/raid1/www/Hosts/bankrupt/CAR_Public/030314.mbx
C L A S S A C T I O N R E P O R T E R
Friday, March 14, 2003, Vol. 5, No. 52
Headlines
ALASKA: Processor's Annual Plan Says Company Hoped To Get Prices Down
CALIFORNIA: Appeals Court Rules V. San Diego Boards of Realtors in Suit
CAMPBELL SOUP: Agrees To Settle Consolidated Securities Lawsuit in NJ
DAIMLERCHRYSLER: Plaintiffs Claim Proof Of Race Discrimination On Loans
HAWAII: To Settle Claims Over Bias V. Blind, Disabled in Health Program
ISLE OF CAPRI: Plaintiffs Appeal NV Court's Refusal to Certify Lawsuit
JUNIPER NETWORKS: NY Court Dismisses In Part Securities Fraud Lawsuit
JUNIPER NETWORKS: CA Court Dismisses Consolidated Securities Fraud Suit
PEOPLE'S DREAM: TX Attorney General Commences Suit For Consumer Fraud
PDI INC.: Asks NJ Court To Dismiss Consolidated Securities Fraud Suit
PDI INC.: Enters Joint Defense, Indemnification Agreement With Bayer AG
REXALL SUNDOWN: To Settle Charges of Deceptive Diet Drug Advertising
T-MOBILE USA: MD Court Dismisses Consolidated Suit Over Wireless Phones
TACO BELL: OR Court To Schedule Trial For Claimants in Overtime Lawsuit
TEXAS: Attorney General Launches Suit Over Deceptive Business Practices
TOBACCO LITIGATION: Parties In Light Cigarettes Suit Await Court Ruling
TOBACCO LITIGATION: Philip Morris Plans Appeal If Verdict Unfavorable
VERIZON COMMUNICATIONS: Court To Decide if Antitrust Suit Can Proceed
WEST CORPORATION: OH Appeals Court Hears Appeal of Certification Denial
WEST CORPORATION: Faces Consumer Fraud Suit Over Club Memberships in CA
Asbestos Alert
ASBESTOS LITIGATION: Asbestos in Guildhall Kitchen Fuels Exposure Fears
ASBESTOS LITIGATION: Fight for Asbestos Payouts Continues in Cumbria
ASBESTOS LITIGATION: Widow Gets GBP4M for Husband's Asbestos Exposure
ASBESTOS LITIGATION: Proposed Bill Could Limit Asbestos Related Suits
ASBESTOS LITIGATION: 3M Sees Decrease in Asbestos Cases at By End 2002
ASBESTOS ALERT: Chubb Served With Complaints Over Asbestos Exposure
ASBESTOS LITIGATION: Federal-Mogul Prepares for Asbestos Related Cases
ASBESTOS LITIGATION: Honeywell Estimates Asbestos Liabilities at $610M
ASBESTOS LITIGATION: OC Seeks More Time To Get Chapter 11 Plan Votes
ASBESTOS LITIGATION: Royal & Sun, Cape Reach Settlement Over Asbestos
ASBESTOS LITIGATION: Residents Sue Union Carbide over Dumped Asbestos
ASBESTOS LITIGATION: United Industrial Says Asbestos Claims Hurt Sale
ASBESTOS LITIGATION: Grace's Asbestos May Remain in Homes' Walls
ASBESTOS ALERT: Ingersoll-Rand Unit Faces Asbestos-Related Lawsuits
ASBESTOS ALERT: Asbestos Claims Threaten Monroe Rubber, Gasket Business
ASBESTOS ALERT: Approval of Cancer Fear Damages Could Endanger Norfolk
New Securities Fraud Cases
ADC TELECOMMUNICATIONS: Reinhardt Wendorf Lodges Securities Suit in MN
ALLOY INC.: Charles Piven Commences Securities Fraud Lawsuit in S.D. NY
ALLOY INC.: Brian Felgoise Commences Securities Fraud Suit in S.D. NY
ALLOY INC.: Brodsky & Smith Lodges Securities Fraud Lawsuit in S.D. NY
ASTROPOWER INC.: Brian Felgoise Commences Securities Suit in DE Court
ASTROPOWER INC.: Brodsky & Smith Commences Securities Suit in DE Court
ASTROPOWER INC.: Charles Piven Commences Securities Fraud Lawsuit in DE
ATMEL CORPORATION: Spector Roseman Commences Securities Suit in N.D. CA
BAYER AG: Wolf Popper Commences Securities Fraud Suit in S.D. New York
INTERSTATE BAKERIES: Brian Felgoise Launches Securities Suit in W.D. MO
MICHAELS STORES: Schatz & Nobel Lodges Securities Fraud Suit in N.D. TX
OWENS CORNING: Bernstein Liebhard Commences Securities Suit in N.D. OH
PROVIDENT FINANCIAL: Brodsky & Smith Lodges Securities Suit in S.D. OH
PROVIDENT FINANCIAL: Berger & Montague Commences Securities Suit in OH
SOLECTRON CORPORATION: Bernstein Liebhard Lodges Securities Suit in GA
*********
ALASKA: Processor's Annual Plan Says Company Hoped To Get Prices Down
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Processor Trident Seafood's annual operating plan for 1992 said the
company hoped to get fishermen prices down to levels "where both the
producer and marketer can make a reasonable profit," according to the
document introduced recently during the defense's presentation of its
case in the trial in Superior Court in Anchorage, Alaska, the
Associated Press Newswires reports.
Approximately 4,500 Bristol Bay fisherman are suing the Seattle
processors and the Japanese importers over an alleged conspiracy to fix
prices paid to the fishermen for their sockeye salmon harvest during
the years 1989 to 1995. The trial started February 3 and is expect to
last three months.
Trident, at the time of the writing of the operating plan for 1992, was
still rebounding from a 1989 sockeye salmon deal that had "gone sour."
Trident President Chuck Bundrant said, during his recent testimony,
that his company lost millions of dollars when Mitsubichi Corp. and two
other Japanese importers reneged on a deal to buy sockeye salmon
harvested in Bristol Bay, False Pass and the Alaska Peninsula.
Mr. Bundrant said the Japanese were "tough competitors," but never the
company's partners. He denied ever trying to convince a competitor to
lower its price.
Plaintiff during this trial day also presented documents showing that
despite the losses in salmon, Trident, a major player in groundfish and
crab processing, was making money. The documents showed profits before
taxes of $20 million, (1991); $17.3 million, (1992); and $3.6 million,
(1993).
Other processor defendants include:
(1) Wards Cove,
(2) Icicle Seafoods,
(3) Ocean Beauty Seafoods,
(4) Peter Pan Seafoods and
(5) Unisea Inc.
Japanese importers are:
(i) Okaya & Co., Ltd.,
(ii) Nichirei Corporation,
(iii) Nichiro Corporation, and
(iv) Nippon Suisan Kalsha Ltd.
Several other defendants, including major importer Marubeni
Corporation, have settled out of court for over $40 million.
CALIFORNIA: Appeals Court Rules V. San Diego Boards of Realtors in Suit
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The 9th Circuit Court of Appeals ruled that all five Boards of Realtors
in San Diego County fixed prices. In its ruling, the federal appeals
court returned the class action to California federal court for
hearings on plaintiffs' requested injunction and determination of
damages.
The case was filed in 1998 by two real estate agents who claimed the
realtor boards were fixing the prices of multiple listing services
(MLS) to all 8,000 realty agents in San Diego County. The plaintiffs
seek $60 million in damages, after tripling as provided under the
Sherman Antitrust Act.
The case arose from a coffee-shop meeting in Washington, DC, at which
officers of the five Boards of Realtors received approval for a price
fixing scheme from the California Association of Realtors and the
National Association of Realtors. After prices were raised, an outcry
by San Diego realty agents led to the lawsuit.
The court also affirmed a sanctions award against the Realtor Boards
for intentionally withholding evidence of an unsuccessful attempt to
end the price fixing. The cover-up was discovered with the aid of a
dying man, William Stegall. After a diagnosis of terminal cancer, and
given a year to live, Mr. Stegall advised Mr. Barry the Realtor Boards
had covered up his unsuccessful efforts to end price fixing. The
District Court lashed the Realtor Boards, declaring their acts
"egregious."
San Francisco attorney David Barry, representing plaintiffs Arleen
Freeman and James Alexander, stated, "The Realtor Associations swindled
real estate agents out of millions of dollars. Now they're going to
have to pay it back, going back to 1994."
The opinion by Circuit Judge Alex Kozinski commented on the admission
of price fixing by the boards of realtors, stating, "Rarely do
antitrust defendants serve up their own heads on so shiny a silver
platter."
All homes for sale in San Diego County are maintained in a multiple
listing service (MLS) run by a corporation called Sandicor, which
achieves $8 billion a year of real estate sales. Sandicor does not
sell MLS services directly to real estate agents. Instead, Sandicor
sells exclusively through the five realtor boards, acting as retailers.
The five realtor boards fixed their retail prices to the 8,000 realty
agents in San Diego County, overcharging them by $2 million per year,
according to the suit. The realtor boards charge agents $45 per month
for MLS services, while the suit alleges the true cost is $25 per
month, an overcharge of about $20 per agent per month. The lawsuit by
Barry seeks to collect overcharges to those 8,000 realty agents,
including triple damages under the antitrust laws.
The five realtor boards own Sandicor. The boards asserted their
ownership made them immune from price fixing lawsuits. The 9th Circuit
rejected that defense.
There are over 1,600 local boards of realtors in the United States, and
half of them have regional MLSs, estimates Mr. Barry. "This decision
affects hundreds of MLSs across the United States," Mr. Barry said. He
asserts that overcharges to realty agents of millions of dollars are
passed on to consumers, and that today's decision will lead to lower
commission rates charged to the public.
For more details, contact David Barry by Phone: 1-415-398-6600 or visit
the Website: http://www.ca9.uscourts.gov
CAMPBELL SOUP: Agrees To Settle Consolidated Securities Lawsuit in NJ
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Campbell Soup Company agreed to settle a consolidated securities class
action pending against it and two of its former executives in the
United States District Court for the District of New Jersey.
The suit alleges, among other things, that the Company and the former
executives misrepresented the Company's financial condition between
September 8, 1997 and January 8, 1999, by failing to disclose alleged
shipping and revenue recognition practices in connection with the sale
of certain company products at the end of the Company's fiscal quarters
in violation of Section10 (b)and 20 (a)of the Securities Exchange Act
of 1934, as amended, and Rule10b-5 promulgated thereunder.
On February 6, 2003, the Company announced it had reached an agreement
in principle to settle this case. If the court approves the
settlement, all claims will be dismissed and the litigation will be
terminated in exchange for a payment of $35, all of which will be
covered by insurance. The settlement agreement recognizes that entry
into the settlement does not constitute an admission of fault or
liability by the company or any other defendant.
DAIMLERCHRYSLER: Plaintiffs Claim Proof Of Race Discrimination On Loans
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Lawyers for six African-American plaintiffs who allege they were denied
loans by DaimlerChrysler based on their race and where they live, say
they have evidence that the automaker's finance unit can screen credit
applications through a "redlining" process, the Chicago Tribune
reports.
Steve Berman, lead attorney for the plaintiffs, said an anonymous
source in DaimlerChrysler Services, the carmaker's lending arm, sent
the plaintiffs' lawyers a copy of detailed instructions for flagging
applications from specific dealerships so they would receive closer
scrutiny than is usually given.
The lawsuit was filed February 3, in US District Court in Chicago. Mr.
Berman said he will seek class action status for the lawsuit filed by
the six Chicagoans to include all applicants in DaimlerChrysler's
Chicago zone who may have been denied loans based on race. The Chicago
zone covers Illinois and part of Iowa. Since the suits were filed last
month, Mr.Berman said his law firm Hagens Berman has received similar
complaints from minorities in other parts of the country, and the suit
may expand to include other areas.
The lawsuit says Daimler Chrysler denied the six Chicago residents
loans even though they qualified based on their credit scores. All six
African-Americans say they had to obtain loans elsewhere at higher
interest rates.
"Our allegations are that rather than just take a credit score and base
loans on that result, DaimlerChrysler would turn a switch on to disable
the automatic credit process," Mr. Berman said. By turning on this
switch in its computer system, the "disabled" system could be used to
highlight when electronic loan applications arrived from two Chicago-
area dealerships in the neighborhoods with large numbers of racial
minorities. This practice is known as redlining.
Mr. Berman says he plans to use the four-page document as evidence if
the lawsuit goes to trial. The document explains how to disable the
automatic credit process and enable it to flag a dealer's applications
with red warnings, using any criteria for which the dealer may want to
be on watch.
The six plaintiffs were customers of Marquette Chrysler-Jeep, a
dealership whose former owner, Gerald Gorman, is a friendly party to
the class action. Mr. Gorman has sued DaimlerChrysler separately. Mr.
Gorman said that DaimlerChrysler Services denied credit to black
customers who had good credit. He also said that after he protested
about this to officials at the company's zone office in Lisle,
DaimlerChrysler Services stopped approving loan applications from his
dealership.
Both Mr. Berman's class action and Mr. Gorman's separate lawsuit allege
that DaimlerChrysler illegally repossessed nearly 70 vehicles after the
company determined the buyers were minorities, and some of them had not
even missed payments. The suits also charge that managers at the Lisle
zone office and North American headquarters near Detroit tolerated and
perpetuated discriminatory lending practices, and that during meetings
with Mr. Gorman and his employees, company officials used racial slurs
and said they did not want to grant loans to blacks.
"Somebody had to step forward. Someone had to say this is wrong," said
Mr. Gorman. "It has been going on way too long."
HAWAII: To Settle Claims Over Bias V. Blind, Disabled in Health Program
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Hawaii has agreed to pay $7 million to settle all legal action stemming
from the Medicaid reforms that began with launching the Quest health
care program for the poor in 1994, the Associated Press Newswires
reports.
The settlement was announced recently by state Attorney General Mark
Bennett and Shelby Anne Floyd, an attorney for the plaintiffs. Ms.
Shelby represented the plaintiffs who sued the state in 1995, claiming
the Quest health care program discriminated against the blind and
disabled. About 300 people later joined the lawsuit as part of a class
action.
"We are pleased that the state has acknowledged its responsibility for
not giving the disabled the same benefits it gave to other Hawaii
residents," Ms. Floyd said. The settlement money covers about 200
people and includes attorney's fees which are "in the millions," she
continued.
The Quest program began in 1994 to provide managed care for poor people
who did not qualify for other types of assistance. It left out
thousands of old, blind and disabled clients who previously had been in
the Medicaid program.
Legal action began in November 1995, with a lawsuit filed on behalf of
a disabled minor and a blind adult. The lawsuit was brought against
the state Department of Human Services, alleging that Quest's
provisions excluded people older than 65 and the blind and disabled,
thereby violating the federal Americans with Disabilities and
Rehabilitation acts.
The state said that because Quest was an experimental program, it had
received a waiver from an agency within the US Department of Health
and Human Services that exempted it from compliance with the two
federal acts. Moreover, said the state, the exemption was a financial
necessity so that the program can just survive.
In April 1996, a District Court judge ruled in the plaintiffs' favor,
which resulted in more than 300 class members filing claims for
compensatory damages.
The $7 million settlement covers "all class actions, damage actions and
appeals and all other matters arising out of the state's 1994 reforms
to its Medicaid program, which was the launching point for the Quest
program, according to the announcement by Attorney General Bennett and
Ms. Floyd, the plaintiffs' attorney.
The Quest program was amended in March 1996, to include an income
threshold, prompting another class action that was decided in favor of
the plaintiffs, but is still pending before the 9th US Circuit Court of
Appeals.
ISLE OF CAPRI: Plaintiffs Appeal NV Court's Refusal to Certify Lawsuit
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Plaintiffs in the class action filed against Isle of Capri Casinos,
Inc. and other manufacturers, distributors and gaming operators,
including many of the country's largest gaming operators, appealed the
United States District Court in Las Vegas, Nevada's decision refusing
class certification for the suit.
The suit charges that the defendants violated the Racketeer Influenced
and Corrupt Organizations Act (RICO) by engaging in a course of
fraudulent and misleading conduct intended to induce people to play
their gaming machines based upon a false belief concerning how those
gaming machines actually operate and the extent to which there is
actually an opportunity to win on any given play. The suit seeks
unspecified compensatory and punitive damages.
The Company is still unable at this time to determine what effect, if
any, the suit would have on its consolidated financial position or
results of operations. The gaming industry defendants are committed to
continuing a vigorous defense of all claims asserted in this matter.
JUNIPER NETWORKS: NY Court Dismisses In Part Securities Fraud Lawsuit
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The United States District Court for the Southern District of New York
dismissed several claims in the securities class action filed against
Juniper Networks, Inc. on behalf of purchasers of the Company's common
stock in its initial public offering in June 1999 and its secondary
offering in September 1999. The suit also names as defendants:
(1) Goldman Sachs Group, Inc.,
(2) Credit Suisse First Boston Corporation,
(3) FleetBoston Robertson Stephens, Inc.,
(4) Royal Bank of Canada (Dain Rauscher Wessels),
(5) SG Cowen Securities Corporation,
(6) UBS Warburg LLC (Warburg Dillon Read LLC),
(7) Chase (Hambrecht & Quist LLC),
(8) J.P. Morgan Chase & Co.,
(9) Lehman Brothers, Inc.,
(10) Salomon Smith Barney, Inc.,
(11) Merrill Lynch, Pierce, Fenner & Smith, Incorporated and
(12) certain of the Company's officers
Specifically, among other things, this complaint alleged that the
prospectus pursuant to which shares of common stock were sold in the
Company's initial public offering and its subsequent secondary offering
contained certain false and misleading statements or omissions
regarding the practices of the Underwriters with respect to their
allocation of shares of common stock in these offerings and their
receipt of commissions from customers related to such allocations.
Various plaintiffs have filed actions asserting similar allegations
concerning the initial public offerings of approximately 300 other
companies. These various cases pending in the Southern District of New
York have been coordinated for pretrial proceedings as "In re
Initial Public Offering Securities Litigation," 21 MC 92.
In April 2002, plaintiffs filed a consolidated amended complaint in the
action against the Company, alleging violations of the Securities Act
of 1933 and the Securities Exchange Act of 1934. Defendants in the
coordinated proceeding filed motions to dismiss. In October 2002, the
Company's officers were dismissed from the case without prejudice
pursuant to a stipulation. On February 19, 2003, the court granted in
part and denied in part the motion to dismiss, but declined to dismiss
the claims against the Company.
The Company believes that it has meritorious defenses to the claims
against it and intends to defend itself vigorously.
JUNIPER NETWORKS: CA Court Dismisses Consolidated Securities Fraud Suit
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The United States District Court for the Northern District of
California dismissed the consolidated securities class action pending
against Juniper Networks, Inc. and certain of its officers and former
officers, on behalf of those stockholders who purchased the Company's
publicly traded securities between April 12, 2001 and June 7, 2001.
The plaintiffs allege that the defendants made false and misleading
statements, assert claims for violations of the federal securities laws
and seek unspecified compensatory damages and other relief. In
September 2002, the defendants moved to dismiss the amended complaint.
In March 2003, the judge granted defendants motion to dismiss with
leave to amend. The Company continues to believe the claims are
without merit.
PEOPLE'S DREAM: TX Attorney General Commences Suit For Consumer Fraud
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Texas Attorney General Greg Abbott filed a lawsuit in Lubbock County
District Court against the People's Dream Development of Lubbock and
Jonathan Blount for unlawful finance practices that deceive low-income
consumers with dreams of home ownership, while leaving others homeless.
The Company represents to consumers with low credit ratings that it can
secure home financing for them. The agent collects fees in advance for
this "service," then fails to arrange financing or refund this deposit
if financing falls through. The Company also fraudulently represents
that it is aligned with certain financial institutions and that it owns
the homes it offers for sale under an owner-finance scheme. Those
receiving this owner financing, moreover, forfeit all monies paid if
they make even one late payment to the Company.
"The dream of home ownership is at the heart of the American dream, and
it's a realization that should come true for everyone," said Attorney
General Abbott. "We believe this company deliberately exploited that
dream to finance its own operations, with no benefit to those who just
wanted a place to call their own."
In another side to the business, the Company advertises that it will
purchase homes from uncreditworthy residents who face foreclosures, tax
liabilities, demolition or other homeowner crises. The Company
convinces these residents to transfer their title into the name of the
Company, potentially depriving the homeowners of family shelter. The
Company also, the lawsuit alleges, fails to pay these residents for
these homes, leaving them virtually homeless and without the means to
obtain a home.
The Attorney General cites several violations of the Deceptive Trade
Practices Act in the lawsuit, including failure to disclose the nature
of its business and deliberately sowing confusion among prospective
homeowners. Abbott will ask the court to issue temporary and permanent
injunctions halting the deceptive practices of Blount and The People's
Dream, and to order the company to refund monies to consumers who were
deceived.
If approved by the court, the injunctions would prohibit the company
from engaging in fraudulent financing, or from destroying or concealing
records, money, stocks, bonds, equipment or other items associated with
its business activities.
PDI INC.: Asks NJ Court To Dismiss Consolidated Securities Fraud Suit
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PDI, Inc. asked the United States District Court for the District of
New Jersey to dismiss the consolidated securities class action pending
against it, its chief executive officer and its chief financial
officer, alleging violations of the Securities Exchange Act of 1934.
The suit alleges claims under Sections 10(b) and 20(a) of the 1934 Act
and Rule 10b-5 established thereunder. The suit purports to state
claims against the Company on behalf of all persons who purchased our
common stock between May 22, 2001 and August 12, 2002 and seeks money
damages in unspecified amounts and litigation expenses including
attorneys' and experts' fees.
The essence of the allegations in the suit is that the Company
intentionally or recklessly made false or misleading public statements
and omissions concerning its financial condition and prospects with
respect to its marketing of Ceftin in connection with:
(1) the October 2000 distribution agreement with GlaxoSmithKline,
(2) its marketing of Lotensin in connection with the May 2001
distribution agreement with Novartis Pharmaceuticals
Corporation, and
(3) its marketing of Evista in connection with the October 2001
distribution agreement with Eli Lilly & Co.
In February 2003, the Company filed a motion to dismiss the suit under
the Private Securities Litigation Reform Act of 1995 and Rules 9(b) and
12(b)(6) of the Federal Rules of Civil Procedure. The Company believes
that the allegations in this purported securities class action are
without merit and intends to defend the action vigorously.
PDI INC.: Enters Joint Defense, Indemnification Agreement With Bayer AG
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PDI Inc. entered into a joint defense and indemnification agreement
with Bayer Pharmaceuticals after it was named as a defendant in
numerous lawsuits, including two class actions, alleging claims arising
from the use of the prescription compound Baycol that was manufactured
by Bayer and co-marketed by the Company on Bayer's behalf under a
contract sales force agreement.
In August 2001, Bayer announced that it was voluntarily withdrawing
Baycol from the US market, after it was linked to several deaths
worldwide.
The Company expects that they may be named in additional similar
lawsuits. To date, the Company has defended these actions vigorously
and have asserted a contractual right of indemnification against Bayer
for all costs and expenses the Company incurs relating to these
proceedings.
In February 2003, the Company entered into a joint defense and
indemnification agreement with Bayer, pursuant to which Bayer has
agreed to assume substantially all of the Company's defense costs in
pending and prospective proceedings, subject to certain limited
exceptions. Further, Bayer has agreed to reimburse the Company for all
reasonable costs and expenses incurred to date in defending these
proceedings.
REXALL SUNDOWN: To Settle Charges of Deceptive Diet Drug Advertising
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A Florida company, Rexall Sundown Inc. of Boca Raton, has agreed to
repay customers who bought its dietary supplement, Cellasene, a pill
containing ginkgo biloba, grape seed extract and other herbal
ingredients, which, the company promised in its advertising, could
erase cellulite, according to a report by Associated Press newswires.
The Federal Trade Commission (FTC) had brought charges against Rexall
for making false and unproven claims about Cellasene in national
advertising in order to market the product. The FTC said sales of
Cellasene exceeded $40 million in the United States. A typical eight-
week regimen cost about $200.
"Hundreds of thousands of consumers were misled," said Howard Beales,
director of the FTC's Bureau of Consumer Protection.
The FTC will administer a fund to repay consumers. The settlement will
become final after it is approved by a federal court in Miami and
related class-action lawsuits in California and Florida are completed,
the FTC said.
Cellasene was advertised in major newspapers, in fashion magazines, on
television, radio and the Internet, as a product that could get rid of
the fatty deposits known as cellulite, that the user of the product
will "notice smoother-feeling legs and a firmer-looking appearance of
the skin in just eight weeks."
T-MOBILE USA: MD Court Dismisses Consolidated Suit Over Wireless Phones
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The United States District Court for the District of Maryland dismissed
the consolidated class action filed against T-Mobile USA, other
wireless carriers and other participants in the wireless industry.
Several suits were initially filed asserting products liability, breach
of warranty and other claims relating to radio frequency transmissions
to and from wireless phones. The complaints seek unspecified damages
for the costs of headsets for wireless phone users as well as
injunctive relief.
In addition, the Company has been named as a defendant, among other
wireless carriers and other participants in the wireless industry in
one case in which the plaintiff alleges that he developed brain cancer
as a result of exposure to radio frequency transmissions. He seeks
unspecified monetary damages. These cases have been consolidated.
The court later dismissed the consolidated suit on grounds it was
preempted by federal law. The ruling is subject to appeal.
TACO BELL: OR Court To Schedule Trial For Claimants in Overtime Lawsuit
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The Circuit Court of the State of Oregon for the County of Multnomah
will likely schedule trial for the remaining claimants in the judgment
in the overtime wage class action pending against fast food giant Taco
Bell Corporation.
Two former Taco Bell shift managers filed the suit on behalf of
approximately 17,000 current and former hourly employees statewide.
The lawsuit alleges violations of state wage and hour laws, principally
involving unpaid wages including overtime, and rest and meal period
violations. The suit seeks an unspecified amount in damages.
Under Oregon class action procedures, the Company was allow0ed an
opportunity to "cure" the unpaid wage and hour allegations by opening a
claims process to all putative class members prior to certificationS of
the class. In this cure process, the Company paid out less than $1
million.
In January 1999, the court certified a class of all current and former
shift managers and crewmembers who claim one or more of the alleged
violations. A court-approved notice and claim form was mailed to
approximately 14,500 class members. Trial began in January 2001.
In March 2001, the jury reached verdicts on the substantive issues in
this matter. A number of these verdicts were in favor of the Company
position, however, certain issues were decided in favor of the
plaintiffs. In April 2002, a jury trial to determine the damages of 93
of those claimants found that the Company failed to pay for certain
meal breaks and/or off-the-clock work for 86 of the 93 claimants.
However, the total amount of hours awarded by the jury was
substantially less than that sought by the claimants. In July and
September 2002, the court ruled on several post-trial motions,
including fixing the total number of potential claimants at 1,031
(including the 93 claimants for which damages have already been
determined) and holding that claimants who prevail are entitled to
prejudgment interest and penalty wages. The court has indicated that
it will likely schedule a damages trial for the remaining 938 claimants
sometime in 2003.
The Company intends to appeal the April 2002 damages verdict as well as
the March 2001 liability verdict.
TEXAS: Attorney General Launches Suit Over Deceptive Business Practices
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Texas Attorney General Greg Abbott filed suit in San Antonio District
Court to stop a statewide scam by a Dallas CPA firm, operated by Karyn
A. Ward and Richard L. Andro. The firm allegedly deceives homeowners
by concealing information about how they can obtain a homestead
exemption. The information is free and publicly available, yet the
firm charges a large fee for recovering the benefits.
"This is the time of year when local tax appraisal districts get ready
to send out new valuation notices to homeowners. Some homeowners will
become vulnerable to business practices like this that can take a big
bite out of tax benefits that rightfully should accrue to them," said
Attorney General Abbott. "The homestead exemption is one of those
benefits."
The suit alleges that Mr. Ward's firm mails flyers to unsuspecting
homeowners who may be entitled to property tax benefits under the
allowable homestead and over-65 exemptions. The correspondence advises
these residents that they may be eligible for a refund from "one or
more public agencies" and induces them to sign a contract permitting
the company to process the necessary paperwork to obtain this refund on
their behalf. The company indicates that it will charge a fee of 50
percent of the amount recovered.
When Mr. Ward's company obtains signed contracts from homeowners, only
then do they disclose to homeowners the true public source of the
information. If disgruntled homeowners then attempt to obtain refunds
on their own, the company still demands payment of the 50 percent fee,
as stated in the contract. Homeowners who refuse to pay are referred
to attorneys for collection of Mr. Ward's fee.
Attorney General Abbott alleges that the company induces homeowners
into blind contractual transactions by omitting the fact that this
information is free of charge and that the "public agencies" are the
tax appraisal offices located in their counties.
For a nominal fee, Mr. Ward's company purchases databases of property
information from several appraisal districts in the state, including
Bexar, Dallas, Tarrant, Harris and Nueces counties. These in turn
include information from various taxing jurisdictions such as cities,
counties, school and other districts. The Company also routinely uses
official exemption application forms used by the various appraisal
districts. The Attorney General has requested temporary and permanent
injunctions against the Company and restitution for homeowners who were
harmed by these deceptive practices.
TOBACCO LITIGATION: Parties In Light Cigarettes Suit Await Court Ruling
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Attorneys for both sides of the class action against Philip Morris USA
say they don't know when Judge Nicholas Byron of the state circuit
court in Madison County will make his ruling in the case. Speculation
on this matter has been rife, since Judge Byron mentioned at one point
that he would rule after closing arguments were concluded, and then
said that he would rule at some point after he had taken post-trial
motions, The Wall Street Journal reports.
Speaking to reporters when closing arguments were made, plaintiffs'
attorney Stephen Tillery said he would not be surprised if Judge Byron
makes a decision later this week or early next week, based on what the
judge has said in court. Both sides have until Friday to respond to
proposed judgment orders, and Judge Byron will make a decision sometime
after that, Mr. Tillery said.
Gregory Lombardi, an attorney for Philip Morris, told reporters he was
not sure when Judge Byron would rule.
The plaintiffs in the lawsuit claim that Philip Morris, a unit of Atria
Group Inc., New York, deceived smokers in Illinois by making false
claims for Marlboro Light and Cambridge Light cigarettes. The
plaintiffs allege the company misled them about the dangers of these
two brands of light cigarettes, that the representations by Philip
Morris were designed to lead Illinois smokers to believe that those
cigarettes, the "lights," contained less nicotine and tar than regular
cigarettes and therefore were safer.
Philip Morris attorneys have argued, among other things, that smokers
don't typically view the term "light" as meaning less harmful, that
people think of the cigarette's flavor when the term is used.
Plaintiffs are asking for a judgment of $7.1 billion in compensatory
damages and $14.2 billion in punitive damages.
TOBACCO LITIGATION: Philip Morris Plans Appeal If Verdict Unfavorable
---------------------------------------------------------------------
If Circuit Court Judge Nicholas Byron's verdict in the light cigarettes
trial that recently concluded in Madison County, Illinois, is
unfavorable, defendant Philip Morris plans to pursue every avenue of
appeal, the Belleville News-Democrat (IL) reports.
The next question posed is whether the cigarette maker would have to
hand over billions of dollars to appeal the judgment in the class
action. Currently, in Illinois, defendants who appeal verdicts in
civil suits have to post the entire amount of the judgment as a bond
during the appeal.
There is a measure pending in the Illinois Legislature, however, that
would place a cap of $100 million on the amount a tobacco company has
to post for a bond while appealing a verdict. It is not clear how that
legislation, if passed, would affect the Philip Morris case, whose
judgment, it is likely, would have been rendered prior to the bill's
enactment into law.
Judge Byron has presided over the non-jury trial, which began January
21and had its last day of testimony last Thursday. Closing arguments
took place on Monday of this week, during which plaintiff attorneys
asked for a judgment of at least $21 billion.
Neither Philip Morris Vice President William Ohlemeyer, who said the
company will appeal an unfavorable verdict all the way to the US
Supreme Court, if necessary, nor Stephen Tillery, lead plaintiffs'
attorney, is sure whether the company could take advantage of the
appeal cap, if enacted.
Philip Morris won't have to file its notice of appeal with the Fifth
District Appellate Court for at least 30 days. By the time the notice
of appeal is filed, the state legislature could have approved the
appeal cap. Would the cap then apply to the appeal in this case?
The appeal cap has been approved by the Illinois House and is pending
in the Senate. Philip Morris has lobbied for the cap, arguing that it
ensures Illinois will get its $9 billion share of a multi-state
settlement with Philip Morris and other tobacco companies. Several of
the 46 states involved in the Master Settlement Agreement of 1998 have
approved similar appeal caps for tobacco companies.
The Madison County case is the first of its kind. It does not involve
claims the people were made ill from cigarettes. Rather, it claims
that smokers of light cigarettes suffered economic losses in that they
did not get the kind of product they thought they were buying.
Further, the lawsuit claims that Philip Morris defrauded Illinois
smokers of Marlboro Lights and Cambridge Lights by marketing them as
being lower in tar and nicotine, knowing that to the smokers such a
description would mean that the light cigarettes were safer. The
company knew, however, that the smokers would actually get just as much
tar and nicotine as smoking the regulars by puffing harder or smoking
more, the plaintiffs assert. Plaintiff attorneys said the company
designed the light cigarettes with tiny air holes so they would perform
well on machine tests performed by the federal government.
VERIZON COMMUNICATIONS: Court To Decide if Antitrust Suit Can Proceed
---------------------------------------------------------------------
The United States Supreme Court recently announced that it will decide
whether a class action can continue against Verizon Communications,
Inc. for anticompetitive practices under federal antitrust and
communication laws, Dow Jones Business News reports.
The lawsuit was brought by the law firm Curtis Trinko LLP on behalf of
itself and consumers in the New York region. Since being allowed to
proceed by a federal appeals court, a number of similar lawsuits have
been filed.
The Curtis Trinko lawsuit alleges that Verizon harmed telephone
consumers by delaying competitor access to the company's local phone
networks as required by telecommunications reforms. In agreeing to
take up the case, the Supreme Court said it will limit its review to
whether a lower court properly revived the civil antitrust claims
against Verizon.
The law firm filed the class action after rival AT&T Corporation
complained to regulators about Verizon's practices. In March 2000,
Verizon settled with the Federal Communications Commission and agreed
to pay $13 million in fines and restitution in connection with AT&T's
allegations.
The issue is just one of many that have been litigated since the 1996
Telecommunications Act was passed in an attempt to turn the telecom
industry from a monopoly based system to a competitive one.
A key part of the law requires the Baby Bell phone companies, which had
regional monopolies over local phone services, to grant rivals access
to their systems under certain circumstances. This issue has been to
court before, and a federal appeals court decided consumers and rival
phone companies could not sue. This time, however, the 2nd U.S.
Circuit Court of Appeals reinstated the class action brought by Curtis
Trinko after it was initially dismissed by a US District Court judge.
The appeals panel in New York said the class could pursue its claims
under federal antitrust laws and part of the federal communications
law. The appeals court ordered the lower court to exercise restraint
with the case, and said the lawsuit could continue without interfering
with the separate regulatory oversight of telecommunications companies.
Verizon's appeal to the Supreme Court argues that the 2nd Circuit panel
has wrongly opened it and other telecommunications firms up to costly
litigation.
"The (appeals panel) ruling throws open the door," said Verizon. "(The
decision) presents new conduct-influencing burdens and risks for firms
in any market where monopoly allegations can be advanced and class
action lawyers see an opportunity."
Curtis Trinko has said that Verizon's appeal to the Supreme Court of
the 2nd Circuit Court's decision was an attempt to "avoid facing
discovery and judicial scrutiny of its challenged practices regarding
how it excluded rivals from the local phone market."
The federal government, on the other hand, has intervened in the case,
arguing that the appeals court decision "dramatically expands antitrust
liability for failure to assist rivals." Solicitor General Theodore
Olson called the appeals court decision "erroneous" and one that could
have a dramatic impact on the telecommunications industry and the
United States economy.
"Further guidance from this court (the US Supreme Court) would resolve
issues that affect the entire national economy," Mr. Olson said.
WEST CORPORATION: OH Appeals Court Hears Appeal of Certification Denial
-----------------------------------------------------------------------
The District Court of Appeals for the State of Ohio heard oral
arguments on plaintiffs' appeal of a lower court's decision refusing to
certify as a class action the suit filed against West Corporation and
two of its clients.
The suit was initially filed in the Court of Common Pleas in Cuyahoga
County, Ohio, against the Company's clients. The suit was amended in
July 2001 to add the Company as a defendant. The suit, which seeks
statutory, compensatory, and punitive damages as well as injunctive and
other relief, alleges:
(1) violation of various provisions of Ohio's consumer protection
laws,
(2) negligent misrepresentation,
(3) fraud,
(4) breach of contract,
(5) unjust enrichment and
(6) civil conspiracy
The suit was filed in connection with the marketing of certain
membership programs offered by the Company's clients.
On February 6, 2002 the court denied the plaintiffs' motion for class
certification. On March 7, 2002, the plaintiffs filed an interlocutory
appeal to the District Court of Appeals for the state of Ohio. Oral
arguments were heard and the Company is awaiting a decision from the
Court.
WEST CORPORATION: Faces Consumer Fraud Suit Over Club Memberships in CA
-----------------------------------------------------------------------
West Corporation and West Telemarketing Corporation face a class action
filed in the California Superior Court, San Diego County, which makes
the same allegations as a class action pending in the United States
District Court for the Southern District of California
According to an earlier Class Action Reporter story, the California
federal complaint alleges that class members were sold club memberships
by misleading means or billed for club memberships they did not
purchase as a part of an upsell offer after ordering another product.
The plaintiff asserts four separate claims, namely:
(1) the defendants mailed unordered merchandise to the plaintiff
and the similarly situated class members in violation of 39
USC (S) 3009,
(2) conversion,
(3) unjust enrichment and
(4) fraud.
The purported class is composed of all persons in the United States
who, after calling a telephone number to inquire about or purchase
another product:
(i) were sent a membership kit in the mail;
(ii) were charged for a Memberworks membership program; and
(iii) were customers of a joint venture between Memberworks and the
Company or were wholesale customers of the Company.
The California state court suit alleges violations of:
(a) the California Consumer Legal Remedies Act, California Civ
Code 1750 et seq.,
(b) unfair business acts in violation of California Business and
Professions Code 17200 et seq.,
(c) untrue or misleading advertising in violation of California
Business and Professions Code 17500 et seq., and
(d) common law claims for conversion, unjust enrichment, fraud and
deceit, and negligent misrepresentation.
The complaint seeks monetary damages, including punitive damages, as
well as injunctive relief. The Company's response to the complaint is
due on March 25, 2003.
Asbestos Alert
ASBESTOS LITIGATION: Asbestos in Guildhall Kitchen Fuels Exposure Fears
-----------------------------------------------------------------------
Asbestos exposed in the Winchester Guildhall's kitchen in the United
Kingdom around two weeks ago has still not been removed. The toxic
material was discovered when a carpenter started widening a doorway in
order to fit a new oven. One kitchen worker, who did not wish to be
named, claimed asbestos dust blew "all over the food".
However, a Winchester City Council's spokesman said the carpenter
stopped work immediately, sealed up the asbestos and called in health
and safety officers. The kitchen was only closed for a short time,
according to the spokesman, and was reopened once the area had been
protected.
"It can be dangerous in large quantities but this was just round the
door frame. It was checked by our officers. It's all been sealed and
there's no danger to the kitchen," he said.
However, he admitted that the asbestos had still not been dealt with,
"It's being done overnight on March 16, from Sunday to Monday morning,
so there will be minimal disruption to the kitchen."
ASBESTOS LITIGATION: Fight for Asbestos Payouts Continues in Cumbria
--------------------------------------------------------------------
People in Cumbria in the United Kingdom, who have lost shipyard friends
and relatives to a disease linked to asbestos, vented their
frustrations at the insurance industry. They spoke of the stress they
are going through and expressed disgust at hearing trade union lawyers
explain that insurance firms were making fresh attempts to avoid paying
full compensation to victims.
The Barrow Trades Union Council, which organized the public meeting at
the Engineers Club in Abbey Road, is now pressing for a meeting with
Health Minister John Hutton and calling for a full inquiry into the
overall effects of asbestos diseases caused by shipyard and other
workplace exposure in Furness, Cumbria. Thousands of people in the
area have asbestos-related conditions ranging from relatively harmless
lung scarring to, in a few cases, full blown cancers such as
mesothelioma.
Asbestos diseases take 20 and 30 years or more to develop after
exposure but over the next 20 years, hundreds more Furness people are
expected to die from mesothelioma and cancer caused by ingesting killer
fibers in the 1950s and 1960s.
Three Walney brothers told the meeting that, within the last two years,
they had lost their father, Jimmy Linton, and their mother-in-law to
mesothelioma. They believed their grandfather had also died of it.
Dave Linton, 41, from Walney, a planner at BAE plc asked whether
children of yard workers, who were exposed to asbestos, could also
receive free body scans now being offered by a North East claims firm.
"We have some concerns because we will have come into contact with our
dad's clothing. At that time they never used to wash the overalls at
the yard and people brought them home. We also have some concerns for
our mother because she will have come in contact with it. We have been
told tonight that we can take scans too," he said.
The family is still fighting for compensation two years after the death
of its patriarch.
Lawyers told the meeting that insurance firms were trying to limit
payments by arguing that if a victim had more than one employer they
should only pay a percentage of a claim.
ASBESTOS LITIGATION: Widow Gets GBP4M for Husband's Asbestos Exposure
---------------------------------------------------------------------
The widow of an entrepreneur who started work as a 15-year-old
butcher's boy and built up the world's biggest tire retread firm from
scratch, has won a record GBP4,370,000 compensation for the death of
her husband from exposure to asbestos.
Justice Simon awarded Lucia Farmer, from Derbyshire, the widow of
Anthony Farmer, the compensation at Leeds high court after four former
employers admitted liability for the death of her husband, who worked
with asbestos in the 1960s and 1970s.
Farmer, a former millwright and power station worker, developed
symptoms of the malignant lung disease mesothelioma just days after he
and his partner sold their tire company, Tire Technics, for
GBP30,000,000 in 1998. He died in August the following year at age 47.
"This is an historic decision," said Mrs. Farmer's solicitor, Adrian
Budgen, of Irwin Mitchell. "The record amount of damages reflects the
fact that his earning potential was very great and he would have
continued to provide for his family as he had always done."
The award, a record for industrial disease, was made on the basis that
Farmer, who had previously taken over another failing business,
successfully run it, then sold it, would have then set up a further
successful business. The claim was made against the late Farmer's main
former employers, Rolls-Royce Industrial Power (India), NEI Clarke
Chapman, and members of the Babcock and Mitsui Babcock engineering
groups.
Mr. Budgen said, "This is a particularly tragic case as (he) left
behind a young wife and daughters, Erica, 24, and Prue, 22. "
He declared that Mr. Farmer was "very significantly exposed" to
asbestos when he inhaled the dust from asbestos pipe insulation and
other asbestos products routinely used in the power stations. He
further accused Mr. Farmer's former employers that they clearly failed
to ensure that he was not exposed.
ASBESTOS LITIGATION: Proposed Bill Could Limit Asbestos Related Suits
---------------------------------------------------------------------
A bill in the House of Delegates could curb asbestos suits filed by
non-residents in West Virginia, officials said. The judiciary
committee reported out Senate Bill 213, which is intended to stop
lawsuits filed by non-residents unless the act happened in the state.
"It's a piece of tort reform," said Delegate John Ellem, R-Wood, a
member of the judiciary committee.
West Virginia has been a repository of thousands of asbestos-related
cases filed by plaintiffs across the country against numerous
companies. Most of the suits have no connection to West Virginia where
the US Supreme Court rejected a petition by Mobil Corporation to block
a single mass trial on all the cases.
Mr. Ellem calls the bill, which now goes before the full House, a venue
reform. It goes along with the medical liability reforms both chambers
of the Legislature have approved, he said.
S.B. 213 will stop the flow of asbestos suits filed in West Virginia
with no tie to the state, said Dana Waldo, who heads the Asbestos
Alliance in West Virginia, part of a national coalition seeking
asbestos lawsuit reform on state and federal levels.
The bill "will preserve West Virginia courts for West Virginians," Mr.
Waldo, who is also executive director of the West Virginia Roundtable,
said. The bill also impacts cases other than asbestos lawsuits, he
added.
S.B. 213 says a nonresident may not bring an action in a West Virginia
court unless all or a substantial part of the acts in the claim
happened in the state. Each plaintiff in a civil action with multiple
plaintiffs must also establish venue.
Asbestos was used for insulation until it was stopped in the 1970s when
scientists determined it could cause lung cancer if inhaled. Other
illnesses could arise, which can take years to develop. About 200,000
asbestos lawsuits are pending around the country, according to the
Asbestos Alliance.
For the cases filed in West Virginia, the state Supreme Court approved
a single mass trial involving more than 8,000 plaintiffs. Mobil
Corporation, one of the defendants, petitioned the US Supreme Court to
block the trial, however, the high court last year rejected the
petition.
The bill passed judiciary 24-1. The single no vote was from Del.
Barbara Fleischauer, D-Monongalia, who said it could cost in-state
companies more money to fight lawsuits and could have constitutional
problems by discriminating against non-residents. Venue reform is a
piece of the total tort reform package West Virginia needs beyond those
for medical liability, Mr. Waldo said.
ASBESTOS LITIGATION: 3M Sees Decrease in Asbestos Cases at By End 2002
----------------------------------------------------------------------
3M Co. (NYSE: MMM) said it was a defendant with multiple co-defendants
in 45,000 asbestos cases as of Dec. 31, 2002, representing a
significant decrease from the 80,000 cases against it the previous
year.
The vast majority of these current claimants allege use of some of the
company's mask and respirator products and seek damages from the
company and other defendants for alleged personal injury from work
place exposures to asbestos or, less frequently, silica and other
occupational dust, found in products manufactured by other defendants.
The remaining claimants generally allege personal injury from
occupational exposure to asbestos from unspecified products claimed to
have been manufactured by the company or other defendants and/or from
specialty products containing asbestos manufactured by the company
and/or other defendants.
The company said it settled a large number of claims during 2002 thus
had a substantial reduction in the number of expected insurance
recoveries and the quarterly changes in the number of claimants at the
end of each quarter.
According to the filing, 3M had estimated accrued liabilities of
$161,000,000 for asbestos related claims, of which a substantial
portion is covered by insurance.
ASBESTOS ALERT: Chubb Served With Complaints Over Asbestos Exposure
-------------------------------------------------------------------
The Chubb Corporation (NYSE: CB) said it has been served with several
complaints in Texas district courts alleging that Chubb Indemnity and
unaffiliated insurers conspired to conceal risks associated with
asbestos exposure.
According to Chubb Corporation's Form 10-K filed with the Securities
and Exchange Commission, the complaints, which were filed in the
district courts of Nueces and Bexar counties, were served to Chubb
Indemnity beginning in December. The plaintiffs, who are seeking to
impose liability on insurers directly, have asked for unspecified
monetary and punitive damages.
Chubb Indemnity denies the charges, the filing said. Warren, N.J.-
based Chubb Corporation is an insurance holding company.
ASBESTOS LITIGATION: Federal-Mogul Prepares for Asbestos Related Cases
----------------------------------------------------------------------
Bankrupt auto parts-maker Federal-Mogul Corporation (OTC: FDMLQ) has
proposed setting aside half of its stock to pay off hundreds of
millions of dollars in asbestos liability claims. The Southfield,
Mich.-based Company filed a reorganization proposal March 8, in US
Bankruptcy Court in Delaware, said spokesman Jim Fisher.
If approved, the company's bondholders and those claiming injury from
asbestos would share in its ownership; current stockholders would get
nothing. The company sought Chapter 11 bankruptcy protection in
October 2001 because of hundreds of millions of dollars in asbestos
claims. At the time, it faced more than 365,000 lawsuits.
Federal-Mogul's asbestos liability problems date to 1998, when it
bought T&N PLC of Manchester, England. The auto parts maker once used
asbestos extensively in a building-supplies business. The plan called
for the issuing of a new class of stock to replace the existing stock.
The plan would put 50.1 percent of the stock into a trust to cover the
asbestos claims. The other 49.9 percent would go to the company's
bondholders, Mr. Fisher said.
"The filing represents a critical step forward in the company's effort
to resolve its asbestos liabilities, de-leverage its balance sheet and
emerge a much stronger company," the company said in a news release.
The plan, which also calls for changing the terms on $1,600,000,000 in
other company debts, requires a vote by Federal-Mogul's creditors and
court approval to take effect. A court hearing is set for June 11.
The creation of a trust to cover liability claims comes under a new
provision of federal bankruptcy law, said Martin Zohn, a Los Angeles
bankruptcy specialist with the law firm Proskauer Rose.
Such moves let company managers get on with the business of running
their businesses, rather than fending off lawsuits. Those running the
trust then take responsibility for paying off claims, Mr. Zohn said.
That job will be tough, he said, because of the 30-year latency period
for asbestos-related health problems.
People who are sick or dying now will find themselves competing for
compensation with those who may become ill decades from now, Mr. Zohn
said. "It's only the first hurdle," he said.
Meanwhile, the company is seeking more time to file a disclosure
statement for its reorganization plan and additional exclusivity to
gather votes in favor of the plan saying significant issues still need
to be addressed before it can finalize its disclosure statement. In
court papers, the company asked the court to extend the exclusive
period to get votes for the plan until Aug. 11 and the period to file
the disclosure statement until April 21.
Federal-Mogul said in its motion seeking more time to file that the
most important part of the disclosure statement yet to be completed is
the procedures for distributing asbestos personal injury claims and the
structure of trusts and sub trusts central to the disclosure. Now that
it has filed the plan, the company said, it will work with other groups
involved in the case to finalize open issues, work out the trust
structure and address the distribution procedures for asbestos personal
injury claims, the motion said. A hearing on the motion is scheduled
for April 2, and objections must be filed by March 21.
Disclosure statements are generally filed concurrently with a
reorganization plan, but the parties in the case agreed the disclosure
wouldn't be adequate without an accurate description of the asbestos
claims distribution procedures, the court papers dated March 6 said.
In a February conference, the bankruptcy court "strongly encouraged"
the company and claimants to file the disclosure statement by April 21,
so the court could schedule a hearing for June 11 to consider the
disclosure's approval, the court papers said. The company said in its
motion that if the disclosure statement hearing wouldn't be held until
June, extending the exclusivity period is appropriate.
On Jan. 31, Federal-Mogul agreed to acquire most of Honeywell
International's Bendix friction materials business in exchange for
taking on all asbestos current liabilities from Bendix. Founded in
1899 in Detroit, Federal-Mogul employs 47,000 people in 24 countries.
ASBESTOS LITIGATION: Honeywell Estimates Asbestos Liabilities at $610M
----------------------------------------------------------------------
Honeywell International Inc. (NYSE: HON) expects its cash expenditures
for asbestos-related claims before insurance recoveries to be around
$610,000,000 in 2003. According to its annual report filed with the
Securities and Exchange Commission, Honeywell said that in the second
half of 2002, it paid indemnity and defense claim costs of roughly
$70,000,000 of asbestos-related claims against its Bendix Corporation
vehicle-brakes unit.
The Company said a "substantial" portion of this amount is expected to
be reimbursed by insurance and that $57,000,000 has been recorded as a
receivable. From 1981 through December 31, 2002, the company has
resolved about 60,000 Bendix claims at an average indemnity cost of
$2,000 a claim. Honeywell said it presently has $2,000,000,000 of
insurance coverage remaining for Bendix-related asbestos claims.
Federal Mogul, a company that tumbled into Chapter 11 because of
asbestos liabilities, announced its acquisition of the Bendix-unit in
January. As reported, the company has around 50,000 asbestos claims
pending.
The automotive brake pads Bendix manufactured included asbestos in an
encapsulated form, the filing said. Honeywell said that potential
claimants consist largely of professional brake mechanics.
ASBESTOS LITIGATION: OC Seeks More Time To Get Chapter 11 Plan Votes
--------------------------------------------------------------------
Owens Corning (OTC: OWENQ) is asking a bankruptcy court for a six-month
extension of its exclusive period to solicit votes in favor of its
reorganization plan. The company, which filed for bankruptcy as a
result of asbestos-related liabilities, currently has until March 14 to
gain support from creditors for its plan, court papers filed in the
case said. Owens Corning seeks to extend the period until September
30.
Owens Corning filed its reorganization plan on Jan. 17 and received an
extension until March 14 to file its disclosure statement, according to
court papers. A hearing on the adequacy of the disclosure statement is
scheduled for June 4. A hearing on the exclusivity extension is
scheduled for April 28 at the U.S. Bankruptcy Court in Wilmington,
Delaware, so the company will receive an automatic extension of the
solicitation period until then.
The Toledo, Ohio, company said it should receive extra time due to the
size of its case and the progress it has made in restructuring, but
also said that "although the asbestos committee and future
representative are co-sponsors of the plan, at this time, the plan is
not consensual."
There are still disputes among some of the creditor groups regarding
the company's aggregate asbestos liability, the amount due the
company's prepetition lenders, and whether some or all of Owens
Corning's estates should be consolidated, the motion said. Owens
Corning said it's working to resolve the issues on several fronts,
including settlement discussions and litigation that is scheduled to
begin April 8 in the Wilmington court.
Owens Corning and 17 affiliates filed for Chapter 11 protection in
October 2000, to address growing demands on cash flow resulting from
multibillion-dollar asbestos liabilities. The liabilities were related
to asbestos-containing products allegedly made, sold or installed by
Owens Corning or one of its units.
ASBESTOS LITIGATION: Royal & Sun, Cape Reach Settlement Over Asbestos
---------------------------------------------------------------------
Royal & Sun Alliance Insurance Group plc (NYSE: RSA), the world's
oldest insurer, reached a settlement with Cape Plc, the U.K. building-
materials maker that was suing in the High Court over its liability for
asbestos claims.
"We and Cape have successfully resolved to the satisfaction of both
parties the outstanding issues between us that have been the subject of
legal proceedings," said Paul Atkinson, a spokesman for London-based
Royal & Sun.
The settlement didn't have an adverse impact on reserves Royal & Sun
put aside to pay claims related to asbestos, he said. He declined to
disclose details of the settlement reached on March 7.
Cape had alleged in court filings the insurer was liable for claims
made by people who suffered asbestos-related health problems because of
work by Andersons Insulation Co., which Cape bought in 1963, court
documents said. It was also seeking GBP2,200,000($3,600,000) to cover
claims Cape has paid. Royal Insurance Holdings Plc, which merged with
Sun Alliance Group Plc in 1996 to form Royal & Sun, insured Andersons
from 1932 until 1965, the suit said. Cape operated asbestos mines and
mills in South Africa.
The settlement comes as Royal & Sun awaits a High Court ruling for
another asbestos-related suit. Turner & Newall, once the U.K.'s
biggest asbestos maker, says the insurer is liable for claims made by
1,000 former employees suffering health problems. Royal & Sun denies
liability.
ASBESTOS LITIGATION: Residents Sue Union Carbide over Dumped Asbestos
---------------------------------------------------------------------
About a dozen Eastside Danbury, Connecticut residents have filed a lawsuit
against Union Carbide Corporation, claiming their property values were hurt
by
disclosures that the company allegedly illegally dumped asbestos on
land that the city later purchased for a flood-control project. The
suit, filed in Marion County Superior Court, also claims that the
residents' health might have been affected by exposure to asbestos from
the site, near I-70 and Emerson Avenue.
More than 25,000 cubic yards of asbestos-contaminated debris were
discovered in 1999 as the city began excavating the site for the Pogues
Run flood-control facility. A city investigation found that the
asbestos had been shipped to Speedway-based Union Carbide from 1972 to
1985, city officials said.
The city in August sued Union Carbide in U.S. District Court to recover
hundreds of thousands of dollars it spent cleaning up about 6 acres,
purchasing additional property and redesigning the project as a result
of the discovery. The city removed about 2,000 cubic yards of
contaminated soil from the site and capped the rest.
"Once the city filed their suit, people in the area started asking
questions like, 'Has my house been contaminated?' and 'What happens
when I go to sell my house?' " residents' attorney Greg Hahn said. He
said residents, who filed suit last month, want Union Carbide to pay
for health testing. They also are seeking monetary damages.
"Obviously they were very scared when they heard about this," he said.
Union Carbide Corporation operated three plants in Speedway that were
best known for making coatings applied to high-tech moving parts, such
as turbine blades in jet engines. In 1992, Union Carbide Coatings
Service Corp. became Praxair Surface Technologies Inc., after Union
Carbide created a spin off company for its industrial gases operations.
Dow Chemical Co purchased Union Carbide.
Neither Union Carbide nor Dow Chemical has made any comment regarding
this issue.
ASBESTOS LITIGATION: United Industrial Says Asbestos Claims Hurt Sale
---------------------------------------------------------------------
Defense contractor United Industrial Corporation (NYSE: UIC), which has
been trying to sell itself since last year, said asbestos claims are
hurting its efforts.
United Industrial, which makes unmanned aerial vehicle and training and
simulation systems, said it continues to pursue the sale of all or part
of the company. United Industrial does not believe the asbestos claims
should have a material effect on the company's long-term financial
condition or results, but may have an adverse effect in a particular
reporting period.
Separately, the New York-company swung to a wider fourth-quarter net
loss of $19,700,000, or $1.51 a share, due to an asbestos provision and
a pre-tax loss from its discontinued transportation unit. In the year-
ago quarter, the company posted a net loss of $1,100,000, or 8 cents a
share. Excluding the $11,500,000 asbestos-related provision, United
Industrial posted income from continuing operations of 31 cents a
share. Revenue rose to more than almost 12 percent to $69,500,000.
ASBESTOS LITIGATION: Grace's Asbestos May Remain in Homes' Walls
-----------------------------------------------------------------------
Contrary to the perception that the federal government will leave no
asbestos behind in its cleanup of Libby, Montana an official said, that
the government is considering removing all contaminated insulation in
attics in the town, but leaving untouched most similarly tainted walls.
Jim Christiansen, the U.S. Environmental Protection Agency's Superfund
project manager in Libby, said that since the agency began cleaning up
contaminated homes in town last August 2002, they have found that to
remove all asbestos-tainted vermiculite insulation from walls of
contaminated homes doubles or triples the cost of cleanup. What's
more, he said, vermiculite-insulated walls that are generally sound
pose no health risk to people living in them.
"It's not going to get in the air, ever, unless that wall is breached,"
he said. "It doesn't pose any risk at all to someone living in that
house."
Attics insulated with asbestos-tainted vermiculite are a different
story. People actually go into their attics. Vermiculite insulation
was generally poured loose into the attic and is prone to being stirred
into the air and inhaled. The cleanup will not leave the walls
completely alone. If a wall appears to be unsound -- potentially
leaking vermiculite insulation -- crews will strip all the insulation
from behind it, Mr. Christiansen said. For all other walls, they will
suck out as much vermiculite as they can and seal off areas where the
wall could leak asbestos into the house, such as around electrical
outlets or into attics.
Teams began systematically cleaning up homes and businesses in Libby
last summer. The town was the longtime home to a W.R. Grace
vermiculite mine. The mineral was used to make vermiculite insulation
that is now in millions of U.S. homes. However, the vermiculite ore in
Libby contained a particularly deadly fiber of asbestos called
tremolite, which causes cancer much more than other kinds of asbestos
when breathed into the lungs. Several hundred residents are believed
to have died of lung disease from vermiculite and many more people
living in Libby are sick. The town is a Superfund site and Mr.
Christiansen and his team are currently conducting an emergency cleanup
operation.
Mr. Christiansen said he believes federal crews will probably spend the
next four or five years cleaning vermiculite out of houses, yards and
gardens. He thinks the agency will clean up at least 1,200 properties,
at an estimated cost of between $30,000 and $40,000 each. To remove
insulation from walls could triple that cost, running up to $120,000
per house.
Mr. Christiansen said the EPA never told residents of contaminated
homes that crews would clean out all the vermiculite. The agency is
still working on a plan outlining exactly what will be cleaned up and
how. Still, there was a perception among some that the government
would leave no vermiculite behind.
"I would love to be able to do everything the people of Libby want," he
said. "We have to act in the most practical way to minimize the risk."
Libby resident Gayla Benefield said she's disappointed by the news.
"Is this based on science or is this based on funding?" she said.
ASBESTOS ALERT: Ingersoll-Rand Unit Faces Asbestos-Related Lawsuits
--------------------------------------------------------------------
According to the latest annual report that Ingersoll-Rand Co. (NYSE:
IR) filed with the Securities and Exchange Commission, its subsidiary,
IR-New Jersey, faces numerous asbestos-related lawsuits in state and
federal courts wherein many other companies have also been named as
defendants.
Ingersoll-Rand said it believes it has enough reserves and insurance to
cover any asbestos liabilities and the cost of defending against
allegations of such liabilities. The company said its asbestos
liabilities probably won't have a material adverse effect on its
financial position, results of operations, liquidity, or cash flows.
Ingersoll-Rand said the claims against IR-New Jersey, generally allege
injury from exposure to asbestos contained in some of its products.
Although IR-New Jersey didn't produce or make asbestos, some of its the
products that it made previously utilized asbestos-containing
components such as gaskets bought from third-party suppliers.
All claims that the company has resolved so far have been either
dismissed or settled, and IR-New Jersey's average settlement amount per
claim has been nominal.
COMPANY PROFILE
Ingersoll-Rand Company Limited (NYSE: IR)
200 Chestnut Ridge Rd.
Woodcliff Lake, NJ 07675
Phone: 201-573-0123
Fax: 201-573-3168
Toll Free: 800-847-4041
http://www.ingersoll-rand.com
Employees : 45,000
Revenue : $8,951,300,000
Net Income : $(173,500,000)
Assets :$10,809,600,000
Liabilities : $7,331,400,000
(As of December 31, 2002)
Description: Known for its tools and machinery, Ingersoll-Rand also
would like to be known for other business segments. With about 130
plants worldwide, the company makes refrigeration equipment (Thermo
King, Hussmann) used mostly in trucks and supermarkets, locks and
security systems (Schlage, Kryptonite), construction and industrial
equipment used for infrastructure improvements (Bobcat, Ingersoll-
Rand), and industrial equipment for increasing productivity (Club Car
utility cars and other products). Ingersoll-Rand sold its Dresser-Rand
compressor operations and its ball-bearing manufacturer The Torrington
Co.
ASBESTOS ALERT: Asbestos Claims Threaten Monroe Rubber, Gasket Business
-----------------------------------------------------------------------
Mike Carter, owner of Monroe Rubber and Gasket Co. in Monroe, can't
understand why about 75 asbestos lawsuits are pending against his
company, which never manufactured the product. "We had no idea what
these suits were all about and why anybody would be suing us for
anything involving asbestos," Mr. Carter said in a statement presented
to the Senate Judiciary Committee at a hearing on asbestos litigation.
But the company, which fabricates and distributes all types of gaskets
to chemical plants and paper mills, did use a compressed asbestos sheet
before 1986 to make gaskets. Attorneys are using that fact to bring
lawsuits on behalf of people who worked in the plants and mills and
claim they were harmed by asbestos. Mr. Carter said the asbestos
lawsuits, which cost the company about $250,000 a year to defend, were
having an impact on his company.
"We normally have 21 people in our Monroe shop, but we are down to 16
right now and that is where we are going to stay," he said. "I can't
hire anybody new until we know how all these lawsuits are going to be
resolved."
Mr. Carter said his insurance company is looking into settling some of
the lawsuits, but he is concerned that the insurance company might be
forced out of business because of the money paid out to settle claims.
"When they are gone, they (the asbestos attorneys) are coming straight
to me for the money," he said. "When that's the case, then it's a
matter of me just locking the door and telling the employees it's been
fun ... because I can't afford a $3 million or $4 million verdict."
COMPANY PROFILE
Monroe Rubber & Gasket Co.
1100 Louisville Avenue (71201)
P.O. Box 3285
Monroe, LA 71210
Phone: 1-318-388-4114
Fax: 1-318-323-9366
ASBESTOS ALERT: Approval of Cancer Fear Damages Could Endanger Norfolk
----------------------------------------------------------------------
The Supreme Court ruled that workers sickened after asbestos exposure
may sue employers simply because they fear their disease will become
lung cancer. The ruling was said to be the first high-court acceptance
of compensation over fear of an event that doesn't necessarily happen,
unlike "pain and suffering" claims for airplane passengers who are
assumed to have experienced fright in the minutes after they learn
their plane will crash.
The 5-4 decision written by Justice Ruth Bader Ginsburg cleared the way
for six retired workers who have asbestosis and can document fears of
cancer to collect $5,800,000 from Norfolk & Western Railway of Norfolk
Southern Corp. (NYSE: NSC) for their anguish.
"It is incumbent upon such a complainant, however, to prove that his
alleged fear is genuine and serious," Justice Ginsburg wrote in a
decision that ended by calling on Congress to enact nationwide laws to
deal with "the elephantine mass of asbestos cases." The court issued
similar advice in a 1999 asbestos decision.
Joining Justice Ginsburg's majority opinion were Justices John Paul
Stevens, Antonin Scalia, David H. Souter and Clarence Thomas. The
dissent by Justice Anthony M. Kennedy - joined by Chief Justice William
H. Rehnquist, Justices Sandra Day O'Connor and Stephen G. Breyer - said
the court ducked responsibility by rewarding speculative lawsuits that
use funds needed by those who actually contract cancer.
"Review for genuineness (of fear) alone does little or nothing to
prevent capricious outcomes," they said, arguing the court should
instead adopt a rule "that reconciles the need to provide compensation
for deserving claimants with the concerns that speculative damage
awards will exhaust the resources available." The dissenters said
asbestos lawsuits have driven into bankruptcy 57 companies that
employed hundreds of thousands of people.
"If asbestosis causes you to fear for your ability to breathe, that's
real and the same as the airplane fear," said Carter Phillips, the
railroad's Washington attorney. "Your fear here is of something that's
not directly traceable to the injury of being exposed to asbestos."
He said many states had adopted the principle yesterday's decision
approved. "In that sense it's not like a floodgate's been opened by
this decision. It's a gate that was already in some ways open. The
court just missed an opportunity to close it," Mr. Phillips said.
Victor Schwartz, a lawyer for an association of insurers called the
Coalition for Asbestos Justice, said it was important the court
restricted compensation to persons actually sick with asbestosis, and
did not include those "with pleural thickening classified as
asymptomatic." Mr. Schwartz echoed the court's call for Congress to
protect industry from the estimated $275,000,000,000 in liability
created by about 600,000 asbestos-related lawsuits already in the
courts.
"I think everybody's recognized that for a long time, except for
Congress," Mr. Phillips said.
COMPANY PROFILE
Norfolk Southern Corporation (NYSE: NSC)
Three Commercial Place
Box 227 Norfolk, VA 23510
Phone: (757) 629-2680
(757) 629-2600
Fax: (757) 629-2361
(757) 664-5069
Toll Free: 800-635-5768
http://www.nscorp.com
Employees : 28,970
Revenues : $6,270,000,000
Net income : $460,000,000
Assets : $19,956,000,000
Liabilities : $13,456,000,000
(As of December 31, 2002)
Description: Norfolk Southern operates Norfolk Southern Railway, a
major freight railroad that covers some 21,500 route miles in 22 states
in the eastern US and in Ontario, Canada. Norfolk Southern owns 11,700
miles of its rail network; it also operates over lines belonging to
Conrail, which is jointly owned by Norfolk Southern and rival CSX.
Norfolk Southern transports coal and general merchandise, including
automotive products and chemicals. The company also offers intermodal
services (freight transportation by a combination of train and truck)
through subsidiaries Triple Crown Services and Thoroughbred Direct
Intermodal Services.
New Security Fraud Cases
ADC TELECOMMUNICATIONS: Reinhardt Wendorf Lodges Securities Suit in MN
----------------------------------------------------------------------
Reinhardt Wendorf & Blanchfield initiated a securities class action in
the United States District Court for the District of Minnesota on
behalf of purchasers of ADC Telecommunications, Inc. (Nasdaq:ADCT)
publicly traded securities during the period between November 28, 2000
and March 28, 2001.
The complaint charges ADC and certain of its officers and directors
with violations of the Securities Exchange Act of 1934. ADC is a
supplier of broadband-network equipment, software and services that
enable communications service providers to deliver high-speed Internet,
data, and voice services across the so-called "last mile" connecting
providers' offices to end-users homes and businesses.
The complaint charges ADC and certain of its officers with violations
of federal securities laws. Among other things, plaintiff claims that
defendants' material omissions and the dissemination of materially
false and misleading statements concerning ADC's financial prospects
caused ADC's stock price to become artificially inflated, inflicting
damages on investors.
The suit alleges that during the class period, defendants repeatedly
represented that ADC would continue to achieve significant growth and
would not be affected by widely known reductions in capital spending on
the telecommunications infrastructure by communications service
providers.
Plaintiff claims that ADC's true financial performance and business
prospects were revealed on March 28, 2001, when defendants acknowledged
that the Company would lower its fiscal 2001 earnings guidance which
defendants had issued only four weeks earlier, cut as many as 4,000
jobs and close facilities in the face of canceled orders and declining
revenues caused by the reductions in spending on equipment by
telecommunications service providers.
For more details, contact Garrett D. Blanchfield by Phone: 800-465-1592
or 651-227-9990, by Fax: 651-297-6543 by E-mail:
g.blanchfield@rwblawfirm.com or visit the firm's Website:
http://www.rwblawfirm.com.
ALLOY INC.: Charles Piven Commences Securities Fraud Lawsuit in S.D. NY
-----------------------------------------------------------------------
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 Alloy, Inc. (Nasdaq:ALOY)
between August 1, 2002 and January 23, 2003, inclusive, in the United
States District Court for the Southern District of New York against the
Company and certain of its executive officers.
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
ALLOY INC.: Brian Felgoise Commences Securities Fraud Suit in S.D. NY
---------------------------------------------------------------------
The Law Offices of Brian M. Felgoise, PC initiated a securities class
action on behalf of shareholders who acquired Alloy, Inc. (Nasdaq:ALOY)
securities between August 1, 2002 and January 23, 2003, inclusive, in
the United States District Court for the Southern District of New York,
against the Company and certain key officers and directors.
The action charges that defendants violated the 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 Brian M. Felgoise by Mail: 261 Old York Road,
Suite 423, Jenkintown, Pennsylvania, 19046, by Phone; 215-886-1900 or
by E-mail: FelgoiseLaw@aol.com
ALLOY INC.: Brodsky & Smith Lodges Securities Fraud Lawsuit in S.D. NY
----------------------------------------------------------------------
Brodsky & Smith, LLC initiated a securities class action on behalf of
shareholders who purchased the common stock and other securities of
Alloy, Inc. (Nasdaq:ALOY) between August 1, 2002 and January 23, 2003,
inclusive, in the United States District Court for the Southern
District of New York against the company and certain of its officers
and directors.
Alloy is a teen-focused media company and direct marketer that targets
Generation Y consumers, i.e. the approximately 60 million people in the
United States between the ages of 10 and 24. The complaint alleges
that by issuing a series of materially false and misleading statements
to the market regarding Alloy's business and financial condition,
between August 1, 2002 and January 23, 2003, the Company, Matthew C.
Diamond (CEO), James K. Johnson Jr. (President and COO) and Samuel A.
Gradess (CFO) violated the Securities Exchange Act of 1934.
The complaint alleges that Alloy claimed that its merchandising and
advertising segments complemented one another in a way that gave it an
edge over competing teen retailers and media businesses, thus enabling
it to succeed despite difficult market conditions in the second half of
2002. Alloy failed to advise investors, however, that the Company
faced fierce competition for the youth market and the weak economy had
forced it to cut its prices and increase operating expenses, e.g. by
offering free shipping and deep discounts, thereby eroding Alloy's
gross profit margin.
On January 23, 2003, the Company shocked the market by announcing that
EBTA for its fiscal fourth quarter ending January 31, 2003 would be $11
million to $12 million instead of the previously projected $15 million
to $16 million and that fiscal 2002 EBTA would be in the range of $30
to $31 million instead of the previously forecast $34 million to $38
million. On this news, the Company's share priced plummeted by 49%, or
$4.57, from the previous day's closing price of $9.10.
For more details, contact Marc L. Ackerman or Evan J. Smith by Mail:
Two Bala Plaza, Suite 602, Bala Cynwyd, PA 19004, by Phone:
877-LEGAL-90 or by E-mail: clients@brodsky-smith.com
ASTROPOWER INC.: Brian Felgoise Commences Securities Suit in DE Court
---------------------------------------------------------------------
The Law Offices of Brian M. Felgoise, PC initiated a securities class
action on behalf of shareholders who acquired AstroPower, Inc.
(Nasdaq:APWR) securities between February 22, 2003 and August 1, 2002,
inclusive, in the United States District Court for the District of
Delaware, against the company and certain key officers and directors.
The action charges that defendants violated the 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 Brian M. Felgoise by Mail: 261 Old York Road,
Suite 423, Jenkintown, Pennsylvania, 19046, by Phone: 215-886-1900 by
E-mail: FelgoiseLaw@aol.com
ASTROPOWER INC.: Brodsky & Smith Commences Securities Suit in DE Court
----------------------------------------------------------------------
Brodsky & Smith, LLC initiated a securities class action on behalf of
shareholders who purchased the publicly traded securities of
AstroPower, Inc. (Nasdaq:APWR) between February 22, 2002 and August 1,
2002, inclusive, in the United States District Court for the District
of Delaware against the Company and certain of its officers and
directors.
AstroPower develops, manufactures, markets and sells a range of solar
electric power generation products. The complaint alleges that by
issuing a series of materially false and misleading statements to the
market regarding AstroPower's business and financial condition, between
February 22, 2002 and August 1, 2002, the Company, Allen M. Barnett
(CEO and President) and Thomas J. Stiner (CFO), violated the Securities
Exchange Act of 1934.
The complaint alleges that throughout the class period, AstroPower
claimed that it was well positioned to take advantage of the increasing
demand for solar power products and that, throughout the class period,
the Company reported strong revenue and earnings growth. As a result
of these statements and reports, which were disseminated to the
investing public, on March 28, 2002, the Company's per share stock
price reached a class period high of $27.00.
The complaint further alleges that throughout the class period, the
Company was unable to effectively manage its expanding and increasingly
complex operations. Consequently, during the time that AstroPower was
stating that it was well positioned to take advantage of the increased
demand for solar products, it was in fact losing ground to more
effective competitors.
Additionally, throughout the class period, AstroPower reported
artificially inflated revenue and earnings by, inter alia, recording
revenue in advance of shipment, contrary to its stated principles of
revenue recognition.
On August 1, 2002, after the close of trading, AstroPower announced its
results for the second quarter ended June 30, 2002. Analysts were
stunned. Reported revenue and net income had not grown and revenue of
$20.4 million was approximately $4.9 million below analysts' consensus
estimate. On this news, AstroPower's share price plunged 48%, to
$7.77, its lowest price in almost three years.
For more details, contact Marc L. Ackerman or Evan J. Smith by Mail:
Two Bala Plaza, Suite 602, Bala Cynwyd, PA 19004, by Phone:
877-LEGAL-90 or by E-mail: clients@brodsky-smith.com
ASTROPOWER INC.: Charles Piven Commences Securities Fraud Lawsuit in DE
-----------------------------------------------------------------------
Charles J. Piven, PA initiated a securities class action on behalf of
shareholders who purchased, converted, exchanged or otherwise acquired
the common stock of AstroPower, Inc. (Nasdaq:APWR) between February 22,
2002 and August 1, 2002, inclusive, in the United States District Court
for the District of Delaware against the Company and certain of its
executive officers.
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
ATMEL CORPORATION: Spector Roseman Commences Securities Suit in N.D. CA
-----------------------------------------------------------------------
Spector, Roseman & Kodroff, P.C. initiated a securities class action in
the United States District Court for the Northern District of
California against Atmel Corporation (Nasdaq:ATML) and certain officers
of the Company, on behalf of all purchasers of Atmel securities between
January 20, 2000 and July 31, 2002, inclusive.
The complaint alleges that defendants violated Sections 10(b) and 20(a)
of the Securities Exchange Act of 1934 by issuing materially false and
misleading statements to the market during the class period.
Specifically, the suit alleges that defendants caused Atmel's shares to
trade at artificially inflated levels through the issuance of false and
misleading financial statements, all the time concealing that Atmel was
selling defective chips to its customers which would lead to product
recalls, repairs and loss of customer relationships.
On July 31, 2002, media reports indicated that the Company had been
sued by a major customer, Seagate Technology Inc., for selling
defective chips which led to defects in millions of disk drives. On
this news, the Company's stock price declined to $2.96.
For more details, contact Robert M. Roseman by Phone: 888/844-5862 or
visit the firm's Website: http://www.srk-law.com
BAYER AG: Wolf Popper Commences Securities Fraud Suit in S.D. New York
----------------------------------------------------------------------
Wolf Popper LLP initiated a securities class action against Bayer (AG)
Aktiengesellschaft (NYSE:BAY), and certain present and former members
of its Board of Management, on behalf of purchasers of Bayer AG
American Depositary Shares (ADRs) from May 26, 1999 through February
21, 2003. (Prior to January 23, 2002, Bayer AG ADRs traded on the
NASDAQ under the symbol BAYZY.), in the United States District Court
for the Southern District of New York.
The complaint alleges, among other things, that throughout the class
period defendants misrepresented Bayer AG's success in marketing it's
Baycol cholesterol lowering drug. Defendants' statements were
materially false and misleading because Bayer AG's own scientists were
stating internally that Baycol, when administered with other popular
medications or at high dosages, caused unacceptable risk of serious
side effects.
In fact, throughout the class period Bayer AG was informed that
patients taking Baycol were experiencing serious and life-threatening
side effects. Baycol was belatedly withdrawn from the market in August
2001 after the FDA raised serious concerns about the safety of Baycol
in light of reports of Baycol patients dying. The true facts
concerning defendants' knowledge of the dangers of Baycol and the
Company's potential liability to Baycol patients were not completely
disclosed until February 22, 2003, in connection with court filings in
various personal injury actions commenced against Bayer AG by persons
who had been prescribed Baycol and had suffered severe side effects.
These court documents demonstrated defendants' early knowledge of the
risk of serious or life threatening side effects to patients taking
Baycol, including the knowledge that patients taking Baycol were found
to have 5 to 10 times the chance of developing a life threatening
illness -- rhabdomyolysis -- as patients taking other similar
medicines. The price per share of Bayer AG ADRs fell approximately 17%
when Baycol was withdrawn from the market in August 2001.
Following the February 22, 2003 disclosure of the true state of
defendants' knowledge of the dangers of Baycol, Bayer AG ADRs declined
an additional 27%, from $17.15 per share to $12.58 days after the
revelation -- more than 68% below the trading price at the beginning of
the class period ($39.75).
For more details, contact Michael A. Schwartz by Mail: 845 Third
Avenue, New York, NY 10022-6689 by Phone: 212-451-9668 or 877-370-7703
by Fax: 212-486-2093 or 877-370-7704 by E-mail:
mschwartz@wolfpopper.com or visit the firms' Website:
http://www.wolfpopper.com
INTERSTATE BAKERIES: Brian Felgoise Launches Securities Suit in W.D. MO
-----------------------------------------------------------------------
The Law Offices of Brian M. Felgoise, PC initiated a securities class
action on behalf of shareholders who acquired Interstate Bakeries
(NYSE:IBC) securities between September 17, 2002 and December 17, 2002,
inclusive, in the United States District Court for the Western District
of Missouri, against the company and certain key officers and
directors.
The action charges that defendants violated the 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 Brian M. Felgoise by Mail: 261 Old York Road,
Suite 423, Jenkintown, Pennsylvania, 19046, by Phone: 215-886-1900 or
by E-mail: FelgoiseLaw@aol.com
MICHAELS STORES: Schatz & Nobel Lodges Securities Fraud Suit in N.D. TX
-----------------------------------------------------------------------
Schatz & Nobel PC initiated a securities class action in the United
States District Court for the Northern District of Texas, Dallas
Division on behalf of all persons who purchased the securities of
Michaels Stores, Inc. (NYSE: MIK) from August 8, 2002 through November
7, 2002, inclusive.
The suit alleges that Michaels, a national specialty retailer which
provides supplies for hobbyists, and certain of its officers and
directors issued materially false and misleading statements.
Specifically, defendants represented that Michaels was strong and that
the Company was continuing to increase its market share. It was not
until November 7, 2002, when the Company released results for its third
quarter of 2002, that investors learned the following:
(1) Defendants' claims that Michaels' purported "record setting
growth" was the result of systems and infrastructure upgrades
were false;
(2) Many of Michaels' customers were already curtailing their
spending for hobby or discretionary purchases by the inception
of the class period and, as a result, Michaels was
experiencing the same adverse market conditions which were
negatively impacting competing retailers;
(3) Michaels was not in "great shape," it did not have
"considerable momentum" and was not proceeding according to
guidance sponsored or provided by defendants.
During the class period, but prior to any disclosure to the market,
certain defendants sold over $15.3 million worth of their personal
holdings of Michaels while in possession of materially adverse
information.
For more details, contact Nancy A. Kulesa by Phone: 1-800-797-5499 by
E-mail: sn06106@aol.com or visit the firm's Website:
http://www.snlaw.net
OWENS CORNING: Bernstein Liebhard Commences Securities Suit in N.D. OH
----------------------------------------------------------------------
Bernstein Liebhard & Lifshitz LLP initiated a securities class action
in the United States District Court for Northern District of Ohio, on
behalf of all persons who purchased or acquired Owens Corning, Inc.
(OTC BB: OWENQ) securities between September 20, 1999 and October 5,
2000, inclusive.
Plaintiff alleges that defendants misrepresented Owens Corning's
financial viability to public investors. While Defendants were publicly
representing that Owens Corning's National Settlement Program (the
"NSP") -- implemented by Owens Corning in 1999 in order to extinguish
Owens Corning's asbestos liabilities -- was effectively managing Owens
Corning's asbestos liabilities and would leave Owens Corning largely
liability-free after 2001, the defendants told a very different story
to a small, select group of Owens Corning investors who were positioned
to control Owens Corning in the event of a bankruptcy.
To the latter group, according to the complaint, defendants revealed
the truth -- that the NSP plan wasn't working, and would in fact
capsize Owens Corning unless NSP-mandated payments were drastically
curtailed. The share price of Owens Corning stock was thus
artificially inflated during the class period by defendants' false
statements, which materially misled the public as to Owens Corning's
true financial state and financial viability.
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 or by E-mail:
OWENQ@bernlieb.com
PROVIDENT FINANCIAL: Brodsky & Smith Lodges Securities Suit in S.D. OH
----------------------------------------------------------------------
Brodsky & Smith, LLC initiated a securities class action on behalf of
shareholders who purchased the common stock and other securities of
Provident Financial Group, Inc. (Nasdaq:PFGI) between April 14, 1998
and March 4, 2003, inclusive. in the United States District Court for
the Southern District of Ohio, Western Division, against the company
and certain of its officers and directors.
The complaint alleges that by issuing a series of materially false and
misleading statements to the market regarding Provident's business and
financial condition, between April 14, 1998 and March 4, 2003, the
Company, Robert L. Hoverson (President) and Christopher J. Carey (CFO)
violated the Securities Exchange Act of 1934.
The complaint alleges, inter alia, that financial reports filed with
the SEC during the class period were materially false and misleading
because they failed to disclose that the Company had improperly
accounted for certain auto lease financing transactions, thereby
materially inflating Provident's reported earnings throughout the class
period.
These facts came to light on March 5, 2003, when the Company announced
that Provident had improperly accounted for nine auto lease financing
transactions originating between 1997 and 1999 in a manner which
inflated its reported earnings from 1997 through 2002, inclusive. In
response, the price of Provident common stock plummeted, falling 20% in
one day, from a March 4, 2003 close of $28.08 per share to $22.46 on
March 5, on unusually heavy trading volume.
For more details, contact Marc L. Ackerman or Evan J. Smith by Mail:
Two Bala Plaza, Suite 602, Bala Cynwyd, PA 19004, by Phone:
877-LEGAL-90 or by E-mail: clients@brodsky-smith.com
PROVIDENT FINANCIAL: Berger & Montague Commences Securities Suit in OH
----------------------------------------------------------------------
Berger & Montague, PC initiated a securities class action against
Provident Financial Group, Inc. (Nasdaq: PFGI) and certain of its
principal officers in the United States District Court for the Southern
District of Ohio on behalf of all persons or entities who purchased
Provident securities between March 30, 1998 and March 4, 2003,
inclusive.
The complaint alleges that Provident and certain of its officers
violated Section 10(b) and 20(a) of the Securities Exchange Act of 1934
by issuing false and misleading statements concerning its business and
financial condition. Specifically, the complaint alleges that, during
the class period, defendants issued numerous statements and filed
annual reports with the SEC that described the Company's purported
financial performance.
These statements were materially false and misleading because they
failed to disclose and/or misrepresented inter alia that the Company
failed to properly account for auto financing leases, thereby causing
it to overstate its earnings.
On March 5, 2003, before the market opened, Provident shocked the
market by announcing that it would be restating its financial results
for fiscal years 1997 through 2002, leading it to substantially reduce
its previously-reported earnings and earnings per share. The Company
stated that the restatement is due to accounting errors for "nine auto
lease financing transactions originated between 1997 and 1999."
In response to this announcement, the price of Provident stock
plummeted from $28.07 per share on March 4, 2003 to $22.46 per share on
March 5, in heavy trading.
For more details, contact Sherrie R. Savett, Michael T. Fantini or
Kimberly A. Walker by Mail: 1622 Locust Street, Philadelphia, PA 19103
by Phone: 888-891-2289 or 215-875-3000 by Fax: 215-875-5715 by E-mail:
InvestorProtect@bm.net or visit the firm's Website:
http://www.bergermontague.com
SOLECTRON CORPORATION: Bernstein Liebhard Lodges Securities Suit in GA
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Bernstein Liebhard & Lifshitz LLP initiated a securities class action
in the United States District Court for Northern District of
California, on behalf of all persons who purchased or acquired
Solectron Corporation (NYSE: SLR) securities between September 17, 2001
and September 26, 2002, inclusive.
Throughout the class period, defendants issued numerous statements
reporting artificially inflated financial results. Plaintiff alleges
that these statements were materially false and misleading because they
misrepresented the state of the Company's inventory, failing to
disclose that the Company was carrying tens of millions of dollars of
obsolete and unsaleable inventory in its Technology Solutions division
that was required to be written down.
As a result of the Company's failure to write down its inventory in a
timely manner, the financial statements published by the Company during
the class period were not prepared in accordance with Generally
Accepted Accounting Principles and were materially false and
misleading. Further, defendants mischaracterized the Company's
earnings during the class period as "in line" with Company guidance,
when had the Company properly accounted for its inventory it would have
drastically missed its guidance.
On September 26, 2002, after the market closed, Solectron issued a
press release announcing its financial results for the fourth quarter
of 2002 and fiscal year 2002. The Company also reported that it was
booking a pre-tax charge of $97 million to reserve for inventory
revaluation and write-off. Solectron attributed the bulk of the charge
to "inventory risk assumed by Solectron's product-oriented Technology
Solutions business unit." Following this announcement, and other
revelations, shares of Solectron common stock fell in value.
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 or by E-mail: SLR@bernlieb.com.
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Copyright 2002. All rights reserved. ISSN 1525-2272.
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