/raid1/www/Hosts/bankrupt/CAR

/raid1/www/Hosts/bankrupt/CAR_Public/030131.mbx C L A S S A C T I O N R E P O R T E R Friday, January 31, 2003, Vol. 5, No. 22 Headlines BANKRATE INC.: Appeals Court Affirms Dismissal of Securities Fraud Suit BAYER AG: Share Prices Fall On Word of Likely Increase in Baycol Suits CREDIT CARDS: Tel Aviv Court Allows Consumer Fraud Lawsuit to Proceed FASTFOOD LITIGATION: Lawyers Use Reports Saying Overeating "Addictive" GEORGIA: Bankers Association Files Suit To Block Predatory Lending Law MASSACHUSETTS: Court Orders Special Help For Retarded In Nursing Homes MICROSOFT CORPORATION: ND High Court Allows Antitrust Suit To Proceed NEBRASKA: Low-Income Parents Commence Lawsuit Seeking Medicaid Benefits NEVADA: NV Judge Faces Civil Rights Lawsuit Over Sentencing Violations STOCKWALK GROUP: Moves Closer To Settlement of MN Securities Fraud Suit TENNESSEE: Court Monitor Recommends Remodeling of Knox County Facility Asbestos Alert ASBESTOS LITIGATION: Asbestos Claims Against US Insurers Approach $34B ASBESTOS LITIGATION: Swindon Firms Start Drive to Stop Asbestos Deaths ASBESTOS LITIGATION: Parliament to Hold Public Hearings on Asbestos ASBESTOS LITIGATION: Ashland Inc. Reports Loss on Asbestos Litigation ASBESTOS LITIGATION: Crane Posts Net Loss on Asbestos-Related Charges ASBESTOS LITIGATION: Shares of Owens-Corning May Become Worthless ASBESTOS LITIGATION: UK Insurers Accused of Avoiding Asbestos Liability ASBESTOS LITIGATION: Saint-Gobain Rules Out ABB-Style Asbestos Payment ASBESTOS LITIGATION: Sealed Air Posts Loss Due to Asbestos Charges ASBESTOS LITIGATION: W.R. Grace Documents Unsafe Asbestos Dust Levels ASBESTOS ALERT: Ace Ltd. Adds $2.18B to Reserve for Asbestos Charges ASBESTOS ALERT: American International CEO Plays Down Asbestos Charges ASBESTOS ALERT: T&N Could Pay Out Asbestos Claims Next Year New Securities Fraud Cases AEGON NV: Charles Piven Launches Securities Fraud Suit in S.D. New York AMERICREDIT CORPORATION: Cauley Geller Commences Securities Suit in TX ARIBA INC.: Stull Stull Commences Securities Fraud Lawsuit in N.D. CA CLEARONE COMMUNICATIONS: Wolf Haldenstein Lodges Securities Suit in UT CLEARONE COMMUNICATIONS: Abbey Gardy Commences Securities Lawsuit in UT MCSi INC.: Charles Piven Commences Securities Fraud Suit in S.D. Ohio ********* BANKRATE INC.: Appeals Court Affirms Dismissal of Securities Fraud Suit ----------------------------------------------------------------------- The United States Second Circuit Court of Appeals affirmed the dismissal of a securities class action pending against Bankrate, Inc. (Nasdaq:RATE). The suit was filed in the United States District Court for the Southern District of New York last March 2000 against the Company, certain of its officers and directors and their underwriters on behalf of stockholders who purchased company stock from May 13, 1999 to March 27, 2000. The suit alleged that the Company violated federal securities laws by misrepresenting and omitting material information concerning the Company's financial results for the quarter ended March 31, 1999. The suit further alleged that the Company also misrepresented information in the Company's registration statement filed with the Securities and Exchange Commission in connection with the Company's initial public offering. BAYER AG: Share Prices Fall On Word of Likely Increase in Baycol Suits ---------------------------------------------------------------------- German pharmaceutical firm Bayer AG's share prices fell to its lowest in ten years, over concerns on the litigation pending against it over its cholesterol drug Baycol, Bloomberg.com reports. The Company recalled the drug in 2001 after it was linked to more than 100 deaths. Chicago lawyer Kenneth Moll, who filed a class-action lawsuit on behalf of Baycol patients worldwide, predicted as many as 15,000 cases, HSBC Holdings Plc said in a report. The Company said earlier this month it knew of 7,400 lawsuits involving the drug. Bayer shares have dropped as the number of lawsuits mounts from patients who contend they were harmed by the cholesterol- lowering medication, once Bayer's third-best-selling product, Bloomberg.com reports. The withdrawal cut profit by more than 800 million euros ($870 million) that year, prompting Bayer to step up the search for a partner for its drug business. "When such numbers appear from the plaintiff side, it's about raising the pressure on Bayer and gaining as much from it as possible," said Alexander Kachler, an analyst at Merck, Finck & Co. in Munich, who rates the stock "hold." Bayer paid as much as $1.25 million to settle cases involving fatalities, Moll said, according to HSBC. "When there are lawsuits in the U.S., there's always a risk," said Lorenzo Carcano, who helps manage 8 billion euros in European equities at Bankhaus Metzler in Frankfurt. "I'm not sure I'd like to get my fingers burned," Bayer shares fell 57 cents, or 3.5 percent, to 15.97 euros as of 5:18 p.m. in Frankfurt after trading as low as 15.30, their lowest price since 1993, Bloomberg reports. The shares have fallen 56 percent in the last 12 months. Bayer spokeswoman Annette Josten declined to comment on the number of lawsuits or the size of settlements, Bloomberg states. Mr. Moll wasn't immediately available to comment, according to his office. CREDIT CARDS: Tel Aviv Court Allows Consumer Fraud Lawsuit to Proceed --------------------------------------------------------------------- The Tel Aviv District Court in Israel allowed a NIS1 billion lawsuit against several credit card companies to proceed as a class action, the Israel Business Arena reports. The suit is the largest ever class action approved in Israeli history, and names as defendants: (1) CAL, (2) Diners Club Israel, (3) Isracard, and (4) American Express Howard Rice filed the suit in August 1998. Mr. Rice owns a pharmacy in Kikar Hamedina in Tel Aviv and serves as chairman of the Pharmaceutical Association of Israel. The suit alleges that between May 1996 and August 1998 the respondents abused their position by charging businesses clearing fees in excess of 2%. Tel Aviv District Court Judge Gavriel Kling noted that the claimant provided prima facie proof that the respondents had a monopoly position in the clearing market, which they abused by overcharging for their services, the Israel Business Arena states. He said the fees were lowered after the period stated in the lawsuit. FASTFOOD LITIGATION: Lawyers Use Reports Saying Overeating "Addictive" ---------------------------------------------------------------------- Overeating may be addictive, lawyers spearheading the litigation against restaurants and fast-food chains said, stating several studies by scientists, the Independent reports. Several reports allegedly state that "overeating might not be a simple matter of self-control. Lovers of burgers, fries, fizzy drinks and other fast foods could be in the grip of an addiction similar to that experienced by users of hard drugs, scientists claim." According to preliminary animal studies, bingeing on foods that are high in fat and sugar may cause changes in the brain that make it hard to say no. By stimulating the brain's natural opioids, large doses of the foods can produce a high that is similar, though less intense, to that produced by heroin and cocaine, they say, the Independent states. The claims are based on preliminary animal studies but are being cited by lawyers acting for overweight Americans, who in a class action against the fast food industry are seeking compensation for the cost of caring for obesity. John Banzhaf, the lawyer who took on the tobacco companies and won, is leading the case. Mr Banzhaf says that to win he only has to convince a jury that fast food companies share the blame for Mr Barber's health problems. "We might even discover that it's possible to become addicted to the all- American meal of burgers and fries," he told New Scientist. John Hoebel, a psychologist at Princeton University, and colleagues showed that rats fed a diet containing 25 per cent sugar developed withdrawal symptoms when the sugar was removed, including chattering teeth and shivering, the Independent states. When the rats were given a dose of naloxone, a drug that blocks opioid receptors, the researchers noted a drop in dopamine levels in the nucleus accumbens, a cluster of cells in the mid-brain linked with feelings of reward. Writing in Obesity Research, he says this is the same pattern of neurochemical activity seen in heroin addicts going through withdrawal. "Drugs give a bigger effect, but it's essentially the same process," he said. Other scientists, including Ann Kelley, a neuroscientist at the University of Wisconsin medical school, have observed similar changes in brain chemistry. Michael Jacobson, director of the Centre for Science in the Public Interest, Washington, said there was little evidence to back the claims, the Independent states. Jeanne Randolph, psychiatrist at the University of Toronto with an interest in obesity, said it was well known that eating fast food and sugary snacks stimulated a cycle of instant satiation followed by a plunge in blood sugar, which triggered desire for another snack. Yesterday Professor James Griffith Edwards, editor of the scientific journal Addiction, said, "Whether a burger habit can be regarded as an addiction depends on how you define addiction. The difference (between a habit and an addiction) is not a qualitative one but a quantitative one. I am quite fond of dark chocolate but it is not going to destroy my life like a heroin addiction." GEORGIA: Bankers Association Files Suit To Block Predatory Lending Law ---------------------------------------------------------------------- The National Minority Mortgage Bankers Association filed a suit in the Dekalb County, Georgia State Court, seeking to block the state's predatory lending law because the law allegedly hurts those it was meant to protect - the poor and minorities, the Ledger-Enquirer states. The National Minority Mortgage Bankers Association says the Georgia Fair Lending Act is causing a "severe reduction in the availability of credit to the public, particularly low- and moderate-income households." Several residents of DeKalb, Cobb and Fulton counties who were unable to get loans have joined the suit. Both sides agreed to expedite the case because of its impact on residents' ability to receive home loans. "I am concerned about the timing of all of this and protecting the rights of residents and the state," Fulton County Superior Court Judge Stephanie Manis told the Ledger-Inquirer. No further hearing dates were immediately set. The predatory lending law applies to home loans of less than $322,700 and protects borrowers from exorbitant balloon payments, prepayment penalties and other fees on high-interest loans. However, lawmakers have pledged to rework the law because it's scaring some mortgage companies out of the state. An earlier Class Action Reporter story states that the law already prompted 26 lenders to pull out of the state. With Standard & Poor having decided to cease rating investments covered under the law, it is believed many banks may follow in their wake. The law was approved last April and applies to home loans of less than $322,700. The Act protects borrowers from exorbitant terms, including prepayment penalties and many fees on high- interest loans. Other states have predatory lending laws, but Georgia's is unique in allowing borrowers to seek punitive damages from lenders and anyone down the financial chain who bought the loan or a security that covers the loan. Banks or other institutions that offer home loans often sell them to large companies like Freddie Mac and Fannie Mae, which often bundle groups of loans together and sell them on the open market like bonds. Investors decide which ones to buy based on how agencies like Standard & Poor's rate them. Republican senators introduced a new predatory lending bill Monday which they say reforms the current law and will help stabilize the state's mortgage industry, the Ledger-Inquirer states. State Sen. Vincent Fort, an Atlanta Democrat who sponsored the current law, has said the Republican proposal would gut the law. Mr. Fort told the Ledger-Inquirer the National Minority Mortgage Bankers Association was "a front organization for the predatory lenders" and said its executives were worked with the Georgia Association of Mortgage Brokers last session to weaken his bill. "This suit is designed to make it appear as if African-Americans have a problem with protecting consumers, and that's not the case," he said. MASSACHUSETTS: Court Orders Special Help For Retarded In Nursing Homes ---------------------------------------------------------------------- A federal appeals court recently upheld a decision requiring the state of Massachusetts to provide specialized services for mentally retarded nursing home residents, according to a report by Associated Press Newswires. The ruling comes almost five years after advocates filed a class action on behalf of approximately 1,600 seriously disabled residents of Massachusetts nursing homes. In, 1999, after the suit was filed in US District Court in Springfield, state officials pledged to seek regular housing for people with mental retardation or other serious disabilities, who ended up in nursing homes but could live in private homes if given special services. In May 2002, however, the federal judge found that the state was failing to provide specialized services required by federal law. The state appealed, arguing that the law requires it to provide specialized services only to people who do not require nursing home care. Requiring the state to pay for specialized services for residents both in and out of nursing homes "runs directly counter to one of the primary purposes of the law, the conservation of federal and state funds." The appeals court, while saying it understood the state's current "exigent budgetary circumstances," said the state must pay for the services. The appeals court said that Congress was concerned with fiscal conservatism, "but clearly the statute's primary purpose is to ensure that the needs of all mentally retarded nursing facility residents are identified and served," the court said in its ruling. The law at issue in the case was passed by Congress in 1987, in response to a widespread problem of mentally retarded residents being inappropriately placed in nursing homes at the expense of Medicaid, where they were not even receiving the specialized services they needed. For residents of nursing homes who were found not to require nursing care, the law required states to find alternate housing for them and to provide the specialized services they needed. It is this mandate which the appeals court decision upheld, finding it to be embodied in the lower court's ruling that the state was failing to provide the specialized services called for by the 1987 federal law. MICROSOFT CORPORATION: ND High Court Allows Antitrust Suit To Proceed --------------------------------------------------------------------- North Dakota's Supreme Court ruled recently that an antitrust class action against Microsoft Corporation may go ahead, the Associated Press Newswires reports. The decision could affect thousands of buyers of the Company's Windows computer operating system. The court, in a unanimous ruling, rejected Microsoft's arguments that there were too many differences among buyers of the company's product to justify class action status. A class action represents many people who have similar grievances against a defendant. Microsoft faces similar lawsuits in more than a dozen states, including Minnesota and South Dakota. California reached a $1.1 billion settlement two weeks ago. Henry Howe, a Grand Forks attorney, and Michael Simonson, a Fargo city transit planner, as plaintiffs, filed the North Dakota class action in Grand Forks in 2000. The lawsuit argues that Microsoft's business practices established a monopoly for Windows, an operating system that controls a computer's basic workings, and thereby stifled potential competitors. Northeast Central District Judge Bruce Bohlman, in Grand Forks agreed to certify the lawsuit as a class action. His decision gave attorneys for Mr. Howe and Mr. Simonson authority to represent the interests of Windows buyers in North Dakota, dating back to May 1994. Microsoft then appealed, arguing that members of the proposed class could not prove they all were harmed in the same fashion by the company's alleged conduct. Microsoft's attorneys also contended the case relied on dubious testimony from economics Professor Keith Leffler at the University of Washington, whose theories were recently rejected by a Michigan state appeals court. In sworn statement filed in the North Dakota case, Professor Leffler set out what he believes are Microsoft's methods of passing through overcharges to buyers of computers equipped with Windows. North Dakota law, however, does not require a judge to sort through the claims of competing expert witnesses in deciding whether to certify a case as a class action, Supreme Court Justice Kapsner wrote. "As long as the basis for the expert's opinion is not so blatantly flawed that, on its face, it would be inadmissible as a matter of law, the court may consider the expert's evidence in determining whether to certify," she wrote. David Tulchin, an attorney for Microsoft, called the ruling "a first step in the case. All this means is that under North Dakota standards, the plaintiffs can get a class certified," Mr. Tulchin said. "It says nothing whatsoever about the merits of the case, and who might eventually have the better argument, and who might eventually win." Mr. Howe, one of the plaintiffs, said that with the certification, the way is now clear for the case to go forward. He said he was unsure how many North Dakota computer buyers might benefit from the class action, but he thought that was the kind of information that would be part of the discovery record. Last year, the US Justice Department settled its own antitrust suit against Microsoft. During the protracted legal struggle, a federal district judge ruled that the company was guilty of monopolistic behavior. NEBRASKA: Low-Income Parents Commence Lawsuit Seeking Medicaid Benefits ----------------------------------------------------------------------- The state of Nevada faces a class action filed on behalf of low-income parents who are losing their Medicaid health-care benefits because of budget cuts this summer, journalstar.com reports. The suit demands the "return of desperately needed Medicaid health care coverage," according to a news release from the Nebraska Appleseed Center for Law in the Public Interest. The suit contends that the state must provide these parents, called "caretaker relatives," with the same transitional Medicaid coverage it offers parents who are being weaned off the Aid to Dependent Children program, journalstar.com reports. Former ADC recipients get six months of Medicaid coverage once they begin work. Then they can get an additional six months if their incomes are less than 185 percent of the federal poverty level, far above the cutoff for these caretaker relatives. The Legislature ended Medicaid coverage for about 10,000 low-income parents or caretaker relatives this summer during a special budget cutting session by ending a practice called "stacking." That practice allowed parents with some income whose children are covered by Medicaid to qualify for the federal and state-funded health-care program. The children of these parents continue to be covered by Medicaid even after the parents' eligibility ends, according to journalstar.com. The plaintiffs, Teresa Kai of Pender and Stacy Noller of Kearney, are both working mothers with small children. Both have chronic medical problems but were able to work and support their families with the help of Medicaid assistance. However, without the medical care, including prescription drugs, they will not be able to work, according to the suit filed in US District Court for Nebraska. "Unfortunately the plaintiffs' situation are just a couple of the very many heartbreaking stories that I'm hearing every day," Ann Vogel, a social worker with the Appleseed's Welfare Due Process Project told journalstar.com. "Working parents who have cancer, immune deficiencies, disabilities, seizure disorders, diabetes, depression, schizophrenia, fibromyalgia -- they all have been cut off of Medicaid. They have nowhere else to turn other than Medicaid." NEVADA: NV Judge Faces Civil Rights Lawsuit Over Sentencing Violations ---------------------------------------------------------------------- Nevada District Court Judge Donald Mosley faces a class action, alleging that he violated a criminal defendant's civil rights by toughening her sentence and exposing her to double jeopardy, the Las Vegas Sun states. The suit, filed in United States District Court in Nevada also names as defendants: (1) former District Attorney Stewart Bell, (2) Deputy District Attorney David Barker, (3) Nevada Department of Corrections Director Jackie Crawford, (4) Nevada Department of Public Services Director Richard Kirkland and (5) Nevada Chief of Parole and Probation R. Warren Lutzow Plaintiff Jeanette Faye Sadoski alleged that Judge Mosley changed her sentence for theft from a misdemeanor to a felony after another charge came to light. According to her attorney Clark Garen, the suit stemmed from a June 2000 guilty plea by Ms. Sadoski to a $6,000 theft from a Las Vegas store where she worked. Judge Mosley originally sentenced Ms. Sadoski to a gross misdemeanor and a suspended sentence of one year in prison. However, between the time that Sadoski gave her plea and the time she was sentenced she was arrested on a drug trafficking charge, according to court documents filed by the District Attorney's office. Mosley then ordered new sentencing, the Las Vegas Sun reports. Ms. Sadoski was re-sentenced to 32 months in prison with minimum parole eligibility of 12 months. In July 2002, Ms. Sadoski was paroled on the drug charge, but remains under house arrest on the theft charge, which runs concurrent to the drug charge. The suit could potentially affect other cases presided over by Judge Mosley, as it calls for him to review all of his past criminal cases to determine if he illegally re-sentenced any defendants. The suit alleges that during a 2002 hearing Judge Mosley admitted to "violating the rights of other criminal defendants in a similar manner ever since his appointment to District Court." Nevada law specifically allows a judge to reduce sentences but does not address lengthening them. STOCKWALK GROUP: Moves Closer To Settlement of MN Securities Fraud Suit ----------------------------------------------------------------------- Stockwalk Group is nearing the settlement of a securities class action filed in June 2002 in the United States District Court in Minnesota by lawfirm Chestnut & Cambrone, on behalf of Dr. Daryl Cooper and all others who purchased Stockwalk Group Commercial Paper and held such paper on September 27, 2001. The suit states that approximately $32 million in Stockwalk commercial paper was unregistered and sold in violation of Section 12(1) of the Securities Act of 1933, 15 U.S.C. sec. 77l(1). Since the collapse of the issuer, Stockwalk Group, Inc., and the bankruptcy of that company, the securities have become worthless, an earlier Class Action Reporter states. Attorney Karl Cambronne of the Minneapolis law firm of Chestnut & Cambronne, who filed the class action suit last June, told the Minneapolis Business Journal that the Company had agreed to pay holders of its commercial paper a total of $5.65 million. The suit covers about $25 million in commercial paper sold by the Company before it collapsed. The settlement represents about 20 cents on the dollar of the original investment. About 400 investors are members of the class action and will split the proceeds along with their attorneys, Mr. Cambronne said. However, before that can happen, the preliminary agreement must be confirmed by the US District Court in Minneapolis. Mr. Cambronne expects a final court decision some time in early April. Mr. Cambronne added that there are a number of issues surrounding the collapse of Stockwalk in 2001 that still have to be resolved. Among those is a claim against Deutsche Bank, which allegedly was involved in the transaction that brought down Stockwalk. TENNESSEE: Court Monitor Recommends Remodeling of Knox County Facility ---------------------------------------------------------------------- Federal court appointed special master Charles C. Banks recommended that part of Knox County, Tennessee's Detention Facility should be remodeled to house maximum-security inmates, in a report to the US District Court Judge James Jarvis, the Knoxville News Sentinel reports. For 16 years, the county has faced litigation over the overcrowding issue. Last year, lawyers in a class action asked that the county be held in contempt for surpassing the downtown cap of 215 inmates on 111 different occasions last year. The court appointed Mr. Burks to sort things out and threatened the county with a $5,000 fine for each day the cap is surpassed. The county then immediately instituted a computer system, which all facets of the judicial system now have access to, to better track inmates. County Executive Mike Ragsdale also got various parties together to look at other ways to alleviate jail crowding. Mr. Burks recommended that county continue to pursue other alternatives, such as pretrial release and other diversion programs. County officials have also talked about citing more people to court on minor offenses rather than jailing them. Mr. Burks cautioned that those programs would take time to implement, so he recommended the Detention Facility option, too, the Knoxville News Sentinel states. That idea surfaced late last year informally and received some positive reaction from several commissioners because it would be vastly less expensive than building a new jail downtown. However, residents point to a promise by the county administration, at the time the facility opened in the early 1990s, that maximum-security inmates would never be housed there. The recommendation brought swift reaction from the Northeast Knox County area, where the Detention Facility is located. "That is just horrible news. That is just appalling," Gail Farzanegan, who lives nearby and is the former president of the North East Knox Preservation Association told the Sentinel. "This will chill (residential) development in this area that is getting ready to start," said Lisa Starbuck, president of NEKPA. Knox County spokesman Mike Cohen told the Sentinel the county would comply with Jarvis' request that the county explain to him in writing within 30 days how the county plans to deal with persistent overcrowding. District Attorney General Randy Nichols, who attended Wednesday's hearing, is supportive of the potential renovation of a pod at the detention facility. "I think we ought to take a look at it," Mr. Nichols said. "It can be certified as maximum." The 140-by-90-foot building was constructed in 1997 in response to the overcrowding problem. It cost $589,000 to construct and furnish the building, and another $1.77 million to operate it, according to county documents, the Sentinel states. That included funding for everything from salaries and benefits for jailers to expenses for food and clothing for prisoners to paying for garbage pickup. The building has since been decertified as a jail, but there have been discussions about having it re-certified. Asbestos Alert ASBESTOS LITIGATION: Asbestos Claims Against US Insurers Approach $34B ---------------------------------------------------------------------- Insurance companies paid as much as $34,000,000,000 in asbestos-related claims through 2000, and the total cost of all past, present, and future asbestos litigation could total more than $200 billion, according to new research released by the US Chamber of Commerce. Asbestos liabilities have also played a "substantial role" in the bankruptcies of as many as 67 companies since the late 1970s, the research concluded. Citing the research, the US Chamber of Commerce called on the federal government to "solve the asbestos litigation mess." "We believe today's briefing will provide policymakers with sound data that highlights the need to protect our nation's communities and stimulate legislative reforms that, first and foremost, provide the truly sick with fair compensation," said chamber President Thomas Donahue in a statement. The chamber released three asbestos-litigation studies, one by the Rand Institute for Civil Justice, one by National Economic Research Associates and one by Sebago Associates and based on a paper commissioned by the American Insurance Association. Among the highlights of the studies: (1) Estimated total costs of resolving asbestos claims through 2000 are $54,000,000,000, including $22,000,000,000 by U.S. insurers, $8,000,000,000 to $12,000,000,000 by non-U.S. insurers and $20,000,000,000 to $24,000,000,000 by other defendants; (2) Estimated costs of resolving future asbestos claims range from $145,000,000,000 to $210,000,000,000; (3) At least five major companies, which weren't named in the study, have spent more than $1,000,000,000 each on asbestos litigation; (4) There are now 600,000 claimants and 8,400 defendants in asbestos litigation; (5) The number of asbestos claims filed annually has risen sharply in recent years, while the average severity of the claimed injuries has declined; (6) An increasing proportion of claims now involve less serious injuries, and the majority of recent claimants are "not currently functionally impaired;" (7) An increasing number of corporate defendants are outside the asbestos and building-products industries; (8) As many as 67 companies have declared bankruptcy since the 1970s because of asbestos liabilities--with 29 such bankruptcies occurring in the past three years; (9) Between 52,000 and 60,000 U.S. jobs have been lost because of asbestos-related bankruptcies. ASBESTOS LITIGATION: Swindon Firms Start Drive to Stop Asbestos Deaths ---------------------------------------------------------------------- Companies in Swindon in the United Kingdom are being urged to take action in a new drive to reduce the number of asbestos-related deaths. New legislation to improve the management of asbestos in workplaces aims to reduce exposures to asbestos and cut the number of deaths by 5,000 over the next 50 years. The Control of Asbestos at Work Regulations 2002, which will come into force in May 2004, features a new duty to manage asbestos and ensure that workers, especially those in the maintenance trades, are not accidentally exposed to lethal fibers. The asbestos-related cancer mesothelioma - dubbed the Swindon Disease - has accounted for thousands of lives in Swindon, many of whom worked at the Great Western Railway works in the town. Last year a sensory garden in memory of those who died from the disease was finished in Queen's Park. ASBESTOS LITIGATION: Parliament to Hold Public Hearings on Asbestos ------------------------------------------------------------------- South African Parliament's Portfolio Committee on Environmental Affairs and Tourism will embark on a second stakeholder consultation process by holding public hearings into asbestos-related matters in the Old Assembly at Parliament, Cape Town. Hundreds of former Cape Public Limited Corporation (Cape Plc) workers died from asbestos-related diseases and more than 6,500 were diagnosed with such diseases over the years. The issue of asbestos-related sicknesses has been in the public domain since former workers and their families challenged the British-based company Cape Plc in court in April last year. Although an agreement was reached in London, the company has not yet paid any compensation to the families - most of whom were previously employed at the Cape Plc-owned asbestos mines of Mafefe in the Northern Province and Prieska in the Northern Cape, which closed in the 1970s. The victims charged that Cape Plc ought to have compensated them for asbestos-related diseases, which had left thousands of South Africans blind and some crippled. Asbestos-related diseases destroy the lungs and eventually kill the victims. The latency period of mesothelioma, an asbestos-related cancer, could be as long as 35 to 40 years. The Department of Environmental Affairs and Tourism said in a statement that the public hearings into asbestos would also consolidate South Africa's position for the forthcoming SADC conference on the same topic that would take place at the end of February. It is envisaged that a SADC declaration would be presented to the International Conference on Chrysotile Asbestos Cement Products, from 5-6 March, in New Dehli, India. The outline for the hearings includes representation from the governments of South Africa and Zimbabwe, the asbestos related industry, organized labor, lawyers representing affected parties and NGOs. Portfolio Committee on Environmental Affairs Chairperson Gwen Mahlangu-Nkabinde, environmental affairs and tourism minister Mohammed Valli Moosa and senior representatives from Zimbabwe are expected to address the media on the merits of the conference. The first South African summit on asbestos-related matters was held in Johannesburg in 1998, to discuss the issue of asbestos and its impact on communities and the environment. Meanwhile, individuals and organizations who still wish to make presentations to the committee but have not been invited, are welcome to do so in writing to the committee secretary Mr A.Myeni by Fax: (021) 461 7969. ASBESTOS LITIGATION: Ashland Inc. Reports Loss on Asbestos Litigation --------------------------------------------------------------------- Ashland Inc. (NYSE: ASH), maker of Valvoline motor oil, said quarterly results swung to a loss, hurt by a hefty asbestos liability charges and high crude oil costs. During the quarter, the Covington, Kentucky- based company took a $95,000,000 charge and added to its asbestos liability reserves to cover costs over the next 10 years. The size of the charge, related to a former subsidiary, rattled some Wall Street analysts. "We haven't seen the end," said Fadel Gheit, oil analyst with Fahnestock & Co. "Liabilities usually grow bigger, not smaller, with time. It's an uncertainty." Ashland, Inc. reported a net loss of $92,000,000 or $1.35 a share, for its fiscal first quarter ended Dec. 31, down from a profit of $27,000,000 or 38 cents, last year. Even without the asbestos charge, earnings dropped well below last year's levels as raw material costs and slack demand for highway construction pushed down results to a profit of 4 cents a share. Overall revenue slipped about 2 percent to $1,850,000,000. ASBESTOS LITIGATION: Crane Posts Net Loss on Asbestos-Related Charges --------------------------------------------------------------------- Industrial products maker Crane Co. (NYSE: CR) reported a fourth- quarter loss after taking a hefty charge for increased asbestos-related liabilities. The Company, whose products include valves, fiberglass reinforced panels for recreational vehicles, coin-changing equipment and aircraft fuel pumps, posted a quarterly net loss of $51,200,000 or 86 cents a share, compared with a net profit of $18,000,000 or 30 cents a share, a year ago. Excluding a $73,300,000 charge to increase its net estimated liability for asbestos-related claims, the Company earned 37 cents per share. Crane said in a statement the charge "reflects the recent significant increase in the rate of new claims filed." Analysts' estimates ranged from 33 cents to 34 cents a share, with an average forecast of 33 cents, according to market tracker Thomson First Call. Stamford, Connecticut-based Crane made the announcement after its shares had closed up 47 cents, or 2.5 percent, at $19.40. During the fourth quarter, the company said it recorded a non-cash charge to increase its net estimated liability for asbestos-related costs to $120,000,000. The asbestos charge in the quarter was made to reflect the increase in estimated costs of asbestos related claims through 2007, net of anticipated insurance recoveries of $80,000,000. The rate of new claims filed, and the costs of settling claims and defense costs, increased significantly, particularly during the last few months of 2002, and the company increased the estimated liability to reflect this more recent claims and cost data, it said. ASBESTOS LITIGATION: Shares of Owens-Corning May Become Worthless ----------------------------------------------------------------- Speculators who bought in at 50 cents dreamed of a windfall. Anxious employees hoped for help for their badly deflated retirement saving accounts. Instead, the rug was pulled out from under those wishes this month when Owens Corning made it clear that its shares will become worthless if a judge approves a company plan to cancel existing stock and issue new shares to creditors as part of the firm's emergence from bankruptcy. The stock fell from 60 cents before the announcement to as low as 8 cents in trading on the over-the-counter market last week. Executives at Toledo's third-largest corporation had hinted at such an outcome ever since the firm filed for Chapter 11 reorganization two years ago to escape multibillion-dollar asbestos liability. Still, some investors were surprised by the plan for the stock, which was revealed in OC's proposed plan of reorganization, January 17. A man who said he owned 3,500 shares called a Toledo radio talk show one morning to express outrage and to demand that something be done. In bankruptcies in which creditors are not fully repaid -- there are predictions that some with claims against OC will only get a few cents on the dollar of the amounts they are owed-shareholders are entitled to nothing. The window apparently has closed on one of the few opportunities open to shareholders: a lawsuit against individual officers and directors of the company that would attempt to prove they fraudulently misled investors about the building products maker's financial health. Financial advisers say the situation is a textbook example of why people contemplating investing in a publicly held firm should go beyond the glossy annual reports and corporate cheerleading to read the fine print of financial reports filed with the US Securities and Exchange Commission. Glen Hiner, who was chairman and chief executive for a decade until his retirement last spring, long declared the asbestos liability "manageable." Creditors have alleged in bankruptcy court filings that his boosterism sometimes crossed the line. Mr. Hiner continued to heap praise on a series of out-of-court settlements reached with asbestos claimants long after the firm recognized that the settlement program didn't work, a committee representing banks, bond holders, and vendors contends in a motion in US Bankruptcy Court in Wilmington, Delaware. The company denies that. Legal chief Maura Abeln Smith, who is overseeing the firm's financial reorganization and helped craft the settlement program, said: "There is extensive disclosure in our SEC filings about asbestos litigation." Indeed, those reports - sometimes in footnotes - describe how the number of claims and size of settlements escalated over the decade prior to bankruptcy. "You really have to read the footnotes," said investment consultant Alan Lancz, whose clients include some of the 1,000 people employed at OC's downtown Toledo headquarters. "It was a situation at OC that, if you read the chairman's annual shareholder letter, even in the late '90s, it was incredibly optimistic and grandiose. Lots of investors, unfortunately, will just read the glossy material and don't go in the back with footnotes talking about liabilities and litigation." Complicating OC's relationship with shareholders, it has filed a creditor-inspired lawsuit against large shareholders who received $100,000 or more in dividends between 1996 and 2000. The action, citing a recent legal opinion, demands the return of the dividend payments on the grounds that the company may have been technically insolvent, and thus prohibited from paying dividends, because of huge, but at the time unknown, asbestos liability. Still, legal experts agree that shareholders have few options now. Based on the firm's most recent estimates, debts will approach $20,000,000,000. That is more than three times the $5,700,000,000 in listed assets. Because liabilities outweigh assets, shareholder claims have "no value" under bankruptcy law, said Michael Hammer, a bankruptcy lawyer with Dickinson, Wright, Moon, Van Dusen & Freeman in Detroit. In bankruptcy, shareholders are considered owners, not creditors. "The concept is that if the creditors aren't getting paid, in the natural order shareholders shouldn't get anything," he said. The statute of limitations on securities fraud suits is two years after the wrongdoing is discovered, according to lawyers. Such actions involve "intense legal battles," said Mr. Hammer. "They are very expensive and time-consuming." They are most likely when stock is concentrated in a few, well-financed hands. The only action against OC officers and directors within the two-year allowance was filed by bond holders, who contend that information was withheld about the firm's other financial obligations at the time of a bond offering in 1998. The suit is pending in a federal court in Massachusetts. Lots of people bought the firm's stock after the Chapter 11 filing, some in hopes that shareholders would get something as part of the reorganization, others in a speculative attempt to take advantage of minor increases and decreases in the stock price. The price slumped to 50 cents on the first day of trading after the bankruptcy, closing at 75 cents that day, but has been up to nearly $4 during the bankruptcy. ASBESTOS LITIGATION: UK Insurers Accused of Avoiding Asbestos Liability ----------------------------------------------------------------------- Royal & Sun Alliance, the UK's second-biggest general insurer, was accused in court of trying to "wriggle out of its liability" to pay compensation to potentially thousands of victims of asbestos-related diseases. A High Court judge in London was told that R&S and the Lloyd's of London syndicate were relying on an exclusion clause to avoid having to pay millions of pounds to former employees of asbestos manufacturing group Turner & Newall (T&N), an engineering company, now in administration. Scores of workers at the firm's Clydeside shipyard in Dalmuir, who worked between 1972 and 1977, have contracted asbestosis but have yet to receive any money. The hearing in London was in response to a case brought by the administrators of T&N on behalf of the victims and their families but the insurers have denied liability, claiming that T&N's cover specifically excluded asbestosis. Claimants have argued that, since 1972, companies have been bound by law to take out full employers' liability insurance. Colin Edelman QC, representing the company's administrators and the interests of the asbestos victims and their families, told Mr Justice Lawrence Collins that the defense which R&S had the "temerity" to put forward was "just ridiculous". A spokesman for R&S assured families it was not shirking any of its responsibilities. The insurers argued that a policy clause, which excluded cover for pneumoconiosis - known as asbestosis when caused by asbestos - also excluded other asbestos-related lung and gut diseases such as mesothelioma and cancer. The hearing in London will last about three weeks. ASBESTOS LITIGATION: Saint-Gobain Rules Out ABB-Style Asbestos Payment ---------------------------------------------------------------------- French glassmaker Saint-Gobain (SGOB:PA) has no plans to follow the example of Swiss firm ABB by making a major payment to settle US asbestos claims, a senior executive said. "These transactions are feasible within the framework of bankruptcy. We are not in a bankruptcy situation," chief financial officer Philippe Crouzet said after a results presentation. Industrial engineering firm ABB announced a crucial $1,200,000,000 agreement to settle US asbestos liabilities, removing considerable doubt over the survival of the heavily indebted group. Financial analysts said the deal, while not yet final, removed fears that ABB could go bankrupt. Shares in Saint-Gobain spiked after it reassured investors that its US asbestos liabilities were not rising significantly. Analysts said investors were also comforted by Saint-Gobain's annual results, which were broadly in line with expectations and its forecast for modest growth in 2003, assuming writedowns of 100 million euros for US asbestos litigation risks, the same as in 2002. "Saint-Gobain is a resilient, cash generative, undervalued company, whose asbestos liabilities are discounted as likely to rise significantly, but which are not rising," Merrill Lynch analysts said in a note. The company reported a 0.6 percent dip in net profit before capital gains for the year to 1.051 billion euros, after it booked the 100 million euro charge for US asbestos litigation risks. Saint-Gobain said the number of new cases reported in the United States last year had risen slightly to 65,000 from 60,000 in 2001. This was due to an exceptional rise in the number of new claims filed in Mississippi at the end of last year as plaintiffs rushed to beat a new law more favorable to defendants that came into effect on January 1, it said. Some analysts said the number of new cases remained well below the rate of millions of total claims discounted by the shares and would provide impetus for the stock in the short-term. They however noted there were still risks that asbestos costs could escalate several-fold. ASBESTOS LITIGATION: Sealed Air Posts Loss Due to Asbestos Charges ------------------------------------------------------------------- Sealed Air Corporation (NYSE: SEE) reported a quarterly net loss, reversing a year-ago profit, after taking an $841,300,000 charge to settle asbestos-related personal injury claims, but reaffirmed its earnings outlook for this year. Sealed Air, the maker of Bubble Wrap and other packaging materials, announced in November it would pay $853,000,000 in cash and stock to resolve all its asbestos claims, a settlement hailed by analysts for putting a cap on the company's liabilities. The Saddle Brook, New Jersey, company posted a fourth-quarter net loss of $501,800,000 or $6.13 a share, compared with net earnings of $38,500,000 or 30 cents a share, a year ago. Excluding the asbestos settlement and other items, the company earned 68 cents a share in the latest quarter, at the high end of analysts' forecasts. Chief Financial Officer David Kelsey said that the company expects free cash flow of about $250,000,000 to $300,000,000 in 2003. Sealed Air will use the funds to reduce debt, purchase preferred stock or build up the cash reserve for its asbestos settlement. Revenue will rise in the mid-single digit range in 2003, Mr. Kelsey said, helping the company to earn between $2.40 and $2.45 a share. The First Call estimate is $2.37 a share. Pension liabilities, which have hurt a number of manufacturers, were less than $150,000,000 at the end of 2002, Mr. Kelsey said, with assets exceeding that amount by about $10,000,000. Fourth-quarter revenue rose 8.3 percent to $846,100,000, helped by strong sales of food and specialty packaging as well as the positive effect of foreign currency translation. ASBESTOS LITIGATION: W.R. Grace Documents Unsafe Asbestos Dust Levels --------------------------------------------------------------------- At least four sets of data, some stemming from manufacturer W.R. Grace & Co.'s own air samplings in the 1970s, have documented unsafe levels of asbestos dust in vermiculite insulation. Attic tests in Montana, Washington state and Canada since 1997 measured airborne asbestos fibers at levels 50 times the federal worker exposure limit and higher. However, the government has yet to warn homeowners or workers who spend much of their time in attics. Officials at the Environmental Protection Agency (EPA) said they were unaware of some of the test data and were trying to obtain them. They said they expect to do more to inform the public within the next two weeks. Sen. Mark Dayton, D-Minn., saying he is appalled by the agency's delay, called EPA officials "criminally negligent." "It's the worst kind of betrayal of the public trust to walk away from the lives of fellow citizens," he said. "I don't know how they can live with themselves . to withhold that information from the public is immoral and despicable." If inhaled, crumbly tremolite asbestos fibers in the vermiculite ore can cause fatal respiratory diseases that don't show up for 10 to 40 years. The attic insulation was sold principally under the trade name Zonolite by now-bankrupt Grace, and EPA officials say it may be present in 10 million homes or more. Regional EPA officials, who spoke on condition of anonymity, have accused the White House Office of Management and Budget (OMB) of preventing EPA Administrator Christie Whitman from issuing a national warning about Zonolite last April. Ms. Whitman denied last week that the OMB dictated her decision. But she said that, before she decides whether to issue a Zonolite warning, she wants to see the results of a study of vermiculite insulation in six Vermont homes. The regional EPA officials said the Vermont study found slightly elevated asbestos levels in two of the six homes. They said the study was flawed, in part because it is not known whether all six homes were insulated with vermiculite from Libby, Montreal, where hundreds of miners who processed the ore have developed serious and even fatal illnesses. When his agency began the study, EPA environmental scientist Dan Thornton said, it did not know that Libby vermiculite had higher asbestos content than ore from other US vermiculite mines. Tom Simons, an EPA environmental specialist, said the agency has been "pushing" for completion of the study and is "about to make more public information available." EPA officials also say they are being meticulous so that any action they take will stand up to legal challenges. However, it was August 2000 when assistant US Surgeon General Hugh Sloan recommended that the National Institute for Occupational Safety and Health (NIOSH) issue a "hazard alert" about vermiculite insulation to workers. NIOSH also has taken no action. Gregory Wagner, director of NIOSH's Respiratory Disease Studies Division, said that his agency also is awaiting the results of the EPA study. Dr. Sloan wasn't the only major public health figure to urge action. In May 2000, Dr. Henry Anderson, a nationally known asbestos researcher, said in an affidavit in a suit against Grace that he believed it was "essential" that homeowners be warned about Zonolite. Grace bought the mine in 1963 and operated it until 1990. Thornton estimates that the firm shipped 5.5 million to 6 million tons of the ore to 241 facilities nationwide, several of which were in Minnesota including a Grace-owned plant in northeast Minneapolis. A second northeast Minneapolis plant, operated from the 1940s until 1971 by the B.F. Nelson Co., also made vermiculite attic insulation. Grace contends the insulation has never harmed anyone. However, its documents, introduced in property owners' class actions against the company, show that its air samplings in 1977 exceeded 4.5 asbestos fibers per cubic centimeter and some were above 10 fibers -- far above the current worker exposure limit of 0.1 fiber. Others have made similar findings: (1) In 2000, a private asbestos consultant in Spokane, Washington, simulated renovation work in an attic containing Zonolite and got readings from 6.96 fibers to 12.48 fibers; (2) In 1997, air samplings in a home in Manitoba showed readings of 3.3 to 6.8 fibers, and more refined analysis identified asbestos concentrations as high as 174 fibers; (3) EPA officials also found significantly elevated asbestos levels in Libby homes containing the insulation. Workers and homeowners have expressed deep concerns about recent revelations of the insulation hazards. Mark McLaughlin, one of more than 100 Minnesota weatherization inspectors who move from attic to attic checking the energy efficiency of low-income households, said he has worked around vermiculite in "hundreds of attics" over the past 20 years. "I'm a little disturbed," said Mr. McLaughlin, who lives in Apple Valley. "They could easily give us a warning so we could provide more protection for ourselves . I was hoping to have a nice retirement, not a short one." ASBESTOS ALERT: Ace Ltd. Adds $2.18B to Reserve for Asbestos Charges -------------------------------------------------------------------- Ace Ltd. said it added $2,180,000,000 to reserves for asbestos-related claims, giving the insurer a loss in the fourth quarter. The new reserve cut fourth-quarter earnings by $354,000,000 or $1.32 a share, the Hamilton, Bermuda-based company said. Operating income was 92 cents a share, versus the 89-cent average analyst estimate, according to Thomson First Call. Ace said $1,860,000,000 of the reserve was covered by reinsurance, including about $533,000,000 from a policy written by National Indemnity Co., a unit of Warren Buffett's Berkshire Hathaway Inc. The asbestos reserves boost follows a similar move by rival Travelers Property Casualty Corporation, which earlier this month added $2,450,000,000 to asbestos loss reserves. "Charges are always an unpleasant thing, but this should clear the air on asbestos," said Thomas Davis, an analyst at Loomis Sayles & Co., which manages $70,000,000,000 and owns Ace shares. "Hopefully they'll be able to do what Travelers did" and provide enough disclosure to satisfy investors. Ace's total asbestos reserves "are now at the high end of the range calculated by our internal analysis and are consistent with the actuarial consulting firm's best estimate," Chairman and Chief Executive Brian Duperreault said in a statement. In an interview, Mr. Duperreault said commercial insurance pricing hasn't peaked yet. "Property policies are starting to approach no increases, but I haven't seen prices falling. Casualty pricing continues to be quite strong. Overall commercial rates are still rising." COMPANY PROFILE ACE Limited (NYSE: ACE) ACE USA, 2 Liberty Pl., 1601 Chestnut St. Philadelphia, PA 19101-1484 Phone: 215-640-1000 Fax: 215-640-2489 http://www.ace.bm Employees : 7,676 Revenue : $6,644,700,000 Net Income : $(146,400,000) Assets : $37,186,800,000 Liabilities : $31,080,100,000 (As of December 31, 2001) Description: Through subsidiaries, ACE Limited (based in tax-friendly Bermuda) sells property/casualty insurance and reinsurance in the US and about 50 other countries. ACE International -- which is subdivided into Asia Pacific, Europe, Far East, and Latin America -- sells property/casualty lines to personal and commercial clients. ACE Global Reinsurance, primarily through its Tempest Re unit, provides catastrophe reinsurance to personal and commercial clients. Through ACE Global Markets, the firm owns four Lloyd's of London managing agencies. ACE USA provides US commercial and casualty insurance. Expanding its operations, the company has also moved into health insurance. ASBESTOS ALERT: American International CEO Plays Down Asbestos Charges ---------------------------------------------------------------------- Maurice Greenberg, Chief Executive of American International Group Inc. (NYSE:AIG), said that the insurer did not have a major problem with asbestos, and that the next chief of AIG would come from inside the company. Mr. Greenberg allayed fears that AIG would be the next insurer to take a massive hit on shoring up reserves for asbestos claims, after rivals ACE Ltd. (NYSE:ACE) and Travelers Property Casualty Corp. (NYSE:TAPa) recently took large asbestos charges. Hartford Financial Services Group (NYSE:HIG) said it was reviewing its asbestos exposure, likely clearing the way for a charge in the second quarter. "We review reserves toward the end of the year, we are in the midst of doing that," Mr. Greenberg said, speaking at a Salomon Smith Barney financial services analyst conference. "If we require to increase reserves, we will do so . We do not have a great deal of asbestos exposure -- we were a very small company at the time asbestos became a problem for others. It's not a major problem for us." The release of AIG's fourth-quarter and year-end results -- which would detail any increase in reserves -- is expected on Feb. 13. COMPANY PROFILE American International Group, Inc. (NYSE: AIG) 70 Pine St. New York, NY 10270 Phone: 212-770-7000 Fax: 212-509-9705 http://www.aig.com Employees : 81,000 Revenue : $55,459,000,000 Net Income : $5,363,000,000 Assets : $492,982,000,000 Liabilities : $440,832,000,000 (As of December 31, 2001) Description: Helmed by financial legend Maurice "Hank" Greenberg, American International Group (AIG) is one of the world's largest insurance firms. Best known domestically as a leading provider of property & casualty and specialty insurance, AIG also has strong life insurance operations abroad and is a presence in financial services and asset management (purchases have included leading annuities firm SunAmerica and other companies specializing in retail financial markets). Other operations include auto insurance, mortgage guaranty, annuities, and aircraft leasing. ASBESTOS ALERT: T&N Could Pay Out Asbestos Claims Next Year ----------------------------------------------------------- Simon Freakley, in charge of the Administration of Turner and Newall in the UK announced that they may pay out asbestos claims by next year. Mr. Freakly says, "In my experience this case is moving as quickly as any that I've seen. We're hopeful that money will start to get into the hands of claimants at some stage during next year." This is the most encouraging news asbestos claimants have had in a long time. Turner and Newall was the world's biggest asbestos producer and had factories in the North West. The Company is also one of the first companies to be sued for asbestos-related liabilities. Asbestos is now Britain's biggest industrial killer. Hundreds of people in the North West alone are dying from asbestos-related cancer. Yet the hazards of the material have been known about for over 100 years, according to Geoff Tweedale from the Manchester Business School. Mr. Tweedale says, "The Government knew as early as 1900. The factory inspectors - the employers - must have known at roughly the same time but certainly by 1930." Edmund Bracewell from New Moston worked as an asbestos pipe lagger at Newall's Insulation in Ancoats for just 18 months. He is dying from mesothelioma. This is a rare form of cancer almost always associated with asbestos. He describes the extraordinary amount of dust generated when working with asbestos, "I was covered in dust . We had a wash, but its still on your clothing and hands." In such conditions, asbestos fibers can float invisibly in the air. These are so small that two million would fit on the head of a pin. Each fiber could allegedly induce cancer. Mr. Bracewell feels angry that such information was not given to him, saying, "I would not have accepted the job knowing it would have damaged my health later in life." Jennifer Leeming, a North West coroner, shares Bracewell's sentiments. She says, "It wouldn't be unusual for me to go and sit in Wigan, for example, and do, say, six inquests and all of these in one particular day will be related to asbestos related diseases." Getting compensation for Bracewell and other victims should be straightforward, but it isn't. Turner and Newall was taken over by Federal Mogul, which also became responsible for its liabilities, in an unfortunate time, five years ago, when asbestos claims in the States have gone from a handful to a quarter of a million. Federal Mogul couldn't survive financially if all the claims had to be paid at once so they voluntarily filed for Chapter 11 Bankruptcy. The action puts all the claims on hold, while still allowing the company to trade and make profits. In Britain, the company went into Administration. Administrators and solicitors representing some British victims believe that the seriously ill British people should be dealt with as a special case. They think British victims should be pulled out of the legal maze so that compensation payments can restart. Presenter Tony Morris put this question to Federal Mogul's chief lawyer, Jim Zamoyski. He declined to give an interview but says, "There's a lot of US victims as well, so I think they're all going to be handled at the same time." One way the seriously ill British victims may receive compensation more quickly is if the Government steps in and make payments now. When Federal Mogul resolves the case, the Government would get its money back. Tony Lloyd is a North West Labour MP and former Turner and Newall employee. He says, "It is not Government who created the problems or who has all the answers . What we do want though is Government galvanized across its different departments and to say that Government can bring pressure to bear on those who can unlock this situation . But what I can't promise is that the answer will come tomorrow. It will take time." Mr. Bracewell says, "I think I'll be dead before the compensation goes through the courts." The first recorded case of asbestosis was that of Nellie Kershaw who worked for Turner and Newall in their Rochdale factory in 1917. She was stationed in the spinning room, which took raw asbestos rock and converted it into a host of products. In 1922, five years after starting work, Ms. Kershaw fell ill. By 1924 she was dead. The inquest, which followed Nellie's death, was the first on an asbestos worker. COMPANY PROFILE T&N,(f/k/a Turner & Newall) A subsidiary of Federal Mogul Federal-Mogul Corporation (OTC: FDMLQ) 26555 Northwestern Hwy. Southfield, MI 48034 Phone: 248-354-7700 Fax: 248-354-8950 http://www.Federal-Mogul.com Employees : 49,000 Revenue : $5,457,000,000 Net Income : $(1,145,900,000) Assets : $9,053,200,000 Liabilities : $8,634,200,000 (As of December 31, 2001) Description: T&N, formerly known as Turner & Newall, was among other things, an English building materials manufacturer that used and sold asbestos products. When Federal-Mogul acquired T&N, it no longer manufactured these materials but was a recognized manufacturer of automotive products headquartered in Manchester, England. Federal- Mogul, a maker of components for cars, trucks, and construction vehicles. Its products include chassis and engine parts, pistons, and sealing systems sold under brand names such as Federal-Mogul, Glyco, and Signal-Stat. Federal-Mogul has manufacturing and distribution facilities primarily in the Americas and Europe; major customers include global automakers such as General Motors, Ford, DaimlerChrysler, BMW, and Volkswagen. Federal-Mogul also distributes auto parts to aftermarket customers. The company has entered Chapter 11 as a result of asbestos claims related to its acquisition of T&N plc. New Securities Fraud Cases AEGON NV: Charles Piven Launches Securities Fraud Suit in S.D. New York ----------------------------------------------------------------------- The Law Offices Of Charles J. Piven, PA initiated a securities class action on behalf of shareholders who purchased, converted, exchanged or otherwise acquired the common stock of Aegon N.V. (NYSE:AEG) between August 9, 2001 and July 22, 2002, inclusive, in the United States District Court for the Southern District of New York against the Company and certain of its officers and directors. The action charges that defendants violated federal securities laws by issuing a series of materially false and misleading statements to the market throughout the class period which statements had the effect of artificially inflating the market price of the Company's securities. For more details, contact Charles J. Piven by Mail: The World Trade Center-Baltimore, 401 East Pratt Street, Suite 2525, Baltimore, Maryland 21202 by Phone: 410-986-0036 or by E-mail: hoffman@pivenlaw.com AMERICREDIT CORPORATION: Cauley Geller Commences Securities Suit in TX ---------------------------------------------------------------------- Cauley Geller Bowman & Coates, LLP initiated a securities class action in the United States District Court for the Northern District of Texas on behalf of purchasers of AmeriCredit Corporation (NYSE: ACF) publicly traded securities during the period between April 14, 1999 and January 15, 2003, inclusive. The complaint charges AmeriCredit and certain of its officers and directors with violations of the Securities Exchange Act of 1934. AmeriCredit purchases auto finance contracts without recourse from franchised and select independent automobile dealerships, and, to a lesser extent, makes loans directly to consumers buying used and new vehicles. Among other things, plaintiff alleges that defendants' material omissions and the dissemination of materially false and misleading statements regarding the nature of AmeriCredit's revenues and earnings caused AmeriCredit's stock price to become artificially inflated, causing huge damages for investors. Specifically, the complaint alleges that defendants were improperly deferring delinquent loans to avoid consumer defaults so AmeriCredit would have access to cash which otherwise would have been restricted. For more details, contact Jackie Addison, Heather Gann or Sue Null by Mail: P.O. Box 25438, Little Rock, AR 72221-5438 by Phone: 1-888-551-9944 by E-mail: info@cauleygeller.com or visit the firm's Website: http://www.cauleygeller.com ARIBA INC.: Stull Stull Commences Securities Fraud Lawsuit in N.D. CA --------------------------------------------------------------------- Stull, Stull & Brody, initiated a securities class action in the United States District Court for the Northern District of California on behalf of purchasers of Ariba, Inc. (Nasdaq:ARBAE) securities between January 11, 2000 and January 15, 2003, inclusive. Ariba provides Internet-based business to business software and services which assist companies in managing their operations' cash costs. The complaint charges that the Company and certain of its officers and directors violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10-b(5). The action alleges that defendants issued a series of false and misleading statements concerning the Company's financial condition while garnering over $692 million as the result of insider trading. Specifically, the suit charges that defendants issued financial results which were presented in violation of Generally Accepted Accounting Principles (GAAP). As a result, the Complaint charges that defendants were forced to restate the Company's financial statements for the fiscal years ended September 30, 2000 and 2001, and for the quarters ended March 31, 2000 through June 30, 2002. The Complaint further alleges that as a result of defendants' actions, plaintiff and the Class were damaged. For more details, contact Michael D. Braun or Patrice L. Bishop by Phone: 888/388-4605 by E-mail: info@secfraud.com CLEARONE COMMUNICATIONS: Wolf Haldenstein Lodges Securities Suit in UT ---------------------------------------------------------------------- Wolf Haldenstein Adler Freeman & Herz LLP initiated a securities class action in the United States District Court for the District of Utah, Central District, on behalf of all persons who purchased the common stock of Gentner Communications Corp. or ClearOne Communications (Nasdaq: CLRO) between April 17, 2001 and January 14, 2003, inclusive against the Company and certain of its officers and directors. Specifically, this class period includes the following members: (1) All purchasers of Gentner Communications' common stock from April 17, 2001 through January 1, 2002, trading under the ticker symbol c; (2) All purchasers of ClearOne Communications' common stock from January 2, 2002 through March 14, 2002, trading under the ticker symbol GTNR; and (3) All purchasers of ClearOne Communications' stock from March 15, 2002 when it began trading under the ticker symbol CLRO through January 14, 2003. The complaint alleges that during the class period, the defendants issued financial statements that were materially false and misleading. In order to artificially inflate the price of ClearOne's stock, defendants falsely reported the Company's financial results during the class period by recognizing revenue improperly. Among other practices, defendants shipped products to certain clients with the agreement that the clients would not have to pay for the merchandise until it was sold, even though ClearOne would immediately record the shipments as sales. On January 15, 2003, the US Securities and Exchange Commission, Salt Lake District Office, filed a complaint against ClearOne Communications Inc. alleging violations of the Securities Act of 1933 and the Securities Exchange Act of 1934. The complaint alleged that the Company overstated revenues, income and accounts receivable by improperly recording certain transactions with its distributors and resellers as sales. ClearOne reported a net loss of $1.2 million, or 10 cents a share, on sales of $13 million for its first fiscal quarter ended September 30, 2002. For more details, contact Fred Taylor Isquith, Michael Miske, George Peters, Derek Behnke by Mail: 270 Madison Avenue, New York, New York 10016, by Phone: (800) 575-0735 by E-mail: classmember@whafh.com or visit the firm's Website: http://www.whafh.com. All e-mail correspondence should make reference to ClearOne. CLEARONE COMMUNICATIONS: Abbey Gardy Commences Securities Lawsuit in UT ----------------------------------------------------------------------- Abbey Gardy, LLP commenced a securities class action in the United States District Court for the District of Utah on behalf of all persons or entities who purchased securities of ClearOne Communications, Inc. (Nasdaq: CLRO) between January 16, 2001 and January 15, 2003, inclusive. The suit charges the Company and Frances M. Flood, the Company's Chairman, CEO and President, and Susie S. Strohm, the Company's CFO and Vice President of Finance with violations of the Securities Exchange Act of 1934. The suit alleges that, in order to inflate the price of ClearOne's stock, defendants caused the Company to falsely report its financial results during the class period through improper revenue recognition practices, including recognizing revenue for shipments to distributors even though the distributors had the right to return or exchange unsold goods. As a result of this inflation, ClearOne was able to complete a private offering of 1.2 million shares, raising proceeds of $25.5 million on December 11, 2001. On January 15, 2003, the last day of the Class Period, the Securities and Exchange Commission (SEC) filed a federal lawsuit alleging that defendants violated numerous federal securities laws, primarily through a program of "channel stuffing" -- shipping large amounts of inventory to the company's distributors with the understanding that the distributors did not have to pay for these products until the distributors resold the products, and that in some instances the distributors were given the right to return or exchange products the distributors were unable to sell. The stock dropped below $1.50 per share on this news, more than 90% lower than its class period high. On February 28, 2003, it was announced that the US Attorney in Utah began an investigation of ClearOne stemming from the SEC Complaint. For more details, contact Nancy Kaboolian by Phone: 1-800-889-3701 by E-mail: Nkaboolian@abbeygardy.com or visit the firm's Website: http://www.abbeygardy.com MCSi INC.: Charles Piven Commences Securities Fraud Suit in S.D. Ohio --------------------------------------------------------------------- The Law Offices Of Charles J. Piven, PA initiated a securities class action on behalf of shareholders who purchased, converted, exchanged or otherwise acquired the common stock of MCSi, Inc. (Nasdaq:MCSI) between July 24, 2001 and February 26, 2002, inclusive, in the United States District Court for the Southern District of Ohio against the Company and certain of its officers and directors. The action charges that defendants violated federal securities laws by issuing a series of materially false and misleading statements to the market throughout the class period which statements had the effect of artificially inflating the market price of the Company's securities. For more details, contact Charles J. Piven by Mail: The World Trade Center-Baltimore, 401 East Pratt Street, Suite 2525, Baltimore, Maryland 21202 by Phone: 410-986-0036 or by E-mail: hoffman@pivenlaw.com ********* 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. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re- mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The CAR subscription rate is $575 for six months delivered via e-mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are $25 each. For subscription information, contact Christopher Beard at 240/629-3300. * * * End of Transmission * * *