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C L A S S A C T I O N R E P O R T E R
Friday, November 22, 2002, Vol. 4, No. 232
Headlines
ACXIOM CORPORATION: Appeals Court Denies Rehearing For Suit Dismissal
AES CORPORATION: Remand of Consumer Fraud Lawsuit To State Court Sought
AES CORPORATION: Plaintiffs Seek Consolidation of IN Securities Suits
AES CORPORATION: To Vigorously Defend V. Securities Lawsuits in E.D. VA
ALLERGAN INC.: Dismissed As Defendant in CA Alphagan Antitrust Lawsuits
ALLERGAN INC.: Dismissed as Defendant in MA Suit Over RICO Violations
ALLERGAN INC.: Dismissed As Defendant in Suit For RICO Violations in PA
CITIGROUP INC.: Information Leaks May Delay Wall Street Reform Plans
ELECTRONICS FOR IMAGING: Settles For $4.4M CA Securities Fraud Lawsuit
ELECTRONICS FOR IMAGING: Plaintiffs Appeal Dismissal of Securities Suit
FLEXTRONICS INC.: Questionable Info Subject of Securities Suits in NY
HARLEY DAVIDSON: WI Court Dismisses Second Suit Over Twin Cam Bearing
LANDAMERICA FINANCIAL: Reaches Final Settlement in CA Consumer Lawsuit
LIFECELL CORPORATION: Reaches Agreement To Settle CA Human Tissue Suit
MEASUREMENT SPECIALTIES: Plaintiffs File Consolidated Fraud Suit in NJ
OLD REPUBLIC: Subsidiary Files For Summary Judgment in RESPA Suit in GA
REHABCARE GROUP: Plaintiffs Files Consolidates Securities Lawsuit in MO
SELECT COMFORT: Approval Hearing For Suit Settlement Set December 2002
SCIENTIFIC-ATLANTA: Asks Court To Dismiss Consolidated Securities Suit
SEPRACOR INC.: "Inflated" Potential Subject of Fraud Lawsuit in MA
SICOR INC.: Faces Several Lawsuits Over Medicare Patient Co-payments
SYNCOR INTERNATIONAL: Discloses Illegal Payments, Discusses Settlement
WATSON PHARMACEUTICALS: Faces Suit Over Average Wholesale Prices in MA
Asbestos Alert
ASBESTOS ALERT: Allstate Takes $32M Charge for Asbestos Settlement
ASBESTOS ALERT: Gencor to Get Legal Advice Over Asbestos Related Suits
ASBESTOS ALERT: Honeywell Says Insurance Might Not Cover Asbestos Suits
ASBESTOS ALERT: Fund's Threat to Sue Lloyd's over Asbestos Raises Anger
ASBESTOS ALERT: Badger Meter Faces Three Multi-Party Asbestos Lawsuits
ASBESTOS ALERT: Cinergy, Subsidiaries Face Asbestos Related Litigation
ASBESTOS ALERT: Citgo Battles Asbestos-Related Cases in Various Courts
ASBESTOS ALERT: Gardner Denver Faces Several Asbestos Related Lawsuits
ASBESTOS ALERT: KeySpan Subsidiaries Face Asbestos Related Litigation
ASBESTOS ALERT: Ladish Co. Asbestos Related Suits Begin Piling Up
ASBESTOS ALERT: McKesson Says Former Division To Assume Asbestos Costs
ASBESTOS ALERT: NSI Announces Settlement of Texas Asbestos Litigation
ASBESTOS ALERT: NL Industries Faces 3,700 More Asbestos Related Claims
ASBESTOS ALERT: PPL Corporation Faces Several Asbestos Related Lawsuits
ASBESTOS ALERT: USMR Faces Lawsuits for Asbestos Exposure in Shipyards
ASBESTOS ALERT: Oglebay Says Insurance Covers Known Asbestos Litigation
ASBESTOS ALERT: WABTEC Asbestos Related Claims Predate 1990 Formation
New Securities Fraud Cases
CREDIT SUISSE: Pomerantz Haudek Files Securities Fraud Suit in S.D. NY
SALOMON SMITH: Cohen Milstein Launches Securities Fraud Suit in S.D. NY
SALOMON SMITH: Schoengold & Sporn Commences Securities Lawsuit in NY
SALOMON SMITH: Lovell Stewart Launches Securities Fraud Suit in S.D. NY
SALOMON SMITH: Cohen Milstein Launches Securities Fraud Suit in S.D. NY
ST. PAUL: Bernstein Liebhard Launches Securities Fraud Suit in MN Court
SYNCOR INTERNATIONAL: Cauley Geller Launches Securities Suit in C.D. CA
TENET HEALTHCARE: Weiss Yourman Files Securities Fraud Suit in C.D. CA
TENET HEALTHCARE: LeBlanc Waddell Lodges Securities Lawsuit in C.D. CA
TENET HEALTHCARE: Schatz & Nobel Lodges Securities Fraud Suit in CA
*********
ACXIOM CORPORATION: Appeals Court Denies Rehearing For Suit Dismissal
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The United States Eighth Circuit Court of Appeals denied the petition
for a rehearing for its decision upholding the dismissal of securities
class actions against Acxiom Corporation and certain of its directors
and officers.
The suit was filed in the United States District Court for the Eastern
District of Arkansas, alleging that the defendants violated Section 11
of the Securities Act of 1933 in connection with the July 23, 1999
public offering of 5,421,000 shares of the common stock of the Company.
In addition, the action seeks to assert liability against the Company's
leader pursuant to Section 15 of the 1933 Act. The action seeks to
have a class certified of all purchasers of the stock sold in the
public offering. Two additional suits were subsequently filed in the
same venue against the same defendants and asserting the same
allegations.
The Company asked the court to dismiss the suits, which the court did
in March 2001. The plaintiffs then appealed the decision to dismiss
to the Eighth Circuit appeals court. On July 15, 2002, the Eighth
Circuit upheld the court's motion to dismiss, and on September 11,
2002, the Eighth Circuit denied the plaintiff's petition for rehearing.
The Company is involved in various other claims and litigation matters
that arise in the ordinary course of the business. None of these,
however, are believed to be material in their nature or scope.
AES CORPORATION: Remand of Consumer Fraud Lawsuit To State Court Sought
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Plaintiffs in the class action against AES Corporation and other power
companies seek to remand the suit to the San Diego County, California
Superior Court.
The suit was commenced in November 2000 against the Company and other
defendants alleging unlawful manipulation of the California wholesale
electricity market, resulting in inflated wholesale electricity prices
throughout California. Alleged causes of action include violation of
the Cartwright Act and the California Unfair Trade Practices Act.
The case has been consolidated with five other lawsuits alleging
similar claims against other defendants. In March 2002, the plaintiffs
filed a new master complaint in the consolidated action, which asserted
the claims asserted in the earlier action and names as defendants the
Company and:
(1) AES Redondo Beach, LLC,
(2) AES Alamitos, LLC, and
(3) AES Huntington Beach, LLC as defendants
In May 2002, the case was removed by certain cross-defendants from the
San Diego County Superior Court to the United States District Court for
the Southern District of California. Plaintiffs have filed a motion to
remand the case to state court, which is currently pending. Defendants
have filed a motion to dismiss the action in its entirety.
The Company and the Company's subsidiaries believe they have
meritorious defenses to any actions asserted against them and expect to
defend themselves vigorously against the allegations.
AES CORPORATION: Plaintiffs Seek Consolidation of IN Securities Suits
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Plaintiffs in several securities class actions pending against AES
Corporation moved to consolidate the suits in the United States
District Court for the Southern District of Indiana. The suits names
as defendants the Company and:
(1) Dennis W. Bakke,
(2) Roger W. Sant, and
(3) Barry J. Sharp
The first suit was commenced in July 2002, and three more suits were
filed in September 2002. All three lawsuits purport to be filed on
behalf of all persons who exchanged their shares of IPALCO, Inc. common
stock for shares of the Company common stock pursuant to the
registration statement dated and filed with the SEC on August 16, 2000.
The complaint purports to allege violations of Sections 11, 12(a)(2)
and 15 of the Securities Act of 1933 based on statements in or
omissions from the Registration Statement covering certain secured
equity-linked loans by AES subsidiaries and the supposedly volatile
nature of the price of AES stock, as well as AES's allegedly unhedged
operations in the United Kingdom.
The Company and the individual defendants believe that they have
meritorious defenses to the claims asserted against them and intend to
defend the lawsuit vigorously.
AES CORPORATION: To Vigorously Defend V. Securities Lawsuits in E.D. VA
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AES Corporation faces several securities class actions filed in the
United States District Court for the Eastern District of Virginia, on
behalf of all persons who purchased the Company's stock between April
26,2001 and February 14,2002. The suits name as defendants the Company
and:
(1) Dennis W. Bakke,
(2) Roger W. Sant and
(3) Barry J. Sharp
The complaints purport to allege that certain statements concerning the
Company's operations in the United Kingdom violated Sections 10(b) and
20(a) of the Securities Exchange Act of 1934, and Rule 10b-5
promulgated thereunder.
These lawsuits have yet to be served on all defendants. The Company
and the individuals believe that they have meritorious defenses to the
claims asserted against them.
ALLERGAN INC.: Dismissed As Defendant in CA Alphagan Antitrust Lawsuits
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Allergan, Inc. has been dismissed without prejudice from the class
actions pending in the United States District Court in California,
alleging violations of the federal antitrust laws.
The suits contend that the Company violated the Sherman Act and the
antitrust and/or unfair business competition statutes of various states
and the District of Columbia by preventing generic versions of Alphagan
from entering the United States market, an earlier Class Action
Reporter story states.
ALLERGAN INC.: Dismissed as Defendant in MA Suit Over RICO Violations
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Allegan, Inc. has been voluntarily dismissed as a defendant in a
consolidated class action filed in the United States District Court in
Massachusetts, alleging violations of the Racketeering Influenced and
Corrupt Organization Act (RICO).
The suit contends that 23 pharmaceutical companies, including the
Company, violated the RICO Act by:
(1) promulgating average wholesale prices that bear no relation to
actual wholesale prices,
(2) abusing Congressional authority to formulate and publish
legitimate and accurate average wholesale prices,
(3) creating artificial and inflated average wholesale prices for
publication in resources used by carriers and clinicians to
determine Medicare reimbursement allowances and
(4) encouraging clinicians to administer drugs with the highest
average wholesale prices.
A stipulation of voluntary dismissal without prejudice as to the
Company was filed on October 28, 2002.
ALLERGAN INC.: Dismissed As Defendant in Suit For RICO Violations in PA
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Allergan, Inc. has been dismissed as a defendant in the class action
filed in the United States District Court in Pennsylvania by advocacy
group Teamsters Health & Welfare Fund of Philadelphia and Vicinity,
The lawsuit contends that 10 pharmaceutical companies, including the
Company, violated the Racketeering Influenced and Corrupt Organization
Act (RICO) by implementing fraudulent marketing and sales schemes to
substantially increase and/or maintain the sale of their pharmaceutical
products which are administered directly by doctors and other medical
providers by deliberately overstating the average wholesale prices for
their products.
A stipulation of voluntary dismissal without prejudice as to the
Company was filed on October 28, 2002.
CITIGROUP INC.: Information Leaks May Delay Wall Street Reform Plans
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Embarrassing public disclosures about Citigroup, Inc. threaten to
complicate final negotiations aimed at cleaning up tainted Wall Street
research and stock offering practices, USA Today reports. The
disclosures have served to sensitize the Wall Street firms to the
possibilities that additional leaks of documents could occur, thereby
increasing the industry's exposure to shareholder class actions.
Top lawyers from Wall Street investment banks are under orders to
demand that the securities regulators give firm assurances that the
industry will be spared further damaging revelations in return for
their signing on to a sweeping reform package under discussion at the
New York Stock Exchange, according to people with knowledge of these
talks.
Senior Citigroup executives are said to be highly disturbed after leaks
of an internal e-mail and memo last week detailing an intriguing tale
involving Citigroup Chairman Sanford Weill, former star Citigroup
telecom analyst Jack Grubman and an elite Upper East Side Manhattan
nursery school.
The documents suggest that Mr. Grubman upgraded his rating on AT&T's
stock in 1999, to help Mr. Weill ingratiate himself with AT&T's
chairman and defeat a corporate rival, as well and that Mr. Weill
helped Mr. Grubman get his children into a prestigious Manhattan
nursery school.
After news stories about the contents of these documents appeared, Mr.
Grubman said that he had exaggerated in order to impress a colleague at
another firm. Mr. Weill said that the help he gave Mr. Grubman was
given as a friend, not to influence his research.
The contents of these documents, which had been solely in the hands of
investigators for months, were apparently leaked by someone involved in
the ongoing Wall Street probe, according to people with knowledge of
the situation. New York Attorney General Eliot Spitzer's office, the
National Association of Securities Dealers and the House Financial
Services Committee have access to the documents. All three deny any
involvement.
Citigroup executives regard the leaks as a gratuitous attempt to smear
Mr. Weill, who is not a target of investigation, according to Attorney
General Spitzer's office. Other Wall Street firms also were taken
aback by the timing of last week's disclosures in The Wall Street
Journal, coming as they did when settlement of some critical Wall
Street issues seemed imminent.
The settlement related to research and IPO-practices is expected to
cost Wall Street firms hundreds of millions of dollars in fines and
lead to new rules to insure stock analysts' independence.
In the current climate of anger and embarrassment created by the
revelations, the firms might demand the regulators' promise not to use
damaging e-mails and other documents to further undermine the industry
and increase its exposure to expensive securities class actions.
While saying he wants to reform, not destroy the industry, Mr. Spitzer
continues to warn that evidence is mounting against many firms and that
criminal charges have not been ruled out.
William Lerach, of the law firm Milberg Weiss Berhard Hynes & Lerach
that files more than half of all shareholder class actions nationwide,
has given a gloomy prediction about the settlement. "Wall Street is
not going to have a global settlement until they deal with the
thousands of stockholders who lost billions of dollars, thanks to
them," he said.
ELECTRONICS FOR IMAGING: Settles For $4.4M CA Securities Fraud Lawsuit
----------------------------------------------------------------------
Electronics For Imaging, Inc. agreed to settle the securities class
action pending against it and certain of its principal officers and
directors in California state court for US$4.4 million.
Several suits filed in both the California Superior Court of the County
of San Mateo and the United States District Court for the Northern
District of California on behalf of purchasers of the Company's common
stock during the class period from April 10, 1997, through December 11,
1997. In August 2001, the court dismissed the complaint filed in the
United States District Court for the Northern District of California,
leaving only the California Superior Court case.
On September 4, 2002, the Company announced that it had decided to
settled all claims in the California case. The Company incurred a
charge to net income in the third quarter of 2002 of $4.4 million ($3.1
million, net of taxes) or $0.06 per weighted average share, including
legal fees and costs related to the settlement.
There is no change in the Company's view that the lawsuit was without
merit. However, the Company determined that settling the suit was in
the best interests of the Company and its shareholders.
ELECTRONICS FOR IMAGING: Plaintiffs Appeal Dismissal of Securities Suit
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Plaintiffs in the consolidated securities class action pending against
Splash Technology Holdings, Inc., which Electronics For Imaging
Corporation acquired in October 2002, appealed the United States
District Court for the Northern District of California's decision
dismissing the suit.
In January 1999, two class actions were filed, and subsequently
consolidated into one case, in the United States District Court
for the Northern District of California against Splash Technology
Holdings and certain of its officers on behalf of purchasers of the
Company's common stock during the class period from January 7, 1997
through October 13, 1998. The complaints alleged violations of
securities laws during the class period.
The court later dismissed the complaint with prejudice, and the
plaintiffs have appealed that ruling. The Company believes these
lawsuits are without merit and intends to continue to defend the
actions vigorously. Due to the inherent uncertainties of litigation,
the Company cannot predict the ultimate outcome of the litigation.
FLEXTRONICS INC.: Questionable Info Subject of Securities Suits in NY
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Flextronics, Inc. faces several securities class actions filed in the
United States District Court for the Southern District of New York on
behalf of purchasers of the Company's ordinary shares between October
2,2001 and June 4,2002.
The suits, which also name the Company's officers and directors as
defendants, generally allege that, during this period, the defendants
made misstatements to the investing public about the Company's
financial condition and prospects. These actions seek unspecified
damages.
The defendants allegedly violated Sections 10(b) and 20(a) of the
Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder,
by issuing a series of materially false and misleading statements to
the market, an earlier Class Action Reporter story states.
While the litigation is currently in a preliminary stage, the Company
believes that the plaintiffs' claims lack merit.
HARLEY DAVIDSON: WI Court Dismisses Second Suit Over Twin Cam Bearing
---------------------------------------------------------------------
Milwaukee County, Wisconsin state court dismissed the second class
action filed against Harley Davidson, Inc. after the Company, on its
own initiative, notified each owner of 1999 and early-2000 model year
Harley-Davidson motorcycles equipped with Twin Cam 88 and Twin Cam 88B
engines that the Company was extending the warranty for a rear cam
bearing to 5 years or 50,000 miles in January 2001.
The complaint alleged that this cam bearing is defective and asserted
various legal theories. The complaint sought unspecified compensatory
and punitive damages for affected owners, an order compelling the
Company to repair the engines, and other relief.
The Company filed a motion to dismiss the amended complaint, and on
February 27, 2002, the motion was granted by the court. An appeal has
been filed and is currently pending in the Wisconsin Court of Appeals.
On April 12, 2002, the same attorneys filed a second nationwide class
action against the Company in state court in Milwaukee County,
Wisconsin relating to this cam bearing issue and asserting different
legal theories than in the first action. The complaint sought
unspecified compensatory damages, an order compelling the Company to
repair the engines and other relief.
The Company filed a motion to dismiss the complaint, and on September
23, 2002, the motion was granted by the court.
The Company believes that the warranty extension it announced in
January 2001 adequately addresses the condition for affected owners.
The Company has established reserves for this extended warranty.
LANDAMERICA FINANCIAL: Reaches Final Settlement in CA Consumer Lawsuit
----------------------------------------------------------------------
Landamerica Financial Corporation reached a final settlement with the
state of California in the defendant class action filed in the
Sacramento County Superior Court by the California Attorney General
against the Company and its principal competitors in California.
Pursuant to the settlement, the Company will pay $1.6 million to the
California Attorney General and a total of $8.0 million in the form of:
(1) cash payments to former escrow customers that meet certain
eligibility requirements and file timely claims and
(2) discounts on future escrow and title insurance services to
eligible customers as agreed to in the settlement.
The Company recorded a reserve for the $1.6 million payment in prior
periods as the case developed. A charge of $660,000 was recorded in
the third quarter of 2002 for estimated cash refund payments to former
customers. Discounts on future escrow and title services will be
treated as reductions of revenue during the period in which they occur.
LIFECELL CORPORATION: Reaches Agreement To Settle CA Human Tissue Suit
----------------------------------------------------------------------
Lifecell Corporation reached an agreement to settle two class actions
pending against it in the Superior Court of California, Los Angeles
County, Central District.
The suits allege among other things, defendants, including the Company,
make profits from the storing, processing, and distribution of human
tissue in contravention of California law. Both actions were brought
under a statute that allows individuals to sue on behalf of the people
of California for unfair business practices, with the court having the
power to award injunctive relief and disgorgement of all profits from
the alleged illegal practices.
The plaintiffs have agreed to dismiss all claims against the Company,
while the Company promises not to sue plaintiffs for malicious
prosecution. A court order embodying this settlement, consented to by
all parties of the suit, is currently before the Court, but has not yet
been signed.
MEASUREMENT SPECIALTIES: Plaintiffs File Consolidated Fraud Suit in NJ
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Plaintiffs in the securities class actions against Measurement
Specialties, Inc. filed an amended consolidated suit in the United
States District Court for the District of New Jersey.
Several suits were commenced in March 2002 on behalf of purchasers of
the Company's common stock against the Company, certain of the
Company's present and former officers and directors, and the
underwriters of the Company's August 2001 public offering and the
Company's former auditors.
The lawsuit alleges violations of the federal securities laws
including, among other things, that the registration statement related
to the Company's August 2001 public offering and the Company's periodic
SEC filings misrepresented or omitted material facts and that certain
of the Company's officers made false or misleading statements of
material fact.
The Company must file a responsive pleading by November 11, 2002. The
Company is currently in the process of responding to the claims made in
the suit, and intends to defend against it vigorously. However, it
cannot predict the outcome and is not currently able to evaluate the
likelihood of success or the range of potential loss, if any.
OLD REPUBLIC: Subsidiary Files For Summary Judgment in RESPA Suit in GA
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One of Old Republic International Corporation's subsidiaries filed for
summary judgment in a class action filed against it in the United
States District Court for the Southern District of Georgia.
The suit alleges that the subsidiary provided pool insurance and other
services to mortgage lenders at preferential, below market prices in
return for mortgage insurance business, and that such practices
violated the Real Estate Settlement Procedures Act.
The subsidiary earlier filed a motion for summary judgment, which the
court granted, leading to the dismissal of the suit. The plaintiffs
appealed and the US Court of Appeals for the Eleventh Circuit vacated
the judgment and remanded the case back to federal court.
The Company's subsidiary has filed a motion seeking a summary judgment
on grounds asserted in its earlier motion but not considered by the
court. While the federal court has not yet ruled on the subsidiary's
summary judgment motion, it recently denied a similar summary judgment
motion filed by an unrelated mortgage guaranty insurer in a similar
class action before the same court.
The ultimate outcome of the litigation cannot be foreseen at the
present time, but as a result of these recent developments, the
subsidiary has established a $4.8 million reserve charge for estimated
legal and other expenses likely to be incurred in this litigation.
REHABCARE GROUP: Plaintiffs Files Consolidates Securities Lawsuit in MO
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Plaintiffs in the securities class actions pending against Rehabcare
Group, Inc. filed a consolidated suit in the United States District
Court for the Eastern District of Missouri on behalf of purchasers of
the securities of RehabCare Group, Inc. (NYSE: RHB) between February 7,
2001 and January 21,2002 inclusive. The action, is pending against the
Company and:
(1) H. Edwin Trusheim (Chairman of the Board) and
(2) Alan C. Henderson (CEO, President and Director)
The complaint charges that defendants violated Sections 10(b) and 20(a)
of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated
thereunder, by issuing a series of materially false and misleading
statements to the market between February 7, 2001 and January 21, 2002.
The complaint alleges that, among other things, defendants issued a
series of materially false and misleading statements concerning the
Company's supplemental staffing division. The complaint alleges these
statements were materially false and misleading because they failed to
disclose that the supplemental staffing division was experiencing
serious operational problems with information systems critical for
matching supply with demand and poor employee training and retention
and that its revenues and earnings were declining as a result,
according to an earlier Class Action Reporter story.
Additionally, each of the directors of the Company was named as a
defendant and the Company was named as the nominal defendant in a
derivative suit filed in the Circuit Court in St. Louis County,
Missouri. The complaint, which is based upon substantially the same
facts as are alleged in the federal class action, was filed on behalf
of the derivative plaintiff by one of the law firms that had earlier
filed one of the actions in the federal class action.
The Company has filed a motion to dismiss based primarily on the
plaintiff's failure to make a pre-suit demand on the board.
Alternatively, the Company has filed a motion to stay the derivative
action until the final resolution of the federal suit. A hearing on
the motions is currently scheduled for December 13, 2002.
SELECT COMFORT: Approval Hearing For Suit Settlement Set December 2002
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Hearing for preliminary approval of the settlement of a securities
class action pending against Select Comfort, Inc. and certain of its
former officers and directors is set for December 13,2002.
The suit was filed in the United States District Court in Minnesota, on
behalf of purchasers of the Company's common stock between December 4,
1998 and June 7, 1999. The suit alleges that the Company and the named
former directors and officers failed to disclose or misrepresented
certain information concerning the Company in violation of federal
securities laws. The Company believes that the suit is without merit
and has vigorously defended the matter.
The Company has consented to a settlement of this litigation negotiated
by the Company's insurance carrier. The settlement is covered by
insurance and involves no cash or other payment obligation by the
Company, and no admission of liability or wrongdoing by the Company.
The settlement is not expected to have any impact on the Company's
results of operations or financial condition. The Company expects the
court to set a schedule for notice to the class and a hearing date for
final approval of the settlement. At the hearing for final approval,
the court will hear any objections to the settlement or its terms. The
Company expects the final hearing on the settlement to occur within six
months of the date the court grants preliminary approval of the
settlement.
SCIENTIFIC-ATLANTA: Asks Court To Dismiss Consolidated Securities Suit
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Scientific-Atlanta, Inc. asked the United States District Court for the
Northern District of Georgia to dismiss the consolidated securities
class action pending on behalf of all purchasers of its securities
between April 19, 2001 and July 19, 2001. The suit names as defendants
the Company, Chief Executive Officer James F. McDonald and Senior Vice
President Wallace G. Haislip.
The complaint alleges that defendants violated Sections 10(b) and 20(a)
of the Securities Exchange Act of 1934 and SEC Rule 10b-5, promulgated
thereunder. The defendants allegedly issued materially false and
misleading statements that had the effect of artificially inflating the
market price of the Company's securities, an earlier Class Action
Reporter story states.
The Company stated in a disclosure to the Securities and Exchange
Commission that it is moving for the suit's dismissal because such
litigation is expensive and diverts management's attention.
SEPRACOR INC.: "Inflated" Potential Subject of Fraud Lawsuit in MA
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Sepracor Inc. (Nasdaq: SEPR) faces a securities class action filed
against it and certain of its current and former officers in the United
States District Court for the District of Massachusetts. The plaintiff
claims to represent all purchasers of the Company's convertible debt
securities during the period from December 4, 2000 through March 6,
2002 and seeks unspecified damages on their behalf.
The plaintiff alleges that the defendants misled the purchasers of the
Company's convertible debt securities concerning prospects for the
Company's rug candidate, SOLTARA(TM).
The Company denies the allegations.
SICOR INC.: Faces Several Lawsuits Over Medicare Patient Co-payments
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Sicor Inc. faces six class actions or representative lawsuits brought
by private plaintiffs who allege claims arising from the reporting of
pricing information by drug manufacturers for the calculation of
patient co-payments under the Medicare program or other insurance plans
and programs.
These actions are among a number of similar actions which have been
filed against many pharmaceutical companies raising similar
allegations, and two of the actions in which the Company is a defendant
have been consolidated to the United States District Court for the
District of Massachusetts.
The Company has established a total reserve of $4.0 million, which
represents management's estimate of costs that will be incurred in
connection with the defense of these matters. Actual costs to be
incurred may vary from the amount estimated.
There can be no assurance that these investigations and lawsuits will
not result in changes to the Company's pricing policies or other
actions that might have a material adverse effect on the Company's
consolidated financial position, results of operations or cash flows.
SYNCOR INTERNATIONAL: Discloses Illegal Payments, Discusses Settlement
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Syncor International Corp. said that it has uncovered as much as
$500,000, in illegal payments by company officials to customers in
Taiwan. The firm also says that it is in "advanced discussions" on
resolving potential claims with federal agencies, The Wall Street
Journal reports.
Meanwhile, the class action scene heats up with three lawsuits having
been served upon the Company since it first revealed the illegal
payments. Two lawsuits have been filed by individual investors, as
well.
It is not clear what impact the disclosure, made in a Securities and
Exchange Commission filing, will have on Cardinal Health Inc.'s plan to
buy the nuclear-medicine company for $1 billion. The irregular
payments were discovered during a review of the Company's books carried
out by Cardinal.
A spokesman for the Dublin, Ohio, prescription-drug wholesaler said no
decision has been made on whether to proceed with the transaction. The
Company said in its filing that it could be required to pay Cardinal as
much as $24 million should the deal fall through.
Earlier this month, the Company placed Monty Fu, its chairman and co-
founder, and his brother Moses Fu, director of the company's Asia
business, on paid leave. The Company also said it was cooperating with
federal investigators.
Also formed, a special board committee advised by outside counsel and a
forensic-accounting firm, to investigate the matter of the illegal
payments. The Company took this action at the time it disclosed
existence of the payments and put the Fu brothers on leave. In its
filing, the Company said it had "accrued $2.5 million for potential
fines or penalties" that might be levied by the SEC or the Department
of Justice.
The Company said its special committee has found "questionable
payments" at operations in six other countries in Latin America, Europe
and Asia. In Taiwan, the committee has reported, payments were made
over a "substantial period of time" to state-owned and private health-
care facilities and to some of their employees.
The Company said "some or all of the payments appear to have violated
US law, including various provisions of the Foreign Corrupt Practices
Act of 1977." The Act bars US companies from making bribes in
connection with overseas business.
WATSON PHARMACEUTICALS: Faces Suit Over Average Wholesale Prices in MA
----------------------------------------------------------------------
Watson Pharmaceuticals, Inc. was named as a defendant in a consolidated
class action pending in the United States District Court for the
District of Massachusetts.
The action alleges that the Company and other pharmaceutical companies
engaged in fraudulent price reporting practices related to the
reporting of the average wholesale prices of certain products, and
committed other improper acts in order to increase prices and market
shares.
The Company has not yet responded to these actions, but believes it has
substantial defenses to the claims alleged by the various plaintiffs.
These actions, if successful, could adversely affect the Company could
have a material adverse effect on its business, results of operations,
financial condition and cash flows.
Asbestos Alert
ASBESTOS ALERT: Allstate Takes $32M Charge for Asbestos Settlement
------------------------------------------------------------------
Allstate Corp. (NYSE:ALL) said it settled an asbestos-related coverage
dispute with a policyholder, a move expected to trim $32 million, or 4
cents a share, from third-quarter net income.
Allstate spokesman Mike Trevino confirmed that the settlement was
related to asbestos, part of the company's discontinued lines and
coverages segment. That line of business covers policies written by
Allstate between 1972 and 1985, when the company wrote business that
exposed it to asbestos, environmental and mass-tort claims, Mr. Trevino
said. "We haven't written that kind of business since 1985," he said.
The insurer does "a regular and extensive review of our reserves" to
ensure that there is adequate reserving for those discontinued lines,
said Trevino. He couldn't say whether there are any other outstanding
asbestos-related issues to be resolved. "We have had asbestos claims,
which are now part of the discontinued lines segment," he said.
"Whatever is there, we believe our reserves are adequate."
Mr. Trevino declined to name the policyholder with which Allstate
settled.
Investment bank Morgan Stanley said in a research note that the added
charge probably wasn't a significant development. Morgan Stanley noted
that Allstate had already reported a $64 million after-tax loss related
to environmental and other losses--including asbestos.
"Because Allstate's margins are improving so rapidly and reserves
appear relatively adequate for asbestos, we still do not expect future
large one-time charges that would significantly affect earnings or
valuation," Morgan Stanley said.
A month ago, Allstate said its third-quarter net income rose to $280
million, or 39 cents a share, from $226 million, or 32 cents a share,
for the same quarter a year ago (BestWire, Oct. 17, 2002). Operating
income increased to $548 million, or 77 cents a share, from $401
million, or 56 cents a share.
Those figures were revised on the company's 10-Q quarterly filing with
the U.S. Securities and Exchange Commission, published Nov. 13, to take
the settlement into account. Net income now stands at $248 million, or
35 cents a share. Revised operating income is $516 million, or 73
cents a share.
Allstate said the revised results don't affect its projected year-end
result. The company still expects operating income per share of $2.80
to $3, excluding restructuring charges and assuming normal catastrophe
losses.
The financial strength of Allstate Insurance Group is rated A+
(Superior) by A.M. Best Co. Allstate's stock was trading at $39.17 a
share on the afternoon of Nov. 14, down 0.89% from the previous close.
ASBESTOS ALERT: Gencor to Get Legal Advice Over Asbestos Related Suits
----------------------------------------------------------------------
South African mining company Gencor said on that it was obtaining legal
advice after being named as co-defendant in the case in which thousands
of South Africans are claiming compensation from a British company for
asbestos-related ailments. The company said in a statement that it had
been named as co-defendant in the case currently being heard in the
United Kingdom.
"This follows permission being granted on 15 October in the English
High Court, in a private hearing, to name Gencor as a co-defendant in
the proceedings against Cape Plc in the United Kingdom," the company
said. Gencor said that unlike Cape, however, it was a South African
company and did not fall under the jurisdiction of the British courts.
"Gencor has already pointed out that it is not in the ordinary course
subject to the jurisdiction of English courts and that it is unaware of
any grounds which could properly justify its joinder to the Cape Plc
proceedings in the United Kingdom," the Company stated. The Company
said it would respond to its inclusion in the suit once it had obtained
legal advice.
Cape reached a settlement with the claimants last year but failed to
pay out the first installment by the due date.
ASBESTOS ALERT: Honeywell Says Insurance Might Not Cover Asbestos Suits
---------------------------------------------------------------------
Honeywell, Inc. has warned its insurance might not cover the cost of
settling asbestos claims against the US industrial group. A settlement
in one of those cases could also have "a material adverse impact" on
operating results and cash flows, the Company said in a regulatory
filing. The company is one of many facing mounting litigation claims
related to asbestos exposure, often in subsidiaries that have since
been sold or closed.
The Company said it was negotiating a settlement with asbestos
claimants suing North American Refractories Company (Narco), a business
it sold in 1986. RHI, the Austrian parent of Narco, filed for
bankruptcy in January to protect itself against claims, but the Company
had already agreed when it sold the business to bear the burden of some
personal injury suits.
The Company said in its filing that although the bankruptcy had stayed
the claims, it was trying to cap its contributions to a trust that
could be set up to handle all incoming Narco claims. However, the cost
of a settlement "could exceed the value of our existing insurance and
reserves plus the existing Narco assets," it said. That could hit
operating cash flow and operating results, although the group's
financial position would be unaffected. The filing makes clear that
the Company has already increased its Narco-related insurance from
$1.2bn to $2bn.
At the same time, the US group said that its insurance would cover "the
vast majority", but not all, of the claims pending against its Bendix
brake pads business. The Company said it did not expect the Bendix
case to have a material adverse impact on its operating results or
financial position.
In the same filing, the Company said it expected a pension expense of
$235 million to $335 million next year and would take a $1.7 billion
charge against equity this year because its pension plan was under-
funded.
The group said it was authorized to make a further $900 million in
voluntary contributions to its pension plan and that "a substantial
portion" of such a contribution would be in Company stock, rather than
cash.
David Cote, Company chief executive, said last month that the group was
taking a look at the funding position of its pension plan and was
reviewing the assumed rate of return and discount rate applied to the
plan. The sharp fall in asset prices over the past two years has
erased pension plan gains that boosted earnings at US industrial
companies.
ASBESTOS ALERT: Fund's Threat to Sue Lloyd's over Asbestos Raises Anger
-----------------------------------------------------------------------
An American "vulture fund" is targeting Equitas, the company set up to
handle old claims for the Lloyd's of London insurance market, by
attempting to scare asbestosis sufferers into selling their claims
against the UK operator.
Bermuda-based G-Risk also has an audacious plan to sue some of the most
high-profile investors, or Names, at Lloyd's if it fails to extract
enough money from Equitas. G-Risk is offering to buy individual and
company insurance claims at a discount. Asbestosis sufferers, who
could wait for years for a settlement from Equitas, are frequently
willing to sell their claims in return for immediate payouts.
G-Risk is attempting to secure more business by predicting that Equitas
is almost certain to collapse into bankruptcy within the next two
years. If that happened, claimants are likely to receive only a
fraction of the money they were seeking. The rate of asbestosis claims
has accelerated in recent years, raising doubts over the long-term
financial position of Equitas, whose accountants refuse each year to
give it a clean bill of health.
One Equitas executive attacked G-Risk's approach. "These are not crack
financial analysts," he said. "They do not have any inside knowledge
of our figures. They are simply trying to drive down the market in the
hope that when they encourage people to sell a $1 million policy for
the knock-down price of $150,000, they will make a big profit."
G-Risk, set up in January last year, said it used a network of global
buyers and sellers of insurance that could give insured people tax
benefits and an early exit route and also offered insurers "significant
benefits."
Sources in the US insurance market suggest that G-Risk plans to combine
thousands of asbestosis claims to take action against Equitas. If
Equitas runs out of funds, G-Risk intends to pursue the claims against
the Lloyd's investors who originally underwrote the risks. This could
run to several thousand individuals for every claim.
However, G-Risk plans to target high-profile investors, such as members
of the Royal family, who would be keen to settle a lawsuit rather than
being dragged through the courts. Prince Michael of Kent, for example,
is known to be a Lloyd's investor.
The Equitas executive said, "They are trying to cash in on our
misfortune and financial uncertainty . Worse, they are trying to scare
some genuine asbestosis sufferers out of money that could be theirs.
Claimants should seek good legal advice rather than selling up."
ASBESTOS ALERT: Badger Meter Faces Three Multi-Party Asbestos Lawsuits
----------------------------------------------------------------------
Badger Meter is a defendant in three multi-party asbestos suits as a
result of its membership in certain trade organizations. The cases are
pending in state court in Mississippi.
Badger Meter has never had a manufacturing plant in Mississippi.
However, some southern states have been fertile ground for asbestos
lawsuits, including Mississippi, where a jury awarded six plaintiffs
$25 million each in compensatory damages alone.
Plaintiffs in one of the Badger Meter lawsuits have argued that the
Company had a duty to inform Mississippi factory workers about the
dangers of asbestos because it belonged to national trade groups with
pertinent safety information.
There is no allegation that any Badger Meter products contained
asbestos that caused an illness, said company President Rich Meeusen
said. The company does not believe the ultimate resolution of these
claims will have a material adverse effect on the Company's financial
position or results of operations, either from a cash flow perspective
or on the financial statements as a whole.
Provision has been made for all known settlement costs. No other risks
or uncertainties were identified that could have a material impact on
operations and no long-lived assets have become permanently impaired in
value.
Badger Meter is subject to contingencies relative to environmental laws
and regulations. Currently, Badger Meter is in the process of
resolving an issue relative to a landfill site.
COMPANY PROFILE
Badger Meter, Inc. (AMEX: BMI)
4545 W. Brown Deer Rd.
Milwaukee, WI 53223
Phone: 414-355-0400
Fax: 414-371-5956
http://www.badgermeter.com
Employees : 936
Revenue : $138,500,000
Net Income : $3,400,000
Assets : $98,800,000
Liabilities : $56,000,000
Description: Badger Meter provides utilities and industrial customers
with instruments that measure and control the flow of liquids. Badger
makes meters, valves, flow tubes, and other measurement devices for
original equipment manufacturers, water and wastewater utilities, and
the pharmaceutical, chemical, concrete, and food and beverage
industries. Badger also makes a handheld device that dispenses and
monitors oil and other fluids for the automotive market. US customers
account for 87% of sales. Badger sold its ultrasonic flowmeters and
natural gas instrumentation businesses to focus on expanding and
improving its liquid measurement equipment.
ASBESTOS ALERT: Cinergy, Subsidiaries Face Asbestos Related Litigation
----------------------------------------------------------------------
Cinergy Corporation's operating units, CG&E and PSI, have been named in
lawsuits related to asbestos at their electric generating stations. In
these lawsuits, plaintiffs claim to have been exposed to asbestos
containing products in the course of their work at the CG&E and PSI
generating stations.
The plaintiffs further claim that as the property owner of the
generating stations, CG&E and PSI should be held liable for their
injuries and illnesses based on an alleged duty to warn and protect
them from any Asbestos exposure. The impact on CG&E's and PSI's
financial position or results of operations of these cases to date has
not been material.
One specific case filed against PSI has been tried to verdict.
Following a ten-week trial of the case entitled William Lee Roberts,
Jr. and Beverly Roberts v. AC&S, Inc., et al., PSI Energy, Inc., Marion
Superior Court 2, on May 24, 2002, the jury returned a verdict against
PSI in the amount of $494,000 on a negligence claim and for PSI on
punitive damages. PSI is appealing the judgment in this case.
COMPANY PROFILE
Cinergy Corp. (NYSE: CIN)
139 East Fourth Street
Cincinnati, OH 45202
Phone: 513-421-9500
Fax: 513-287-3171
Toll Free: 800-262-3000
http://www.cinergy.com
The Cincinnati Gas & Electric Company
(An Ohio Corporation)
139 East Fourth Street
Cincinnati, Ohio 45202
(513) 421-9500
PSI Energy, Inc.
(An Indiana Corporation)
1000 East Main Street
Plainfield, Indiana 46168
(513) 421-9500
Employees : 8,769
Revenue : $12,922,500,000
Net Income : $442,300,000
Assets : $12,299,800,000
Liabilities : $9,358,400,000
(As of December 31, 2001)
Description: Cinergy harnesses the synergy of regulated and
nonregulated energy markets. Its traditional operating units,
Cincinnati Gas & Electric and PSI Energy, transmit and distribute
electricity to more than 1.5 million customers and natural gas to
500,000 in Ohio, Indiana, and Kentucky. The utilities have about 6,000
MW of generating capacity. Cinergy also has wholesale energy operations
and international investments in power generation, transmission, and
distribution facilities. Other ventures include power technology (fuel
cells, solar energy) and infrastructure and consulting businesses.
ASBESTOS ALERT: Citgo Battles Asbestos-Related Cases in Various Courts
----------------------------------------------------------------------
There are about 310 lawsuits currently pending against CITGO Petroleum
in state and federal courts, primarily in Louisiana, Texas, and
Illinois.
Former employees and contractor employees seeking damages for asbestos
related illnesses allegedly resulting from exposure at refineries owned
or operated by the Company in Lake Charles, Louisiana, Corpus Christi,
Texas and Lemont, Illinois brought the cases.
In many of these cases, there are multiple defendants. In some cases,
the Company is indemnified by or has the right to seek indemnification
for losses and expense that it may incur from prior owners of the
refineries or employers of the claimants.
The Company does not believe that the resolution of the cases will have
an adverse material effect on its financial condition or results of
operations.
COMPANY PROFILE
CITGO Petroleum Corporation
1 Warren Place, 6100 S. Yale Ave.
Tulsa, OK 74136
Phone: 918-495-4000
Fax: 918-495-4511
http://www.citgo.com
Employees : 4,300
Revenue : $19,734,700,000
Net Income : $317,000,000
Assets : $5,809,900,000
Liabilities : $3,892,100,000
(As of December 31, 2001)
Description: Citgo refines and markets petroleum products, including
jet fuel, diesel fuel, heating oils, and lubricants. It markets CITGO
gasoline through about 13,400 independent retail outlets in the US
(including 2,200 7-Elevens), mainly east of the Rockies. CITGO
Petroleum owns oil refineries in Louisiana and Texas, asphalt
refineries in New Jersey and Georgia, and 41% of LYONDELL-CITGO
Refining, from which it buys light fuels. It also owns a 142-mile crude
oil pipeline and has stakes in three crude oil pipeline companies and
five refined product pipeline firms. CITGO Petroleum is the operating
subsidiary of PDV America, itself a subsidiary of Venezuela's PDVSA.
ASBESTOS ALERT: Gardner Denver Faces Several Asbestos Related Lawsuits
----------------------------------------------------------------------
Gardner Denver is a party to various legal proceedings, lawsuits and
administrative actions, which are of an ordinary or routine nature.
Due to the bankruptcies of several asbestos manufacturers and other
primary defendants, the Company has begun to be named as a defendant in
an increasing number of asbestos personal injury lawsuits.
In addition, the Company has also been named as a defendant in a number
of silicosis personal injury lawsuits. Predecessors to the Company
manufactured and sold the products allegedly at issue in these asbestos
and silicosis lawsuits, namely:
(1) asbestos-containing components supplied by third parties; and
(2) portable compressors that were used as components for
sandblasting equipment manufactured and sold by other
parties.
Since its formation in 1993, the Company has not manufactured or sold
asbestos containing products or portable compressors. Nonetheless,
these lawsuits represent potential contingent liabilities to the
Company as a result of its predecessors' historical sales of these
products.
The Company believes that these pending legal proceedings, lawsuits and
administrative actions will not, in the aggregate, have a material
adverse effect on its consolidated financial position, results of
operations or liquidity, based on:
(i) the Company's anticipated insurance and indemnification
rights to address the risks of such matters;
(ii) the limited risk of potential asbestos exposure from the
components described above, due to the complete enclosure of
the components within the subject products and the additional
protective non-asbestos binder which encapsulated the
components;
(iii) the fact that neither the Company, nor its predecessors, ever
manufactured, marketed or sold sandblasting equipment;
(iv) various other potential defenses available to the Company with
respect to such matters; and
(v) the Company's prior disposition of comparable matters.
COMPANY PROFILE
Gardner Denver, Inc. (NYSE: GDI)
1800 Gardner Expwy.
Quincy, IL 62301
Phone: 217-222-5400
Fax: 217-228-8247
http://www.gardnerdenver.com
Employees : 2,000
Revenue : $419,800,000
Net Income : $22,000,000
Assets : $488,700,000
Liabilities : $290,000,000
(AS of December 31, 2001)
Description: Gardner Denver Inc sells Joy-brand compressors as well as
reciprocating, rotary screw, and sliding vane compressors and positive
displacement and centrifugal blowers. Manufacturing plants and
industrial facilities use the compressors to produce durable goods,
process petroleum and pharmaceuticals, and to treat wastewater.
Compressed air products account for more than 70% of its sales. Gardner
Denver also makes well-servicing pumps for oil and natural gas
companies, and it is adding.
ASBESTOS ALERT: KeySpan Subsidiaries Face Asbestos Related Litigation
---------------------------------------------------------------------
KeySpan subsidiaries, along with several other parties, have been named
as defendants in numerous proceedings filed by plaintiffs claiming
various degrees of injury from asbestos exposure. Most of these
proceedings have been commenced in the New York State Supreme Court for
New York County by contractor employees allegedly as a result of
exposure to asbestos in connection with the construction and
maintenance of its electric generating facilities.
At the present time, KeySpan is unable to determine the outcome of
these proceedings, but does not believe that such outcome, if adverse,
will have a material effect on its financial condition or results of
operation.
COMPANY PROFILE
KeySpan Corporation (NYSE: KSE)
1 MetroTech Center
Brooklyn, NY 11201-3850
Phone: 718-403-1000
Fax: 718-488-1782
Toll Free: 888-222-7359
http://www.keyspanenergy.com
Employees : 13,000
Revenue : $6,633,100,000
Net Income : $224,300,000
Assets : $11,789,600,000
Liabilities : $8,814,800,000
(As of December 31, 2001)
Description: KeySpan's Energy Delivery units bring natural gas to 2.5
million customers in New York, Massachusetts, and New Hampshire. The
company also contracts with the Long Island Power Authority to manage
electricity service for about 1.1 million customers, and it owns
fossil-fueled power plants with a combined generating capacity of 6,200
MW. KeySpan markets electricity and gas to retail customers in the
Northeast, and it sells capacity on its fiber-optic network in the New
York City area to telecom carriers and ISPs.
ASBESTOS ALERT: Ladish Co. Asbestos Related Suits Begin Piling Up
-----------------------------------------------------------------
Ladish Co. Inc. has been named as a defendant in a number of lawsuits
filed in Circuit Court in the State of Mississippi alleging personal
injuries from asbestos exposure.
The Company has notified its insurers and is vigorously defending these
claims, saying it has never manufactured asbestos and does not believe
that its products contain asbestos. At this time, the Company cannot
predict the outcome of this litigation.
COMPANY PROFILE
Ladish Co., Inc. (NASDAQ: LDSHE)
5481 S. Packard Ave.
Cudahy, WI 53100
Phone: 414-747-2611
Fax: 414-747-2963
http://www.ladishco.com
Employees : 1,193
Revenues : $252,400,000.00
Net Income : $16,400,000.00
Assets : $210,800,000.00
Liabilities : $106,100,000.00
(As of December 31, 2001)
Description: Ladish Co. Inc. designs and manufactures high-strength
forged and cast metal components for aerospace and industrial markets.
Jet engine parts, missile components, landing gear, helicopter rotors,
and aerospace products account for more than 90% of sales. The company
also makes large crankshafts and metal forgings used in power-
generation equipment and heavy-duty off-road vehicles. Rolls-Royce,
United Technologies, and GE together account for around 50% of Ladish's
sales; the US government accounts for 15%. About half of Ladish's total
sales are in the US. Grace Brothers owns about 30% of the company.
ASBESTOS ALERT: McKesson Says Former Division To Assume Asbestos Costs
----------------------------------------------------------------------
McKesson Corporation, through its former division, has been named as
one of more than 200 defendants in 41actions filed in state courts in
Mississippi as a result of the former division's alleged distribution
of asbestos. These actions typically involve multiple plaintiffs
claiming personal injuries and unspecified compensatory and punitive
damages arising from their alleged exposure to asbestos-containing
materials.
McKesson Corporation sold the assets of its former McKesson Chemical
Company division in 1986. The provisions of the sale included an
indemnification agreement, which, by its terms, obligates the buyer
(now known as Univar USA, Inc.) to defend and fully indemnify the
Company from various claims including those alleging personal injury.
The Company has tendered each of these cases to Univar under the terms
of the Indemnity Agreement, and Univar is defending the Company in all
cases. However, Univar has recently advised the Company that it wants
to confer and discuss the extent of Univar's obligations under the
Indemnity Agreement.
The Company has made no payments, nor paid or incurred any costs or
expenses in connection with these actions to date. In addition, the
Company believes that, if necessary, a portion of these claims would be
covered by insurance.
COMPANY PROFILE
McKesson Corporation (NYSE: MCK)
1 Post St.
San Francisco, CA 94104
Phone: 415-983-8300
Fax: 415-983-7160
http://www.mckesson.com
Employees : 24,000
Revenue : $50,006,000,000
Net Income : $418,600,000
Assets : $13,324,000,000
Liabilities : $9,383,900,000
(As of March 31, 2002)
Description: McKesson (formerly McKesson HBOC) is the second-largest
pharmaceuticals distributor (Cardinal Health is #1) in the US. The
company distributes pharmaceuticals, health and beauty care products,
medical supplies, and equipment throughout the country via 30
distribution centers serving all 50 states. The company's Zee Medical
subsidiary provides safety training and first aid products. Medication
Management operates as a pharmacy management consulting subsidiary.
McKesson also offers information management software and other
technical resources for health care providers, including hospitals,
managed care providers, and physician groups.
ASBESTOS ALERT: NSI Announces Settlement of Texas Asbestos Litigation
---------------------------------------------------------------------
National Service Industries (NYSE: NSI) announced that it has entered
into an agreement in principle to settle a significant number of
asbestos claims currently pending against the Company in Jefferson
County (Beaumont) and Orange County, Texas.
These cases were filed in Texas on behalf of Alabama residents before
tort reform was enacted in the State of Texas in 1997. Texas tort
reform prohibits future out-of-state plaintiffs with injuries incurred
in other states from bringing their claims in Texas state courts.
The settlement will require a series of scheduled payments in 2003 and
2004. NSI expects substantially all of these payments to be covered by
its available insurance. Specific terms of the settlement are
confidential, pursuant to agreement with the plaintiffs' counsel.
"We are pleased to put these pre-tort reform Texas cases behind us,"
said Brock Hattox, Chairman and Chief Executive Officer of NSI. "These
cases involved out-of-state plaintiffs who brought these claims against
us in unfavorable judicial venues in Jefferson County and Orange
County, Texas. We recognize that this is a large settlement. However,
by settling these cases we believe we have significantly reduced our
overall litigation risk."
Subsequent to August 31, the company concluded that it was in the best
interests of the company and its shareholders to settle these Texas
pre-tort reform claims for amounts greater than originally anticipated,
rather than risk potentially higher jury awards. As a result, the
company will increase on its balance sheet its asbestos liability and
recoverable insurance receivable by $64 million and $53 million,
respectively, as of August 31, 2002.
The difference between the increase in the liability and receivable
will result in an additional $11 million pre-tax charge to earnings in
the fourth quarter of the fiscal year ended August 31, 2002. Although
substantially all of the cash payments associated with this settlement
are anticipated to be covered by insurance, the $11 million charge is
necessary to account for insolvent insurers based on future
projections.
After considering the recording of this transaction, the Company's
diluted earnings per share from continuing operations for the year
ended August 31, 2002 will be a 67-cent loss per share.
Management will continue to monitor its asbestos related activities,
including all claims, the status of lawsuits (including settlement
initiatives), legislative developments, insurance related matters and
costs incurred. As additional information becomes available, the
company will reassess its liability and insurance receivable and revise
and record its estimates in the future reporting periods as necessary.
COMPANY PROFILE
National Service Industries, Inc. (NYSE: NSI)
1420 Peachtree St., NE
Atlanta, GA 30309-3002
Phone: 404-853-1000
Fax: 404-853-1015
http://www.nationalservice.com
Employees : 7,100
Revenue : $532,400,000
Net Income : $(32,072,000)
Assets : $519,098,000
Liabilities : $298,465,000
(As of August 31, 2002)
Description: NSI operates two segments, linen rental and envelope
manufacturing. Its National Linen Service unit rents linens and related
products to the restaurant, lodging, and health care industries,
primarily in the southeastern US. Its other subsidiary, Atlantic
Envelope, makes custom envelopes and other office products. In late
2001 NSI spun off Lithonia Lighting Group (residential, commercial,
industrial, and institutional lighting fixtures) and NSI Chemicals
Group into a new company named Acuity Brands.
ASBESTOS ALERT: NL Industries Faces 3,700 More Asbestos Related Claims
----------------------------------------------------------------------
Since the filing of NL's SEC Quarterly Report on Form 10-Q for the
quarter ended March 31, 2002, NL Industries has been named as a
defendant in asbestos and/or silica cases in various jurisdictions
brought on behalf of about 3,700 additional personal injury claimants.
Included in the foregoing total is one case in Mississippi state court
involving approximately 3,005 plaintiffs (Lawrence Graves, et al. vs.
Monsanto Company, et al., Circuit Court, Second Judicial District,
Jones County, Mississippi, Civil Action No. 2002-141-CV4).
The Company anticipates that several of these cases will be set for
trial from time-to-time for the foreseeable future.
COMPANY PROFILE
NL Industries, Inc. (NYSE: NL)
16825 Northchase Drive
Suite 1200
Houston TEXAS 77060-2544
Phone: +1 281 423-3300
http://www.nl-ind.com
Employees : 2,500
Revenues : $835,100,000.00
Net Income : $121,400,000.00
Assets : $1,151,100,000.00
Liabilities : $764,100,000.00
No of Asbestos Claims: 3,700
(As of December 31, 2001)
Description: NL Industries manufactures titanium dioxide pigments,
which are used for imparting whiteness, brightness and opacity to a
wide range of products including paints, plastics, papers and ceramics.
Kronos currently produces over 40 different titanium dioxide grades
sold under the Kronos and Titanoxsold under the Kronos and Titanox
Trademarks. The international operations of the company are conducted
through Kronos International, Inc., a Germany-based holding company.
The company conducts mining and sells ilmenite ore and manufactures and
sells ilmenite ore and iron-based water treatment chemicals. The
company's current production capacity is located mostly in Europe and
Canada.
ASBESTOS ALERT: PPL Corporation Faces Several Asbestos Related Lawsuits
-----------------------------------------------------------------------
There have been increasing litigation claims throughout the U.S. based
on exposure to asbestos against companies that manufacture or
distribute asbestos products or that have these products on their
premises.
Certain of PPL's generation subsidiaries and certain of its energy
services subsidiaries, such as those that have supplied or installed
asbestos material in connection with the repair or installation of
heating, ventilating and air conditioning systems, have been named as
defendants in asbestos-related lawsuits.
PPL cannot predict the outcome of these lawsuits or whether additional
claims may be asserted against its subsidiaries in the future. PPL
does not expect that the ultimate resolution of the current lawsuits
will have a material adverse effect on its financial condition.
Electric and Magnetic Fields (PPL, PPL Energy Supply and PPL Electric)
Concerns have been expressed by some members of the scientific
community and others regarding the potential health effects of EMFs.
These fields are emitted by all devices carrying electricity, including
electric transmission and distribution lines and substation equipment.
Government officials at all levels in the U.S. and government officials
in the U.K. have focused attention on this issue.
PPL and its subsidiaries support the current efforts to determine
whether EMFs cause any human health problems and are taking low cost or
no cost steps to reduce EMFs, where practical, in the design of new
transmission and distribution facilities.
PPL is unable to predict what effect, if any, the EMF issue might have
on its operations and facilities either in the U.S. or abroad, and the
associated cost, or what, if any, liabilities it might incur related to
the EMF issue. Lower Mt. Bethel (PPL and PPL Energy Supply.
COMPANY PROFILE
PPL Corporation (NYSE: PPL)
2 N. 9th St.
Allentown, PA 18101-1179
Phone: 610-774-5151
Fax: 610-774-4198
Toll Free: 800-345-3085
http://www.pplweb.com
Employees : 12,496
Revenue : $5,725,000,000
Net Income : $231,000,000
Assets : $12,574,000,000
Liabilities : $10,635,000,000
(As of December 31, 2001)
Description: PPL packs a powerful punch in Pennsylvania, where it
distributes electricity to about 1.3 million customers through
regulated subsidiary PPL Electric Utilities. PPL also generates
electricity and sells it in wholesale and retail markets in North
America, and it holds stakes in electricity distributors (serving 4.4
million customers) and power plants in Europe and Latin America. Other
businesses include energy management and infrastructure services,
natural gas and propane distribution, mechanical and electrical
contracting, and engineering services.
ASBESTOS ALERT: USMR Faces Lawsuits for Asbestos Exposure in Shipyards
----------------------------------------------------------------------
Unites States Maritime Repair Inc. has been named together with a
number of other parties as defendant in multiple civil actions by
various parties alleging damages from past exposure to asbestos at USMR
shipyards and aboard the ships USMR has repaired.
The pending actions against USMR involve claims regarding injuries or
illnesses allegedly caused by exposure to asbestos. To date USMR has
not been found liable in any of these actions.
COMPANY PROFILE
United States Maritime Repair Inc.
750 W. Berkley Ave.
Norfolk, VA 23523
Phone: 757-494-4000
Fax: 757-494-4184
http://www.usmarinerepair.com
Employees : 2,200
Revenues : $390,700,000.00
Net Income : $10,100,000.00
Assets : $213,200,000.00
Liabilities : $240,600,000.00
(As of December 31, 2001)
Description: United States Marine Repair (USMR), the largest non-
nuclear ship repair firm in the US, operates facilities at the US
Navy's principal ports: Norfork, Virginia, the home of the Atlantic
Fleet; and San Diego, California, the home of the Pacific Fleet. It
also operates smaller shipyards in San Francisco and San Pedro,
California, and Ingleside, Texas. USMR also maintains a presence in
Hawaii through its agreement with Pacific Shipyards International. The
company was formed in 1998 when investment firm The Carlyle Group
combined Southwest Marine and Norshipco. USMR was acquired by United
Defense Industries in 2002.
ASBESTOS ALERT: Oglebay Says Insurance Covers Known Asbestos Litigation
-----------------------------------------------------------------------
Oglebay Norton Company and certain of its subsidiaries are involved in
various claims and routine litigation incidental to their businesses,
including claims relating to the exposure of persons to asbestos and
silica.
The full impact of the claims and proceedings in the aggregate
continues to be unknown. The company believes that these claims and
proceedings are covered by insurance and are unlikely to have a
material adverse effect on the company's financial statements.
COMPANY PROFILE
Oglebay Norton Company (Nasdaq: OGLE)
1100 Superior Ave., 21st Fl.
Cleveland, OH 44114-2598
Phone: 216-861-3300
Fax: 216-861-2399
Toll Free: 800-894-8587
http://www.oglebaynorton.com
Employees : 1,881
Revenues : $404,200,000.00
Net Income : $(18,800,000.00)
Assets : $680,100,000.00
Liabilities : $558,200,000.00
As of December 31, 2001
Description: Two-thirds of the company's sales come from its Great
Lakes Minerals and Global Stone units (limestone, lime, and
construction aggregates), which operate 15 plants in the US. Oglebay
Norton's Performance Minerals segment has nine silica plants and two
mica mining operations. The company's products are used in the steel,
construction, building materials, oil well services, fiberglass and
ceramics, and environmental industries. Primarily a shipping company
until 1998, Oglebay Norton still operates a Great Lakes fleet that
transports limestone, coal, and iron ore.
ASBESTOS ALERT: WABTEC Asbestos Related Claims Predate 1990 Formation
----------------------------------------------------------------------
Westinghouse Air Brake Technologies Corporation says that its
operations and that of its affiliates do not use and their products do
not contain any asbestos.
Asbestos actions have been filed against the company and certain of its
affiliates. Consistent with the experience of others, the numbers of
claims have increased in recent years. The asbestos claims involve
products sold prior to the 1990 formation of the company.
The Company and its affiliates have not incurred any significant costs
related to these asbestos claims. The claims are covered by insurance
or are subject to indemnity from the companies who manufactured or sold
the products in question. The Company believes that these claims will
not be material.
COMPANY PROFILE
Wabtec Corporation (NYSE: WAB)
1001 Air Brake Ave.
Wilmerding, PA 15148
Phone: 412-825-1000
Fax: 412-825-1019
http://www.wabtec.com
Employees : 4,436
Revenues : $783,700,000.00
Net Income : $61,800,000.00
Assets : $730,000,000.00
Liabilities : $484,800,000.00
As of December 31, 2001
Description: Westinghouse Air Brake Technologies Corp is a
manufacturer of braking equipment and other parts for locomotives,
freight cars, and passenger railcars. Its products include air brake
systems, electronic monitoring and control equipment, traction motors,
draft gears, door controls, and climate-control equipment. Wabtec also
makes low-horsepower locomotives and supplies replacement parts and
repair services to customers such as the Metropolitan Transportation
Authority/New York City Transit.
New Securities Fraud Cases
CREDIT SUISSE: Pomerantz Haudek Files Securities Fraud Suit in S.D. NY
----------------------------------------------------------------------
Pomerantz Haudek Block Grossman & Gross, LLP initiated a securities
class action in the United States District Court for the Southern
District of New York against Credit Suisse First Boston Corporation and
Elliott Rogers, on behalf of investors who purchased the common stock
of Agilent Technologies, Inc. (NYSE:A) during the period from December
13, 1999 through September 9, 2002, inclusive.
The complaint alleges that CSFB issued analyst reports regarding
Agilent that recommended the purchase of the Company's common stock.
However, such analyst reports were false and misleading because they
conflicted with defendants' privately expressed doubts and failed to
disclose that defendants' coverage and ratings of Agilent were not
independent and objective, but instead were biased and a marketing tool
for CSFB to maintain and enhance its investment banking business with
Agilent.
Throughout the class period, CSFB maintained "Buy" or "Hold"
recommendations on Agilent in order to obtain and support lucrative
financial deals for CSFB. As a result of CSFB's false and misleading
analyst reports, Agilent common stock traded at artificially inflated
levels during the class period.
On October 21, 2002, the Commonwealth issued a press release announcing
that it had charged CSFB with violating the Massachusetts Securities
Act by issuing false and misleading analyst reports on numerous
companies. The Commonwealth complaint describes the influence and
control exerted by CSFB's investment bankers on its supposedly
independent research analysts and seeks to order CSFB to separate its
investment banking and research departments and to impose a nearly $2
million fine.
For more details, contact Andrew G. Tolan by Phone 888-476-6529,
888-4-POMLAW by E-mail: agtolan@pomlaw.com or visit the firm's Website:
http://www.pomerantzlaw.com
SALOMON SMITH: Cohen Milstein Launches Securities Fraud Suit in S.D. NY
-----------------------------------------------------------------------
Cohen, Milstein, Hausfeld & Toll, PLLC initiated a securities class
action in the United States District Court for the Southern District of
New York against Salomon Smith Barney, Inc., and Jack Grubman on behalf
of all persons or entities who purchased the common stock of Metromedia
Fiber Networks (OTC:MFNXQ.PK) from November 25, 1997 through July 25,
2001, inclusive.
The suit arises as a result of the issuance by the Defendants of
analyst reports regarding Metromedia which recommended the purchase of
Metromedia common stock and which allegedly set price targets for
Metromedia common stock without any reasonable factual basis.
Furthermore, when issuing the Metromedia reports, defendants allegedly
failed to disclose significant, material conflicts of interest which
they had, in light of their use of Mr. Grubman's reputation and his
Metromedia analyst reports, to obtain investment banking business for
Salomon Smith Barney.
Throughout the class period, defendants maintained a "Buy"
recommendation on Metromedia in order to obtain and support lucrative
financial deals for Salomon Smith Barney. Salomon Smith Barney
garnered millions of dollars in fees as a result of underwriting and
managing debt and equity offerings on behalf of Metromedia.
For more details, contact Steven J. Toll or Robert Smits by Mail: 1100
New York Avenue, NW West Tower, Suite 500, Washington, DC 20005 by
Phone: 888-240-0775 or 202-408-4600 by E-mail: stoll@cmht.com or
rsmits@cmht.com or visit the firm's Website: http://www.cmht.com
SALOMON SMITH: Schoengold & Sporn Commences Securities Lawsuit in NY
--------------------------------------------------------------------
Schoengold & Sporn, PC initiated a securities class action against
Citigroup, Inc., Salomon Smith Barney, Inc. and Jack Grubman, in the
United States District Court for the Southern District of New York on
behalf of all person or entities who purchased or otherwise acquired
the common stock of Metromedia Fiber Network, Inc. Other (OTC:MFNXQ)
securities during the period between November 25, 1997 and July 25,
2001.
The suit alleges that defendants violated Section 10(b) of the
Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder,
by issuing analyst reports regarding Metromedia that recommended the
purchase of Metromedia common stock and which set price targets for
Metromedia common stock, without any reasonable factual basis.
The complaint further alleges that, when issuing its Metromedia analyst
reports, Defendants failed to disclose significant, material conflicts
of interest which it had, in light of Defendants' Metromedia reports,
to obtain investment banking business for Salomon.
Furthermore, in issuing Metromedia reports, in which it recommended the
purchase of Metromedia common stock, Defendants failed to disclose
material, non-public, adverse information, which they possessed about
Metromedia.
Throughout the class period, Defendants maintained a "BUY"
recommendation on Metromedia in order to obtain and support lucrative
financial deals for Salomon.
The class period begins on November 25, 1997 the date when Salomon
"initiated coverage" of and issued their first report on Metromedia.
The class period ends on July 25, 2001, the date Defendants belatedly
downgraded Metromedia from a "Buy" to a "Neutral."
As a result of defendants' false and misleading analyst reports,
Metromedia common stock traded at artificially inflated levels during
the class period.
For more details, contact Schoengold & Sporn PC by Mail: 19 Fulton
Street, Suite 406, New York, New York 10038 or by Phone: 866-348-7700
SALOMON SMITH: Lovell Stewart Launches Securities Fraud Suit in S.D. NY
-----------------------------------------------------------------------
Lovell Stewart Halebian LLP initiated a securities class action on
behalf of all persons who purchased, converted, exchanged or otherwise
acquired the securities of Williams Communications Group, Inc.
(NasdaqNM:WCG) between October 27, 1997 and November 2, 2001,
inclusive.
This lawsuit is related to a group of actions brought against Jack
Grubman and Salomon Smith Barney. The suit is pending in the US
District Court for the Southern District of New York and asserts claims
under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934
and Rule 10b-5 promulgated by the SEC thereunder and the common law and
seeks to recover damages.
The complaint alleges that during the class period Salomon Smith
Barney, Inc. and Jack Grubman, Salomon Smith Barney's lead
telecommunications analyst, made misrepresentations and omissions of
material fact, including:
(1) recommending Williams Communications and setting price targets
for Williams Communications stock without any reasonable
basis,
(2) failing to disclose nonpublic information that defendants
possessed about Williams Communications, and
(3) failing to disclose that defendants maintained a "buy"
recommendation on Williams Communications in order to obtain
and support lucrative investment banking engagements for
Salomon Smith Barney.
The complaint alleges that the foregoing harmed investors by causing
the market price of Williams Communications Group securities to be
artificially inflated during the class period.
For more details, contact John Halebian or Christopher J. Gray by
Phone: 212-608-1900 by E-mail: info@lshllp.com
SALOMON SMITH: Cohen Milstein Launches Securities Fraud Suit in S.D. NY
-----------------------------------------------------------------------
Cohen, Milstein, Hausfeld & Toll, PLLC initiated a securities class
action in the United States District Court for the Southern District of
New York against Salomon Smith Barney, Inc. and Jack Grubman on behalf
of all persons or entities who purchased the common stock of Williams
Communications Group, Inc. (NYSE: WCG) from October 27, 1997 through
November 2, 2001, inclusive.
The suit arises as a result of the issuance by the Defendants of
analyst reports regarding Williams which recommended the purchase of
Williams common stock and which allegedly set price targets for
Williams common stock without any reasonable factual basis.
Furthermore, when issuing the Williams reports, defendants allegedly
failed to disclose significant, material conflicts of interest which
they had, in light of their use of Mr. Grubman's reputation and his
Williams analyst reports, to obtain investment banking business for
Salomon Smith Barney.
Throughout the class period, defendants maintained an "Buy"
recommendation on Williams in order to obtain and support lucrative
financial deals for Salomon Smith Barney. Salomon Smith Barney
garnered millions of dollars in fees as a result of underwriting and
managing several debt and equity offerings on behalf of Williams.
For more details, contact Steven J. Toll or Diana Steele by Mail: 1100
New York Avenue, NW, West Tower, Suite 500, Washington, DC 20005 by
Phone: 888-240-0775 or 202-408-4600 by E-mail: stoll@cmht.com or
dsteele@cmht.com or visit the firm's Website: http://www.cmht.com
ST. PAUL: Bernstein Liebhard Launches Securities Fraud Suit in MN Court
-----------------------------------------------------------------------
Bernstein Liebhard & Lifshitz, LLP initiated a securities class action
in the United States District Court for the District of Minnesota on
behalf of all persons who purchased or acquired The St. Paul Companies
(NYSE: SPC) common stock between November 5, 2001 and July 9, 2002,
inclusive.
The complaint charges the Company and certain of its officers and
directors with issuing false and misleading statements concerning its
business and financial condition. Specifically, the complaint alleges
the defendants' omissions and misleading statements concerning the
Company's exposure to asbestos claims liability caused St. Paul's stock
price to become artificially inflated, inflicting damages on investors.
The suit claims that during the class period, defendants failed to make
adequate disclosures or take adequate reserves concerning litigation
filed in 1993 in California state court known as Western MacArthur Co.
et al. v. United States Fidelity & Guaranty Co., et al, Case No.
721595-7 (consolidated with Case No. 828101-2, Superior Court of
California, Alameda County).
Plaintiffs allege that although trial of the Western MacArthur
litigation commenced in approximately March 2002, the Company first
disclosed the existence of the litigation on or about May 15, 2002, but
did not disclose or quantify the amount or general magnitude of
potential exposure to liability which St. Paul might suffer as a result
of the litigation, nor did the Company increase its reserves at that
time.
On June 3, 2002, the Company announced that a settlement had been
reached whereby St. Paul would pay almost $1 billion to satisfy the
claims reflected in the litigation, although the Company's SEC filings
stated that as of December 31, 2001, the Company's net reserves for
asbestos claims was only $367 million.
The suit charges that the Company tried to disguise the impact of the
Western MacArthur litigation settlement by focusing on the alleged
after-tax impact of the litigation and falsely claiming that $150
million of the litigation payments could be charged to the Company's
reserves, and that a subsequent SEC filing by the Company reflected St.
Paul's failure to take adequate reserves for its potential liability in
the litigation.
News of the Western MacArthur litigation settlement caused the price of
the Company's stock to decline during the class period from a high of
$49.20 on November 5, 2001 to a low of $34.65 on July 9, 2002, the last
day of the class period.
For more details, contact Ms. Linda Flood, Director of Shareholder
Relations by Mail: 10 East 40th Street, New York, New York 10016 by
Phone: 800-217-1522 or 212-779-1414 by E-mail: SPC@bernlieb.com or
visit the firm's Website: http://www.bernlieb.com.
SYNCOR INTERNATIONAL: Cauley Geller Launches Securities Suit in C.D. CA
-----------------------------------------------------------------------
Cauley Geller Bowman & Coates, LLP initiated a securities class action
in the United States District Court for the Central District of
California, on behalf of purchasers of the common stock of Syncor
International Corp. (Nasdaq: SCOR) publicly traded securities during
the period between April 25, 2001 and November 5, 2002, inclusive. The
suit names as defendants the Company and:
(1) Monty Fu, Chairman of the Board,
(2) Robert G. Funari, President and Chief Executive Officer,
(3) Moses Fu, Director of Syncor Overseas Ltd. and
(4) William Forester, Chief Financial Officer and Sr. Vice
President of the Company
The defendants allegedly violated Sections 10(b) and 20(a) of the
Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder,
by issuing a series of material misrepresentations to the market during
the class period thereby artificially inflating the price of Company
securities.
The suit alleges these press releases and SEC filings were materially
false and misleading: April 25, 2001 press release, the March 31, 2001
Form 10-Q, July 24, 2001 press release, June 30, 2001 Form 10-Q,
October 24, 2001 press release, September 30, 2001 Form 10-Q, February
20, 2002 press release, 2001 10-K, April 24, 2002 press release, March
31, 2002 Form 10-Q, July 30, 2002 press release, October 11, 2002 press
release.
These press releases and public filings were materially false and
misleading in that they failed to disclose that throughout the Class
Period, the Company's Chairman of the Board and the director of its
Asian division were making illegal payments to Syncor's overseas
customers.
Before the market opened on November 6, 2002, the Company shocked the
market by announcing that it was conducting an internal investigation
into illegal payments to its overseas customers and had contacted the
Justice Department and the Securities and Exchange Commission, and that
its previously announced acquisition by Cardinal Health, Inc. was in
doubt.
As a result of this news, Syncor's stock price dropped sharply in pre-
market trading to $22.50 per share, down $13.42 per share from its
previous closing price of $35.92, and Nasdaq halted trading of Syncor's
stock pending a satisfactory response to its request for additional
information from the Company. When trading resumed the price of
Syncor's stock dropped $8.52 to $27.
For more details, contact Jackie Addison, Heather Gann or Sue Null by
Mail: P.O. Box 25438, Little Rock, AR 72221-5438 by Phone: 888-551-9944
by E-mail: info@cauleygeller.com or visit the firm's Website:
http://www.cauleygeller.com
TENET HEALTHCARE: Weiss Yourman Files Securities Fraud Suit in C.D. CA
----------------------------------------------------------------------
Weiss & Yourman initiated a securities class action in the United
States District Court for the Central District of California on behalf
of purchasers of Tenet Healthcare Corporation (NYSE: THC) common stock
between October 3, 2001 and November 7, 2002, inclusive.
The suit charges that defendants violated Sections 10(b) and 20(a) of
the Securities Exchange Act of 1934 and Rule 10-b(5). The action
arises from damages incurred by the class as a result of a scheme and
common course of conduct by defendants, which operated as a fraud and
deceit on the class during the class period.
Tenet operates general hospitals and related health care facilities
throughout the United States. The complaint alleges that during the
class period, defendants repeatedly represented that Tenet's financials
were strong due largely to its state-of-the-art facilities and
commitment to high-quality and cost-effective patient care.
However, defendants knew that the Company's financial statements were
artificially inflated by, among other things, wrongfully inducing
patients to undergo unnecessary and invasive surgeries. As further
alleged, due to defendants' deceptive and illegal conduct, plaintiff
and the other class members purchased their Company securities at
artificially inflated prices and were damaged thereby.
For more details, contact the firm by Phone: 800-437-7918 by E-mail:
info@wyca.com or visit the firm's Website: http://www.wyca.com
TENET HEALTHCARE: LeBlanc Waddell Lodges Securities Lawsuit in C.D. CA
----------------------------------------------------------------------
LeBlanc & Waddell, LLC commenced a securities class action against
Tenet Healthcare Corporation (NYSE:THC) and certain of its current and
former top officers, accusing the for-profit hospital chain of
defrauding its shareholders, in the U.S. District Court for the Central
District of California. It seeks damages for violations of federal
securities laws on behalf of all investors who bought Company
securities from October 3, 2001 through October 31, 2002.
The lawsuit claims that the Company artificially inflated its financial
results by using aggressive pricing tactics to over-bill Medicare.
Investors began to learn the truth about Tenet on October 28, 2002 when
a UBS Warburg analyst revealed that the company was far more dependent
than other hospitals on Medicare outlier payments, and that those
payments had tripled over 3 years to total nearly a quarter of Tenet's
projected revenue for this fiscal year. Outlier payments are
reimbursements made from Medicare when patient care exceeds the normal
cost.
Then, on October 31, 2002, news broke that the FBI was investigating
two doctors at Tenet's Redding Medical Center in California for
allegedly performing many unnecessary heart surgeries and billing
Medicare for them, thus artificially boosting the hospital's revenue
and profits.
According to the news articles, the two doctors had performed these
unnecessary and invasive procedures on as many as 25 to 50 percent of
their patients since at least 1995. Three other doctors associated with
Tenet had concluded that many of the procedures were "medically
unnecessary," but Tenet refused to investigate or stop the practice
after hearing of the complaints, according to the lawsuit.
As a result of these revelations, Tenet's stock price has dropped from
an all-time high of $52.50 per share on Oct. 3, 2002 to around $15 per
share today, erasing a staggering $11 billion in market value.
For more details, contact Chad A. Dudley by Mail: 5353 Essen Lane,
Suite 420, Baton Rouge LA 70809 by Phone: 800-988-3514 or by E-mail:
cdudley@leblancwaddell.com
TENET HEALTHCARE: Schatz & Nobel Lodges Securities Fraud Suit in CA
-------------------------------------------------------------------
Schatz & Nobel PC initiated a securities class action in the United
States District Court for the Central District of California on behalf
of all persons who purchased or otherwise acquired the publicly traded
securities of Tenet Healthcare Corp. (NYSE: THC) from October 3, 2001
through October 31, 2002, inclusive.
The suit alleges that the company, which through its subsidiaries, owns
and operates general hospitals and healthcare related facilities in the
United States, made misrepresentations concerning its financial
condition. The suit alleges that defendants represented that Tenet's
financials were strong due to its state-of-the-art facilities and cost-
effective care.
According to the suit, defendants knew that Tenet's profits were
inflated by wrongfully inducing patients into undergoing unnecessary
and invasive surgeries. The scheme included unnecessary heart
catheterizaton, including stent placement, angioplasty, coronary artery
bypass surgery and heart valve replacement surgery.
On October 31, 2002, the Associated Press issued a press release
stating that the Company had plunged over 26% after federal prosecutors
filed an affidavit regarding alleged false billing by two doctors at
its Redding, California facility. The stock was also hurt by a rumor,
denied by the Company, that the FBI had searched Tenet's corporate
headquarters. On this news, the stock price dropped $10.22 to close at
$28.75 per share on October 31, 2002.
For more details, contact Nancy A. Kulesa by Phone: 800-797-5499 by E-
mail: sn06106@aol.com or visit the firm's Website: http://www.snlaw.net
*********
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., Trenton, New Jersey, and
Beard Group, Inc., Washington, D.C. Enid Sterling, Aurora Fatima
Antonio and Lyndsey Resnick, Editors.
Copyright 2002. All rights reserved. ISSN 1525-2272.
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