/raid1/www/Hosts/bankrupt/CAR

/raid1/www/Hosts/bankrupt/CAR_Public/030718.mbx C L A S S A C T I O N R E P O R T E R Friday, July 18, 2003, Vol. 5, No. 141 Headlines AMERICAN PROMOTIONAL: Recalls 22,700 Fireworks For Injury Hazard APOLLO GROUP: Trial Still To Be Set in CA Overtime Wage Lawsuit ASARCO: Misses $1.8M Payment To Ruston, Washington Residents ATARI INC.: High Court Refuses Writ of Certiorari For KY Lawsuit ATARI INC.: Included as Defendant in Dismissed Columbine Lawsuit BEAR STEARNS: Named As Defendant in Securities Suit in CO Court CELLSTAR CORPORATION: Investors File Corporate Waste Suit in DE CHATTEM INC.: Court Approves Settlement of Consumer Fraud Suit CHATTEM INC.: Faces Suits Over PPA-Containing DEXATRIM Product COCA-COLA CO.: Women Say Law Firm Misrepresented Their Interests COREL CORPORATION: PA Court Approves Securities Suit Settlement COREL CORPORATION: Plaintiffs File Amended Securities Suit in NY CRYO-CELL INTERNATIONAL: Faces Securities Fraud Suits in M.D. FL INTERLAND INC.: Former MEI Employees Launch Overtime Wage Suit INTERVOICE-BRITE INC.: Fails To Reach Settlement in Mediation INTRAWARE INC.: Reaches Settlement For NY Securities Fraud Suit INTRAWARE INC.: Dismissed From FL Stock Lawsuit V. Credit Suisse INVESTMENT FIRMS: Move Closer To Pact With Regulators Over Enron LAIDLAW INTERNATIONAL: Settles Safety-Kleen Acquisition Lawsuit LAIDLAW INTERNATIONAL: Forges Settlement For Bondholder Lawsuits LATINO REPATRIATION: Suit To Seek Apology For Removal To Mexico LEHMAN BROTHERS: NY Court Approves Final Global Stock Settlement LEHMAN BROTHERS: Named as Defendant in Fleming Securities Suit MODELING AGENCIES: NY Ruling Allows Expansion of Antitrust Suit MSC INDUSTRIAL: Asks NY Court To Dismiss Consolidated Stock Suit PHILIPPINES: Court Awards Frozen Marcos Swiss Deposits To State PRINCESS CRUISES: CA Appeals Court Upholds Settlement Rejection TORO COMPANY: Recalls TimeCutter Lawn Mowers For Injury Hazard Asbestos Alert ASBESTOS LITIGATION: Groups Back Moves for Asbestos Provisions ASBESTOS LITIGATION: US Senate Nears Passage of Asbestos Bill ASBESTOS LITIGATION: PPL Says Asbestos Claims Number Unchanged ASBESTOS LITIGATION: Todd Shipyards Reveals Asbestos Lawsuits ASBESTOS LITIGATION: Tyco Reveals Asbestos Related Liabilities ASBESTOS LITIGATION: UIC Continues to Battle Asbestos Lawsuits New Securities Fraud Cases BLUE RHINO: Scott + Scott Launches Securities Lawsuit in C.D. CA POLYMEDICA CORPORATION: Brodsky & Smith Files MA Securities Suit ********* AMERICAN PROMOTIONAL: Recalls 22,700 Fireworks For Injury Hazard ---------------------------------------------------------------- American Promotional Events, Inc. is cooperating with the United States Consumer Product Safety Commission by voluntarily recalling about 22,700 "TNT" Reloadable Tube Fireworks. The firework device has a defective base and can break during launch. If reused, the launching device could then send fireworks in unintended directions, possible causing injury. There have been two reports of the base of these fireworks devices breaking. No injuries were reported. The firework device consists of a black base with a multicolored PVC material tube having approximate dimensions of 11 inches high by 1.25 inches in diameter. Each product is sold with six shells with fuses. The product is labeled "Model No. CP983," "Item No 460070," "TNT," and "#1 SELLING BRAND." Firework display stands and tents and retail operations in those states where the sale of consumer fireworks is legal. They were sold from June 2003 through July 2003 for about $35. For more details, contact the Company by Phone: (800) 243-1189 between 8 a.m. and 4:30 p.m. CT Monday through Friday. APOLLO GROUP: Trial Still To Be Set in CA Overtime Wage Lawsuit --------------------------------------------------------------- Trial has not been set in the class action pending against the Apollo Group, Inc. in the Superior Court of the State of California for the County of Solano. The plaintiffs, one current and two former enrollment advisors with University of Phoenix, filed this class action on behalf of themselves and current and former enrollment advisors employed by the Company in the State of California and seek certification as a class, monetary damages in unspecified amounts, and injunctive relief. Plaintiffs allege that during their employment, they and other enrollment advisors worked in excess of 8 hours per day or 40 hours per week, and contend that the Company failed to pay overtime. Three status conferences have been held, but no trial date has been set. While the outcome of this legal proceeding is currently not determinable, management does not expect the results of this action will have a material adverse effect on the Company's business, financial position, results of operations, or cash flows. ASARCO: Misses $1.8M Payment To Ruston, Washington Residents ------------------------------------------------------------ Asarco, a mining company located in Phoenix, has missed a recent deadline to pay $1.8 million to residents of Ruston, Washington, a Tacoma-area community affected by pollution from Asarco's now defunct copper smelter, the Associated Press Newswires reports. It is the second payment Asarco has missed this year. The company has cited as the cause its cash-flow problems. The residents were awarded the funds in the 1995 settlement of a class action against Asarco. Asarco's attorney in Seattle, John Phillips, has said the residents eventually will be paid. However, the company's failure to make the June 30 payment and a smaller one in January, worries activists who have seen other large mining operations declare bankruptcy, thereby leaving taxpayers with hundreds of millions of dollars in cleanup costs. "It is one thing to refuse to clean up your messes, but it is another to refuse to pay people who have won a legal judgment against you," said Whitney Painter of the Mineral Policy Center, a watchdog group in Washington, D.C. Mr. Phillips said that $1.4 million will be available from funds set up under the 1995 settlement to compensate local property owners and to ensure the medical monitoring the area residents also were granted under the terms of the settlement. The company also plans to tap a $1.5 million insurance payment due next year, said Mr. Phillips. That $2.9 million will more than cover the $2.5 million in past- due payments, Mr. Phillips added, and can be used to meet the unmet obligations if the residents and the court agree. The class action was filed over contamination left behind by the copper smelter in Rushton, which operated for about a century under various owners before closing in 1985. Asarco's cleanup of the Rushton site has cost about $80 million so far, and is expected to cost an additional $60 million. The cleanup is scheduled for completion in 2005. Plaintiff Richard Hamm said he is more concerned about Asarco completing the cleanup than about continuing to receive payments. Still, Mr. Hamm said, he would like to see more money, because the money the residents have received was not enough to do the remediation of their yards. Originally known as the American Smelting and Refining Co., Asarco has cleanup liability at smelters, mines and other facilities across the country. When the company was acquired, in 1999, by Grupo Mexico S.A. de C.V., federal officials sued, concerned that the sale would gut Asarco's assets and leave the company unable to meet its cleanup obligations. The lawsuit was resolved when Grupo agreed to establish a $100 million environmental cleanup trust fund. However, critics say the deal also forgave $4.5 million in cleanup liability, waived millions of dollars in pollution penalties and capped Asarco's cleanup obligations at $10.5 million over three years. "It appears to me that Asarco was let off the hook for the full cost of cleanup," said US Senator Max Baucus, D-Mont., when the deal was announced earlier this year. It is hard at this juncture to say what Asarco's total environmental liabilities are, the Associated Press Newswire's report said. In June, the company was sued by Washington's state Department of Ecology for failing to start the cleanup of a contaminated neighborhood in Everett, expected to cost $78 million. Federal officials say Asarco has cleanup obligations at more than 20 other sites around the country. Byproducts of copper smelting include toxic arsenic, which can cause several kinds of cancer; and lead, which can affect children's brain development. ATARI INC.: High Court Refuses Writ of Certiorari For KY Lawsuit ---------------------------------------------------------------- The United States Supreme Court denied the plaintiffs' petition for writ of certiorari in the lawsuit filed against Atari, Inc. by the administrators for three children who were murdered on December 1, 1997 by Michael Carneal at the Heath High School in McCracken County, Kentucky. The suit was brought against 25 defendants, including the Company and other corporations in the videogame business, companies that produced or distributed the movie The Basketball Diaries, and companies that provide allegedly obscene internet content. The complaint alleges, with respect to the Company and other corporations in the videogame business, that Mr. Carneal was influenced by the allegedly violent content of certain videogames and that the videogame manufacturers are liable for Mr. Carneal's conduct. The complaint seeks $10.0 million in compensatory damages and $100.0 million in punitive damages. The Company and approximately 10 other corporations in the videogame business have entered into a joint defense agreement and have retained counsel. The court later granted a motion to dismiss the complaint, and plaintiffs filed a motion to vacate the dismissal of the action. The court denied this motion. Plaintiffs appealed the dismissal of the action to the Court of Appeals for the Sixth Circuit. Plaintiffs' and defendants' final appellate briefs were submitted on November 30, 2000, and oral argument was heard on November 28, 2001. The Sixth Circuit issued a complete affirmation of the action's dismissal. The plaintiffs filed a petition for writ of certiorari in the United States Supreme Court, which the court denied in a summary order. ATARI INC.: Included as Defendant in Dismissed Columbine Lawsuit ---------------------------------------------------------------- Atari, Inc. was named as one of the defendants in the class action filed by families of the victims of the Columbine High School murders. The Colorado State Court has dismissed the suit. The family of William David Sanders, a teacher murdered on April 2, 1999 in a shooting rampage committed by Eric Harris and Dyland Klebold at the Columbine High School in Jefferson County, Colorado, filed the suit against 25 defendants. These include the Company and other corporations in the videogame business, companies that produced or distributed the movie, The Basketball Diaries, and companies that provide allegedly obscene internet content. The complaint alleges, with respect to the Company and other corporations in the videogame business, that Mr. Harris and Mr. Klebold were influenced by the allegedly violent content of certain videogames and that the videogame manufacturers are liable for their conduct. The complaint seeks a minimum $15,000 for each plaintiff and up to $15.0 million in compensatory damages for certain plaintiffs and $5.0 billion in punitive damages, injunctive relief in the form of a court established "monitoring system" requiring video game companies to comply with rules and standards set by the court for marketing violent games to children. On June 6, 2001 the Company waived service of a summons, and on July 9, 2001 the Company filed a motion to dismiss. Plaintiffs filed papers opposing the Company's motion to dismiss and on September 14, 2001 the Company filed its reply brief. On March 4, 2002 the Court granted our motion to dismiss and later denied plaintiffs' motion for reconsideration. The plaintiffs then filed a notice of appeal to the Court of Appeals for the Tenth Circuit. A stipulation of dismissal was filed on December 9, 2002 and the Court of Appeals for the Tenth Circuit dismissed the appeal. BEAR STEARNS: Named As Defendant in Securities Suit in CO Court --------------------------------------------------------------- Bear Stearns Companies, Inc. was named as a defendant in a securities class action filed in the United States District Court for the District of Colorado on behalf of clients of the defendants who purchased securities in unspecified companies between January 1, 1999 and December 21, 2001, as well as other non-client purchasers of securities during this proposed class period. Named as defendants are: (1) Citigroup Global Markets, Inc., (2) Merrill Lynch, Pierce, Fenner & Smith, Inc., (3) Bear, Stearns & Co. Inc., (4) Credit Suisse First Boston LLC, (5) UBS Warburg, LLC, (6) Goldman Sachs & Co., (7) JP Morgan Securities, Inc., (8) US Bancorp Piper Jaffray, Inc., (9) Morgan Stanley & Co., Inc. and (10) Lehman Brothers, Inc. Plaintiff asserts, among other things, that Bear Stearns violated Sections 10(b) and 20 of the Securities Exchange Act of 1934 in connection with recommending stocks without any reasonable basis and in an attempt to acquire and maintain investment banking business for the defendants. Compensatory damages in an unspecified amount are sought. Bear Stearns denies all allegations of wrongdoing asserted against it in this litigation and believes that it has substantial defenses to these claims. CELLSTAR CORPORATION: Investors File Corporate Waste Suit in DE ---------------------------------------------------------------- CellStar Corporation faces a class action filed in the Court of Chancery of the State of Delaware, New Castle County, alleging breach of fiduciary duty and corporate waste in connection with the CellStar Asia Transaction. The suit also names as defendants: (1) James L. Johnson, (2) John L. Jackson, (3) Jere W. Thompson, (4) Dale V. Kesler and (5) Terry S. Parker The suit alleges breach of fiduciary duty and corporate waste in connection with the CellStar Asia Transaction, and seeks injunctive and other equitable relief, rescissory and/or compensatory damages and reimbursement of attorney's fees and costs. The Company obtained an initial temporary stay of the proceedings for a period of 60 days from May 1, 2003, and subsequently obtained another temporary stay until the earlier of September 30, 2003, or plaintiff's determination that the transaction is likely to proceed, as a result of the Company's announced delay of the proposed IPO due to the outbreak and spread of Severe Acute Respiratory Syndrome (SARS). The Company believes it has meritorious defenses to these claims. CHATTEM INC.: Court Approves Settlement of Consumer Fraud Suit -------------------------------------------------------------- California State Court approved the settlement proposed by Chattem, Inc. to settle a consolidated class action filed over its skin products containing zinc oxide, which in turn contains lead. The Company was initially named as a defendant in a lawsuit brought by the Center for Environment Health (CEH) contending that it violated the California Safe Drinking Water and Toxic Enforcement Act of 1998 (Proposition 65) by selling to California consumers, without a warning, topical skin care products containing zinc oxide which in turn contains lead. The lawsuit contended that the purported failure to comply with Proposition 65 requirements also constituted a violation of the California Business & Professions Code. Violations of either Proposition 65 or the California Business and Professions Code render a defendant liable for civil penalties of up to $2.5 per day per violation. The Company was also named as a defendant in a lawsuit filed on December 29, 1999, entitled "JOHNSON et al. v. BRISTOL-MYERS SQUIBB CO., et al." This was a putative class action brought by two named plaintiffs on behalf of the general public in California, against the same entities that are defendants in the CEH lawsuit. The suit makes similar assertions as the CEH Suit, but did not assert claims directly under Proposition 65. Instead, it asserted that the alleged failure to comply with Proposition 65 gave rise to claims under California's Business and Professions Code and the California Civil Code. The lawsuit sought injunctive and equitable relief, restitution, the disgorgement of allegedly wrongfully obtained revenues and damages. The plaintiffs in the two separate actions filed a consolidated amended complaint that included a claim based upon the allegation that zinc oxide allegedly also contains cadmium. During the third quarter of fiscal 2002 a settlement was finalized among the parties for these two cases pending final court approval. Final court approval of the settlement was made on April 23, 2003. In the settlement, the Company paid an amount that was within the expected range that had been previously accrued by the Company. The settlement amount was not material to its results of operations. CHATTEM INC.: Faces Suits Over PPA-Containing DEXATRIM Product -------------------------------------------------------------- Chattem, Inc. has been named as a defendant in approximately 320 lawsuits involving claims by approximately 1,500 plaintiffs alleging that the plaintiffs were injured as a result of ingestion of products containing phenylpropanolamine (PPA), since July 1, 2003. PPA is an active ingredient in most of the Company's DEXATRIM products until November 2000. The Company anticipates that additional lawsuits will be filed with similar or other allegations related to its DEXATRIM products containing PPA. Because of the number of lawsuits filed, the early stage of discovery in many of these cases, the non-specific factual allegations against a broad group of defendants in most cases, the unspecified amount of damages in most of the cases, and the unresolved evidentiary hearings and other legal matters presently pending before the various state and federal courts, it is impractical to state with certainty at this time the amount being sought in these cases. The lawsuits that are federal cases have now been transferred to the United States District Court for the Western District of Washington (In re Phenylpropanolamine (PPA) Products Liability Litigation, MDL No. 1407). The remaining cases are state court cases which have been filed in a number of different states. As a result of a recent evidentiary hearing in the federal cases, the Company expects that lawsuits involving claims for injuries other than ischemic or hemorrhagic stroke will be excluded from the federal PPA litigation. Also, plaintiffs in the federal cases were required under a recent court order to identify by June 30, 2003 the specific PPA containing product they have taken. The Company anticipates that these two developments could significantly reduce the number of lawsuits and plaintiffs who are parties to those lawsuits pending against it. There are no cases involving an alleged ingestion of DEXATRIM with PPA currently set for trial in 2003. However, it is anticipated that significant evidentiary and other hearings will be held during the course of the year in the federal cases. Slightly more than half of the existing suits represent cases involving alleged injuries by products manufactured and sold prior to the Company's acquisition of DEXATRIM in December 1998. Of the approximately 150 lawsuits, involving approximately 1,285 plaintiffs that the Company is defending, approximately 185 plaintiffs allege injury as a result of ingestion of DEXATRIM containing PPA, approximately 770 plaintiffs allege injury as a result of ingestion of a product other than DEXATRIM, and approximately 330 plaintiffs have not identified a product. The Company currently believes that there are approximately 88 identified plaintiffs who allege that they suffered a stroke within three days of ingesting DEXATRIM products containing PPA that were sold after our acquisition of DEXATRIM in December 1998. Of these 88 plaintiffs the Company believes, based on discovery conducted to date that a smaller number of plaintiffs present claims that are significant. As additional lawsuits are filed and discovery in the existing lawsuits continues, the Company expects to know more about the characteristics of the cases. COCA-COLA CO.: Women Say Law Firm Misrepresented Their Interests ---------------------------------------------------------------- The Willie Gary law firm, based in Stuart, Florida, is on the receiving end of two more complaints relating to its alleged misrepresentation of the women's interests in lawsuits against Coca-Cola Co., The Atlanta Journal-Constitution reports. Motisolah Abdallah and Dana Allen announced recently that they have joined Marietta Goodman and Sharron Magnum in a complaint involving Mr. Gary. In June, Ms. Goodman and Ms. Magnum filed a claim with the Florida State Bar alleging that Mr. Gary failed to "exercise competence and due diligence in representing his clients' interests against Coca-Cola Co. These four women were among the 17 current and former Coke employees who sought representation from Mr. Gary's firm instead of taking a settlement from Coke in a racial discrimination class action. Ms. Abdallah also was among the eight original plaintiffs in the class action, which was filed against Coke in 1999. Like Ms. Goodman and Ms. Magnum, before them, Ms. Abdallah and Ms. Allen claim that Mr. Gary did not disclose that the TV network he founded, Atlanta-based Major Broadcasting Cable Network, had an advertising deal with Coca-Cola. The deal was widely publicized when it happened. The class action against Coke alleged that the company discriminated against African-American employees. A large majority of workers in the class took settlements from Coke. COREL CORPORATION: PA Court Approves Securities Suit Settlement --------------------------------------------------------------- The United States District Court for the Eastern District of Pennsylvania granted preliminary approval to the settlement proposed by Corel Corporation for the class action filed against it and Dr. Michael C.J. Cowpland on behalf of all persons who purchased or otherwise acquired Corel common shares between December 7, 1999 and March 20,2000. The complaint alleges that the defendants violated various provisions of US federal securities laws, including Section 10(b), Section 20(a) and Rule 10b-5 of the Securities Exchange Act of 1934, by misrepresenting or failing to disclose material information about Corel's financial condition. The complaint seeks an unspecified amount of money damages. The Company and co-defendant Dr. Cowpland have filed their answers to the amended Complaint, denying all liability to Plaintiffs and asserting various affirmative defenses. By order dated February 1, 2002, the court granted plaintiffs' motion for class certification and on May 3, 2002, approved the expanded class period as claimed in the amended consolidated suit. The Company has responded to extensive interrogatories and plaintiffs have conducted numerous depositions of both current and former Corel employees and directors. Following the attendance of a mediation in April 2003, the parties signed in June 2003 a Stipulation and Agreement of Settlement to resolve all claims in the case. In entering into the settlement, the parties acknowledged that Corel continued to deny any wrongdoing, that it had entered into the Settlement in view of the uncertainties and expense of further litigation and that the Settlement was not an admission of fault. On July 1, 2003, the court granted Preliminary Approval to the proposed Settlement. The class will be notified about the Settlement and will be given the opportunity to opt out or object to the Settlement. This notification will indicate the terms of the Settlement. The court will then determine whether to grant final judicial approval to the Settlement. This procedure is expected to last at least until the Fall of 2003. COREL CORPORATION: Plaintiffs File Amended Securities Suit in NY ---------------------------------------------------------------- Plaintiffs in the securities class action filed against Corel Corporation filed an amended suit in the Supreme Court of the State of New York, County of Nassau. The suit also names as defendants: (1) Derek Burney, (2) James Baillie, (3) Lyle Blair, (4) David Galloway, (5) Hunter Grant, (6) James Hopkins, (7) Jean-Louis Malouin, (8) The Hon. Barbara McDougall, and (9) Germaine Gibara The suit arises from the non-disclosure and standstill agreement for the acquisition of Corel by Vector Capital, entered into by Corel and Vector on March 24, 2003, and claims unspecified compensatory damages and injunctive relief. The plaintiff alleges that the defendants breached their duties to take steps to ensure that the shareholders receive maximum value for their shares in a change of control transaction. On June 5, 2003, Corel and the individual defendants moved to dismiss on the basis that the plaintiff's claim for breach of fiduciary duty is a Canadian corporate law question which ought not be heard in the courts of New York and that the court lacks personal jurisdiction over the defendants. The plaintiff served Corel and the individual defendants with an amended complaint on June 27, 2003, updating references to the price of the acquisition as reflected in the acquisition agreement signed between Corel and Vector on June 6, 2003. The allegations are otherwise identical to the complaint. CRYO-CELL INTERNATIONAL: Faces Securities Fraud Suits in M.D. FL ---------------------------------------------------------------- Cryo-Cell International, Inc. faces six class actions filed against it, certain of its current and former officers and directors and two accounting firms who previously audited the Company's financial statements. The suits, filed in the United States District Court for the Middle District of Florida, Tampa Division, allege violations of federal securities laws, including improper recognition of revenue in the financial statements presented in certain public reports of the Company. The complaints generally seek among other things, certification of a class of persons who purchased the Company's common stock between March 16, 1999 and May 20, 2003 and unspecified damages. The Company has not yet responded to any of the complaints. The Company believes the complaints are without merit. INTERLAND INC.: Former MEI Employees Launch Overtime Wage Suit -------------------------------------------------------------- Interland, Inc. faces an employee class action filed in the United States District Court for Idaho. In this case, five individual plaintiffs claim that when they were employees of Micron Electronics Inc. (MEI) between 1999 and April 2001, they and other similarly situated employees did not receive overtime pay to which they were entitled under the Fair Labor Standards Act. The Company disputes these claims and believes the plaintiffs are not entitled to any material additional wages. The court conditionally certified a class of not more than eight hundred former employees, and notices of the litigation are being sent to these persons to give them the opportunity to "opt in" to the litigation. The parties are continuing to conduct discovery. At this early stage of the litigation, the Company is unable to estimate its total expenses, possible loss or range of loss that may ultimately be connected with the matter. This potential liability remains with Interland even though it sold the PC Systems business. INTERVOICE-BRITE INC.: Fails To Reach Settlement in Mediation ------------------------------------------------------------- Mediation for the consolidated securities class action filed against Intervoice-Brite, Inc. in the United States District Court, Northern District of Texas, Dallas Division failed to lead to a settlement. The consolidated suit, filed on behalf of purchasers of common stock of the Company during the period from October 12, 1999 through June 6, 2000, alleges claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Securities and Exchange Commission Rule 10b-5 against the Company as well as certain named current and former officers and directors of the Company on behalf of the alleged class members. In the complaint, plaintiffs claim that the Company and the named current and former officers and directors issued false and misleading statements during the class period concerning the financial condition of the Company, the results of the Company's merger with Brite and the alleged future business projections of the Company. Plaintiffs have asserted that these alleged statements resulted in artificially inflated stock prices. The Company believes that it and its officers and directors complied with their obligations under the securities laws, and denies the allegations. The Company responded to this complaint by filing a motion to dismiss the complaint in the consolidated proceeding. The Company asserted that the complaint lacked the degree of specificity and factual support to meet the pleading standards applicable to federal securities litigation. On this basis, the Company requested that the United States District Court for the Northern District of Texas dismiss the complaint in its entirety. Plaintiffs responded to the Company's request for dismissal. On August 8, 2002, the court entered an order granting the Company's motion to dismiss the lawsuit. In the order dismissing the lawsuit, the court granted plaintiffs an opportunity to reinstate the lawsuit by filing an amended complaint. Plaintiffs filed an amended complaint on September 23, 2002. The Company has filed a motion to dismiss the amended complaint, and plaintiffs have filed a response in opposition to the Company's motion to dismiss. At the direction of the court, the parties attended a mediation with a neutral third-party mediator during June 2003. The mediation did not result in a settlement. All discovery and other proceedings not related to the dismissal have been stayed pending resolution of the Company's request to dismiss the amended complaint. INTRAWARE INC.: Reaches Settlement For NY Securities Fraud Suit --------------------------------------------------------------- Intraware, Inc. has reached a tentative settlement for a consolidated securities class action filed in the United States District Court for the Southern District of New York, on behalf of all persons who purchased the Company's common stock from February 25, 1999 (the date of its initial public offering) through December 6, 2000. The suit names as defendants the Company, three of its present and former officers and directors, and several investment banking firms that served as underwriters of its initial public offering. 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 amended complaint also alleges that the underwriters misused their securities analysts to manipulate the price of the Company's stock. No specific damages are claimed. Lawsuits containing similar allegations have been filed in the Southern District of New York challenging over 300 other initial public offerings and secondary offerings conducted in 1999 and 2000. All of these lawsuits have been consolidated for pretrial purposes before United States District Court Judge Shira Scheindlin. On July 15, 2002, an omnibus motion to dismiss was filed in the coordinated litigation on behalf of the issuer defendants, of which Intraware and its three named current and former officers and directors are a part, on common pleadings issues. On October 9, 2002, the court entered and ordered a stipulation of dismissal, which dismissed the three named current and former officers and directors from the litigation without prejudice. On February 19, 2002, the Court entered an order denying in part the issuer defendants' omnibus motion to dismiss, including those portions of the motion to dismiss relating to Intraware. No discovery has been served on us to date. A special committee of the Company's Board recently approved a tentative settlement proposal from plaintiffs. There is no guarantee that the settlement will become final, as it is subject to a number of conditions, including court approval. However, based on this proposed settlement, the Company does not believe it will suffer material future losses related to this lawsuit. INTRAWARE INC.: Dismissed From FL Stock Lawsuit V. Credit Suisse ---------------------------------------------------------------- Intraware, Inc., its chief executive officer and its chief financial officer have been dismissed as defendants in the amended securities class action filed in the United States District Court in the Southern District of Florida. The defendants were Credit Suisse Group, several of Credit Suisse Group's current and former directors and officers, and several public companies and certain of their current and former directors and officers, including the Company and its chief executive officer and former chief financial officer. The suit alleged that the defendants engaged in a scheme to under-price initial public offerings and then artificially inflate prices of those stocks in the aftermarket, in violation of Florida blue sky law, Sections 11, 12 and 15 of the Securities Act of 1933, Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and the common law of fraud and negligence. The suit sought unspecified damages, restitution, and injunctive relief. On June 19, 2003, the plaintiffs filed an amended complaint, dismissing the Company and its chief executive officer and former chief financial officer from the suit without prejudice. Based on this dismissal, the Company does not believe it will suffer material future losses related to this lawsuit and therefore have not accrued for any losses. INVESTMENT FIRMS: Move Closer To Pact With Regulators Over Enron ---------------------------------------------------------------- Two major banks tied to a number of questionable Enron Corporation transactions may be close to settlements with the Securities and Exchange Commission and the New York City District Attorney's Office, the Houston Chronicle reports. The Wall Street Journal, according to the Houston Chronicle's report, said J.P. Morgan Chase may pay between $ 100 million and $150 million in fines to the SEC and up to $25 million to the office of Manhattan District Attorney Robert Morgenthau. The Financial Times, the Chronicle reports, quoted a Citigroup executive as saying Citigroup expects to reach settlements with the SEC and the district attorney during this fiscal quarter. The course of these settlement talks, particularly, whether criminal prosecution results, are of pronounced interest to the plaintiffs in the pending class actions brought by former Enron shareholders and employees, who seek evidence of wrongdoing by the banks to support their class action charges. Chase and Citigroup remain entrenched in these class actions after US District Judge Melinda Harmon refused a request by the banks to get out of the lawsuits. The Fifth US Circuit Court of Appeals refused to review a claim by Chase and other banks that Judge Harmon abused her discretion. The civil trial is scheduled for October 2005, but at the present time the parties are engaged in court-ordered mediation. The Chase and Citigroup settlement talks are thought to relate to transactions the banks helped Enron arrange, called prepays. In these deals, Enron received payment up front for the future delivery of a commodity, such as electricity, oil or natural gas. A report by court-appointed bankruptcy Examiner Neal Batson has described such transactions as little more than disguised loans from the banks, because the bank employees had verbal guarantees from Enron that they would not lose money; in most cases, no commodity was delivered. Citigroup has said, the Chronicle reports, that it relied on its accountants and advisers to report the transactions properly. Chase officials have noted they were not responsible for how Enron reported the transactions. If settlements are reached, penalties paid, and prosecution avoided, it is likely Chase and Citigroup will be told to change certain business practices and to cooperate with ongoing investigations, according to the Chronicle. LAIDLAW INTERNATIONAL: Settles Safety-Kleen Acquisition Lawsuit --------------------------------------------------------------- Laidlaw International, Inc. settled the consolidated class action filed against it in the United States District Court for the District of South Carolina, asserting claims under the federal securities laws that the Company's financial statements had accounting irregularities based on the Company's incorporation and/or consolidation of the financial results of Safety-Kleen in the reported consolidated financial results of the Company. PricewaterhouseCoopers LLP and PricewaterhouseCoopers LLP (Canada) have agreed to a settlement with the plaintiff class. The suit was previously pending against Safety-Kleen Corporation and others. Safety-Kleen, which is in a chapter 11 reorganization proceeding, was dismissed as a defendant. In the currently active complaint, plaintiffs allege that, during the class period, in violation of the federal securities laws, the defendants disseminated to the investing public false and misleading financial statements and press releases concerning the financial statements and results of operations of LESI and Safety-Kleen. Plaintiffs further allege that the proxy statement, prospectus and registration statement pursuant to which LESI and Old Safety-Kleen were merged contained false and misleading financial information. PricewaterhouseCoopers LLP has agreed to a settlement with the plaintiff class. A consolidated amended class action complaint for violations of federal securities laws was later filed against the Company and other parties. In this complaint, the plaintiffs alleged that the defendants caused to be disseminated a proxy statement that contained misrepresentations and omissions of a materially false and misleading nature. On June 7, 2001, the court dismissed the claims against the Company and some of the defendants. The plaintiffs then filed a motion seeking leave to file an amended complaint that asserts a common law claim for negligent misrepresentation against the Company and other defendants. The court granted the motion after the Company's chapter 11 filing, then subsequently vacated its order granting the motion with respect to the Company. Certain of the defendants in the above actions asserted claims for indemnification against the Company. As a result of the Safety-Kleen settlement described above, claims of the seven Safety-Kleen Directors will be withdrawn with prejudice. LAIDLAW INTERNATIONAL: Forges Settlement For Bondholder Lawsuits ---------------------------------------------------------------- Laidlaw International, Inc. forged a "Bondholder Settlement Agreement" for the securities class actions pending against it, and the other defendants, including some of the Company's current or former officers and directors, the underwriter defendants, PricewaterhouseCoopers LLP and PricewaterhouseCoopers LLP (Canada). The other defendants, including the Company, will also release or have already released various claims against each other. The Bondholder Settlement Agreement was approved by the Bankruptcy Court and the Canadian Court on August 30, 2002 and September 11, 2002, respectively, and by the federal court in South Carolina on December 17, 2002. Subject to the Bondholder Settlement Agreement being fully implemented on the current terms, the plaintiff bondholder classes would be paid $42.875 million, and the estate of the Company would receive $12.5 million. The settlement provides for two different effective dates. The settlement between PricewaterhouseCoopers LLP and PricewaterhouseCoopers LLP (Canada) and all other parties has already become effective, and the estate of the Company has received $11.5 million of the settlement proceeds. The remaining $1.0 million was received upon the Company's emergence from bankruptcy. The Bondholder Settlement Agreement encompasses the following cases: (1) John Hancock Life Insurance Company, New York Life Insurance Company, Aid Association for Lutherans, American General Annuity Insurance Company and the Variable Annuity Life Insurance Company filed a securities fraud class action in the United States District Court for the Southern District of New York against the Company, certain of the Company's current or former officers and directors, various underwriters in the Company's sale of certain notes (the "Prepetition Notes"), and its auditors, PricewaterhouseCoopers LLP and PricewaterhouseCoopers LLP (Canada). Plaintiffs assert claims under the federal securities laws and the common law of South Carolina, alleging that the registration statement and prospectus for the Prepetition Notes contained misleading statements with respect to the Company's financial condition and the relative priority of the Prepetition Notes. This action was transferred to the District of South Carolina; (2) Barbara Meltzer filed a securities fraud class action complaint in the United States District Court for the District of South Carolina against the Company and certain of its current or former officers and directors. Plaintiff asserts claims under the federal securities laws that, during the class period, defendants disseminated to the investing public false and misleading financial statements and press releases concerning the relative priority of the Company's Prepetition Notes and the Company's publicly reported financial condition and future prospects. This action and the Hancock action discussed above were consolidated by order of the South Carolina federal court dated June 20, 2001, and the caption of the case was changed to In re Laidlaw Bondholders Litigation. (3) The Bondholder Settlement Agreement also includes the settlement of a class action brought by certain Company bondholders against Citibank, N.A., the indenture trustee for the Prepetition Notes. (4) Westdeutsche Landesbank Girozentrale, New York Branch, filed a securities fraud class action complaint against the Company in the United States District Court for the Southern District of New York. Other defendants in the proceeding include certain of the Company's current or former officers and directors, various underwriters in the Company's sale of the Prepetition Notes, PricewaterhouseCoopers LLP and PricewaterhouseCoopers LLP (Canada). Plaintiff alleges that defendants disseminated to the investing public false and misleading financial statements and press releases concerning the Company's obligations with respect to prepetition indentures entered into in 1992 and 1997 and the Company's prepetition credit facility. LATINO REPATRIATION: Suit To Seek Apology For Removal To Mexico --------------------------------------------------------------- In a campaign carried out by Los Angeles County and city authorities, in cooperation with federal immigration officials, hundreds of families of Mexican descent were loaded aboard trains in the mid-1930s and moved to Mexico. This scene was repeated as part of a decade-long, nationwide effort to reduce unemployment and public welfare rolls during the Depression by forcing more than one million Mexicans and Mexican Americans to leave the United States, according to some scholars who have studied that campaign, the Los Angeles Times reports. As part of a movement to win reparations and an apology for victims of that largely forgotten campaign, a class action is being prepared and will soon be filed in Los Angeles Superior Court, seeking unspecified damages from the city and county of Los Angeles, the state of California and possibly other defendants, said attorney Raymond P. Boucher, of the Los Angeles law firm of Kiesel, Boucher & Larson. The plaintiffs will allege that their constitutional rights were violated by the removal effort, said Mr. Boucher. The scholars estimate that 60 percent of the people sent to Mexico in the 1930s "repatriation" campaign were United States citizens. State Senator Joseph Dunn (D-Santa Ana) also is involved in the effort to win reparations and an apology for victims of the repatriation campaign. Senator Dunn recently presided over a Senate hearing that will examine the 1930s removal of Mexicans and Mexican Americans. Senator Dunn also is preparing legislation that would extend the statute of limitations for victims who wish to file claims for damages. The legislation also would commission a state study of the repatriation and ask Congress to review the issue. "It is important for us as a society to recognize the wrong that was committed," Senator Dunn said. "The best approach would be for Congress to enact a reparations program similar to that which was done for victims of the Japanese American internment." Civil right advocates have said about the repatriation campaign that the issue resonates far beyond the victims. "We learn from lessons of the past," said Dale Shimasaki, former director of the Civil Liberties Public Education Fund, a program created by the Civil Liberties Act of 1988, to educate people about the Japanese American internment. The foundation for Senator Dunn's effort was laid by two Southern California scholars: Francisco Balderrama, a California State L.A. professor of Chicano studies and history; and Raymond Rodriguez, a retired history professor from Long Beach City College. They pooled their passion and years of research to write the 1995 book "Decade of Betrayal." Ironically, many of the Mexican nationals who were forced to leave the United States in the 1930s, had been encouraged to come here by industries in need of cheap, reliable labor, particularly California's agricultural industry. The onset of the Depression, however, created support for a growing action against Mexican and Mexican American laborers, which grew during the 1930s as worsening unemployment and growing demands for public aid produced a national clamor. In Washington, Republican President Herbert Hoover initiated a repatriation program in 1930. However, federal support ended when Democrat Franklin Delano Roosevelt took office in 1933. State and local governments continued their efforts throughout the decade. Across the country, Mexicans, or people suspected of being Mexican, were stopped on the streets and asked to show papers to prove their right to be in the United States. The campaign spread to pool halls, parks and other gathering places. Senator Dunn said the issue is still relevant because of the ongoing debate over immigration, especially during times of economic difficulty. "The deportation program of the 1930s is not a proud chapter in American history," Senator Dunn said. "Hopefully, by acknowledging this, we can minimize the likelihood of unjustly treating future immigrants to this great nation." LEHMAN BROTHERS: NY Court Approves Final Global Stock Settlement ---------------------------------------------------------------- The United States District Court in the Southern District of New York Hearing Panel granted approval to the final global settlement forged by Lehman Brothers, Inc. (LBI) and other investment firms with the United States Securities and Exchange Commission (SEC), the New York State Attorney General's Office, the New York Stock Exchange (NYSE), the National Association of Securities Dealers (NASD) and the North American Securities Administrators Association (on behalf of state and territory securities regulators). The settlement was forged to resolve the firms' industry-wide investigations relating to allegations of research analyst conflicts of interest at various investment banking firms, including the Company. The settlement involves several of the leading securities firms in the United States, including LBI, and various federal and state regulators and self-regulatory organizations. Without admitting or denying any of the allegations of violations of certain NASD and NYSE rules relating to investment research activities, the Company entered into consents and agreements with the SEC, the NYSE, the NASD and the Alabama Securities Commission (which acted as LBI's lead state regulator in connection with the Final Global Settlement) to resolve their investigations of LBI relating to those matters. Pursuant to the Final Global Settlement, LBI agreed to: (1) pay $25 million as a penalty; (2) pay $25 million as disgorgement of commissions and other monies; (3) contribute a total of $25million over five years to provide third-party independent research to clients; (4) contribute a total of $5 million over five years towards investor education; (5) adopt internal structural and operational reforms that will further augment the steps it has already taken to promote research analyst independence; and (6) be enjoined from the alleged violations of NASD and NYSE rules. In connection with the Final Global Settlement, LBI also voluntarily agreed to adopt restrictions on the allocation of shares in initial public offerings to executives and directors of public companies. LBI expects to reach similar arrangements with most or all of the other states, the District of Columbia and the Commonwealth of Puerto Rico. Any monetary penalties and other payments required by these individual arrangements are expected to be included within the aggregate amounts discussed above. In April 2003, to effectuate the Final Global Settlement, the SEC filed a Complaint and Final Judgment in the United States District Court for the Southern District of New York. The Final Judgment has not yet been entered by the court, and the court has asked for certain additional information. Also in April, the NASD accepted the Letter of Acceptance, Waiver and Consent entered into with LBI in connection with the Final Global Settlement and in May 2003, the NYSE advised LBI that the Hearing Panel's Decision, in which it accepted the Final Global Settlement, had become final. Payment will be made in conformance with the payment provisions of the Final Judgment, once the Final Judgment is entered. LEHMAN BROTHERS: Named as Defendant in Fleming Securities Suit -------------------------------------------------------------- Lehman Brothers, Inc. was named as defendant in a lawsuit captioned Massachusetts State Carpenters Pension Fund v. Fleming Companies,Inc., et al., filed in the 160th District Court of Dallas County, Texas, asserting claims arising under Sections 11, 12(a)(2), and 15 of the Securities Act of 1933. The action was brought on behalf of a purported class of investors who purchased in two simultaneous Fleming securities offerings in June 2002. The offerings raised approximately $378 million. The complaint alleges that the prospectus and registration statement for the offerings contained false and misleading statements or omitted material facts concerning, among other things, deductions Fleming took on vendor invoices, its accounting for recognition of income, amortization of long term assets and use of capitalized interest, and the performance of Fleming's retail operations. The complaint seeks unspecified damages, interest, attorneys' fees, costs and expenses. In addition to Fleming, the suit named ten individual defendants (officers and/or directors of Fleming), Fleming's auditor, and the underwriters of the offerings, including LBI. The case was removed to the United States District Court for the Northern District of Texas. Subsequent to that removal, on April 1, 2003, Fleming filed for protection under the federal bankruptcy code. Also in April 2003, plaintiffs filed a virtually identical second lawsuit in the United States District Court for the Eastern District of Texas. MODELING AGENCIES: NY Ruling Allows Expansion of Antitrust Suit --------------------------------------------------------------- US District Judge Harold Baer Jr.'s decision granting class certification to the lawsuit filed against the nation's top modeling agencies will allow six little-known models from California to expand the suit, which charges the agencies with overcharging on commissions for finding them work. Others who want to allege the agencies are violating the antitrust laws can now join the suit. Judge Baer rejected the agencies' arguments that each model's case must be treated individually by the court because each model is unique, with different looks, talent, gender and age. A sampling, however, of contracts for the models shows that about 95 percent of them are contracted to pay the industry standard 20 percent commission rate, Judge Baer said. "Given the plethora of differences between models, as laundry- listed by the defendants, the fact that the overwhelming number of models were charged the same rate belies any claim that the rates vary as a function of services needed," Judge Baer said. The models' lawsuit alleges that the modeling agencies conspired to fix commission rates for finding the models work and charged them unlawful expenses as well, forcing them to pay fees and expenses that are disallowed by federal antitrust laws. The lawsuit, which was filed in Manhattan, in US District Court, says Wilhelmina, Ford, Elite and other New York City-based agencies, conspired to maintain matching, nonnegotiable commissions of 20 percent. The conspiracy began in the 1970s, when the agencies quietly raised the commissions above a ten percent ceiling set by state law, the lawsuit says. MSC INDUSTRIAL: Asks NY Court To Dismiss Consolidated Stock Suit ---------------------------------------------------------------- MSC Industrial Direct Co. asked the United States District Court for the Eastern District of New York to dismiss the consolidated securities class action filed against it, its directors and certain of its officers. The suit, filed on behalf of a class of the Company's stockholders, sought unspecified damages based on allegations arising from the Company's announcement that it would restate its consolidated financial statements for fiscal years 1999 through 2001 and the first three quarters of fiscal 2002. The suit alleges that during the periods affected by the restatement, the Company, its directors and certain of its officers violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder, by materially misleading the investing public by making false statements in order to inflate the price of the Company's common stock. A lead plaintiff, International Association of Machinists National Pension Fund, was named on November 6, 2002. The Company filed a motion to dismiss on February 3, 2003, and the Company and the plaintiffs submitted briefs. Oral arguments on the motion have not yet been scheduled. PHILIPPINES: Court Awards Frozen Marcos Swiss Deposits To State --------------------------------------------------------------- The Supreme Court recently awarded the Philippine government the frozen Swiss bank deposits of former president Ferdinand Marcos, which, as of early last year, amounted to $658.2 million, the Associated Press Newswires reports. "In the face of undeniable circumstances and the avalanche of documentary evidence against them, respondent Marcoses failed to justify the lawful nature of their acquisition of the said assets," the Supreme Court said in a 100-page ruling. "Hence, the Swiss deposits should be considered ill-gotten wealth and forfeited in favor of the State." The decision reversed an earlier ruling by the anti-graft court Sandiganbayan that the money was in the name of several foundations and the government had not fully established that they belonged to the Marcos family. A Swiss court transferred around US$570 million in Marcos deposits in 1999, to the Philippine National Bank, which holds them in escrow pending a final resolution on ownership. The Swiss accounts represent the largest amount to be recovered from the billions of dollars Mr. Marcos and his wife Imelda allegedly acquired while in power. The late President Marcos served as president from 1966, until he was exiled in a popular revolt in February 1986. The late president and his family went into exile in Hawaii, where he died three years later without admitting wrongdoing. The Sandiganbayan earlier determined that the combined salaries of Mr. Marcos and his wife Imelda -- who served as governor of metropolitan Manila and as minister of human settlements -- were equivalent to only about US$304,300 over the 20-year period. The Swiss bank deposits amounted to about US$356 million when they were discovered shortly after the Marcos government was toppled, and the amount has grown with interest. The Swiss Supreme Court has ruled that the money can be released to the Philippine government if Imelda Marcos was criminally convicted in connection with the deposits and if victims of human rights violations during Ferdinand Marcos's administration are compensated. The Marcos estate lost a class action for human rights violations to 9,539 Filipinos, who were awarded nearly US$2 billion in compensation by the US District Court in Hawaii. None of the claimants has received any money. PRINCESS CRUISES: CA Appeals Court Upholds Settlement Rejection --------------------------------------------------------------- The California Appeals Court upheld a lower court's rejection of a settlement proposed by Princess Cruises PLC to settle a class action filed against it in the Los Angeles County Superior Court alleging that it inappropriately assessed its passengers with certain port charges in addition to their cruise fare. The plaintiffs have not claimed a specific damage amount but settlement of this litigation had been agreed in principle with the plaintiffs for coupons for future travel in amounts between $5 and $24, with a total face value of approximately $13 million. However, on January 17, 2002, a Los Angeles, California Superior Court Judge ruled that he would not consider the class-wide settlement agreed by the parties on the grounds that he had previously ruled that there was no appropriate class. The plaintiffs appealed the ruling, and the Court of Appeal upheld the lower court's ruling. The plaintiff's writ to the California Supreme Court has been denied. As a result of this ruling, the case remains pending. TORO COMPANY: Recalls TimeCutter Lawn Mowers For Injury Hazard -------------------------------------------------------------- Toro Company is cooperating with the United States Consumer Product Safety Commission by voluntarily recalling 7,500 TimeCutter Z Riding Lawn Mowers. The actuator arm could fail, resulting in a loss of transmission control and risk of personal injury. One consumer reported loss of control resulting in a tip-over. The consumer received a black eye, along with cuts and bruises. The recalled models are: (1) Model 74301, Serial Numbers 230000001-230003210, 14 HP 38-inch cut zero-turn radius tractor; (2) Model 74325, Serial Numbers 230000001-230000500, 16 HP 42-inch cut zero-turn radius tractor; (3) Model 74330, Serial Numbers 230000001-230003070, 16 HP 42-inch cut zero-turn radius tractor; (4) Model 74350, Serial Numbers 230000001-230001145, 17 HP 42-inch cut zero-turn radius tractor The model and serial number decal can be found on the frame below the seat. Authorized Toro dealers sold these tractors nationwide from January 2003 to April 2003 for between $2700 and $3300. For more information, contact the Company by Phone: (800) 525-0059, between 8 a.m. and 6 p.m. CT Monday through Friday or visit the firm's Website: http://www.toro.com. Asbestos Alert ASBESTOS LITIGATION: Groups Back Moves for Asbestos Provisions -------------------------------------------------------------- Groups in the power industry have formed an alliance with community support groups to lobby for better health facilities and support for victims of asbestos-related diseases. The Gippsland Trades and Labor Council have written to the Victorian Government saying there are insufficient medical and associated facilities, despite the high prevalence of the diseases among power industry workers. Luke Vandermeulen from the Construction, Forestry, Mining and Energy Union says the unions and the support groups have come together in the hope of forcing some action from the Government. "The Gippsland Asbestos and Related Diseases Support group is going to be involved, the Latrobe Asbestos Disease Support group is going to be involved, the medical profession will be involved and I think also the legal profession will be involved in pushing the Government towards a decent response to a major issue in the Latrobe Valley, which is asbestos," he said. "I think that's going to be the way of the future . that all the groups get together and push as one, because it's a common issue and we need to have a common push to a solution," he continued. ASBESTOS LITIGATION: US Senate Nears Passage of Asbestos Bill ------------------------------------------------------------- The US Senate has edged forward in its moves to curb asbestos litigation. The bill, which aims to set up a national fund to compensate people whose health has been ruined by asbestos, is nearing completion. On a 10-8 vote last week, the Senate Judiciary Committee sent to the floor a business-backed plan to close the courts to all asbestos claims. Instead, these claims would be transferred to a new federal trust fund. During its 27-year life, the fund is expected to have $108,000,000,000 to compensate victims of asbestos-related diseases. The money would come from about 8,500 companies that made or sold asbestos products, directly or through subsidiaries, as well as their insurers. Most of the firms would pay no more than $25,000,000 per year. The Senate bill would cancel all pending settlements after the passage of the bill. Attorneys who represent people who have been sickened by asbestos decries the bill saying it is a bailout for big business. "It's a scandal and a disgrace," said Steven Kazan, an Oakland, California, lawyer who filed the first asbestos suits in 1974. ASBESTOS LITIGATION: PPL Says Asbestos Claims Number Unchanged -------------------------------------------------------------- PPL Corporation declares in its latest quarterly filing with the Securities and Exchange Commission that there have been increasing litigation claims throughout the U.S. based on exposure to asbestos. There has been no accountable increase in these lawsuits against the companies based on asbestos exposure charges against companies that manufacture or distribute asbestos products or that have these products on their premises. Certain of PPL's generation subsidiaries and certain of its energy services subsidiaries, such as those that have supplied, may have supplied or installed asbestos material in connection with the repair or installation of process piping and heating, ventilating and air conditioning systems, have been named as defendants in asbestos-related lawsuits. PPL cannot predict the outcome of these lawsuits or whether additional claims may be asserted against its subsidiaries in the future. PPL does not expect that the ultimate resolution of the current lawsuits will have a material adverse effect on its financial condition. ASBESTOS LITIGATION: Todd Shipyards Reveals Asbestos Lawsuits ------------------------------------------------------------- Todd Shipyards reports in its latest filing with the Securities and Exchange Commission that it is included in about 375 cases open as of March 30, 2003, and there are around 570 claimants. Todd Shipyards declares that the exact number of claimants is not determinable as around 150 of the open cases include multiple claimant filings against 30-100 defendants. The filings do not indicate which claimants allege liability against the Company. The previously stated 570 claimants is the Company's best estimate taking known facts into consideration. Parties alleging damages from past exposure to toxic substances, generally asbestos, at closed former Company facilities, have named the Company as a defendant in civil actions. The cases generally include as defendants, in addition to the Company, other ship builders and repairers, ship owners, asbestos manufacturers, distributors and installers, and equipment manufacturers and arise from injuries or illnesses allegedly caused by exposure to asbestos or other toxic substances. The Company assesses claims as they are filed and as the cases develop, dividing them into two different categories based on severity of illness. Based on current fact patterns, certain diseases including mesothelioma, lung cancer and fully developed asbestosis are categorized by the Company as "malignant" claims. All other claims of a less medically serious nature are categorized as "non-malignant." The Company is currently defending approximately 36 "malignant" claims and approximately 534 "non-malignant" claims. About 365 claimants do not assert any specific amount of relief sought. A total of around 150 claims contain standard boilerplate language asserting on behalf of each claimant a claim for damages of $2,000,000 compensatory and $20,000,000 punitive against approximately 100 defendants. Approximately 20 claims set forth the same boilerplate language asserting $10,000,000-$20,000,000 in compensatory and $10,000,000- $20,000,000 in punitive damages on behalf of each claimant against approximately 30-100 defendants. Around 20 cases assert $1,000,000-$15,000,000 in compensatory and $5,000,000-$10,000,000 in punitive damages on behalf of each claimant against approximately 30-100 defendants. Approximately 10 claimants seek compensatory damages of less than $100,000 per claim and approximately five claimants seek compensatory damages between $1,000,000 and $15,000,000. The claims involved in the foregoing cases do not specify against which defendants which claims are made or alleged dates of exposure. Based upon settled or concluded claims to date, the Company has not identified any correlation between the amount of the relief sought in the complaint and the final value of the claim. The Company and its insurers are vigorously defending these actions. During fiscal year 2003, the Company experienced no material changes in its bodily injury liabilities and insurance receivables. At both March 30, 2003 and March 31, 2002, respectively, the Company had recorded bodily injury liability reserves of $9,400,000 and bodily injury insurance receivables of $7,100,000. These bodily injury liabilities and receivables are classified within the Company's Consolidated Balance Sheets as environmental and other reserves, and insurance receivables, respectively. ASBESTOS LITIGATION: Tyco Reveals Asbestos Related Liabilities -------------------------------------------------------------- Tyco International reports that around 12,000 asbestos liability cases are currently pending against it. Like many other companies, Tyco and some of its subsidiaries are named as defendants in personal injury lawsuits based on alleged exposure to asbestos-containing materials. Consistent with the national trend of increased asbestos-related litigation, Tyco has observed an increase in the number of these lawsuits in the past several years. The majority of these cases have been filed against subsidiaries in its Healthcare segment and its Engineered Products and Services segment. A limited number of the cases allege premises liability, based on claims that individuals were exposed to asbestos while on a subsidiary's property. Some of the cases involve product liability claims, based principally on allegations of past distribution of heat-resistant industrial products incorporating asbestos or the past distribution of industrial valves that incorporated asbestos-containing gaskets or packing. Each case typically names between dozens to hundreds of corporate defendants. Tyco's involvement in asbestos cases has been limited because its subsidiaries did not mine or produce asbestos. Furthermore, in its experience, Tyco declares that a large percentage of these claims were never substantiated and have been dismissed by the courts. The company's vigorous defense of these lawsuits has resulted in judgments in its favor in all cases tried to verdict. Tyco prides for not having suffered an adverse verdict in a trial court proceeding related to asbestos claims. Tyco believes that together with its subsidiaries, it has substantial indemnification protection and insurance coverage, subject to applicable deductibles, with respect to asbestos claims. These indemnitors and the relevant carriers typically have been honoring their duty to defend and indemnify. ASBESTOS LITIGATION: UIC Continues to Battle Asbestos Lawsuits -------------------------------------------------------------- United Industrial Company reports that as of April 30, 2003, it has received notice that it has been named as a defendant in 485 active cases involving around 18,463 asbestos bodily injury claimants, of which about 450 cases involving some 18,400 claimants were filed before January 1, 2003, according to its first quarter filing with the Securities and Exchange Commission. UIC and its Detroit Stoker subsidiary have been named as defendants in asbestos-related personal injury litigation. Neither UIC nor Detroit Stoker fabricated, milled, mined, manufactured or marketed asbestos. The Company stopped the use of asbestos-containing materials in connection with its products in 1981. The litigation is pending in Michigan, Mississippi, New York, North Dakota and Wisconsin. During 2002 UIC and Detroit Stoker experienced a significant increase in the volume of asbestos bodily-injury claims. Most of these lawsuits do not include specific dollar claims for damages, and many include a number of plaintiffs and multiple defendants. Based on historical data and the large increase in claimants over and above the projected incidence of disease relative to the Company's products, management believes the claimants in the vast majority of these cases will not be able to demonstrate that they have been exposed to the Company's asbestos-containing products or suffered any compensable loss as a result of such exposure. The direct asbestos-related expenses of the Company for defense and indemnity for the past five years was not material. New Securities Fraud Cases BLUE RHINO: Scott + Scott Launches Securities Lawsuit in C.D. CA ---------------------------------------------------------------- Scott + Scott, LLC initiated a securities class action in the United States District Court for the Central District of California on behalf of purchasers of Blue Rhino Corporation (Nasdaq: RINO) securities during the period between August 15, 2002 and February 5, 2003. Scott + Scott, LLC filed this complaint against the defendants for violations of federal securities laws and did so at the request and as authorized by a shareholder. For more details, contact David R. Scott or Neil Rothstein by Mail: 108 Norwich Avenue, Colchester, Connecticut 06415 by Phone: 800/404-7770 by Fax: 860/537-4432 by E-mail: drscott@scott-scott.com or nrothstein@scott-scott.com or visit the firm's Website: http://www.scott-scott.com POLYMEDICA CORPORATION: Brodsky & Smith Files MA Securities Suit ---------------------------------------------------------------- Brodsky & Smith, LLC initiated a securities class action on behalf of shareholders who purchased the common stock and other securities of PolyMedica Corporation (NasdaqNM:PLMD) between, July 23, 2001 and June 30, 2003 inclusive. The lawsuit was filed in the United States District Court for the District of Massachusetts. The complaint alleges that defendants violated federal securities laws by issuing a series of material misrepresentations to the market during the class period, thereby artificially inflating the price of the Company's securities. Specifically, the complaint alleges that throughout the class period, PolyMedica understated its operating expenses and overstated its assets, thus creating a false impression of efficiency with the overall effect being that PolyMedica misled investors concerning its growth and earnings. For more details, contact Marc L. Ackerman or Evan J. Smith by Mail: Two Bala Plaza, Suite 602, Bala Cynwyd, PA 19004, by Phone: 877-LEGAL-90 or by E-mail: clients@brodsky-smith.com ********* 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. 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