In their consolidated class action, which alleges Racketeer Influenced and Corrupt Organizations Act violations, unfair competition and other claims, homeowners say that Countrywide and other lenders engaged in a scheme to steer borrowers into "inherently toxic and unaffordable" loans that were then bundled and sold as investments on the secondary market as "mortgage- backed securities." These "pay option" negative amortization loans "unconscionably increased the debt burden and costs associated with the mortgage," according to the complaint, because they offered either interest- only payments or minimum-monthly payments that were less than the amount of interest owed. The plaintiffs also claim that the subprime loans were also "inherently unaffordable," exceeding 31% for the front-end debt- to-income ratio, a term that describes the ratio for housing payment, including principal, interest, taxes and insurance compared to gross monthly income. And the loans exceeded 45% for the back-end debt-to-income ratio, which covers total outstanding, recurring obligations including mortgage payments, credit cards, child support or alimony, and car payments compared to gross monthly income. Countrywide sold these loans in mass quantities by loosening underwriting standards and convincing borrowers that qualifying for loans meant they could afford them, according to the complaint. Employees and brokers executed the scheme since they had an incentive to put more customers into subprime loans; they used standardized sales scripts that assured borrowers that they were receiving the "best" loans available; and they failed to disclose risks, future rate increases and underwriting standards, the plaintiffs claimed. While all 500,000-plus class members fell victim to the underlying "scheme," U.S. District Court Judge Dana Sabraw in San Diego found that the dissimilarities in the victims' cases are so widespread that class resolution is not workable. Regarding the RICO claim, Judge Sabraw noted that Countrywide made loans through four divisions, two of which worked through 30,000 independent brokers who had no contact with the bank. These brokers issued almost half of the class loans and used no Countrywide-provided script. Loan officers in a third division used scripts, while a fourth division did not. For this and other reasons, the RICO and unfair-competition claims fail due to lack of a "common course of conduct." Countrywide and Bank of America, which acquired the company in 2008, already agreed to a $624 million settlement in another class action filed by a group of pension funds that had said Countrywide misled investors about their reliance on subprime and option- adjustable-rate mortgages. The complaint also claimed the bank had falsely assured investors about surviving the housing downturn during the heart of the crash. In January of this year, Bank of America took another hit when it paid Fannie Mae and Freddie Mac $2.8 billion to settle claims over Countrywide's questionable loans. A copy of the Order Denying Plaintiffs' Motion for Class Certification in In re: Countrywide Financial Corp. Mortgage Marketing and Sales Practices Litigation, Case Nos. 08-md-01988, 08-cv-01888, 08-cv-01957, 08-cv-01972 (S.D. Calif.), is available at: http://www.courthousenews.com/2011/10/14/mortgage.pdf BAYER HEALTHCARE: Sued Over False Claims on Flea & Tick Products ---------------------------------------------------------------- Climaco, Wilcox, Peca, Tarantino & Garofoli Co., L.P.A. has filed a class action lawsuit on behalf of dog and cat owners in Ohio alleging, among other things, that Bayer HealthCare, LLC and Merial Limited regularly make false and deceptive claims in advertisements for their flea and tick pet products. Bayer is the manufacturer of the family of products made for dogs and cats under the trade names Advantage(R), Advantage(R) II, Advantix(R), Advantix(R) II, K9 Advantix(R), K9 Advantix(R) II, Advantage Multi(R), and Advocate(R). Merial is the manufacturer of the family of products made for dogs and cats under the trade names Frontline(R), Frontline(R) Plus, Frontline Top Spot(R), and Certifect(TM). These products are sold as treatments for dogs and cats suffering with fleas, ticks, adult flea eggs, larvae, mosquito, heartworm, ear mites, and sarcoptic mange. While each one of individual products targets only a limited subset of the pet aliments, all of the products target fleas and their larvae. As fully set forth in Plaintiff's complaint, Bayer and Merial collectively sell approximately $2 billion of the products annually under the allegedly false and/or misleading assertions claiming that the products: are self-dispersing and cover the entire surface area of the dog or cat's body when applied in a single limited spot; are effective for one month and require monthly application to continue to be effective; do not enter the blood stream of the pet and instead move across the pet's skin to cover the pet; and are waterproof and remain effective following shampoo treatments, swimming, or after exposure to rain or sunlight. Plaintiff seeks to prevent Bayer and Merial from continuing to allegedly misrepresent these products and seeks to recover damages on behalf of all those who purchased the products. About Climaco, Wilcox, Peca, Tarantino & Garofoli Co., L.P.A. Climaco, Wilcox, Peca, Tarantino & Garofoli Co., L.P.A. -- http://www.climacolaw.com-- is a full-service law firm. The firm has practice groups in Class Actions, Litigation, Business Law, Employment Law and Government and Public Finance. BLUFF CITY, TN: Faces Class Action Over Traffic Camera ------------------------------------------------------ Jamie Satterfield, writing for Knoxville News Sentinel, reports that an Upper East Tennessee town's already troubled traffic camera enforcement program has hit another speed bump -- a federal proposed class-action lawsuit. Attorney Dan Stanley has filed on behalf of motorists Chris Cawood and Jonathan Kelly Proffitt a $6 million proposed class-action lawsuit against Bluff City and its mayor, Irene Wells, and the Arizona-based traffic camera firm American Traffic Solutions Inc. The lawsuit alleges the city and the firm are conspiring to violate the Fair Debt Collections Act, state law and the city's own ordinances by imposing an administrative fee of $40 on top of the $50 fine imposed for motorists allegedly captured on the city's two speed enforcement cameras on Highway 11E. The plaintiffs further allege the city and firm are "threatening criminal prosecution for contempt of court and suspension of driver's licenses" if the fees and fines aren't paid. The action also alleges the city created a "speed trap" on the section of Highway 11E under enforcement by the city's cameras by dropping the speed limit from 55 mph to 45 mph less than a mile from where the cameras are posted. The city's traffic enforcement program was already embroiled in controversy in two separate instances involving a new law that took effect in July and imposes limitations on red light and speed camera enforcement programs. In the first incident, the Bluff City Police Department fired an officer who allowed a reserve officer to review and approve hundreds of tickets after the law took effect. The law requires potential violations captured on camera to be reviewed and approved by an officer who is certified under the state's Peace Officers Standards and Training Commission. The city estimated it would have to refund some $12,000 in collections as a result. The second incident came when the city was hit with complaints, similar to those in the lawsuit, that one of its two cameras was positioned less than a mile from a sign that signaled a drop in the speed limit from 55 mph to 45 mph. The new state law bars the placement of speed cameras within a mile of any 10-mph drop in the speed limit. City officials have said they believed their program was grandfathered, giving them until 2015 -- when the contract with American Traffic Solutions expires -- to make the change. However, an August state Attorney General's opinion opined that no such grandfather provision was included in the new law. Bluff City last month shut down the offending camera and began the process of tallying refunds. Records showed that more than 1,300 tickets had been issued by that camera, which monitors the southbound side of the section of Highway 11E. Of those, 640 had already been paid. The lawsuit alleges Bluff City dropped the speed on the section of Highway 11E that is subject to the speed camera enforcement program without performing "an engineering and traffic investigation pursuant to statute and, therefore, was negligent in assessing the need for (a) speed reduction on Highway 11E. Such reduction was much lower than required, thus creating a 'speed trap.'" Bluff City and American Traffic Solutions have until Oct. 27 to file a formal response to the lawsuit. Neither attorney J. Paul Frye, who represents Bluff City, and attorney C. Crews Townsend, who represents American Traffic Solutions, responded to requests for comment on Oct. 13. COMPUTER SCIENCES: Four Shareholder Class Actions Consolidated -------------------------------------------------------------- Bryant Ruiz Switzky, writing for Washington Business Journal, reports that four similar class-action lawsuits have been consolidated in cases alleging that Computer Sciences Corp. and some of its executives concealed information and misled shareholders about the company's financial challenges. One of the consolidated suits was filed in July by Hilary Kramer, a frequent media commentator, although the court named Ontario Teachers' Pension Plan Board as the lead plaintiff. The move is a significant milestone in the quest of shareholders who want to get back some of the money they say was invested in Falls Church-based CSC at a time when its stock price was allegedly artificially inflated. COVENTRY HEALTH CARE: Judge Rejects Class Action Settlement ----------------------------------------------------------- Paul Koepp, writing for Kansas City Business Journal, reports that a federal judge rejected the $1.4 million settlement of a class- action lawsuit against Coventry Health Care of Kansas that alleged the insurer charged copayments improperly. In a Sept. 26 order, U.S. District Judge Greg Kays said he was concerned the settlement would only actually compensate the tiny fraction of class members who submitted claims, to the tune of about $346,000. EATON CORP: Truck Transmission Antitrust Suit Can Proceed --------------------------------------------------------- Truckinginfo reports that plaintiffs cleared another hurdle in their antitrust lawsuit against truck manufacturers -- Wallach v. Eaton Corp -- when a Delaware federal judge ruled that claims alleging the trucking giants conspired to create a monopoly should stand. The class action lawsuit was filed by the trustee for Performance Transportation Services Inc., the second-largest transporter of new vehicles and light trucks in North America before its bankruptcy in 2007. The lawsuit charged that Daimler Trucks North America LLC, Mack Trucks Inc., Peterbilt Motors Co. and Volvo Trucks North America conspired to create a monopoly and used exclusionary contracts to maintain a monopoly by Eaton Corp. in the market for transmissions used in large trucks. The lawsuit charged that conspiracy violates the Sherman Antitrust Act and Clayton Act. U.S. District Judge Sue L. Robinson recently ruled that all claims under the Sherman Act should proceed. Defendants had filed motions to dismiss the complaint. The judge ruled that there is sufficient evidence to suggest that the trucking manufacturers conspired with Eaton to form and continue the illegal scheme to put Eaton's competitors out of business and raise prices for truck purchasers. The effect of the agreements was to expand Eaton's monopoly and permit "all defendants to share in the profits resulting from this monopoly," the judge said. The evidence shows that Eaton gave discounts and rebates to the trucking manufacturers in exchange for their agreement to exclusively use Eaton's transmissions, Judge Robinson said. "The allegations suggest that each party needed to fully participate in order for the conspiracy to succeed," the judge ruled. The plaintiffs contend the conspiracy resulted in higher prices and less innovation in the trucks they purchased. The case will next move to the discovery phase, where plaintiffs will have to prove the merits of their case. Much of the current action appears to be based on the ZF Meritor case, in which Judge Robinson recently rejected Meritor's damages case in its entirety and entered a final judgment of $0 damages. Both sides are appealing that decision. Speaking for Eaton, James W. Parks, manager of business communications, said, "Eaton believes that it has, at all times, competed fairly and lawfully, and consistent with company policy, will not comment further on pending litigation." Similar Action in Kansas In October 2010, a class action complaint was filed in the U.S. Court for the District of Kansas on behalf of a nationwide class of Class 8 truck purchasers which alleged that Eaton cut deals with truck makers to keep other transmission makers out of the market, particularly ZF Meritor, which was forced out of the market. ZF Meritor is a joint venture of ArvinMeritor and ZF Friedrichshafen AG formed in 1999. Although ZF Meritor still exists as a legal entity, ArvinMeritor has said it was forced to stop selling transmissions because of Eaton's actions. Because of this, the suit claims, truck buyers paid more than they would have if there had been serious competition. A year earlier, a jury determined that Eaton's exclusivity agreements with the OEMs "constituted a contract, combination, or conspiracy that unreasonably restrained trade," the complaint notes, in the case ZF Meritor LLC and Meritor Transmission Corporation v. Eaton Corporation. ArvinMeritor prevailed in that action. FERRELLGAS PARTNERS: Settles Propane Tank Class Action ------------------------------------------------------ Paul Koepp, writing for Kansas City Business Journal, reports that Ferrellgas Partners LP will pay as much as $25 million to settle a class-action suit alleging that it shortchanged customers by under-filling propane tanks and fixing prices with a competitor. The Overland Park company will pay at least $10 million in claims and related settlement costs. Each plaintiff will get $7.50 a tank to a maximum of $150. Any of the initial $10 million left over after claims are paid would go toward low-income home energy assistance programs in 10 states. Tens of thousands of consumers bought the tanks at 43,000 locations nationwide. GENERAL MILLS: Faces Class Action Over Misleading Product Labels ---------------------------------------------------------------- Something is mostly missing from Fruit Roll-Ups, Fruit by the Foot, and Fruit Gushers: fruit, according to a complaint filed on Oct. 14 in federal court in California. Labels state those General Mills snacks are "fruit flavored," "naturally flavored," a "good source of vitamin C," and low in calories, fat, and gluten, according to the complaint filed on behalf of a California mother by the nonprofit Center for Science in the Public Interest and the consumer protection law firm Reese Richman LLP. But obscured on labels is the fact that the so- called fruit snacks are mostly sugars (some from fruit concentrate and some from corn syrup), artificial additives, and potentially harmful artificial dyes. Strawberry Fruit Roll-Ups are made from pears from concentrate, corn syrup, dried corn syrup, sugar, partially hydrogenated cottonseed oil, citric acid, acetylated monoglycerides, fruit pectin, dextrose, malic acid, Vitamin C (ascorbic acid), unspecified "natural flavor," and Red 40, Yellow 5, Yellow 6, and Blue 1. Even with the pear ingredient, the product provides little of the beneficial fiber or nutrients associated with real strawberries. While labels tout the naturalness of the added flavorings, CSPI says that many of the ingredients are artificial by anyone's definition, including the partially hydrogenated cottonseed oil and the acetylated monoglycerides. The side panels on some General Mills "fruit" candies read "Made With Real Fruit." At least one variety of Fruit Roll-Ups has pictures of strawberries and oranges on the box. But despite the names of the products, there are no strawberries in Strawberry Fruit Roll-Ups, nor watermelon in Fruit Gushers Watermelon Blast. The bright colors of those products come from synthetic, petroleum-based dyes that can impair some children's behavior. "General Mills is basically dressing up a very cheap candy as if it were fruit and charging a premium for it," said CSPI litigation director Steve Gardner. "General Mills is giving consumers the false impression that these products are somehow more wholesome, and charging more. It's an elaborate hoax on parents who are trying to do right by their kids." According to the complaint, filed in United States District Court in the Northern District of California, the presence of partially hydrogenated oil in "fruit" snacks marketed as healthy and wholesome is deceptive. The artificial trans fat in partially hydrogenated oil lowers HDL, or "good" cholesterol, raises LDL, or "bad" cholesterol. CSPI states that the amounts of trans fat are small, but that they have no place in a product marketed as if it were healthful and a source of fruit. "Defendant is conveying an overall message of a healthful snack product to parents when, in fact, the Products contain dangerous, non-nutritious, unhealthy partially hydrogenated oil, large amounts of sugar, and potentially harmful artificial dyes," the complaint states. The complaint contends that the labeling of fruit-flavored snacks violates various state laws, including Minnesota's Uniform Deceptive Trade Practices Act, and several California laws governing misleading and deceptive advertising and fraudulent business practices. General Mills is based in Golden Valley, Minnesota. General Mills has a habit of skirting the truth with its marketing and advertising, according to CSPI. In 2009, the Food and Drug Administration took enforcement action against the company for making misleading cholesterol-lowering and cancer-prevention claims on Cheerios packages. Before resorting to litigation, CSPI had privately urged General Mills to change its "fruit" snacks labels, but without success. HENRY GORDY: Agrees to $1-Mil. Penalty Over Toy Dart Gun Sets ------------------------------------------------------------- The U.S. Consumer Product Safety Commission (CPSC) announced that Henry Gordy International, Inc. (Henry Gordy), of Plainfield, N.J., has agreed to pay a civil penalty of $1,100,000. The penalty agreement has been provisionally accepted by the Commission (5-0). The settlement resolves CPSC staff's allegations that Henry Gordy knowingly failed to report the safety defect and hazard with the "Auto Fire Target Set" immediately to CPSC, as required by federal law. CPSC staff also alleges that the firm made a material misrepresentation to CPSC staff in the course of staff's investigation into the target sets. CPSC staff alleges that Henry Gordy knew on or about May 2006 that the target set was defective and could cause harm but failed to report this to CPSC. CPSC staff alleges that the target set is defective because if a child places the soft, pliable, plastic toy dart into his or her mouth, the toy can be inhaled into the throat and can prevent the child from breathing. CPSC staff also alleges that Henry Gordy made a material misrepresentation to the staff in the course of the staff's investigation into the target sets in May 2009 by not reporting all of the information Henry Gordy was then aware of. In May 2010, Family Dollar Stores, Inc. and CPSC announced the recall of about 1.8 million Auto Fire Target Sets because Henry Gordy refused to conduct the recall [http://www.cpsc.gov/cpscpub/prerel/prhtml10/10234.html]. By that time, there were three deaths associated with the target set. Auto Fire Target Sets were sold exclusively by Family Dollar between September 2005 and January 2009 for about $1.50 each. Each set came with a toy gun; soft, pliable, plastic toy darts and a small target. Pictures of the recalled products are available at: http://www.cpsc.gov/cpscpub/prerel/prhtml12/12010.html Federal law requires manufacturers, distributors and retailers to report to CPSC immediately (within 24 hours) after obtaining information reasonably supporting the conclusion that a product contains a defect which could create a substantial product hazard, creates an unreasonable risk of serious injury or death, or fails to comply with any consumer product safety rule or any other rule, regulation, standard or ban enforced by CPSC. Companies also must specifically report to CPSC choking incidents involving small balls, latex balloons, marbles, or toys or games containing these items or other small parts. Companies that receive information about children choking on any of these items and, as a result, dying, suffering serious injury, ceasing breathing for any length of time or being treated by a medical professional must report this information to CPSC immediately. In agreeing to the settlement, Henry Gordy denies CPSC staff allegations as to the existence of a defect or that it knowingly violated the law. Pursuant to the Consumer Product Safety Act, CPSC must consider the appropriateness of the penalty to the size of the business of the person charged, including how to address undue adverse economic impacts on small businesses. MEDASSETS INC: Faces Data Theft Class Action in Illinois -------------------------------------------------------- Brandon Worix, on behalf of himself and all others similarly situated v. MedAssets, Inc., Case No. 2011-CH-35609 (Ill. Cir. Ct., Cook Cty., October 13, 2011) arises from a June 2011 incident wherein a computer hard drive was stolen from a MedAssets employee's car. The hard drive, which was neither encrypted nor password-protected, had the confidential, personal information of over 82,000 individuals, 32,000 of which were patients within the Cook County Health & Hospitals System. The Plaintiff asserts that MedAssets didn't notify him and the other patients of the theft for nearly 2 months. The Plaintiff alleges that MedAssets deliberately and negligently failed to implement and maintain reasonable procedures to safeguard its patients' highly sensitive information, including names, birthdates and social security numbers. He argues that MedAssets' actions and inaction fail the requirements of the Health Insurance Portability and Accountability Act of 1996, and constitute violations of the Federal Stored Communications Act and the Illinois Consumer Fraud and Deceptive Business Practices Act. Mr. Worix is a resident of Cook County, Illinois. He was, at all relevant times, a patient of Cook County Health. MedAssets is a Delaware corporation, licensed to do business in Illinois. MedAssets describes itself as a "financial improvement partner for health care providers." A copy of the Complaint in Worix v. MedAssets, Inc., Case No. 11CH35609 (Ill. Cir. Ct., Cook Cty.), is available at: http://www.courthousenews.com/2011/10/14/Data%20Theft.pdf The Plaintiff is represented by: Joseph J. Siprut, Esq. Aleksandra M. S. Vold, Esq. SIPRUT PC 122 South Michigan Avenue, Suite 1850 Chicago, IL 60603 Telephone: (312) 588-1440 Facsimile: (312) 878-1342 E-mail: jsiprut@siprut.com avold@siprut.com MLS REALCOMP: Supreme Court Ruling Won't Hit Class Action --------------------------------------------------------- Daniel Duggan and Chad Halcom, writing for Crain's Detroit Business, report that the nearly 10-year fight involving a policy by Farmington Hills-based MLS Realcomp II Ltd. is officially over after the U.S. Supreme Court declined to take the case. The group has spent close to $2 million fighting a 2006 complaint by the Federal Trade Commission, which found that Realcomp's 2001 policy of treating some real estate listings different than others was anti-competitive. "We're disappointed," said CEO Karen Kage. "We have taken this as far as we can, we took it to the top, and now it's time to move on." But while it ends one legal fight, a class action case related to the policy continues, with a 2013 trial set. At issue is how a multiple listing service should handle the new breeds of real estate listings. Under a traditional brokerage contract, called an "exclusive right to sell," a real estate agent is the exclusive agent for selling a home. When that broker sells the home, he or she keeps a portion of the commission, which is usually 6% to 7%. Particularly with the rise of the Internet, business models have emerged where an agent charges a flat fee to list the home on the MLS, then gives the seller the option to sell the home on his or her own -- with no commission given to a broker. The company is called an "exclusive agency" listing. Realcomp policy has always allowed exclusive agency listings on its MLS. But when Realcomp feeds public Web sites such as realestate.com or trulia.com with homes for sale, Realcomp tried to exclude the exclusive listing agencies' clients. The worry is that consumers will use the MLS, through Web sites, to complete deals without the use of real estate agents. Realcomp lost its fight in the FTC's internal appeal process and then lost an appeal in the U.S. 6th Circuit Court of Appeals in April. In a class action suit filed in October 2010, a group of consumers who hired real estate agents asked for financial damages, saying the Realcomp policy forced them to pay more than they needed to in real estate commissions because the policy gave the traditional firms an advantage. "Plaintiffs paid more for real estate brokerage services than they would have paid had Realcomp, its Board of Governors, its shareholders, and its members not illegally restrained competition in the Southeastern Michigan MLS Service area by developing, implementing, and facilitating unlawful Realcomp MLS rules, policies and procedures," they wrote in the complaint. In June, U.S. District Judge Stephen Murphy III denied a motion to have the case dismissed and a jury trial has been set for Jan. 10, 2013. Attorney Norman Lippitt of Birmingham-based Lippitt O'Keefe PLLC, who represented Realcomp in the Supreme Court petition and is defending the MLS in the class action case, said the full impact remains to be seen. "You know the odds with the Supreme Court. We took our chances and knew this might happen," Mr. Lippitt said. "It's the end of the line for the FTC case, but it's a little foggy to me at this point about what this does or what the impact of the rule will be on the other (class action) case." It's unlikely the Supreme Court action will have any impact on the class action case, said Todd Mendel and attorney with Detroit- based Barris, Sott, Denn & Driker PLLC, one of the attorneys representing plaintiffs in the class action case. "The likelihood of the Supreme Court taking the case was so low, that for all practical purposes the 6th Circuit opinion was expected to be the last word," Mr. Mendel said. NEW YORK LAW SCHOOL: Disputes Class Action Over Job Rates --------------------------------------------------------- Jessica Dye, writing for Reuters, reports that New York Law School is seeking to dismiss a lawsuit accusing it of misleading students about their post-graduation employment prospects, calling the plaintiffs' claims a baseless attempt to vilify the entire law school industry. The law school was hit in August with a putative class-action suit in New York state court filed by three former students, asking for as much as $200 million in tuition refunds on behalf of all recent graduates, and an order forcing it to be more transparent in how it reports post-graduate employment and salary information. In a motion to dismiss the complaint filed on Oct. 14, the law school said the plaintiffs relied on "broad generalities" instead of concrete facts to back up their claims that the school massaged its post-graduation statistics to lure prospective students. "The allegations are not only baseless, but also belied by the plaintiffs' own complaint, which demonstrates this case has nothing to do with New York Law School and everything to do with a crusade against the entire law school industry," Michael Volpe, an attorney with Venable representing the school, said in a statement. The school, which is located in lower Manhattan and has no affiliation with New York University School of Law, argued that it is in full compliance with American Bar Association procedures for reporting post-graduation employment data. If plaintiffs have a problem with that, the school argued in its motion, they should target the ABA. "These attacks on the ABA rules are wholly insufficient to state claims for the three individual plaintiffs against NYLS," the motion stated. Targeting 15 Law Schools Jesse Strauss, an attorney with Strauss Law representing the plaintiffs, said the school failed to address the plaintiffs' primary allegations in its motion. "The fact remains that when our clients paid the annual tuition of over $40,000 to attend New York Law School, they did so based on New York Law School's misleading representation that they had an over 90% chance of getting a job, and that those jobs paid certain salaries," Mr. Strauss said. "That representation is demonstrably false." Mr. Strauss is helping to represent plaintiffs suing Thomas M. Cooley Law School in Lansing, Michigan, over similar claims. He and co-counsel David Anziska recently announced they were planning to file class-action lawsuits against 15 additional schools in seven states over their reporting of post-graduation employment rates. Congress has also turned its scrutiny on law schools' career statistics. In a letter sent on Oct. 13, Republican Senator Tom Coburn of Oklahoma and California Senator Barbara Boxer, a Democrat, asked the inspector general of the U.S. Department of Education for a report focusing on the "confluence of growing enrollments, steadily increasing tuition rates and allegedly sluggish job placement" at American law schools. The case is Gomez-Jimenez et al v. New York Law School, in the Supreme Court of the State of New York, County of New York, index no. 652226/2011. For the plaintiffs: David Anziska, Esq., LAW OFFICES OF DAVID ANZISKA 305 Broadway, 9th Floor New York, NY 10007 Tel. No: (914) 216-3540 E-mail: david@anziskalaw.com - and - Jesse Strauss, Esq. STRAUSS LAW PLLC 305 Broadway, 9 FL New York, NY 10007 Tel. No. (212) 822-1496 E-mail: Jesse@strausslawpllc.com For NYLS: Michael Volpe, Esq. Edmund O'Toole, Esq. Michael Hartmere, Esq. Julia Davis, Esq. VENABLE LLP Washington, DC 575 7th Street, NW Washington, DC 20004 Telephone: (202) 344-4000 E-mail: mjvolpe@Venable.com emotoole@Venable.com mchartmere@Venable.com jldavis@Venable.com NVIDIA: Judge Dismisses Securities Fraud Class Action ----------------------------------------------------- Nick McCann at Courthouse News Service reports that a federal judge dismissed a class action alleging NVIDIA committed securities fraud by propping up share prices through false and misleading statements that concealed problems with its computer chips. The lead plaintiff claimed in the action that NVIDIA's customers, including HP and Dell, complained that there were problems with its computer chips. Almost 80% of NVIDIA's revenue comes from its graphics-processing units and media and communications processors, and the plaintiffs said a "mismatch in thermal properties" caused the alleged problems. As a result of the computer failures, NVIDIA's stock prices dropped 31% in 2008, from $18.78 to $12.98 per share, which led to the securities fraud action. U.S. District Judge Richard Seeborg said on Oct. 12 that shareholders could not prove that NVIDIA took "extraordinary, secret steps" for at least 11 months before telling investors about the problem. The company's switch to high-lead solder in products suggests that it knew its materials contributed to the defects, but that response "does not create or contribute to a strong inference that NVIDIA knew the scope of its potential financial liability at the time it was redesigning the chips and hoped to hide that fact," the judge found. "While NVIDIA omitted discussion of the alleged defect from its public statements until the May 2008 quarterly report, a more reasonable, competing inference is that the company was investigating the scope of the issue," Judge Seeborg wrote. NVIDIA might have underappreciated the likelihood of "incurring extraordinary financial liability," despite the possibly misleading nature of the partial disclosure, the judge found. "Such behavior, at worst, reflects recklessness in the ordinary sense of the word with respect to customer relations and potential financial risk," the 17-page decision states. A copy of the Order Granting Motion to Dismiss Second Consolidated Amended Class Action Complaint in In re NvIDIA Corporation Securities Litigation, Case No. 08-cv-04260 (N.D. Calif.), is available at: http://www.courthousenews.com/2011/10/14/308-cv-04260.pdf SA HAJJ: May Face Class Action over Hajj Visa Scam -------------------------------------------------- Warda Meyer, writing for IOL News, reports that the Muslim Judicial Council (MJC) has slammed agents and individuals who have purchased and sold Hajj visas outside of the established accreditation framework. This follows claims of corruption in the Hajj industry from a newly-formed group calling themselves Friends of the Hujjaj, who say they plan to bring a class action lawsuit aimed at disbanding the SA Hajj and Umrah Council (Sahuc). In a statement issued on Feb. 14, secretary general of the MJC Moulana Abdul Khaliq Allie said Sahuc had assured the MJC that it had already embarked on an investigation to ensure those responsible were brought to book. Mr. Allie appealed to allow Sahuc to conduct its investigation and report back to the community. Mr. Allie also expressed the MJC's gratitude to Saudi Arabian ambassador to South Africa, Mohammed bin Mahmoud bin Ali Al-Ali, for issuing an additional 107 visas to those accredited pilgrims who became stranded as a direct result of the visa debacle. The MJC statement came on the day that Friends of the Hujjaj held a placard demonstration outside the Sahuc offices at the MJC's building in Athlone. Men and women held placards which read "Stop Hajj Lottery" and "I'm Muslim, Why must I gamble with Hajj?" Gigi Richards from Hanover park said the "poor Muslims of the Cape are fed-up with the MJC and Sahuc". "The MJC does not care or look out for our people. They are part of this Hajj mess." Naziemah Lesch, from Lansdowne, said that as a former Sahuc employee, she believed that the organization needed to throw out its current accreditation system. "They paid such a lot of money for the system yet the problems continue." Imraahn Mukaddam, of the National Consumer Forum and Friends of the Hujjaj member, said Sahuc had to be replaced by a more representative and accountable model. "This (the current system) is a lottery model and if you throw your R100 into the hat you must pray that you are chosen," said Mr. Mukaddam, the whistleblower in the bread price-fixing scandal. SATYAM COMPUTER: Edinburgh Dragon Trust to Pursue Legal Action -------------------------------------------------------------- Gary Jackson, writing for Fundweb, reports that the GBP526.3 million Edinburgh Dragon trust is continuing with legal action to recover losses caused by the 2009 Satyam scandal despite several US investors settling with the Indian company. Earlier this year, Satyam Computer Services informed the Bombay Stock Exchange that it had reached a $125 million (GBP79.3 million) settlement in a class action suit launched by a number of US-based plaintiffs. The company added that the settlement does not cover the claim made by Aberdeen Asset Managers on behalf of Edinburgh Dragon and another trust. Fundweb understands that Aberdeen has not agreed to any settlement from Satyam as the group considers the payout made to the US investors to be too small and hopes to win a larger settlement, although it does not expect to recover the full loss made through the scandal. The Edinburgh Dragon trust sold out of Satyam Computer Services in early 2009 after founder-chairman Ramalinga Raju admitted that the firm's accounts had been falsified for several years. The investment trust's annual financial report from August 2008 shows 2.2% of the Edinburgh Dragon portfolio, worth about GBP8.25 million at the time, was held in Satyam. In its latest annual report, the trust's managers assure investors that they are still attempting to recoup the loss more than two years after the scandal broke. "The manager, on behalf of the board, continues to pursue all avenues, including potential legal action, to recover the losses which were incurred from the investment in Satyam," the statement says. Dubbed by some commentators as India's Enron, the scandal was the biggest-ever example of corporate fraud in India. A statement by Mr. Raju at the time said about GBP650 million of the cash on Satyam's books was made up in a bid to conceal the company's losses. Mr. Raju's resignation letter described the fraud as like "riding a tiger, not knowing how to get off without being eaten." SIFY TECHNOLOGIES: Appeals From IPO Suit Settlement Order Pending ----------------------------------------------------------------- Appeals from the final approval of a settlement resolving a securities class action lawsuit against Sify Technologies Limited remain pending, according to the Company's October 13, 2011, Form 20-F filing with the U.S. Securities and Exchange Commission for the year ended March 31, 2011. Sify technologies Limited and its subsidiaries (the "Group") and certain of its officers and directors are named as defendants in a securities class action lawsuit filed in the United States District Court for the Southern District of New York. This action, which is captioned In re Satyam Infoway Ltd. Initial Public Offering Securities Litigation, also names several of the underwriters involved in the Sify's initial public offering of American Depositary Shares as defendants. This class action is brought on behalf of a purported class of purchasers of the Sify's American Depositary Shares (ADSs) from the time of the Sify's Initial Public Offering ("IPO") in October 1999 through December 2000. The central allegation in this action is that the underwriters in the Sify's IPO solicited and received undisclosed commissions from, and entered into undisclosed arrangements with, certain investors who purchased the Sify's ADSs in the IPO and the aftermarket. The complaint also alleges that Sify violated the United States Federal Securities laws by failing to disclose in the IPO prospectus that the underwriters had engaged in these allegedly undisclosed arrangements. More than 300 issuers have been named in similar lawsuits. In July 2002, an omnibus motion to dismiss all complaints against issuers and individual defendants affiliated with issuers was filed by the entire group of issuer defendants in these similar actions. In October 2002, the cases against the Sify's executive officers who were named as defendants in this action were dismissed without prejudice. In February 2003, the court in this action issued its decision on defendants' omnibus motion to dismiss. This decision denied the motion to dismiss the Section 11 claim as to Sify and virtually all of the other issuer defendants. The decision also denied the motion to dismiss the Section 10(b) claim as to numerous issuer defendants, including Sify. On June 26, 2003, the plaintiffs in the consolidated IPO class action lawsuits currently pending against Sify and over 300 other issuers who went public between 1998 and 2000, announced a proposed settlement with Sify and the other issuer defendants. The proposed settlement provided that the insurers of all settling issuers would guarantee that the plaintiffs recover $1 billion from non-settling defendants, including the investment banks who acted as underwriters in those offerings. In the event that the plaintiffs did not recover $1 billion, the insurers for the settling issuers would make up the difference. This proposed settlement was terminated on June 25, 2007, following the ruling by the United States Court of Appeals for the Second Circuit on December 5, 2006, reversing the District Court's granting of class certification. On August 14, 2007, the plaintiffs filed Amended Master Allegations. On September 27, 2007, the Plaintiffs filed a Motion for Class Certification. Defendants filed a Motion to Dismiss the focus cases on November 9, 2007. On March 26, 2008, the Court ruled on the Motion to Dismiss, holding that the plaintiffs had adequately pleaded their Section 10(b) claims against the Issuer Defendants and the Underwriter Defendants in the focus cases. As to the Section 11 claim, the Court dismissed the claims brought by those plaintiffs who sold their securities for a price in excess of the initial offering price, on the grounds that they could not show cognizable damages, and by those who purchased outside the previously certified class period, on the grounds that those claims were time barred. This ruling, while not binding on the Sify's case, provides guidance to all of the parties involved in this litigation. On October 2, 2008, plaintiffs requested that the class certification motion in the focus cases be withdrawn without prejudice. On October 10, 2008, the Court signed an order granting that request. On April 2, 2009, the parties lodged with the Court a motion for preliminary approval of a proposed settlement between all parties, including Sify and its former officers and directors. The proposed settlement provides the plaintiffs with $586 million in recoveries from all defendants. Under the proposed settlement, the Issuer Defendants collectively would be responsible for $100 million, which would be paid by the Issuers' insurers, on behalf of the Issuer Defendants and their officers and directors. Accordingly, any direct financial impact of the proposed settlement is expected to be borne by the Sify's insurers. On June 12, 2009, the Federal District Court granted preliminary approval of the proposed settlement. On October 6, 2009, the District Court issued an order granting final approval of the settlement. Subsequent to the final approval of Settlement agreement by the District court, there are several notices of appeal filed. Most were filed by the same parties that objected to the settlement in front of the District Court. The Company says these appeals will likely be consolidated into a single appeal and briefing schedule will be provided shortly. Any direct financial impact of the preliminary approved settlement is expected to be borne by the Sify's insurers. Sify believes, the maximum exposure under this settlement is approximately $338,983, an amount which it believes is fully recoverable from its insurers. STERLING CHEMICALS: 5th Cir. Flips Ruling in Retirees' Lawsuit -------------------------------------------------------------- The U.S. Court of Appeals for the Fifth Circuit said employers generally are free under ERISA to modify or terminate plans, but if the plan sponsor cedes its right to do so, it will be bound by that contract. On Feb. 21, 2007, three retired employees of Sterling Fibers, Inc., one of Sterling Chemicals, Inc.'s former subsidiaries, sued the Company, several of its benefit plans and the plan administrators for those plans in a class action suit in the United States District Court, Southern District of Texas, Houston Division (Case No. H-07-0625). The plaintiffs allege that the Company was not permitted to increase their premiums for retiree medical insurance based on a provision contained in an asset purchase agreement that governed the purchase by Sterling Fibers of Cytec Industries Inc.'s acrylic fibers business in 1997. During Sterling Chemical's bankruptcy case in 2002, the Company and Sterling Fibers sought and obtained bankruptcy court authority to reject the asset purchase agreement. The plaintiffs claimed that the Company violated the terms of its benefit plans, breached fiduciary duties governed by the Employee Retirement Income Security Act and failed to comply with sections of the Bankruptcy Code dealing with retiree benefits, and sought damages, declaratory relief, punitive damages and attorneys' fees. A trial was held during the second week of November 2009 and, on July 1, 2010, the district judge ruled for the Company on the merits and dismissed all of the plaintiffs' claims. The plaintiffs filed an appeal on July 16, 2010. Briefing for the appeal was completed in the first quarter of 2011. Circuit Judge Harold R. DeMoss, who wrote the opinion, held that Sterling voluntarily ceded its right to modify the Plaintiffs' premiums when it entered into the APA and approved of the Section 5.05(F) terms under the APA. Section 5.05(F) of the APA provided in relevant part that "[Sterling] shall continue to provide postretirement medical and life insurance benefits for such [qualifying] Acquired Employee that are no less favorable to such Acquired Employee than those benefits provided by [Cytec] under the [Cytec benefit plans] as in effect on the date hereof, and [Sterling] shall not reduce the level of such benefits without the prior written consent of [Cytec]; provided, that such consent shall not be withheld to the extent that [Cytec] or Cyanamid has similarly reduced the level of such benefits. . . . [A]n increase in premiums required to be paid for postretirement benefits shall be considered a reduction in such benefits. [Cytec] shall notify [Sterling] in writing to the extent that [Cytec] becomes aware of a reduction in postretirement medical and life insurance benefits under the [Cytec benefit] plans." According to Judge DeMoss, the rejection of the APA in bankruptcy did not destroy Section 5.05(f)'s status as a valid plan amendment, and that Section 5.05(F) was assumed in bankruptcy pursuant to Sterling's Plan of Reorganization. The Fifth Circuit relied on a prior ruling in Halliburton Co. Benefits Committee v. Graves, 463 F.3d 360 (5th Cir. 2006), a case where the Circuit Court found that a provision in a merger agreement constituted a valid amendment to an ERISA plan, was controlling. "Because Sterling was required to receive Cytec's prior written consent before it raised Plaintiffs' premiums, something it acknowledges it did not do, we reverse the order of the district court and remand for additional proceedings consistent with this opinion," the ruling held. The appellate case is ROBERT E. EVANS; RELMOND H. HAMILTON; DENNIS HARTHUN, Plaintiffs-Appellants, v. STERLING CHEMICALS, INCORPORATED, Individually and as successor-in-interest to Sterling Chemicals Holdings Incorporated; STERLING CHEMICALS INCORPORATED EMPLOYEE BENEFITS PLANS COMMITTEE, in its capacity as Plan Administrator of the Sterling Chemicals Incorporated Medical Benefits Plan for Salaried Employees and the Sterling Chemicals Incorporated Prescription Drug Benefits Plan for Salaried Employees; STERLING CHEMICALS INCORPORATED MEDICAL BENEFITS PLAN FOR SALARIED EMPLOYEES; STERLING CHEMICALS INCORPORATED PRESCRIPTION DRUG BENEFITS PLAN FOR SALARIED EMPLOYEES; STERLING CHEMICALS INCORPORATED MEDICAL BENEFITS PLAN FOR RETIREES; STERLING CHEMICALS INCORPORATED PRESCRIPTION DRUG BENEFITS PLAN FOR RETIREES, Defendants-Appellees, No. 10-20493 (5th Cir.). The Fifth Circuit panel consists of Circuit Judges E. Grady Jolly, DeMoss, and Edward C. Prado. A copy of the Fifth Circuit's Oct. 13, 2011 decision is available at http://is.gd/qYgvk4from Leagle.com. About Sterling Chemicals Sterling Chemicals Holdings, a manufacturer of petrochemicals, acrylic fibers, and pulp chemicals, filed for Chapter 11 protection (Bankr. S.D. Tex. Case No. 01-_____) on July 16, 2001. Lawyers at Skadden, Arps, Slate, Meagher & Flom, represented the Debtors in their restructuring effort. It emerged from bankruptcy in December 2002. WINDSTREAM CORP: Settles Class Action Over Paetec Merger -------------------------------------------------------- Will Astor, writing for Rochester Business Journal, reports that Windstream Corp. has inked a memorandum of understanding laying to rest a shareholder class action challenging its proposed takeover of Paetec Holding Corp, Windstream officials said on Oct. 14. Terms of the MOU call for new disclosures to be added to information related to the merger revealed in previously filed proxies. All parties including Paetec and officers of Windstream and Paetec to be released from liability and for the lawsuit, filed in a Delaware state court, to be dismissed without the possibility of the complaint being refiled. "Windstream, Paetec and the other defendants deny all of the allegations in the Consolidated Lawsuit and believe the disclosures in the proxy statement/prospectus are adequate under the law. Nevertheless, Windstream, Paetec and the other defendants have agreed to settle the consolidated lawsuit in order to avoid costly litigation and reduce the risk of any delay to the completion of the merger," Windstream official said in a statement. The Windstream statement makes no mention of financial terms. Windstream officials on Oct. 14 could not immediately be reached. Settlements in merger-related shareholder class actions such as the Windstream suit often call for defendants to make additional disclosures but no financial concessions outside of fees collected by plaintiffs' attorneys and modest sums paid to a few would-be lead plaintiffs. Among new disclosures added as a result of the settlement are that Paetec chairman and CEO Arunas Chesonis stated in a July 8 meeting that he had no intention of joining Windstream after a merger and that after entering an exclusivity agreement with Windstream, Paetec was contractually prohibited from talking to another suitor, identified in the proxy only as "Company B." ********* 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. Leah Felisilda, Noemi Irene A. Adala, Joy A. Agravante, Julie Anne Lopez, Christopher Patalinghug, Frauline Abangan and Peter A. Chapman, Editors. Copyright 2011. 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 prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The CAR subscription rate is $575 for six months delivered via e-mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are $25 each. For subscription information, contact Christopher Beard at 240/629-3300. * * * End of Transmission * * *