/raid1/www/Hosts/bankrupt/CAR_Public/030516.mbx
C L A S S A C T I O N R E P O R T E R
Friday, May 16, 2003, Vol. 5, No. 96
Headlines
ACE CASH: Settles Claims Over Goleta Bank Consumer Payday Loans
ALLSTATE CORPORATION: Appeals Court To Review Suit Certification
ALLSTATE CORPORATION: Faces Suits Over Auto "Diminished Value"
BRAWN OF CALIFORNIA: Plaintiffs Drop Class Charges in CA Lawsuit
CROMPTON COMPANY: Sued in Various Courts over Chemical Products
CROMPTON COMPANY: Asks Courts to Dismiss Several Antitrust Suits
CYBERSOURCE CORPORATION: NY Court Refuses to Dismiss Stock Suit
EXTREME NETWORKS: NY Court Dismisses In Part Securities Lawsuit
HANOVER COMPRESSOR: Settles Shareholder Suit For Over $30M
HANOVER DIRECT: NJ Court Deliberates Motion To Stay Fraud Suit
HANOVER DIRECT: High Court Yet To Decide on Suit Certification
HANOVER DIRECT: CA Court Dismisses With Prejudice Consumer Suit
INDIANA: Elkhart County Hires Consultant To "Cure" Overcrowding
MICHIGAN: Lawyer Asks For Cash Settlement Over Plant Upgrades
MONTEREY PASTA: Investors File Securities Fraud Suits in N.D. CA
NABORS INDUSTRIES: Plaintiff Appeals Securities Suit Dismissal
OPLINK COMMUNICATIONS: NY Court Dismisses In Part Stock Lawsuit
PERINI CORPORATION: Asks MA Court To Dismiss Securities Lawsuit
PEROT SYSTEMS: NY Court Dismisses in Part Securities Fraud Suit
PRG SCHULTZ: Discovery Commences in Consolidated Securities Suit
SEMINIS INC.: Shareholders Sue Opposing Fox Paine Stock Purchase
TOBACCO LITIGATION: Philip Morris Asks High Court To Limit Bond
TRANSMETA CORPORATION: Lawyer Appeals Parts of $5.5M Settlement
TRANSMETA CORPORATION: Court Dismisses in Part Securities Suit
TYSON FOODS: Parties Agree To Settle OK Water Pollution Lawsuit
Asbestos Alert
ASBESTOS LITIGATION: Alliance Lauds NAIC Move on Asbestos Suits
ASBESTOS LITIGATION: Victim's Widow Receives Six-Figure Payout
ASBESTOS LITIGATION: Asbestos found at API construction site
ASBESTOS LITIGATION: CT Governor Calls for Asbestos Legislation
ASBESTOS LITIGATION: Electrolux Reports Latest Asbestos Stats
ASBESTOS LITIGATION: GP Determines Asbestos Trust Contribution
ASBESTOS LITIGATION: Victim To Get $1.2M From Union Carbide
ASBESTOS LITIGATION: T&N Claimants See Light in New Ruling
ASBESTOS ALERT: Mestek Battles Asbestos-Related Suits
ASBESTOS ALERT: Seeboard to Pay GBP25T for Asbestos Complaints
New Securities Fraud Cases
ACCREDO HEALTH: Lockridge Grindal Lodges Securities Suit in TN
COMPANY DOCTOR: Schatz & Nobel Lodges Securities Suit in N.D. AL
CREDIT SUISSE: Shapiro Haber Lodges Securities Suit in MA Court
SARA LEE: Cauley Geller Lodges Securities Fraud Suit in N.D. IL
SARA LEE: Schiffrin & Barroway Lodges Securities Suit in N.D. IL
*********
ACE CASH: Settles Claims Over Goleta Bank Consumer Payday Loans
----------------------------------------------------------------
Ace Cash Express Inc. said, in a press release, that it has
settled claims over offering Goleta National Bank (Goleta Bank)
short-term loans at Ace stores, Associated Press Newswires
reports.
The company said the agreement was reached in a nationwide class
action lawsuit that was pending in the US District Court in
Dallas. The agreement is subject to court approval.
The settlement addresses short-term, or payday, loans made by
Goleta Bank nationwide through its relationship with ACE. Under
the settlement, all persons who obtained those loans and don't
exclude themselves from the settlement, will release ACE and
Goleta from all liability.
In exchange, ACE will discontinue further collection efforts on
all unpaid Goleta loans, refund finance charges and abide by
other restrictions on its short-term lending activities for up
to two years.
If the total payments to former borrowers and certain other
costs relating to the settlement are less than $2.5 million, ACE
will pay the difference to certain consumer-advocacy groups.
ACE also will pay up to $2.1 million to attorneys representing
the plaintiffs in some Goleta-loan-related lawsuits.
Based on its estimate of anticipated claims from borrowers and
administrative and related costs, ACE has established a $5
million reserve for the third quarter. In establishing this
reserve, ACE has incurred a one-time charge, net of tax, of $3
million or 29 cents a share, for the third quarter.
ALLSTATE CORPORATION: Appeals Court To Review Suit Certification
----------------------------------------------------------------
The United States Eleventh Circuit Court of Appeals agreed to
review the class certification for a lawsuit filed against
Allstate Corporation regarding its specification of after-market
(non-original equipment manufacturer) replacement parts in the
repair of insured vehicles.
Two suits were originally filed against the Company. One of
these suits alleges that the specification of such parts
constitutes breach of contract and fraud, and this suit mirrors
to a large degree lawsuits filed against other carriers in the
industry. The plaintiffs allege that after-market parts are not
"of like kind and quality" as required by the insurance policy,
and they are seeking actual and punitive damages.
In the second lawsuit, plaintiffs allege that Allstate and three
co-defendants have violated federal antitrust laws by conspiring
to manipulate the price of auto physical damage coverages in
such a way that not all savings realized by the use of
aftermarket parts are passed on to the policyholders. In
November 2002, a nationwide class was certified in this case,
which the defendants appealed.
The Company has been vigorously defending the suits and their
outcome is uncertain.
ALLSTATE CORPORATION: Faces Suits Over Auto "Diminished Value"
--------------------------------------------------------------
Allstate Corporation faces a number of statewide and nationwide
class actions alleging that its failure to pay "inherent
diminished value" to insureds under the collision,
comprehensive, uninsured motorist property damage, or auto
property damage liability provisions of auto policies
constitutes breach of contract and fraud.
Plaintiffs define "inherent diminished value" as the difference
between the market value of the insured automobile before an
accident and the market value after repair. Plaintiffs allege
that they are entitled to the payment of inherent diminished
value under the terms of the policy. To a large degree, these
lawsuits mirror similar lawsuits filed against other carriers in
the industry.
These lawsuits are pending in various state and federal courts,
and they are in various stages of development. A class has been
certified in only one case, a multi-state class action.
The Company has been vigorously defending these lawsuits and,
since 1998, has been implementing policy language in a majority
of states reaffirming that its collision and comprehensive
coverages do not include diminished value claims. In addition,
there are three statewide putative class action lawsuits pending
against Allstate alleging that it improperly deducts betterment
in connection with the repair of vehicles. The outcome of these
disputes is currently uncertain.
BRAWN OF CALIFORNIA: Plaintiffs Drop Class Charges in CA Lawsuit
----------------------------------------------------------------
Plaintiffs in the class action filed against Brawn of
California, Inc. dba International Male and Undergear, and Does
1-100 dropped their class action claims after a bench trial in
the Superior Court of the State of California, City and County
of San Francisco.
Does 1-100 are allegedly Internet and catalog direct marketers
offering a selection of men's clothing, sundries, and shoes who
advertise within California and nationwide.
The complaint alleges that:
(1) for at least four years members of the class and the
general public have been charged an unlawful, unfair
and fraudulent insurance fee and tax on orders sent to
them by Brawn;
(2) Brawn was engaged in untrue, deceptive and misleading
advertising in that it was not lawfully required or
permitted to collect an insurance fee, tax and sales
tax from customers in California; and
(3) Brawn has engaged in acts of unfair competition under
the state's Business and Professions Code.
Plaintiff seeks:
(i) restitution and disgorgement of all monies wrongfully
collected and earned by Brawn, including interest and
other gains made on account of these practices,
including reimbursement in the amount of the insurance
fee, tax and sales tax collected unlawfully, together
with interest,
(ii) an order enjoining Brawn from charging customers the
insurance fee and tax on its order forms and/or from
charging tax on the delivery, shipping and insurance
charges,
(iii) an order directing Brawn to notify the California State
Board of Equalization of the failure to pay the correct
amount of tax to the state and to take appropriate
steps to provide the state with the information needed
for audit, and
(iv) compensatory damages, attorneys' fees, pre-judgment
interest and costs of the suit
The plaintiff alleged that the claims of the individually named
plaintiff and for each member of the class amount to less than
$75,000. On April 15, 2002, the Company filed a motion to stay
the suit, but the court denied the motion.
In October 2002, the Court granted the Company's Motion for
leave to amend the answer. Discovery is completed. A
mandatory settlement conference was held on April 7, 2003 and a
bench trial took place from April 14 through 17, 2003. At the
bench trial, plaintiff withdrew the class action allegations and
continued to proceed individually and on behalf of the general
public pursuant to California Business and Professions Code
Section 17200 et seq. Post-trial briefing should be completed
in the third quarter of 2003. No decision date has been set by
the Court. The Company plans to continue its vigorous defense
of this action.
CROMPTON COMPANY: Sued in Various Courts over Chemical Products
---------------------------------------------------------------
Crompton Company, individually or together with certain of its
subsidiaries and other companies, was named as a defendant in
certain direct purchaser class action lawsuits filed in federal
courts during the period from late March 2003 through April 18,
2003 involving the sale of rubber chemicals, EPDM and plastic
additives, including heat stabilizers, impact modifiers and
processing aids.
With respect to rubber chemicals, the Company, its subsidiary
Uniroyal Chemical Company, Inc. and other companies have been
named as defendants in two class actions, both of which were
filed in California, by plaintiffs on behalf of themselves and a
class consisting of all individuals and entities who purchased
rubber chemicals in the United States directly from the
defendants, their predecessors or their controlled subsidiaries
from January 1, 1995 to October 10, 2002.
With respect to EPDM, the Company, individually or together with
Uniroyal Chemical Company, Inc. and other companies, has been
named as a defendant in five class actions, filed in New Jersey,
Connecticut, New York and California, by plaintiffs on behalf of
themselves and a class consisting of all individuals and
entities who purchased EPDM in the United States directly from
the defendants, their alleged co- conspirators, predecessors or
controlled subsidiaries during various periods with the earliest
period commencing on January 1, 1994.
With respect to plastic additives, the Company and other
companies have been named as defendants in four class actions,
all of which were filed in the State of Pennsylvania, by
plaintiffs on behalf of themselves and a class consisting of
all individuals and entities who purchased plastic additives in
the United States directly from the defendants, predecessors or
controlled subsidiaries during various periods with the earliest
period commencing on January 1, 1985.
The complaints in these actions principally allege that the
defendants conspired to fix, raise, maintain or stabilize prices
for rubber chemicals, EPDM or plastic additives, as applicable,
sold in the United States in violation of Section 1 of the
Sherman Act and that this illegal conspiracy caused injury to
the plaintiffs who paid artificially inflated prices for such
products as a result of such anticompetitive activities. The
plaintiffs seek, among other things, treble damages of
unspecified amounts, costs (including attorneys' fees) and
injunctive relief preventing further violations of the Sherman
Act.
CROMPTON COMPANY: Asks Courts to Dismiss Several Antitrust Suits
----------------------------------------------------------------
Crompton Company has asked for the dismissal of twenty class
actions filed against it and certain of its subsidiaries from
October 2002 through December 2002 in state courts in seventeen
states and in the District of Columbia.
The putative class in each of the actions comprises all persons
within each of the applicable states and the District of
Columbia who purchased tires other than for resale that were
manufactured using rubber processing chemicals sold by the
defendants since 1994. The complaints principally allege that
the defendants agreed to fix, raise, stabilize and maintain the
price of rubber processing chemicals used as part of the tire
manufacturing process in violation of state antitrust and
consumer protection laws and that this illegal conspiracy caused
injury to individuals who paid more to purchase tires as a
result of such anticompetitive activities.
The plaintiffs seek, among other things, treble damages of an
unspecified amount, interest and attorneys' fees and costs. The
Company and its defendant subsidiaries have filed motions to
dismiss on substantive and personal jurisdictional grounds or
answers with respect to each of these actions.
CYBERSOURCE CORPORATION: NY Court Refuses to Dismiss Stock Suit
---------------------------------------------------------------
The United States District Court for the Southern District of
New York refused to dismiss the consolidated securities class
action filed against Cybersource Corporation, its chairman and
chief executive officer, a former officer and four brokerage
firms that served as underwriters of its initial public
offering.
The suit was filed on behalf of persons who purchased the
Company's stock issued pursuant to or traceable to the initial
public offering during the period from June 23, 1999 through
December 6, 2000. The action alleges that the Company's
underwriters charged secret excessive commissions to certain of
their customers in return for allocations of the Company's stock
in the offering. The two individual defendants are alleged to
be liable because of their involvement in preparing and signing
the registration statement for the offering, which allegedly
failed to disclose the supposedly excessive commissions.
The suit's class was later expanded to include persons who
purchased the Company's stock issued pursuant to or traceable to
the follow-on public offering during the period from November 4,
1999 through December 6, 2000.
The lawsuit filed against the Company is one of several hundred
lawsuits filed against other companies based on substantially
similar claims. In October 2002, the Company's officer and a
former officer that were named in the amended complaint were
dismissed without prejudice.
In July 2002, the Company, along with other issuer defendants in
the case, filed a motion to dismiss the consolidated amended
complaint with prejudice. On February 19, 2003, the court
issued a written decision denying the motion to dismiss with
respect to the Company.
The Company believes that the allegations seem directed
primarily at its underwriters and has been informed that this
action is one of numerous similar actions filed against
underwriters relating to other initial public offerings. The
Company intends to exercise its indemnification rights against
the underwriters and to defend itself vigorously. While there
can be no assurances as to the outcome of the lawsuit, the
Company does not presently believe that an adverse outcome in
the lawsuit would have a material effect on its financial
condition, results of operations or cash flows.
EXTREME NETWORKS: NY Court Dismisses In Part Securities Lawsuit
---------------------------------------------------------------
The United States District Court for the Southern District of
New York dismissed in part the consolidated securities class
action filed against Extreme Networks, Inc. on behalf of all
persons who purchased the Company's common stock from April 8,
1999 through December 6, 2000.
It also names as defendants six of the Company's present and
former officers and several investment banking firms that served
as underwriters of the Company's initial public offering and
October 1999 secondary offering. Subsequently, plaintiffs and
one of the individual defendants stipulated to a dismissal of
that defendant without prejudice.
The complaint alleges liability under Sections 11 and 15 of the
Securities Act of 1933 and Sections 10(b) and 20(a) of the
Securities Exchange Act of 1934, on the grounds that the
registration statement for the offerings did not disclose that:
(1) the underwriters had agreed to allow certain customers
to purchase shares in the offerings in exchange for
excess commissions paid to the underwriters; and
(2) the underwriters had arranged for certain customers to
purchase additional shares in the aftermarket at
predetermined prices.
The Securities Act of 1933 allegations against the Company and
officers are made as to the secondary offering only. The
amended complaint also alleges that false analyst reports were
issued. No specific damages are claimed.
The Company is aware that similar allegations have been made in
other lawsuits filed in the same court challenging over 300
other initial public offerings and secondary offerings conducted
in 1999 and 2000. On July 15, 2002, the Company (and the other
issuer defendants) filed a motion to dismiss.
On February 19, 2003, the court ruled on the motions to dismiss.
The court denied the motions to dismiss claims under the
Securities Act of 1933. The court denied the motion to
dismiss the claim under Section 10(a) of the Securities Exchange
Act of 1934 against the Company and 184 other issuer defendants,
on the basis that the complaints alleged that the respective
issuers had acquired companies or conducted follow-on offerings
after their initial public offerings. The court denied the
motion to dismiss the claims under Section 10(a) and 20(a) of
the Securities Exchange Act of 1934 against the remaining
Extreme Networks individual defendants and 59 other individual
defendants, on the basis that the respective amended complaints
alleged that the individuals sold stock.
The Company cannot give any assurance that it will prevail in
the lawsuit. Failure to prevail could have a material adverse
effect on our consolidated financial position, results of
operations and cash flows in the future.
HANOVER COMPRESSOR: Settles Shareholder Suit For Over $30M
----------------------------------------------------------
Hanover Compressor Co., which compresses natural gas for energy
companies, said it had settled a class action brought by
shareholders for more than $30 million, according to a report by
Associated Press Newswires.
The lawsuit alleged that defendants engaged in insider trading,
which caused Hanover officials to improperly report revenues and
manipulate the value of the stock. As a result, in 2002,
Hanover twice restated the financial results for the three
previous years.
Under the terms of the proposed settlement, Hanover will make a
cash payment of $30 million, of which $26.7 million will be paid
through the company's insurance. Hanover also will issue 2.5
million shares of common stock and issue a note with a principal
amount of up to $9.2 million, based on Hanover's stock price.
Hanover also agreed that shareholders with more than one percent
of outstanding shares could nominate candidates for two new
independent director positions.
Hanover said it is still cooperating with the Securities and
Exchange Commission's investigation. The agency is looking into
the company's accounting for an off-balance sheet partnership
called Hampton Roads Shipping Investors II and other matters
since last November.
HANOVER DIRECT: NJ Court Deliberates Motion To Stay Fraud Suit
--------------------------------------------------------------
The Superior Court of New Jersey for Bergen County heard Hanover
Direct, Inc.'s motion to stay the class action filed against it
and Hanover Brands, Inc. on behalf of all persons and entities
in New Jersey who purchased merchandise from Hanover within six
years prior to filing of the lawsuit and continuing to the date
of judgment.
On the basis of a purchase made by plaintiff in August 2002 of
certain clothing from Hanover (which was from a men's division
catalog, the only one which retained the insurance line item in
2002), plaintiff claims that for at least six years, Hanover
maintained a policy and practice of adding a charge for
"insurance" to the orders it received and concealed and failed
to disclose its policy with respect to all class members.
Plaintiff claims that Hanover's conduct was:
(1) in violation of the New Jersey Consumer Fraud Act, as
otherwise deceptive, misleading and unconscionable;
(2) such as to constitute Unjust Enrichment of Hanover at
the expense and to the detriment of plaintiff and the
class; and
(3) unconscionable per se under the Uniform Commercial Code
for contracts related to the sale of goods.
Plaintiff and the class seek damages equal to the amount of all
insurance charges, interest thereon, treble and punitive
damages, injunctive relief, costs and reasonable attorneys'
fees, and such other relief as may be just, necessary, and
appropriate.
On December 13, 2002, the Company filed a motion to stay the
suit. Plaintiff then filed an amended complaint adding
International Male as a defendant. The Company's response to
the Amended Complaint was filed on February 5, 2003.
Plaintiff's response brief was filed on March 17, 2003, and the
Company's reply brief was filed on March 31, 2003. The
Company plans to conduct a vigorous defense of this action.
HANOVER DIRECT: High Court Yet To Decide on Suit Certification
--------------------------------------------------------------
Oklahoma Supreme Court has yet to rule on the appeal of the
class certification for a lawsuit filed against Hanover Direct,
Inc. and John Does 1 through 10 in the State Court of Oklahoma
(District Court in and for Sequoyah County).
Plaintiff commenced the action on behalf of himself and a class
of persons who have at any time purchased a product from the
Company and paid for an "insurance charge." The complaint sets
forth claims for:
(1) breach of contract,
(2) unjust enrichment,
(3) recovery of money paid absent consideration,
(4) fraud and
(5) a claim under the New Jersey Consumer Fraud Act
The complaint alleges that the Company charges its customers for
delivery insurance even though, among other things, the
Company's common carriers already provide insurance and the
insurance charge provides no benefit to the Company's customers.
Plaintiff also seeks a declaratory judgment as to the validity
of the delivery insurance. The damages sought are:
(i) an order directing the Company to return to the
plaintiff and class members the "unlawful revenue"
derived from the insurance charges,
(ii) declaring the rights of the parties,
(iii) permanently enjoining the Company from imposing the
insurance charge,
(iv) awarding threefold damages of less than $75,000 per
plaintiff and per class member, and
(v) attorneys' fees and costs
On April 12, 2001, the court held a hearing on plaintiff's class
certification motion. Subsequent to the April 12, 2001 hearing
on plaintiff's class certification motion, plaintiff filed a
motion to amend the definition of the class. On July 23, 2001,
plaintiff's class certification motion was granted, defining the
class as "All persons in the United States who are customers of
any catalog or catalog company owned by Hanover Direct, Inc. and
who have at any time purchased a product from such company and
paid money that was designated to be an 'insurance' charge." On
August 21, 2001, the Company filed an appeal of the order with
the Oklahoma Supreme Court and subsequently moved to stay
proceedings in the District Court pending resolution of the
appeal.
The appeal has been fully briefed. At a subsequent status
hearing, the parties agreed that issues pertaining to notice to
the class would be stayed pending resolution of the appeal, that
certain other issues would be subject to limited discovery, and
that the issue of a stay for any remaining issues would be
resolved if and when such issues arise. The Oklahoma Supreme
Court has not yet ruled on the pending appeal. Oral argument on
the appeal, if scheduled, was expected during the first half of
2003 but has yet to be scheduled by the Court.
The Company believes it has defenses against the claims and
plans to conduct a vigorous defense.
HANOVER DIRECT: CA Court Dismisses With Prejudice Consumer Suit
---------------------------------------------------------------
The Superior Court of the State of California, City and County
of San Francisco dismissed the class action filed against
Hanover Direct, Inc. subsidiary Domestications LLC and Does 1-
100.
The plaintiff is a non-profit public benefit corporation suing
under the California Business and Professions Code. Does 1-100
would include persons responsible for the conduct alleged in the
complaint, including the direct sale of tangible personal
property to California consumers including the type of
merchandise that Domestications sells, by telephone, mail order,
and sales through the web site www.domestications.com.
The plaintiff claims that:
(1) for at least four years members of the class have been
charged an unlawful, unfair, and fraudulent tax and
sales tax for different rates and amounts on the
catalog and Internet orders on the total amount of
goods, tax and sales tax on shipping charges, which are
not subject to tax or sales tax under California law,
in violation of California law and court decisions,
including the state Revenue and Taxation Code, Civil
Code, and the California Board of Equalization;
(2) that Domestications engages in unfair business
practices; and
(3) that Domestications engaged in untrue and misleading
advertising in that it was not lawfully required to
collect tax and sales tax from customers in California.
Plaintiff and the class seek:
(i) restitution of all sums, interest and other gains made
on account of these practices;
(ii) prejudgment interest on all sums wrongfully collected;
(iii) an order enjoining Domestications from charging
customers for tax on their orders and/or from charging
tax on the shipping charges; and
(iv) attorneys' fees and costs of the suit
The Company filed an answer and separate affirmative defenses
to the complaint, generally denying the allegations of the
complaint and each and every cause of action alleged, and
denying that plaintiff has been damaged or is entitled to any
relief whatsoever.
On September 19, 2002, the Company filed a motion for leave to
file an amended answer, containing several additional
affirmative defenses based on the proposition that the proper
defendant in this litigation (if any) is the California State
Board of Equalization, not the Company, and that plaintiff
failed to exhaust its administrative remedies prior to filing
suit. That motion was granted.
On February 28, 2003, the Company filed a notice of Motion and
memorandum of points and authorities in support of its Motion
for summary judgment setting forth that Plaintiff's claims are
without merit and incorrect as a matter of law. On March 17,
2003, the court granted Plaintiff's Request for Dismissal and
the case was dismissed with prejudice.
INDIANA: Elkhart County Hires Consultant To "Cure" Overcrowding
---------------------------------------------------------------
Elkhart County commissioners have approved hiring a $100-an-hour
consultant to help alleviate jail overcrowding, the Associated
Press Newswires reports.
The commissioners will be hiring Al Bennett, a former Department
of Corrections official who has worked with more than 30
criminal justice systems around the country, particularly in
Indiana. Mr. Bennett will help the county formulate a plan to
reduce inmate population to 417 persons.
It is hoped this plan will move Elkhart closer to settling a
class-action lawsuit brought last year by an inmate of Elkhart
County Jail, the result of which was a court order requiring
that a plan be drawn up by the commissioners for the improvement
of the jail by the month of August, with a final version of the
plan be submitted to the court by the end of the year 2003.
However, Mr. Bennett's work is anticipated to include more than
improving the conditions under which the jail operates. His
contract may run as long as three years during which period he
will help the county develop a long-range plan to make its
criminal justice system more efficient, The Truth of Elkhart
reports.
MICHIGAN: Lawyer Asks For Cash Settlement Over Plant Upgrades
-------------------------------------------------------------
A lawyer for more than 150 people, in Lyon Township, who claim
pollution from an aluminum foundry triggered migraines, asthma
and other ailments, decided to ask for $1 million in lieu of the
plant upgrades his clients have been seeking from the foundry in
order to reduce emissions, The Detroit News reports.
The Grand Rapids lawyer Philip Grashof confirmed he had asked
attorneys for Continental Aluminum for the cash, adding that he
did so in a last-ditch attempt to settle the five-year-old
lawsuit.
Continental's President William Altgilbers said he was shocked,
since the cash would have negated Continental's offer to make
$750,000 worth of improvements at its Milford Road Plant,
including the addition of a bag house for dust collection and an
engineering study to improve noise issues. This offer was
contained in a settlement letter obtained by The Detroit News.
"These were things presented by their attorneys that we agreed
to do. To turn around and say, 'Forget it. Just give us some
money,' is just heading in a different direction,' Mr.
Altgilbers said.
Continental's St. Louis-based attorney, Alan Popkin, rejected
the cash settlement. The case most likely will be resolved in
court, although no trial date has been set. Mr. Grashoff has
said that the request for a $1 million settlement was "just an
opportunity to see what they would do; it was just part of
general discussions."
However, plaintiff Darcy Hollon, a Lyon Township resident and
mother of two children, said only intensive pollution control
measures at the plant will convince her the community is not at
risk. "The only way to resolve this issue is to get proactive
control devices," Ms. Hollon said.
A gag order prevents those suing Continental for health problems
from discussing the case, but at least two other plaintiffs,
both residents of the area affected by the pollution emissions,
expressed outrage that the lawsuit might have been settled
monetarily. Both claimed their lawsuits are aimed at reducing
or eliminating emissions from the plant, that the legal actions
taken have not been motivated by money.
The Air Quality Division of the Michigan Department of
Environmental Quality has cited the company for pollution
violations six times since the company relocated to Lyon
Township in 1998. A Detroit News investigation discovered that
Continental had relocated from Detroit after concealing its
pollution record in Wayne County. The investigation revealed
that Continental Aluminum, which recycles aluminum scrap, failed
to inform Lyon Township officials about a $50,000 settlement
paid to Wayne County for air pollution problems.
MONTEREY PASTA: Investors File Securities Fraud Suits in N.D. CA
----------------------------------------------------------------
Monterey Pasta Company faces several securities class actions
filed in the United States for the Northern District of
California, on behalf of all persons who purchased the common
stock of the Company from July 11, 2002 through December 16,
2003.
The complaints allege that the Company and two of its officers
and directors issued false statements regarding expected
earnings and revenues, in violation of Sections 10(b) and/or
20(a) of the Securities Exchange Act of 1934. No specific
amount of damages is claimed.
The Company will respond to the lawsuits once a lead plaintiff
is appointed and a consolidated or operative complaint is filed
or designated and will vigorously defend itself against the
suit.
NABORS INDUSTRIES: Plaintiff Appeals Securities Suit Dismissal
--------------------------------------------------------------
One of the plaintiffs in the lawsuits against Nabors Industries
Ltd. appealed the United States District Court for the Southern
District of Texas' decision dismissing the litigation.
Shareholder Steve Rosenberg filed the first suit in May 2002
against the Company and its directors, alleging that the
Company's May 10, 2002 proxy statement/prospectus contained
certain material misstatements and omissions in violation of
federal securities laws and state law. The Company's May 10,
2002 proxy statement/prospectus was sent to shareholders in
connection with the special meeting to consider and vote on the
Company's proposed reorganization and effective reorganization
in Bermuda. The AFL-CIO moved to intervene in the suit and
filed a complaint containing similar allegations.
On June 5, 2002, Marilyn Irey, an individual shareholder of
Nabors, filed a complaint in the United States District Court
for the Southern District of Texas (Civil Action No. 02-2108)
that is nearly identical to Steve Rosenberg's complaint. The
three shareholders requested that the court either enjoin the
closing of the shareholder vote on the scheduled date or the
effectuation of the reorganization.
In addition, two of the shareholders (Steve Rosenberg and
Marilyn Irey) purported to bring a class action on behalf of all
shareholders, alleging that the Company and its directors
violated their state law fiduciary duties by making these
alleged misstatements and omissions. These two shareholders, on
behalf of their purported class, seek monetary damages for their
state law claims.
Since the beginning of the litigation, two of the shareholders
(Steve Rosenberg and the AFL-CIO) amended their complaints, but
did not add any substantive allegations. On June 13, 2002, the
court granted the AFL-CIO's motion to intervene. On June 15,
2002, the court denied a motion for temporary restraining order
brought by two of the shareholders (Steve Rosenberg and the AFL-
CIO) in their attempts to prevent the closing of Nabors'
reorganization and its effective reorganization in Bermuda.
On July 2, 2002, the Court granted an agreed motion to
consolidate the suits. The Company and its directors moved to
dismiss the lawsuits of all three shareholders. On March 18,
2003, the court granted the motion and dismissed all claims with
prejudice. On April 14, 2003, Mr. Rosenberg filed an appeal of
the United States District Court's decision to the United States
Fifth Circuit Court of Appeals. The AFL-CIO and Ms. Irey did
not appeal.
The Company and its directors believe that the allegations in
this lawsuit are without merit, and the Company and its
directors will defend themselves vigorously against these
claims.
OPLINK COMMUNICATIONS: NY Court Dismisses In Part Stock Lawsuit
---------------------------------------------------------------
The United States District Court for the Southern District of
New York dismissed in part the consolidated securities class
action pending against Oplink Communications, Inc. and certain
of its officers and directors.
In the amended complaint, the plaintiffs allege that the
Company, certain of its officers and directors and the
underwriters of its initial public offering, or IPO, violated
section 11 of the Securities Act of 1933 based on allegations
that the Company's registration statement and prospectus failed
to disclose material facts regarding the compensation to be
received by, and the stock allocation practices of, the IPO
underwriters.
The complaint also contains a claim for violation of section
10(b) of the Securities Exchange Act of 1934 based on
allegations that this omission constituted a deceit on
investors. The plaintiffs seek unspecified monetary damages and
other relief.
Similar complaints were filed against hundreds of other public
companies, or Issuers, that went public in the late 1990s. In
October 2002, the parties agreed to toll the statute of
limitations with respect to the Company's officers and directors
until September 30, 2003, and on the basis of this agreement,
the Company's officers and directors were dismissed from the
lawsuit without prejudice.
In February 2003, the court issued a decision denying the motion
to dismiss the Section 11 claims against the Company and almost
all of the other Issuers, and granting the motion to dismiss the
Section 10(b) claims against the Company without leave to amend.
The Company believes that this litigation is without merit and
intends to defend against it vigorously. This litigation,
however, as well as any other litigation that might be
instituted, could result in substantial costs and a diversion of
management's attention and resources.
PERINI CORPORATION: Asks MA Court To Dismiss Securities Lawsuit
---------------------------------------------------------------
Perini Corporation asked the United States District Court for
the District of Massachusetts to dismiss a class action filed
against it on behalf of holders of the Company's $2.125
Depositary Convertible Exchangeable Shares, each of which
represents 1/10th of a share of the Company's $21.25 Convertible
Exchangeable Preferred Shares. The suit also names as
defendants certain of the Company's current and former directors
of Perini.
Specifically, the suit alleges that the defendants breached
their fiduciary duties owed to the holders of the Depositary
Shares and to the Company. The plaintiffs principally allege
that the Massachusetts Defendants improperly authorized the
exchange of Series B Preferred Stock for common stock while
simultaneously refusing to pay accrued dividends due on the
Depositary Shares. The plaintiffs seek damages in an amount not
less than $14,875,000 plus interest, costs, fees, and other
unspecified punitive and exemplary damages.
On January 6, 2003, the defendants moved to dismiss the lawsuit.
Among other things, the defendants argued that:
(1) they did not owe fiduciary duties to the holders of the
Depositary Shares and
(2) the claims of breach of fiduciary duty owed to Perini
must be dismissed because the claim could only be
brought as a derivative action.
On March 21, 2003, the plaintiffs filed an opposition to the
motion to dismiss. The Court has not yet ruled on the motion to
dismiss.
PEROT SYSTEMS: NY Court Dismisses in Part Securities Fraud Suit
---------------------------------------------------------------
The United States District Court for the Southern District of
New York dismissed in part the consolidated securities class
action filed against Perot Systems Corporation, some of its
current and former officers and the investment banks that
underwrote the Company's initial public offering.
The suit alleges violations of Rule 10b-5, promulgated under the
Securities Exchange Act of 1934, and Sections 11, 12(a)(2) and
15 of the Securities Act of 1933.
The suit focuses on alleged improper practices by the investment
banks in connection with the Company's initial public offering
in February 1999. The plaintiffs allege that the investment
banks, in exchange for allocating public offering shares to
their customers, received undisclosed commissions from their
customers on the purchase of securities and required their
customers to purchase additional Company shares in aftermarket
trading.
The lawsuit also alleges that the Company should have disclosed
in its public offering prospectus the alleged practices of the
investment banks, whether or not the Company was aware that the
practices were occurring.
Approximately 300 issuers and 40 investment banks have been sued
in similar cases. The suits against the issuers and underwriters
have been consolidated for pretrial purposes in the IPO
Allocation Securities Litigation.
In 2002, the individual Company defendants were dismissed from
the case. In exchange for the dismissal, the individual
defendants entered agreements with the plaintiffs that toll the
running of the statute of limitations and permit the plaintiffs
to refile claims against them in the future. In February 2003,
in response to the defendant's motion to dismiss, the court
dismissed the plaintiffs' Rule 10b-5 claims against the Company,
but did not dismiss the remaining claims.
The Company believes the claims against it are without merit and
will vigorously defend itself in this case.
PRG SCHULTZ: Discovery Commences in Consolidated Securities Suit
----------------------------------------------------------------
Discovery is proceeding in the consolidated securities class
action filed against PRG Schultz International, Inc. and certain
of its present and former officers in the United States District
Court for the Northern District of Georgia, Atlanta Division.
In that Complaint, Plaintiffs allege that the Company, John M.
Cook, Scott L. Colabuono, the Company's former Chief Financial
Officer, and Michael A. Lustig, the Company's former Chief
Operating Officer, violated Sections 10(b) and 20(a)of the
Securities Exchange Act of 1934 and Rule 10b-5 promulgated
thereunder by allegedly disseminating false and misleading
information about a change in the Company's method of
recognizing revenue and in connection with revenue reported for
a division.
Plaintiffs purport to bring this action on behalf of a class of
persons who purchased the Company's stock between July 19, 1999
and July 26, 2000. Plaintiffs seek an unspecified amount of
compensatory damages, payment of litigation fees and expenses,
and equitable and/or injunctive relief.
On January 24, 2001, Defendants filed a Motion to Dismiss the
Complaint for failure to state a claim under the Private
Securities Litigation Reform Act, 15 U.S.C. 78u-4 et seq. The
Court denied defendants' motion to dismiss on June 5, 2001.
Defendants served their Answer to plaintiffs' Complaint on June
19, 2001. The court granted Plaintiffs' Motion for Class
Certification on December 3, 2002.
The Company believes the alleged claims in this lawsuit are
without merit and intends to vigorously defend itself against
this lawsuit. Due to the inherent uncertainties of the
litigation process and the judicial system, the Company is
unable to predict the outcome of this litigation.
SEMINIS INC.: Shareholders Sue Opposing Fox Paine Stock Purchase
----------------------------------------------------------------
Seminis, Inc. faces five purported class actions filed relating
to the proposed transaction under which Fox Paine & Company,
LLC, a San Francisco based private equity firm and certain
Savia-related parties would acquire all of the outstanding
shares of the Company.
Four of these actions were filed in the Delaware Court of
Chancery (New Castle, County), while the fifth was filed in
California Superior Court (Ventura County). The four complaints
filed in Delaware have been consolidated into one action.
All five complaints allege that the above-described transaction,
if consummated, would provide insufficient consideration to
Seminis common stockholders and allege that the defendants
breached their fiduciary duties in connection with the
transaction.
The complaints seek a preliminary and permanent injunction to
enjoin the transaction and, in the event the transaction is
consummated, rescission and damages. The defendants will
vigorously defend against these allegations.
TOBACCO LITIGATION: Philip Morris Asks High Court To Limit Bond
---------------------------------------------------------------
Philip Morris has joined with other tobacco companies and
prominent national and state business organizations as well, to
ask the Illinois Supreme Court to limit the amount of bond
required to stay enforcement of a judgment pending appeal of an
adverse verdict in class actions, or those in which punitive
damages are awarded, Associated Press Newswires reports.
"In these days of multimillion -- and even multibillion --
dollar verdicts, judicial fairness demands that companies be
allowed to post a reasonable bond to stay enforcement of a trial
court judgment and gain access to the appellate courts," said
William S. Ohlemeyer, Phillip Morris USA vice president and
associate general counsel.
"A judgment so large that it cannot be bonded tilts the scales
of justice and can force companies to settle cases even if they
believe the facts and the law will result in the reversal of a
verdict after review by an appellate court," Mr. Ohlemeyer said.
The petition asks the Illinois Supreme Court to place a $100
million limit on the amount of bond that must be posted in order
to appeal a judgment in a class action, or one that includes
punitive damages.
Trial courts would retain discretion to set lower bonds, and
both parties would still have the right to ask an appellate
court to review and alter a bond required by the trial court as
long as the bond conforms with the proposed rules.
"This request, if granted, simply levels the judicial playing
field and guarantees that a defendant can appeal a mega-verdict
without being forced to consider settlement or being faced with
significant business disruption," Mr. Ohlemeyer added.
At the present time, Illinois rules require a party receiving an
adverse verdict to post an appeal bond in the full amount of the
trial court judgment, plus interest and costs, in order to
obtain an automatic stay of enforcement of a money judgment.
This is not the first time the issue of altering state rules for
appeal bonds has become an issue. During the Engle class action
in Miami, Florida passed a statute limiting the amount of a bond
a defendant must post. Since then, 16 additional states have
established reduced bond limits for either tobacco companies
that have agreed to the 1998 settlement with the state attorneys
general or for all defendants in civil cases.
Parties joining Philip Morris USA, in its petition include:
(1) United States Chamber of Commerce,
(2) Illinois Business Roundtable,
(3) Illinois Chamber of Commerce,
(4) Illinois Manufacturers Association,
(5) Illinois Retail Merchants Association,
(6) National Federation of Independent Businesses,
(7) Brown and Williamson Tobacco Corporation,
(8) R.J. Reynolds Tobacco Corporation, and
(9) Lorillard Tobacco Co.
Philip Morris ultimately did succeed in getting the amount
reduced for the posting of the appeal bond, after warning that
it would not be able to meet payment of the April 15
installments due the states under the 1998 tobacco settlement,
if it attempted to post the required $12 billion appeal bond.
Philip Morris's percentage of the total annual installment due
the states is by far the largest. The states began publicly
despairing about what this meant in terms of meeting budgetary
shortfalls.
Some of the states' attorneys general joined together to
petition for a reduction of the appeal bond in this isolate
instance, since Philip Morris was also adding the warning of
seeking protection under a Chapter 11 bankruptcy to its
announcements of the dire consequences that would follow upon
its attempt to meet the $12 billion appeal bond Judge Byron had
ordered.
Judge Byron, who had rendered a $10.1 billion adverse verdict
against Philip Morris, in the 'light' cigarettes case, did
decide to alter the $12 billion appeal bond to stay enforcement
of the judgment. In addition to Philip Morris's warnings, Mr.
Ohlemeyer also informed Judge Byron that the appeal bond's
amount "thus far exceeded the company's net worth and was one
that could not be bonded."
Judge Byron subsequently modified his bond order and now
requires the company to post a bond secured by a pre-existing $6
billion owed to Philip Morris USA. The company also must
deposit the annual $420 million in interest that the bond
generates annually, plus an additional $800 million in cash to
be placed in an escrow account with the Clerk of the Court.
TRANSMETA CORPORATION: Lawyer Appeals Parts of $5.5M Settlement
---------------------------------------------------------------
Plaintiffs' attorney appealed several parts of the US$5.5
million settlement for the securities class action filed against
Transmeta Corporation, its directors, and certain of its
officers in the United States District Court for the Northern
District of California.
The consolidated amended suit purported to allege a class action
on behalf of all persons, other than the individual defendants
and the other officers of the Company, who purchased or acquired
the Company's common stock during the period from November
7, 2000 to July 19, 2001.
The consolidated suit alleged violations of Sections 10(b) and
20(a) of the Securities Exchange Act of 1934, as amended, and
Rule 10b-5 promulgated thereunder, and Sections 11 and 15 of the
Securities Act of 1933, as amended. In March 2002, the court
granted in part and denied in part defendants' motions to
dismiss the consolidated amended suit.
In May 2002, the court granted in part and denied in part
defendants' motion to dismiss the second amended complaint, and
denied plaintiffs' motion for leave to file a third amended
complaint. In June 2002, defendants answered the second amended
complaint as to the only surviving claim. In July 2002,
defendants filed a motion for summary judgment relating to
that claim. Plaintiffs moved for class certification, and the
court was scheduled to hear defendants' motion for summary
judgment and plaintiffs' motion for class certification in
December 2002.
The Company believes that the allegations in the second amended
complaint and the antecedent complaints are without merit and
have defended the consolidated action vigorously.
Notwithstanding this belief, and in order to avoid any
additional waste of management time and expense, the Company and
the individual defendants entered into a memorandum of
understanding with plaintiffs' counsel to settle all claims that
might have been brought in this action for approximately $5.5
million, all of which monies have been paid by the defendants'
Directors and Officer (D & O) liability insurance.
In December 2002, the court granted preliminary approval to the
proposed settlement agreement. In March 2003, the court granted
final approval of the settlement and entered judgment in the
action. In April 2003, a plaintiff's attorney who was not
selected as class counsel filed a notice of appeal relating to
certain orders of the court appointing class counsel and
addressing certain applications of her firm for attorneys' fees.
TRANSMETA CORPORATION: Court Dismisses in Part Securities Suit
--------------------------------------------------------------
The United States District Court for the Southern District of
New York dismissed in part the consolidated securities class
action filed against Transmeta Corporation, certain of its
directors and officers, and certain of the underwriters for its
initial public offering.
The consolidated complaint alleges that the prospectus from the
Company's November 7, 2000 initial public offering failed to
disclose certain alleged actions by the underwriters for the
offering. The consolidated amended complaint alleges claims
against the Company and several of its officers and directors
under Sections 11 and 15 of the Securities Act of 1933, as
amended, and under Sections 10(b) and Section 20(a) of the
Securities Exchange Act of 1934, as amended.
Other actions have been filed making similar allegations
regarding the initial public offerings of more than 300 other
companies. All of these consolidated cases have been
coordinated for pretrial purposes as In re Initial Public
Offering Securities Litigation, Master File No. 21 MC 92 (SAS).
The Company believes that the allegations in the consolidated
suit and its antecedents are without merit and intend to defend
the action vigorously. In November 2002, the Company joined a
coordinated motion to dismiss filed on behalf of all issuers and
individual defendants. In March 2003, the court granted in part
and denied in part that coordinated motion to dismiss, and
issued an order regarding pleading of amended complaints.
TYSON FOODS: Parties Agree To Settle OK Water Pollution Lawsuit
---------------------------------------------------------------
Parties in the class action filed against Tyson Foods, Inc. in
the United States District Court for the Northern District of
Oklahoma reached an agreement to settle the suit.
On December 10, 2001, the City of Tulsa, Oklahoma and the Tulsa
Metropolitan Utility Authority filed the case styled The City of
Tulsa and the Tulsa Municipal Utility Authority v. Tyson Foods,
Inc., et al. against the Company, Cobb-Vantress, Inc., a wholly
owned subsidiary of the Company, four other fully integrated
poultry companies and the City of Decatur, Arkansas.
With respect to the Company and Cobb-Vantress, Inc., the suit
alleges that degradation of the Tulsa water supply is
attributable, in whole or in part, to the non-point source run-
off from the land application of poultry litter in the watershed
feeding the lakes that act as the City of Tulsa's water supply,
and that the Company and Cobb-Vantress, Inc. are, together with
the other defendants named in the lawsuit, jointly and severally
responsible for the alleged over application of poultry litter
in the watershed.
The parties settled the lawsuit on March 24, 2003 but the court
has ordered that the terms remain confidential until it approves
the settlement. Liability with respect to this matter is
expected to approximate amounts previously reserved, and thus,
the Company does not expect any material adverse effect on its
consolidated financial position or results of operations from
this settlement.
Asbestos Alert
ASBESTOS LITIGATION: Alliance Lauds NAIC Move on Asbestos Suits
---------------------------------------------------------------
The Alliance of American Insurers says the adoption of an
asbestos resolution, May 13, by the National Association of
Insurance Commissioners will reportedly give insurers and other
parties seeking to rein in runaway litigation costs an important
arrow in their quiver when addressing Congress.
The resolution, approved by a special conference call vote of
the NAIC membership, was modified from one adopted by the NAIC's
Property/Casualty Committee last month.
"This is an important resolution, and we are pleased that state
regulators took several recommendations from the industry to
strengthen it from earlier versions," said John Lobert, Alliance
senior vice president of state government affairs. "It
demonstrates that insurance regulators understand and support
the industry's need to address runaway asbestos litigation that
is bleeding insurers, business and the nation's economy dry."
The resolution encourages Congress to act on the critical issues
facing all segments of US business by enacting laws that:
(1) Mandate use of objective medical standards that
distinguish between impaired and unimpaired claimants;
(2) Reform venue and other procedural rules so that
asbestos claims must be brought in jurisdictions with
an appropriate connection to the claimant or the
asbestos exposure; and
(3) Address proposed mechanisms to fund asbestos
liabilities.
"This resolution will give state regulators a seat at the table
in the Congressional debates on the asbestos issue with
something to say about what should be done to solve the
problem," said Lenore Marema, Alliance vice president of legal
and regulatory affairs. "Previous iterations of the NAIC
resolution were far too general. So general, in fact, that it
could have been interpreted to support any reform, no matter how
weak. The version that was approved today is much more specific
and encourages meaningful changes to the current system."
ASBESTOS LITIGATION: Victim's Widow Receives Six-Figure Payout
--------------------------------------------------------------
A widow of an electrician, who died in 1998, got an undisclosed
six-figure payment in an out of court settlement a few hours
before the five-year old asbestos-related case was due to be
heard in Cardiff County Court.
Christine Martin, 61, of St Davids, Pembrokeshire, accepted the
compensation May 13. Her husband Paul, 59, was exposed to
asbestos as an electrician at the bases of the Ministry of
Defense at Brawdy and Trecwn in the United Kingdom, between 1961
and 1978. Mrs. Martin, a retired-Ceri Jones teacher, said,
"Paul was such a kind and caring man. The money will help but
it won't bring him back."
ASBESTOS LITIGATION: Asbestos found at API construction site
------------------------------------------------------------
Removal of asbestos found weeks after construction began for the
new Alaska Psychiatric Institute will cost the state $460,000.
Workers discovered buried asbestos at the site. An estimated
1,600 cubic yards of contaminated dirt now is being bagged and
hauled away at a cost to the state of nearly half a million
dollars.
The buried asbestos was discovered this spring during excavation
for the new hospital and its parking lot. One worker has
complained to environmental regulators that he was exposed to
asbestos.
Asbestos refers to a group of minerals used for decades in
building materials, car brakes and other products. It is now
known to cause serious disease, including lung cancer, when
microscopic, barblike fibers work their way into lungs. It must
then be removed by specially trained and equipped workers.
On April 3, Neeser Construction Inc., the API general
contractor, alerted the state that workers found what looked to
be a small construction dump, with bits of wire and steel mixed
into the dirt, said Dirk Christie, resident engineer on the
project for the state Department of Transportation and Public
Facilities.
About a week later, Neeser asked a company that was already
testing an underground steam pipe at the site for asbestos to
check out the dirt pile. It came up positive, according to
letters and laboratory reports sent to the state on April 11.
"It was a pretty good catch on their part to identify it," said
Stuart Jacques, president and owner of Central Environmental
Inc., the company that oversaw the testing and now is removing
the dirt.
The asbestos removal workers are suited up in protective gear
and respirators, he said. They keep the dirt wet, to prevent
asbestos fibers from floating into the air. They test that by
monitoring air samples. They've cordoned off the contaminated
area and posted warning signs. Workers are filling hundreds of
reinforced sacks with contaminated dirt, piling them on flatbed
trucks and hauling them to the Anchorage landfill, Mr. Jacques
said.
"It's not like there's a lot of asbestos that you can see all
over the place," he said. "We're just dealing with the whole
pile as contaminated."
The unexpected asbestos adds $460,000 to the original
$35,100,000 design-build contract for the hospital, said Jerry
Watkins, the state's project manager. The total budget of
$41,700,000 includes consultants, furnishings, 1 percent for art
and contingencies like the asbestos removal, Mr. Watkins said.
A worker involved in the excavation has complained to the
federal Environmental Protection Agency. It doesn't appear the
project managers violated any federal environmental requirements
for handling asbestos, said John Pavitt, EPA air compliance
inspector in Anchorage. "EPA does not require and does not
expect during a routine excavation that people would be
screening for asbestos material," Mr. Pavitt said.
He checked the site late Thursday and went back Friday while
crews were working. The company removing the dirt is following
all protective precautions, he said.
From a worker safety standpoint, contractors should assume that
pre-1980 construction debris may contain asbestos and should
take precautions from the start, said John Stallone, acting
chief for Alaska Occupational Safety and Health, a state agency.
At any rate, there shouldn't have been any health risk because
the dirt stayed wet, keeping the fibers contained, said Mr.
Christie, the state engineer.
ASBESTOS LITIGATION: CT Governor Calls for Asbestos Legislation
---------------------------------------------------------------
Governor John G. Rowland of Connecticut, in a meeting in
Washington, DC, asked Connecticut's congressional delegation, to
push for laws that would help companies deal with asbestos-
related litigation, May 13, a day after The Hartford Financial
Services Group disclosed 1,500 job cuts. Gov. Rowland asked the
lawmakers to sign a letter, which he refused to make public, to
the House Judiciary Committee calling for action on asbestos
reform.
"There is no question that we need to address the liabilities
caused by asbestos exposure not only for the sake of the
companies but for the sake of the employees that may be
affected," said Rep. Christopher Shays, R-Conn.
The insurer announced that it would write off $1,700,000,000 in
earnings to fund reserves against asbestos claims and get out of
the property-casualty reinsurance business. The Hartford also
decided to increase its asbestos reserves from $3,910,000,000 to
$5,900,000,000, after studying the potential exposure to claims.
Joyce Willis, a spokeswoman for The Hartford, said Rowland's
timing is perfect as Congress negotiates an end to asbestos
lawsuits with a multibillion-dollar trust fund that would be
financed by insurers and companies.
Sen. Christopher Dodd, D-Conn., said that he is "cautiously
optimistic" that a consensus can be found on the matter in the
next few weeks or months.
"Not only is it necessary something be done, it is imperative,
because it affects our insurance companies in Connecticut," said
Mike Kirk, a spokesman for Rep. John Larson, D-Conn. "It's a
big issue for the whole delegation. It's just a matter of
deciding the most appropriate action."
The issue is not new. Gov. Rowland has been pressing for action
on the matter for months, but now, as a result of The Hartford
layoffs, there is a greater urgency to it, said Rowland
spokesman Allan Guyet. He said Rowland wants Congress to figure
out a way to clear up the logjam of asbestos lawsuits in the
court system.
Michele Sullivan, Gov. Rowland's press secretary, said a draft
of Rowland's letter mentions how few of the asbestos cases being
filed today involve people with cancer but that the litigation
is forcing companies out of business. Gov. Rowland also has
discussed the issue with executives from The Hartford, Mr. Guyet
said.
ASBESTOS LITIGATION: Electrolux Reports Latest Asbestos Stats
-------------------------------------------------------------
The Electrolux Group declares that around 301 lawsuits related
to asbestos are pending against them in the US representing
approximately 18,000 plaintiffs, as of March 31, according to
the latest annual report they filed with the Securities and
Exchange Commission.
Almost all of the cases refer to externally supplied components
used in industrial products manufactured by discontinued
operations prior to the early 1970s. Almost all of the cases
involve multiple plaintiffs who have made identical allegations
against many other defendants who are not part of the Electrolux
Group.
A total of 96 new cases were filed during the first quarter of
2003 and 13 were resolved. A total of about 17,900 of the
plaintiffs refer to cases pending in the state of Mississippi.
ASBESTOS LITIGATION: GP Determines Asbestos Trust Contribution
--------------------------------------------------------------
Georgia-Pacific chief executive Pete Correll refused to disclose
the exact amount of money that the company will put into a
national private trust that would pay asbestos claims. Mr.
Correll also would not say whether the amount is higher than
$665,000,000, the amount Georgia-Pacific has put aside to pay
asbestos claims and expenses through 2012.
Asbestos exposure has dogged the forest products company for
several years. As of December 28, Georgia-Pacific settled, had
dismissed or was in the process of settling about 269,700
asbestos claims, according to its annual report. Mr. Correll
made his comments during a Q&A session that followed a speech to
the Commerce Society Networking Club at the Commerce Club in
downtown Atlanta, May 13.
Companies such as Georgia-Pacific that have asbestos liabilities
would pay into the trust fund that would be used to pay
asbestos-related claims. Establishing a payment for each
company would remove the uncertainty they face when defending
against asbestos lawsuits.
"Legislation is like making sausage," he said. "It's not a
pretty process to watch."
Analysts are closely monitoring the expected legislation and the
impact it would have on companies that have large asbestos
liabilities. "Undoubtedly, any legislation which would increase
the certainty surrounding the size of Georgia-Pacific's
liabilities should be positive for the company," said Lise
Shonfield, an analyst at J.P. Morgan Securities. "However, in
terms of specific impact, the devil is still very much in the
details and, specifically, in how much money Georgia-Pacific
would have to put into the trust fund and whether payments would
be staggered, say on an annual basis, which would be more
favorable."
ASBESTOS LITIGATION: Victim To Get $1.2M From Union Carbide
-----------------------------------------------------------
Dennis Kavanaugh, a carpenter diagnosed in March 2001 with
malignant mesothelioma of the peritoneum received a $1,200,000
job-related verdict against Union Carbide Corporation, now a
subsidiary of Dow Chemical. A West Palm Beach jury found the
chemical maker 100 percent negligent when it sold and marketed
its "Calidria"
Mr. Kavanaugh was allegedly exposed to asbestos dust in the
1970s to a drywall joint compound that contained Union Carbide's
Calidria product when other workers were sanding drywall tape
manufactured by Georgia Pacific that contained Union Carbide's
asbestos fibers. Union Carbide claims that the verdict was
motivated by sympathy for Mr. Kavanaugh's illness and vows to
appeal.
Ferraro & Associates, the law firm representing the plaintiff,
said their research found Union Carbide confidential internal
documents stating mesothelioma is an incurable form of cancer
that can occur after brief exposure to the asbestos fibers. The
disease typically does not manifest itself until 20 to 40 years
after exposure, the firm added.
"Millions of people unknowingly were exposed to Union Carbide's
asbestos fibers through a wide variety of products, including
vinyl floor tile, ceiling tile, paints, sealants and coatings,
paper products, Bakelite and joint compound," said Jim Ferraro,
Ferraro & Associates senior partner. "Hopefully, this verdict
will send a message that Union Carbide must take responsibility
and compensate the thousands of workers its products have
harmed."
"The verdict is especially significant because, for the first
time, a jury specifically determined Union Carbide's asbestos
can and does cause peritoneal mesothelioma," said plaintiff's
trial counsel, Todd Falzone. "Union Carbide's lawyers
repeatedly have argued in courts nationwide that their Calidria
asbestos was harmless and could not cause any disease whatsoever
and I'm thrilled that this jury saw right through the argument."
The firm said the verdict is its second in two tries against
Union Carbide regarding the harm linked to the company's
asbestos fibers. In December, Ferraro & Associates said it
obtained a $1,800,000 verdict in Broward County against the
chemical giant on behalf of a man suffering with asbestosis.
ASBESTOS LITIGATION: T&N Claimants See Light in New Ruling
----------------------------------------------------------
Former employees of Turner and Newall and their families have
been given a lift as the court ordered insurance companies Royal
& Sun Alliance and Lloyds to cover insurance claims for
employers from T&N from 1972 to 1995.
Justice Lawrence Collins ruled that it was illegal for Royal and
SunAlliance and Lloyds to exclude asbestos-related diseases from
the insurance they wrote for T and N, a company that tumbled
into administration because of burgeoning asbestos claims.
But the asbestos victims will have to win another legal battle
before they can receive any compensation. Royal and SunAlliance
and Lloyds are claiming they were misled about how dangerous
asbestos was at that time and they intend to go back to court
again.
Tony Whiston of the Greater Manchester Asbestos Victims Support
Group, said, "The Royal and SunAlliance and Lloyds should stop
all court action now and pay all those asbestos victims whose
lives have been devastated by asbestos related diseases. The
dangers of asbestos were known at the turn of the century and
the first regulations to control asbestos were introduced in
1931 followed by further regulations in 1969. To suggest that
the dangers of asbestos were not well known in the 1970s is
simply preposterous."
ASBESTOS ALERT: Mestek Battles Asbestos-Related Suits
-----------------------------------------------------
Mestek, Inc. has been named in 28 outstanding asbestos-related
products lawsuits. All of these suits seek to establish
liability against the Company as successor to companies that may
have manufactured, sold or distributed products containing
asbestos materials or because the Company currently sells and
distributes boilers, an industry that has been historically
associated with asbestos-related products. However, the Company
has never manufactured, sold or distributed any product
containing asbestos materials.
In addition, the Company believes it has valid defenses to all
of the pending claims and vigorously contests that it is a
successor to companies that may have manufactured, sold or
distributed any product containing asbestos materials. However,
the results of asbestos litigation have been unpredictable, and
accordingly, an adverse decision or adverse decisions in these
cases, individually or in the aggregate, could materially
adversely affect the financial position and results of operation
of the Company. The total requested damages in these cases is
approximately $3,200,000,000.
Thus far, however, the Company has had over 30 asbestos-related
cases dismissed without any payment and it settled a group of
ten asbestos-related cases for a de minimis value. Through
December 31, 2002, the total costs of defending the
approximately 50 current and previously dismissed cases has
totaled less than $200,000.
COMPANY PROFILE
Mestek, Inc. (NYSE: MCC)
260 N. Elm St.
Westfield, MA 01085
Phone: 413-568-9571
Fax: 413-568-2969
http://www.mestek.com
Employees : 2,825
Revenue : $373,900,000
Net Income : $(30,400,000)
Assets : $220,300,000
Liabilities : $82,600,000
As of December 31, 2002
Description: Through its subsidiaries, Mestek makes heating,
ventilating, and air-conditioning products (about 80% of sales)
such as hydronic heat-distribution units, gas-fired heating and
ventilating equipment, louver and damper equipment, boilers, and
refrigeration equipment. the company sells directly and through
independent reps to contractors, installers, and OEMs. Mestek
also makes metal products (flexible metal hose and grey iron
castings) and metal-forming equipment. The acquisitive company
has spun off its software division. Chairman and CEO John Reed
and his son, Stewart, own 38% and 25% of Mestek, respectively.
ASBESTOS ALERT: Seeboard to Pay GBP25T for Asbestos Complaints
--------------------------------------------------------------
Magistrates fined Seeboard Powerlink GBP25,000 after the company
admitted breaching two serious health and safety regulations on
November 12 and 13, 2001. The violation meant employees were
exposed to "significant" amounts of white, blue and brown
asbestos potentially deadly if inhaled as dust at Greenwich
power station.
Health and Safety Executive prosecuted the company. An HSE
spokesman said, "A Seeboard Powerlink employee removed part of a
layer of thermal insulation from an alternator . He was wrongly
advised the insulation was not asbestos. The employee and
engineers from Alstom Power Construction were exposed to
significant amounts of asbestos. A subsequent investigation by
the HSE concluded Seeboard Powerlink's procedures were not
adequate. The serious risks to health from inhalation of
asbestos fibres are well known."
Seeboard Powerlink pleaded guilty to failing to prevent the
exposure of its employee to asbestos and was fined GBP5,000, as
well as GBP20,000 after admitting exposing Alstom engineers to
health and safety risks.
COMPANY PROFILE
SEEBOARD Powerlink Limited
Forest Gate
Brighton Road
Crawley
West Sussex
RH11 9BH
Phone: 020 7654 7312/3
Fax: 020 7654 7350
http://www.seeboardpowerlink.com
Description: Seeboard Powerlink is a consortium of SEEBOARD,
Balfour Beatty and ABB. In 1998, Seeboard Powerlink signed a
thirty-year Private Finance Initiative contract to operate,
maintain, finance and renew London Underground's power
distribution system.
The PFI contract passed responsibility for the distribution of
high voltage electricity supplies to London Underground's 270
stations and over 400 km of track to Seeboard Powerlink.
New Securities Fraud Cases
ACCREDO HEALTH: Lockridge Grindal Lodges Securities Suit in TN
--------------------------------------------------------------
Lockridge Grindal Nauen PLLP initiated a securities class action
in the United States District Court for the Western District of
Tennessee, Memphis Division, on behalf of purchasers of Accredo
Health, Inc. (NasdaqNM:ACDO) publicly traded securities during
the period between June 16, 2002 and April 7, 2003, inclusive.
The complaint alleges that defendants violated Sections 10(b)
and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5
promulgated thereunder, by issuing a series of material
misrepresentations to the market between June 16, 2002 and April
7, 2003, thereby artificially inflating the price of Accredo
common stock. The complaint alleges that these statements were
materially false and misleading because they failed to disclose
and misrepresented the following adverse facts, among others:
(1) that the Company was failing to timely record an
impairment in the value of certain receivables that it
had acquired in a recent acquisition. As a result, the
Company's reported financial results were artificially
inflated throughout the class period;
(2) as a result of the foregoing, the Company's financial
statements published during the class period were not
prepared in accordance with Generally Accepted
Accounting Principles and were therefore materially
false and misleading;
(3) that the Company would not have been able to meet its
stated earnings guidance had it properly reserved for
its accounts receivables; and
(4) defendants' earnings guidance and positive statements
concerning the Company was lacking in a reasonable and
therefore materially false and misleading.
On April 8, 2002, prior to the opening of the market, Accredo
shocked the market by announcing that it was reducing its
previously issued earning guidance and that it was examining the
adequacy of reserves for accounts receivables that it acquired
in a recent acquisition. In response to this announcement, the
price of Accredo Health common stock declined precipitously
falling from $25.40 per share to as low as $13.76 per share, on
extremely heavy volume.
During the class period, Accredo insiders sold more than $12
million worth of their personally-held Accredo stock while in
possession of the true facts about the Company.
For more details, contact Karen M. Hanson by Mail: 100
Washington Avenue South, Suite 2200 Minneapolis, MN 55401 by
Phone: (612) 339-6900 or by E-mail: kmhanson@locklaw.com
COMPANY DOCTOR: Schatz & Nobel Lodges Securities Suit in N.D. AL
----------------------------------------------------------------
Schatz & Nobel PC initiated a securities class action in the
United States District Court for the Northern District of
Alabama on behalf of all persons whose common stock and/or
options of The Company Doctor (TCD) were converted to shares
and/or options of HealthSouth Corporation (formerly NYSE: HRC;
now OTC: HLSH) as the result of a merger consummated on or about
June 29, 1998.
Named as defendants in the complaint are HealthSouth, certain of
its current and former officers and directors, and Ernst & Young
LLP, which had been HealthSouth's auditor. The complaint
alleges that the Registration Statement and Proxy/Prospectus
issued in connection with the TCD merger materially overstated
revenue, earnings and assets and understated expenses and
liabilities of HealthSouth, thereby causing TCD shareholders to
receive HealthSouth stock, which was overvalued due to the
fraud. Plaintiffs seek to recover damages on behalf of all Class
Members.
For more details, contact Schatz & Nobel, PC by Phone:
(800) 797-5499, or by E-mail: sn06106@aol.com.
CREDIT SUISSE: Shapiro Haber Lodges Securities Suit in MA Court
---------------------------------------------------------------
Shapiro Haber & Urmy LLP initiated a securities class action
against Credit Suisse First Boston (CSFB), a subsidiary of
Credit Suisse Group (NYSE:CSR), on behalf of persons who
purchased Synopsys, Inc. (NasdaqNM:SNPS) common stock from April
14, 1999 through June 28, 2000, inclusive. The action was filed
in the United States District Court for the District of
Massachusetts.
The complaint alleges that CSFB violated section 10(b) of the
Securities Exchange Act, and Rule 10b-5 promulgated thereunder,
by rating Synopsys a "Strong Buy" and issuing favorable research
reports that were materially false or misleading because the
rating did not reflect the good faith beliefs of the analyst who
issued the reports and because they failed to disclose conflicts
of interest of Credit Suisse, and in particular the practice of
Credit Suisse to gain lucrative investment banking business by
providing coverage and issuing favorable research reports on
existing or prospective investment banking customers.
The Securities and Exchange Commission filed a complaint against
CSFB that charged CSFB with issuing fraudulent research reports
on Synopsys.
For more details, contact Thomas G. Shapiro, or Liz Hutton by
Mail: 75 State Street, Boston, MA 02109 by Phone: (800) 287-8119
by Fax: (617) 439-0134, or by E-mail: cases@shulaw.com.
SARA LEE: Cauley Geller Lodges Securities Fraud Suit in N.D. IL
---------------------------------------------------------------
Cauley Geller Bowman Coates & Rudman, LLP initiated a securities
class action in the United States District Court for the
Northern District of Illinois on behalf of purchasers of Sara
Lee Corporation (NYSE: SLE) publicly traded securities during
the period between August 1, 2002 to April 24, 2003, inclusive.
The complaint alleges that defendants violated Sections 10(b)
and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5
promulgated thereunder, by issuing a series of material
misrepresentations to the market between August 1, 2002 and
April 24, 2003, thereby artificially inflating the price of Sara
Lee securities.
The complaint alleges that defendants issued a series of
materially false and misleading statements concerning the
Company's operations and prospects. In particular, the
complaint alleges that the statements were materially false and
misleading because they failed to disclose:
(1) that, despite the Company Reshaping program, the
Company was still burdened with numerous poorly
performing businesses and would have to reevaluate its
various businesses. Accordingly, Sara Lee did not have
"the right mix of businesses" in that several material
businesses were "not growing" or were "in significant
decline;"
(2) that the Company's under-performing businesses were
causing the Company to experience declining results
and, as a result, the Company would not be growing at
the rates represented to the market;
(3) due to a lack of proper internal or financial controls,
Sara Lee failed to identify or recognize those
businesses or brands among its portfolio of companies
that would need to be "run dramatically differently in
the future"; and
(4) based on the foregoing, Sara Lee lacked any reasonable
basis upon which to project it would experience
"double-digit operating income increase" for fiscal
2003 among its "five lines of business" or have diluted
EPS for fiscal 2003 in the range of $1.54 to $1.60.
On April 24, 2003, Sara Lee shocked the public when it issued a
press release announcing its financial results for the third
quarter, the period ending March 31, 2003. The Company
announced that it was reducing earnings for fiscal 2003 to $1.50
to $1.52 per share, significantly below consensus expectations
of $1.59. In response to this announcement, the price of Sara
Lee common stock dropped by 10%. During the Class Period, Sara
Lee insiders sold more than $23 million of their personally-held
Sara Lee common stock to the unsuspecting public.
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
SARA LEE: Schiffrin & Barroway Lodges Securities Suit in N.D. IL
----------------------------------------------------------------
Schiffrin & Barroway, LLP initiated a securities class action
filed in the United States District Court for the Northern
District of Illinois on behalf of all purchasers of the common
stock of Sara Lee Corporation (NYSE:SLE) from August 1, 2002
through April 24, 2003, inclusive.
The complaint alleges that defendants violated Sections 10(b)
and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5
promulgated thereunder, by issuing a series of material
misrepresentations to the market between August 1, 2002 and
April 24, 2003, thereby artificially inflating the price of Sara
Lee securities. The complaint alleges that defendants issued a
series of materially false and misleading statements concerning
the Company's operations and prospects. In particular, the
Complaint alleges that the statements were materially false and
misleading because they failed to disclose:
(1) that, despite the Company Reshaping program, the
Company was still burdened with numerous poorly
performing businesses and would have to reevaluate its
various businesses. Accordingly, Sara Lee did not have
"the right mix of businesses" in that several material
businesses were ``not growing'' or were ``in
significant decline;''
(2) that the Company's under-performing businesses were
causing the Company to experience declining results,
and as a result, the Company would not be growing at
the rates represented to the market;
(3) due to a lack of proper internal or financial controls,
Sara Lee failed to identify or recognize those
businesses or brands among its portfolio of companies
that would need to be "run dramatically differently in
the future;" and
(4) based on the foregoing, Sara Lee lacked any reasonable
basis upon which to project that it would experience
``double-digit operating income increase'' for fiscal
2003 among its ``five lines of business'' or have
diluted EPS for fiscal year 2003 in the range of $1.54
to $1.60.
On April 24, 2003, Sara Lee shocked the market when it issued a
press release announcing its financial results for the third
quarter, the period ending March 31, 2003. The Company announced
that it was reducing earnings for fiscal 2003 to $1.50 to $1.52
per share, significantly below consensus expectations of $1.59.
In response to this announcement, the price of Sara Lee common
stock dropped by 10%. During the Class Period, Sara Lee
insiders sold more than $23 million of their personally held
Sara Lee common stock to the unsuspecting public.
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
*********
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 * * *