/raid1/www/Hosts/bankrupt/CAR

/raid1/www/Hosts/bankrupt/CAR_Public/030613.mbx C L A S S A C T I O N R E P O R T E R Friday, June 13, 2003, Vol. 5, No. 116 Headlines BLUE RHINO: Shareholders Commence Securities Lawsuits in C.D. CA CAMPBELL SOUP: NJ Court Approves Securities Lawsuit Settlement CATHOLIC CHURCH: Expects More Settlements Like Louisville Pact CHINA: Rights Group Lauds Congress' Support of Jiang Zemin Suit COEUR D'ALENE: Court Hears Motion For Bunker Hill Suit Dismissal COLORADO: 32 Female US Mint Works Sue Over Sexual Discrimination CORAL CALCIUM: FTC Initiates Action For Fraudulent Advertising DANKA BUSINESS: Customers File Unfair Trade Practices Suit in FL DEY INC.: Texas Atty. Gen. Reaches Settlement in Fraud Lawsuit HASTINGS ENTERTAINMENT: TX Court Approves Securities Suit Pact RENT-WAY INC.: Employees Launch Suit Over Unpaid Overtime in PA TOBACCO LITIGATION: IL Court Refuses Appeal of $10.1B Verdict UNITED STATES: House Republicans Push New Class Litigation Bill Asbestos Alert ASBESTOS LITIGATION: Labor Group Scores Proposed Asbestos Bill ASBESTOS LITIGATION: Court to Hear Arguments on Asbestos Reports ASBESTOS LITIGATION: UK Official Raps Delay in Asbestos Removal ASBESTOS ALERT: Record Producer's Death Not Caused by Asbestos ASBESTOS LITIGATION: AWI Bankruptcy Case May Be Over Soon ASBESTOS LITIGATION: Congoleum Discusses Certain Amendments ASBESTOS LITIGATION: Congoleum Discusses Certain Amendments ASBESTOS LITIGATION: Halliburton Units To Enter Chapter 11 ASBESTOS LITIGATION: Equitas Banks GBP399M for Asbestos Claims ASBESTOS LITIGATION: Gencor Ltd. Discloses Terms of Unbundling ASBESTOS LITIGATION: ABB Eyes Asbestos Decision By Month-End New Securities Fraud Cases ALLOU HEALTHCARE: Schatz & Nobel Lodges Securities Lawsuit in NY CRYO-CELL INTERNATIONAL: Federman & Sherwood Lodges Suit in FL FEDERAL HOME: Cauley Geller Launches Securities Suit in S.D. NY FEDERAL HOME: Schiffrin & Barroway Lodges Securities Suit in NY FEDERAL HOME: Weiss & Yourman Lodges Securities Suit in S.D. NY FEDERAL HOME: Charles Piven Lodges Securities Lawsuit in S.D. NY FEDERAL HOME: Abbey Gardy Files Securities Fraud Suit in E.D. VA LEHMAN BROTHERS: Kaplan Fox Commences Securities Suit in S.D. NY PROVIDENT FINANCIAL: Charles Piven Lodges Securities Suit in NY PRUDENTIAL SECURITIES: Kirtland & Packard Lodges Suit in N.D. CA ********* BLUE RHINO: Shareholders Commence Securities Lawsuits in C.D. CA ---------------------------------------------------------------- Blue Rhino Corporation and four of its officers and directors face several securities class actions filed in the United States District Court for the Central District of California on behalf of individuals who purchased the Company's common stock between August 15, 2002 and February 5, 2003. The plaintiff alleges violations of Section 10(b) of the Securities Exchange Act of 1934, Rule 10b-5 promulgated under Section 10(b), and Section 20(a) of the Exchange Act. In particular, among other claims, the plaintiff has alleged that the Company and the individual defendants made materially false and misleading statements and/or concealed material adverse facts throughout the class period relating to the Company's financial position, the impact of overfill prevention device regulations on the Company's business, the financial position of distributors Ark and Platinum, and the Company's acquisition of Ark and Platinum. The suits seeks unspecified damages, plus reasonable costs and expenses, including attorneys' fees and experts' fees. The Company anticipates that all of the existing shareholder class action lawsuits, and any additional similar shareholder class action suits that may be filed, ultimately will be consolidated into a single action. CAMPBELL SOUP: NJ Court Approves Securities Lawsuit Settlement -------------------------------------------------------------- The United States District Court for the District of New Jersey granted approval to the settlement of the securities class action filed against the Campbell Soup Company and two of its former executives. The consolidated suit alleges, among other things, that the Company and the former executives misrepresented the Company's financial condition between September 8, 1997 and January 8, 1999, by failing to disclose alleged shipping and revenue recognition practices in connection with the sale of certain Company products at the end of the Company's fiscal quarters in violation of Section 10(b) and 20(a) of the Securities Exchange Act of 1934, as amended, and Rule 10b-5 promulgated thereunder. On February 6, 2003, the Company announced it had reached an agreement in principle to settle this case. The district court's order approving the settlement was issued on May 22, 2003; that order is subject to appeal until June 23, 2003. Pursuant to the court's order, all claims have been dismissed and the litigation has been terminated in exchange for a payment of $35, which is expected on June 23, 2003. The full amount of the payment will be covered by insurance. The settlement does not constitute an admission of fault or liability by the company or any other defendant. CATHOLIC CHURCH: Expects More Settlements Like Louisville Pact -------------------------------------------------------------- The Roman Catholic Church expects more settlements to be forged after the Archdiocese of Louisville, Kentucky agreed to pay $25.7 million to settle clerical sex abuse charges against it, the Associated Press reports. The 243 participants in the Louisville settlement only represent a small part of outstanding claims nationwide. In the last year, more than 1,000 people have come forward with new allegations against dioceses across the country, according to Mark Chopko, general counsel for the US Conference of Catholic Bishops. This might signal more financial battles ahead for US dioceses. "It's going to be substantial period of time - years - before this is over," Steve Rubino, a longtime victims' attorney from New Jersey told AP. Even dioceses like Louisville, that have agreed to multimillion- dollar payouts, may see more lawsuits. The Kentucky settlement was shared among people who all accused priests and employees of child sex abuse. The Survivors Network of Those Abused by Priests said in a statement Tuesday that "we are certain there are still dozens of wounded victims in the Louisville diocese who remain trapped in silence," and encouraged them to come forward. David Clohessy, the Survivors Network national director, told AP it is common for victims in the same diocese to await the outcome of someone else's lawsuit before filing one themselves. "The last thing they want is to be hurt again. They say, 'I'm going to sit tight and see how this works out,'" Mr. Clohessy said. "People think these lawsuits come in a deluge. It's just the reverse." CHINA: Rights Group Lauds Congress' Support of Jiang Zemin Suit --------------------------------------------------------------- Civil rights group Friends of Falun Gong USA commended the US House of Representatives Committee on International Relations for supporting a class action brought by Falun Gong practitioners who seek to hold Jiang Zemin accountable for genocide, torture, and acts against humanity. In filing an amicus brief in the case, the Committee affirms the sanctity of the inalienable rights enshrined in our Constitution. The brief notes that "human rights concerns, such as those raised by this case, have long been considered a key aspect of US foreign policy" and endorses the use of the Alien Tort Claim Act and Torture Victim Protection Act to protect Falun Gong practitioners' ability to freely practice their faith. Falun Gong practitioners in China and abroad are individuals who follow a spiritual belief system that Jiang Zemin has vowed to "eradicate." Within China, they are systematically denied the opportunity to practice their beliefs without fear of severe reprisal, including various forms of intimidation and torture. In filing the lawsuit in October 2002, they sought the protection of the US legal system and an end to the persecution under which they suffer. The International Relations Committee recognizes Falun Gong followers' quest to live by moral principles such as honesty, kindness, and tolerance for others and through its brief, extends the protection of Congressional legislation toward that end. Friends of Falun Gong applauded this stance. In a statement, they said "Our fervent hope is that the case will be allowed to move forward and that justice will ultimately prevail." For more details, visit the group's Website: http://www.fofg.org. COEUR D'ALENE: Court Hears Motion For Bunker Hill Suit Dismissal ---------------------------------------------------------------- The Idaho District Court for the First District in Kootenai County heard the dismissal motions filed by Coeur d'Alene Mines Corporation and other defendants in the private class action filed by eight northern Idaho residents seeking medical benefits and real property damages from the mining companies involved in the Bunker Hill Superfund site. In October 2002, the court conducted a hearing on motions resulting in an order striking certain of the alleged causes of action from the complaint, and dismissing the complaint with leave to amend it. In January 2003, the plaintiffs filed an amended complaint. Certain of the defendants, including the Company, filed motions to dismiss the complaint, which will be heard by the court in May 2003. While the Company believes the suit is without merit, at this early stage of the proceedings, the Company cannot predict the outcome of this suit. COLORADO: 32 Female US Mint Works Sue Over Sexual Discrimination ---------------------------------------------------------------- Thirty-two women working at the United States Mint in Denver, Colorado filed a petition with the US Treasury Department, alleging sexual harassment and discrimination by male colleagues and supervisors, the Associated Press reports. Employees claimed that women were treated unfairly in all aspects of work. Beverly Mandigo Milne, an employee with the mint since 1978, revealed that women have complained for years to supervisors, managers and union officials. She said some have filed individual complaints with the mint's equal- employment-opportunity staff. "There has been unfair treatment to women in promotions, job assignments, training opportunities - there's been such harassment, and it has created an overall hostile work environment," Ms. Mandigo Milne told the Associated Press. The complaint does not seek punitive damages. Lynn Feiger, the women's attorney, said the suit seeks ways to stop discrimination and changes in how the mint handles complains. The suit will be assigned to an administrative law judge with the US Equal Employment Opportunity Commission, Ms. Feiger continued. Kenneth Boris Sr., industrial manager at the Denver Mint, declined to comment, the Associated Press reports. CORAL CALCIUM: FTC Initiates Action For Fraudulent Advertising -------------------------------------------------------------- The United States Federal Trade Commission (FTC) is initiating legal action against an operation that sells Coral Calcium Supreme, a calcium supplement made from dead marine coral that allegedly could cure everything from heart disease to cancer, the Associated Press reports. The claims are "too good to be true," the FTC said. The commission is asking Chicago federal court to shut down Shop America and Deonna Enterprises Inc., who sold Coral Calcium and advertised it in one of the most widely run infomercials on cable television this year. Hearing is scheduled on Friday. The FTC also charged the Company's officers - Kevin Trudeau and Robert Barefoot - of making unproven health claims. The agency wants to freeze their assets and return money to consumers. The FTC and the Food and Drug Administration also are sending dozens of warning letters to retail and Internet marketers of coral calcium products, ordering them to remove false or deceptive advertising. Many claims for the products go far beyond any scientific evidence on the health benefits of calcium, the FTC said, AP reports. "The danger here is using an ineffective treatment for a really serious condition," Howard Beales, director of the FTC's Bureau of Consumer Protection told AP. "Calcium is good stuff - it builds strong bones, but it doesn't cure cancer." "We disagree with the FTC's interpretation of our practices," Nancy Sterling, a spokeswoman for Barefoot told AP. "There is ample research to support the benefits of calcium." The promotions for the products falsely claimed that the product will treat or cure all forms of cancer and diseases such as multiple sclerosis, lupus, heart disease and chronic high blood pressure, the FTC complaint alleges. The ads also made allegedly false claims that scientific research shows that calcium supplements can cure cancer. DANKA BUSINESS: Customers File Unfair Trade Practices Suit in FL ---------------------------------------------------------------- Danka Business Systems PLC faces a class action filed in Florida state court, alleging claims for: (1) breach of contract, (2) fraud/intentional misrepresentation, (3) unjust enrichment, (4) violation of the Florida Deception and Unfair Trade Protection Act and (5) injunctive relief The suit also names other defendants, including American Business Credit Corporation. The Company does not expect these legal proceedings to have a material effect upon its financial position, results of operations or liquidity. DEY INC.: Texas Atty. Gen. Reaches Settlement in Fraud Lawsuit -------------------------------------------------------------- Texas Attorney General Greg Abbott reached a settlement with a pharmaceutical company that deliberately falsified price reports to the Texas Medicaid program for its products. Under terms of the agreement, Dey, Inc. will pay a total of $18,500,000, with more than $9 million going to the State. The remaining portion of the settlement will go to the federal government, which jointly funds the Texas Medicaid program and has reached its own settlement with the Company. Dey, a subsidiary of German pharmaceutical giant Merck KGaA, manufactures and markets inhalant products that are generally prescribed for persons suffering from respiratory illnesses. Under Texas law, drug manufacturers are required to report the prices at which they sell their products to wholesalers and distributors. The Texas Medicaid program then uses this pricing information as a basis for calculating provider cost and reimburses Medicaid providers accordingly. The attorney general's Civil Medicaid Fraud Section found that Dey deliberately falsified its pricing reports for the benefit of its customers, which directly led to overpayments by the Texas Medicaid program. "Texas citizens will not tolerate this kind of behavior by those who wish to do business in the State," Attorney General Abbott said. "Our evidence against Dey was overwhelming, and we were more than prepared to go to court if necessary. I'm satisfied with the agreement because the State is going to get back every cent it overpaid as a result of unethical practices made at the expense of Texas taxpayers. In fact, under the settlement, the State will recover more than two times its damages, as well as all costs and attorneys' fees." The State's case is based on information provided by industry insider Ven-a-Care of the Florida Keys, Inc., which initiated the action as a Relator under the Texas Medicaid Fraud Prevention Act. Ven-a-Care has also assisted the State and the federal government in obtaining previous settlements with Bayer Corp. and TAP Pharmaceuticals, Inc. In addition to the monies recovered from Dey for its past violations, the Texas Medicaid program will save millions of dollars in the future as a result of evidence the attorney general's office uncovered in its investigation. The attorney general's lawsuit against two other drug manufacturers - Warrick Pharmaceuticals and Roxane Laboratories - is still pending before Travis County District Judge Suzanne Covington. The case is set for trial in August. HASTINGS ENTERTAINMENT: TX Court Approves Securities Suit Pact -------------------------------------------------------------- The United States District Court for the Northern District of Texas granted final approval to the settlement proposed by Hastings Entertainment, Inc. for the consolidated securities class action, asserting various claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934. The suit names as defendants the Company, its current and former directors and officers at the time of its June 1998 initial public offering and three underwriters: (1) Salomon Smith Barney, (2) A.G. Edwards & Sons, Inc. and (3) Furman Selz, LLC The suit asserts various claims under Sections 11, 12(2) and 15 of the Securities Act of 1933. Motions to dismiss these actions were filed by the Company and, on September 25, 2001, were denied by the court. On September 12, 2002, the Company announced that an agreement in principle to settle the actions had been reached. The settlement required a payment of $5.75 million on behalf of the defendants in the lawsuits and the assignment to the plaintiff settlement class of any claims the Company may have had against KPMG Peat Marwick, LLP, its outside auditors at the time of the March 7, 2000 announcement. The settlement resolves all claims against the Company, its current and former defendant officers and directors and the defendant underwriters. The plaintiff settlement class separately settled all claims against KPMG. RENT-WAY INC.: Employees Launch Suit Over Unpaid Overtime in PA --------------------------------------------------------------- Employees for Rent-Way, Inc. filed a class action in the United States District Court in Erie, Pennsylvania, accusing the Company of not paying workers for all their overtime work, the Times Leader report. The Company allegedly asked store managers to reduce the number of hours non-salaried workers logged to a maximum of 50 hours per week, allowing it to save on wages for employees who work over 50 hours per week. The Company also allegedly failed to fully pay workers who logged more than 40 hours a week. Former Beaver County assistant managers Justin Badgett and John P. Leasha alleged that they worked for more than 40 hours per week. They also worked in the capacity of account representatives or sales associates. Sometimes, the two employees reportedly logged more than 50 hours per week. "We're not privy to all of Rent-Way's records, but we know this happened in many of Rent-Way's stores and they have stores all over the country," Pittsburgh attorney Harry Kunselman, who is representing workers in the class action along with another lawyer, E.J. Strassburger, told the Times Leader. "We don't know how formal it is, but it appears (Rent-Way) at least has an informal policy (to reduce wage costs)," Mr. Strassburger said. "Whether they've sent a written directive, we'll find that out." An attorney for Rent-Way disputed the claim and said the company will fight the lawsuit. "We've reviewed the complaint," Rob DeMoss, Rent-Way's general counsel told the Times Leader. "We've retained outside counsel and we intend to vigorously defend against the complaint." TOBACCO LITIGATION: IL Court Refuses Appeal of $10.1B Verdict ------------------------------------------------------------- The Illinois Supreme Court declined to accept a direct appeal of the $10.1 billion verdict against Philip Morris USA handed down in March by a Madison County Circuit Court in the "lights" class action lawsuit, a Company press release states. Philip Morris USA asked the state's highest court to take the unusual step of accepting a direct appeal of the case, in effect bypassing the state's intermediate appellate court, the Court of Appeals for the Fifth District. "Philip Morris USA will now proceed to the intermediate court and present our very compelling arguments why this verdict should be reversed and the class should be decertified," said William S. Ohlemeyer, Philip Morris USA vice president and associate general counsel. "The trial court recognized that this case presents important legal issues. We continue to believe that this case should not have been certified as a class action, and we believe the essential allegations in the case should be governed entirely by federal law setting forth requirements for cigarette labeling," Mr. Ohlemeyer continued. Mr. Ohlemeyer noted that the trial court disagreed with the company on those key issues, and the appellate court will have an opportunity to take a fresh look at those and other issues. On March 21, Madison County Judge Nicholas Byron ordered the company to pay $7.1 billion to an estimated 1.1 million smokers whom the court found to have been misled about the health risks of Marlboro Lights and Cambridge Lights cigarettes based upon the proofs of just two class representatives. From that amount, he awarded plaintiffs' attorneys $1.77 billion in fees. Judge Byron also awarded punitive damages of $3 billion to be paid to the state. In order for Philip Morris USA to stay enforcement of the judgment pending appeal, the company has posted a bond secured by a pre-existing $6 billion note owed to Philip Morris USA. It also must deposit the annual $420 million in interest that note generates plus an additional $800 million in cash in an escrow account with the Clerk of the Court. Last month, appellate courts in Florida and Massachusetts issued rulings decertifying class actions in the Engle and Aspinall cases. The Engle case, which produced a $145 billion judgment, was a class action comprised of Florida smokers who have contracted lung cancer and other diseases. Like the above suit, the Aspinall case, was comprised of smokers who purchased Marlboro "light" cigarettes and sought a refund for all the cigarettes they bought. Philip Morris USA is challenging one other Lights class certification, in the Hines case in Florida, before a state appellate court. For more details, contact David Tovar of Altria Corporate Services by Phone: 917/663-2144 UNITED STATES: House Republicans Push New Class Litigation Bill --------------------------------------------------------------- Republicans in the United States Congress are pushing legislation that would move most national class actions from state to federal courts, the Macon Telegraph reports. The House will vote on the proposal Thursday, with most Republicans arguing that trial lawyers use litigation more for profit from multimillion dollar settlements. The proposed law would grant federal jurisdiction in cases where a member of the proposed class is a citizen of a state different from where the defendant is located, as long as the amount at issue exceeds $2 million. State jurisdiction would apply in cases where a substantial majority of class members are from the same state or if fewer than 100 are filing the suit. Opponents of the measure said businesses would be more favored by the bill. The bill would also make it harder for individuals to go against powerful firms and would add to the overload of suits in federal courts. Public Citizen, a consumer advocacy group, says more than 100 companies and pro-business groups spent millions and used at least 475 lobbyists to push the legislation, the Macon Telegraph states. The bill "contains a number of changes that will enable corporations to injure or defraud average Americans while hiding behind legal loopholes or procedural technicalities," the group said in a report. Businesses however said that it would do them good, as they have long complained about the threats from liability suits and made changing the way such cases are tried a priority. "These lawsuits hurt consumers, rewarding them with nearly worthless coupons, while a handful of personal injury lawyers walk away with millions in fees," Sherman Joyce, president of the American Tort Reform Association told the Telegraph. House Judiciary Chairman James Sensenbrenner, R-Wis., planned changes to the bill to make it closer to the Senate's version. "I believe that by offering this amendment we can attract more bipartisan support for this important legislation," Mr. Sensenbrenner said Wednesday. Asbestos Alert ASBESTOS LITIGATION: Labor Group Scores Proposed Asbestos Bill -------------------------------------------------------------- AFL-CIO asked US senators not to back a bill to curb asbestos lawsuits after a top labor official met Utah Republican Sen. Orrin Hatch to discuss it. The labor group sent a strongly worded letter to all senators on June 10 condemning the legislative proposal by Sen. Hatch as a step backward in the effort to adequately compensate victims of the asbestos. AFL-CIO President John Sweeney met Hatch, chairman of the Senate Judiciary Committee, for about two hours on June 6 to discuss labor's concerns about Sen. Hatch's bill, said Senate aides close to the talks. The aides said they thought the Hatch- Sweeney meeting went well, and telephone contacts between Sen. Hatch's staff and labor representatives have continued this week, discussing their differences over the legislation. The AFL-CIO's letter to senators, signed by legislative director William Samuels and dated June 10, was very negative about Sen. Hatch's proposal for a $108,000,000,000 fund to pay asbestos claims. The bill, which Sen. Hatch introduced over labor's objections last month, has "extensive and severe shortcomings," Mr. Samuels wrote. Asbestos, a heat-resistant mineral, was widely used for fireproofing and insulation until the 1970s, when scientists concluded that inhaled fibers could be linked to cancer and other diseases. Hundreds of thousands of asbestos claims clogging US courts have driven over 60 companies into bankruptcy. With no end to claims in sight, Sen. Hatch's proposal would take the cases out of the courts and set up the trust fund, supported by business and industry, to pay them. Sen. Hatch introduced his bill on May 22 after lengthy negotiations among asbestos companies, their insurers and labor representatives. However, labor's unhappiness with the legislation has kept the number of Democratic co-sponsors to a minimum, with just two signing on, and reduced its chances of passage in the closely divided Senate. Among the bill's worst deficiencies, Mr. Samuels wrote in the letter, was it sought to set an absolute cap on companies' asbestos liability, and left workers harmed by asbestos bearing all the risk if the fund set up to pay claims runs out of money. Also, the medical criteria set out for victims to qualify for compensation are too strict, the AFL-CIO letter said. It complained the bill limits payments to victims who smoke, and requires their awards be reduced by amounts received from health insurance. Sen. Hatch said last week he is open to proposals for changes in the bill, but also warned he intended to press ahead with a committee vote on the legislation this month. ASBESTOS LITIGATION: Court to Hear Arguments on Asbestos Reports ---------------------------------------------------------------- The Montana Supreme Court will hear arguments later this month in a lawsuit accusing the state of wrongly keeping secret occupational health studies that showed miners in Libby were working around and breathing dangerous levels of asbestos dust. Hundreds of people in Libby died or contacted asbestos-related illnesses while studies documenting the risk remained sealed in state file cabinets for years. Nine Libby residents diagnosed with asbestos-related health problems contend the state knew as early as 1956 of dangers posed by exposure to asbestos dust from a nearby vermiculite mine. The plaintiffs contend the state was negligent in failing to warn mine workers and their families of the risks. The case, to be argued by lawyers June 26, appeals an August 2001 decision by District Judge Jeffrey Sherlock of Helena. He threw out the suit after concluding the state had no legal obligation to warn Libby residents of the danger. In their appeal, the nine residents contend the state stood by while a "human disaster of epic proportions unfolded in Libby." In its response, the state argued that state law and an attorney general's opinion demanded the government keep secret the information it gathered in a series of seven studies over 18 years. The state had no obligation to warn Libby residents, and no power to set standards to asbestos exposure or regulate mine safety, it said. Also, government was immune from suits for actions before the new Montana Constitution eliminated that protection in 1973, state lawyers said. Libby was once home to a vermiculite mine W.R. Grace & Co. operated from 1963 until it closed in 1990. Asbestos in the vermiculite ore has been blamed for hundreds of illnesses and at least 200 deaths. The Environmental Protection Agency has been cleaning up the mine site and other contaminated areas in the town since 1999. Libby was declared a Superfund site last October. The people involved in the Supreme Court appeal are eight former mine workers and the wife of one miner, all of whom have asbestos-related diseases. They argue studies conducted by the state in 1956, 1958, 1962, 1963, 1964, 1967 and 1974 warned of hazardous asbestos dust and recommended steps to control the problem. Through death certificates, the state also knew of deaths caused by the asbestos exposure, it said. "Harm was not only foreseeable, there was an ongoing health emergency in Libby, of which the state was on notice with each new death certificate showing death by asbestos disease," the appeal says. Once the state knew of the asbestos danger, the plaintiffs argue, it had a legal responsibility to alert those in its path. The state, however, contends the law imposes a duty on employers - not the state - to ensure a safe workplace. Nothing transfers that obligation to the state simply because government conducted limited inspections of the workplace, it said. ASBESTOS LITIGATION: UK Official Raps Delay in Asbestos Removal --------------------------------------------------------------- Councilor Bill Martin of the United Kingdom has accused housing chiefs of taking too long in removing asbestos from Paisley homes. He claims families have been waiting three months for the potentially deadly substance to be removed. The asbestos is in lagging that surrounds water tanks in homes in Glenburn, Cumbria, the United Kingdom. Now, some families are too scared to go into the lofts - where the tanks are. Councilor Martin has written to Renfrewshire Council housing bosses demanding to know why it has taken so long. Mr Martin said, "There's people in Glenburn who were told three months ago that they had this in their houses and that it would be removed, but they are still waiting . The council should take steps immediately to have this danger removed from these homes, because the people in Glenburn are really worried about this. They received official notification saying that there was a danger but so far nothing has been done about it and people really are concerned." "One woman is too scared to go up into the loft to get her suitcases out because she knows this asbestos is up there," he continued. "She is so worried about this she is seriously considering buying new cases so she doesn't have to go into the loft." He added, "There's about 70 houses affected by this in Colonsay Road, Raasay Drive, Lismore Drive and Bute Crescent, the asbestos is in the lagging in the water tank . When they found the same problem in the Cochrane Castle area of Johnstone the council sent people in within a week and the tanks and the lagging were all removed. I've written to Mike Bailey, the head of housing, to try to find out why there is a difference in the way the people in Johnstone are treated and the way the people in Glenburn are treated." However a council spokesman insisted there was no difference in the way they had dealt with the situation in Glenburn. He said, "There is no difference in the way we are approaching asbestos removal in Glenburn and Johnstone . We expect work to start on the physical removal of the asbestos in the next week to ten days. Over the past few weeks the contractor has been visiting properties and assessing how best to go about that in each house." "Simultaneously, as with any such contract, the contractor has submitted a health and safety plan for the work program. That is about to be finalized and approved and the work program will be ready to commence then," the council spokesman said. ASBESTOS ALERT: Record Producer's Death Not Caused by Asbestos -------------------------------------------------------------- The record company of pop music producer Mickie Most denies speculations that his death was caused by asbestos. Mr. Most, who had more number one hits than any other producer worldwide, died of mesothelioma, a cancer commonly associated with asbestos. That led to speculation that the substance had been used in soundproofing tiles, which Mr. Most was exposed to. However, recording studio experts said asbestos did not have acoustic properties and was unlikely to have been used. Neil Grant of acoustic and design consultants Harris Grant said asbestos was inefficient for soundproofing and was more commonly used for heat insulation. "The material is extremely poor for anything we might ever want within a recording environment," he said. "It's certainly not an efficient or state of the art material." However, it may have been used for "sound deadening" to absorb noise in some circumstances in the 1950s and 60s, he said. A spokeswoman for Mr. Most's record label, Rak, told BBC News Online it was "impossible" to find out the cause of Mr. Most's illness. She said the producer had spent "many years in South Africa in the 50s and 60s", adding it was strange that more people in the music industry had not got the disease if studios contained dangerous materials. "If you think of all the recording studios in the world and all the bands and producers who have worked in them over the years, and then they suddenly come up with this theory, it doesn't really make any sense," she said. Cancer Research UK said 90% of cases of mesothelioma were caused by exposure to asbestos. "It's impossible to say what the rest of the causes are," a spokesman said. Singers and musicians paid tribute at Most's funeral at Golders Green crematorium in north London on Monday. Famous names including Lulu, Donovan and Chrissie Hynde joined Most's wife Christina, daughters Nathalie and Crystalle and son Calvin for the service. Mr. Most, whose real name was Michael Peter Hayes, died of cancer at home in Totteridge, north London on 30 May. Some of the hits he produced were played at the ceremony, including House of the Rising Sun by The Animals and I'm Into Something Good by Herman's Hermits. ASBESTOS LITIGATION: AWI Bankruptcy Case May Be Over Soon ---------------------------------------------------------- US Bankruptcy Judge Randall J. Newsome, in an eight-page order filed on June 6, specified the timetable for the final, crucial steps in the 2-year-old Armstrong case. Following Armstrong's recent revisions to its proposed plan for reorganizing under Chapter 11 and emerging from bankruptcy protection, the judge detailed the schedule for the remaining parts of the process. Armstrong's creditors and claimants will vote on the plan then, assuming the plan is approved, having the court approve the plan at a confirmation hearing. Judge Newsome, in line with the approximate schedule proposed by Armstrong one week ago, told the company to have ballots in the mail to creditors and claimants by June 20. Ballots must be returned by September 22. Objections to the plan also are due September 22. Armstrong and others who wish to reply to those objections have until October 24. The confirmation hearing will start November 17, at 9:30 am, in the federal courthouse in Newark, NJ. If the court backs the plan, Armstrong would be out of bankruptcy before the year's end. Lancaster-based Armstrong filed for bankruptcy protection in December 2000 to resolve tens of thousands of claims alleging personal injury from exposure to asbestos insulation the firm once sold and installed. The reorganization plan calls for dissolving the current corporation and canceling the current stock, replacing them with a new corporation and new stock. ASBESTOS LITIGATION: Congoleum Discusses Certain Amendments ----------------------------------------------------------- Congoleum Corporation (AMEX:CGM) reported that it has executed certain amendments to the settlement agreement it entered into on April 10, 2003 with lawyers representing more than 75% of the known present claimants with asbestos claims pending against Congoleum and certain ancillary agreements relating to that settlement agreement. The amendments provide additional time for parties to review and respond to information required in order to participate in the settlement. The settlement agreement contemplates a Chapter 11 reorganization seeking confirmation of a pre-packaged plan of reorganization that would leave trade and other unsecured creditors unimpaired and would resolve all pending and future asbestos claims against Congoleum, including personal injury asbestos claims against Congoleum's distributors and affiliates that derive from claims made against Congoleum. Approval of such a plan of reorganization will require the supporting vote of at least 75% of the asbestos claimants with claims against Congoleum who vote on the plan. Roger S. Marcus, Chairman of the Board, commented "As we indicated in our 10-Q filing last month, we anticipated that we would amend these agreements to address concerns as to whether the deadlines in the original agreements were too ambitious. We believe the settlement is a fair and good one for both the claimants and the company, and felt that our interests would be best served by assuring that claimants were afforded adequate time to review the agreement, make a considered decision on participation, and submit the necessary paperwork. Although this amendment postpones our anticipated date for entering into Chapter 11 until September, we believe it reduces the risk of delays to the confirmation of our plan and the far more important goal of exiting Chapter 11 with the asbestos issue behind us, which we still hope to accomplish by the end of the year. I continue to be encouraged by our progress and grateful for the continued support of our employees, customers, suppliers, lenders and shareholders." ASBESTOS LITIGATION: Congoleum Discusses Certain Amendments ----------------------------------------------------------- Congoleum Corporation (AMEX:CGM) reported that it has executed certain amendments to the settlement agreement it entered into on April 10, 2003 with lawyers representing more than 75% of the known present claimants with asbestos claims pending against Congoleum and certain ancillary agreements relating to that settlement agreement. The amendments provide additional time for parties to review and respond to information required in order to participate in the settlement. The settlement agreement contemplates a Chapter 11 reorganization seeking confirmation of a pre-packaged plan of reorganization that would leave trade and other unsecured creditors unimpaired and would resolve all pending and future asbestos claims against Congoleum, including personal injury asbestos claims against Congoleum's distributors and affiliates that derive from claims made against Congoleum. Approval of such a plan of reorganization will require the supporting vote of at least 75% of the asbestos claimants with claims against Congoleum who vote on the plan. Roger S. Marcus, Chairman of the Board, commented "As we indicated in our 10-Q filing last month, we anticipated that we would amend these agreements to address concerns as to whether the deadlines in the original agreements were too ambitious. We believe the settlement is a fair and good one for both the claimants and the company, and felt that our interests would be best served by assuring that claimants were afforded adequate time to review the agreement, make a considered decision on participation, and submit the necessary paperwork. Although this amendment postpones our anticipated date for entering into Chapter 11 until September, we believe it reduces the risk of delays to the confirmation of our plan and the far more important goal of exiting Chapter 11 with the asbestos issue behind us, which we still hope to accomplish by the end of the year. I continue to be encouraged by our progress and grateful for the continued support of our employees, customers, suppliers, lenders and shareholders." ASBESTOS LITIGATION: Halliburton Units To Enter Chapter 11 ---------------------------------------------------------- Halliburton expects two of its major subsidiaries to file a pre- negotiated bankruptcy later this year. The company further declared that a due diligence review on cases related to its proposed asbestos settlement won't be completed until mid-July, delaying a prepackaged bankruptcy filing until the third quarter. On December 18, 2002, Houston-based Halliburton said it had reached an agreement in principle to settle hundreds of thousands of asbestos-related claims for about $4,000,000,000 in cash and stock. Halliburton also said on June 6 that it would ask the bankruptcy court in the Harbison-Walker proceeding to extend a stay on more than 200,000 pending asbestos cases. The hearing is set for July 21. Harbison-Walker, which incurred the asbestos liability, was spun off from Dresser Industries in 1992 and filed for bankruptcy last year. Halliburton bought Dresser in 1998. The oil services and engineering and construction giant said it would continue to follow legislative proposals for asbestos reform now pending in Congress. Halliburton said it is reviewing documentation of asbestos claims and expects to complete its due diligence next month. Then Halliburton can focus on finalizing procedures for distributing settlement funds to individuals claiming personal injury and agreement on a reorganization plan for subsidiaries DII Industries and Kellogg Brown & Root and certain of their subsidiaries. In a pre-negotiated bankruptcy, companies file Chapter 11 having already settled most issues with creditors so they can emerge from the cases more quickly than in instances where the negotiations occur after the filing. Kellogg Brown & Root's U.S. government operations business, Halliburton, Halliburton Energy Services Inc., Landmark Graphics Corporation and most other Halliburton subsidiaries won't be part of the filing, which will include the reorganization plan. ASBESTOS LITIGATION: Equitas Banks GBP399M for Asbestos Claims -------------------------------------------------------------- Equitas, has set aside an extra GBP399 million to settle its asbestos liabilities. The chairman of Equitas, Hugh Stevenson, said, "When I wrote to reinsured 'Names' last December I stated that it was possible we would have to strengthen our asbestos reserves at the end of the year. "I also referred to the falls in the UK and US equity markets and to the impact of exchange losses on the portion of our surplus held in US dollars. These three factors have combined to produce the decrease in both our accumulated surplus and our solvency margin . asbestos remains the greatest single threat to Equitas." Equitas declared that a review of potential defendants identified policies that were not previously recognized as potential targets of asbestos claims. Equitas said in April it would pay Honeywell International $472,000,000 to settle asbestos claims at former divisions of the world's biggest maker of climate control systems. The update on Equitas' asbestos reserves came as it reported weaker results for the year to March. Its accumulated surplus after tax fell to GBP527 million compared with GBP679 million the previous year. Mr. Stevenson said, "The balance sheet of Equitas is weaker than it was a year ago, and we still face significant uncertainties arising from matters over which we have little or no control." Equitas says it moved earlier than rivals, increasing its asbestos reserves by GBP3.2 million three years ago. Others insurance groups face similar woes. Royal & Sun Alliance reported a fourth-quarter loss of GBP245 million last year and said it has asbestos reserves of GBP8 million. ASBESTOS LITIGATION: Gencor Ltd. Discloses Terms of Unbundling -------------------------------------------------------------- Gencor Ltd. reported that its shareholders would get 8.8 Impala Platinum shares for every 100 Gencor shares they held, marking the final stage of Gencor's unbundling. Gencor said in April it would go ahead with unbundling after setting aside ZAR460,500,000 to be paid into a trust after it faced claims to compensate former mine workers, who said they contracted asbestos-related illnesses while working in asbestos mines linked to Gencor. The Asbestos Relief Trust was set up to compensate current and future claimants. This settlement removed any objection to Gencor's proposed unbundling. Unbundling involves distributing about 30,600,000 Impala shares. Impala said, `As a consequence of the unbundling, Implats' free float has increased significantly to 100%, which will result in improved liquidity of the share on the international markets. At the same time the company's ratings, in respect of the MSCI index, should also improve in line with the increase in the free float." As part of the unbundling Gencor has already transferred its listing from the "resources-platinum" sector on the JSE Securities Exchange SA to the "financials-specialty & other finance." In the final step of the unbundling, Implats share certificates will be posted to certificated shareholders. ASBESTOS LITIGATION: ABB Eyes Asbestos Decision By Month-End ------------------------------------------------------------ ABB still sees a decision on its proposed $1,300,000,000 asbestos settlement by the end of the month despite market talk it could come earlier. A deal is crucial as it caps potentially ruinous U.S. asbestos claims and would ease a divestment needed to cut the firm's $8,200,000,000 debt mountain. A Swedish news agency, citing a lawyer involved in the case, suggested that Judge Judith Fitzgerald, hearing the case, would make a decision before June 27. She had previously indicated no ruling was likely before the end of June. "At the moment it seems we will have it before the end of June," an ABB spokesman said. "We have heard these rumors but we don't have any precise information on that." Judge Fitzgerald is expected to approve the deal because the vast majority of claimants and creditors support the agreement, centering on ABB's Combustion Engineering Inc unit, which once made industrial boilers insulated with asbestos. Approval would be followed by a 10-day appeal window and a district judge would then sign off if all goes to plan. New Securities Fraud Cases ALLOU HEALTHCARE: Schatz & Nobel Lodges Securities Lawsuit in NY ---------------------------------------------------------------- Schatz & Nobel PC initiated a securities class action filed in the United States District Court for the Eastern District of New York on behalf of all persons who purchased the securities of Allou Healthcare, Inc. (Amex: ALU) from June 22, 1998 through April 9, 2003, inclusive. The complaint alleges that the Company's auditors and certain of its officers and directors issued materially false and misleading statements concerning the Company's business condition. Allou is a distributor of consumer personal care products and prescription pharmaceuticals. The complaint alleges that defendants were materially overstating accounts receivable, thereby overstating revenue and earnings. It is also alleged that Allou had materially overstated its inventory by approximately $35 million thereby overstating its net worth. According to the complaint, defendants Mayer Ripsler, Arthur Andersen and KMPG did not conduct their audits in accordance with generally accepted auditing standards as they knew of or recklessly disregarded, the accounting fraud at Allou. On April 9, 2003, Allou announced that "its lenders have filed an involuntary petition for bankruptcy in the Eastern District of New York." Allou consented to the petition shortly after it was filed. The Amex halted trading in Allou stock on that day. The last trading price for Allou was $1.07 per share, which is 91.92% below the class period high of $13.25. For more details, contact Schatz & Nobel, PC by Phone: (800) 797-5499, or by E-mail: sn06106@aol.com. CRYO-CELL INTERNATIONAL: Federman & Sherwood Lodges Suit in FL -------------------------------------------------------------- Federman & Sherwood initiated two securities class actions against CRYO-CELL International, Inc. (Nasdaq: CCELE) in the United States District Court for the Middle District of Florida. The suit also names as defendants certain current and former officers and directors of the Company, and two of the Company's former accounting firms. Each complaint alleges violations of federal securities laws, including allegations of improper recognition of revenue in the financial statements included in certain public reports of the Company. Previously the Company's accounting firm, Ernst & Young, resigned as the Company's independent auditor. For more details, contact William B. Federman by Mail: 120 N. Robinson, Suite 2720, Oklahoma City, OK 73102 by Phone: (405) 235-1560 by Fax: (405) 239-2112 or by E-mail: wfederman@aol.com FEDERAL HOME: Cauley Geller Launches Securities Suit in S.D. NY --------------------------------------------------------------- Cauley Geller Bowman & Rudman, LLP initiated a securities class action in the United States District Court for the Southern District of New York, on behalf of purchasers of Federal Home Loan Mortgage Corporation (NYSE: FRE) publicly traded securities during the period between April 18, 2000 and June 6, 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 April 18, 2000 and June 6, 2003, thereby artificially inflating the price of Freddie Mac securities. Throughout the class period, as alleged in the Complaint, defendants issued numerous statements which described the Company's increasing financial performance. The complaint alleges that these statements were materially false and misleading because they failed to disclose and/or misrepresented the following adverse facts, among others: (1) that the Company failed to properly classify hedges and assets with respect to derivative securities; (2) that the Company used "cookie jar" accounting wherein Freddie Mac deferred gains to quarters in a bid to keep its revenue and earnings growth steady; (3) that the Company provided investigators with altered and misleading documents in order to conceal the Company's improper accounting; (4) that the Company lacked adequate internal controls and was therefore unable to ascertain the true financial condition of the Company; and (5) that as a result, the value of the Company's net income and financial results were materially misstated at all relevant times. On June 6, 2003, the last day of the class period, the Company issued a press release, which provided details of the progress of the Company's previously-announced financial restatement. Specifically, the Company announced the resignation of certain senior officers of the Company, as well as the termination of David Glenn, the Company's former President and Chief Operating Officer. As stated in the press release, Mr. Glenn was terminated because of "serious questions as to the timeliness and completeness of his cooperation and candor with the Board's Audit Committee counsel, retained in January 2003, to review the facts and circumstances surrounding the principal accounting errors identified during the restatement process." Following this announcement, shares of Freddie Mac fell $9.61 per share, or 16 percent, to close at $50.26 per share, wiping out $7 billion in market value. For more details, contact Samuel H. Rudman or David A. Rosenfeld 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 FEDERAL HOME: Schiffrin & Barroway Lodges Securities Suit in NY --------------------------------------------------------------- Schiffrin & Barroway, LLP initiated a securities class action in the United States District Court for the Southern District of New York on behalf of all purchasers of the securities of Federal Home Loan Mortgage Corporation (NYSE:FRE) from April 18, 2000 through June 6, 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 April 18, 2000 and June 6, 2003, thereby artificially inflating the price of Freddie Mac securities. During the class period, the Company issued statements that failed to disclose and/or misrepresented the following adverse facts, among others: (1) that the Company failed to properly classify hedges and assets with respect to derivative securities; (2) that the Company used ``cookie jar'' accounting wherein Freddie Mac deferred gains to subsequent quarters in a bid to keep its revenue and earning growth steady; (3) that the Company provided investigators with altered and misleading documents in order to conceal the Company's improper accounting; (4) that the Company lacked adequate internal controls and was therefore unable to ascertain the true financial condition of the Company; and (5) that as a result, the value of the Company's net income and financial results were materially misstated at all relevant times. On June 9, 2003, the Company announced sweeping changes in its management team. These changes arose out of the Company January 22, 2003 announcement that it would have to restate its financial results for fiscal years 2000, 2001, and 2002. Market reaction to the news was swift. Shares of Freddie Mac fell $9.61 per share or 16 percent to close at $50.26 per share, wiping out $7 billion in market value. For more details, contact Marc A. Topaz or Stuart L. Berman by Mail: Three Bala Plaza East, Suite 400, Bala Cynwyd, PA 19004 by Phone: (888) 299-7706 or (610) 667-7706 by E-mail: info@sbclasslaw.com FEDERAL HOME: Weiss & Yourman Lodges Securities Suit in S.D. NY --------------------------------------------------------------- Weiss & Yourman lodged a securities class action against Federal Home Loan Mortgage Corporation (NYSE:FRE) and its officers was commenced in the United States District Court for the Southern District of New York on behalf of purchasers of Freddie Mac securities between April 18, 2000 and June 9, 2003. The complaint charges defendants with violations of the Securities Exchange Act of 1934. It alleges that defendants issued materially false and misleading statements which resulted in plaintiffs purchasing Freddie Mac securities during the class period at artificially inflated and/or maintained prices. For more details, contact Mark D. Smilow, James E. Tullman, and/or David C. Katz, by Mail: The French Building, 551 Fifth Avenue, Suite 1600, New York, New York 10176 by Phone: 888/593-4771 or 212/682-3025 FEDERAL HOME: Charles Piven Lodges Securities Lawsuit in S.D. NY ---------------------------------------------------------------- The Law Offices Of Charles J. Piven, PA initiated a securities class action on behalf of shareholders who purchased, converted, exchanged or otherwise acquired the common stock of Federal Home Loan Mortgage Corporation (NYSE:FRE) between January 27, 2003 and June 9, 2003, inclusive. The case is pending in the United States District Court for the Southern District of New York against Freddie Mac and certain of its executive officers. The action charges that defendants violated federal securities laws by issuing a series of materially false and misleading statements to the market throughout the class period which statements had the effect of artificially inflating the market price of the Company's securities. For more details, contact Charles J. Piven by Mail: The World Trade Center-Baltimore, 401 East Pratt Street, Suite 2525, Baltimore, Maryland 21202, by Phone: 410-986-0036 or by E-mail: hoffman@pivenlaw.com FEDERAL HOME: Abbey Gardy Files Securities Fraud Suit in E.D. VA ---------------------------------------------------------------- Abbey Gardy, LLP initiated a securities class action in the United States District Court for the Eastern District of Virginia on behalf of all persons who purchased securities of Freddie Mac (NYSE: FRE) between January 22, 2003 and June 6, 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 during the class period thereby artificially inflating the price of Freddie Mac securities. The complaint charges Freddie Mac and Leland Brendsel, David Glenn and Vaughn Clarke with violations of federal securities laws. The complaint alleges that during the class period defendants materially misled the investing public by issuing a series of materially false and misleading statements that failed to disclose and/or misrepresented the following facts, among others: (1) that the Company lacked adequate internal controls and was therefore unable to ascertain the true financial condition of the Company; (2) that the Company did not provide timely and complete information about its business operations; (3) that the restatement was not on "track" and would be delayed; and (4) that the Company had failed to properly account for derivative securities resulting in the shifting of income from one quarter to another. On June 9, 2003, Freddie Mac announced that several top officers and directors were fired or were voluntarily resigning from the Company. In addition, the Company announced that the previously announced restatement of its financial results would be delayed further than originally reported because certain defendants had failed to cooperate with the Company's special counsel and failed to provide documents relevant to the restatement process. On this news the Company stock price fell $9.61 to close at $50.26. The Securities and Exchange Commission and the Attorney General of Virginia have commenced investigations of Freddie Mac's financial statements. For more details, contact Nancy Kaboolian by Phone: (212) 889-3700 or 800-889-3701 or by E-mail: nkaboolian@abbeygardy.com LEHMAN BROTHERS: Kaplan Fox Commences Securities Suit in S.D. NY ---------------------------------------------------------------- Kaplan Fox & Kilsheimer LLP filed a securities class action against Lehman Brothers, Inc. and Michael E. Stanek, in the United States District Court for the Southern District of New York on behalf of all persons or entities who purchased or otherwise acquired the common stock of RealNetworks, Inc. (NasdaqNM:RNWK) between July 1, 1999 and June 30, 2001, inclusive. The complaint alleges that defendants issued false and misleading analyst reports to the investing public on RealNetworks, a global provider of software products and services for internet media delivery, in a bid to win or maintain lucrative banking and advisory work from the Company. From July 1999 through June 2001, Lehman maintained its highest rating on RealNetworks stock, despite the fact that the stock lost approximately 90% of its value, falling from a high of $78.59 per share in February 2000 to a low of $7.06 in April 2001. As a result of defendants' false and misleading statements, the market price of RealNetworks common stock was artificially inflated, maintained or stabilized during the class period, to the injury of plaintiff and the other class members who purchased the stock at the time relying on the integrity of the market price of the stock. For more details, contact Frederic S. Fox or Donald R. Hall by Mail: 805 Third Avenue, 22nd Floor, New York, NY 10022 by Phone: (800) 290-1952 or (212) 687-1980 by Fax: (212) 687-7714 or by E- mail: mail@kaplanfox.com PROVIDENT FINANCIAL: Charles Piven Lodges Securities Suit in NY --------------------------------------------------------------- The Law Offices Of Charles J. Piven, PA initiated a securities class action in the United States District Court for the Southern District of New York on behalf of purchasers of CorTS Trust II for Provident Financial Trust I (NYSE:KVN) (NYSE:UNM) UnumProvident Corporate-Backed Trust Securities (CorTS) Certificates pursuant to an initial public offering on or about April 18, 2001 and/or in the aftermarket for CorTS through and including March 24, 2003. The complaint charges CorTS Trust II for Provident Financial Trust I, UnumProvident, Salomon Smith Barney and certain UnumProvident officers with violations of the Securities Exchange Act of 1934 and with violations of the Securities Act of 1933. UnumProvident Corporation is the parent holding company for a group of insurance and non-insurance companies that collectively operate throughout North America and in the United Kingdom, Japan and Argentina. UnumProvident's principal operating subsidiaries are Unum Life Insurance Company of America, Provident Life and Accident Insurance Company, The Paul Revere Life Insurance Company (Paul Revere Life) and Colonial Life & Accident Insurance Company (Colonial). UnumProvident, through its subsidiaries, is a provider of group and individual disability insurance. It also provides a complementary portfolio of other insurance products, including long-term care insurance, life insurance, employer- and employee-paid group benefits and related services. According to the CorTS IPO prospectus, UnumProvident Corporation guaranteed the payment of distributions on the Underlying Capital Securities but only to the extent that the Underlying Issuer had funds legally and immediately available therefor. On April 18, 2001, the first day of the class period, the CorTS were issued pursuant to the Prospectus and Registration Statement and began to publicly trade. The trust consisted of a single class of certificates, which represented interests in the trust and the certificates would only be paid through the trust. Therefore, the CorTS would only be paid if UnumProvident paid the original trust. During the class period, UnumProvident falsely reported financial results because it did not properly account for the long-term impairment of its investments. Moreover, the financial information was inflated due to UnumProvident's overzealous denial of legitimate claims of its insureds through, what one federal judge deemed ``a comprehensive system for targeting and terminating expensive claims.'' The financial statements and related press releases by UnumProvident identified above contained statements that were materially false and misleading when made. On March 24, 2003, UnumProvident issued a press release in which they stated their intentions to restate financial statements from previous years. This put the payments of the CorTS in jeopardy and caused the CorTS to lose almost 50% of their value. For more details, contact Charles J. Piven, PA by Mail: The World Trade Center-Baltimore, 401 East Pratt Street, Suite 2525, Baltimore, Maryland 21202, by Phone: 410-986-0036 or by E-mail: piven@pivenlaw.com PRUDENTIAL SECURITIES: Kirtland & Packard Lodges Suit in N.D. CA ---------------------------------------------------------------- Kirtland & Packard LLP and Lehmann Law Office initiated a securities class action in the United States District Court for the Northern District of California on behalf of California residents who, while customers of Prudential Securities, Inc (Prudential), and in the course of the relationship, engaged in the investment process known as writing put options in not less than three years prior to the filing of the original complaint in this matter, which was February 4, 2003. An amended complaint in this action was filed on May 22, 2003. The complaint alleges that as a matter of corporate policy, Prudential with deliberate recklessness encouraged its brokers to promote writing put options for its customers. A person who "writes" a put agrees, in return for a small fee, to purchase a stock from any investor who purchases said put during a period of specified duration in the future at a specified price, at the purchaser's option, even if the stock sells for a lower price on the open market. As alleged in the complaint, it is a high risk strategy. The complaint further alleges that while Prudential was writing puts on behalf of its customers, Prudential and its parent company, Prudential Insurance Company of America, were buying puts as a means of hedging against potential losses from market price declines in equities which they held for their own accounts. The complaint alleges that the above actions created an undisclosed conflict of interest between Prudential and its customers because Prudential was buying puts in the same markets in which it was encouraging its customers to write puts. Prudential was, in effect, protecting itself and its parent company by transferring their own investments risks to its customers. Furthermore, the complaint alleges that since Prudential was itself following the opposite strategy of what it was advising its customers, thus with deliberate recklessness giving advice that it did not believe. Based on the foregoing, the complaint seeks damages, restitution and injunctive relief based on claims that Prudential breached its fiduciary and statutory duty to class members and that Prudential violated Section 10(b) of the Securities Exchange Act of 1934. For more details, contact Harry Lehmann by Phone: 415-897-2121 or contact Michael L. Kelly by Phone: 310-536-1000, or visit the firm's Website: http://www.KirtlandPackard.com. ********* A list of Meetings, Conferences and Seminars appears in each Wednesday's edition of the Class Action Reporter. Submissions via e-mail to carconf@beard.com are encouraged. Each Friday's edition of the CAR includes a section featuring news on asbestos-related litigation and profiles of target asbestos defendants that, according to independent researches, collectively face billions of dollars in asbestos-related liabilities. The Asbestos Defendant Profiles is backed by an online database created to respond to custom searches. Go to http://litigationdatasource.com/asbestos_defendant_profiles.html ********* 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 * * *