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/raid1/www/Hosts/bankrupt/CAR_Public/030425.mbx C L A S S A C T I O N R E P O R T E R Friday, April 25, 2003, Vol. 5, No. 81 Headlines 407 ETR: Canadian Court Approves Late Fees Lawsuit Settlement ALASKA: Sues Financial Institutions Over $26M Worldcom Losses ALLIED CAPITAL: NY Court Dismisses Consolidated Securities Suit CALIFORNIA: Los Angeles Settles Cyclists' Rights Suit for $2.7M COMCAST CABLE: UT Customers Sue Over Cable Service Interruptions COMPUTERIZED THERMAL: OR Court Dismisses Consolidated Fraud Suit FISHER-PRICE: Recalls 67T Animal Sounds Farms For Choking Hazard INTERSTATE BAKERIES: Shareholders File Securities Lawsuits in MO MICHIGAN: Yemeni Man Accuses Denver PD of Racial Profiling NEVADA: Norwalk Virus Blamed For Stomach Illness Outbreak in NV NORTHWESTERN CORPORATION: Faces Securities Fraud Lawsuits in SD PRUDENTIAL FINANCIAL: Faces Possible Lawsuits Over Fee Increase TENNESSEE: Knoxville Residents Launch Lawsuit Over Toxic Dumping TOBACCO LITIGATION: Philip Morris USA Files Post-Judgment Motion TOBACCO LITIGATION: Moody's Cuts Altria's Unsecured Debt Rating US SUPERMARKETS: Consumers Sue Over Artificially-Colored Salmon Asbestos Alert ASBESTOS LITIGATION: Local Council to Pay For Asbestos Damages ASBESTOS LITIGATION: Mayor's Widow To Support Asbestos Victims ASBESTOS LITIGATION: Asbestos Issues Haunt Heatrae Sadia Heating ASBESTOS LITIGATION: ABB Awaits Court's Final Chap. 11 Decision ASBESTOS LITIGATION: Asbestos Victims Meet South African Lawyers ASBESTOS LITIGATION: Babcock To Revise Its Disclosure Statement ASBESTOS LITIGATION: US Asbestos Lawsuits Settlement Draws Near ASBESTOS ALERT: PNM Resources Faces Asbestos-Related Litigation ASBESTOS ALERT: Phelps Dodge Discloses Role in Asbestos Lawsuit ASBESTOS ALERT: California Coastal Faces Asbestos Related Claims New Securities Fraud Cases IMPERIAL CHEMICAL: Charles Piven Commences Securities Suit in NY MICROTUNE INC.: Milberg Weiss Lodges Securities Suit in E.D. TX NORTHWESTERN CORPORATION: Schiffrin & Barroway Lodges Suit in SD NORTHWESTERN CORPORATION: Cauley Geller Files SD Securities Suit ORTHODONTIC CENTERS: Cauley Geller Lodges Securities Suit in LA SUPERGEN INC.: Brodsky & Smith Lodges Securities Suit in N.D. CA SUPERGEN INC.: Stull Stull Commences Securities Suit in N.D. CA VAXGEN INC.: Scott + Scott Lodges Securities Lawsuit in N.D. CA ********* 407 ETR: Canadian Court Approves Late Fees Lawsuit Settlement ------------------------------------------------------------- Canadian Justice Warren Winkler certified the settlement proposed by 407 ETR and representatives of its customers, to settle a class action related to the company's Late Payment Fee. As part of the settlement, the Company offers a $6 credit on the accounts of up to 840,000 customers who were charged its $30 Late Payment Fee. The Company improved its fees associated with the collection of tolls and other charges. As well, anyone who was charged the Late Payment Fee as a result of an administrative or system error is eligible for a credit of the entire $30 fee. The court ordered that any class member who does not wish to participate in the settlement must opt out in writing within 45 days. As part of the agreement, the Company accepts no admission of liability in agreeing to the settlement and the plaintiffs agree the old Late Payment Fee did not represent a criminal interest rate or penalty. The Company also agreed to establish a process to ensure that customers applying for the $6 credit or $30 refund are treated fairly and equitably. "This settlement is good news for the company and our customers," Jose Lopez, President and Chief Executive Officer for 407 ETR, said in a press statement. "We believe our old Late Payment Fee would have withstood this legal challenge, but we agreed that it can be improved and made more transparent. That is precisely what we have done." "This is a fair settlement that we recommend to members of the Class," said Ken Rosenberg, from Paliare Roland Rosenberg Rothstein LLP, and Kirk Baert of Koskie Minsky, firms representing the plaintiffs. "As a result of our action, 407 ETR carefully reviewed its collection costs and practices and made improvements to its collection policies and fees." Effective April 21st, 407 ETR replaced the Late Payment Fee with new fees that are directly tied to the collection costs the company incurs when a customer has not paid a bill for at least three months. ALASKA: Sues Financial Institutions Over $26M Worldcom Losses ------------------------------------------------------------- Alaska, which lost about $26 million from its Constitutional Budget Reserve, pension and other investment funds when WorldCom collapsed and went bankrupt, is suing several financial institutions that, the state claims, failed to inform it and other investors about the telecommunication company's true financial condition, Associated Press Newswires reports. The Alaska Permanent Fund Corporation also lost about $55 million, mostly in the form of bonds, which the fund will attempt to recoup through a separate class action in which it is currently involved, said the fund's executive director Robert Storer. The lawsuit, filed in Juneau Superior Court against 18 financial institutions, including CitiGroup Inc., J.P. Morgan and accounting firm Arthur Andersen, alleges Alaska purchased WorldCom bonds based on the false and misleading financial information in bond documents provided by the named defendant financial institutions. "We hope to restore money to the State of Alaska's funds and send Wall Street a message that we will hold them accountable if they abandon honesty for profits," Attorney General Gregg Renkes said in a recent statement. The recently filed lawsuit alleges investment banks acting as underwriters for the bonds had "virtually unbridled access" to WorldCom's books and knew of the company's accounting irregularities. Defendants, including J.P. Morgan Securities Inc., Bank of America Corporation and Arthur Andersen, marketed WorldCom bonds in a "multi- city roadshow" predicting strong revenue and profit growth for the company, the lawsuit said. Other defendants named in the state case are: (1) Salomon Smith Barney, (2) Banc of American Securities LLC, (3) ABN AMRO Inc., (4) Deutsche Bank AG, (5) Deutsche Banc Alex. Brown Inc., (6) Lehman Brothers Inc., (7) Credit Suisse Group, (8) Credit Suisse First Boston Corporation and (9) Nationsbanc Montgomery Securities LLC The defendant banks also made sure WorldCom purchased liability insurance on the offerings and took other steps as well to protect themselves before the scandal emerged, said the lawsuit. Alaska joined Illinois, California, Ohio, West Virginia, Montana, Washington, Minnesota and Wisconsin in hiring San Diego Milberg Weiss Bershad Hynes and Lerach to represent it, said assistant attorney general Mike Barnhill. Mr. Barnhill said he expects the state lawsuit to be moved to federal court and ultimately end up with other state suits against WorldCom's money managers in a New York federal court. WorldCom, the Clinton, Mississippi-based parent company of long- distance carrier MCI, filed for Chapter 11 protection last year, following disclosures that it had disguised more than $9 billion in expenses by use of fraudulent accounting. The bankruptcy also spawned federal criminal charges against WorldCom executive Scott Sullivan -- charges of conspiracy, securities fraud and false Securities and Exchange Commission filings. ALLIED CAPITAL: NY Court Dismisses Consolidated Securities Suit --------------------------------------------------------------- The United States District Court for the Southern District of New York granted Allied Capital Corporation's motion to dismiss the consolidated securities class action, for failure to state a claim upon which relief may be granted. The suit names as defendants the Company and certain of its directors and officers. The suit alleges violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. The suit specifically alleges, among other things, that the Company purportedly misstated the value of certain portfolio investments in its financial statements, which allegedly resulted in the purchase of its common stock by purported class members at artificially inflated prices. Several of the complaints also alleged state law claims for common law fraud. The complaints sought compensatory and other damages, and costs and expenses associated with the litigation. Judge Gerard Lynch ruled that "(t)here is simply no basis (in the Complaint) on which to infer that Allied's valuation of its investments was in fact incorrect or inflated, and thus no basis to infer that Allied's accounting policies resulted in fraudulent overvaluation." He further held that "(s)ince Allied's actual valuation policies were public, as was all adverse information about the companies in which Allied had invested, plaintiffs have not alleged that Allied concealed any facts from its investors." In addition, the judge held that plaintiffs had not properly pled that any alleged overvaluation was material. The court therefore dismissed the case in its entirety. CALIFORNIA: Los Angeles Settles Cyclists' Rights Suit for $2.7M --------------------------------------------------------------- Los Angeles County in California agreed to settle for $2.7 million a lawsuit filed by cyclists who were arrested during the 2000 Democratic National Convention, while staging a ride downtown to promote a bike- friendly environment, the Associated Press reports. Police allegedly arrested them for ignoring traffic laws and showing a disregard for safety. The suit alleges that women in the group were subjected to strip and body cavity searches in a jail corridor. In addition, the plaintiffs said they were denied telephone calls and medication, and were imprisoned for 12 hours after charges were dismissed. The county supervisors voted to settle the lawsuit. The move follows a decision last month to set aside the money for a settlement. The plaintiffs' lawyers say the settlement will compensate 71 clients, 23 of them women. The women plaintiffs will receive $70,000 each and the men $5,000 each. COMCAST CABLE: UT Customers Sue Over Cable Service Interruptions ---------------------------------------------------------------- Cable television provider Comcast faces a class action filed in the Third District Court in Utah, by four Utah men, alleging that the company should be required to refund money when customers' cable service is out, the Deseret News reports. The suit was filed on behalf of Donald H. Ellefsen, Gary Ellefsen, John Wilson and Darryl H. Peterson, and alleges that the Company's advertisements promis "on demand," continuous cable service and that service interruptions make these claims false and misleading. Attorney for the plaintiffs James W. McConkie told the Deseret News, "Our theory is unjust enrichment .. If you don't provide complete service, then the benefit ought to go to the customer, not to the company." He continued, while the money due one customer may not warrant a lawsuit, the money due many customers does. "People purchase cable for so many dollars a month. The cable TV service goes out for a certain number of hours. If people want to be reimbursed, they can call and the company will reimburse them," he said. He continued, "But many, many people, we think, have their cable go out and aren't reimbursed. In these types of lawsuits, when you're taking a little from a large number of people, it makes it difficult for one person to step in and do anything about it. The class action lawsuit allows people to come together and say, 'We'd like to be reimbursed.'" Mr. McConkie also said the four plaintiffs are required to request that the case proceed as a "class action" case. A judge will determine whether it can; if the judge agrees, the firm may represent clients nationwide. Mr. McConkie said Comcast has 30 days to respond to the initial complaint. It could be months before a judge decides whether the case may proceed as a class action. Comcast spokeswoman Barbara Shelley declined to comment on the lawsuit, the Deseret News states. COMPUTERIZED THERMAL: OR Court Dismisses Consolidated Fraud Suit ---------------------------------------------------------------- The United States District Court for the District of Oregon dismissed without prejudice the securities class action filed against Computerized Thermal Imaging, Inc. (CTI) (AMEX: CIO) on behalf of purchasers of its common stock during the period between October 11, 1999 and December 21, 2001, inclusive. The complaint charges the Company and certain of its officers and directors with issuing false and misleading statements concerning its business and financial condition. Specifically, the complaint alleges that the Company has admitted that during the class period, the Company's then-President and Chief Operating Officer, David Packer, consistently made material public misrepresentations regarding FDA approval of the Company's Breast Cancer Detection System. These statements had the effect of artificially raising the price of Company stock so that investors who purchased shares during the class period did so at inflated prices and were damaged thereby. In his written opinion, US District Judge Garr M. King concluded that the statements made by the Company, which plaintiff's alleged were misleading to investors, were either not material, not misleading, or not plead by plaintiffs with sufficient particularity to constitute a claim. The court gave plaintiffs 21 days to re-plead three of the nine claims if the plaintiffs have additional facts. Judge King's opinion does not allow plaintiffs to re-plead the remaining claims. FISHER-PRICE: Recalls 67T Animal Sounds Farms For Choking Hazard ---------------------------------------------------------------- Fisher-Price is cooperating with the United States Consumer Product Safety Commission, (CPSC) by voluntarily recalling about 67,000 Little People(r) Animal Sounds Farms manufactured from June 17, 2002 through July 31, 2002. Two small metal screws that hold the toy "stall doors" in place can come off, posing an aspiration or choking hazard to young children. Fisher-Price has received 33 reports of the screws coming off of the toy, including four reports where a screw was found in the child's mouth and one report of a child that aspirated a screw into his lung. The latter case required the child to be hospitalized and undergo emergency surgery to remove the screw from his lung. The recalled Little People(r) Animal Sounds Farms are shaped like a barn and make animal sounds when the doors of the cow or horse stall are opened. The recalled toys have a model number of 77973 or 77746 and a six-character manufacturing date code that begins with 168 through 212, followed by the number 2 as the fourth digit. Both the model number and date code can be found on the underside of the green ramp. The Fisher-Price logo appears at the top of the tallest side of the barn in red and white. The recalled toys were manufactured in Mexico. Mass merchants and toy stores nationwide sold these toys between July 2002 and December 2002 for about $30. For more details, contact the Company by Phone: (866) 259-7873 anytime to receive a free repair kit, or visit the firm's Website: http://www.service.mattel.com. INTERSTATE BAKERIES: Shareholders File Securities Lawsuits in MO ---------------------------------------------------------------- Interstate Bakeries Corporation and certain of its current and former officers and directors face several securities class actions filed in the United States District Court for the Western District of Missouri. Most of the complaints were brought on behalf of putative classes of shareholders who purchased or sold Company stock between September 17, 2002 and December 17, 2002. One complaint, however, is brought on behalf of a putative class beginning in April 2002 and several complaints seek to include shareholders who purchased or sold stock through February 11, 2003. The complaints generally allege that certain of the Company's press releases, SEC filings, and other public statements prior to a February 11, 2003 announcement reducing its guidance contained misrepresentations regarding its financial condition. The complaints further allege that certain officers and directors improperly sold IBC shares at artificially inflated prices during the class period. The cases seek compensatory damages (including interest), disgorgement of allegedly improper gains from insider stock sales, costs and expenses and any other relief deemed proper by the court. The Company has not yet been required to file answers to the complaints. The litigation is in its preliminary stages and the amount of potential loss, if any, cannot reasonably be estimated. MICHIGAN: Yemeni Man Accuses Denver PD of Racial Profiling ---------------------------------------------------------- The Detroit Police Department has been accused of racial profiling by a man questioned by FBI agents for allegedly videotaping an international bridge and having firecrackers, shotgun shells and a police baton in his car, the Associated Press reports. Mohamed Elmathil, 26, and another man were arrested late Sunday near the Ambassador Bridge. Mr. Elmathil alleges that the police targeted him because of his ethnicity. He said three FBI agents interrogated him for three hours, asking him if he trained with al-Qaida or had been to Afghanistan. "I tried to explain that I have been here since 1981," Mr. Elmathil told AP, a native of Yemen. "Of course, I was profiled." Neither Mr. Elmathil nor the other man has been charged with a crime, but the police said the case remains under investigation. FBI Special Agent Dawn Clenney would not comment beyond confirming that the two men were released and no federal charges were filed. Detroit Police Cmdr. Jesse Banks said officers acted appropriately and did not profile the men. "It had nothing to do with anyone being Arabic," Mr. Banks told AP. "The officers were on routine patrol and saw suspicious activity." Authorities initially said the men were stopped for videotaping the bridge. But now police say they were pulled over because of the tinted rear windows on Elmathil's car. The Ambassador Bridge has about 10 million vehicle crossings every year and handles about 25 percent of all trade traffic between the United States and Canada. NEVADA: Norwalk Virus Blamed For Stomach Illness Outbreak in NV --------------------------------------------------------------- The Norwalk virus is being blamed as the cause of an outbreak of stomach illness among dozens of teenage girls who competed in a volleyball tournament in Reno over the weekend, the Reno Gazette- Journal reports. Many of the players stayed at the Reno Hilton, and competed in a four- day tournament in the Reno-Sparks Convention Center. Officials have investigated the two places, saying the cause could range from the food they ate to the balls they spiked. So far, health officials estimate more than 100 people were sickened, some of whom neither stayed at the Hilton nor took part in the tournament. Bob Sack, head of the Washoe District Health Departments environmental division, told the Gazette-Journal the search for the source of the virus could lead investigators to almost any source, including tournament volleyballs, which may have passed the virus among players. He continued that the first six tests of sick individuals revealed the Norwalk virus. Health inspectors have interviewed about 100 people and more will be questioned. He further said additional interviewing must be done to determine where those people were staying and what they were doing at the time of the illness. The virus recently sickened hundreds of cruise ship passengers and caused an outbreak in 1996 at the Reno Hilton. It is transmitted when food or water is contaminated with fecal material or by person-to- person contact, the Reno-Gazette states. In 1996, the Norwalk virus affected 642 guests and 365 employees at the Hilton over a two-month period. A Washoe District Court jury last year awarded $25.2 million in punitive damages to plaintiffs in the class- action suit against the hotel that resulted from the virus outbreak. The Hilton is appealing the decision. NORTHWESTERN CORPORATION: Faces Securities Fraud Lawsuits in SD --------------------------------------------------------------- Northwestern Corporation faces several securities class actions filed in the United States District Court in Sioux Falls, South Dakota on behalf of all purchasers of the Company's common stock from August 2, 2000 through March 31, 2003, inclusive. The complaint charges NorthWestern and certain of its executive officers and directors with issuing false and misleading statement concerning its business and financial condition, according to an earlier Class Action Reporter story. Specifically the Company failed to disclose that: (1) the Company had not maintained adequate reserves for accounts receivable in its subsidiary, Expanets; (2) massive amounts of the Company's goodwill was impaired and would require significant write-downs; (3) that the Company lacked adequate internal controls and was therefore unable to ascertain the true financial condition of the Company; and (4) that as a result, the value of the Company's net income and financial results were materially overstated. Prominent law firm Milberg Weiss Bershad Hynes & Lerach, LLP filed the most recent suit on behalf of the Carpenters Pension Trust For Southern California and Oppenheim Investment Management LLC. "A $700 million charge doesn't just come out of the night," Lawyer Darren Robbins told the Associated Press. "This is serious money." "The payments made to Andersen were not made to insure the veracity and completeness of these statements, but rather were payoffs for Andersen's role in helping the senior management of the company set up and run what has been described as a 'private-equity' company for key executives - which allowed them to profit handsomely from engaging in clandestine related-party transactions with the company's subsidiaries," the complaint said. NorthWestern spokesman Roger Schrum declined comment on the lawsuits Wednesday, saying the company had not been served with either suit, the Associated Press reports. PRUDENTIAL FINANCIAL: Faces Possible Lawsuits Over Fee Increase --------------------------------------------------------------- Insurance firm Prudential Financial might face legal action and ombudsman complaints over its sudden decision to increase its premium rates for critical illness cover in two months, the Financial Times reports. Early this week, the Company announced the changes, which will hit the terms of the medical conditions covered by the policy, increase the premiums by up to 40 per cent and rates would be variable after five years. Crucially, however, the new terms would also affect applications received but not yet accepted as well as new business submitted from 14 April. This decision will endanger GBP720 million of critical illness premiums. Sources close to the decision said there were 48,000 clients waiting for acceptance letters, some for more than three months. The company refused to confirm this figure but said it was significantly less than 50,000, the Financial Times states. John Ellis, head of public affairs for the LIA, told FT "I have never heard of anyone doing this. It is an example of bad practice as I cannot see how Prudential can retrospectively do this. The policies in the Pru's pipeline would have been sold by IFAs on the basis of existing terms and conditions but now the advice would be wrong because of a change in terms." Keith Carr, senior technical adviser for LifeSearch, told the Financial Times Prudential had been caught by increasing demand for CI cover and reduced underwriting by reinsurers following Swiss Re's departure from the market last year. LifeSearch said it had instructed solicitors to bring a class action against the Pru. Inter-Alliance said it was also taking legal advice. Paul Keeble, media relations manager of Prudential, told FT "Our main concern is to keep customers and IFAs happy. As with others in the industry, the reinsurance market for guaranteed business has hardened which means we have had to change our terms. While the rates change we are introducing 30 days' free life and CI cover to anyone who has not yet received an acceptance letter. I have not heard about the class action." TENNESSEE: Knoxville Residents Launch Lawsuit Over Toxic Dumping ---------------------------------------------------------------- Residents of a Knoxville, Tennessee, community have filed a class action in Knox County Circuit Court, alleging that, among other things, the dumping of contaminated debris from a former railroad yard has "stigmatized" their neighborhood and significantly lowered their property values, the Associated Press Newswires reports. Named in the lawsuit brought by lawyers representing 72 residents are the city of Knoxville, a railroad, four contractors and the owner of the sinkhole where a demolition company sent more than 800 truckloads of the debris from the railroad yard. Subsequent tests, according to the lawsuit, showed the soils in the sinkhole are laced with diesel fuel, arsenic, lead, polychlorinated biphenyls (PCBs) and other contaminants. These same compounds later showed up in the area's wells, the lawsuit says. The lawsuit further alleges the defendants handled the hazardous materials with negligence, resulting in the violation of six federal and state environmental laws covering the handling of toxic and hazardous substances and the disposal of solid waste, as well as causing devaluation of plaintiffs' property. Each plaintiff is suing for $1 million in compensatory damages and $2 million in punitive damages. The lawsuit also seeks $20 million in compensatory damages and $20 million in punitive damages for others who may join the lawsuit. The class action is the largest of five civil actions filed in connection with the dumping controversy. A federal grand jury is also reviewing for possible criminal actions. The complaint names the City of Knoxville, Norfolk Southern Railway Co., Burnett Demolition & Salvage Co., S&ME Inc., The Development Corporation of Knox County, Barge Waggoner Sumner & Cannon Inc. and the sinkhole owner Philip Reagan. Other defendants might be named later, said Knoxville attorneys J.D. Lee and Dan Stanley, who are representing the plaintiffs. TOBACCO LITIGATION: Philip Morris USA Files Post-Judgment Motion ---------------------------------------------------------------- Philip Morris USA today asked Madison County Circuit Court Judge Nicholas Byron to overturn the $10.1 billion verdict he issued in the class action - known as the Price case - over deceiving 1.1 million Illinois smokers into believing that 'light' cigarettes are safer than regular cigarettes or, significantly reduce the amount of damages he awarded, Associated Press Newswires reports. In the recent filing of this motion, the company listed numerous reasons why the Illinois state Court should reverse itself and enter a judgment for Philip Morris USA, grant the company a new trial, modify its judgment or reduce the damages. "Simply put, the Price verdict is contrary to the Illinois consumer fraud law and conflicts with federal laws governing the advertising, marketing and sale of cigarettes," said William S. Ohlemeyer, Philip Morris USA vice president and associate general counsel. "The company is asking the trial court to take what it believes to be the legally correct action; set this verdict aside or at least dramatically reduce the damages awarded to an amount that is in line with the evidence presented in the case," Mr. Ohlemeyer added. Judge Byron, following a bench trial, awarded $7.1 billion in compensatory damages and $3 billion in punitive damages to an estimated 1.1 million class members, who claimed they had been misled into believing 'light' cigarettes were less harmful than full-flavored cigarettes. The verdict includes $1.77 billion in fees for the plaintiffs' attorneys and $2 billion in prejudgment interest on the compensatory damages award. The company said even if the court believed damages were warranted, they should be in the millions, rather than billions, of dollars, and state law does not permit prejudgment interest in this type of case. The claims in this case were brought under the Illinois Consumer Fraud Act, and under that law an individual or company cannot be held liable for any 'action or transaction specifically authorized by laws administered by any regulatory body or officer acting under statutory authority' of the United States. "Clearly, every pack of Marlboro Lights and Cambridge Lights purchased by consumers in the state of Illinois for the past 30 years, was marketed, advertised and sold in accordance with congressionally- mandated laws," Mr. Ohlemeyer said. "In this case, the Court has erroneously declared that conduct permitted by federal law is nevertheless unlawful in Illinois. This verdict ignores the doctrine of federal preemption and interferes with Congress' uniform, comprehensive, nationwide regulation of cigarette marketing practices . The bottom line is that this Court may not declare unlawful, or impose liability based upon, cigarette marketing practices that are regulated by federal law," Mr. Ohlemeyer added. "As to claims that plaintiffs believed the cigarettes to be less hazardous, every package of Marlboro and Cambridge Lights sold in the United States has carried the same health warnings Congress says must appear on all cigarette packs and advertising, and the company never marketed them as a less hazardous alternative to full-flavored cigarettes . The issues that this court attempted to decide are national in scope and governed by federal laws and regulations. It is not appropriate for a state judge to substitute his judgment on these issues for those of the Congress and the US Federal Trade Commission," Mr. Ohlemeyer said. Mr. Ohlemeyer noted as well that other courts, including the US Supreme Court, have ruled that the federal labeling law prohibits states from requiring additional warnings, including those suggested by the plaintiffs in the Price case, and have determined that the current warnings are sufficient, as a matter of law, to notify consumers of the potential health hazards of smoking. "We are hopeful that Judge Byron will reconsider his earlier decision and vacate this verdict, but if not, Philip Morris USA is prepared to take prompt action necessary to expedite its appeal, up to and including the United States Supreme Court," Mr. Ohlemeyer said. TOBACCO LITIGATION: Moody's Cuts Altria's Unsecured Debt Rating --------------------------------------------------------------- Moody's Investors Service Inc. cut Altria Group Inc.'s senior unsecured debt rating to just two notches above non-investment grade, or junk level, The Wall Street Journal reports. Moody's left Altria's rating outlook negative, signaling the likelihood of further downgrades down the road as the company struggles with litigation woes. This action by Moody's affects about $20 billion of debt securities. Standard & Poor's gives Altria a comparable triple-B rating, with the negative Credit Watch; while Fitch Ratings has the company rated a notch higher at triple-B-plus rating with a negative watch. Corporate-bond investors are braced for the worst. "The market obviously has provided for the possibility of them going to junk," said Robert J. Truesdell, senior fixed-income portfolio manager at M&T Asset Management. "The debt is trading very cheap," Mr. Truesdell added. The Moody's report cited a few reasons for the downgrade. These included reduced free cash flow as a result of a bonding requirement rendered against Philip Morris USA in the class action in Illinois. Altria is Philip Morris's parent company. Additional reasons for the downgrade include as well additional pressure on Altria's profitability as a result of difficult conditions in the US tobacco market; the risk of future legal rulings to the company; and Philip Morris's reduced financial flexibility because of the bonding requirement. How did Altria reach this point, the point of downward spiral? On March 21, Judge Nicholas Byron, in Madison County, Illinois, ordered Philip Morris USA, a unit of Altria, to pay $7.1billion in compensatory damages, an additional $3 billion in punitive damages, as well as $1.78 billion in plaintiff-lawyer fees. The verdict in the class action said the company deceived 1.1 billion Illinois smokers by claiming 'light' cigarettes are less harmful than the regular cigarettes. Philip Morris said it was uncertain if it would be able to make its next annual payments to the state governments, due April 15, under the 1998 tobacco settlement with 46 states, because of the $12 billion appeal bond it was required to post by the Illinois court in order to file an appeal of the decision. Last week, however, Judge Byron relaxed the bond requirements. Now, Philip Morris has to post an appeal bond -- a promissory note for $6 billion between Altria and Philip Morris -- secured by $800 million in cash, payable in four equal installments of $200 million, beginning September 2003. Interest is payable on the promissory note annually, in the amount of $420 million, until such time as Philip Morris completes its appeal process. US SUPERMARKETS: Consumers Sue Over Artificially-Colored Salmon --------------------------------------------------------------- Supporters of aquaculture reform, say the salmon farming industry in Canada needs to clean up its act or lose its massive US market. Class action lawsuits filed today in Seattle, Washington claim that the three largest grocery chains in the United States - Safeway, Albertson's and The Kroger Company - illegally concealed the artificial coloring in their farm-raised salmon. Without this artificial coloring, farmed- salmon fillets would be an unappetizing gray - something most fish lovers don't know. Salmon is one of the most popular fish in the US, second only to shrimp and canned tuna. According to Jennifer Lash, a spokesperson for the British Columbia- based Coastal Alliance for Aquaculture Reform, a group that has been running a consumer education initiative on farmed salmon in Canada and the US, if the suit deters US consumers from purchasing farmed salmon, it could have a huge economic impact on the industry based in Canada. In BC alone, 80% of farmed salmon is exported. "The US is an enormous market for farmed salmon and the stores named sell salmon farmed in BC and the east coast of Canada," said Ms. Lash. "US consumers are not getting the full story when it comes to how it is raised and produced. We see this suit as an important step in consumer health protection as well as a wake-up call to industry." The lawsuits charge that the chains, which account for over 6,000 stores in more than 30 states across the US, deceived consumers by failing to comply with federal law requiring disclosure of artificial coloring in farm-raised salmon. Unlike wild salmon, farm-raised fish rely on chemicals to turn their flesh pink. Industry sponsored market research shows that "consumers will pay more for redder salmon" because consumers believe color is an indicator of salmon quality. Fish farmers use what's called a "Salmofan" -not unlike the chips found in paint stores - to determine the volume of chemical needed to get the right flesh color. Wild salmon develop their trademark color naturally, because they feed on certain prey like krill (tiny shrimp- like crustaceans). Farmed salmon get their color from formulated feed, which usually contains the chemicals astaxanthin and canthaxanthin. (In response to concerns about adverse health affects, the European Union has agreed to significantly reduce the level of canthaxanthin that may be fed to farm-raised salmon). According to the suits' claims, lack of labeling also misleads the public into thinking they're buying wild salmon, avoiding the problems associated with farm-raised salmon including: (1) contamination from antibiotics and exposure to pesticides and other chemicals, (2) misrepresentation of health benefits - according to the US Department of Agriculture, farmed Atlantic salmon is over 200 percent higher in saturated fat than wild pink or chum salmon, (3) Risks to wild salmon and other aquatic species from disease and parasites like sea lice, which escape from farm pens, (4) Impacts on marine ecosystems in British Columbia from fish farm pollution, The claims are being brought by Smith & Lowney, PLLC, a law firm specializing in public interest consumer law. The named representatives in the class action suits are consumers who purchased farm-raised salmon from the chains, and were not made aware of the presence of artificial colorants. The lawsuits are designed to protect millions of consumers who purchase farm-raised salmon from the three chains, and call for: (i) Damages for consumers, expected to exceed tens of millions of dollars for each chain, (ii) A court order requiring the chains to inform consumers that the salmon are artificially colored, (iii) Civil penalties for violation of various consumer protection statutes For more details, contact Knoll Lowney by Phone: (206) 860-2976 or (206) 650-1044 or contact Paul Kampmeier Attorney by Phone: (206) 860-4102 or the Coastal Alliance for Aquaculture Reform, British Columbia through Jennifer Lash by Phone: (250) 741-4006 Asbestos Alert ASBESTOS LITIGATION: Local Council to Pay For Asbestos Damages -------------------------------------------------------------- Twenty families, of Southwark in East Inner London, criticized the local council for poor administration, claiming they have been unknowingly exposed to asbestos for three years. The Local Government Ombudsman issued a report which asks the authority to pay compensation to nine of the households because officers failed to notify them about the problems with their properties after a 1997 survey. The families complained they were all put at risk for asbestos exposure and should be compensated for the worry it caused. They asserted that had they known about the problem prior to the purchase of their homes under the Right to Buy, they may have opted not to do so. The Southwark council has been told to pay out more than GBP8,500 in sums ranging from GBP250 to GBP750. A spokeswoman for the council said the investigation had not yet been completed and could only say it was working on an agreement with the ombudsman. ASBESTOS LITIGATION: Mayor's Widow To Support Asbestos Victims -------------------------------------------------------------- Tony Carlin, mayor of Derry in 1989/90, succumbed to mesothelioma in February, less than a year after being diagnosed. His wife has pledged her support for a campaign demanding justice for victims of asbestos- related illnesses. Mr. Carlin allegedly contracted the respiratory disease as a result of inhalation of asbestos fibers nearly 40 years ago. The 56-year-old, who retired as postmaster eight years ago, had worked as a laborer for two companies in Derry where asbestos was used when he was 18. The Derry City Council facilitated a special forum for victims and families of asbestos-related illnesses. The widow of Mr. Carlin graced the forum. Angela Clarke, who heard stories on asbestos-related deaths pushed for the forum and Mrs. Carlin promised to help out, saying, "I am just determined to help Angela and all the other people. There is nothing we can do for Tony, his case is being taken care of on our behalf by a firm of solicitors in Belfast . But, if I can help Angela or any of the other people affected I will do whatever I can. There is going to be a lot more people needing support as time goes on." Mrs. Carlin further said that her husband's illness and death has been a horrible blow. The family is currently pursuing legal action for compensation against the companies allegedly culpable. ASBESTOS LITIGATION: Asbestos Issues Haunt Heatrae Sadia Heating ---------------------------------------------------------------- Heatrae Sadia Heating, formerly known as Heatrae Limited, battles former workers with asbestos-related illnesses and a legal firm tracking down those who may have been exposed to the killer dust. The legal team at Irwin Mitchell Solicitors has received an overwhelming response from people who fear they were exposed to deadly asbestos. The firm is particularly hoping to hear from people who worked for the company between 1955 and 1965, who may be entitled to compensation. Adrian Budgen, spokesman for Irwin Mitchell, said several former workers have come forward since news about their project spread last month. "I'm pleased to say we had a tremendous response to our appeal for witnesses . A good number of those people we have talked to are themselves suffering from asbestos-related illnesses," he said. Andrew Davidson, who runs the Norwich based, Asbestos and Respiratory Industrial Disease Association (Arid), said it was inevitable people would come forward. "Hundreds of people have passed through the doors of Heatrae, so it is likely people will come forward and a number of them will be asbestosis sufferers . But they are just the surface, there are dozens of firms that need to be brought to book. We've known about the damaging effects of asbestos on people's health since 1895 and still it was used. We are not expecting the number of sufferers to peak until 2020," he stated. Heatrae Sadia is the UK market leader in storage heating and is now based in Hurricane Way, on the Norwich Airport Industrial Estate. The Company refused to comment on this issue. ASBESTOS LITIGATION: ABB Awaits Court's Final Chap. 11 Decision --------------------------------------------------------------- ABB projects that the final court decision on its pre-packaged Chapter 11 filing for Combustion Engineering, might not be finalized till next week. The Swiss engineering group, whose US Subsidiary caused its asbestos problems, is due to publish its report and accounts today, April 25. The court decision, which had been expected at early April, was subsequently postponed until April 24. ABB said that the court may not finish hearing evidence until next week. Two further court dates on May 1 and 2 have been set aside. The share price of the group has hiked in recent weeks amid growing confidence that it would win court approval of its $1,200,000,000 asbestos settlement plan. ABB downplayed the significance of the latest delay stressing that it was in the interest of the court to have as much time as possible to consider the complex settlement plan. The delay in finalizing the settlement may complicate ABB's efforts to draw a line under its past and revert its attention on the plans to repair its balance sheet and reach its targets of 4 per cent sales growth in 2003 and a 4 per cent operating margin. The said delay may be one of the reasons why no one is still willing to complete the acquisition of its oil gas and petrochemicals business which is believed to be worth around to $1,500,000,000. "Dealing with the US legal system is always fraught with danger" said Mark Cusack, Deutsche Bank's veteran ABB-watcher, who believes that if the US court judgment goes against ABB its fallback plan is to go for a "free fall" Chapter 11. "This will give them resolution, but it could mean that the settlement terms have to be haggled over and renegotiated. This uncertainty is unhelpful but at least the company is acting to resolve the asbestos problem which has caused them such grief in the past," said Mr Cusack. ASBESTOS LITIGATION: Asbestos Victims Meet South African Lawyers ---------------------------------------------------------------- Asbestos claimants met with their London-based lawyers in the Moffat Mission church in Kuruman. According to Feirouz Williams, one of the South African lawyers, far more than 1,000 attended, coming from all over the Northern Cape, some of them even had to sit outside. This is the first visit to South Africa of the lawyers after the multi-million- rand asbestos settlements with British mining firm Cape plc and South Africa's Gencor last month. Mr. Williams said the terms of the agreements were explained at length to the Northern Cape claimants, which most likely triggered the signing up of new and potential claimants with the lawyers. ASBESTOS LITIGATION: Babcock To Revise Its Disclosure Statement --------------------------------------------------------------- The lawyers party to the bankruptcy case of Babcock & Wilcox Co. said the company will revise the Chapter 11 disclosure statement to address objections. Another hearing on the disclosure statement is set for May 8, and according to Gay Mayeux, a spokeswoman for the parent company of the boiler maker, McDermott International Inc. (MDR), Babcock & Wilcox is hopeful the bankruptcy court will set a confirmation hearing for its Chapter 11 plan after the said hearing. She further declared that no major changes will be made to the plan. Some of the objections to the disclosure statement related to qualification of people to vote on the company's reorganization plan and claims of those who haven't provided adequate information. Attorneys on the case said the court wants Babcock & Wilcox to submit an amended disclosure statement, addressing the various objections, by May 5. A disclosure statement sets out how a company under bankruptcy protection plans to pay off creditors and is generally filed in conjunction with a Chapter 11 reorganization plan. The company's disclosure statement faced limited objections from an unofficial committee of certain asbestos claimants, as well as Texaco Marine Services Inc. and Atlantic Richfield Co. at a hearing in U.S. Bankruptcy Court in New Orleans. In its objection filed with the court, the committee of asbestos claimants said the voting procedures in the disclosure statement allow people who made claims after the bar dates to vote on the reorganization plan and doesn't disqualify claims that don't provide sufficient information. Babcock & Wilcox has said up to 75% of the 221,000 asbestos claims it has received don't supply proper medical or work history information. Allowing such claims to have votes on the company's plan "severely impinges on the rights of those with legitimate claims against the debtor," the objection said. In separate objections, Texaco Marine Services, which owned and operated ships containing Babcock & Wilcox boilers, and Atlantic Richfield, objected to their treatment under the proposed plan. McDermott International said in December it reached a settlement with the representatives of two asbestos-related claimant groups in the Babcock & Wilcox case. Under the settlement, McDermott International agreed to put 4.75 million shares of its stock and $92,000,000 in unsecured promissory notes into a trust for the benefit of asbestos- related personal injury claimants. ASBESTOS LITIGATION: US Asbestos Lawsuits Settlement Draws Near --------------------------------------------------------------- US Congress and the parties involved in the asbestos saga are close to agreement to settle all asbestos lawsuits. The idea is to pay people with asbestos-related diseases from a national privately financed trust. The Congress and President Bush will have to approve the trust. It would pay more than $100,000,000,000 to hundreds of thousands of asbestos victims over the next 30 years. The move would virtually put a stop to the flood asbestos lawsuits, 200,000 of which are recoded in the last two years alone. There are many points of the trust remain to be worked out, including the exact amount of payments to victims and who will pay if the trust unexpectedly runs short of money, and the negotiations could still stall. An asbestos trust would not allow people to opt out and sue. All new and existing claims would be settled through the trust, which would largely or entirely be financed by businesses and insurers. ASBESTOS ALERT: PNM Resources Faces Asbestos-Related Litigation --------------------------------------------------------------- The utility subsidiary of PNM Resources Inc. (PNM), Public Service Company of New, which transmits and distributes electricity to more than 380,000 customers and natural gas to 440,000 customers, was served with 20 lawsuits seeking damages for personal injuries (and one death) allegedly caused by primary exposure to asbestos at PNM's premises. The company, based in Albuquerque, New Mexico, said 19 lawsuits were filed in Bernalillo County District Court in Albuquerque on April 17 and another suit was filed in federal court in Albuquerque the same day. PNM said it is one of more than 20 defendants named in the suits and is cited in just one count in the lawsuits. The plaintiffs are identified as construction workers, their spouses or other family members. The suits seek unspecified damages. PNM was also served on February 20, as one of many defendants, with an amended complaint for wrongful death alleging secondary exposure from asbestos. The company said it was covered by a number of different insurance policies during the time period in question and it is currently researching the scope of that coverage. PNM said it intends to vigorously defend against the lawsuits. The company said that, although it is unable to fully predict the outcome of the litigation, at this time it does not believe the lawsuits will have a material impact on its financial condition. COMPANY PROFILE PNM Resources, Inc. (NYSE: PNM) Alvarado Sq. Albuquerque, NM 87158 Phone: 505-241-2700 Fax: 505-241-4322 Toll Free: 800-687-7854 http://www.pnm.com Employees :2,656 Revenue : $1,169,000,000 Net Income : $64,300,000 Assets : $3,026,900,000 Liabilities : $2,040,100,000 (As of December 31, 2002) Description: Most glowing lights in New Mexico are lit by PNM Resources (formerly Public Service Company of New Mexico). The company's utility unit, Public Service Company of New Mexico, transmits and distributes electricity to more than 380,000 customers and natural gas to 440,000 customers. PNM Resources operates power plants with nearly 1,900-MW of generating capacity (primarily coal-fired). The company also markets wholesale energy in the western US; however, it is scaling back on its spot-market trading activities due to volatility in the US power market. PNM Resources has terminated its agreement to buy two Kansas- based electric utilities from Westar Energy (formerly Western Resources). ASBESTOS ALERT: Phelps Dodge Discloses Role in Asbestos Lawsuit --------------------------------------------------------------- According to its 10-K filing with the Securities and Exchange Commission, Phelps Dodge or its subsidiaries have been named as a defendant in a number of product liability or premises lawsuits brought by electricians and other skilled tradesmen or contractors claiming injury from exposure to asbestos found in limited lines of electrical wire products produced or marketed many years ago, or from asbestos at certain Phelps Dodge properties since around 1990. Phelps Dodge believes its liability, if any, in these matters will not have a material adverse effect, either individually or in the aggregate, upon its business, financial condition, liquidity, results of operations or cash flow. There can be no assurance; however, that future developments will not alter this conclusion. COMPANY PROFILE Phelps Dodge Corporation (NYSE: PD) 1 N. Central Ave. Phoenix, AZ 85004-2306 Phone: 602-366-8100 Fax: 602-366-7329 http://www.phelpsdodge.com Employees : 13,500 Revenue : $3,722,000,000 Net Income : $(338,100,000) Assets : $7,029,000,000 Liabilities: $4,215,400,000 (As of December 31, 2002) Description: Phelps Dodge (PD) acquired Cyprus Amax in 1999 making it the world's second-largest copper producer, after Chile's Codelco. Copper accounts for two-thirds of PD's sales, but the company also produces gold, silver, and other mineral and chemical by-products of its copper operations. Other businesses -- which may be sold -- include Phelps Dodge Wire and Cable (magnet wire used in electrical motors; specialty conductors for the aerospace, computer, and automotive industries; and telecommunications cables) and Columbian Chemicals (a producer of carbon black used in rubber products). ASBESTOS ALERT: California Coastal Faces Asbestos Related Claims ---------------------------------------------------------------- The consolidated balance sheet of California Coastal Communities, Inc. includes reserves for contingent indemnity obligations for certain businesses disposed of by former affiliates and unrelated to its current operations, according to its latest annual report filed with the Securities and Exchange Commission. In May 2002, Dresser Industries, Inc. filed charges, captioned Dresser Industries, Inc. vs. California Coastal Communities, Inc. and RESCO Holdings, Inc. (a former affiliate), in the 58th Judicial District Court of Jefferson County, Texas. Dresser seeks a declaratory judgment regarding the rights and obligations of the parties under a January1988 purchase agreement, whereby Dresser acquired an engineering and construction business from a former parent of the Company. Dresser's indemnity claims relate to several hundred contested asbestos claims made by third parties in connection with work in facilities with which the business disposed of by the former parent was allegedly connected. The Company was not formed until September 1988 and, upon being spun-off in December 1988, indemnified its former parent for potential liabilities under the January 1988 purchase agreement with Dresser to the extent that any such liabilities are not covered by insurance. However, California Coastal believes its indemnity for any third-party asbestos claims expired in March 1991 under the terms of the January 1988 purchase agreement. This litigation is in the early stages of discovery and the Company intends to vigorously defend itself in this case and related matters. The Company also believes that it has a number of other meritorious defenses to this litigation. Thus far, no claim for monetary damages has been made in connection with this litigation and, given the preliminary nature of these proceedings, the Company is not able to assess its potential exposure with any degree of accuracy. While the Company currently believes its reserves are adequate, damage awards in asbestos cases can involve amounts that would have a material adverse effect on the Company's business, operations or financial condition, in the event that such an award was to be rendered against the Company. COMPANY PROFILE California Coastal Communities, Inc. 6 Executive Circle, Ste. 250 Irvine, CA 92614 Phone: 949-250-7700 Fax: 949-250-7705 Employees : 33 Revenue : $39,000,000 Net Income : $11,100,000 Assets :$180,400,000 Liabilities: $21,400,000 (As of December 31, 2001) Description: California Coastal Communities owns some 300 acres situated on important wetlands in Bolsa Chica, so environmental groups have opposed the company's plan to build over them. Legal wrangling drove the firm into bankruptcy, from which it emerged in 1997, but the battle to win the right to develop residential lots on part of the acreage continues. The company also owns Hearthside Homes, a homebuilder offering residential lots on some 20 acres each in Yucaipa and near North Corona, California. California Coastal also owns some 60 acres of residential lots in Upper Peninsula, Michigan. New Securities Fraud Cases IMPERIAL CHEMICAL: Charles Piven Commences Securities Suit in NY ---------------------------------------------------------------- The Law Offices Of Charles J. Piven, PA initiated a securities class action filed on behalf of shareholders who purchased, converted, exchanged or otherwise acquired Imperial Chemical Industries PLC (NYSE:ICI) American Depositary Shares (ADSs), each representing 1 pound Sterling Ordinary Share, during the period between August 1, 2002 to March 24, 2003, inclusive. The case is pending in the United States District Court for the Southern District of New York. 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: 410-332-0030 or by E-mail: hoffman@pivenlaw.com MICROTUNE INC.: Milberg Weiss Lodges Securities Suit in E.D. TX --------------------------------------------------------------- Milberg Weiss Bershad Hynes & Lerach LLP initiated a securities class action on behalf of an institutional investor, in the United States District Court for the Eastern District of Texas, Sherman Division, on behalf of purchasers of Microtune, Inc. (NASDAQ:TUNE) common stock during the period between April 23, 2001 and February 20, 2003. The complaint charges Microtune and certain of its officers and directors with violations of the Securities Exchange Act of 1934. Microtune is a radio frequency silicon and systems company, providing high-performance radio frequency tuners, upstream amplifiers and transceivers to the broadband communications markets. The complaint alleges that during the class period, defendants issued a series of positive representations regarding the Company's financial performance and future prospects. These statements were each materially false and misleading, as they misrepresented and/or omitted the following true facts which were known by each of the defendants, but concealed from the investing public: (1) the Company's margins were being squeezed by a dramatic decline in the price of low-tech products thereby severely reducing Microtune's market opportunity; (2) the Company's so-called product "advantages" were grossly overstated as the Company was experiencing shortfalls due to competitors' successes; (3) many of the Company's customers who had agreed to take receipt of the Company's products only did so after receiving generous "credits" as an inducement and/or were unable to pay for the products when shipped; (4) the Company was shipping non-compliant products to customers to make quarterly earnings; and (5) the Company's valuation of its Transilica acquisition was overstated by more than $50 million. On February 20, 2003, Microtune issued a press release announcing its 4thQ 02 results and admitting that 2002 results would be much lower than originally projected. In addition, the release stated: "The Board of Directors of the Company has directed its Audit Committee to conduct an inquiry into the events that led to ... material negative charges during the fourth quarter of 2002. The Audit Committee has retained independent counsel to investigate the events." On this news, Microtune stock collapsed to $1.18 per share on volume of 13 million shares. The Company later announced that its Form 10-K for 2002 would not be filed with the SEC until May 2003. For more details, visit the firm's Website: http://www.milberg.com NORTHWESTERN CORPORATION: Schiffrin & Barroway Lodges Suit in SD ---------------------------------------------------------------- Schiffrin & Barroway, LLP initiated a securities class action in the United States District Court for the District of South Dakota on behalf of all purchasers of the common stock of NorthWestern Corporation (NYSE:NOR) from August 2, 2000 through April 15, 2003, inclusive. The complaint charges NorthWestern and certain of its executive officers and directors with issuing false and misleading statement concerning its business and financial condition. Specifically the Company failed to disclose that: (1) the Company had not maintained adequate reserves for accounts receivable in its subsidiary, Expanets; (2) massive amounts of the Company's goodwill was impaired and would require significant write-downs; (3) that the Company lacked adequate internal controls and was therefore unable to ascertain the true financial condition of the Company; and (4) that as a result, the value of the Company's net income and financial results were materially overstated. Subsequently, on April 16, 2003, before the market opened, NorthWestern announced that it would take significant charges for fiscal year 2002 totaling $878.5 million. The breakdown of the charges included: (i) an impairment of goodwill and other long-lived assets related to one of the Company's subsidiaries Blue Dot Services, Inc. for $301.7 million, (ii) an additional impairment of goodwill and other long-lived assets related to another Company subsidiary Expanets, Inc. for $288.7 million, (iii) a charge for discontinued operations for a third subsidiary CornerStone Propane Partners L.P. for a net of tax benefit of $101.7 million, (iv) a valuation allowance of a deferred tax asset for $71.5 million, (v) billing adjustments and accounts receivable write-offs related to Expanets equaling $65.8 million, (vi) an impairment of the Montana First Megawatts project for $35.7 million, and (vii) the retirement of an acquisition term loan, equaling a net of tax benefit of $13.4 million By the close of trading on April 16, 2003, the share price plummeted to $1.95 per share, 92% down from its Class Period high of $23.53 per share. For more details, contact Marc A. Topaz or Stuart L. Berman by Phone: 1-888-299-7706 (toll free) or 1-610-667-7706 or by E-mail: info@sbclasslaw.com NORTHWESTERN CORPORATION: Cauley Geller Files SD Securities Suit ---------------------------------------------------------------- Cauley Geller Bowman Coates & Rudman, LLP initiated a securities class action in the United States District Court for the District of South Dakota, on behalf of purchasers of NorthWestern Corporation (NYSE: NOR) common stock during the period between August 2, 2000 and April 15, 2003, inclusive. The complaint charges NorthWestern and certain of its executive officers and directors with issuing false and misleading statements concerning its business and financial condition. Specifically the Company failed to disclose that: (1) the Company had not maintained adequate reserves for accounts receivable in its subsidiary, Expanets; (2) massive amounts of the Company's goodwill was impaired and would require significant write-downs; (3) that the Company lacked adequate internal controls and was therefore unable to ascertain the true financial condition of the Company; and (4) that as a result, the value of the Company's net income and financial results were materially overstated. Subsequently, on April 16, 2003, before the market opened, NorthWestern announced that it would take significant charges for fiscal year 2002 totaling $878.5 million. The breakdown of the charges included: (i) an impairment of goodwill and other long-lived assets related to one of the Company's subsidiaries Blue Dot Services, Inc. for $301.7 million, (ii) an additional impairment of goodwill and other long-lived assets related to another Company subsidiary Expanets, Inc. for $288.7 million, (iii) a charge for discontinued operations for a third subsidiary CornerStone Propane Partners L.P. for a net of tax benefit of $101.7 million, (iv) a valuation allowance of a deferred tax asset for $71.5 million, (v) billing adjustments and accounts receivable write-offs related to Expanets equaling $65.8 million, (vi) an impairment of the Montana First Megawatts project for $35.7 million, and (vii) the retirement of an acquisition term loan, equaling a net of tax benefit of $13.4 million By the close of trading on April 16, 2003, the share price plummeted to $1.95 per share, 92% down from its Class Period high of $23.53 per share. For more details, contact Samuel H. Rudman, David A. Rosenfeld, Jackie Addison, Heather Gann or Sue Null by Mail: P.O. Box 25438, Little Rock, AR 72221-5438 by Phone: 1-888-551-9944 by Fax: 1-501-312-8505 or by E- mail: info@cauleygeller.com ORTHODONTIC CENTERS: Cauley Geller Lodges Securities Suit in LA --------------------------------------------------------------- Cauley Geller Bowman Coates & Rudman, LLP initiated a securities class action in the United States District Court for the Eastern District of Louisiana, on behalf of purchasers of Orthodontic Centers of America, Inc. (NYSE: OCA) publicly traded securities during the period between November 14, 2002 and March 18, 2003, inclusive. The complaint charges OCA and certain of its officers and directors with violations of the Securities and Exchange Act of 1934. More specifically, the complaint alleges that on May 17, 2001, OCA and OrthAlliance, Inc. announced that the parties had entered into a definitive merger agreement, whereby a wholly owned subsidiary of OCA would merge into OrthAlliance in a stock-for-stock transaction, with OrthAlliance becoming a wholly owned subsidiary of OCA. Following the May 17, 2001 announcement, a number of OrthAlliance's affiliated practices filed lawsuits against OrthAlliance and/or notified OrthAlliance that it was in default under their service, management service, and consulting agreements, in response to which OrthAlliance engaged outside counsel to represent its interests. The complaint also alleges that after the announcement of the completed merger on November 9, 2001, OCA set forth an integration plan with respect to OrthAlliance affiliated practices. The integration plan, however, was not proceeding "very, very well" as articulated by defendants. In fact, several other OrthAlliance affiliated practices, in addition to the practices that filed lawsuits, discontinued paying their services fees under their service, management service, and consulting agreements; while at the same time, OCA continued to recognize revenue it allegedly received from such fees. The complaint further alleges that the statements disseminated by defendants during the Class Period and with respect to the financial well- being of the Company were each materially false and misleading because OCA failed to disclose and indicate that the integration of OrthAlliance practices was not proceeding as had indicated by the defendants, which, in turn, caused the Company to experience less profit generation because: (1) not only had some OrthAlliance practices sued but other OrthAlliance practices had discontinued paying their services fees; (2) because the Company continued to recognize revenue from the services from OrthAlliance practices that were in litigation and from those that had stopped paying their service fees; (3) because the defendants mischaracterized that only "some doctors" had stopped paying their service fees, which only created "a little noise" for the Company when in fact the magnitude of the problem, which OCA was required to report, was greater than reported; (4) because the Company was recognizing revenue in violation of the Generally Accepted Accounting Principles (GAAP); and (5) because the defendants were actively concealing these facts in order to manipulate the Company's earnings outlooks in order to maintain its favorable stock prices. The complaint additionally alleges that following the close of the markets on March 18, 2003, OCA issued a press release announcing its year-end earnings for 2002 wherein the Company reported that earnings and fee revenue were down from the previous year. The decline in fee revenue resulted from numerous OrthAlliance affiliated practices that discontinued paying fees required under their service, management service, and consulting agreements in 2002. Market reaction to these revelations was swift. Immediately following the announcement on March 19, 2003, shares of the Company fell $3.93, or 41 percent, to close at $5.64, from a closing price of $9.57 per share on March 18, 2003. For more details, contact Samuel H. Rudman, David A. Rosenfeld, Jackie Addison, Heather Gann or Sue Null by Mail: P.O. Box 25438, Little Rock, AR 72221-5438 by Phone: 1-888-551-9944 by Fax: 1-501-312-8505 or by E- mail: info@cauleygeller.com SUPERGEN INC.: Brodsky & Smith Lodges Securities Suit in N.D. CA ---------------------------------------------------------------- Brodsky & Smith, LLC initiated a securities class action on behalf of shareholders who purchased the common stock and other securities of SuperGen, Inc. (Nasdaq:SUPG) between April 18, 2000 and March 13, 2003, inclusive. The case is pending in the United States District Court for the Northern District of California against the company, its Chairman, President and Chief Executive Officer. The complaint charges defendants with violations of the Securities and Exchange Act of 1934, alleging that the defendants issued materially false and misleading statements and failed to disclose certain key information regarding the efficacy and risks associated with its drug MitoExtra(tm). The materially false and misleading statements caused the Company's stock to trade at artificially inflated prices during the Class Period and caused damages to the Class Members. 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 SUPERGEN INC.: Stull Stull Commences Securities Suit in N.D. CA --------------------------------------------------------------- Stull Stull & Brody initiated a securities class action in the United States District Court for the Northern District of California on behalf of purchasers of SuperGen, Inc. (NasdaqNM:SUPG) securities between April 18, 2000 and March 13, 2003, inclusive. The complaint charges that the Company and its Chief Executive Officer, President and Chairman of the Board violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10-b(5). The action alleges that defendants issued a series of false and misleading statements concerning its Mitozytrex, also known as MitoExtra, drug and the drug's ability to treat cancer. Specifically, the Complaint charges that defendants repeatedly issued press releases claiming Mitozytrex was a new drug available to treat gastric and pancreatic cancers, when, in fact, the drug was nothing more than an injectable form of the already existing drug mitomycin. Moreover, the Complaint alleges that defendants purposefully did not inform the public of the significant risks associated with use of Mitozytrex, including but not limited to fever, anorexia, nausea, vomiting, myelosuppression and hemolytic uremic syndrome. As a result of these false and misleading statements, defendants were able to sell millions of shares of SuperGen stock and notes for proceeds of $25 million, thereby profiting from the artificial inflation in SuperGen's stock price. The complaint charges that as a result of defendants' actions, plaintiff and the Class were damaged. For more details, contact Michael Braun or Patrice Bishop by Phone: 888-388-4605 by E-mail: info@secfraud.com or visit the firm's Website: http://www.secfraud.com. VAXGEN INC.: Scott + Scott Lodges Securities Lawsuit in N.D. CA --------------------------------------------------------------- Scott + Scott, LLC initiated a securities class action in the United States District Court for the Northern District of California on behalf of purchasers of VaxGen, Inc. (Nasdaq: VXGN) publicly traded securities during the period between August 6, 2002 and February 26, 2003, inclusive. The complaint charges the Company and certain of its officers and directors with issuing materially false and misleading statements concerning its business and financial condition. The Company is engaged in the development and commercialization of AIDSVAX, a vaccine designed to prevent infection or disease caused by HIV (Human Immunodeficiency Virus), the virus that causes AIDS. During the class period, defendants were completing the final stages of AIDSVAX's Phase III clinical trials required to obtain Food and Drug Administration approval to market AIDSVAX as an AIDS vaccine. Throughout the class period, defendants caused VaxGen to make a number of positive statements about the status of the trial and describing their eventual plans to manufacture and market AIDSVAX, causing VaxGen's stock to trade at artificially inflated prices. On February 26, 2003, however, defendants were forced to admit that the reliability of their earlier reports of higher efficacy rates for non- caucasians were impaired because they had not taken the requisite "penalties" to account for the fact that less than 500 of the 5000 clinical trial participants were non-caucasians, resulting in an extremely small subset of data being analyzed for non-caucasians. As the news that earlier promises that AIDSVAX could prove useful for non- caucasians fell apart, the stock declined further, resulting in a total loss in market cap since November 18, 2002 of approximately 85%. For more details, contact David R. Scott or Neil Rothstein by Mail: 108 Norwich Avenue, Colchester, Connecticut 06415 by Phone: 800-404-7770 by Fax: 860-537-4432 or by E-mail: drscott@scott-scott.com or nrothstein@scott-scott.com ********* S U B S C R I P T I O N I N F O R M A T I O N Class Action Reporter is a daily newsletter, co-published by Bankruptcy Creditors' Service, Inc., Trenton, New Jersey, and Beard Group, Inc., Washington, D.C. Enid Sterling, Aurora Fatima Antonio and Lyndsey Resnick, Editors. Copyright 2003. All rights reserved. ISSN 1525-2272. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re- mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The CAR subscription rate is $575 for six months delivered via e-mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are $25 each. For subscription information, contact Christopher Beard at 240/629-3300. * * * End of Transmission * * *