/raid1/www/Hosts/bankrupt/CAR_Public/000329.MBX
C L A S S A C T I O N R E P O R T E R
Wednesday, March 29, 2000, Vol. 2, No. 62
Headlines
BANK WEST: Announces Dismissal of MI Suit over Charge on Loan Documents
CALIFORNIA CREDIT: Faces Suit Re Unenforceable Reaffirmation Agreements
CHARTWELL FINANCIAL: Case Remanded over Alternate Payment Schedules
CREDIT ACCEPTANCE: Announces Dismissal of Securities Suit in MI
DELAINE EASTIN: CA Consent Decree Resolved Parents' Action over FAPE
EVOLVING SYSTEMS: Resolves Securites Lawsuit in Colorado
FEN-PHEN: Court Restrains Web Site From Featuring Procedure to Opt Out
FEN-PHEN: HMO Louisiana Gets Right to Intervene in AHP Settlement Pact
FEN-PHEN: More Lawsuits Predicted Despite Proposed Settlement Pact
FUNERAL HOMES: CA Lawsuit to Close with Multi-Million Dollar Settlement
HOLOCAUST VICTIMS: WJC Signals End of Lawsuits When German Law Enacted
MANHATTAN INVESTMENT: Hedge Fund Fraud Victims Target Third Parties
MICROSOFT CORP: Ruling Delayed As Co. Offers Removing Windows Browser
MUSICMAKER.COM, INC: Wolf Haldenstein Files Securities Suit in CA
RAVISENT TECHNOLOGIES: Cauley & Geller Files Securities Suit in PA
RAVISENT TECHNOLOGIES: Schiffrin & Barroway Expands PA Securities Suit
ROCKETDYNE FACILITIES: Judge Dismisses 60 Claims Lacking Commonality
SAIPAN SWEATSHOP: Eight More U.S. Clothing Retailers Agree to Settle
TACO BELL: Settlement Will Improve Accessibility of CO Restaurants
THERMEDICS INC: Report with SEC Tells of Merger & Suits over Proposal
TOBACCO LITIGATION: Dying Ex-Smoker Awarded $20 Million
* AHP Agrees to Sell Cyanamid Crop Unit to Basf At $ 3.8 Bil
*********
BANK WEST: Announces Dismissal of MI Suit over Charge on Loan Documents
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Bank West Financial Corporation (Nasdaq: BWFC) reported on March 27 that
the court had ruled in its favor in the pending class action lawsuit.
The original complaint, filed by Christine Cowles in July 1998, claimed
that Bank West engaged in the unauthorized practice of law by charging a
fee for preparing loan documents. It also alleged violations of the
Michigan Consumer Protection Act. Amended complaints added assertions
that the Bank violated the federal Truth in Lending Act. On March 24,
2000, the court entered judgment in favor of Bank West on all claims.
While the plaintiffs have a right to appeal, Bank West won all aspects
of the case and expects to prevail in any appeal.
Bank West Financial Corporation says it is a holding company for Bank
West, a Michigan savings bank. Bank West specializes in commercial and
residential lending. With its headquarters in Walker, Michigan, the Bank
serves western Michigan from four branch locations (Walker, Bridge
Street, Cascade, Jenison) and one loan production office in Caledonia.
CALIFORNIA CREDIT: Faces Suit Re Unenforceable Reaffirmation Agreements
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A class action lawsuit seeking monetary damages and equitable relief
against the California Credit Union for allegedly collecting money on
unenforceable reaffirmation agreements has been certified by Judge
Consuelo B. Marshall (C.D. Cal.). Eddie and Victoria Magee v. the
California Credit Union, No. CV 99-5892 CBM (Feb. 15, 2000).
The plaintiff class includes all former Chapter 7 debtors who signed
reaffirmation agreements with the defendant that either were not
approved by the bankruptcy court, if the debtor was not represented by
counsel, or were not filed with the bankruptcy court, if the debtor was
represented by counsel.
The plaintiffs offered proof of 155 accounts in which reaffirmation
agreements were not filed with the court. The court found this evidence
supported the numerosity requirement for class certification.
The defendant admitted its reaffirmation procedures were improper and
said they had been corrected leaving the amount of damages as the only
issue to be litigated. Because the amount of damages would be different
in each case, the defendant argued that the class did not satisfy the
commonality requirement for certification. The district court disagreed,
finding that the class members were treated in a like manner by the
defendant and that treatment presented common issues of law.
The court also found that the injuries suffered by the named plaintiffs
were typical of those suffered by all members of the class, that they
did not hold any interests in conflict with their fellow class members
and that they were adequately represented by counsel.
Solomon B. Cera of Gold Bennett Cera & Sidener LLP in San Francisco
represents the debtors in this case, as well as in the actions of Malone
v. Norwest Financial, Inc. and Malone v. U.S. Bancorp. (Consumer
Bankruptcy News, March 21, 2000)
CHARTWELL FINANCIAL: Case Remanded over Alternate Payment Schedules
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A consumer lending agency violated the Truth in Lending Act when it used
the cash collateral received from its customers to reduce the amount of
their loans but based its disclosure report of the annual percentage
interest rate on the unreduced loan amount. In addition, the agency may
have further violated the TILA if a finding of fact indicated that its
alternate payment schedule was mandatory. The interest charged under the
alternate payment schedule conflicted with the APR on the agency's TILA
disclosure statement. Williams, et al. v. Chartwell, Nos. 99-2258,
99-2287 (7th Cir. 2/8/00).
Theresa L. Cannon Williams and Lois Reed obtained loans from Chartwell
Financial Services, a small consumer lending agency. Chartwell required
Williams and Reed to make a cash collateral payment at the time they
received their loans. If they repaid their loans, Chartwell was to
return their collateral with nine percent interest. Chartwell provided
Williams and Reed with disclosure statements as required by Regulation
Z, implementing the TILA. The disclosure statement signed by Williams
listed an APR of 345 percent and a total loan amount of 1,650 to be
repaid in five monthly installments of 350. In the case of Reed's loan,
the APR was 427 percent. The total amount of Reed's obligation was also
1,650, again to be repaid in five monthly installments of 350. Chartwell
provided Williams and Reed with an alternate payment schedule. This
document outlined a payment plan in which they would repay their loans
in 10 bi-weekly installments rather than the five monthly installments
disclosed.
Williams and Reed filed separate complaints against Chartwell alleging
various TILA violations. Williams's compliant was styled as a class
action. The District Court consolidated the cases. It denied class
certification stating that the classes would be unmanageable and granted
Chartwell's motion for summary judgment with respect to the TILA claims.
Williams and Reed appealed to the 7th Circuit.
No Security Interest
Williams and Reed alleged that the only purpose for Chartwell's
collateral requirement was to reduce the amount of their loans. However,
they contended that Chartwell calculated the APR on the stated loan
amount without taking into account the reduction effected by the
collateral. They claimed this resulted in a much higher APR than was
disclosed. The court agreed, rejecting Chartwell's assertion that the
purpose of the collateral was to make the loans more secure. It said
"the cash collateral demanded by Chartwell did not serve to reduce the
creditor's risk by providing it with an interest in the property it
could take or sell upon default." The court found that the record
indicated Chartwell used the collateral solely to reduce the outstanding
obligations due under the loans. It held that this resulted in
Chartwell's significant understatement of the APRs on both loans.
The court noted that the TILA exempts deposits that earn more than five
percent interest from its disclosure obligations. However, the court
held that because Chartwell was not licensed to accept deposit accounts
and the cash security it accepted was not federally insured or
regulated, it did not qualify for this safe harbor.
Because the collateral did not constitute a deposit account and did not
function as a security interest, the Court of Appeals reversed the
decision of the District Court and found that Chartwell violated the
TILA by failing to disclose the impact of the collateral on its APR. The
TILA obligated Chartwell to calculate its APR based on the amount of the
loans as reduced by the collateral.
Conflicting Interest Rates, Payment Schedules
Williams and Reed contended that Chartwell's practice of issuing
alternate payment schedules also violated the TILA since these schedules
conflicted with the number and schedule of payments Chartwell provided
in its TILA disclosure statements. The court noted that, although the
use of the alternate payment schedules resulted in a lower APR than that
listed on the disclosure statements, both underdisclosure and
overdisclosure violated the TILA.
Chartwell claimed the inaccuracy in the calculation of the APR on the
alternate payment schedules was inadvertent and, under Regulation Z, an
inadvertent error did not result in a TILA violation. The court
disagreed, holding that Chartwell knew it was providing conflicting
schedules.
Chartwell also contended that the alternate schedules were voluntary and
did not conflict with the disclosure statements since nothing in the
TILA prevented a creditor from accepting payments more frequently than
required by its disclosure statement. Williams and Reed argued that the
alternate payment schedules presented to them were mandatory. The court
found that Chartwell's requirement that Williams and Reed initial the
alternate payment schedules supported this contention. The court stated
that while it could not conclude that the alternate payment schedules
were mandatory, Williams and Reed presented sufficient evidence to give
rise to a material issue of disputed fact. It reversed and remanded the
claim. (Consumer Bankruptcy News, March 21, 2000)
CREDIT ACCEPTANCE: Announces Dismissal of Securities Suit in MI
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Credit Acceptance Corporation (Nasdaq:CACC) announced on March 27 that
the United States District Court for the Eastern District of Michigan
(Hon. Nancy G. Edmunds) has granted the motion of the Company and
certain of its present and former officers and directors to dismiss with
prejudice the Second Amended Consolidated Class Action Complaint in the
action entitled In re Credit Acceptance Corporation Securities
Litigation and has entered a final judgment in favor of the defendants.
A prior complaint in this action was dismissed with prejudice by Judge
Edmunds in April, 1999. Plaintiffs were subsequently granted leave to
replead, however, as a result of a clarification of the governing legal
standard.
Credit Acceptance Corporation says it is a specialized financial
services company which provides funding, receivables management,
collection, sales training and related products and services to
automobile dealers selling vehicles to consumers with limited access to
traditional sources of consumer credit.
DELAINE EASTIN: CA Consent Decree Resolved Parents' Action over FAPE
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A U.S. District Court, for the Northern District of California found
that a consent decree entered into by the district and group of parents
resolved a class action brought by the parents, who claimed that the
district did not provide FAPE to students with disabilities. Emma C. v.
Delaine Eastin, 31 IDELR 206 (N.D. Cal. 09/02/99).
Under the consent decree, the district promised to implement a
comprehensive corrective action plan. In return, the parents promised
not to pursue any further action against the district.
The CAP required the district to pay for a court-appointed neutral
monitor, who would direct the implementation of the CAP and ensure that
the district provided FAPE and compensatory education to the students.
Some of the monitor's duties included the creation of a time-task
calendar and budget, selection of consultants, preparation of monthly
reports to the parents and the court, the development of CAP supplements
and modifications, the hiring of parent advocates and recommendations to
the district regarding hiring personnel.
The district's other duties included paying for compensatory education
and compensatory claims where compensatory education was not
appropriate, paying the expenses of parent participation in CAP
committees, providing notice to class members regarding the remedies
available to them under the CAP, and paying the parents' attorney's
fees. The CAP also provided that after May 2001 the parties could
request the monitor to issue a determination that the district has or
has not implemented a system that provided FAPE. After consideration of
any comments from the parties concerning the monitor's determination,
the court could also issue an order modifying the CAP or dismissing the
action, as it deemed appropriate. (School Law Bulletin, March 23, 2000)
EVOLVING SYSTEMS: Resolves Securites Lawsuit in Colorado
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In June 1998, four securities class action complaints were filed against
the Company and certain of its current and former officers and directors
in the U.S. District Court for the District of Colorado alleging
violations of the federal securities laws. The complaints were
consolidated. The plaintiffs purported to represent a class of persons
who purchased the Company's securities during the period of May 12, 1998
through July 23, 1998. The complaints alleged that the Company and
certain of its officers misled the investing public regarding the
financial prospects of the Company. The Company denied these
allegations. The parties reached a settlement of $10 million, of which
the Company paid $2.5 million in April 1999. The settlement was approved
by the Court on October 4, 1999. The Company incurred approximately
$719,000 in legal costs associated with the lawsuit.
FEN-PHEN: Court Restrains Web Site From Featuring Procedure to Opt Out
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The diet drug MDL court has issued a temporary restraining order
prohibiting a New York law firm from referring to the orange opt-out
form that is included in the official claims administrator's packet
being sent to diet drug users who wish to register for or opt out of
American Home Products Corp.'s (AHP) proposed global settlement. In re
Diet Drugs (Phentermine, Fenfluramine, Dexfenfluramine) Products
Liability Litigation , MDL No. 1203; Brown et al. v. American Home
Products Corp. et al., Ind. No. 99-20593 (E.D. Pa., TRO continued in
effect Jan. 21, 2000).
The Plaintiffs' Management Committee (PMC) had sought the order to force
the law firm of Napoli, Kaiser & Bern to alter or shut down a Web site
that was allegedly misleading and confusing diet drug plaintiffs about
their rights and obligations under the proposed settlement.
The plaintiffs cited at least 11 instances in which it felt the site's
frequently asked questions page is "false, misleading, incomplete,
inaccurate and otherwise deviates" from the terms and conditions of the
settlement.
After one hearing on the issue, U.S. District Judge Louis C. Bechtle on
Jan. 21 continued the restraining order specifically barring Napoli,
Kaiser & Bern from using any form of the phrase "'ORANGE OPT-OUT FORM --
protect your rights to obtain a money award -- mail in an Orange Opt-out
pursuant to the Court's Order by March 30, 2000, or lose your rights' or
any substantially similar phrase on the Internet or otherwise until a
hearing."
He further directed the PMC to join in AHP's motion for a preliminary
injunction and to factually supplement their briefing as needed.
While the claims administrator's packet to diet drug users does include
the orange opt-out form and while prospective class members do have a
March 30 deadline for opting out, the packet also includes several other
forms designed to allow diet drug users to register for the settlement
class and state their claims if they choose to join the settlement.
The PMC had argued that by prominently displaying the orange opt-out
form -- but not the rest of the claims administrators' package -- on its
Web site, the Napoli firm is "distorting the impression that one
document should make in the course of arriving at an appropriate
decision by absent class members."
According to the PMC, the Napoli firm is motivated by its "self-serving
interest in disrupting the settlement to protect its inventory of
clients to obtain its attorneys fees from American Home Products
Corporation." Napoli obviously believes that if it can disrupt the
settlement, it can cause AHP to walk away from the global settlement and
offer a separate settlement with its clients, the PMC charged. AHP has
made similar arguments.
Napoli, Kaiser & Bern argued that the PMC and drug manufacturer
defendants were attempting to interfere with its First Amendment right
to express its views on the merits of the proposed settlement. It
contends that the site is not misleading, and it has changed the Web
site to include disclaimers that it is not associated with the parties
to the settlement.
In a separate but similar action, Judge Bechtle denied a motion for a
preliminary injunction against Paul D. Rheingold and his New York law
firm, Rheingold, Valet, Rheingold & Shkolnik. The PMC had sought a court
order barring the firm from running newspaper advertisements that it
alleged were confusingly similar to the official, court-sanctioned class
notice ads that have been run in newspapers and magazines throughout the
country.
" The court notes that it denied said motion in the shadow of a finding
that the court is disturbed by the advertisement's timing and linkage to
the court-approved notices that were disseminated pursuant to the
federal settlement preliminarily approved in the Brown action," Judge
Bechtle admonished.
Other Settlement Developments
In a flurry of activity, the diet drug MDL court has undertaken several
actions to advance the proposed AHP global settlement in preparation for
the May 1 fairness hearing:
-- Judge Bechtle has created a special discovery court for the
limited purpose of resolving discovery disputes regarding the nationwide
class action settlement agreement. The new court will meet every
Wednesday to hear disputes needing court intervention;
-- The judge also issued a protective order, similar to the one
that covers the entire MDL proceedings, to protect any discovery made
in connection with the settlement;
-- He established a separate document depository for documents
relating only to the settlement; and
-- He ordered the payment of $3.35 million to Seabury & Smith Inc.
for various costs involved in administering the settlement, including
office expenses, computer specialists, maintenance of a Web site and a
toll-free number and opening of a post office box; the payment of more
than $5 million to the advertising and public relations firm of Tierney
& Partners for the costs of publishing the settlement notices in
newspapers and magazines; and the payment of $5.1 million to
Smith-Edwards-Dunlap Co., a mail-order house, for the cost of postage to
mail out the notice packages to tens of thousands of prospective
plaintiff class members. (Mass Tort Litigation Reporter, March 2000)
FEN-PHEN: HMO Louisiana Gets Right to Intervene in AHP Settlement Pact
----------------------------------------------------------------------
A Louisiana HMO that is seeking to represent all health insurers and
third-party payors in the thousands of pending diet drug lawsuits
nationwide has been granted the right to intervene in American Home
Products Corp.'s (AHP) proposed $4.8 billion global settlement in order
to oppose the plan. In re Diet Drugs (Phentermine, Fenfluramine,
Dexfenfluramine) Products Liability Litigation , MDL No. 1203; Brown et
al. v. American Home Products Corp. et al., Ind. No. 99-20593 (E.D. Pa.,
motion granted Feb. 14, 2000); see Mass Tort LR, February 2000, P. 4.
HMO Louisiana is the named plaintiff in a class action suit seeking to
recover medical costs for treating diseases allegedly caused by diet
drugs on behalf of all health insurers.
In asking to intervene in the proposed global settlement now pending
before the diet drug multidistrict litigation (MDL) court in the Eastern
District of Pennsylvania, HMO Louisiana claimed the settlement agreement
bars health insurers, third party payors and health benefit providers
from pursuing their claims directly against AHP for the costs of
diagnosing and treating diet drug users for primary pulmonary
hypertension, heart valve disease and other illnesses.
In thousands of cases, diet drug users have already obtained insurance
coverage for the diagnosis and treatment of illnesses attributed to
fenfluramine or dexfenfluramine. In its separate class action suit
against the diet drug manufacturers, originally filed in the Western
District of Louisiana, the HMO is seeking reimbursement for those costs
on behalf of itself and all other similarly situated health insurers.
The settlement class plaintiffs argue that the health benefit providers
would still have the right to pursue those claims against the
defendants, but HMO Louisiana contends that the clear language of the
agreement shows the plaintiffs' assertion to be untrue.
Citing Part VII of the agreement, HMO Louisiana pointed out that Section
D says that subrogation rights "shall not be asserted directly against
AHP and/or the released parties," and the section requires the parties
to the settlement to call upon the court for an order "to preclude the
assertion of such subrogation claims against AHP and/or the released
parties."
HMO Louisiana had also argued that it should be allowed to intervene in
the proposed settlement because the plaintiffs and defendants are
intentionally attempting to interfere with the health benefit providers'
contractual rights with their members.
U.S. District Judge Louis C. Bechtle granted the HMO's motion to
intervene following a hearing on the issue on Jan. 10, 2000.
Related JPML Action
In the meantime, HMO Louisiana is trying to prevent the Judicial Panel
on Multidistrict Litigation (JPML) from transferring its class action
suit, Louisiana HMO Inc. v. American Home Products Corp. et al., No.
99-1086 (W.D. La.), to the MDL court in Philadelphia. Both the
Plaintiffs' Management Committee (PMC) and the drug manufacturer
defendants have filed responses opposing the HMO's attempt to have the
case returned to the Louisiana federal court.
HMO Louisiana argues that its claims are very different from the claims
asserted in the MDL by thousands of diet drug users, and that the
proposed global settlement between AHP and the plaintiffs in those cases
does not include reimbursements to medical insurers and HMOs.
If the case is transferred, the MDL court will have to preside over two
distinct types of cases involving different discovery issues, theories
of recovery and issues of proof, the HMO said. Thus, transferring the
suit to the MDL would result in more time and expense on the part of all
parties rather than a saving of judicial resources, the plaintiff
contended.
The Opposition's Response
Given HMO Louisiana's now successful move to intervene in the proposed
global settlement being adjudicated in the MDL court, its attempt here
to have its own case returned to a local court is "completely contrary
to that asserted in the Eastern District of Pennsylvania," said the PMC,
which is also the class counsel for the AHP global settlement class.
"The PMC suggests that the present pleading should be afforded no weight
whatsoever and that HMO Louisiana be estopped from arguing that transfer
is not appropriate on the grounds that its claims can not be addressed
in the very court in which it is seeking to intervene to have those
claims heard. Such duplicity is not well taken. HMO Louisiana's motion
is not only suspect, it is specious," the plaintiffs told the panel.
(Mass Tort Litigation Reporter, March 2000)
FEN-PHEN: More Lawsuits Predicted Despite Proposed Settlement Pact
------------------------------------------------------------------
The advertisements began popping up on television and radio two months
ago: Weitz & Luxenberg, a Manhattan law firm, was telling people who
said they had been made ill by the diet pill combination fen-phen that
their chances of being fairly compensated might be in jeopardy.
A $3.75 billion settlement in a class action lawsuit could be approved
by a federal court soon, and the advertisements warned that most people
harmed by the once-popular prescription would be barred from bringing
individual suits unless they "opt out" of the class action suit by
Thursday. And, of course, the announcer urged those affected to call
Weitz & Luxenberg to "investigate your legal options."
The firm says it has received more than 200 responses to its
advertisements and has taken on 25 of the cases. Along with another
firm's Web site, which is critical of the proposed class action
settlement and has offered to provide forms for those wanting to
withdraw from the suit, the Weitz & Luxenberg advertisements make clear
that the litigation over fen-phen will continue even if the settlement
is approved.
Both the advertisements and the Web site, maintained by the New York
firm of Napoli, Kaiser & Bern, highlight a paradox of the legal
profession: class action agreements can fuel the litigation fires they
are intended to douse.
"It tells you about the culture of the legal profession and about the
money at stake," said Stephen Gillers, the vice dean of New York
University School of Law and a specialist in legal ethics. He said the
Weitz & Luxenberg advertisements did not breach legal ethics. "When we
see plaintiff lawyers versus defense lawyers, that's only Act 1," he
said of widespread personal injury litigation over a product or
material. "Act 2 becomes plaintiff lawyers versus plaintiff lawyers."
Lester Brickman, a specialist in legal ethics at the Benjamin N. Cardozo
School of Law at Yeshiva University, said that with class action suits
in general, plaintiff lawyers skirmishing to either maximize or reduce
the class size will say "they're acting in the public interest." They
will "not get up and say, 'Folks, we're doing this because we see a
chance to make some money,' " Mr. Brickman said. The proposed fen-phen
settlement includes up to $429 million in fees for the lawyers.
But Roy D. Simon, a law professor at Hofstra University, said, "If it's
accurate, I think this type of advertisement is actually helpful to
people." He said that usually in class litigation, "if people have large
individual claims, they may be better off in an individual action than a
class action." An advertisement like this, he said, affords "another
perspective."
The proposed settlement, intended to cover thousands of people across
the country who have suffered heart valve damage after taking two of the
diet pills in the fen-phen combination, was reached in October with the
American Home Products Corporation of Madison, N.J., and is subject to
approval by the presiding judge, Louis C. Bechtle, of Federal District
Court in Philadelphia. The accord does not cover several hundred people
who say the drugs gave them primary pulmonary hypertension, an often
fatal lung disorder.
The company's pharmaceutical division, Wyeth-Ayerst Laboratories, made
Pondimin -- its brand name for fenfluramine, an appetite depressant that
is the "fen" in the case -- and distributed a similar drug, Redux. Some
six million people took one or the other, often in combination with
phentermine -- the "phen" in the formula -- which increases the rate at
which calories are burned.
Robert Gordon, a partner in Weitz & Luxenberg, which is not involved in
the class litigation, termed his firm's advertisements "a public service
to alert people to deadlines they might not know about and to let them
know they may do better" with an individual suit.
Stanley M. Chesley, a lawyer from Cincinnati who helped negotiate the
settlement, gave a different view. "It's just another law firm trying to
get business at this late date," he said, calling the proposed accord
"an excellent settlement."
American Home Products pulled Pondimin and Redux off the market in late
1997 after studies linked them to heart valve damage.
About 7,000 individual lawsuits have been filed by former users claiming
such valve damage. The class settlement would give those with serious
damage -- and who did not opt out of the class action -- payments of
$7,400 to nearly $1.5 million, depending on factors like age and the
degree of damage. There are provisions for withdrawing from the class
suit after Thursday under certain circumstances.
If too many withdraw to pursue individual suits, American Home Products
can scrap the accord, and with it the pot of legal fees. A spokesman for
the company, Doug Petkus, said it had not determined how many "opt outs"
would be too many.
Mr. Gordon said Weitz & Luxenberg had "turned down far more than we
accepted" of those who responded to its advertisements, which stopped
running two weeks ago, and had told many callers to stick with the class
settlement plan "if they don't have a significant claim." He added, "I'm
not saying the plan is bad, only that it's not right for every case."
(The New York Times, March 28, 2000)
FUNERAL HOMES: CA Lawsuit to Close with Multi-Million Dollar Settlement
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A class action lawsuit against 160 California funeral homes has been
settled for 4.17 million. "The settlement is reasonable and should be
adopted," said state superior court Judge Talmidge R. Jones, as he
signed the settlement agreement, possibly bringing an end to a nearly
three-year legal battle centering on the disposal of cremated remains.
The lawsuit was brought as a class action by more than 4,000 families
who requested the cremated remains of their loved ones be scattered at
sea. It was discovered that the pilot who had been hired by the funeral
homes to do the scattering had lost his pilot's license and was allowing
the cremated remains to pile up in a storage locker in Contra Costa
County, Calif.
The pilot, Allan Kenneth Vieira, committed suicide in June 1997, while
he was being sought on charges of grand theft and fraud.
Division of the Settlement
The funeral homes have agreed to pay 4.17 million to settle the case. Of
those funds, 200,000 will be dedicated to pursuing legislation that will
allow more thorough investigation of contractors hired to scatter
cremated remains to prevent similar cases to this one from occurring.
Among the ideas suggested for preventing future problems: requiring the
pilot to post an insurance bond, completing background checks and
listing licensed pilots on a Web site.
An additional 300,000 will be spent to implement the settlement,
including making sure eligible recipients have the right forms to file
claims, and can get checks mailed to them. It will also be used to
determine the amount each person is due. Administrative costs of 150,000
related to the settlement will be covered in the total.
The attorneys in the case will receive 1.2 million, or 35 percent, of
the total settlement. While some of the families complained in court
that the legal fees were too high, attorney Michael Grob said the
lawyers contractually agreed to the 35 percent contingency fee, and the
law firms have 15,000 hours of work invested in the case - 7,500 hours
by the lawyers themselves.
The remainder will be paid to the families, using a points system that
will measure factors including loss and pain and suffering. It is
expected to take three to six months to assign the points, which will
determine the amount of the payouts. Of the settlement, 500,000 will be
set aside for families who dispute the number of points they get. A
judge will be the ultimate arbiter of those claims.
Questions about how to pay people who did not agree with the terms of
the settlement had thwarted an earlier attempt to settle the case. The
parties had reached a settlement agreement in September 1998 for 4.17
million, but it was rejected by a judge in 1999 because there was no
provision for people who felt they deserved more than the settlement
provided.
A total of 12,800 families were tracked down after it was determined
they may have been affected by the case. Of those, 4,000 submitted
claims and 356 actually qualify for funds. An additional 110 families
are asking for special compensation.
Apart from the claims, there are 200 sets of cremated remains that were
never claimed and cannot be identified. They will be scattered under the
terms of a court order some time in the next three months.
Other conditions
Funeral directors do not admit any liability as a result of the
settlement. Their attorney, Brian Kindsvater, said the case was easier
and cheaper to settle than to defend, given the number of funeral
directors who would have had to testify. He described the whole debacle
as an "embarrassment and a black eye to the industry," but joined with
Judge Jones in the belief that Vieira was responsible for what happened,
not the funeral homes. If anything, they were chastised for not doing
enough research on Vieira, a decision that will be costly when they pay
this settlement. (Death Care Business Advisor, March 22, 2000)
HOLOCAUST VICTIMS: WJC Signals End of Lawsuits When German Law Enacted
----------------------------------------------------------------------
Former Nazi slave- and forced-labourers will signal an end to their
legal action against Germany when a compensation deal becomes law, the
World Jewish Congress said.
The German cabinet last week adopted a draft law to set up a foundation
to distribute 10 bln dm in compensation, half of which is to come from
the German government, half from German firms. A spokesman for German
industrialists expressed concern when the deal was announced concerning
the possibility of future lawsuits from former slave- and
forced-labourers.
WJC executive director Elan Steinberg has now said that, "a letter of
interest from the State Department and the Justice Department, supported
by the WJC, to the judge is being prepared, supporting the dismissal of
these class action suits." (AFX European Focus, March 28, 2000)
MANHATTAN INVESTMENT: Hedge Fund Fraud Victims Target Third Parties
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Victims of one of the costliest hedge fund disasters are taking aim at
the third-party firms that were charged with issuing statements,
clearing trades and auditing the books of Manhattan Investment Fund.
A civil complaint, filed in the United States district court in
Manhattan, alleges that misconduct by Deloitte & Touche, Bear Stearns
and Fund Administration Services (Bermuda), an affiliate of Ernst &
Young International, allowed Manhattan and its head, Michael Berger, to
perpetuate a fraud that ultimately cost investors more than $350-million
(all figures in U.S. funds).
The class action lawsuit, filed on behalf of Cromer Finance, a British
Virgin Islands investment company, accuses Deloitte, the fund's auditor,
and FASB, its administrator, of recklessly overlooking trading
statements from Bear Stearns, a prime broker, that revealed Manhattan
was incurring huge losses even as it reported double-digit gains to
investors.
The suit alleges that executives at Bear Stearn were aware of the fund's
losses and tipped off select investors with whom it had prior business
dealings. It is also alleged that Bear Stearns profited handsomely by
clearing trades for the losing fund even after it failed to satisfy
minimum margin requirements set out by the New York Stock Exchange. Bear
Stearns said the allegations were baseless and without merit.
At least two other lawsuits are expected to be filed that will make
similar assertions. They will be filed on behalf of individual
investors, and could seek hundreds of millions of dollars in damages.
The allegations come less than a year after the bank agreed to pay $
38.5-million to settle claims in connection with former client AR Baron,
the now defunct brokerage firm. Officials at Ernst & Young and Deiloitte
& Touche could not be reached. Mr. Berger, who was also named in the
Cromer suit, declined to comment.
Mr. Berger rose to prominence as his fund racked up gains using a
contrarian investment strategy that had bankrupted many others. Mr.
Berger short-sold stocks, primarily in the Internet and technology
sector, betting that they would decline in value.
The strategy appealed to investors, including the Bank of Austria,
because it hedged against a feared tumble in the equity markets while
also offering a competitive return.
In January, the Securities and Exchange Commission brought charges
against Mr. Berger, accusing him of falsifying performance figures to
hide losses. ((National Post (formerly The Financial Post), March 28,
2000)
MICROSOFT CORP: Ruling Delayed As Co. Offers Removing Windows Browser
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Microsoft stock fell almost 7% Monday, March 27 closing at $ 104 1/16,
on news that government lawyers reacted coolly to Microsoft's offer to
settle the antitrust case against it.
Meanwhile, Judge Thomas Penfield Jackson, who was expected to rule on
March 28 that Microsoft violated antitrust laws, is more likely to hand
down his decision late this week, say people familiar with the matter.
The delay, however, may be unrelated to the settlement talks. Many
believed Microsoft would try to settle in a bid to head off a negative
ruling that could hurt it in the numerous class-action lawsuits it
faces. But officials now say any settlement would likely be reached
after Jackson's decision.
While officials say a settlement decree would likely nullify Jackson's
ruling, some lawyers say other judges could still give it weight.
"There's a substantial risk" for Microsoft, says George Cary of Cleary
Gottlieb Steen & Hamilton in Washington, D.C.
The government and Microsoft continued Monday to communicate through the
mediator, Judge Richard Posner. Prosecutors are asking Microsoft to more
clearly spell out its proposed concessions.
Microsoft largely has resisted, making some prosecutors skeptical that a
settlement can be reached. Still, some officials believe there is a good
chance the two sides will meet in Chicago, possibly later this week, in
a last-ditch bid to iron out their differences.
In its offer, Microsoft said it would, among other things, let PC makers
remove its Web browser from its dominant Windows software; charge all PC
makers the same price for Windows, eliminating discounts that reward
those featuring other Microsoft products; and supply the PC makers
Windows' source code so they can package non-Microsoft products.
Jackson found last year that Microsoft stifled competition and harmed
consumers.
The Computer and Communications Industry Association says even explicit
restrictions would be toothless. It has joined a faction of prosecutors
calling for the breakup of Microsoft. "A big powerful company that wants
to evade the rules has a great chance to do it," says CCIA President Ed
Black. (USA TODAY, March 28, 2000)
MUSICMAKER.COM, INC: Wolf Haldenstein Files Securities Suit in CA
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Wolf Haldenstein Adler Freeman & Herz announced on March 28 that a class
action was filed the United States District Court for the Central
District of California on behalf of a class consisting of all persons
who purchased the common stock of Musicmaker.com, Inc.
("Musicmaker.com") (Nasdaq: HITS - news) between July 7, 1999 and
November 15, 1999, inclusive (the "Class Period").
The Complaint charges Musicmaker.com, including controlling parties EMI
and Virgin, and certain of its officers with violations of federal
securities laws. Among other things, plaintiff claims that defendants'
material omissions and the dissemination of materially false and
misleading statements regarding the nature of Musicmaker.com's
operations drove the Company's stock price to a Class Period high of
$28.125 per share and enabled insiders to profit from sales of
Musicmaker.com common stock at artificially inflated prices.
Musicmaker.com common stock fell substantially below its offering price
and market trading price, inflicting enormous damages on investors.
Contact: Wolf Haldenstein Adler Freeman & Herz LLP (800) 575- 0735
Gregory Nespole, Esq. Michael Miske via e-mail at classmember@whafh.com
or whafh@aol.com or nespole@whafh.com or Gnespole@aol.com Website
http://www.whafh.com
RAVISENT TECHNOLOGIES: Cauley & Geller Files Securities Suit in PA
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The Law Firm of Cauley & Geller, LLP announced on March 28 that it has
filed a class action in the United States District Court for the Eastern
District of Pennsylvania on behalf of all individuals and institutional
investors that purchased the common stock of Ravisent Technologies, Inc.
(Nasdaq:RVST) between July 15, 1999 and February 17, 2000, inclusive
(the "Class Period").
The complaint charges that the Company and certain of its officers and
directors violated the federal securities laws by providing materially
false and misleading information about the Company's revenue recognition
policy, revenues and income. As a result of these false and misleading
statements the Company's stock traded at artificially inflated prices
during the class period. When the truth about the Company was revealed,
the price of the stock dropped significantly.
Contact: Cauley & Geller, LLP, Boca Raton Sue Noll or Sharon Jackson
Toll Free: 1-888-551-9944 E-mail: CauleyPA@aol.com
RAVISENT TECHNOLOGIES: Schiffrin & Barroway Expands PA Securities Suit
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The law firm of Schiffrin & Barroway, LLP gives notice that a class
action lawsuit was filed in the United States District Court for the
Eastern District of Pennsylvania on behalf of all purchasers of the
common stock of Ravisent Technologies, Inc. (Nasdaq: RVST) from July 15,
1999 through March 14, 2000, inclusive (the "Class Period").
The complaint charges Ravisent and certain of its officers and directors
with issuing false and misleading statements concerning the Company's
revenue recognition policy, revenues and income.
Contact: Schiffrin & Barroway, LLP Marc A. Topaz, Esq. Robert B. Weiser,
Esq. Three Bala Plaza East, Suite 400, Bala Cynwyd, PA 19004
1-888-299-7706 (toll free) or 1-610-667-7706 Or by e-mail at
info@sbclasslaw.com
ROCKETDYNE FACILITIES: Judge Dismisses 60 Claims Lacking Commonality
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A federal judge on Monday March 27 dismissed lawsuits filed by 60
plaintiffs alleging that rocket testing and research at Rocketdyne
facilities caused them to develop cancer and related illnesses. U.S.
District Judge Audrey B. Collins also hinted that she would consider
decertifying a class-action suit against Boeing North American,
Rocketdyne's parent company. Based on her review of some cases, she said
the claims may be substantially different from each other. "The
individual differences came to bear upon me," she said, suggesting that
the defendants file a motion to decertify the class of plaintiffs.
The lawsuit claims that dangerous chemicals and radionuclides migrated
from four Rocketdyne facilities in the Simi and San Fernando
valleys--including the Santa Susana Field Laboratory--and contaminated
surrounding soil, air and water.
Thousands of people in Ventura County and the San Fernando Valley are
seeking unspecified damages through the class-action suit for alleged
contamination of their properties as well as medical monitoring of any
related health risks.
Nearly 300 individual plaintiffs with cancer and other serious illnesses
who have been joined to the class-action suit claim that their
conditions were caused by the alleged chemical seepage.
On Monday, Collins ruled that 60 of those individuals should have known
that their illnesses, which were diagnosed before 1997, may have been
caused by testing and research at the facilities, and should have filed
their claims prior to the class-action lawsuit, which was filed in 1998.
J. Paul Gignac, a lawyer for the ill plaintiffs, said the judge reasoned
that media coverage of the facilities, including a UCLA study on
Rocketdyne workers, should have prompted them to file suit earlier. The
study found that some workers have a greater-than-expected cancer death
rate. "Based on the massive publicity, everyone actually affected should
have been put on notice," said Gary Black chief in-house counsel for
Boeing.
The judge is still reviewing the claims of the other ill plaintiffs,
Gignac said. The judge said that as she reviewed the 60 claims, she
concluded that a class-action lawsuit for the property-related claims
may not be appropriate, and suggested that Boeing consider filing a
motion to decertify the class.
The judge had certified the class in 1998. A class action is often used
in cases with a large number of plaintiffs. However, to be certified,
the class members' claims must be based on the same facts.
Black said the company would probably follow the judge's suggestion.
Barry Cappello, an attorney for the plaintiffs, said he was not
disheartened by Collins' ruling. "This was not a fatal blow," he said.
"The class action is still alive . . . but she's clearly having some
second thoughts about it." (Los Angeles Times , March 28, 2000)
SAIPAN SWEATSHOP: Eight More U.S. Clothing Retailers Agree to Settle
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Eight more leading U.S. clothing retailers -- Calvin Klein Inc., Jones
Apparel Group, Liz Claiborne Inc., The May Department Stores Company,
Oshkosh B'Gosh Inc., Sears, Roebuck and Company, Tommy Hilfiger USA
Inc., and Warnaco, Inc. -- have agreed to settle claims against them in
a federal class-action lawsuit alleging sweatshop conditions in the
garment industry on the Western Pacific island of Saipan, a U.S.
Commonwealth.
March 28's announcement means that 17 U.S. retailers have agreed to pay
a total of $8.0 million in settlement and to adhere to a rigorous system
of independent monitoring at the Saipan factories of contractors who
produce their clothing. The settlement provides that in future supply
contracts, retailers will require factories to comply with strict
employment standards, including guaranteeing overtime pay for overtime
work, providing safe food and drinking water, and agreeing to honor
employees' basic human rights. The settlement agreement requires court
approval and does not involve an admission of wrongdoing by the
defendants.
That leaves The Gap, J.C. Penney, Target and Lane Bryant, among other
defendants, who have not agreed to settle these claims. None of the
primarily foreign owners who actually operate the garment factories on
Saipan have yet agreed to settle.
"This is an important step in the right direction. We are glad to see
these companies take a stand for human rights on Saipan," commented
Medea Benjamin, President of Global Exchange. "These settlements will
dramatically improve the lives of thousands of garment workers on
Saipan. The strict and independent monitoring established will insure
that in the future rights will be protected and laws obeyed," said Jay
Mazur, President of UNITE!
Under the terms of the settlement announced, the 17 companies will each
make a one-time contribution to a fund that will finance an independent
monitoring program, as well as payments to workers, public education,
administration costs and attorneys' fees. These settlements will bring
the total fund to approximately $8 million.
"As a result of these settlements, the first legally enforceable set of
monitoring standards have been agreed to by retailers and will provide a
model for the rest of the industry to follow," said Lora Jo Foo, an
attorney with Asian Law Caucus and President of Sweatshop Watch.
Verite, an Amherst, Massachusetts-based non-profit group, will
independently monitor compliance by exercising far-reaching powers to
oversee the conduct of contractors doing business with the settling
retailers, including surveillance, announced and unannounced visits to
facilities, and investigations of worker complaints. The monitoring body
can provide for payment of back wages, reimbursement of impermissible
recruitment fees, and even recommend the termination of contracts where
a pattern of violations exists.
Verite will report jointly to the retailers and to the plaintiffs in the
two settled lawsuits. These include two international human rights
groups, Global Exchange and Sweatshop Watch; the Asian Law Caucus; and
UNITE!, the labor union which represents many garment workers. Verite
has extensive workplace monitoring experience, and has previously served
as an independent monitor under agreement with Tommy Hilfiger USA Inc.,
among others.
The two lawsuits at issue were filed in January 1999. One is a class
action alleging violations of U.S. anti-peonage and indentured servitude
laws and of international human rights law, initially filed in Los
Angeles federal court and recently transferred to Hawaii. The other is
an unfair business practices case filed in San Francisco Superior Court.
The litigation will continue to be prosecuted against the Saipan factory
owners and several other major U.S. retailers who have yet to settle.
Plaintiffs are represented by the San Diego firm of Milberg Weiss
Bershad Hynes & Lerach and the San Francisco firm of Altshuler, Berzon,
Nussbaum, Rubin & Demain.
Contact: Elizabeth Buchanan of Fenton Communications, 202-822-5200, ext.
234., for Milberg Weiss Bershad Hynes & Lerach
TACO BELL: Settlement Will Improve Accessibility of CO Restaurants
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A settlement agreement reached earlier this month will improve the
accessibility of all Taco Bell restaurants located in Colorado.
Kevin W. Williams of the Colorado Cross-Disability Coalition in Denver
represented the plaintiffs in the suit against Taco Bell Corp. along
with Timothy P. Fox and Amy Robertson of Fox & Robertson, P.C., also in
Denver. The class action suit focused heavily on the alleged
inaccessibility of the queue lines at Taco Bell restaurants. Within the
meaning of the settlement agreement, a "queue line" is any barrier or
other device that is used to have customers from a single line when
patronizing a service counter. The suit initially challenged the alleged
inaccessibility of counters as well, said Fox, but that issue was
resolved before the class was certified.
Taco Bell admits no wrongdoing by way of the settlement; in fact, it
"denies each and every material allegation contained in Plaintiffs'
complaint." Nevertheless, it agrees to take several steps to improve
access at all of its locations across the state.
Pursuant to the settlement, Taco Bell agreed to make all the queue lines
in its Colorado restaurants accessible by the end of 2001. In addition,
it further agreed to make all future Colorado Taco Bell restaurants
accessible. The company will also pay 50 to each member of the plaintiff
class, up to a maximum of 5,700. Another 210,000 will go towards
attorney's fees, costs and expenses of suit.
In addition, a Colorado Cross-Disability Coalition representative will
monitor compliance with accessibility requirements by visiting Colorado
Taco Bell restaurants. Taco Bell will pay the representative at a rate
of 25 per hour, with the total of payments not to exceed 3,500.
Finally, the Taco Bell has agreed to provide training and written
instruction to employees regarding the maintenance of unobstructed queue
lines. "We are very happy with the settlement," Fox said. (Disability
Compliance Bulletin, March 24, 2000)
THERMEDICS INC: Report with SEC Tells of Merger & Suits over Proposal
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The following is an verbatim extract from the report of Thermedics Inc.
filed with the SEC:
"In March 1999, the Company acquired, through a merger, all of the
outstanding shares of Thermo Voltek that it did not previously own,
other than the shares owned by Thermo Electron Corporation. Subsequent
to this transaction, the Company and Thermo Electron owned approximately
97% and 3%, respectively, of the outstanding common stock of Thermo
Voltek. The cost of the acquisition exceeded the estimated fair value of
the incremental net assets by $10,050,000. . .
In late March and early April 1998, four putative class actions were
filed in the Court of Chancery of the State of Delaware in and for New
Castle County by shareholders of Thermo Voltek, which were consolidated
under the caption In re Thermo Voltek Corp. Shareholders Litigation,
Consolidated C.A. 16287 (the Action) in October 1998.
The complaint in the Action names the Company, Thermo Voltek, Thermo
Electron, and directors of Thermo Voltek as defendants and alleges,
among other things, that Thermo Voltek's directors violated the
fiduciary duties of loyalty, good faith, and fair dealing that they owed
to all shareholders of Thermo Voltek other than the named defendants and
the affiliates of the named defendants because the proposed price of
$7.00 per share to be paid to Thermo Voltek's shareholders under the
terms of the proposed Merger Agreement was allegedly unfair and grossly
inadequate. The complaints further allege that the Company, Thermo
Voltek, and Thermo Electron have violated their alleged fiduciary duty
of fair dealing by proposing the merger transaction at the time. The
parties are currently conducting discovery. Due to the inherent
uncertainty of litigation, the outcome of this matter cannot be
estimated. The Company expects, however, that any resolution will not
materially affect its future results of operations or financial
position."
TOBACCO LITIGATION: Dying Ex-Smoker Awarded $20 Million
-------------------------------------------------------
A jury that has already decided the tobacco industry conspired to make a
killer product now turns to two key questions that could cripple
cigarette makers. Jurors are being asked to award damages to cover the
medical bills, pain and suffering for three sick smokers who represent
an estimated 500,000 others in the first class-action case against the
tobacco industry ever to go to trial. The jury then will be asked to set
a dollar figure to punish the industry. Company officials fear a ruinous
$300 billion punitive damage verdict.
Closing arguments in the compensatory-damages phase of the trial against
the nation's five biggest tobacco companies were to resume on Tuesday,
March 28 and last through Thursday.
The jury last summer found the companies engaged in ''extreme and
outrageous conduct'' in making a defective product that causes
emphysema, lung cancer and other illnesses.
The attorney for the smokers, all of whom have cancer, played more than
seven minutes of cigarette TV commercials from the 1950s and early 1960s
in court Monday in an attempt to illustrate how the industry glossed
over tobacco's health hazards. ''It sure doesn't seem like a dangerous
product, does it?'' Stanley Rosenblatt said after playing commercials
featuring celebrities such as Lucy and Desi Arnaz. Referring to the
tobacco companies, Rosenblatt bellowed, ''Their prosperity caused a lot
of unnecessary suffering. They want to walk away.'' The six-member jury
is being asked to order the companies to pay for the medical bills, pain
and suffering of Mary Farnan, Frank Amodeo and the late Angie Della
Vecchia. Their doctors testified their cancers were caused by smoking.
In a separate case in San Francisco on Monday, March 27, a jury ordered
two top cigarette makers to pay $20 million in punitive damages to a
dying smoker. The jury earlier awarded $1.7 million in compensatory
damages.
In the Florida case, the industry has offered evidence that
bronchioalveolar cancer a form of lung cancer that the jury decided is
not linked to smoking was the culprit in the illness of Farnan, who
smoked for 29 years, and Della Vecchia, who smoked for 40. It blamed
industrial wood dust as a possible cause of the throat cancer in Amodeo,
a clock maker who smoked for 34 years.
The defendants are Philip Morris Inc., R.J. Reynolds Tobacco Co., Brown
& Williamson Tobacco Corp., Lorillard Tobacco Co., Liggett Group Inc.
and the industry's Council for Tobacco Research and Tobacco Institute.
A news media challenge to a gag order imposed by Circuit Judge Robert
Kaye on all parties in the trial also was to be heard a few blocks away
in federal court. (AP Online, March 28, 2000)
* AHP Agrees to Sell Cyanamid Crop Unit to Basf At $ 3.8 Bil
------------------------------------------------------------
Six years after the drug maker American Home Products wrested control of
American Cyanamid in Wayne, AHP has agreed to sell the crop protection
company to Europe's largest chemical manufacturer, BASF, for $ 3.8
billion in cash and debt assumption.
The acquisition by Germany's BASF lifts a burden off the shoulders of
Madison-based AHP, the world's ninth-largest drug maker. Cyanamid, which
abandoned its sprawling offices in Wayne after the merger, has grossly
underperformed AHP's pharmaceutical division for the past several years.
The sale is expected to strengthen AHP's balance sheet, making the
company more attractive to other drug makers looking for a pure merger
partner.
"The sale of Cyanamid reflects AHP's strategy to focus on our
pharmaceutical, biopharmaceutical, consumer health care, and animal
health products businesses,"said AHP's 62-year-old chairman, John
Stafford, who also has served as chief executive since 1986.
It is not known how many Cyanamid jobs will be at risk under the new
ownership, but AHP began taking strides a few years ago to reduce the
crop protection workforce in preparation for a sale. Cyanamid is based
in Parsippany and employs 380 people there. Nearly 600 work in
Princeton. The company employs 4,700 people worldwide.
BASF is based in Ludwigshafen, Germany, but its North American
headquarters are in Mount Olive. BASF has almost 3,000 workers in New
Jersey. "I don't think any 1 NEW3 decisions have been made; we have to
look at both operations and decide how they need to look," said William
Pagano, a BASF spokesman.
Cyanamid makes insecticides, herbicides, and other agricultural
chemicals. In recent years, the company has lost much of its market
share, especially in soybean crop protection, to St. Louis-based
Monsanto, the maker of popular soybean seeds that withstand the harm
usually caused by herbicides.
Because of Monsanto's dominance, Cyanamid has become an albatross
weighing down the parent company. Cyanamid makes a profit,"but the
margins are nowhere near that of pharmaceuticals,"said Sergio Traversa,
a drug industry analyst for Mehta Partners in New York.
However, the recent controversy over genetically modified seeds could
hurt Monsanto and benefit Cyanamid, said one veteran chemicals industry
analyst. "We don't expect to see significant further decline in
Cyanamid's pesticide business this year or in 2001,"said Haworth
resident Ted Semegran of Brown Brothers Harriman.
For AHP shareholders, the sale could be just what the company needs
after three tumultuous quarters. AHP remains under pressure to settle
thousands of lawsuits spawned by the marketing of the diet drugs
fen-phen and Redux, both of which were pulled from the market in 1997.
Diet drug users have until March 30 to opt out of a $ 4.75 billion
settlement offer from the company.
In January, AHP was dealt a second blow when the company lost a bidding
war for drug maker Warner-Lambert. The Morris Plains company walked away
from a merger with AHP and instead agreed to a deal with Pfizer, a much
larger drug maker based in New York. In return, AHP received $ 1.8
billion in break-up fees from Warner-Lambert. Much of the cash was
earmarked for diet drug settlements.
When AHP bought Cyanamid for $ 9.7 billion, Stafford and his board got
more than farm chemicals. The deal included valuable pharmaceutical
assets such as a 54 percent stake in the Seattle-based Immunex Corp., a
biotechnology company that makes the rheumatoid arthritis drug Enbrel.
However, the deal also included Pondimin, one-half of the fen-phen drug
combination and the chemical that cost the company billions of dollars
in liability because of heart and 1 NEW3 lung problems the drug caused
in some patients. Now, with thousands of plaintiffs participating in the
fen-phen settlement, AHP is looking much healthier than it was in
September, Traversa said. "If you add the $ 3.8 billion AHP gets from
this deal, plus the $ 1.8 billion they got from the broken merger, this
company is looking much better,"he said.
With the acquisition, BASF will move to the top ranks of the world's
crop protection manufacturers, behind Syngenta, Aventis CropScience, and
Monsanto. BASF's Mount Olive campus is home to the company's
pharmaceutical division, Knoll Pharmaceuticals, as well as the North
American offices for BASF chemical, consumer, and life science
divisions. (The Record (Bergen County, NJ), March 22, 2000)
*********
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., Princeton, NJ, and Beard Group, Inc.,
Washington, DC. Theresa Cheuk, Managing Editor.
Copyright 1999. 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
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Information contained herein is obtained from sources believed to be
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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
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