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            C L A S S   A C T I O N   R E P O R T E R

              Friday, March 5, 2004, Vol. 5, No. 46

                            Headlines

ANTHRAX LITIGATION: Govt Seeks Dismissal of Vaccine Lawsuit
BLUEBERRY FIRMS: Price-Fixing Settlement Remanded To Lower Court
BRIDGESTONE/FIRESTONE: Lawyer Disputes Tire Recall Statements
CITIGROUP INC: 10 of 12 Pending Cases Related to Enron Deals
CITIGROUP INC: Enron Judge Stays Decision on Motion to Dismiss

CITIGROUP INC: Added to Dynegy Inc.'s Securities Fraud Suit
CITIGROUP INC: Faces Suit Related to Adelphia Public Offerings
CITIGROUP INC: Report Earns Indictment in Global Crossing Case
CITIGROUP INC: Rhythm NetConnections Plaintiffs Withdraw Suit
CITIGROUP INC: WorldCom Securities Suit Trial Set January 2005

CORINTHIAN COLLEGES: CEO Dismisses Lawsuit, Reiterates Policies
DIGITAL ISLAND: Appeals Court Affirms Securities Suit Dismissal
FOOTSTAR: Files for Chapter 11 Bankruptcy Protection Amid Probe
FORD MOTOR: GA Jury Awards Nearly $14M in `Faulty Latch' Lawsuit
FRANKLIN RESOURCES: Denies SEC Investigation In Funds Probe

HGI INCORPORATED: Administrative Proceedings Filed in NY Court
IBP INCORPORATED: Appeals Court Affirms RICO Suit Dismissal
KIA MOTORS: Appeals Court Vacates 'Sephia' Ruling, Remands Case
MARTHA STEWART: Jury in Stock Fraud Case Begins Deliberations
MARTHA STEWART: Jury Requests Evidence in Day 1 of Deliberations

MENORAH GARDENS: Lawyers Decry Proposed $100M Pact in SCI Suit
NEW ENGLAND: Appeals Court Affirms Dismissal RICO Suit
NISSAN MOTOR: Recalls 13,757 Quest Minivans with Faulty Air Bags
OBESITY LEGISLATION: House Republicans to Vote Next Week on Bill
SAME-SEX MARRIAGES: 2nd NY Mayor To Hold Weddings, Seeks License

SAME-SEX MARRIAGES: Congress Set for Constitutional Review Talks
SAME-SEX MARRIAGES: State Law Disallows Gay Weddings, Says NY AG
SAME-SEX MARRIAGE: OR County Latest to Approve Gay Weddings
SECURITY TRUST: AZ Court Enters Final Judgment vs. Former Veep
UNITED STATES: Bill Holds Professionals Liable for False Ads

VISTA 2000: GA Court Enters Final Judgment in Securities Lawsuit
WALT DISNEY COMPANY: Calls for Chairman's Ouster Mount
WORLDCOM/MCI: Ex-CEO Pleads Not Guilty in Accounting Fraud Case

* ChoicePoint Launches System to Help Detect Mortgage Fraud

                     Asbestos Alert

ASBESTOS LITIGATION: Aearo Faces Suits for Defective Respirators
ASBESTOS LITIGATION: Losses from CTC Acquisition Balloon
ASBESTOS LITIGATION: Citigroup Subsidiary Sells Class A Stock
ASBESTOS LITIGATION: Former Coke Subsidiary Seeks Reimbursement
ASBESTOS LITIGATION: Consolidated Edison Inc Adds Up Reserves

ASBESTOS LITIGATION: Corning Reaches Settlement With Claimants
ASBESTOS LITIGATION: Crum & Forster Adjusts Asbestos Reserves
ASBESTOS LITIGATION: Exide Subsidiary Indemnifies Claimants
ASBESTOS LITIGATION: Goodrich Spin off Involved in Lawsuits
ASBESTOS LITIGATION: Hartford Suffers Loss from Asbestos Charge

ASBESTOS LITIGATION: Hartford's Ratings Revised After Study
ASBESTOS LITIGATION: Imperial Tobacco Acquisition Named in Suits
ASBESTOS LITIGATION: Ingersoll-Rand Disburses Asbestos Claims
ASBESTOS LITIGATION: James Hardie Concerned for Liability Claims
ASBESTOS LITIGATION: MeadWestVaco Asbestos Lawsuits Reach 700

ASBESTOS LITIGATION: North Safety Products In 670 Lawsuits
ASBESTOS LITIGATION: St. Paul Companies Develop Reserves
ASBESTOS LITIGATION: USG Subsidiary's Asbestos Reserve Increased
ASBESTOS ALERT: Precision Castparts Named in Asbestos Lawsuits


                 New Securities Fraud Cases

AaiPHARMA: Schiffrin & Barroway Files Securities Suit in E.D. NC
AaiPHARMA: Milberg Weiss Commences Securities Fraud Suit in NC
AaiPHARMA: Wechsler Harwood Lodges Securities Suit in E.D. NC
EL PASO CORPORATION: Bernard Gross Files Securities Suit in TX
EL PASO CORPORATION: Cauley Geller Lodges Securities Suit in TX

ITT EDUCATIONAL: Berman DeValerio Lodges Securities Suit in IN
MEDICAL STAFFING: Cauley Geller Files Securities Suit in S.D. FL
MEDICAL STAFFING: Schiffrin & Barroway Lodges Stock Suit in FL

                       *********

ANTHRAX LITIGATION: Govt Seeks Dismissal of Vaccine Lawsuit
-----------------------------------------------------------
According to Court papers filed Wednesday in U.S. District
Court, the U.S. Justice Department is seeking to have a federal
judge dismiss a lawsuit brought by six members of the military
who are challenging the Pentagon's use of a vaccination against
anthrax, the Associated Press reports.

The justice department contends the suit has no merit because
the Food and Drug Administration ruled on Dec. 30 that the
vaccine was safe and effective. "FDA's expert scientific
judgment that the product is safe and effective merits great
deference from the court," government lawyers said in the
documents. "FDA's decision is rational, supported by the
evidence, and should be upheld."

Eight days before the FDA action, U.S. District Judge Emmet
Sullivan issued an injunction that stopped the military from
inoculating service personnel. After the FDA acted, Judge
Sullivan lifted that ban except for the six anonymous military
personnel who had sued. They claim that the vaccine is
experimental and that it is being improperly used for inhalation
anthrax as well as exposure of the bacteria to the skin. More
than 900,000 service personnel have received anthrax vaccine
shots, and several hundred were discharged or punished for
refusing the vaccine, according to the Pentagon.


BLUEBERRY FIRMS: Price-Fixing Settlement Remanded To Lower Court
----------------------------------------------------------------
Maine's Supreme Judicial Court remanded a blueberry price-fixing
case to the Superior Court where a judge will consider a
proposed settlement between two blueberry processors and
blueberry growers, effectively putting on hold an appeal of last
year's jury verdict that awarded damages of $56 million to
growers, the Associated Press reports.

Allen's Blueberry Freezer of Ellsworth, one of the three
processors in the suit, had hoped to have the appeal heard next
week. A Superior Court jury in Rockland last November found that
three major processors -- Allen's, Jasper Wyman & Son of
Milbridge, and Cherryfield Foods Inc. -- conspired to fix the
prices it paid hundreds of blueberry growers in the late 1990s.

All three companies appealed the decision to the Supreme Court,
but Cherryfield Foods and Jasper Wyman last month agreed to
settle with the growers under a deal worked out with a state
mediator. Cherryfield agreed on a $2.5 million settlement, and
Jasper Wyman agreed to a $1.5 million settlement. Allen's
refused to settle the case for $1 million, choosing instead to
continue with the appeal. Allen's was prepared to argue next
week that the whole case should be thrown out, said attorney
Robert Keach, who represents Allen's. The settlement will now be
considered by Justice Joseph Jabar, who heard the 11-day trial
last year.

Attorneys for Wyman's and Cherryfield will file a request with
the judge to ask for his preliminary approval of the settlement.
Comments or objections will then be solicited from members of
the class action before a final hearing. After that, growers
will submit claims for what processors owe them for 1996 through
1999. Justice Jabar will decide when, how and how much the
growers will be paid.

William Robitzek, a Lewiston attorney representing growers, said
Allen's "has already said that they would object to the
settlements by the other defendants. I suppose they now have the
opportunity to throw a monkey wrench into the deal, if that's
what they want to do." He said if Allen's came forward and
offered to pay the recommended $1 million to settle case, he
would have to go back to his clients for their approval. "I
don't have any authority at this time to accept any amount," he
told the AP.


BRIDGESTONE/FIRESTONE: Lawyer Disputes Tire Recall Statements
-------------------------------------------------------------
In the wake of statements made this past week by
Bridgestone/Firestone North American Tire, LLC and the National
Highway Traffic Safety Administration (NHTSA) regarding the
recall of Steeltex tires, the attorney handling the national
class action lawsuit against the tire manufacturer disputed both
the "announced explanation" of the recall and decried the timing
which he said may have cost injuries and deaths, Business Wire
reports.

BFNT and NHTSA on February 26 jointly announced that the tire
manufacturer was voluntarily recalling approximately 490,000
Firestone Steeltex LT265/75R16 Load Range D light truck tires,
which were produced at the Joliette plant in Quebec, Canada. It
was reported that the tires were being recalled because they
were linked to six accidents causing five fatalities and 20
injuries. According to BFNT, the recall emanated from the
company's "early warning system," while NTHSA claimed it was the
result of "new federal reporting requirements."

On August 13, 2002, Attorneys Joseph and Gail Lisoni of the
Pasadena, CA-based law firm of Lisoni & Lisoni filed a national
class action lawsuit against Bridgestone Corporation, Inc. and
Bridgestone/Firestone, Inc. for alleged defects in the Steeltex
tire series. Commenting on the recall Joseph Lisoni said it is
"far too little and too late." Noting that there are between 30
and 40 million Steeltex tires on the roads that are potential
health hazards, he stressed that the announced recall is an
insignificant attempt to address a major problem.

Mr. Lisoni said he was particularly incensed at NTHSA because of
its refusal to reopen its original investigation of the Steeltex
tire series despite a "mountain of evidence" demonstrating that
the tires are defective, which his firm had provided to the
federal agency that was obtained during its own 18-month
independent investigation of Steeltex tires. Mr. Lisoni pointed
to a major meeting held at the NTHSA offices in Washington,
D.C., on May 7, 2003, as the time when the agency should have
understood that the Steeltex tire series was a threat to the
public's health and safety. Joining Mr. Lisoni at the meeting in
an effort to educate NTHSA to the Steeltex problem were: William
Orr, a former 25-year employee of Firestone who was in charge of
its Quality Control Laboratory in LaVerne, TN; Clarence Ditlow
of the Center for Automobile Safety; and Joan Claybrooke of the
organization Public Citizen.

Attending the meeting representing NTHSA, Mr. Lisoni reported
were administrators, engineers and attorneys, including:
Kathleen Demeter, Greg Magano and Jeff Quandt from its Office of
Defect Investigation; Enid Rubenstein and Jennifer Timial from
the Office of Chief Counsel; and Jon White. Also present was
Steve Beretsky, who was the Chief Investigator for NTHSA's
initial investigation of the Steeltex tires, who recommended it
be closed. He also served in the same capacity for the agency's
investigation of Firestone's Wilderness tires series and
concluded that there was no defect trend. Subsequently, the
Wilderness tire was the subject of a Congressional
investigation, which resulted in NHTSA being ordered to issue a
recall for the Wilderness tires.

At the meeting, Mr. Lisoni said NTHSA personnel viewed a
Steeltex tire and were given a detailed analysis by Mr. Orr,
layer by layer, of where the defects were and how they would
cause damage to the tires.  Mr. Orr also provided those present
with evidence of the "C-95 Project," a program initiated by the
tire manufacturer in 1995 to cut $2 billion in costs in order to
increase profits by using substandard materials in the
manufacturing of the Steeltex tires. "At that point in time --
10 months ago -- NTHSA knew full well that there were defects in
all Steeltex tires, not just the ones coming out of the Joliette
plant," Mr. Lisoni stressed, adding: "To say that this week's
recall came as a result of ``early warning systems' or ``new
federal reporting requirements' is ludicrous."

Mr. Lisoni reported the defective tires are not only a threat to
individual consumers, but complaints have been received from
ambulance companies in 33 states of defects in their Steeltex
tires. Many, he noted, have voluntarily replaced the Steeltex
tires at their own cost to ensure the safety of their employees
and the people they transport. He also pointed to a series of
CBS Television Network news reports that have detailed alleged
defects in Steeltex tires in 26 states.

"The now admittedly defective tires from the Joliette plant are,
unfortunately, only the `tip of the iceberg,'" Mr. Lisoni
emphasized. "Hopefully NTHSA will do its duty before there are
more accidents, injuries and deaths linked to Steeltex tires."


CITIGROUP INC: 10 of 12 Pending Cases Related to Enron Deals
------------------------------------------------------------
Citigroup Inc., along with certain affiliates and other parties,
is a defendant in these cases, according to its latest SEC
disclosure:   

     (a) Actions brought by a number of pension and benefit
         plans, investment funds, mutual funds, and other   
         individual and institutional investors in connection
         with the purchase of Enron equity and debt securities,
         alleging violations of various state and federal
         securities laws, state unfair competition statutes,
         common law fraud, misrepresentation, unjust enrichment,
         breach of fiduciary duty, conspiracy, and other
         violations of state law;

     (b) An action by banks that participated in two Enron
         revolving credit facilities, originally alleging fraud,
         gross negligence, breach of implied duties, aiding and
         betting and civil conspiracy in connection with
         defendants' administration of a credit facility with
         Enron; the Court granted Citigroup's motion to dismiss
         with respect to all claims except for certain claims of
         aiding and abetting and civil conspiracy;

     (c) An action brought by several funds in connection with
         secondary market purchases of Enron debt securities,
         alleging violations of the federal securities law,       
         including Section 11 of the Securities Act of 1933, as     
         amended, and claims for fraud and misrepresentation;

     (d) A series of putative class actions by purchasers of    
         NewPower Holdings common stock, alleging violations of
         the federal securities law, including Section11 of the
         Securities Act of 1933, as amended, and Section 10(b)
         of the Securities Exchange Act of 1934, as amended;

     (e) A putative class action brought by clients of CGMI in
         connection with research reports concerning Enron,   
         alleging breach of contract;


     (f) An action brought by a retirement and health benefits
         plan in connection with the purchase of certain Enron  
         notes, alleging violation of federal securities law,
         including Section 11 of the Securities Act of 1933, as
         amended, violations of state securities and unfair
         competition law, and common law fraud and breach of
         fiduciary duty;

     (g) An action brought by the Attorney General of
         Connecticut in connection with various commercial and  
         investment banking services provided to Enron;

     (h) An action brought by purchasers in the secondary market
         of Enron bank debt, alleging claims for common law
         fraud, conspiracy, gross negligence, negligence and
         breach of fiduciary duty;

     (i) An action brought by an investment company, alleging
         that Enron fraudulently induced it to enter into a
         commodity sales contract;

     (j) Five adversary proceedings filed by Enron in its  
         chapter 11 bankruptcy proceedings to recover alleged
         preferential payments and fraudulent transfers
         involving Citigroup, certain of its affiliates and
         other entities, and to disallow or to subordinate
         claims that Citigroup and other entities have filed
         against Enron;

     (k) Third-party actions brought by former Enron officers
         and directors, alleging violation of state securities
         and other laws and a right to contribution from
         Citigroup, in connection with claims under state
         securities and common law brought against the officers
         and directors and others; and

     (l) A purported class action brought on behalf of
         Connecticut municipalities, alleging violation of state  
         statutes, conspiracy to commit fraud, aiding and  
         abetting a breach of fiduciary duty and unjust
         enrichment. Several of these cases have been
         consolidated or coordinated with the NEWBY action and
         stayed pending the Court's decision on the pending
         motions of certain defendants to dismiss NEWBY.

For more information, contact Citigroup Inc. by Mail: 399 Park
Avenue, New York, NY 10043 or by Phone: (212) 559-1000


CITIGROUP INC: Enron Judge Stays Decision on Motion to Dismiss
--------------------------------------------------------------
Citigroup Inc. was named in April 2002 a defendant along with,
among others, commercial and/or investment banks, certain
current and former Enron officers and directors, lawyers and
accountants in a putative consolidated class action complaint
that was filed in the United States District Court for the
Southern District of Texas seeking unspecified damages.

The action, brought on behalf of individuals who purchased Enron
securities (NEWBY, ET AL. V. ENRON CORP., ET AL.), alleges
violations of Sections 11 and 15 of the Securities Act of 1933,
as amended, and Sections 10(b) and 20(a) of the Securities
Exchange Act of 1934, as amended.  

Citigroup's motion to dismiss the complaint was denied in
December 2002, and Citigroup filed an answer in January 2003. In
May 2003, plaintiffs filed an amended consolidated class action
complaint, and Citigroup filed a motion to dismiss in June 2003.
Plaintiffs filed a motion for class certification in May 2003.
This action is stayed, except with respect to certain discovery,
until after the Court's decision on class certification.

For more information, contact Citigroup Inc. by Mail: 399 Park
Avenue, New York, NY 10043 or by Phone: (212) 559-1000


CITIGROUP INC: Added to Dynegy Inc.'s Securities Fraud Suit
------------------------------------------------------------
A complaint in a pre-existing putative class action pending in
the United States District Court for the Southern District of
Texas (IN RE: DYNEGY INC. SECURITIES LITIGATION) brought by
purchasers of publicly traded debt and equity securities of
Dynegy Inc. was amended on June 6, 2003 to add Citigroup,
Citibank and Citigroup Global Markets Inc. as defendants. The
plaintiffs allege violations of Sections 10(b) and 20(a) of the
Securities Exchange Act of 1934, as amended, against the
Citigroup defendants.

For more information, contact Citigroup Inc. by Mail: 399 Park
Avenue, New York, NY 10043 or by Phone: (212) 559-1000


CITIGROUP INC: Faces Suit Related to Adelphia Public Offerings
---------------------------------------------------------------
The Official Committee of Unsecured Creditors, on behalf of
Adelphia Communications Corporation, filed on July 6, 2003 an
adversary proceeding against certain lenders and investment
banks, including Citigroup Global Markets Inc. (CGMI), Citibank,
N.A., Citicorp USA, Inc., and Citigroup Financial Products, Inc.
(together, the Citigroup Parties).

The complaint alleges that the Citigroup Parties and numerous
other defendants committed acts in violation of the Bank Holding
Company Act and the common law. The complaints seek equitable
relief and an unspecified amount of compensatory and punitive
damages.

In November 2003, the Equity Holders Committee of Adelphia filed
a similar adversary proceeding.  In addition, CGMI is among the
underwriters named in numerous civil actions brought to date by
investors in Adelphia debt securities in connection with
Adelphia securities offerings between September 1997 and October
2001. Three of the complaints also assert claims against
Citigroup Inc. and Citibank, N.A.  All of the complaints allege
violations of federal securities laws, and certain of the
complaints also allege violations of state securities laws and
the common law.  The complaint seeks unspecified damages. In
December 2003, a second amended complaint was filed and
consolidated before the same judge of the United States District
Court for the Southern District of New York.

For more information, contact Citigroup Inc. by Mail: 399 Park
Avenue, New York, NY 10043 or by Phone: (212) 559-1000

CITIGROUP INC: Report Earns Indictment in Global Crossing Case
--------------------------------------------------------------
The lead plaintiff in a consolidated putative class action in
the United States District Court for the Southern District of
New York (IN RE: GLOBAL CROSSING, LTD. SECURITIES LITIGATION)
filed on January 28, 2003 a consolidated complaint on behalf of
purchasers of the securities of Global Crossing and its
subsidiaries, which names as defendants, among others,
Citigroup, Citigroup Global Markets Inc. and certain executive
officers and current and former employees.

The complaint asserts claims under federal securities laws for
allegedly issuing research reports without a reasonable basis in
fact and for allegedly failing to disclose conflicts of interest
with Global Crossing in connection with published investment
research. In addition, actions asserting claims against
Citigroup and certain of its affiliates relating to its Global
Crossing research reports are pending in numerous arbitrations
around the country.

For more information, contact Citigroup Inc. by Mail: 399 Park
Avenue, New York, NY 10043 or by Phone: (212) 559-1000


CITIGROUP INC: Rhythm NetConnections Plaintiffs Withdraw Suit
-------------------------------------------------------------
Since May 2002, Citigroup Inc., Citigroup Global Markets Inc.
and certain executive officers and current and former employees
have been named as defendants in numerous putative class action
complaints and arbitration demands by purchasers of various
securities, alleging that they violated federal securities law,
including Sections 10 and 20 of the Securities Exchange Act of
1934, as amended, for allegedly issuing research reports without
a reasonable basis in fact and for allegedly failing to disclose
conflicts of interest with companies in connection with
published investment research, including AT&T Corp., Winstar
Communications, Inc., Rhythm NetConnections, Inc., Level 3
Communications, Inc., Metromedia Fiber Network, Inc., XO
Communications, Inc., and Williams Communications Group Inc.

Almost all of these putative class actions are pending before a
single judge in the United States District Court for the
Southern District of New York for coordinated proceedings. The
Court has consolidated these actions into separate proceedings
corresponding to the companies named above. On January 30, 2004,
plaintiffs in the Rhythm NetConnections, Inc. action voluntarily
dismissed their complaint with prejudice.

For more information, contact Citigroup Inc. by Mail: 399 Park
Avenue, New York, NY 10043 or by Phone: (212) 559-1000


CITIGROUP INC: WorldCom Securities Suit Trial Set January 2005
---------------------------------------------------------------
Citigroup Inc., Citigroup Global Markets Inc. (CGMI) and certain
executive officers and current and former employees have been
named as defendants, along with twenty-two other investment
banks, certain current and former WorldCom officers and
directors, and WorldCom's former auditors in a consolidated
class action brought on behalf of individuals and entities who
purchased or acquired publicly traded securities of WorldCom
between April 29, 1999 and June 25, 2002.

The class action complaint asserts claims against CGMI under (i)
Sections 11 and 12(a)(2) of the Securities Act of 1933, as
amended, in connection with certain bond offerings in which it
served as underwriter, and (ii) Sections 10(b) and 20(a) of the
Securities Exchange Act of 1934, as amended, and Rule 10b-5
promulgated under Section 10(b), alleging that it participated
in the preparation and/or issuance of misleading WorldCom
registration statements and disseminated misleading research
reports concerning WorldCom stock.

On May 19, 2003, the Court denied CGMI's motion to dismiss the
consolidated class action complaint.  On October 24, 2003, the
Court granted the plaintiffs' motion for class certification. On
December 31, 2003, the United States Court of Appeals for the
Second Circuit granted CGMI's petition seeking leave for an
interlocutory appeal of the class certification order. The
District Court has scheduled trial to begin in January 2005.

    Other WorldCom Cases

Although, pursuant to an order entered May 28, 2003, the
District Court consolidated approximately seventy individual
actions with the class action for pretrial proceedings, motions
to remand are pending.  The claims asserted in these individual
actions are substantially similar to the claims alleged in the
class action and assert state and federal securities law claims
based on CGMI's research reports concerning WorldCom and/or
CGMI's role as an underwriter in WorldCom offerings.

Numerous other actions asserting claims against CGMI in
connection with its research reports about WorldCom and/or its
role as an investment banker for WorldCom are pending in other
federal and state courts. These actions have been remanded to
various state courts, are pending in other federal courts, or
have been conditionally transferred to the United States
District Court for the Southern District of New York to be
consolidated with the class action.  In addition, actions
asserting claims against Citigroup and certain of its affiliates
relating to its WorldCom research reports are pending in
numerous arbitrations around the country.  These actions assert
claims that are substantially similar to the claims asserted in
the class action.

For more information, contact Citigroup Inc. by Mail: 399 Park
Avenue, New York, NY 10043 or by Phone: (212) 559-1000


CORINTHIAN COLLEGES: CEO Dismisses Lawsuit, Reiterates Policies
---------------------------------------------------------------
Corinthian Colleges Inc. (COCO) dismissed quality concerns
roiled by a recent lawsuit and said it sees favorable
demographics driving growth in the U.S. and Canada, The Dow
Jones Business News reports.

"Look at our student population, over 30% of them come to us
through referrals, that's the best evidence of our credibility
and quality," said Chief Operating Officer Tony Digiovanni,
speaking at the Merrill Lynch 7th Annual Advertising/Marketing,
Education & Information Conference. At the conference, which
featured ITT Educational Services Inc. (ESI), Career Education
Corp. (CECO) and other education-related stocks, Mr. Digiovanni
reiterated the company's guidance, talked about strong
demographic trends and dismissed a recent lawsuit as without
merit. Some analysts have also brushed aside concerns about the
suit recently, including J.P. Morgan, which upgraded the stock
Wednesday to overweight.

Mr. Digiovanni's reassuring statements come following a 3%
decline in Corinthian shares during Tuesday's session, following
a filing that said it plans to defend itself against a lawsuit
filed by a former student. Shares have also traded down recently
in sympathy with problems for competitors. Corinthian shares
lost 3% and Career Education shares shed 5% on news of a federal
raid on headquarters of ITT Educational Services, which sent ITT
shares down 33%. The reason for the raid remains unknown.

Career Education has also been accused by former workers from
two of its schools of acting illegally and improperly. One
charge was discredited, and the other is part of a pending
lawsuit. The suit against Corinthian's, brought by a former
student, alleges that its Florida Metropolitan University
concealed the fact that it's not accredited by a certain
regional accrediting body, and that FMU credits can't be
transferred to other institutions, and is seeking more than
$15,000 in damages and class-action status.

Mr. Digiovanni reiterated the company's 8K filing about the
lawsuit, saying that the student had signed an acknowledgment
that Corinthian can't predict credit transfers. Some analysts
have also dismissed the suit. Others have suggested that
troubles from the suit could linger, however. Bear Stearns
analyst Jennifer Childe said that while the financial risk is
"immaterial," shares could trade lower as the lawsuit will
likely "provide fodder for the critics who have been raising
issues about quality."

Ms. Childe doesn't own shares, but Bear Stearns makes a market
in Corinthian shares. Shares of Corinthian Colleges recently
traded at $60.39, up 28 cents, or 0.5%. The stock traded as high
as $62.10 Wednesday, up 3.3%.


DIGITAL ISLAND: Appeals Court Affirms Securities Suit Dismissal
---------------------------------------------------------------
The United States Court of Appeals, Third Circuit affirmed a
ruling by the U.S. District Court for the District of Delaware
granting defendant's motion to dismiss a lawsuit brought against
Digital Island, Incorporated, on behalf of shareholder Plaintiff
William Blair Massey, et al., alleging violations of federal
securities laws.

This lawsuit arises out of the acquisition of Digital Island,
Inc. by Cable & Wireless, PLC. Pursuant to a May 14, 2001 Merger
Agreement between Digital Island and C & W, Dali Acquisition
Corp., a wholly owned subsidiary of C & W, made a cash tender
offer to shareholders of Digital Island under which it acquired
80 percent of the shares of Digital Island.
      
Plaintiffs in this case represent a class comprised of all
persons, other than the named defendants and certain related
parties, who owned Digital Island common stock during the
relevant period and who received the tender offer. Defendants
are Digital Island, members of Digital Island's Board of
Directors during the relevant time period, including Digital
Island's CEO, Ruann Ernst & Young, C & W, C & W's CEO, Graham
Wallace, and Dali. Plaintiffs allege that, in connection with
the tender offer, Defendants made misleading statements and
failed to disclose material information in violation of Section
14(e) of the Securities and Exchange Act of 1934, as amended by
the Williams Act of 1968. Plaintiffs further allege that the
Directors received "extra consideration" for their shares in
violation of Section 14(d)(7) of the '34 Act, 15 U.S.C.
78n(d)(7), and Securities and Exchange Commission Rule 14d-10,
the so-called "Best Price Rule," 17 C.F.R. 240.14d-10(a).
Plaintiffs allege both individual violations by Defendants of
these provisions, as well as "control person liability" under
Section 20(a) of the '34 Act. 15 U.S.C. 78t(a). Plaintiffs filed
a Consolidated Amended Class Action Complaint on May 15, 2002.

The District Court dismissed Plaintiffs' consolidated amended
complaint, with prejudice, for failure to state a claim pursuant
to Fed.R.Civ.P. 12(b)(6) and the Private Securities Litigation
Reform Act of 1995, 15 U.S.C. 78u-4. By a subsequent order, the
District Court denied Plaintiffs' motion, pursuant to
FedR.Civ.P. 59(e), which sought to alter the court's judgment
and to permit Plaintiffs to file an amended complaint under
Fed.R.Civ.P. 15(a). Plaintiffs appealed.


FOOTSTAR: Files for Chapter 11 Bankruptcy Protection Amid Probe
---------------------------------------------------------------
Shoe retailer Footstar Inc. filed Tuesday for Chapter 11
bankruptcy protection following a costly accounting problem and
declining sales to key customer Kmart, Reuters News reports.

The company, which is under a U.S. Securities and Exchange
Commission investigation, said it secured $300 million in
financing from a group led by Fleet National Bank and GECC
Capital Markets Group, pending bankruptcy court approval.
Proceeds of the financing will be used for normal operations and
payment of the filing, Footstar said.

"We are taking a hard look at our business and all of our
alternatives and expect to refocus our resources on a more
profitable business base," Dale Hilpert, the retailer's CEO and
president, said in a statement. Mr. Hilpert, a former CEO of
rival Foot Locker Inc., was hired by the company in January.
Wendy Kopsick, a spokeswoman for Footstar, said the company is
conducting business as usual, but would not comment beyond what
was said in the statement. The West Nyack, New York-based
company, which operates Footaction and Just For Feet stores, as
well as shoe sections in Kmart stores, said it filed for
bankruptcy on Tuesday in the U.S. Bankruptcy Court in White
Plains, New York.

In early January, the New York Stock Exchange delisted
Footstar's shares, citing continued delay in Footstar's
financial restatement and uncertainty of its past results. The
retailer struggled to recoup sales lost when Kmart closed some
600 stores as part of its Chapter 11 reorganization. Kmart
emerged from bankruptcy last May. Footstar shares, now trading
on the Pink Sheets, closed at $1.37 on Tuesday.


FORD MOTOR: GA Jury Awards Nearly $14M in `Faulty Latch' Lawsuit
----------------------------------------------------------------
A Georgia jury ordered Ford Motor Co. on Wednesday to pay nearly
$14 million in punitive damages to a young girl who was
paralyzed during a 2000 crash her family blamed on a faulty back
seat latch in their sedan, the Associated Press reports.

The money is atop $33.9 million in compensatory damages the same
jury awarded the family of Kelsey Sasser on Tuesday. "I
certainly hope the people at Ford get the message that it is
improper to market and sell vehicles that can injure people,"
the family's attorney, Jeffrey Harris, said in a telephone
interview.

Ford attorney Donald Dawson did not immediately return a call
for comment Wednesday. Dearborn, Mich.-based Ford plans to
appeal the decision, said a company spokeswoman who declined to
identify herself. "This was a tragic accident, and we feel for
the family, but the outcome does not match the evidence," the
spokeswoman said, reading a prepared statement.

Rhonda Sasser sued the automaker and the Atlanta dealership that
sold the white 2000 Lincoln LS, claiming it had a back fold-down
seat that failed to latch securely and collapsed on her 6-year-
old daughter, Kelsey, during the accident. The damages were
awarded following a two-week trial in state court.  Concerns
about the latch system prompted Ford to change its design in
2001, according to lawyers for the Sassers.

The Sassers maintained that Ford knew about the latch defect as
early as 1993. Mr. Dawson has said previously that there were
minor problems with the latch system in a small percentage of
the 2000 sedans, but not the Sassers' car. Mr. Dawson told
jurors there was no reason for a recall because customers could
easily detect a malfunctioning latch, which dealers would
replace. The defense attorney also maintained that Kelsey wasn't
sitting in the back, alleging that she was in the front
passenger seat and was injured by an air bag designed for an
adult.


FRANKLIN RESOURCES: Denies SEC Investigation In Funds Probe
-----------------------------------------------------------
Franklin Resources Inc., the largest publicly traded mutual fund
company, said federal regulators will not recommend civil action
against its co-chief executive in a case related to improper
trading, Reuters News reports.

In a filing Tuesday with the U.S. Securities and Exchange
Commission, Franklin, which manages the popular Templeton funds,
said it was informed that SEC staff will not recommend action
against Gregory Johnson, its president and co-chief executive.
The company said on Feb. 17 the contemplated action was related
to improper trading at Franklin and a case brought earlier that
month by Massachusetts Secretary of the Commonwealth William
Galvin.

Franklin said talks with SEC staff are continuing in an effort
to resolve the issues raised in its investigation related to
Franklin Advisers Inc., a unit of the company. No further
details were provided. The SEC does not comment on
investigations. But a person close to the matter said in
February that the SEC had documented market-timing activities at
Franklin that went beyond Mr. Galvin's complaint.

Franklin has said it was confident that no investors were harmed
by an unauthorized arrangement made by a company officer with an
individual investor in 2001. As reported in December, the
officer was placed on administrative leave and later resigned,
it said. In a 19-page response to Mr. Galvin's complaint,
Franklin said in February that Las Vegas investor Daniel Calugar
made three in-and-out trades of about $20 million in the now-
named Franklin Small-Mid Cap Growth fund, resulting in a
$700,000 loss. Mr. Johnson had been aware of Mr. Calugar's
activities.

Franklin said neither the fund nor its shareholders were harmed.
The $20 million was a fraction of the fund's $8 billion in
assets and its typical $1.8 billion cash position. It added that
neither the fund's strategy nor its cash management was
affected. In addition, Franklin said there was no illicit
"sticky asset" arrangement that allowed investors to quickly
trade in and out of a fund in lieu of parking money in another
fund, from which an asset management firm could earn fees.

Mr. Johnson refused a subsequent proposal by Mr. Calugar to
market-time Franklin funds with larger investments, which could
have harmed investors. The company said that Mr. Johnson and
Franklin were intent on protecting investors, and not profiting
personally.  Franklin also manages Franklin, Mutual Series and
Fiduciary Trust funds and offers investment services to
individuals, institutions and pension plans. It had more than
$336 billion in assets under management at Dec. 31. Its stock
added 13 cents to $57.89 on Wednesday on the New York Stock
Exchange.


HGI INCORPORATED: Administrative Proceedings Filed in NY Court
--------------------------------------------------------------
The Securities and Exchange Commission (SEC) issued an Order
Instituting Administrative Proceedings Pursuant to Section 15(b)
of the Securities Exchange Act of 1934 Making Findings and
Imposing Remedial Sanctions against Steven Arevalo, a former
registered representative of HGI, Inc., and Mark Hanna, a former
control person of HGI, as a result of permanent injunctions
entered against the Respondents in the civil action entitled
Securities and Exchange Commission v. HGI Inc., et. al., 99 Civ
3866 (DLC) in the Southern District of New York and their
convictions in the parallel criminal actions pending against
them in the Eastern District of New York.  

The Commission's complaint in SEC v. HGI alleges that from June
1994 through July 1997 the Respondents defrauded investors out
of millions of dollars by using fraudulent "boiler-room" sales
practices to induce investors to purchase certain highly
speculative securities in initial public offerings underwritten
by HGI, which was then a registered broker-dealer. Specifically,
the Commission's complaint charges both Misters Arevalo and
Hanna with violations of Section 17(a) of the Securities Act of
1933, Section 10(b) of the Exchange Act and Rule 10b-5
thereunder.  It also charges Mr. Hanna with control person
liability pursuant to Section 20(a) of the Exchange Act and with
violations of Rules 101 and 102 of Regulation M thereunder.   

The Order finds the following:

     (1) On March 2, 2004, a Final Judgment and Order on Consent
         was entered against Arevalo, permanently enjoining him
         from future violations of Section 17(a) of the  
         Securities Act, Section 10(b) of the Exchange Act and
         Rule 10b-5 thereunder, in SEC v. HGI.  On May 17, 2002,
         Mr. Arevalo pled guilty to one count of conspiracy to
         commit securities fraud, in connection with his conduct
         while at HGI, in violation of Title 18 United States
         Code, Section 371, before the United States District
         Court for the Eastern District of New York, in United
         States v. Steven Arevalo, 01 CR 0076.  On March 14,
         2003, Mr. Arevalo was sentenced to 24 months in prison
         and ordered to pay restitution up to $800,000.  

     (2) On Jan. 26, 2004, a Partial Judgment and Order on
         Consent was entered against Mr. Hanna, permanently
         enjoining him from future violations of Section 17(a)
         of the Securities Act, Section 10(b) of the Exchange
         Act and Rule 10b-5 and Rules 101 and 102 of Regulation
         M thereunder, in SEC v. HGI.  

On Nov. 15, 2002, Mr. Hanna pled guilty, in connection with his
conduct while at HGI, to one count of securities fraud in
violation of Title 15 United States Code, Section 78j(b), one
count of conspiracy to commit securities fraud in violation of
Title 18 United States Code, Section 371 and one count of
unlawful monetary transaction in violation of Title 18 United
States Code, Section 1957, before the United States District
Court for the Eastern District of New York, in  United States v.
Mark Hanna, 01 CR 0076.  Based on the above, the Order bars
Misters Arevalo and Hanna from association with any broker or
dealer.  The Respondents consented to the issuance of the Order
without admitting or denying any of the allegations in the civil
injunctive action.  


IBP INCORPORATED: Appeals Court Affirms RICO Suit Dismissal
-----------------------------------------------------------
The United States Court of Appeals, Seventh Circuit affirmed a
decision by the U.S. District Court for the Central District of
Illinois, dismissing a purported class action brought against
IBP, Incorporated, on behalf of Plaintiff Deborah Baker, et al.,
alleging that employer violated Racketeer Influenced and Corrupt
Organizations Act (RICO) by knowingly employing undocumented,
illegal immigrants for unskilled positions in effort to reduce
labor costs by driving down employee wages.

Plaintiffs want to represent all persons, authorized to work in
the United States, who have been or are now employed at IBP's
meat-processing plant in Joslin, Illinois.  They appeal from the
district court's decision that their claim should have been
submitted to the National Labor Relations Board rather than a
court.  

Plaintiffs' complaint alleges that about half of the employees
at IBP's Joslin plant are aliens who cannot lawfully work in
the United States. Moreover, the complaint alleges, IBP has
arrangements with immigrant-welfare organizations, such as the
Chinese Mutual Aid Association based in Chicago, under which
these groups refer known illegal aliens to IBP for employment.  
As such, Plaintiffs believe that wages at the Joslin plant are
depressed by about $4 per hour compared with what IBP would have
to pay if the labor force included only U.S. citizens plus
aliens holding green cards.


KIA MOTORS: Appeals Court Vacates 'Sephia' Ruling, Remands Case
---------------------------------------------------------------
The United States Court of Appeals, Third Circuit vacated and
remanded a decision by the U.S. District Court for the Eastern
District of Pennsylvania, granting certification of a lawsuit
brought against Kia Motors America, Inc., on behalf of Plaintiff
Shamell Samuel-Bassett, et al., seeking damages arising from
automobile's allegedly defective brake system, under the
Pennsylvania Unfair Trade Practices and Consumer Protection Law,
and alleging breach of warranty.

The plaintiff purchased a model year 2000 KIA Sephia automobile
on October 27, 1999. Dissatisfied with the performance of the
car, she filed a class action against the manufacturer, Kia, in
the Court of Common Pleas of Philadelphia County, Pennsylvania
on January 17, 2001.  The complaint alleges that because of a
design defect in the braking system, plaintiff returned the car
for repairs on five separate occasions between January 12, 2000
and August 22, 2000.  In four instances, the brake rotors and
pads had to be replaced even though the vehicle had been driven
less than 17,000 miles.
      
Despite her requests for rescission of the purchase contract, or
correction of the braking problem, she asserts the defendant
failed to meet its obligations. The complaint asks for
certification of a class consisting of Pennsylvania residents
who purchased or leased KIA Sephia model automobiles in the
years before she filed the suit.
      
The defendant removed the case to the Eastern District of
Pennsylvania on February 12, 2001 asserting diversity between
the parties and an amount in controversy exceeding $75,000.  The
District Court denied the plaintiff's motion to remand,
rejecting her post-removal assertion that she did not seek
damages in excess of $74,999. Following further proceedings, the
Court certified a class consisting of residents of Pennsylvania
who purchased or leased model years 1997-2001 KIA Sephia
automobiles for personal, family or household purposes.  
Defendant appealed.


MARTHA STEWART: Jury in Stock Fraud Case Begins Deliberations
-------------------------------------------------------------
The Martha Stewart jury began deliberating Wednesday after a
federal judge urged the panel to consider the stock fraud case
with "complete fairness and impartiality," the Associated Press
reports.

"You are the sole and exclusive judges of the facts," U.S.
District Judge Miriam Goldman Cedarbaum told the jurors, giving
them a set of legal instructions to guide their deliberations.
The judge released the alternate jurors with instructions not to
speak to anyone about the case.

Ms. Stewart faces four federal counts related to the sale of
about $225,000 worth of ImClone stock on Dec. 27, 2001, the day
before the stock plummeted on news that the government declined
to review the firm's cancer drug.


MARTHA STEWART: Jury Requests Evidence in Day 1 of Deliberations
----------------------------------------------------------------
The Martha Stewart jury requested evidence related to a key
prosecution witness on Wednesday as it began wrestling with the
question of whether the homemaking icon lied about a stock sale,
the Associated Press reports.

After about two hours of deliberations, jurors sent out a note
asking for the evidence related to the testimony of former
brokerage assistant Douglas Faneuil. The jurors asked for a
readback of testimony about Mr. Faneuil's phone calls with Ms.
Stewart and her co-defendant, former broker Peter Bacanovic, on
Dec. 27, 2001 - the day she sold ImClone stock. They also asked
to see charts detailing the phone calls of Ms. Stewart, Mr.
Bacanovic, Mr. Faneuil and ImClone founder Samuel Waksal on that
day.

The panel of eight women and four men had retired to a jury room
at about 11:40 a.m. EST, after 90 minutes of instructions from
the judge on the legal requirements the government must meet for
a conviction.

Almost immediately, the 12 jurors sent the judge their first
note - a request to have lunch with the six excused alternates.
The judge allowed the group lunch but urged jurors not to
deliberate over their meal.

The combined charges against Ms. Stewart carry a penalty of up
to 20 years in prison. If convicted on any charge, she also
would be required to step down as chief creative officer of her
media company, Martha Stewart Living Omnimedia. Ms. Stewart and
Mr. Bacanovic are accused of lying to investigators about why
Ms. Stewart sold 3,928 shares of ImClone Systems stock just
before it plunged on a negative government report. The pair
claim they had struck a deal before Dec. 27, 2001, to get rid of
Ms. Stewart's shares when the stock fell to $60. The supposed
agreement is the cornerstone of the defense.


MENORAH GARDENS: Lawyers Decry Proposed $100M Pact in SCI Suit
--------------------------------------------------------------
A proposed $100M settlement in the class action against two
Menorah Gardens cemeteries for burial site desecrations, now
comes under legal attack by attorneys representing a separate
group of plaintiffs in Palm Beach County suing Service
Corporation International, the largest provider of funeral
services in the country and the owner of the two cemeteries in
Broward and Palm Beach counties, the Sun-Sentinel reports.

The attorneys for the second group of plaintiffs want to seek
their own punitive damages against SCI, and they took the first
step Tuesday necessary to object to the class-action settlement
by asking the Broward judge to hear their arguments. The
cemeteries have been accused of burying people in the wrong
places, breaking open vaults to squeeze in other burials and, in
a handful of instances, tossing bones into the woods. SCI
already settled a lawsuit by the Florida Attorney General's
Office by agreeing to pay up to $14 million to people whose
loved ones were affected and to clean up the problems at the
cemeteries. The settlement agreement filed Tuesday requires the
approval of Broward Circuit Judge J. Leonard Fleet, who will
hold a number of hearings in the coming months to work out the
details.

The agreement says $65 million will go to the class members, and
the attorneys said in December that most of the remaining money
will go to settle individual claims in several cases that were
split off from the class. Those settlements, which are
confidential, were handled separately because the allegations
were the most egregious, involving remains that were improperly
removed from their resting places.

The legal fight developing between the attorneys representing
the class and the attorneys for the second group of plaintiffs
revolves around the punitive damages set out in the class-action
case. Weston attorney Gary M. Farmer Jr. and Palm Beach Gardens
attorney Ted Leopold, who represent the second group of about 70
plaintiffs in their suit in Palm Beach County Circuit Court,
recently told the judge hearing their case that they intend to
seek separate punitive damages. Leopold said Tuesday that he
believes the $25 million figure set by the attorneys for the
class-action and SCI is too low.

SCI's attorneys say the second group of plaintiffs is not
entitled to separate punitive damages, and that its share, if
any, must come from the $25 million. Palm Beach Circuit Judge
Art Wroble, who is hearing the second case, has not ruled on
whether the second group can seek separate punitive damages. He
has said his decision will depend in part on how Fleet handles
the proposed settlement.

Misters Farmer and Leopold allege in their motion to intervene
that the attorneys for the class have a conflict of interest in
representing both individual plaintiffs and the class in the
settlement. The motion also alleges SCI has taken its position
to insulate the company from further punitive damages.

The settlement calls for a panel to review the work now being
done to fix problems at the cemeteries, which already is being
supervised by a court-appointed independent examiner. SCI also
has agreed to bear the costs of moving remains that are not
buried in the right place and supplying new gravesites if family
members cannot be buried together as intended.


NEW ENGLAND: Appeals Court Affirms Dismissal RICO Suit
------------------------------------------------------
The United States Court of Appeals, First Circuit affirmed a
ruling by the U.S. District court for the District of
Massachusetts, dismissing a lawsuit brought against New England
Mutual Life Insurance Co., et al., on behalf of Plaintiff
Michele Grispino, et al., over allegations of insurance fraud.

After opting out of national class action suit, plaintiffs
(insureds) bought state law claims under Pennsylvania law and
federal Racketeer Influenced and Corrupt Organizations (RICO)
claim against life insurer and agents, arising from allegedly
false representations that premium payments would "vanish" after
set number of years. Action was removed, and Multi-District
Litigation panel ordered action transferred to the United States
District Court for the District of Massachusetts as a "tag-
along" action to national class action. Plaintiffs amended
complaint to withdraw sole federal claim. The United States
District Court for the District of Massachusetts, Robert E.
Keeton, Senior District Judge, denied insureds' motion to remand
and granted defendants' motion to dismiss on limitations
grounds. Plaintiffs appealed.


NISSAN MOTOR: Recalls 13,757 Quest Minivans with Faulty Air Bags
----------------------------------------------------------------
A company spokesman said Wednesday that Nissan Motor Co. is
recalling 13,757 Quest minivans because the passenger air bag
could deflate when there's a child in the front seat, the
Associated Press reports.

The recall involves Quests from the 2004 model year. Nissan
discovered during vehicle testing that the air bags could fire
when a dummy the size of a 6-year-old was in the front passenger
seat, Nissan spokesman Eric Booth said. Federal standards
require many new vehicles to have advanced air bag systems,
which detect the weight of a passenger and don't fire the air
bags if the passenger is too small to withstand the force.

Nissan will begin notifying customers about the recall in May,
Booth said. Dealers will recalibrate the system in affected
vehicles. Booth said Nissan also will offer to recalibrate seats
in 1,500 Quest minivans in Canada, even though the system meets
Canadian standards. Booth said drivers should be aware that if
the air bag indicator light is on, the air bags won't deflate.
If the light is off, the air bags will deflate.


OBESITY LEGISLATION: House Republicans to Vote Next Week on Bill
----------------------------------------------------------------
House Republicans plan to vote next week on the so-called
"cheeseburger bill," which would bar people from suing fast-food
outlets on the grounds that they've become fat from overeating,  
www.hillnews.com reports.

Rep. Ric Keller (R-Fla.), a former attorney at a midsize Orlando
law firm before he won a seat in Congress in 2000, said he
became interested in stopping suits against fast-food
restaurants after watching a news segment on the "CBS Evening
News" last year. The segment included a report about trial
lawyers who sought to link fast food restaurants to increases in
obesity. Citing research produced by the U.S. surgeon general
that obesity cost Americans $117 billion each year, the lawyers
threatened to sue restaurants to recoup those costs. "The food
industry is the largest private sector employer in the country,"
Keller said. "I think it's time to put an end to the nonsense."

House leaders realized last year their best strategy was to
force lawmakers, especially Democrats, to vote on bills narrowly
tailored to specific industries. "We have a guns-and-butter
strategy," said Stuart Roy, spokesman for Majority Leader Tom
DeLay (R-Texas). "[We favor] narrow bills that highlight
Democratic ties to special-interest trial lawyers. [Democrats]
can stick with trial lawyers or vote for a common sense bill.
Either way works for us." Republican aides said they hope to
force votes on the House floor over the next few weeks on bills
that shed light on issues that they believe restrain economic
growth, such as tort reform.

In the Senate, Sen. Lindsey Graham (R-S.C.) introduced
legislation Monday requiring losers to pay the winner's legal
costs in class-action lawsuits, a practice that has been common
in other countries, including Britain, for some time. Keller's
bill will come to the House floor a week after McDonald's
decided remove so-called 'supersized' French fries and drinks
from its menus. McDonald's had been targeted in a lawsuit filed
in New York by teenagers who alleged that patronizing the
outlets had made them obese. "It is not the place of the law to
protect them against their own excesses," U.S. District Judge
Robert Sweet said in dismissing the suit. But he said another
suit could proceed under different legal reasoning.

Some states have adopted legislation that would shield
restaurants from such lawsuits. On Monday, the Georgia state
House passed similar legislation, and Louisiana passed its
version of the bill last year.

Still, the Centers for Disease Control study has found that "the
prevalence of obesity among U.S. adults increased to 20.9
percent in 2001, a 5.6 percent increase in one year and a 74
percent increase since 1991." Obesity is a serious public health
problem, but the pending legislation in the House has the usual
lobbies ready to do battle.


SAME-SEX MARRIAGES: 2nd NY Mayor To Hold Weddings, Seeks License
----------------------------------------------------------------
A second New York mayor said Wednesday he will start marrying
gay couples and plans to seek a license himself to marry his
same-sex partner, the Associated Press reports.

Nyack Mayor John Shields will join the New Paltz mayor, Jason
West, in issuing the licenses. West vowed to go ahead with up to
two dozen same-sex weddings this weekend, despite being charged
with 19 criminal counts and possibly facing jail time for
marrying gay couples.

Meanwhile, the Senate Judiciary Constitution subcommittee is
focusing on whether judges are overstepping their bounds and
eroding traditional marriage. The panel is using the
Massachusetts high court ruling permitting same-sex marriages as
an impetus. Sen. John Cornyn, R-Texas, said he called
Wednesday's hearing to examine the "judicial invalidation of
traditional marriage laws." Cornyn supports a constitutional
amendment protecting traditional marriage as the union of a man
and a woman. Last week, President Bush called on Congress to
quickly pass an amendment prohibiting gay marriages.

Shields told The Associated Press he will start officiating at
weddings of same-sex couples as early as this week and planned
to join other gay New Yorkers in visiting municipal clerks'
offices Friday seeking marriage licenses. West married 25 gay
couples on Friday, making this small college village 75 miles
north of New York City another flash point in the national
debate over gay marriage. More than 3,400 couples have been
married in San Francisco; West now has about 1,000 couples on a
waiting list.

West, 26, said he was motivated by civil rights and "common
decency" to join the vanguard of the growing gay marriage
movement, along with San Francisco Mayor Gavin Newsom. West was
to be in court Wednesday night to answer charges that he married
19 couples knowing they did not have marriage licenses, a
violation of the state's domestic relations law. He planned to
plead innocent. He insisted Wednesday that it was New York's
Health Department that was breaking the law by refusing to give
marriage licenses to same-sex couples.

"I don't plan to spend time in jail," the Green Party mayor
said. "I think that the judge before whom this case will be
heard will see that the constitution is clear on this, will see
that our laws are clear on this and will see that these
marriages are in fact legal." West was charged with a
misdemeanor and the punishment could run from a $25 to $500 fine
or jail time. Ulster County District Attorney Donald Williams
said a jail term wasn't being contemplated at this point.


SAME-SEX MARRIAGES: Congress Set for Constitutional Review Talks
----------------------------------------------------------------
Congress is taking its first steps toward what promises to be a
divisive election-year battle over a constitutional amendment
banning gay marriages, the Associated Press reports.

Using the Massachusetts high court ruling permitting same-sex
marriages as an impetus, the Senate Judiciary Constitution
subcommittee is focusing on whether judges are overstepping
their bounds and eroding traditional marriage. Gay rights
supporters are fighting back, framing the issue as America's
next civil rights battle.

Sen. John Cornyn, R-Texas, said he called Wednesday's hearing to
examine the "judicial invalidation of traditional marriage
laws." Cornyn supports a constitutional amendment protecting
traditional marriage as the union of a man and a woman.
"Judicial activism has made the defense of marriage a national
issue that can only be addressed at the national level," Cornyn
told the AP.

In November, the Massachusetts Supreme Judicial Court ruled 4-3
that gay couples have a constitutional right to marry. Thousands
of gay weddings have been performed in San Francisco since Feb.
12, when the city began issuing marriage licenses to same-sex
couples. Last week, President Bush last week called on Congress
to quickly pass an amendment prohibiting gay marriages.

Sen. John Kerry, D-Mass., who effectively wrapped up the
Democratic presidential nomination on Tuesday, says he is
against gay marriage but would oppose amending the U.S.
Constitution to bar it. In testimony prepared for delivery
Wednesday, Yale University Professor R. Lea Brilmayer said a
constitutional amendment to determine what Massachusetts can do
within its own borders would be wrong. "It is for the people of
Massachusetts to say what their constitution should say," she
said. "This premise is the basic principle of federalism, upon
which the American constitutional system as a whole depends."

But other legal experts disagree. Nebraska Attorney General Jon
Bruning, who is also expected to testify, said the Massachusetts
ruling could invalidate Nebraska's ban on same-sex marriages.
The federal Defense of Marriage Act signed into law in 1996 by
President Clinton tried to leave the gay marriage issue up to
the states. But Bruning said recent court decisions indicate
that federal courts may eventually allow same-sex marriages.
The arguments for and against a constitutional amendment also
fall along social and civil rights lines. Lawmakers are divided
on the issue, with many expressing a reluctance to tinker with
the constitution.


SAME-SEX MARRIAGES: State Law Disallows Gay Weddings, Says NY AG
----------------------------------------------------------------
New York Attorney General Eliot Spitzer said on Wednesday the
state's laws do not permit gay marriage, dealing a harsh blow to
the growing nationwide battle for same-sex weddings, the
Associated Press reports.

Spurred to give an opinion after a small town mayor married gays
last week, Spitzer said he personally supports the desire of
same-sex couples to marry but must uphold the state's laws.
"I know gays and lesbians want marriage and I respect their
commitment to each other and I personally support their desire,"
Spitzer told a news conference. But as state attorney general,
he said he must put New York law before, "my personal views or
political considerations."

Spitzer said in a written analysis of state law that, "The
language of the New York State Domestic Relations Law -- which
includes references to 'bride and groom' and 'husband and wife'
-- does not authorize the issuance of licenses to same sex
couples in New York." Spitzer's ruling will not end the debate
in New York. The city's Department of Law instructed the city
clerk not to grant marriage licenses to gays but that, "it is
for the Legislature to decide whether as a matter of policy New
York should authorize same-sex marriages." It added that "the
constitutionality of the Domestic Relations Law is likely to be
challenged."

The push for gay marriages has swept from Massachusetts to
California as gay rights advocates press for equal treatment.
Spitzer was dragged into it after the mayor of New Paltz, a
village in upstate New York, officiated at about two dozen gay
weddings last week even though the couples did not have marriage
licenses.

Gay marriage has become a contentious election-year issue after
about 3,500 same-sex couples wed in recent weeks in San
Francisco. A New Mexico county has also granted same-sex
marriage licenses and Massachusetts' top court has ordered
lawmakers to allow gay marriages by mid-May. President Bush has
called for a constitutional amendment that would ban gay
marriage.


SAME-SEX MARRIAGE: OR County Latest to Approve Gay Weddings
-----------------------------------------------------------
Same-sex couples exchanged marriage vows in Oregon on Wednesday
hours after commissioners in Multnomah County, which includes
Portland, the state's largest city, said the practice was legal,
Reuters News reports.

Hundreds of gay couples, many clutching flowers and minding
children, waited in pelting rain to apply for marriage licenses
after county officials, citing an ambiguously worded state law,
matched recent rulings in several U.S. cities and towns.

"We asked our (county) attorney if our current practice was
still legal. Based on her opinion, we would be violating the
Oregon constitution if we were to continue to deny same-sex
couples marriage licenses," county commissioner Serena Cruz told
a news conference.

Lonnie Roberts, a conservative on the county commission who
opposes gay marriage but supports civil unions, was cut out of
the discussions and plans to challenge the ruling. "We have
several options," said Gary Walker, Robert's chief of staff
"There are already people working up law suits."

According to Oregon law, marriage is a "civil contract entered
into in person by males at least 17 years of age and females at
least 17 years of age," which technically does not rule out
same-sex marriage, proponents say.

The decision touched off a firestorm of criticism from
conservatives and Christian groups. Some critics showed up
outside the county courthouse in Portland to shout their
disapproval. One carried a sign reading, "God is watching you
pervert." But the newly married couples, some of whom took their
vows on the court house steps, were ecstatic.

Gay marriage has become a national election-year issue in recent
weeks after the Massachusetts high court ordered gay marriages
by mid-May and more than 3,440 same-sex couples were married in
San Francisco. Proponents said banning gay marriages violated
anti-discrimination laws by prohibiting couples from inheriting
each other's assets, jointly owning homes or providing each
other with health benefits. Oregon's governor and attorney
general did not immediately comment on the ruling.


SECURITY TRUST: AZ Court Enters Final Judgment vs. Former Veep
--------------------------------------------------------------
The United States District Court for the District of Arizona
entered a judgment in a mutual fund market timing and late
trading case against defendant Nicole McDermott, a former senior
vice president at Phoenix, Arizona-based Security Trust Company,
N.A. (STC). The Final Judgment enjoins McDermott from future
violations of the antifraud provisions of Section 17(a) of the
Securities Act of 1933 and Section 10(b) of the Securities
Exchange Act of 1934 and Rule 10b-5 thereunder.  McDermott
consented to the entry of the judgment without admitting or
denying the allegations in the Commission's complaint.  The
judgment provides that the court will retain jurisdiction to
determine the appropriateness and amounts of disgorgement,
prejudgment interest and a civil penalty and will for this
purpose accept as and deem true the facts alleged in the
Commission's complaint.

In addition to McDermott, 34, who resides near Phoenix, the
Commission's complaint, filed on Nov. 25, 2003, charged STC, an
uninsured national banking association that, among other
services, effected mutual fund trades for participants in
retirement plans and processed data regarding those trades for
the plans' third party administrators (TPAs); STC's former chief
executive officer, Grant D. Seeger, 40, of Phoenix; and its
former president, William A. Kenyon, 57, of Phoenix.  The case
is pending against these defendants.

The Commission's complaint alleged the following:

     (1) Late Trading: From May 2000 to July 2003, STC
         facilitated hundreds of mutual fund trades in nearly
         400 different mutual funds by several hedge funds
         controlled by Edward J. Stern, known as the Canary
         Capital funds. Approximately 99% of these trades were
         transmitted to STC after the 4:00 p.m. EST market
         close; 82% of the trades were sent to STC between 6:00
         p.m. and 9:00 p.m. EST.  The hedge funds' late trading
         was effected by STC through its electronic trading
         platform, which was designed primarily for processing
         trades by TPAs for retirement plans.  STC repeatedly
         misrepresented to mutual funds that the hedge funds
         were a retirement plan account, even though the
         defendants knew that the hedge funds were not a TPA or
         a retirement plan account.  

     (2) Market Timing: During its three-year relationship with
         the Canary hedge funds, STC and the other defendants
         employed various methods to attempt to conceal the
         hedge funds' market timing activities from mutual
         funds, including a "piggybacking" strategy in which STC
         set up a sub-account within the account of one of STC's
         TPA clients and attached the Canary hedge funds'
         mutual fund trades to the trades of this client without
         its knowledge.

The complaint charged McDermott, STC, Seeger, and Kenyon with
violating Section 17(a) of the Securities Act and Section 10(b)
of the Exchange Act and Rule 10b-5 thereunder.  STC is also
charged with violating Rule 22c-1, under Section 22(c) of the
Investment Company Act of 1940, which prohibits the purchase or
sale of mutual fund shares except at a price based on the
current NAV of such shares that is next calculated after receipt
of a buy or sell order. Seeger is also charged with violating
Section 37 of the Investment Company Act, which prohibits
stealing the assets of a registered investment company. The
Commission is seeking an accounting, disgorgement, and penalties
from all defendants and a judgment of permanent injunction
against Seeger and Kenyon.


UNITED STATES: Bill Holds Professionals Liable for False Ads
------------------------------------------------------------
The Assembly Consumer Affairs Committee approved a bill
yesterday that would make licensed professionals - such as
doctors and lawyers - subject to the Consumer Fraud Act, holding
them accountable for false or misleading advertisements, The
Home News Tribune reports.

A state Supreme Court case ruling earlier this month said
consumers could not sue doctors over false claims made in
advertisements because the Consumer Fraud Act didn't apply to
"learned professionals." The case stems from a class action
lawsuit brought by patients of Dr. Joseph Dello Russo - a
Bergenfield eye specialist who performed laser eye surgery on
sports figures. His patients said his advertising convinced them
that licensed physicians would care for them and instead a
doctor - whose license was suspended for multiple violations -
provided their care. The case was dismissed based on the court's
interpretation of the Consumer Fraud Act.


VISTA 2000: GA Court Enters Final Judgment in Securities Lawsuit
----------------------------------------------------------------
The Securities and Exchange Commission (SEC) announced that the
United States District Court for the Northern District of
Georgia entered an order and final judgment against Richard P.
Smyth of Fernandina Beach, Fla., directing payment of
disgorgement in the amount of $397,362.38, along with
prejudgment interest thereon in the amount of $303,399.38.  On
the same day, Judge Cooper entered an order and final judgment
against Arnold E. Johns, Jr., of Atlanta, Ga., directing payment
of disgorgement in the amount of $421,563 along with prejudgment
interest thereon in the amount of $321,564.02.    

In an earlier order of Sept. 24, 2001, Smyth, who had served as
Vista 2000, Inc.'s chief executive officer and chairman of its
board, was permanently enjoined from further violations of
Section 17(a) of the Securities Act of 1933; Section 10(b) of
the Securities Exchange Act of 1934 and Rule 10b-5 thereunder;
Section 13(a) of the Exchange Act and Rules 12b-20, 13a-1, 13a-
11, 13a-13 thereunder; Sections 13(b)(2)(A) and 13(b)(2)(B) of
the Exchange Act; Section 13(b)(5) of the Exchange Act and Rules
13b2-1 and 13b2-2 thereunder; and Sections 16(a) and 16(c) of
the Exchange Act and Rules 16a-2 and 16a-3 thereunder, and was
barred from acting as an officer or director of a public
company.  In another order of Oct. 31, 2002, Johns, who had
served as Vista's president and director, was permanently
enjoined from further violating the antifraud provisions, books
and records provisions, internal accounting control and
reporting provisions of the Section 17(a) of the Securities Act
and Sections 10(b), 13(a), 13(b)(2)(A), 13(b)(2)(B), and
13(b)(5) of the Exchange Act and Rules 10b-5, 12b-20, 13-11,
13a-13 and 13b2-1 thereunder.

In ordering disgorgement against the defendants, the Court
concluded that  Smyth and Johns sold Vista stock while in
possession of material, adverse and nonpublic information, which
allowed them to avoid losses in the amounts of $397,362.38 and
$421,563, respectively.  The Commission's complaint and amended
complaint alleged a wide-range of securities law violations,
including that misstatements were made by Vista in filings with
the Commission.  Smyth and Johns were charged with violations,
as control persons of Vista, arising from those filings.  The
allegations included, among other things, that Vista's revenues,
income, earnings per share, and assets were overstated by Smyth
from 1994 through 1996 and by Johns during 1995 and 1996, and
that Smyth and Johns engaged in insider trading during 1995 and
1996.  The orders direct that Smyth and Johns pay disgorgement
and prejudgment interest in full within 30 days from the entry
of the orders.  


WALT DISNEY COMPANY: Calls for Chairman's Ouster Mount
------------------------------------------------------
More than 40 percent of Walt Disney Co.'s shareholders withheld
their support for reelecting Chief Executive Michael Eisner to
the company's board on Wednesday, casting doubt on his future
role at the entertainment conglomerate, Reuters News reports.

Two former Disney directors, Stanley Gold and Roy Disney, who
first touched off the investor insurgency, called the no-
confidence vote "unprecedented in American corporate history"
and renewed their call for Eisner's ouster. At Disney's annual
meeting in Philadelphia, about 24 percent of votes also were
withheld from George Mitchell, the former senator who serves as
Disney's chief independent director. The vote against Eisner was
43 percent. Eisner has also been criticized for Disney's longer-
term stock performance, low ratings at the company's struggling
ABC network and what detractors see as his mishandling of a now-
scuttled movie distribution deal with Pixar Animation Studios
Inc.

Comcast Corp., the nation's largest cable operator, called on
Disney's board to sit down and reconsider its $49 billion, all-
stock takeover offer, a bid that the Disney board and Eisner had
earlier rejected as too low. Comcast said it had not raised its
bid for Disney. Many investors and analysts expected Disney to
offer to split the roles of chief executive and chairman, but
some also questioned whether that would go far enough to appease
disgruntled shareholders, who voted against Eisner in a much
larger block than either side had first anticipated.

Nancy Barber, a fund manager at U.S. Bancorp Asset
Management/First American Funds, which has assets of about $122
billion, said that splitting the two roles would represent a
minimal concession by Disney. "If they split those positions, it
is only going to do any good if the person that they add in the
chairman role is a strong personality with a great background in
managing those types of assets," she told Reuters News. "What
shareholders are requesting of Disney -- these are reasonable
things: Good governance, succession planning ... accountability.
That's what people want and there hasn't been any," Barber said.

Roy Disney and Gold, who were granted time to address the
several thousand shareholders in Philadelphia, blamed Eisner for
the company's poor performance over the last 10 years, leaving
the company vulnerable to Comcast Corp.'s  bid. Institutional
Shareholder Services analyst Pat McGurn said the vote was a
"worst case scenario" for Eisner. "I think the chairman change
is a done deal at this point," he said.

For its part, the Disney board has solidly backed Eisner, saying
the company is on a good track with a forecast for 30 percent
growth in earnings per share this year and double digit compound
annual growth through 2007. Disney shares closed off 11 cents at
$26.65 on the New York Stock Exchange.


WORLDCOM/MCI: Ex-CEO Pleads Not Guilty in Accounting Fraud Case
---------------------------------------------------------------
Appearing before the same judge who 24 hours earlier accepted a
guilty plea from the government's star witness against him,
former WorldCom Inc. Chief Executive Bernard Ebbers pleaded not
guilty on Wednesday to charges that he orchestrated the largest
accounting fraud in U.S. history, the Associated Press reports.

Ebbers entered pleas of innocence to charges of fraud,
conspiracy and making false statements in connection with the
$11 billion bookkeeping scandal that fueled WorldCom's collapse.
Ebbers did not comment outside the courthouse following the
arraignment, but his attorney, Reid Weingarten, said his client
had committed no crime. "We don't believe Bernie Ebbers ever
sought to mislead investors," Weingarten told reporters. "He
never wanted to hurt the company he built."

Asked about Scott Sullivan, WorldCom's former chief financial
officer and Ebbers' one-time top lieutenant, who has agreed to
assist in the government's prosecution of Ebbers, Weingarten
said: "We feel very bad for Scott Sullivan. He was in a very
fragile family situation under enormous pressure. Plenty of
people will do a lot of things to protect their families."
Weingarten said he did not know what Sullivan had told the
government.

U.S. District Judge Barbara Jones set a trial date of Nov. 9 and
said Ebbers could remain free on $10 million bail, secured in
part by his $2.5 million house in Mississippi. Ebbers was forced
to surrender his passport, and his travel within the United
States was restricted to New York City, Washington, D.C.,
Mississippi and Louisiana.

Ebbers is one of the biggest figures yet to be charged in the
wave of corporate scandals that has roiled the U.S. business
world and cost investors billions of dollars. The charges
against him were unveiled in New York on Tuesday by U.S.
Attorney General John Ashcroft, underlining the case's
importance as a symbol of the self-enrichment that pervaded
corporate boardrooms in the boom years of the late 1990s.

His indictment follows government charges brought last month
against Jeffrey Skilling, former chief executive of energy
company Enron Corp., which also fell into bankruptcy in a
massive bookkeeping scandal. The top figure at Enron, former
Chairman Kenneth Lay, has not been charged. The government said
Ebbers, who resigned from WorldCom in 2002 as its problems began
to emerge, demanded that the company's financial results match
Wall Street expectations. He could be convicted solely on the
testimony of Sullivan, legal experts say.


* ChoicePoint Launches System to Help Detect Mortgage Fraud
-----------------------------------------------------------
Mortgage Asset Research Institute, Inc. (MARI), a company of
ChoicePoint, has introduced a new early alert system to help the
mortgage industry detect and fight incidents of fraud,
PRNewswire reports.

The Mortgage Fraud Alert System(SM) (MFAS) is a cooperative
service that notifies participating companies about emerging
patterns of alleged fraud in its early stages. The companies
contribute information into the system and then can use the
shared data to take action as necessary to mitigate potential
risk and minimize their own exposure.

One costly fraud trend, known as "property flipping," can
temporarily inflate property taxes, depress long-term real
estate values and diminish the quality of life in residential
neighborhoods. Flipping is also a major source of financial
losses to mortgage lenders, investors and insurers. Another
trend, identity theft, can result in years of effort to undo the
damage caused to consumers. Identity theft is the fastest
growing white-collar crime in the U.S., according to the Federal
Trade Commission.

The Mortgage Bankers Association worked closely with MARI to
create the Mortgage Fraud Alert System to address, identify and
alert the industry about mortgage fraud issues at the time of
detection. For example, an early discovery of an alleged lien
release scheme involving hundreds of properties in Pennsylvania
was recently submitted to MFAS. The scheme consists of third-
party speculators purchasing properties at county "tax upset
sales" and then filing "quiet title" actions seeking to divest
all liens of record, including mortgages against the property.
The action is filed solely on the hope that it will go
unanswered by the lien holder and a default judgment will be
issued to discharge all liens.

MARI, a ChoicePoint company, is the premier provider of risk
management solutions to the mortgage industry. MARI's MIDEX (R)
database services are endorsed by Mortgage Bankers Association,
National Home Equity Mortgage Association and Manufactured
Housing Institute.


                   Asbestos Alert


ASBESTOS LITIGATION: Aearo Faces Suits for Defective Respirators
----------------------------------------------------------------
Aearo Corporation is a defendant in lawsuits by plaintiffs
alleging that they suffer from respiratory medical conditions,
such as asbestosis or silicosis, and that such conditions result
from exposure to asbestos and silica in part due to the use of
respirators that allegedly were negligently designed or
manufactured.  

Most of these claims are covered by the Asset Transfer Agreement
entered into on June 13, 1995 by the Company and Aearo Company,
on the one hand, and Cabot Corporation and certain of its
subsidiaries, on the other hand.  In the 1995 Asset Transfer
Agreement, so long as the Company makes an annual payment of
$400,000 to Cabot, the Sellers agreed to retain, and Cabot and
the Sellers agreed to defend and indemnify the Company against,
any liability or obligation relating to or otherwise arising
under any proceeding or other claim against the Company or Cabot
or their respective affiliates or other parties with whom any
Seller directly or indirectly has a contractual liability
sharing arrangement which sounds in product liability or related
causes of action arising out of actual or alleged respiratory
medical conditions caused or allegedly caused by the use of
respirators or similar devices sold by Sellers or their
predecessors (including American Optical Corporation and its
predecessors) prior to July 11, 1995.

To date, the Company has elected to pay the annual fee and
intends to continue to do so.  The Company could potentially be
liable for claims currently retained by Sellers if the Company
elects to cease paying the annual fee or if Cabot and the
Sellers no longer are able to perform their obligations under
the 1995 Asset Transfer Agreement.  Cabot acknowledged in the
Stock Purchase Agreement that it and the Company entered into on
June 27, 2003 (providing for the sale by Cabot to the Company of
all of the common and preferred stock of the Company owned by
Cabot) that the foregoing provisions of the 1995 Asset Transfer
Agreement remain in effect.  The 1995 Asset Transfer Agreement
does not apply to claims relating to the business of Eastern
Safety Equipment, the stock of which the Company acquired in
1996.

At December 31, 2003 and September 30, 2003, the Company has
recorded liabilities of about $4,500,000, which represents
reasonable estimates of its probable liabilities for product
liabilities substantially related to asbestos and silica-related
claims as determined by the Company in consultation with an
independent consultant.  This reserve is re-evaluated
periodically and additional charges or credits to operations may
result as additional information becomes available.  Consistent
with the current environment being experienced by companies
involved in asbestos and silica-related litigation, there has
been an increase in the number of asserted claims that could
potentially involve the Company.  Various factors increase the
difficulty in determining the Company's potential liability, if
any, in such claims, including the fact that the defendants in
these lawsuits are often numerous and the claims generally do
not specify the amount of damages sought.  Additionally, the
bankruptcy filings of other companies with asbestos and silica-
related litigation could increase the Company's cost over time.  
In light of these and other uncertainties inherent in making
long-term projections, the Company has determined that the five-
year period through fiscal 2008 is the most reasonable time
period for projecting asbestos and silica-related claims and
defense costs.  

It is possible that the Company may incur liabilities in an
amount in excess of amounts currently reserved.  However, taking
into account currently available information, historical
experience, and the 1995 Asset Transfer Agreement, but
recognizing the inherent uncertainties in the projection of any
future events, it is management's opinion that these suits or
claims should not result in final judgments or settlements in
excess of the Company's reserve that, in the aggregate, would
have a material effect on the Company's financial condition,
liquidity or results of operations.


ASBESTOS LITIGATION: Losses from CTC Acquisition Balloon
--------------------------------------------------------
Alleghany Corporation's recent Securities and Exchange
Commission filing said that the 2003 results of its acquisition
Capitol Transamerica Corporation (CTC) primarily reflect
$21,900,000 of loss reserve strengthening related to assumed
reinsurance treaties written by its subsidiary Capitol Indemnity
between 1969 and 1976.  Such assumed reinsurance treaties
primarily relate to asbestos and environmental exposures.  
Promptly after its acquisition by Alleghany in January 2002,
CATA's management commenced a program to settle, or position for
commutation, Capitol Indemnity's assumed reinsurance treaties
and make appropriate payments on a timely basis when deemed
necessary.  

Since January 2002, Capitol Indemnity has experienced an
increase in paid losses on this assumed reinsurance, which was
initially attributed to a change in CATA's settlement
philosophy.  Upon completion in 2003 of an actuarial study
undertaken by management, it was determined that the increase in
paid losses related to the treaties reflected developments in
the underlying claims environment, particularly with respect to
asbestos related claims, and, accordingly, CATA strengthened its
reserves related to such assumed reinsurance coverages in the
amount of $21,900,000.


ASBESTOS LITIGATION: Citigroup Subsidiary Sells Class A Stock
--------------------------------------------------------------
A recent filing with the Securities and Exchange Commission
disclosed that Travelers Property Casualty Corp. (TPC), an
indirect wholly owned subsidiary of Citigroup Inc. on December
31, 2001, sold 231,000,000 shares of its class A common stock
representing around 23.1% of its outstanding equity securities
in an initial public offering on March 27, 2002.  In 2002,
Citigroup recognized an after-tax gain of $1,158,000,000 as a
result of the IPO.  

In connection with the IPO, Citigroup entered into an agreement
with TPC that provides that, in any fiscal year in which TPC
records asbestos-related income statement charges in excess of
$150,000,000, net of any reinsurance, Citigroup will pay to TPC
the amount of any such excess up to a cumulative aggregate of
$520,000,000 after-tax.  A portion of the gross IPO gain was
deferred to offset any payments arising in connection with this
agreement.  During 2002 and 2003, $159,000,000 and $361,000,000,
respectively, were paid pursuant to this agreement.


ASBESTOS LITIGATION: Former Coke Subsidiary Seeks Reimbursement
---------------------------------------------------------------
The Coca-Cola Company ran Aqua-Chem from 1970 to 1981.  During
this period, Coke purchased over $400,000,000 of insurance to
cover Aqua-Chem from certain product liability and other claims.  
Cleaver Brooks, an Aqua-Chem subsidiary, manufactured boilers,
some of which contained asbestos gaskets.  The Company sold
Aqua-Chem to Lyonnaise American Holding, Inc. in 1981 under the
terms of a stock sale agreement and, following a lawsuit
involving a tax dispute, entered into a settlement agreement in
1983 with Lyonnaise and Aqua-Chem.  The 1981 and 1983
agreements, among other things, outlined the parties' rights and
obligations concerning past and future claims and lawsuits
involving Aqua-Chem.

Aqua-Chem was first named as a defendant in asbestos lawsuits in
or around 1985 and, to date, has more than 100,000 claims
pending against it.  In October 2002, Aqua-Chem asserted that
since 1985 it had incurred around $10,000,000 in expenses
related to these claims that were not covered by insurance.  
Aqua-Chem demanded that the Company reimburse these expenses
pursuant to its interpretation of the terms of the 1981 and 1983
agreements.  It also demanded that the Company acknowledge its
continuing obligations to Aqua-Chem under these agreements for
any future liabilities and expenses that are excluded from
coverage under the applicable insurance or for which there is no
insurance.  The Company disputes Aqua-Chem's interpretation of
the agreements and believes it has no past, present or future
obligation to Aqua-Chem in this regard.  This led to the filing
of the Georgia Case.  

The Wisconsin Case initially was stayed, pending final
resolution of the Georgia Case, and later was voluntarily
dismissed without prejudice by Aqua-Chem.  The parties have
agreed to an extension of the discovery period in the Georgia
Case through April 15, 2004, and have submitted to the Court a
consent order setting forth the agreed discovery schedule.  

The Company believes it has substantial legal and factual
defenses to Aqua-Chem's claims.


ASBESTOS LITIGATION: Consolidated Edison Inc Adds Up Reserves
-------------------------------------------------------------
In a recent Securities and Exchange Commission filing,
Consolidated Edison Inc. reported that it had deferral asbestos-
related reserve costs amounting to $38,783,200 and its
affiliates CECoNY Consolidated and Orange and Rockland
Utilities, Inc. had $37,700,000 and $1,083,200 respectively.

The Company cited Orange and Rockland Utilities' deferred
asbestos-related reserve costs on its consolidating balance
sheet as of December 31, 2003.


ASBESTOS LITIGATION: Corning Reaches Settlement With Claimants
--------------------------------------------------------------
Corning Inc. has been named as a defendant in many lawsuits over
a period of more than two decades against Pittsburgh Corning
Corporation and several other defendants involving claims
alleging personal injury from exposure to asbestos.  At the time
PCC filed for bankruptcy protection, there were around 12,400
claims pending against Corning in state court lawsuits alleging
various theories of liability based on exposure to PCC's
asbestos products and typically requesting monetary damages in
excess of $1,000,000 per claim.  Corning has defended those
claims on the basis of the separate corporate status of PCC and
the absence of any facts supporting claims of direct liability
arising from PCC's asbestos products.  

Corning is also named in around 11,200 other cases (around
40,700 claims) alleging injuries from asbestos and similar
amounts of monetary damages per claim.  Those cases have been
covered by insurance without material impact to Corning to date.

In the bankruptcy court, PCC in April 2000 obtained a
preliminary injunction against the prosecution of asbestos
actions arising from PCC's products against its two shareholders
to afford the parties a period of time in which to negotiate a
plan of reorganization for PCC.  The Injunction Period was
extended on several occasions through September 30, 2002, and
later for a period from December 23, 2002 through January 23,
2003, and was reinstated as of April 22, 2003, and will now
continue, pending developments with respect to the PCC Plan.

On May 14, 2002, PPG Industries, Inc. announced that it had
agreed with certain of its insurance carriers and
representatives of current and future asbestos claimants on the
terms of a settlement arrangement applicable to claims arising
from PCC's products.  The announced arrangement would permit PPG
and certain of its insurers to make contributions of cash over a
period of years, PPG's shares in PCC and Pittsburgh Corning
Europe N.V. (PCE), a Belgian corporation, and an agreed number
of shares of PPG's common stock in return for a release and
injunction channeling claims against PPG into a settlement trust
under the PCC Plan.

On March 28, 2003, Corning announced that it had also reached
agreement with representatives of current and future asbestos
claimants on a settlement arrangement that will be incorporated
into the PCC Plan.  This settlement is subject to a number of
contingencies, including a favorable vote by 75% of the asbestos
claimants voting on the PCC Plan, and approval by the bankruptcy
court.  Corning's settlement will require the contribution, when
the Plan becomes effective, of its equity interest in PCC, its
one-half equity interest in PCE, and 25,000,000 shares of
Corning common stock.  Corning also will be making cash payments
of $136,000,000 (net present value as of December 31, 2003) in
six installments beginning in June 2005 assuming the Plan is
effective.  In addition, Corning will assign policy rights or
proceeds under primary insurance from 1962 through 1984, as well
as rights to sell proceeds under certain excess insurance, most
of which falls within the period from 1962 through 1973.  In
return for these contributions, Corning expects to receive a
release and an injunction channeling asbestos claims against it
into a settlement trust under the PCC Plan.

Corning's negotiations with the representatives of asbestos
claimants have produced a tentative settlement, but certain
cases may still be litigated.  Final approval of a global
settlement through the PCC bankruptcy process may impact the
results of operations for the period in which such costs, if
any, are recognized.  Total charges of $413,000,000
($263,000,000 after-tax) have been incurred through December 31,
2003; however, the final settlement value will be dependent on
the price of Corning's common stock at the time it is
contributed to the settlement trust.  Management cannot provide
assurances that the ultimate outcome of a settlement will not be
materially different from the amount recorded to date.

Corning's $223,000,000 net loss in 2003 included a charge of
$413,000,000 ($263,000,000 after-tax) related to the pending
asbestos settlement of current and future tort claims in
connection with a proposed reorganization plan for the Company's
PCC equity affiliate.

The Company said it may accelerate some or all of the funding of
the cash payments to the asbestos settlement trust, as needed,
to maximize the tax benefits it can realize in connection with
the related settlement charges.

Among Corning's other accrued liabilities as of December 31,
2003, the $282,000,000 asbestos settlement represents the fair
value of Corning's 25,000,000 shares at December 31, 2003 and
Corning's investment balance of PCE to be contributed to the
trust as part of the settlement.  The remainder of Corning's
reserve for this settlement is reflected in other long-term
liabilities.


ASBESTOS LITIGATION: Crum & Forster Adjusts Asbestos Reserves
-------------------------------------------------------------
Crum & Forster Holdings Corp. reported that uncertainties
regarding its reserves (including reserves for asbestos,
environmental and other latent exposure claims) could result in
a liability exceeding the reserves by an amount that would be
material to the Company's financial condition or results of
operations in a future period, and such liabilities would reduce
future net income and cash flows and the ability of its
insurance subsidiaries to pay dividends or make other
distributions to the Company.

There are significant additional uncertainties in estimating the
amount of reserves required for asbestos, environmental and
other latent exposure claims.  The possibility that these claims
would emerge was often not anticipated at the time the policies
were written, and traditional actuarial reserving methodologies
have not been generally useful in accurately estimating ultimate
losses and LAE for these types of claims.  In addition, the loss
settlement period of certain of these claims may extend for
decades after the expiration of the policy period, and during
such time it often becomes necessary to adjust, sometimes to a
significant degree, the estimates of liability on a claim either
upward or downward.  Crum & Forster's gross asbestos reserves
were $298,200,000, $370,900,000 and $495,200,000 at December 31,
2001, 2002 and 2003, respectively.  The Company's asbestos
reserves, net of reinsurance, were $228,100,000, $264,800,000
and $366,400,000, at December 31, 2001, 2002 and 2003,
respectively.  Among the uncertainties relating to such reserves
are a lack of historical data, long reporting delays and
complex, unresolved legal issues regarding policy coverage and
the extent and timing of any such contractual liability.  Courts
have reached different and frequently inconsistent conclusions
as to when losses occurred, what claims are covered, under what
circumstances the insurer has an obligation to defend, how
policy limits are determined and how policy exclusions are
applied and interpreted.  Plaintiffs often are able to choose
from a number of potential venues to bring an action in the
court that they expect will be most advantageous to their
claims.  Because of these uncertainties, the Company's exposure
to asbestos, environmental and other latent exposure claims is
more difficult to estimate and is subject to a higher degree of
variability than is its exposure to non-latent exposure claims.
In addition, insurers generally, including Crum & Forster, are
generally experiencing an increase in the number of asbestos-
related claims due to, among other things, more intensive
advertising by lawyers seeking asbestos claimants, an increasing
focus by plaintiffs on new and previously peripheral defendants
and an increase in the number of insured entities seeking
bankruptcy protection as a result of asbestos-related
liabilities.  In addition to contributing to the increase in
claims, the bankruptcy proceedings of insureds may have the
effect of significantly accelerating and increasing loss
payments by insurers, including the Company.  Recently a court
required insurers of a bankrupt company to pay not only claims
already made, but also to make payments for all estimated future
claims.

Increasingly, policyholders have asserted that their claims for
asbestos-related insurance are not subject to aggregate limits
on coverage and that each individual bodily injury claim should
be treated as a separate occurrence under the policy.  The
Company expects this trend to continue.  Although it is
difficult to predict whether these policyholders will be
successful on the issue, to the extent the issue is resolved in
their favor, the Company's coverage obligations under the
policies at issue could be materially increased and bounded only
by the applicable per occurrence limits and the number of
asbestos bodily injury claims against the policyholders.  
Accordingly, it is difficult to predict the ultimate size of the
claims for coverage not subject to aggregate limits.

In addition, proceedings recently have been launched directly
against insurers challenging insurers' conduct with respect to
asbestos claims, including in some cases with respect to
previous settlements.  Crum & Forster anticipates the filing of
other direct actions against insurers, potentially including the
Company, in the future.  Particularly in light of jurisdictional
issues, it is difficult to predict the outcome of these
proceedings, including whether the plaintiffs will be able to
sustain these actions against insurers based on novel legal
theories of liability.

During 2002 and 2003, the asbestos-related trends described
above both accelerated and became more visible.  The Company has
continued to see the emergence of trends including an increased
number of claimants filing asbestos claims against its insureds,
an increased value of claims against viable asbestos defendants
as co-defendants seek bankruptcy protection, and an increased
number of insureds asserting that their asbestos claims are not
subject to aggregate limits and that each individual bodily
injury claim should be treated as a separate occurrence.  During
2003, the Company increased its asbestos reserves by
$149,800,000, net of reinsurance.  Due to the inherent
uncertainties described above and to the potential impact of
recent trends, the Company's ultimate liability for asbestos,
environmental and other latent claims may vary substantially
from the amount currently reserved.

Although reinsurance makes the assuming reinsurer liable to us
to the extent of the risk ceded, the Company is not relieved of
its primary liability to its insureds as the direct insurer.  As
a result, the Company bears credit risk with respect to its
reinsurers, both with respect to receivables reflected on its
balance sheet as well as to contingent liabilities with respect
to reinsurance protection on future claims.  The Company cannot
guarantee that its reinsurers will pay all reinsurance claims on
a timely basis or at all.  At December 31, 2003, the Company had
reinsurance recoverable on paid and unpaid losses and LAE, net
of uncollectible reinsurance reserves, of $1,680,500,000 due
from around 315 reinsurers; however, the preponderance of these
recoverables is with relatively few reinsurers. At such date,
the Company's ten largest gross reinsurance recoverables
aggregated $1,224,200,000.  After consideration of collateral
the Company held in respect of these balances, the unsecured
amounts due from these reinsurers was $554,100,000.  The Company
periodically has contractual disputes with certain reinsurers
regarding coverage under reinsurance policies.  Historically,
this has principally occurred in the interpretation of coverage
relating to asbestos and environmental claims.  The Company
evaluates each reinsurance claim based on the facts of the case,
historical experience with the reinsurer on similar claims and
existing case law and include in the Company's reserve for
uncollectible reinsurance any amounts deemed uncollectible.  If
reinsurers are unwilling or unable to pay the Company amounts
due under reinsurance contracts, it will incur unexpected losses
and its cash flow will be adversely affected.  During 2001, 2002
and 2003, the Company incurred, or expects that it will incur,
reinsurance losses due to reinsurer insolvencies and settlement
of disputed balances.  For the years ended December 31, 2001,
2002 and 2003, the Company incurred charges for uncollectible
reinsurance of $500,000, $600,000 and $5,300,000, respectively.  
Many factors, principally including the need to increase the
Company's reserves in the future because of asbestos,
environmental or other latent exposures, could adversely affect
the ability of Crum & Forster's insurance subsidiaries to pay
dividends to it.

Crum & Forster's results in each of the last three years have
been adversely affected by development of prior years' loss and
LAE reserves, particularly for asbestos liabilities.  The
Company performs exhaustive and continuous analyses of its loss
emergence and loss reserve levels and believes its reserves are
adequate.  However, because it takes many years for losses to be
ultimately reported and paid, there is inherent uncertainty in
the estimation process, particularly for asbestos exposures.

Net income rose 63.7% in 2003, excluding from 2002 the
aforementioned cumulative effect of a change in accounting
principle.  The improvement was principally the result of
substantial realized investment gains, offset in part by adverse
development of prior years' loss and LAE reserves of
$123,000,000, arising from asbestos exposures, and a 38.8%
decline in net investment income due to the large cash position
the Company has held since June 2003.

The adverse development before corporate aggregate reinsurance
in calendar year 2003 of $137,200,000 (17.8 percentage points)
was primarily due to a deficiency in asbestos reserves,
consistent with an industry-wide deterioration in asbestos
liabilities caused by increases in the number of claimants
filing asbestos claims and attorneys targeting new and
previously peripheral defendants, including some of the
Company's insureds.  Based on its actuarial reserve review, the
Company strengthened its asbestos, environmental and other
latent reserves by $153,600,000, principally in the general
liability line of business for accident years prior to 1998.  
Asbestos liabilities accounted for $149,000,000 of the
development.  These reserve increases were partially offset by
favorable development of $73,300,000 for accident years 2002 and
prior excluding accident year 2001 which developed unfavorably
by $56,900,000.  The 2001 development was principally in the
workers' compensation and general liability lines.

The adverse development before corporate aggregate reinsurance
in calendar year 2002 of $29,600,000 (4.6 percentage points)
includes $67,600,000 for asbestos liabilities, which was driven
by increases in several large asbestos accounts.  This adverse
development was partially offset by favorable non-latent
development of $38,000,000.

Details of the 2001 adverse loss development by line of business
Adverse development of $224,200,000 was recorded for general
liability.  Included in the adverse development was $74,500,000
for asbestos, environmental and other latent liabilities, which
was driven by increases in the estimated asbestos liabilities
for several large insureds due to the adverse trends in
asbestos.  

The Company wrote general liability, commercial multi-peril and
umbrella policies under which the Company's policyholders
continue to present asbestos, environmental and other latent
claims.  The vast majority of these claims are presented under
policies written many years ago.  There are significant
uncertainties in estimating the amount of reserves required for
asbestos, environmental and other latent exposure claims.  
Reserves for these exposures cannot be estimated solely with the
traditional loss reserving techniques, which rely on historical
accident year development factors and take into consideration
the previously mentioned variables.  Among the uncertainties
relating to asbestos, environmental and other latent reserves
are a lack of historical data, long reporting delays, and
complex unresolved legal issues regarding policy coverage and
the extent and timing of any such contractual liability.  Courts
have reached different and frequently inconsistent conclusions
as to when losses occurred, which claims are covered, the
circumstances under which the insurer has an obligation to
defend, how policy limits are determined and how policy
exclusions are applied and interpreted. Plaintiffs often are
able to choose from a number of potential venues to bring an
action in the court that they expect will be most advantageous
to their claims.

Asbestos continues to be the most significant and difficult mass
tort for the insurance industry in terms of claims volume and
dollar exposure.  The litigation environment has become
increasingly adverse.  More than half of the lawsuits filed in
recent years have been filed in five plaintiff-oriented states,
where significant verdicts historically have been rendered
against commercial defendants.  The Company believes that the
insurance industry has been adversely affected by judicial
interpretations that have had the effect of maximizing insurance
recoveries for asbestos claims, from both a coverage and
liability perspective.  Even when these claims are resolved
without loss payment, as a large portion of them are,
significant expense costs are paid to defend the claims.  
Generally speaking, only policies underwritten prior to 1986
have potential asbestos exposure, since most policies
underwritten after this date contained an absolute asbestos
exclusion.

Over the past few years the industry has experienced an increase
over prior years in the number of asbestos claimants, including
claims by individuals who do not appear to be impaired by
asbestos exposure.  It is generally expected throughout the
industry that this trend will continue.  The reasons for this
evident increase are many: more intensive advertising by lawyers
seeking additional claimants, increased focus by plaintiffs on
new and previously peripheral defendants, an increase in the
number of entities seeking bankruptcy protection and a rush to
file claims before potential implementation of proposed
legislative reforms.  To date, this continued flow of claims has
forced around 68 manufacturers and users of asbestos products
into bankruptcy.  These bankruptcies have, in turn, aggravated
both the volume and the value of claims against viable asbestos
defendants.  Accordingly, there is a high degree of uncertainty
with respect to future exposure from asbestos claims, both in
identifying which additional insureds may become targets in the
future and in predicting the total number of asbestos claimants.

Early asbestos claims focused on manufacturers and distributors
of asbestos-containing products.  Thus, the claims at issue
largely arose out of the products hazard and typically fell
within the policies' aggregate limits of liability.  
Increasingly, insureds have been asserting that their asbestos
claims are not subject to these aggregate limits and that each
individual bodily injury claim should be treated as a separate
occurrence, potentially creating even greater exposure for
primary insurers.  Generally, insureds who assert these
positions are installers of asbestos products or property owners
who allegedly had asbestos on their property.  In addition, in
an effort to seek additional insurance coverage some insureds
that have eroded their aggregate limits are submitting new
asbestos claims as "non-products" or attempting to reclassify
previously resolved claims as non-products claims. The extent to
which insureds will be successful in obtaining coverage on this
basis is uncertain, and, accordingly, it is difficult to predict
the ultimate size of the claims for coverage not subject to
aggregate limits.

Crum & Forster's asbestos exposure is related mostly to insureds
that are peripheral defendants, including a mix of
manufacturers, distributors, and installers of asbestos-
containing products as well as premise owners.  For the most
part, these insureds are defendants on a regional rather than a
nationwide basis.  As the financial assets and insurance
recoveries of traditional asbestos defendants have been
depleted, plaintiffs are increasingly focusing on these
peripheral defendants.  The company is experiencing an increase
in asbestos claims on its policies.

For the year ended December 31, 2003, the Company's combined
ratio was 114.1%, including 19.5 percentage points arising from
adverse development of asbestos liabilities.  As of December 31,
2003, the Company had cash and invested assets of
$3,200,000,000, total assets of $5,600,000,000 and stockholder's
equity of $906,100,000.

Crum & Forster continues to emphasize a specialized approach to
managing its exposure to asbestos, environmental and other
latent claims.  It employs The RiverStone Group, a Fairfax
affiliate solely focused on providing claim and reinsurance
recovery services with respect to asbestos, environmental and
other latent exposure claims to the Fairfax group of companies.  
Prior to its acquisition by Fairfax in 1999, RiverStone had
already acquired significant experience in specialized claims
and reinsurance recovery services of latent exposures.


ASBESTOS LITIGATION: Exide Subsidiary Indemnifies Claimants
-----------------------------------------------------------
From 1957 to 1982, Compagnie Europeene D'Accumulateur (CEAC),
Exide Technologies' principal French subsidiary, operated a
plant using crocidolite asbestos fibers in the formation of
battery cases, which, once formed, encapsulated the fibers.  
Around 1,500 employees worked in the plant over the period.  
Since 1982, the French governmental agency responsible for
worker illness claims has received 34 employee claims alleging
asbestos-related illnesses, and no such claims have been filed
since August 2001.  For some of those claims, CEAC is obligated
to and has indemnified the agency in accordance with French law
for about $132,000, $169,000, and $260,000 in calendar years
2001, 2002 and 2003, respectively.  In addition, CEAC has been
adjudged liable to indemnify the agency for about $45,000,
$78,000, and $200,000, during the same periods to date for the
dependents of four such claimants.  Although the Company cannot
predict the number or size of any future claims, after
consultation with legal counsel the Company does not believe
resolution of the current or any future claims, individually or
in the aggregate, will have a material adverse effect on the
Company's financial condition, cash flows or results of
operations.


ASBESTOS LITIGATION: Goodrich Spin off Involved in Lawsuits
-----------------------------------------------------------
On May 31, 2002, Goodrich Corporation completed the tax-free
spin-off of its Engineered Industrial Products segment by a tax-
free distribution to its shareholders of all the capital stock
of its wholly owned subsidiary EnPro Industries Inc., whose only
material asset was all of the capital stock and certain
indebtedness of Coltec Industries Inc.  Coltec and its
subsidiaries owned substantially all of the assets and
liabilities of the EIP segment, including the associated
asbestos liabilities and related insurance.  At the time of the
spin-off, two subsidiaries of Coltec were defendants in a
significant number of personal injury claims relating to alleged
asbestos-containing products sold by those subsidiaries.  It is
possible that asbestos-related claims might be asserted against
the Company on the theory that it has some responsibility for
the asbestos-related liabilities of EnPro, Coltec or its
subsidiaries, even though the activities that led to those
claims occurred prior to its ownership of any of those
subsidiaries.  Creditors may seek to recover from the Company if
the businesses spun off are unable to meet their obligations in
the future, including obligations to asbestos claimants.

A limited number of asbestos-related claims have been asserted
against the Company as "successor" to Coltec or one of its
subsidiaries.  Goodrich believes that it has substantial legal
defenses against these claims, as well as against any other
claims that may be asserted against it on the theories
described.  In addition, the agreement between EnPro and
Goodrich that was used to effectuate the spin-off provides the
Company with an indemnification from EnPro covering, among other
things, these liabilities.  The success of any such asbestos-
related claims would likely require, as a practical matter, that
Coltec's subsidiaries were unable to satisfy their asbestos-
related liabilities and that Coltec was found to be responsible
for these liabilities and was unable to meet its financial
obligations.  Goodrich believes any such claims would be without
merit and that Coltec was solvent both before and after the
dividend of its aerospace business to us.  If Goodrich is
ultimately found to be responsible for the asbestos-related
liabilities of Coltec's subsidiaries, the Company believes it
would not have a material adverse effect on its financial
condition, but could have a material adverse effect on its
results of operations and cash flows in a particular period.

Goodrich Corp., as well as a number of its subsidiaries, has
been named as defendant in various actions by plaintiffs
alleging injury or death as a result of exposure to asbestos
fibres in products, or which may have been present in its
facilities.  A number of these cases involve maritime claims,
which have been and are expected to continue to be
administratively dismissed by the court.  These actions
primarily relate to previously owned businesses.  The Company
believes that pending and reasonably anticipated future actions,
net of anticipated insurance recoveries, are not likely to have
a material adverse effect on our financial condition, results of
operations or cash flows.

Goodrich believes that it has substantial insurance coverage
available to it related to any remaining claims.  However, a
major portion of the primary layer of insurance coverage for
these claims is provided by the Kemper Insurance Companies.  
Kemper has indicated that, due to capital constraints and
downgrades from various rating agencies, it has ceased
underwriting new business and now focuses on administering
policy commitments from prior years.  The Company cannot predict
the long-term impact of these actions on the availability of the
Kemper insurance.

Net cash used by discontinued operations of $118,700,000 in the
year ended December 31, 2002 includes $47,000,000 paid, net of
insurance receipts, for asbestos-related matters.


ASBESTOS LITIGATION: Hartford Suffers Loss from Asbestos Charge
----------------------------------------------------------------
Hartford Financial Services Group Inc. reported in a filing with
the Securities and Exchange Commission that its net loss for
2003 and 2001 includes the after-tax effect of an asbestos
charge of $1,701,000,000.

Claims for asbestos, environmental and certain other liabilities
under general liability policies are managed in the Company's
Property & Casualty's Other Operations segment regardless of the
writing company.  The Other Operations segment had earned
premiums of $18,000,000, $69,000,000 and $17,000,000 in 2003,
2002 and 2001, respectively, and underwriting losses of
$2,716,000,000 (includes $2,604,000,000 of net asbestos reserve
strengthening), $164,000,000 and $132,000,000 for each of the
respective periods.

Hartford Accident and Indemnity Company, a subsidiary of the
Company, issued primary general liability policies to MacArthur
Company and its subsidiary, Western MacArthur Company, both
former regional distributors of asbestos products, during the
period 1967 to 1976.  In 1987, Hartford A&I notified MacArthur
that its available limits for asbestos bodily injury claims
under these policies had been exhausted, and MacArthur ceased
submitting claims to Hartford A&I under these policies.  
Thirteen years later, MacArthur filed an action against Hartford
A&I seeking for the first time additional coverage for asbestos
bodily injury claims under the Hartford A&I primary policies on
the theory that Hartford A&I had not exhausted limits MacArthur
alleged to be available for non-products liability.  Following
the voluntary dismissal of MacArthur's original action, the
coverage litigation proceeded in the Superior Court in Alameda
County, California.  MacArthur sought a declaration of coverage
and damages, alleging that its liability for liquidated but
unpaid asbestos bodily injury claims was $2,500,000,000, of
which more than $1,800,000,000 consisted of unpaid judgments,
and that it had substantial additional liability for
unliquidated and future claims.  Four asbestos claimants holding
default judgments against MacArthur also were joined as
plaintiffs and asserted a right to an accelerated trial.  
Hartford A&I has been vigorously defending that action.

On June 3, 2002, The St. Paul Companies, Inc. announced a
settlement of a coverage action brought by MacArthur against
United States Fidelity and Guaranty Company, a subsidiary of St.
Paul.  Under the settlement, St. Paul agreed to pay a total of
$975,000 to resolve its asbestos liability to MacArthur in
conjunction with a proposed bankruptcy petition and pre-packaged
plan of reorganization to be filed by MacArthur.  On November
22, 2002, pursuant to the terms of its settlement with St. Paul,
MacArthur filed a bankruptcy petition and proposed plan of
reorganization.  A month-long confirmation trial was held during
the fourth quarter of 2003.  Hartford A&I objected to the
proposed plan and took the leading role for the objectors at
trial.

As reported in the December 26, 2003 edition of the CAR
newsletter, Hartford A&I entered into a settlement agreement on
December 19, 2003 with MacArthur, the Official Unsecured
Creditors Committee representing the asbestos plaintiffs, the
Futures Representative appointed by the court, and the
plaintiffs' lawyers representing the holders of default
judgments against MacArthur.  The settlement is contingent on
the occurrence of certain conditions, including final, non-
appealable court orders approving the settlement agreement and
confirming a bankruptcy plan under which, among other things,
all claims against the Company relating to the asbestos
liability of MacArthur are enjoined.  If the conditions are met,
the settlement will resolve all disputes concerning Hartford
A&I's alleged obligations arising from MacArthur's asbestos
liability.  Under the settlement agreement, Hartford A&I will
pay $1,150,000,000 into an escrow account in the first quarter
of 2004, and the funds will be disbursed to a trust to be
established for the benefit of present and future asbestos
claimants pursuant to the bankruptcy plan once all conditions
precedent to the settlement have occurred.

Recently, many insurers, including The Hartford, also have been
sued directly by asbestos claimants asserting that insurers had
a duty to protect the public from the dangers of asbestos.  
Management believes these issues are not likely to be resolved
in the near future.


ASBESTOS LITIGATION: Hartford's Ratings Revised After Study
-----------------------------------------------------------
Hartford Life Inc. said in a filing with the Securities and
Exchange Commission that upon completion of its asbestos reserve
study and its capital-raising activities, certain of the major
independent ratings organizations revised its financial ratings.  
On May 23, 2003, Fitch affirmed all ratings on The Hartford
Financial Services Group, Inc. and these ratings have been
removed from Rating Watch Negative and now have a Stable Rating
Outlook.

On May 20, 2003, Standard & Poor's removed from CreditWatch and
affirmed the long-term counterparty credit and senior debt
rating of The Hartford Financial Services Group, Inc. and the
counterparty credit and financial strength ratings on the
operating companies following the Company's completion of
capital-raising activities.  The outlook is stable.

On May 14, 2003, Moody's downgraded the debt ratings of both The
Hartford Financial Services Group, Inc. and Hartford Life, Inc.
to A3 from A2 and their short-term commercial paper ratings to
P-2 from P-1.  The outlook on all of the ratings except for the
P-2 rating on commercial paper and P-1 short-term rating is
negative.

On May 13, 2003, A.M. Best affirmed the financial strength
ratings of A+ of The Hartford Fire Intercompany Pool and the
main operating life insurance subsidiaries of Hartford Life,
Inc.  Concurrently, A.M. Best downgraded to "a-" from "a+" the
senior debt ratings of The Hartford Financial Services Group,
Inc. and Hartford Life Inc. and removed the ratings from under
review.


ASBESTOS LITIGATION: Imperial Tobacco Acquisition Named in Suits
----------------------------------------------------------------
In a recent filing Imperial Tobacco Canada Limited reported
discontinued operations and related contingency.  On September
29, 2003, an indirect wholly owned subsidiary of the Corporation
absolutely and irrevocably transferred to a newly created trust
all of its rights and interest in, and title to, 100% of the
issued and outstanding stock of the Flintkote Company together
with CAD4,000,000 ($3,000,000) in cash and did not receive any
consideration in return.  The Trust, administered by an
independent trustee, has been created for the management,
conservation and eventual disposition of the assets transferred
to the Trust and names a medical facility active in the research
and treatment of asbestos-related diseases as ultimate
beneficiary.

Flintkote, a US company which was part of the acquisition of
Genstar Corporation by Imasco Limited in 1986, had been and
continues to be named, along with a large number of defendants,
in numerous actions filed in various jurisdictions by
individuals seeking damages based upon alleged exposure to
asbestos products allegedly manufactured and/or sold by such
defendants.  Other plaintiffs allege damage to their buildings
due to the presence in the buildings of certain materials
containing asbestos allegedly manufactured and/or sold by such
defendants.  Certain of these claims and suits allege
significant damage.  All claims relate to businesses that ceased
operations in the early 1970s.  Since its acquisition in 1986,
Flintkote, a separate legal entity, was operated as a separate
and independent business, and was in no way integrated with any
of Imperial's other businesses.  To the date of disposal,
substantially all of the defense and indemnity costs incurred in
connection with these suits were covered by insurance proceeds,
and the expectation was that they would continue to be so.  
However, the recovery of these costs is dependent on the
insurers honoring their coverage obligations as specified in the
insurance policies.  There remain a number of factors, beyond
the control of Flintkote, which could impact future costs
including, but not limited to, the possible insolvency of
codefendants and/or insurance carriers and, the potential for
legislative reform.  Regardless of the outcome of current and
potential future claims against Flintkote, in the Corporation's
view, no future costs should accrue to the Corporation beyond
what has already been presented in their consolidated financial
statements.


ASBESTOS LITIGATION: Ingersoll-Rand Disburses Asbestos Claims
-------------------------------------------------------------
Ingersoll-Rand Co. reported to the Securities and Exchange
Commission that a portion of its discontinued operations,
amounting to $17,800,000 of expense, is primarily the retained
costs of Ingersoll-Dresser Pump Company (IDP), which was sold in
2000.  IDP costs include employee benefits and product liability
costs, primarily related to asbestos claims.  Discontinued
operations, net of tax, for 2002 and 2001 amounted to
$95,400,000 and $66,200,000 of income, respectively, which
includes the results of the businesses sold in 2003 and IDP
costs of $14,800,000 and $5,900,000, respectively.

Ingersoll-Rand Company (IR-New Jersey), a Company subsidiary, is
a defendant in numerous asbestos-related lawsuits in state and
federal courts.  In virtually all of the suits a large number of
other companies have also been named as defendants.  The claims
against IR-New Jersey generally allege injury caused by exposure
to asbestos contained in certain of IR-New Jersey's products.  
Although IR-New Jersey was neither a producer nor a manufacturer
of asbestos, some of its formerly manufactured products utilized
asbestos-containing components, such as gaskets purchased from
third-party suppliers.  

All claims resolved to date have been dismissed or settled, and
IR-New Jersey's average settlement amount per claim has been
nominal.  For the year ended December 31, 2003, total costs for
settlement and defense of asbestos claims after insurance
recoveries and net of tax were around $16,600,000.  The Company
believes that its reserves and insurance are adequate to cover
its asbestos liabilities and the costs of defending against
them, and that these asbestos liabilities are not likely to have
a material adverse effect on its financial position, results of
operations, liquidity or cash flows.


ASBESTOS LITIGATION: James Hardie Concerned for Liability Claims
----------------------------------------------------------------
James Hardie Industries NV welcomed the announcement by the New
South Wales Premier of a Special Commission of Inquiry into the
establishment of the Medical Research and Compensation
Foundation (MRCF) but is concerned that the terms of reference
will fail to examine the impacts of the alleged blowout in
asbestos liability claims on all parties, including the NSW
Government.

James Hardie's CEO, Mr. Peter Macdonald, said the company would
co-operate fully with the Inquiry, even though the former James
Hardie Group companies were liable for around 15% of asbestos
claims in Australia.  In total there are more than 150
defendants in asbestos litigation in Australia.

"If the claims of an alleged blow-out in liabilities is
sustained across all defendants, it is important that the
Commission establish how big these liabilities are and how all
future sufferers of asbestos-related diseases will be provided
for," Mr. Macdonald said.

Mr. Macdonald said James Hardie Industries Limited (JHIL)
established the MRCF in 2001 with almost $300,000,000 in assets
to compensate people with asbestos related diseases as a result
of their exposure to products that were manufactured and sold by
two former James Hardie Group companies.  At the time many,
including the NSW government, welcomed the move.

"We welcome the Commission and the opportunity it provides to
clear up misconceptions and explore the broader issue of
asbestos liability, but it in no way alters the company's well-
established position on this issue," Mr. Macdonald said.

The two former James Hardie Group companies are two of around
150 defendants in asbestos litigation, and based on the
Foundation's own figures they account for $1,000,000,000 of the
predicted $6,000,000,000 future liabilities in Australia.


ASBESTOS LITIGATION: MeadWestVaco Asbestos Lawsuits Reach 700
-------------------------------------------------------------
MeadWestVaco Corp. reported that its earnings benefited from
favorable developments in 2002 related to environmental
liabilities offset by provisions for litigation expense
including asbestos-related cases.

As with numerous other large industrial companies, the company
has been named a defendant in asbestos-related personal injury
litigation.  Typically, these suits also name many other
corporate defendants.  All of the claims against the company
resolved to date have been concluded before trial, either
through dismissal or through settlement with payments to the
plaintiff that are not material to the company.  To date, the
costs resulting from the litigation, including settlement costs,
have not been significant.  As of February 26, 2004, there were
around 700 lawsuits.  Management believes that the company has
substantial indemnification protection and insurance coverage,
subject to applicable deductibles and policy limits, with
respect to asbestos claims.  The company has valid defenses to
these claims and intends to continue to defend them vigorously.  
Additionally, based on its historical experience in asbestos
cases and an analysis of the current cases, the company believes
that it has adequate amounts accrued for potential settlements
and judgments in asbestos-related litigation.  At December 31,
2003, the company has litigation liabilities of about
$27,000,000, a significant portion of which relates to asbestos.  
Should the volume of litigation grow substantially, it is
possible that the company could incur significant costs
resolving these cases.  Although the outcome of this type of
litigation is subject to many uncertainties, after consulting
with legal counsel, the company does not believe that such
claims will have a material adverse effect on its consolidated
financial condition, liquidity or results of operations.


ASBESTOS LITIGATION: North Safety Products In 670 Lawsuits
----------------------------------------------------------
North Safety Products Inc. (a North Safety Products LLC
subsidiary), its predecessors and/or the former owners of such
business are presently named as a defendant in around 670
lawsuits involving respirators manufactured and sold by it or
its predecessors.  The Company is also monitoring an additional
10 lawsuits in which it feels that North Safety Products, its
predecessors and/or the former owners of such businesses may be
named as defendants.  Collectively, these 680 lawsuits represent
a total of about 32,000 plaintiffs.  Around 88% of these
lawsuits involve plaintiffs alleging they suffer from silicosis,
with the remainder alleging they suffer from other or combined
injuries, including asbestosis.  These lawsuits typically allege
that these conditions resulted in part from respirators that
were negligently designed or manufactured.  Invensys plc
("Invensys"), formerly Siebe plc, is contractually obligated to
indemnify the Company for any losses, including costs of
defending claims, resulting from respiratory products
manufactured prior to the Company's acquisition of North Safety
Products in October 1998.

Consistent with the current environment being experienced by
companies involved in silica and asbestos-related litigation,
there has been an increase in the number of asserted claims that
could potentially involve the Company.  Based upon information
provided to the Company by Invensys, North Safety Products
believes activity related to these lawsuits was as follows for
the periods indicated:

Bankruptcy filings of companies with asbestos and silica-related
litigation could increase the Company's cost over time.  If
North Safety Products was found liable in these cases and either
Invensys or Norton Company failed to meet their indemnification
obligations to the Company or the suit involved products
manufactured by the Company after its October 1998 acquisition
of North Safety Products Inc., it would have a material adverse
effect on its business.


ASBESTOS LITIGATION: St. Paul Companies Develop Reserves
--------------------------------------------------------
The St. Paul Companies, Inc. and Travelers Property Casualty
Corp. said during a presentation at Merrill Lynch's Insurance
Investor Conference that catastrophes were large in 2003,
$229,000,000 after tax numbers, versus a very light year in
2002.  Robert I. Lipp, chairman and CEO of TPC said that the
company's prior year development was significant in the fourth
quarter, citing the significant increase in its asbestos
reserve, with some prior year reserve development.  Mr. Lipp
also said that there is reward in terms of interest rates in the
future and common equity, in the fourth quarter of 2002, because
of the asbestos reserve increase and within a couple of
quarters, back to the pre-asbestos reserve levels.

St. Paul Companies, Inc. offers liability and casualty,
property, workers' compensation, auto, marine and other
commercial coverage to companies in North America and in the UK.


ASBESTOS LITIGATION: USG Subsidiary's Asbestos Reserve Increased
----------------------------------------------------------------
On June 25, 2001, USG Corporation and 10 of its United States
subsidiaries (collectively, the "Debtors") filed voluntary
petitions for reorganization under chapter 11 of the United
States Bankruptcy Code in the United States Bankruptcy Court for
the District of Delaware.  The chapter 11 cases of the Debtors
have been consolidated for purposes of joint administration as
In re: USG Corporation et al. (Case No. 01-2094).  This action
was taken to resolve asbestos claims in a fair and equitable
manner, to protect the long-term value of the Debtors'
businesses, and to maintain the Debtors' leadership positions in
their markets.  The Debtors are operating their businesses as
debtors-in-possession subject to the provisions of the United
States Bankruptcy Code.  These cases do not include any of the
Corporation's non-U.S. subsidiaries.

The Debtors' Chapter 11 Cases, along with four other asbestos-
related bankruptcy proceedings pending in the federal courts in
the District of Delaware, have been assigned to the Honorable
Alfred M. Wolin of the United States District Court for the
District of New Jersey.  Judge Wolin has indicated that he will
handle all issues relating to asbestos personal injury claims.  
Other bankruptcy issues in the Chapter 11 Cases, including
issues relating to asbestos property damage claims, will be
addressed by Judge Judith K. Fitzgerald, a bankruptcy court
judge sitting in the United States Bankruptcy Court for the
District of Delaware.

United States Gypsum Company, which became a wholly owned
subsidiary of the Corporation in 1984, is a defendant in 11
asbestos lawsuits alleging property damage and more than 100,000
asbestos personal injury lawsuits.  Other subsidiaries of the
Corporation also have been named as defendants in a small number
of asbestos personal injury lawsuits.  As a result of the
Filing, all pending asbestos lawsuits against U.S. Gypsum and
other subsidiaries are stayed, and no party may take any action
to pursue or collect on such asbestos claims absent specific
authorization of the Bankruptcy Court.  Since the Filing, U.S.
Gypsum has ceased making payments with respect to asbestos
lawsuits, including payments pursuant to settlements of asbestos
lawsuits.

During late 2000 and in 2001, following the bankruptcy filings
of other defendants in asbestos personal injury litigation,
plaintiffs substantially increased their settlement demands to
U.S. Gypsum.  During that period, payments to resolve asbestos
personal injury lawsuits against U.S. Gypsum increased
dramatically.  U.S. Gypsum's asbestos-related costs (on a cash
basis and before insurance) rose from $100,000,000 in 1999 to
$162,000,000 in 2000 and, absent the Filing, were expected to
exceed $275,000,000 in 2001.  The Corporation determined that
voluntary protection under chapter 11 would be the best way to
resolve asbestos claims in a fair and equitable manner.

Prior to the Filing, in the fourth quarter of 2000, U.S. Gypsum
recorded a non-cash, pretax provision of $850,000,000,
increasing to $1,185,000,000 its total accrued reserve for
resolving in the tort system the asbestos claims pending as of
December 31, 2000, and expected to be filed through 2003.  At
that time, the estimated range of U.S. Gypsum's probable
liability was between $889,000,000 and $1,281,000,000, including
defense costs.  As of December 31, 2003, the Corporation's
accrued reserve for asbestos claims totaled $1,061,000,000.  
These amounts are based upon the results of an independent
actuarial study of U.S. Gypsum's current and potential future
asbestos liabilities completed in 2000; they are stated before
tax benefit and are not discounted to present value.  Less than
10 percent of the reserve is attributable to defense and
administrative costs.

At the time of recording this reserve, it was expected that the
reserve amounts would be expended over a period extending
several years beyond 2003, because asbestos cases in the tort
system historically have been resolved an average of three years
after filing.  The Corporation concluded that it did not have
adequate information to allow it to reasonably estimate the
number of claims to be filed after 2003, or the liability
associated with such claims.

U.S. Gypsum's asbestos liability is classified within
liabilities subject to compromise.  The amount of the asbestos
reserve reflects U.S. Gypsum's pre-petition estimate of
liability associated with asbestos claims to be filed in the
tort system through 2003, and this liability, including
liability for post-2003 claims, is the subject of significant
legal proceedings and negotiation in the Chapter 11 Cases.

At this point, there is great uncertainty as to the amount of
the Debtors' asbestos-related liability and thus the value of
any recovery for pre-petition creditors or stockholders under
any final plan of reorganization.  No plan of reorganization has
thus far been proposed, and the Debtors have the exclusive right
to propose a plan until March 1, 2004, subject to possible
further extensions of the period of exclusivity.

The Debtors intend to address their liability for all present
and future asbestos claims, as well as all other pre-petition
claims, in a plan or plans of reorganization approved by the
Bankruptcy Court.  A key factor in determining the recovery of
pre-petition creditors or stockholders under any such plan of
reorganization is the amount that must be provided in the plan
to resolve the Debtors' liability for present and future
asbestos claims.  

Counsel for the Official Committee of Asbestos Personal Injury
Claimants and counsel for the legal representative for future
asbestos personal injury claimants, appointed in the Chapter 11
Cases, have indicated that they believe the Debtors' liabilities
for present and future asbestos claims exceed the value of the
Debtors' assets and, therefore, are significantly greater than
both the reserved amount and the high end of the range estimated
in 2000, and that the Debtors are insolvent.  In contrast, the
Debtors believe they are solvent if their asbestos liabilities
are fairly and appropriately valued.

If the Fairness in Asbestos Injury Resolution Act of 2003 is
passed (Senate Bill 1125), which is extremely speculative at
this time, such legislation may affect the amount that will be
required to resolve the Debtors' asbestos personal injury
liability in the Debtors' Chapter 11 Cases.

If the amount of the Debtors' asbestos liabilities is not
resolved through negotiation in the Chapter 11 Cases or
addressed by federal legislation, the outcome of litigation
proceedings in the Chapter 11 Cases may determine the Debtors'
liability for present and future asbestos claims.  Because of
these uncertainties, the Corporation believes that no change
should be made at this time to the previously recorded reserve
for asbestos claims, except to reflect certain minor asbestos-
related costs incurred since the Filing.

As the Chapter 11 Cases and potential legislation activities
proceed, the Debtors likely will gain more information from
which a reasonable estimate of the Debtors' probable liability
for present and future asbestos claims can be determined.  If
such estimate differs from the existing reserve, the reserve
will be adjusted, and it is possible that a charge to results of
operations will be necessary at that time.  In such a case, the
Debtors' asbestos liability could vary significantly from the
recorded estimate of liability and could be greater than the
high end of the range estimated in 2000.  This difference could
be material to the Corporation's financial position, cash flows
and results of operations in the period recorded.

The Corporation believes that, as a result of the Filing and
activities relating to potential federal legislation addressing
asbestos personal injury claims, there is greater uncertainty in
estimating the reasonably possible range of asbestos liability
for pending and future claims as well as the most likely
estimate of liability within this range.  There are significant
differences in the treatment of asbestos claims in a bankruptcy
proceeding as compared to the tort litigation system.  Among
other things, these uncertainties include:

     (1) how the Long-Term Settlements will be treated in the
bankruptcy proceeding and plan of reorganization and whether
those settlements will be set aside;

     (2) the number of asbestos claims that will be filed or
addressed in the proceeding;

     (3) the number of future claims that will be estimated in
connection with preparing a plan of reorganization;

     (4) how claims for punitive damages and claims by persons
with no objective evidence of asbestos-related disease will be
treated and whether such claims will be allowed or compensated;

     (5) the impact historical settlement values for asbestos
claims may have on the estimation of asbestos liability in the
bankruptcy proceeding;

     (6) the results of any litigation proceedings in the
Chapter 11 Cases regarding the estimated value of present and
future asbestos personal injury claims alleging cancer or other
diseases;

     (7) the treatment of asbestos property damage claims in the
bankruptcy proceeding; and

     (8) the impact any relevant potential federal legislation
may have on the proceeding.

These factors, as well as the uncertainties discussed above in
connection with the resolution of asbestos cases in the tort
system, increase the uncertainty of any estimate of asbestos
liability.

Three creditors' committees, one representing asbestos personal
injury claimants, another representing asbestos property damage
claimants, and a third representing unsecured creditors, were
appointed as official committees in the Chapter 11 Cases.  The
Bankruptcy Court also appointed the Honorable Dean M. Trafelet,
formerly a judge of the Circuit Court of Cook County, Illinois,
as the legal representative for future asbestos claimants in the
Debtors' bankruptcy proceeding.  The appointed committees,
together with Mr. Trafelet, will play significant roles in the
Chapter 11 Cases and resolution of the terms of any plan of
reorganization.

The Debtors and the committee representing unsecured creditors
moved in November 2003 to remove Judge Wolin from the Chapter 11
Cases.  The committee representing asbestos personal injury
claimants and the legal representative for future asbestos
claimants opposed these motions.  On February 2, 2004, Judge
Wolin denied the motions, and the Debtors and the unsecured
creditors committee are appealing.

The plan of reorganization ultimately approved by the Bankruptcy
Court may include one or more independently administered trusts
under Section 524(g) of the Bankruptcy Code, which may be funded
by the Debtors to allow payment of present and future asbestos
personal injury claims and demands.  Under the
Bankruptcy Code, a plan of reorganization creating a Section
524(g) trust may be confirmed only if 75% of the asbestos
claimants who vote on the plan approve the plan.  A plan of
reorganization, including a plan creating a Section 524(g)
trust, may be confirmed without the consent of non-asbestos
creditors and equity security holders if certain requirements of
the Bankruptcy Code are met.

The Debtors also expect that the plan of reorganization will
address the Debtors' liability for asbestos property damage
claims, whether by including those liabilities in a Section
524(g) trust or by other means.  If the confirmed plan of
reorganization includes the creation and funding of a Section
524(g) trust(s), the Bankruptcy Court will issue a permanent
injunction barring the assertion of present and future asbestos
claims against the Debtors, their successors, and their
affiliates, and channeling those claims to the trust(s) for
payment in whole or in part.

While it is the Debtors' intention to seek a full recovery for
their creditors, it is not possible to predict the amount that
will have to be provided in the plan of reorganization to
resolve present and future asbestos claims, how the plan of
reorganization will treat other pre-petition claims, whether
there will be sufficient assets to satisfy the Debtors' pre-
petition liabilities, and what impact any plan may have on the
value of the shares of the Corporation's common stock and other
outstanding securities.  The payment rights and other
entitlements of pre-petition creditors and the Corporation's
shareholders may be substantially altered by any plan of
reorganization confirmed in the Chapter 11 Cases.  Pre-petition
creditors may receive under the plan of reorganization less than
100% of the face value of their claims, the pre-petition
creditors of some Debtors may be treated differently from the
pre-petition creditors of other Debtors, and the interests of
the Corporation's stockholders are likely to be substantially
diluted or cancelled in whole or in part.  There can be no
assurance as to the value of any distributions that might be
made under any plan of reorganization with respect to such pre-
petition claims, equity interests, or other outstanding
securities.


ASBESTOS ALERT: Precision Castparts Named in Asbestos Lawsuits
--------------------------------------------------------------
Precision Castparts Corp. said that it and SPS Technologies, LLC
(formerly known as Star Acquisition, LLC) are defendants in
lawsuits alleging personal injury as a result of exposure to
chemicals and substances in the workplace, including asbestos.  
To date, the Company and/or SPS have been dismissed from a
number of these suits and have settled a number of others.  The
outcome of litigation such as this is difficult to predict and a
judicial decision unfavorable to the Company could be rendered,
possibly causing serious harm to the business of the combined
company.  Precision Castparts is investigating and negotiating
the extent, if any, to which some of such asbestos litigation
would be covered by insurance.


COMPANY PROFILE

Precision Castparts Corp.
4650 S.W Macadam Avenue, Suite 440
Portland, OR 97239
Phone: 503-417-4800
Fax: 503-417-4850
http://www.precast.com/

Description: Precision Castparts Corp. manufactures complex
metal components and products, including high-quality investment
castings and forgings for aerospace and power generation
customers.


                 New Securities Fraud Cases


AaiPHARMA: Schiffrin & Barroway Files Securities Suit in E.D. NC
----------------------------------------------------------------
Schiffrin & Barroway, LLP initiated a Class Action lawsuit in
the United States District Court for the Eastern District of
North Carolina, Southern Division, on behalf of all purchasers
of the common stock of aaiPharma, Inc. from April 24, 2002
through February 27, 2004, inclusive, against defendants
aaiPharma, and:

     (1) Philip S. Tabbiner, and

     (2) William L. Ginna, Jr.

The lawsuit alleges violations of Sections 10(b) and 20(a) of
the Securities Exchange Act of 1934, and Rule 10b-5 promulgated
thereunder. More specifically, the complaint alleges that,
throughout the Class Period, defendants issued numerous
statements to the market concerning the Company's financial
results, which failed to disclose and/or misrepresented the
following adverse facts, among others:

     (i) that the Company's core business plan was
         deteriorating;

    (ii) that the Company was unloading inventory onto
         wholesalers in order to make sales;

   (iii) that the aforementioned practice was necessary because
         the Company needed to keep its stock price up in order
         to fend off a third party suitor;

    (iv) that the Company was improperly recognizing revenue, in
         violation of Generally Accepted Accounting Principles,
         from sales that were not complete; and

     (v) as a result, the Company's financial results were
         materially inflated at all relevant times.

On February 5, 2004, aaiPharma announced that the Company
expected net revenues to be between $340 million and $355
million for 2004. Diluted earnings per share for 2004 were
expected to remain, as previously disclosed, between $1.45 and
$1.52. Based on current trends, milestones achieved and other
developments, the Company expected to generate earnings of $0.27
to $0.30 per diluted share during the first quarter of 2004.
Additionally, the Company announced that it was setting aside
money to pay for refunds on older medicines after an unusually
high return rate in the fourth quarter. On news of this, shares
of aaiPharma fell 23 percent, or $6.36 per share to close at
$21.24 per share on extremely heavy volume.

On March 1, 2004, aaiPharma stated that an internal
investigation had been commenced due to "sales abnormalities in
the Company's Brethine (R) and Darvoct (TM) product lines during
the second half of 2003." The Company further stated that the
results of this investigation could have a "material" impact on
financial results for the first quarter and all of fiscal 2004.
On news of this, aaiPharma stock fell an additional 36% on
unusually high trading volumes.

For more information, contact Marc A. Topaz or Stuart L. Berman,
by Mail: Three Bala Plaza East, Suite 400, Bala Cynwyd, PA  
19004, by Phone: 1-888-299-7706 (toll free) or 1-610-667-7706,
or by E-mail: info@sbclasslaw.com.


AaiPHARMA: Milberg Weiss Commences Securities Fraud Suit in NC
--------------------------------------------------------------
Milberg Weiss Bershad Hynes & Lerach LLP initiated a class
action lawsuit in the United States District Court for the
Eastern District of North Carolina, on behalf of purchasers of
the securities of AaiPharma, Inc. between April 24, 2002 and
February 27, 2004, inclusive, seeking to pursue remedies under
the Securities Exchange Act of 1934, against defendants
aaiPharma, and:

     (1) Philip S. Tabbiner, and

     (2) William L. Ginna, Jr.

The lawsuit alleges violations of Section 10(b) and 20(a) of the
Securities Exchange Act of 1934, and Rule 10b-5 promulgated
thereunder. Throughout the Class Period, defendants issued
quarter after quarter of "record" financial results. Defendants
emphasized increased revenues throughout the Class Period,
fueled by strong sales of pharmaceutical products including
sales of Brethine, an asthma medication. Defendants failed to
disclose that these stellar financial results were only made
possible through improper sales practices, such as "channel
stuffing" or flooding wholesalers with products in order to
artificially boost sales, and failing to properly reserve for
product returns in violation of Generally Accepted Accounting
Principles. As a result, defendants' Class Period financial
statements were materially overstated.

On February 5, 2004, before the market opened, defendants
shocked the market by announcing that due to excessive product
returns of products such as Brethine, and necessary additions to
product return reserves, fourth quarter net revenues were
reduced by $15.9 million. In response to the news concerning
AaiPharma's previously undisclosed inventory issues, the price
of AaiPharma stock dropped from over $27 per share on February
4, 2004 to $21.30 on February 5, 2004, a drop of over 23% on
unusually large trading volumes of 4.8 million shares traded.

On March 1, 2004, defendants admitted that an internal
investigation had been commenced due to "sales abnormalities in
the Company's Brethiner and DarvoctT product lines during the
second half of 2003." The Company further revealed that the
results of this investigation could have a "material" impact on
financial results for the first quarter and all of fiscal 2004.
In response to this news, AaiPharma stock plunged an additional
36% on abnormally high trading volumes.

For more information, contact Steven G. Schulman, by Mail: One
Pennsylvania Plaza, 49th fl., New York, NY, 10119-0165, by
Phone:(800) 320-5081, or by E-mail: aaipharma@milberg.com.


AaiPHARMA: Wechsler Harwood Lodges Securities Suit in E.D. NC
-------------------------------------------------------------
Wechsler Harwood LLP initiated a Federal Securities fraud class
action in the United States District Court for the Eastern
District of North Carolina, on behalf of persons or entities who
purchased or otherwise acquired the securities of AaiPharma,
Inc. from April 24, 2002 through and including March 1, 2004,
against aaipharma, and:

     (1) Frederick D. Sancilio,

     (2) Philip S. Tabbiner, and

     (3) William L. Gina, Jr.

The complaint, styled: Miller v. AaiPharma, Inc., et al.,  
alleges that Defendants violated Sections 10(b) and 20(a) of the
Securities Exchange Act of 1934, and Rule 10b-5 promulgated
thereunder. Specifically, the complaint alleges throughout the
Class Period, defendants issued quarter after quarter of
"record" financial results. Defendants emphasized increased
revenues throughout the Class Period, fueled by strong sales of
pharmaceutical products. The complaint alleges that Defendants
failed to disclose that these stellar financial results were
only made possible through improper sales practices, such as
"channel stuffing" or flooding wholesalers with products in
order to artificially boost sales, and failing to properly
reserve for product returns in violation of Generally Accepted
Accounting Principles.

On February 5, 2004, before the market opened, defendants
announced that fourth quarter net revenues were reduced by $15.9
million. In response to the news concerning AaiPharma's
previously undisclosed inventory issues, the price of AaiPharma
stock dropped from over $27 per share on February 4, 2004 to
$21.30 on February 5, 2004, a drop of over 23% on unusually
large trading volumes of 4.8 million shares traded. The stock
continued to drop as the fraudulent nature of the Company's
sales and accounting practices came to light, trading at only
$20 per share on February 9, 2004. On March 1, the Company
confirmed investors' worst fears by announcing that it is
investigating "sales abnormalities" in key product lines, that
"will materially affect" its outlook for the first quarter and
full-year 2004 and that it was withdrawing earnings estimates
for those periods. On this news, AaiPharma shares again plunged
another $5.51, or 36%, to $9.77.

For more information, contact David Leifer, Shareholder
Relations Department, by Mail: 488 Madison Avenue, 8th Floor,           
New York, N.Y. 10022, by Phone:(877) 935-7400, or by E-mail:         
dleifer@whesq.com.


EL PASO CORPORATION: Bernard Gross Files Securities Suit in TX
--------------------------------------------------------------
Law Offices Bernard M. Gross, P.C. initiated a class action
lawsuit in the United States District Court for the Southern
District of Texas, on behalf of all persons who purchased El
Paso common stock pursuant to the $24 billion merger with
Coastal Corp. in a stock for stock transaction completed on
January 29, 2001, seeking remedies under the Securities Exchange
Act of 1934, against defendants El Paso Corporation and William
A. Wise.

The Complaint alleges that defendants violated the federal
securities laws by issuing materially false and misleading
statements regarding El Paso's financial results and reported
reserves. As a result of Defendants' conduct, the complaint
alleges, El Paso was able to inflate its stock price, maintain
its credit rating, and maintain its status in the energy
industry as a leader.

On February 17, 2004, El Paso announced that the Company had cut
its proven natural gas reserves estimate by approximately 41%
and would take a $1 billion pretax charge in the fourth quarter
of 2003. In response to the Company's devastating news, El
Paso's stock price plummeted by approximately 18% to close at
$7.26 on unusually heavy trading volume of 57 million shares on
February 18, 2004. The magnitude of the write down of the
reserves shocked the market and, quoting one analyst, "suggests
to us that prior management had significantly overstated the
productive capacity of the company's gas reserves." Another
analyst is quoted as alleging that El Paso had "prematurely
booked" certain reserves before securing necessary permission to
develop the assets.

For more information, contact Susan R. Gross or Deborah R.
Gross, by Mail: 1515 Locust Street, Suite 200, Philadelphia, PA
19102, by Phone: 866-561-3600 (toll free) or 215-561-3600, or by
E-mail: susang@bernardmgross.com or debbie@bernardmgross.com.


EL PASO CORPORATION: Cauley Geller Lodges Securities Suit in TX
---------------------------------------------------------------
Cauley Geller Bowman & Rudman, LLP initiated a class action
lawsuit in the United States District Court for the Southern
District of Texas, Houston Division, on behalf of purchasers of
El Paso Corporation publicly traded securities during the period
between February 22, 2000 and February 17, 2004, against
defendants El Paso, and:

     (1) Mark Leland,

     (2) William A. Wise,
    
     (3) H. Brent Austin,

     (4) Ronald L. Kuehn, Jr., and

     (5) D. Dwight Scott

The lawsuit alleges violations of Sections 10(b) and 20(a) of
the Securities Exchange Act of 1934, and Rule 10b-5 promulgated
thereunder.

More specifically, the complaint alleges that throughout the
Class Period, defendants issued a series of statements to the
market which were materially false and misleading as they failed
to disclose and/or misrepresented the following material adverse
facts which were then known to defendants or recklessly
disregarded by them:

     (i) El Paso's reporting of proved oil and gas reserves was
         overstated by 41%;

    (ii) the Company's estimate of discounted future cash flows
         was overstated; and

   (iii) El Paso's method of estimating reserves and discounted
         future cash flows deviated from industry standards and
         violated rules of the Securities and Exchange
         Commission. As a result of defendants' conduct, the
         price of El Paso securities was materially overstated
         throughout the Class Period.

On February 17, 2004, El Paso announced that the Company had
overstated its reported reserves by 41% or 1.8 trillion cubic
feet and that, as a result, it would have to take a $1 billion
pretax charge in the fourth quarter of 2003. In response to this
revelation, El Paso common stock fell 18% on unusually heavy
trading volume of 57 million shares, to close at $7.26 a share
on February 18, 2004.

For more information, 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 (toll free), Fax: 1-501-312-8505, or by
E-mail: info@cauleygeller.com.


ITT EDUCATIONAL: Berman DeValerio Lodges Securities Suit in IN
--------------------------------------------------------------
Berman DeValerio Pease Tabacco Burt & Pucillo, LLP initiated a
class action lawsuit in the U.S. District Court for the Southern
District of Indiana, on behalf of all investors who bought ITT
common stock from April 17, 2003, through and including February
24, 2004, alleging violations of federal securities laws,
against defendants ITT Educational Services, Inc., and:

     (1) Rene R. Champagne;

     (2) Omer E. Waddles; and

     (3) Kevin M. Modany

The lawsuit claims that the defendants violated Sections 10(b)
and 20(a) of the Securities Exchange Act of 1934 and the rules
and regulations promulgated thereunder, including U.S.
Securities and Exchange Commission (SEC) Rule 10b-5. According
to the complaint, the defendants materially misrepresented ITT's
financial condition during the Class Period, causing the
company's stock to trade at artificially high prices.

Specifically, ITT touted its strong financial performance and
consistent growth in revenue, earnings and student enrollment.
In reality, the lawsuit says, ITT's statements were false and
misleading because the company failed to disclose that it had
falsified a variety of statistics submitted to the federal
government in order to continue its eligibility under Title IV
of the Higher Education Act of 1965 and record revenue from
federal education aid programs, thereby artificially inflating
its reported financial performance.

On February 25, 2004, ITT shocked the investing public by
announcing that it had been served with a search warrant and
related grand jury subpoenas. ITT reported that the search
warrant and subpoenas related to information and documentation
concerning placement, retention, graduation and attendance
figures, as well as recruitment and admissions materials,
student grades, graduate salaries and transferability of credits
to other institutions.

Trading in ITT's stock was halted for approximately two hours
pending release of this news. After trading resumed, ITT's stock
price plummeted approximately 33% from a closing price of $57.40
on February 24, 2004 to a close of $38.50 on February 25, 2004.

For more information, contact Nicole R. Starr or Michael T.
Matraia, by Mail: One Liberty Square, Boston, MA 02109, by
Phone:(800) 516-9926, or by E-mail: law@bermanesq.com.


MEDICAL STAFFING: Cauley Geller Files Securities Suit in S.D. FL
----------------------------------------------------------------
Cauley Geller Bowman & Rudman, LLP initiated a class action
lawsuit in the United States District Court for the Southern
District of Florida, on behalf of purchasers of Medical Staffing
Network Holdings Inc. common stock during the period between
April 18, 2002 and June 16, 2003, inclusive, against defendants
Medical Staffing, and:

     (1) Robert J. Adamson,

     (2) Kevin S. Little,

     (3) Joel Ackerman,

     (4) David J. Wenstrup, and

     (5) Scott F. Hilinski

The lawsuit alleges violations of Sections 10(b) and 20(a) of
the Securities Exchange Act of 1934, and Rule 10b-5 promulgated
thereunder. More specifically, the complaint alleges that,
throughout the Class Period, defendants issued numerous
statements to the market concerning the Company's financial
results, which failed to disclose and/or misrepresented the
following adverse facts, among others:

     (i) that the Company's strategy of expansion through the
         opening and development of de novo branches was not
         successful and was thus adversely affecting the
         Company's revenue growth;

    (ii) that the Company's de novo program was near
         termination;

   (iii) that due to the regional and seasonal fluctuations in
         hospital patient censuses, particularly in Florida,
         more of the Company's hospital and healthcare facility
         clients adjusted staffing levels, which adversely
         affected the Company's business; and

    (iv) that the Company was in process of consolidation due to
         the adverse growth prospects.

On June 16, 2003, the Company announced lower guidance for
fiscal year 2003 and also announced it had completed a
restructuring plan. With respect to the Company's restructuring
plan, Medical Staffing stated it closed 13 satellite per diem
recruitment locations and 16 per diem branches on May 21, 2003.
Additionally, the Company stated that it reduced the number of
full- time staff in its de novo branch locations by
approximately 5%. News of this shocked the market resulting in
shares of Medical Staffing falling 16.27%, or $1.44 per share,
to close at $7.41 per share on June 17, 2003.

For more information, contact Samuel H. Rudman or David A.
Rosenfeld, Client Relations Department: Chandra West, Jackie
Addison or Heather Gann, by Mail: P.O. Box 25438, Little Rock,
AR 72221-5438, by Phone: 1-888-551-9944 (toll free), Fax:
1-501-312-8505, or by E-mail: info@cauleygeller.com.


MEDICAL STAFFING: Schiffrin & Barroway Lodges Stock Suit in FL
--------------------------------------------------------------
Schiffrin & Barroway, LLP, initiated a class action lawsuit in
the United States District Court for the Southern District of
Florida, on behalf of all purchasers of the common stock of
Medical Staffing Network Holdings, Inc. from April 18, 2002
through June 16, 2003, inclusive, against defendants Medical
Staffing, and:

     (1) Robert J. Adamson,

     (2) Kevin S. Little,

     (3) Joel Ackerman,

     (4) David J. Wenstrup, and

     (5) Scott F. Hilinski

The lawsuit alleges violations of Sections 10(b) and 20(a) of
the Securities Exchange Act of 1934, and Rule 10b-5 promulgated
thereunder. More specifically, the complaint alleges that,
throughout the Class Period, defendants issued numerous
statements to the market concerning the Company's financial
results, which failed to disclose and/or misrepresented the
following adverse facts, among others:

     (i) that the Company's strategy of expansion through the
         opening and development of de novo branches was not
         successful and was thus adversely affecting the
         Company's revenue growth;

    (ii) that the Company's de novo program was near
         termination;

   (iii) that due to the regional and seasonal fluctuations in
         hospital patient censuses, particularly in Florida,
         more of the Company's hospital and healthcare facility
         clients adjusted staffing levels, which adversely
         affected the Company's business; and

    (iv) that the Company was in process of consolidation due to
         the adverse growth prospects.

On June 16, 2003, the Company announced lower guidance for
fiscal year 2003 and also announced it had completed a
restructuring plan. With respect to the Company's restructuring
plan, Medical Staffing stated it closed 13 satellite per diem
recruitment locations and 16 per diem branches on May 21, 2003.
Additionally, the Company stated that it reduced the number of
full- time staff in its de novo branch locations by
approximately 5%. News of this shocked the market resulting in
shares of Medical Staffing falling 16.27%, or $1.44 per share,
to close at $7.41 per share on June 17, 2003.

For more information, contact Marc A. Topaz or Stuart L. Berman,
by Mail: Three Bala Plaza East, Suite 400, Bala Cynwyd, PA  
19004, by Phone: 1-888-299-7706 (toll-free) or 1-610-667-7706,
or by e-mail: info@sbclasslaw.com.


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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.  


                            *********


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Class Action Reporter is a daily newsletter, co-published by
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Copyright 2004.  All rights reserved.  ISSN 1525-2272.

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