/raid1/www/Hosts/bankrupt/CAR_Public/040423.mbx
C L A S S A C T I O N R E P O R T E R
Friday, April 23, 2004, Vol. 6, No. 80
Headlines
CALIFORNIA: Employers, Employees Sue Banks For Payroll Charges
CITICORP: Discovery Proceeding in TX Enron Securities Litigation
EARTHGRAINS BAKING: Recalls Bread Due To Undeclared Ingredients
FLORIDA: Lawyer To Tour Brevard Jail, Plans To Commence Lawsuit
HOMESTORE.COM: Deadline For Claim, Exclusion in CA Suit Extended
J.C. BRADFORD: TN Court Grants Approval To Fraud Suit Settlement
MINNESOTA: Lawmakers To Lodge Bill To Block Fast Food Lawsuits
NEW YORK: Hearing For Armenian Suit Settlement Set July 2004
NOKIA OYJ: Lead Plaintiff Deadline in Stock Suit Set June 2004
NORTEL NETWORKS: NY Court Grants Certification To Stock Lawsuit
NORTH CAROLINA: AG Cooper Launches Fraud Suit V. Mortgage Broker
OCWEN FINANCIAL: Agreed To Halt Business Practices in Agreement
PARALEGAL CREDIT: MI Atty. General Files "Credit Fix" Fraud Suit
PIPE MANUFACTURERS: CA Court Approves Poz-Lock Suit Settlement
TENNESSEE: Nears Agreement To Help Mentally Retarded Citizens
Asbestos Alert
ASBESTOS LITIGATION: American Locker Named in 140 Asbestos Cases
ASBESTOS LITIGATION: Ameron Faces Lawsuits With 18,489 Claimants
ASBESTOS LITIGATION: Converium Exposed To Liabilities in Germany
ASBESTOS LITIGATION: Fairfax Financial Records $772M in Reserves
ASBESTOS LITIGATION: Hartford Claims Mostly In Insurance Unit
ASBESTOS LITIGATION: Hercules Inc. Settlement Agreement Ongoing
ASBESTOS LITIGATION: James Hardie Reacts to Foundation Inquiry
ASBESTOS LITIGATION: McDermott Intl Rating Low Due To B&W Co.
ASBESTOS LITIGATION: Metso Has 123 Asbestos Claims Still Pending
ASBESTOS LITIGATION: PPG Discloses Improved First Quarter Income
ASBESTOS LITIGATION: RPM Subsidiaries In Pending Asbestos Suits
ASBESTOS LITIGATION: Selas Corporation Dealing With 101 Lawsuits
ASBESTOS ALERT: Bayer AG Named As Premises Defendant In WV, TX
ASBESTOS ALERT: Curtiss-Wright Settles Claims Due To Components
ASBESTOS ALERT: Duke Capital LLC Named in Personal Injury Claims
ASBESTOS ALERT: Dismissal of Genlyte Asbestos Claim Affirmed
ASBESTOS ALERT: Mine Safety Facing Possible Product Litigation
ASBESTOS ALERT: Pullman Co. Subject to Asbestos Exposure Cases
New Securities Fraud Cases
ADOLOR CORPORATION: Milberg Weiss Lodges Securities Suit in PA
ASCONI CORPORATION: Marc Henzel Lodges Securities Lawsuit in FL
BOSTON COMMUNICATIONS: Marc Henzel Lodges Securities Suit in MA
CANADIAN IMPERIAL: Stull Stull Lodges Securities Suit in S.D. NY
DVI INC.: Marc Henzel Lodges Securities Fraud Lawsuit in E.D. PA
EMCOR GROUP: Marc Henzel Lodges Securities Fraud Lawsuit in NY
NORTEL NETWORKS: Berger & Montague Lodges Securities Suit in NY
NORTEL NETWORKS: Marc Henzel Lodges Securities Fraud Suit in NY
NOVASTAR FINANCIAL: Johnson & Perkinson Lodges Stock Suit in MO
NOVASTAR FINANCIAL: Weiss & Yourman Lodges Securities Suit in MO
ODYSSEY HEALTHCARE: Schiffrin & Barroway Files Stock Suit in TX
PMA CAPITAL: Marc Henzel Launches Securities Lawsuit in E.D. PA
SPEAR & JACKSON: Lodges Securities Fraud Lawsuit in S.D. Florida
SPEAR & JACKSON: Brodsky & Smith Commences Securities Suit in FL
WATSON PHARMACEUTICALS: Marc Henzel Lodges Stock Suit in C.D. CA
*********
CALIFORNIA: Employers, Employees Sue Banks For Payroll Charges
--------------------------------------------------------------
Bank of America and Wells Fargo, two of the nation's largest
banks, face class actions filed by some California employers and
employees, seeking to stop banks from charging fees to cash
paychecks, KCRA reports.
The two banks allegedly charge non-account holders $5 to cash
payroll checks that are drawn on the banks. Consumer advocates
say it's unethical, and some even call it extortion.
"I (thought) it was wrong from the beginning, because why do
they need to take money from us when the accounts are there?
That's money that we worked for. It's not their money," Terry
White, whose employer banks with Bank of American, told KCRA.
Bank of America told CALL 3 Wednesday that the fee does not
leave employers liable. The bank started charging the fee two
years ago to recover costs of servicing non-account holders and
decrease teller wait times for people who do have accounts,
according to Bank of America officials. Wells Fargo started
charging the fee just this month and calls it fair and
appropriate for the service. Bank of America says consumers can
avoid the fee by opening an account or cashing their check at a
bank where they have an account.
CITICORP: Discovery Proceeding in TX Enron Securities Litigation
----------------------------------------------------------------
Discovery is proceeding in the consolidated securities class
action filed in the United States District Court for the
Southern District of Texas against Citigroup, Inc. and other
commercial and/or investment banks, in relation to Enron
Corporation. The suit also names as defendants certain current
and former Enron officers and directors, lawyers and
accountants.
The suit, styled "NEWBY, ET AL. V. ENRON CORP., ET AL.," is
brought on behalf of individuals who purchased Enron securities.
The suit 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.
The Company's motion to dismiss the complaint was denied in
December 2002, and the Company filed an answer in January 2003.
In May 2003, plaintiffs filed an amended consolidated class
action complaint, and the Company filed a motion to dismiss in
June 2003. Plaintiffs filed a motion for class certification in
May 2003. Discovery is proceeding pending the Court's decision
on class certification.
Additional actions have been filed against Citigroup and certain
of its affiliates, including Citicorp, along with other parties,
including:
(1) 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 and Enron-related 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;
(2) an action by banks that participated in two Enron
revolving credit facilities, originally alleging fraud,
gross negligence, breach of implied duties, aiding and
abetting 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;
(3) 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;
(4) a series of putative class actions by purchasers of
NewPower Holdings common stock, alleging violations of
the federal securities law, including Section 11 of the
Securities Act of 1933, as amended, and Section 10(b)
of the Securities Exchange Act of 1934, as amended;
(5) a putative class action brought by clients of Citigroup
Global Markets Inc. (CGMI) in connection with research
reports concerning Enron, alleging breach of contract;
(6) 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;
(7) an action brought by the Attorney General of
Connecticut in connection with various commercial and
investment banking services provided to Enron;
(8) 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;
(9) an action brought by an investment company, alleging
that Enron fraudulently induced it to enter into a
commodity sales contract;
(10) 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;
(11) 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
(12) 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 are now generally inactive pending the
Court's decision on the pending motion on class certification.
EARTHGRAINS BAKING: Recalls Bread Due To Undeclared Ingredients
---------------------------------------------------------------
Earthgrains Baking Companies, Inc., is voluntarily recalling
loaves of Country Farms r Old Fashioned Wheat Bread exclusively
sold and distributed at Albertsons, Inc., stores in Arizona
because they contain buttermilk, which is not listed as an
ingredient on the package.
Consumption of this bread by people who have an allergy or
sensitivity to milk may result in a serious or life-threatening
allergic reaction. However, this product only poses a potential
hazard to milk-allergic and milk-sensitive individuals. The
company has not received any consumer complaints regarding this
bread.
The 16-ounce packaged bread loaves have been removed from store
shelves and are no longer available for purchase, but some
loaves may remain in consumer possession.
The recall applies only to Country Farms Old Fashioned Wheat
Bread sold in Arizona with a purchase-by date of April 30 or
earlier. The purchase-by date is printed in ink on the front of
the bread bag in the following format: "BEST IF PURCHASED BY APR
30." The recall does not apply to any other Country Farms brand
products, which are sold exclusively by Albertsons, Inc.
Consumers may return bread loaves to any Arizona Albertsons
store for a full refund.
Earthgrains Baking Companies, Inc., the baker of Country Farms
Old Fashioned Wheat Bread in Arizona, is working with
Albertsons, Inc., and the Food and Drug Administration in
undertaking a voluntary recall of this product. The mislabeled
product was discovered during a routine audit of the company's
Phoenix bakery. The company has also notified the Food Allergy
and Anaphylaxis Network of the voluntary recall.
Consumers who may have questions or concerns should call the
Earthgrains Baking Companies, Inc., toll-free consumer line at
(800) 323-7117. The consumer line is available from 7 a.m. to
2:30 p.m. Mountain Standard Time Mondays through Fridays (9 a.m.
to 4:30 p.m. Central Standard Time). For after-hours calls,
messages may be left, and they will be returned by the end of
the next business day.
FLORIDA: Lawyer To Tour Brevard Jail, Plans To Commence Lawsuit
---------------------------------------------------------------
A West Palm Beach, Florida lawyer is considering filing a
lawsuit against the Brevard County jail on behalf of its
inmates, because of overcrowding and substandard living
conditions inside it, Florida Today reports.
Attorney James Green is planning to visit the jail sometime in
the first half of May, in response to five inmate suicides from
late December to March. The attempts spurred an investigation
by Brevard Sheriff Phil Williams.
Mr. Green represented Brevard inmates in a class action in 1983
that eventually led to a 1993 federal court order that capped
the number of inmates at the jail at 732. However, the order
was rendered powerless by a 1998 federal law - the Prisoner
Litigation Reform Act - that makes it harder for prisoners to
use class action lawsuits to ease jail overcrowding.
Assistant County Attorney Shannon Wilson, who has followed the
case for the county, told Florida Today the original class-
action lawsuit by Brevard inmates is now "administratively
closed," and the federal court is no longer "actively
monitoring" conditions at the jail.
Ms. Wilson said Mr. Green contacted her office about touring the
jail. "If the plaintiffs allege (that overcrowding and bad
conditions) still exist, they could reactivate the case or start
a whole new case," she said. "The question is whether it rises
to the level to bring a lawsuit."
HOMESTORE.COM: Deadline For Claim, Exclusion in CA Suit Extended
----------------------------------------------------------------
The deadline to file a claim and request for exclusion from
settlement of the class action filed against Homestore.com, Inc.
in the United States District Court for the Central District of
California has been extended to May 31,2004. The suit is styled
"In re Homestore.com, Inc. Securities Litigation Master File N.
01-CV-11115."
Members of the class are all persons or entities who purchased
or otherwise acquired the common stock of the Company from
January 1, 2000 through December 21,2001. They were initially
given until March 16,2004 to file their claim and request for
exclusion.
For more details, contact the suit's claims administrator by
Phone: 1-866-216-0264 or visit the firm's Website:
http://www.homestoresettlement.com.
J.C. BRADFORD: TN Court Grants Approval To Fraud Suit Settlement
----------------------------------------------------------------
A Nashville, Tennessee judge granted preliminary approval to the
settlement of a class action filed against executives of
brokerage firm J.C. Bradford & Co., over proceeds from the
Company's $605 million sale to the former PaineWebber Group of
New York, the Tennessean reports.
The suit charged executives, including former CEO Jeff Powell of
self-dealing in the negotiations that denied other partners a
larger share of the sale proceeds. The Company, started in
1927, was the last remaining Nashville-based investment banking
firm at the time.
A hearing is scheduled for June 25 to consider any objections
and determine the fairness of the settlement. Under the
proposed settlement, the 300 former partners would receive on
average about $13,000 each of the $3.9 million left after
plaintiff lawyers claim $2 million in fees and another $100,000
in legal costs. The amount they actually receive depends on
their level of ownership in the firm - $2,350 for each equity
point.
"It's beneficial for all parties to be able to move forward from
the facts of this difficult case," Howard Safer, who had headed
the brokerage's Bradford Trust Co. unit before the sale and is a
part of the class action, told the Tennessean.
Last year, Davidson County Circuit Court Judge Hamilton Gayden
Jr. dismissed two key claims against firm co-senior partner J.C.
"Jimmy" Bradford Jr., whose father founded the firm. He ruled
that Mr. Bradford had the right to sell the name of the firm -
which he owned - to PaineWebber for $15 million and the right to
sell his service at any price in agreeing to stay on for five
years with the acquiring firm for $6 million.
"It obviously had a substantial impact on the obvious value of
the case," Dana Pescosolido, the Baltimore-based lead plaintiff
attorney, told the Tennessean about the dismissals. "When you
have half of your case thrown out, it sets you back."
After six months of negotiations Mr. Pescosolido said was
initiated by the defense, the parties agreed to settlement
terms, he said. "We're happy to be able to negotiate a
significant payout for the former Bradford partners, where the
average partner is going to walk away with a five-figure check,"
he said.
Powell and several lawyers for the defendants, which also
included the former J.C. Bradford firm and PaineWebber (now UBS
Financial Services), yesterday declined to comment. Defendants
have denied any wrongdoing, the Tennessean states.
MINNESOTA: Lawmakers To Lodge Bill To Block Fast Food Lawsuits
--------------------------------------------------------------
Minnesota Rep. Dean Urdahl, R-Grove City, is filing a bill that
would block obese people from suing restaurants and food
manufacturers, the Associated Press reports.
Several legislators across the nation have filed similar bills,
after several lawsuits were filed against major restaurant
chains last year, blaming the companies for their obesity.
However, most of these lawsuits have been dismissed or settled.
The lawsuits have, however, attracted a great deal of attention
and they come amid a national debate over "obesity" as a leading
cause of preventable death.
No such lawsuits have been filed in Minnesota, but Rep. Urdahl,
R-Grove City, said he's worried about the impact they might have
on farmers and food companies, AP reports. "Vilifying
hamburgers ultimately hurts the beef producers," he said.
Rep. Urdahl's bill would also give immunity to food
manufacturers for any lawsuits related to a person's "obesity."
"Such lawsuits fail to acknowledge the role of the individual
consumer in their own weight gain," he said in a news conference
on the Capitol lawn Tuesday.
Attorney Joseph Price, who defends companies from large-scale
lawsuits, said people are following the same path they followed
in launching lawsuits against tobacco companies, but he said the
logic isn't the same.
"If it's an addiction question, we all have to eat to one degree
or another," he told AP, noting that "obesity" and related
illnesses come from a variety of causes ranging from lack of
exercise to genetics.
NEW YORK: Hearing For Armenian Suit Settlement Set July 2004
------------------------------------------------------------
Fairness hearing for the settlement of the class action filed
against New York Life Insurance Company (NYLIC), styled "Martin
Marootian, et al., on behalf of themselves and all others
similarly situated v. New York Life Insurance Company, Case No.
C99-12073 CAS (MCx)," is set for July 30,2004 in the United
States District Court for the Central District of California.
The suit was filed on behalf of all beneficiaries, heirs of
beneficiaries, owners, heirs of owners and all other persons
having claims of any nature under life insurance policies
meeting all of the following requirements:
(1) that insured the lives of persons of Armenian descent;
(2) that were issued by NYLIC) in the Turkish Ottoman
Empire in and follwing 1875;
(3) that were in force as of January 1, 1915; and
(4) on which there has been no payment of death benefits,
surrender values, cash values, endowments or any other
form of payment
The suit alleges that the company wrongfully failed to pay
benefits under life insurance policies it issued in and
following 1875 in the Turkish Ottoman Empire on the lives of
persons of Armenian descent. NYLIC denies these allegations,
believes them to be false and misleading and has asserted
numerous defenses to the Plaintiff's allegations.
The proposed settlement is not to be interpreted as an admission
of wrongdoing or any liability or of the strength or weakness of
any of the claims asserted in the suit. Provided the proposed
settlement is court-approved, the Company has agreed to pay as
part US$20 million, of which distribution shall be made to:
(1) members of the class who do not exclude themselves from
the settlement and whose individual claims are
submitted to and approved by a Settlement Fund Board as
provided in the settlement agreement;
(2) a fund from which distributions will be made to
Armenian charitable organizations;
(3) the cost of administering the settlement and
(4) class counsel as attorneys fees and costs.
The proposed settlement provides for a release of the Company
and the released New York Life Parties with respect to any and
all subject policies and class claims, as defined by the
settlement.
The hearing will be held before Judge Christina A. Snyder to
determine whether the proposed settlement, as set forth in the
agreement on file with the court, should be approved as fair,
reasonable, adequate and in the best interest of class members;
whether the settlement class should be certified as a class for
settlement purposes; whether a final order and judgment should
be entered approving the settlement agreement and dismissing the
action with prejudice on the merits and releasing the class
claims against the Company and other defendants; whether the
court should approve the application of class counsel for
payment of attorney's fees, cost and expenses and whether the
court should approve an application of class counsel for
individual payments to the class representatives.
For more details, call 1-866-442-0124 or visit the Website:
http://www.ArmenianInsuranceSettlement.com.
NOKIA OYJ: Lead Plaintiff Deadline in Stock Suit Set June 2004
--------------------------------------------------------------
Deadline for filing lead plaintiff motions in the securities
class action filed against Nokia Oyj (Nokia Corporation) in the
United States District Court for the Southern District of New
York is set for June 7,2004.
The suit was filed on behalf of purchasers of the Company's
securities between January 8,2004 and April 6,2004. The
principal trading markets for Company securities are the New
York Stock Exchange, in the form of ADRs (NYSE:NOK) and the
Helsinki Exchange, in the form of shares (Helsinki: NOK1V.FH).
In addition, the shares are listed on the Frankfurt exchange
(Frankfurt: NOKS.F), the Stockholm Exchange (Stockholm:NOKI.ST)
the Paris Bourse (Paris: NOKS.PA), and in Switzerland
(Virtex:NOK1V.VX)
The actions is pending before the Hon. Richard M. Berman against
the Company, and:
(1) Jorma Ollila,
(2) Richard Simonson,
(3) Pekka Ala- Pietila, and
(4) Matti Alahuhta
The suit 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 market share for its handsets was
eroding;
(ii) that this was due to its failure to introduce
attractive handsets (a GSM clamshell model) in key
middle-markets such as the United States, Asia, and
Europe;
(iii) that sales of networking equipment were worse than
expected due to market erosion of Nokia's products;
(iv) that the Company's new reorganization to four operating
divisions did not energize the Company but rather
reduced responsiveness to its business problems and
caused the Company to experience operational
effectiveness; and
(v) that, as a result of the foregoing, defendants lacked a
reasonable basis for their positive statements about
the Company and their earnings projections.
On April 6, 2004, Nokia announced that its first quarter 2004
net sales would be below guidance. Nokia's net sales for the
first quarter 2004 were estimated to be EUR 6.6 billion,
representing a decline of 2% compared to the first quarter 2003
(vs. guidance of up 3-7%). News of this shocked the market.
Shares of Nokia on the NYSE fell 18.6%, or $3.94 per share, to
close at $17.21 per share, down nearly 27% from their 52-week
high of $23.52 per share in early March 2004. Additionally,
shares of Nokia on the Helsinki exchange dropped 17.1% to 14.38
euros ($17.39).
For more details, contact Steven G. Schulman, Andrei V. Rado or
Peter E. Seidman by Mail: One Pennsylvania Plaza, 49th floor,
New York, NYU 10119-0165 by Phone: 800-320-5081 by E-mail:
nokiacase@milberg.com or visit the firm's Website:
http://www.milberg.com
NORTEL NETWORKS: NY Court Grants Certification To Stock Lawsuit
---------------------------------------------------------------
The United States District Court for the Southern District of
New York certified as a class action the lawsuit filed against
Nortel Networks Corporation, styled "In re Nortel Networks
Corporation Securities Litigation, Consolidated Civil Action No.
2001-CV-1855 (RMB)."
The suit was filed on behalf of all persons or entities who
purchased Company stock or call options or sold Nortel put
options during the period October 24,2000 through February
15,2001, inclusive.
The suit asserts claims against the Company and certain of its
officers and directors for violations of certain provisions of
the federal securities laws. The defendants have denied all
allegations of wrongdoing asserted against them and have
asserted affirmative defenses to the claims.
For more details contact by Mail: Nortel Securities Litigation,
c/o The Garden City Group, Inc. P.O. Box 9000 #6169, Merrick,
New York 11566-9000 or by Phone: 1-866-808-3538.
NORTH CAROLINA: AG Cooper Launches Fraud Suit V. Mortgage Broker
----------------------------------------------------------------
A Wilmington mortgage broker who embezzled close to $1.8 million
and caused some consumers to lose their homes has been arrested,
North Carolina Attorney General Roy Cooper.
"This broker cost families thousands of dollars and even their
homes," AG Cooper said. "We want to make sure that someone like
this never gets a chance to rip off consumers again."
Tim Caviness, president of Homesavers Financial and Equality
Mortgage, was arrested late Friday on criminal charges brought
by AG Cooper. Mr. Caviness was arrested by State Bureau of
Investigation Agents in Guilford County after the New Hanover
County Grand Jury indicted him last week on 18 counts of
obtaining $849,042.62 by false pretenses and 18 counts of
embezzling $849,042.62 from consumers. He is currently being
held in New Hanover County jail on $1.5 million bond. Mr.
Caviness is scheduled to appear in New Hanover County Superior
Court for a bond hearing at 2 PM Wednesday. The examination by
SBI agents and Department of Justice prosecutors working for
Cooper will continue and may result in additional charges.
Between 1999 and 2001, approximately 48 consumers in
southeastern North Carolina lost $1.8 million through Mr.
Caviness' mortgage scheme. According to consumers who came
forward, Mr. Caviness approached them about refinancing their
mortgages, promising that the new mortgage could be paid off in
five years. Mr. Caviness convinced homeowners to refinance 100%
of their existing mortgage at a higher interest rate and with
higher fees, telling them that the equity they had already paid
on their home would go into a trust fund. He promised consumers
that they would be able to retire the new debt within five years
by using money in the trust fund to make payments on the new
mortgage.
Within a matter of months, homeowners found that Mr. Caviness
had drained their trust funds. Families lost between $8,000 and
$177,000 each. Many consumers saw their interest rates and
their monthly payments more than double, and some lost their
homes as a result. Consumers who have sought new home loans
with more reasonable payments have had a difficult time finding
reputable lenders who are willing to refinance the entire
mortgage.
The Attorney General's Office first became aware of the scheme
in August 2001 because of consumer complaints to the N.C. Office
of the Commissioner of Banks. Within weeks, AG Cooper filed
suit against Mr. Caviness and put a temporary halt to his
business. In 2003, AG Cooper won a permanent injunction and a
judgment of $1.5 million against Mr. Caviness and his company.
Mr. Caviness has failed to make the court-ordered payment. A
bond held by Equality Mortgage worth $150,000 was used to repay
consumers a small fraction of the money they lost.
"For most people, your home is your greatest investment," said
Cooper. "Protect that investment carefully by doing your
homework before you agree to refinance your home loan."
For more details, contact Noelle Talley, Public Information
Officer, N.C. Department of Justice by Phone: (919) 716-6484 or
(919) 716-6413 by Fax: (919) 716-0803 or by E-mail:
ntalley@ncdoj.com
OCWEN FINANCIAL: Agreed To Halt Business Practices in Agreement
---------------------------------------------------------------
Ocwen Financial Corporation agreed to stop several of its
business practices after borrowers, consumer advocates and
class-action attorneys criticized them, the Palm Beach Post
reports.
The West Palm Beach-based Company faces several consumer class
actions, alleging the Company imposed unjustified fees and
refused to listen to consumer complaints. In January, Company
president Ronald Faris labeled the suits "misdirected and
baseless."
The Company has now entered a nine-page "supervisory agreement"
with the federal Office of Thrift Supervision, the company and
regulators told the Palm Beach Post. Under the agreement, the
Company:
(1) will no longer charge borrowers for letters notifying
them they've defaulted on their mortgages;
(2) will take "reasonable actions" before forcing
homeowners to pay for pricey insurance policies;
(3) will include "only supportable and actual fees and
charges" when it tells borrowers how much they owe;
(4) will "improve the manner and reduce the time" it takes
to respond to consumer complaints;
(5) has set up an ombudsman's office to handle customer
complaints
"We are grateful for the insights gained from our ongoing
dialogue with OTS and consumer interest organizations, and will
continue to strive for ways to better serve our clients," Ocwen
Chairman and Chief Executive William Erbey said in a statement.
Consumer advocate David Berenbaum of the National Consumer
Reinvestment Coalition told the Post the regulatory action
doesn't go far enough. Ocwen should offer to repay borrowers
who have been charged fees unfairly or who have lost their
houses, he said.
And because the regulatory agreement doesn't compensate past
customers, Berenbaum expects lawsuits to continue. "Is it going
to buy Ocwen peace from its critics? By no means, because we
still have hundreds of consumers who have been wronged by
Ocwen," Mr. Berenbaum said.
PARALEGAL CREDIT: MI Atty. General Files "Credit Fix" Fraud Suit
----------------------------------------------------------------
A Wayne County company that purports to fix consumers' credit
ratings faces legal action for selling form letters and other
documents that mislead purchasers about how to repair their
credit, Michigan Attorney General Mike Cox announced.
In a Notice of Intended Action (NIA), AG Cox alleges Paralegal
Credit Services violates Michigan law by charging fees -
sometimes in excess of $3,000 - for programs that falsely claim
to both eliminate debts without payments to creditors and to
improve credit ratings by removing negative information from
credit reports.
"Working men and women who are honestly trying to repair their
credit rating cannot afford to rely on bogus promises," AG Cox
said in a statement. "A good credit rating is essential to
realizing the American dream of home ownership. This kind of
scam kills those dreams."
Paralegal Credit Services also does business under the name
Credit Management Group. Additionally named in the NIA are
Debra Rawlins, Paul Robert Rawlins, Paul Robert Rawlins II
and Lisa Rawlins, who own or operate Credit Management Group
through a Garden City location.
The company sells the form letters to consumers, who are
supposed to send them to debt collectors. Consumers are falsely
assured that sending the letters will invalidate the debt.
Another tactic used by the company provides consumers with lines
of credit that will, if used, result in a better credit rating.
Consumers who need real credit repair help can use the Federal
Trade Commission's free information on credit repair and credit
online counseling or by calling toll free 1-877-382-4357.
PIPE MANUFACTURERS: CA Court Approves Poz-Lock Suit Settlement
--------------------------------------------------------------
The United States District Court for the Northern District of
California granted preliminary approval to the settlement of the
class action filed against several pipe companies, styled
"Foothil/DeAnza Community College District v. Northwest Pipe
Company, et al. No. C-00-20749-JF (EAI)."
The suit was filed on behalf of all current and former owners of
a commercial or residential building in which a fire sprinkler
system using Poz-Lok pipe was installed. Poz-Lok is a brand of
pipe and pipe-fittings sold for use in fire sprinkler systems in
residential and commercial buildings beginning in 1990. The
pipe is a silver colored metal, bearing the Poz-Lok name.
The lawsuit alleges that:
(1) Poz-Lok pipe is defective and prone to leaking because
of manufacturing and design defects involving the lack
of galvanization of the internal weld seam of the pipe;
(2) Poz-Lok pipe is prone to premature corrosion and that
failure, e.g. leaking and/or splitting, will inevitably
result;
(3) Defendants (Southwestern Pipe, Inc., P&H Tube
Corporation and Northwest Pipe Company) knew of the
defect but concealed the defect from the owners of
buildings in which Poz-Lok pipe was installed.
Defendants denied the existence of a defect and contend that the
pipe failures were due to other factors. Defendants and their
insurers have agreed to pay up to $14.5 million into a
settlement fund to be administered over the next 18 years.
Payments depend upon an inspection and will be made according to
a schedule based on the date of installation of the pipe and
when it leaked. Class members have until May 21,2004 to opt-out
of the class.
The court will determine if the proposed settlement is fair,
reasonable and adequate at a hearing on June 7,2004 at 11:00 am
at the United States District Court for the Northern District of
California.
For more details, call 1-866-898-5087 or visit the Website:
http://www.poz-lok.com
TENNESSEE: Nears Agreement To Help Mentally Retarded Citizens
-------------------------------------------------------------
The state of Tennessee and a group of lawyer advocates for the
state's mentally retarded citizens are nearing a consent decree
that will improve the support network and services for them, the
Tennessean reports.
More than 3,000 families statewide have been on a years-long
waiting list for home- and community-based state assistance.
The families require a wide range of services for their mentally
retarded children - from nutritional counseling to vocational
training to home care services that would allow qualified
personnel to watch over the children while the parents to get
out of the house for a respite.
"It would be great if I could just get some respite care
sometimes," Belinda Bell, mother of a mentally retarded 22-year-
old named Crystal, told The Tennessean. "I love my daughter,
but sometimes it would be great if I could just get out of the
house. You know?"
Crystal Bell, almost outgrown the school-based services
available to special-needs children. She functions at the level
of a 5-year-old and is a sweet, social person, but is
nevertheless extremely demanding of her parents' time, her
mother continued.
Mrs. Bell put her daughter on a waiting list for services almost
five years ago, to no avail. She told the Tennessean she does
not want her daughter to go into a large institution - she
believes a group home with qualified care would be ideal for
Crystal - but there are currently no options for her in
Tennessee, the way there would be in many other states.
In 2000 Nashville attorneys Gary Housepian and Kent E. Krause
launched a class action in the U.S. District Court for the
District of Tennessee on behalf of family members who said they
were unable to gain access to services that they contended
Tennessee was obligated to provide. Judge Robert Echols later
combined portions of that class-action suit with a related claim
filed by the advocacy group People First.
Since then, Housepian's organization, Tennessee Advocacy &
Protection Inc., and People First, represented by Jack
Derryberry, have been engaged in sometimes stormy negotiations
with the state. In 2003, Judge Echols ordered mediator and
veteran state official Stephen Norris to intervene in the suit.
In October 2003, Gov. Phil Bredesen appointed Mr. Norris to
become deputy commissioner of the Division of Mental Retardation
Services.
At a fairness hearing held last week, Judge Echols indicated
that he intended to approve the consent decree reached by both
sides. At the hearing, Deputy Attorney General Dianne Dycus
told the court that the state has begun implementing plans to
expand the home- and community-based services, Deputy Attorney
General Dianne Dycus told the court. The services enable people
to get the help they need at home without having to send their
mentally retarded children to institutions.
Already 6,500 families receive this type of assistance, but
3,200 remain on a waiting list. The judge, the state and the
plaintiffs expect that by July that backlog will begin to
diminish as Tennessee puts more resources into the system.
Judge Echols has said he expects the plan to eliminate or
substantially reduce the number of people on the state's waiting
list for assistance.
Under the consent decree, the plaintiffs and the state will meet
monthly to monitor the state's progress. The proposed consent
decree also requires a public-information plan and a rigorous
effort to calculate how many people statewide actually require
these types of assistance programs. Each family will get up to
$30,000 worth of assistance, according to need.
Asbestos Alert
ASBESTOS LITIGATION: American Locker Named in 140 Asbestos Cases
----------------------------------------------------------------
In September 1998 and subsequent months, American Locker Group
Inc. was named as an additional defendant in around 140 cases
pending in state court in Massachusetts. The plaintiffs in each
case assert that a division of the Company manufactured and
furnished to various shipyards components containing asbestos
during the period from 1948 to 1972 and that injuries resulted
from exposure to such products. The Company sold the division's
assets in 1973. During the process of discovery in certain of
these actions, documents from sources outside the Company have
been produced which indicate that the Company appears to have
been included in the chain of title for certain wall panels
which contained asbestos and which were delivered to the
Massachusetts shipyards. These cases' defense has been assumed
by the Company's insurance carrier, subject to a reservation of
rights. As of February 19, 2004, settlement agreements have
been entered in 15 cases with funds authorized and provided by
the Company's insurance carrier. Further, over 90 cases
originally filed in 1995 through 2000 against other defendants
to which the Company was joined as an additional defendant have
been terminated as to the Company without liability to the
Company under Massachusetts procedural rules. Therefore, the
balance of unresolved cases against the Company as of February
19, 2004 is around 35 cases originally filed against other
defendants in 2001 through 2003.
While the Company cannot predict what the ultimate resolution of
these asbestos cases may be because the discovery proceedings
on the cases are not complete, based upon the Company's
experience to date with similar cases, as well as the assumption
that insurance coverage will continue to be provided with
respect to these cases, at the present time, the Company does
not believe that the outcome of these cases will have a
significant adverse impact on the Company's operations or
financial condition.
ASBESTOS LITIGATION: Ameron Faces Lawsuits With 18,489 Claimants
----------------------------------------------------------------
As of February 29, 2004, Ameron Company was a defendant in
asbestos-related cases involving 18,489 claimants, compared to
17,447 claimants as of November 30, 2003. For the quarter ended
February 29, 2004, there were new claims involving 1,077
claimants, dismissals and/or settlements involving 35 claimants
and no judgments. Net costs and expenses incurred by the
Company for the quarter ended February 29, 2004 in connection
with asbestos-related claims were about $61,000.
ASBESTOS LITIGATION: Converium Exposed To Liabilities in Germany
----------------------------------------------------------------
Converium Holding AG has exposure to liabilities for asbestos
and environmental impairment from its assumed reinsurance
contracts, primarily arising from business written by Converium
Ruckversicherung (Deutschland) AG, historically known as
Agrippina Ruckversicherung AG and subsequently known as Zurich
Ruckverscherung (Koln) AG or ZRK. Its asbestos exposure
primarily originates from U.S. business written through the
London Market and from treaties directly written with reinsurers
in the United States. The Company cancelled its relevant London
Market reinsurance contracts in 1966 and 1967. At the time, it
reduced its participation in asbestos and environmental-exposed
U.S. treaties, with the eventual result that Converium
Ruckversicherung (Deutschland) AG ceased property and liability
underwriting in the United States in 1990. Due to uncertainties
as to the definitions and to incomplete reporting from clients,
exact separation of asbestos and environmental exposures cannot
be reached. The Company believes that Converium Reinsurance
(North America) Inc.'s exposure to asbestos-related and
environmental pollution claims is limited due to the diminutive
amount of business written prior to 1987 and the protection
provided by the continuing reinsurance protections. In
addition, Converium AG's exposure is also minimal because, under
the terms of the Quota Share Retrocession Agreement, Converium
AG will only reinsure business written with an inception or
renewal date on or after January1, 1987. In 1986, the Company's
contract wording was revised, consistent with a general industry
change, such that asbestos and environmental claims were
generally excluded.
As of December 31, 2003 and 2002, Converium's total loss and
adjustment expense reserves, including additional reserves and
IBNR reserves, for U.S.-originated asbestos and environmental
losses were about $45,800,000 or 0.7% and $44,600,000 or 0.8% of
the Company's total net reserves for losses and loss adjustment
expenses, respectively. This provision includes reserves
originally communicated by the Company's cedents, together with
additional reserves it established.
Converium estimates that the survival ratio of its asbestos and
environmental risk portfolio, calculated as the ratio of
reserves held, including IBNR, over claims paid over the average
of the last three years, is around 13.6 years and 13.5 years as
of December 31, 2003 and 2002, respectively. Survival ratio is
an industry measure of the number of years it would take a
company to exhaust its reserves for asbestos and environmental
liabilities based on that company's current level of claims
payments. The Company currently has no retrocessional
protection for its U.S.-originated asbestos and environmental
exposure, other than the arrangements with Zurich Financial
Services provided by the stop-loss agreement and other
arrangements.
Reserving for asbestos and environmental claims is subject to a
range of uncertainties that has historically been greater than
those presented by other types of claims. Among the
complications are a lack of historical data, long reporting
delays and uncertainty as to the number and identity of insureds
with potential exposure. In addition, there are complex,
unresolved legal issues regarding policy coverage and the extent
and timing of contractual liability.
In the asbestos context, many of these same issues exist, and
other issues may arise concerning
(1) the scope of so-called "asbestosis" exclusions
(2) the extent to which policy aggregate limits for product
liability or completed operations apply in the context
of a particular asbestos exposure
(3) the interplay between various insurers' policy
wordings, especially in the context of the trigger of
coverage, when determining insurers' defense and
indemnity obligations for a particular asbestos loss
(4) the existence and nature of defense or defense
reimbursement obligations under various policy forms
(5) the disposition of asbestos claims in the context of
policyholder or insurer insolvencies.
These issues are not likely to be resolved in the near future.
Consequently, traditional loss reserving techniques cannot
wholly be relied on and, therefore, the uncertainty with respect
to the ultimate cost of these types of claims is greater than
the uncertainty relating to standard lines of business. In
addition, changes to existing legal interpretation, new
legislation or new court decisions could materially impact the
Company's reserves, results of operations, cash flows and
financial position in future periods.
Converium believes that its exposure to environmental impairment
liability and asbestos-related claims is relatively small due to
the diminutive amount of business written prior to 1987 for
Converium AG and Converium Reinsurance (North America) Inc.
Additionally, Converium Reinsurance (North America) Inc. is
protected by a stop loss agreement with Zurich Insurance Company
(ZIC), a wholly owned subsidiary of Zurich Financial Services,
for business effected prior to June 1, 1993. As of December 31,
2003, 2002 and 2001, Converium Ruckversicherung (Deutschland) AG
had reserves for environmental impairment liability and
asbestos-related claims of $45,800,000, $44,600,000, and
$44,600,000 respectively, representing a survival ratio
(calculated as the ratio of reserves held, including IBNR, over
claims paid over the average of the last three years) of 13.6
years, 13.5 years and 13.8 years, respectively.
ASBESTOS LITIGATION: Fairfax Financial Records $772M in Reserves
----------------------------------------------------------------
Fairfax Financial Holdings has established reserves that
represent its best estimate of ultimate claims and claim
adjustment expenses based upon known facts and current law.
Gross asbestos reserves were $1,600,000,000 at December 31,
2003. Asbestos reserves, net of reinsurance but excluding
vendor indemnities, were $772,200,000 at December 31, 2003. The
Company stated that it cannot quantify with a high degree of
certainty the ultimate exposure represented by asbestos and
other latent claims and related litigation.
ASBESTOS LITIGATION: Hartford Claims Mostly In Insurance Unit
-------------------------------------------------------------
Hartford Financial Services Group Inc. said that the Other
Operations segment of its Property & Casualty insurance business
includes substantially all of the Company's asbestos and
environmental exposures. Property & Casualty will continue to
include income and expense items not directly allocated to the
operating segments, such as net investment income, net realized
gains and losses, other expenses and income taxes.
The Company included the non-GAAP measure operating income,
before the impact of the 2003 asbestos reserve addition, among
other items, as applicable, in its presentation of operating
results by segment. The Company provided this measure to
enhance investor understanding of the financial performance of
the Company's operating businesses because it relates solely to
legacy business. Property & Casualty in the quarter ended June
30, 2003 included the impact of $2,604,000 of before-tax impact
of 2003 asbestos reserve addition, and $1,701,000 of after-tax
impact of 2003 asbestos reserve addition.
ASBESTOS LITIGATION: Hercules Inc. Settlement Agreement Ongoing
---------------------------------------------------------------
Hercules Inc. is a defendant in numerous asbestos-related
personal injury lawsuits and claims, which typically arise from
alleged exposure to asbestos fibers from resin-encapsulated pipe
and tank products sold by one of the Company's former
subsidiaries to a limited industrial market. The Company is
also a defendant in lawsuits alleging exposure to asbestos at
facilities formerly or presently owned or operated by the
Company. Claims are received and settled or otherwise resolved
on an on-going basis. In late December 1999, the Company
entered into a settlement agreement to resolve the majority of
the claims then pending. In connection with that settlement,
the Company also entered into an agreement with several of the
insurance carriers, which sold primary and first level excess
insurance policies insuring that former subsidiary. Under the
terms of that agreement, the majority of the amounts paid to
resolve those products claims were insured, subject to the
limits of the insurance coverage provided by those policies.
The terms of both settlement agreements are confidential.
Since entering into the agreements referenced in the above
paragraph, the Company has continued to receive and settle or
otherwise resolve claims on an on-going basis. Between January
1, 2003 and December 31, 2003, the Company received around
16,885 new claims, over half of which were included in
"consolidated" complaints naming anywhere from one hundred to
thousands of plaintiffs and a large number of defendants, but
providing little information connecting any specific plaintiff's
alleged injuries to any specific defendant's products or
premises. It is the Company's belief that a significant
majority of these "consolidated" claims will be dismissed for no
payment. During that same time period, the Company also
received around 3,175 other new claims, all of which were
included in "consolidated" complaints and which have either been
dismissed without payment or are in the process of being
dismissed without payment, but with plaintiffs retaining the
right to re-file should they be able to establish exposure to an
asbestos-containing product for which the Company bears
liability. With respect to total claims pending, as of January
31, 2004, there were around 33,220 unresolved claims, of which
around 1,080 were premises claims and the rest were products
claims. There were also around 1,615 unpaid claims that have
been settled or are subject to the terms of a settlement
agreement. In addition, as of January 31, 2004, there were
around 11,920 claims (an amount that includes the 3,175 claims
noted) which have either been dismissed without payment or are
in the process of being dismissed without payment, but with
plaintiffs retaining the right to re-file should they be able to
establish exposure to an asbestos-containing product for which
the Company bears liability.
In June and July 2003, the Company entered into several
settlement agreements that will permanently resolve around
12,500 claims. Of those claims, around 3,600 are categorized as
"unresolved" in the above paragraph, and around 8,900 are among
those claims that have been dismissed without payment or are in
the process of being dismissed without payment. The terms of
these settlement agreements are confidential. The Company
believes that the vast majority of these claims will be
permanently dismissed without payment.
The Company's primary and first level excess insurance policies
that provided coverage for these asbestos-related matters have
exhausted their limits. The Company has not yet reached
agreement with its other insurance carriers to fund the cost of
defending and resolving its asbestos-related matters. As a
result, until the Company's other insurance carriers begin to
fund the cost of defending and resolving these matters, the
Company will have to fully fund the cost of defending and
resolving these matters. Net of insurance payments received or
made on its behalf, the Company spent $40,000,000 on these
matters during the year ended December 31, 2003, including
$7,000,000 of legal expenses. Nonetheless, based on the current
number of claims pending, the amounts the Company anticipates
paying to resolve those claims which are not dismissed or
otherwise resolved without payment and anticipated future
claims, the Company believes that it and its former subsidiary
together have sufficient additional insurance to cover the
majority of its current and estimated future asbestos-related
liabilities. However, there can be no assurance that such
liabilities will be sufficiently covered. The foregoing is
based on the Company's assumption that the number of future
claims filed per year and claim resolution payments will vary
considerably from year-to-year and by plaintiff, disease, venue
and other circumstances, but will, when taken as a whole, remain
relatively consistent with the Company's experience to date and
will decline as the population of potential future claimants
expires due to non-asbestos-related causes. It is also based on
the results of a study, the Company's evaluation of potentially
available insurance coverage and its review of the relevant case
law. However, the Company recognizes that the number of future
claims filed per year and claim resolution payments could
greatly exceed those reflected by its past experience and
contemplated by the study referenced below, that the Company's
belief of the range of its reasonably possible financial
exposure could change as the study referenced below is
periodically updated, that its evaluation of potentially
available insurance coverage may change depending upon numerous
variables including risks inherent in litigation, potential
legislation, and the risk that one or more insurance carriers
may refuse or be unable to meet its obligations to the Company,
and that conclusions resulting from its review of relevant case
law may be impacted by future court decisions or legislative or
other changes in the law.
The Company is seeking defense and indemnity payments or an
agreement to pay from those carriers responsible for excess
coverage whose levels of coverage have been or will soon be
reached. Although those excess carriers have not yet agreed to
defend or indemnify the Company, the Company believes that it is
likely that they will ultimately agree to do so, and that the
majority of its estimated future asbestos-related costs will
ultimately be paid or reimbursed by those carriers. However,
since the Company has not yet reached satisfactory agreements
with those excess carriers, the Company will be required to
completely fund these matters while it seeks reimbursement from
those carriers. In order to maximize the likelihood of
obtaining insurance payments for these asbestos-related costs,
on November 27, 2002, the Company initiated litigation against
its excess insurance carriers in a matter captioned Hercules
Incorporated v. OneBeacon, et al., Civil Action No. 02C-11-237
(SCD), Superior Court of Delaware, New Castle County. That
litigation is proceeding through discovery and motion practice,
and trial is currently scheduled in October 2004.
Notwithstanding the filing of this litigation, the Company is
continuing settlement discussions with several of its key
insurers.
The Company commissioned a study of its asbestos-related
liabilities by Professor Eric Stallard, who is a Research
Professor of Demographic Studies at a major national university
and a Member of the American Academy of Actuaries. Professor
Stallard is a consultant with broad experience in estimating
such liabilities. Based on the results of the study undertaken
by Professor Stallard, the Company estimated that its reasonably
possible financial exposure for these matters (excluding about
$1,000,000 for previously settled but unpaid claims) ranged from
$220,000,000 to $675,000,000. Due to inherent uncertainties in
estimating the timing and amounts of future payments, this range
does not include the effects of inflation and has not been
discounted for the time value of money. In addition, the range
of financial exposures set forth above does not include
estimates for future legal costs. It is the Company's policy to
expense these costs as incurred. As stated above, the Company
presently believes that the majority of this range of financial
exposures will ultimately be funded by insurance proceeds. Cash
payments related to this exposure are expected to be made over
an extended number of years and actual payments, when made,
could be for amounts in excess of the range due to potential
future changes in estimates as well as the effects of inflation.
Due to the dynamic nature of asbestos litigation and the present
uncertainty concerning the participation of its excess insurance
carriers, the Company's estimates are inherently uncertain, and
these matters may present significantly greater financial
exposures than presently anticipated. In addition, the Company
intends to periodically update the asbestos study referenced in
the above paragraph, and further analysis combined with new data
received in the future could result in a material modification
of the range of reasonably possible financial exposure set forth
above. As a result of all of the foregoing, the Company's
liability with respect to asbestos-related matters could exceed
present estimates and may require a material change in the
accrued liability for these matters within the next 12 months.
If the Company's liability does exceed amounts recorded in the
balance sheet, the Company presently believes that the majority
of any additional liability it may reasonably anticipate will be
paid or reimbursed by its insurance carriers. However, there can
be no assurance that such liabilities will be reimbursed.
ASBESTOS LITIGATION: James Hardie Reacts to Foundation Inquiry
--------------------------------------------------------------
James Hardie Industries made a statement regarding the Medical
Research and Compensation Foundation inquiry established by the
NSW Government into how the Foundation was set up in 2001. The
inquiry was prompted by statements made last October by the
Foundation that it was unlikely to have sufficient funds to meet
projected future asbestos compensation claims.
The inquiry started the week of March 19, 2004. As expected, it
attracted significant media interest and this is likely to
continue until June 30, when the inquiry is due to report.
Based on the media coverage so far, it appears that some of the
coverage will be negative and inaccurate.
James Hardie Chairman Alan McGregor AO wrote, "We are alarmed
and troubled by the Foundation's forecasts that future claims
could be as much as three times higher than were forecast by
experts at the time it was established. This suggests there is
a much wider issue emerging in Australia generally, that will
also affect the vast majority of claims, which won't involve the
two former James Hardie subsidiaries. We hope the inquiry will
recommend how these broader and more complex issues could be
properly understood, and ultimately addressed for the benefit of
all asbestos claimants." The company created a special section
on its Investor Relations website
(http://www.ir.jameshardie.com.au),with all its releases,
presentations and statements about the inquiry as it progresses.
ASBESTOS LITIGATION: McDermott Intl Rating Low Due To B&W Co.
-------------------------------------------------------------
McDermott International Inc. (MII) reported in a regulatory
filing with the Securities and Exchange Commission that Moody's
Investors Service rating outlook for both McDermott Inc. (of
which MII is a parent company) and MII is negative due to the
continued uncertainty regarding the Babcock & Wilcox Company
asbestos settlement previously mentioned in the CAR newsletter
on March 25, 2004. McDermott is also a parent company of
Babcock & Wilcox Co.
ASBESTOS LITIGATION: Metso Has 123 Asbestos Claims Still Pending
----------------------------------------------------------------
As of February 20, 2004, there were a total of 288 complaints
alleging asbestos injuries filed in the United States in which a
Metso Corp. entity is one of the named defendants. Where a
given plaintiff has named more than one viable Metso unit as a
defendant, the cases are tallied using the number of viable
Metso defendants. Of these claims, 123 are still pending and
165 cases have been closed. Of the closed cases, 112 were
dismissed and 53 were settled. For the 53 cases settled, the
average compensation has been $540 per case. The outcome of the
still pending cases is not expected to materially deviate from
the outcome of the previous claims. Hence, management believes
that Metso has no material asbestos related liability in the
United States.
ASBESTOS LITIGATION: PPG Discloses Improved First Quarter Income
----------------------------------------------------------------
PPG Industries reported first quarter net income of
$115,000,000, or 67 cents a share, which includes after-tax
charges of $4,000,000, or 2 cents a share, reflecting the
previously announced decision to begin expensing stock options
in 2004, and $3,000,000, or 2 cents a share, to reflect the net
increase in the current value of the company's obligation under
its asbestos settlement agreement reported in May 2002. That
compares with first quarter 2003 net income of $78,000,000, or
46 cents a share, which includes after-tax charges of
$6,000,000, or 3 cents a share, for the cumulative effect of a
required change in the accounting for asset retirement
obligations, and $3,000,000, or 2 cents a share, to reflect the
value of the company's obligation under its asbestos settlement
agreement.
The company cited the unpredictability of possible future
litigation (including litigation that could result if the
asbestos settlement discussed in PPG's reports filed with the
Securities and Exchange Commission does not become effective) as
a factor that could cause actual results to differ from the
company's forward-looking statements.
ASBESTOS LITIGATION: RPM Subsidiaries In Pending Asbestos Suits
---------------------------------------------------------------
RPM International Inc. has reported that certain of its wholly
owned subsidiaries, principally Bondex International, Inc., have
been involved in a large number of asbestos-related personal
injury suits filed primarily in state courts during the past two
decades. The rate at which plaintiffs filed asbestos-related
suits against Bondex increased in the fourth quarter of fiscal
2002 and the first three quarters of fiscal 2003, influenced by
the bankruptcy filings of numerous other defendants in asbestos-
related litigation. Based on the significant increase in
asbestos claims activity and inequitable joint and several
liability determinations against Bondex, as previously reported,
the Company's third-party insurance was depleted in the first
quarter of this fiscal year. Third-party insurers historically
have been responsible, under various cost-sharing arrangements,
for the payment of around 90% of the indemnity and defense costs
associated with RPM's asbestos litigation. Prior to this sudden
precipitous increase in loss rates, the combination of book loss
reserves and insurance coverage was expected to adequately cover
asbestos claims for the foreseeable future. RPM has reserved
its rights with respect to various of its third-party insurers'
claims of exhaustion, and in late calendar 2002 commenced
reviewing known insurance policies to determine whether or not
other insurance limits may be available to cover asbestos
liabilities. As a result of this examination, on July 3, 2003,
the Company filed a complaint in Federal Court against several
insurance carriers for declaratory judgment, breach of contract
and bad faith. The Company is unable at the present time to
predict whether, or to what extent, any additional insurance may
cover its asbestos liabilities.
During the last seven months of fiscal 2003, new state liability
laws were enacted in three states where more than 80% of the
claims against Bondex are pending. The changes generally
provide for liability to be determined on a "proportional cause"
basis, thereby limiting Bondex's responsibility to only its
share of the alleged asbestos exposure. These state law changes
are not expected to have an impact on asbestos litigation
affecting the Company until the latter part of fiscal 2004 or
early in fiscal 2005.
At the end of fiscal 2002 and through the third quarter of
fiscal 2003, Bondex had concluded it was not possible to
estimate its cost of disposing of asbestos-related claims that
might be filed against Bondex in the future. During the fourth
quarter of fiscal 2003, Bondex retained a nationally recognized
consulting firm with broad experience in estimating resolution
costs associated with mass tort litigation, including asbestos,
to assist it in analyzing its loss history data, to evaluate
whether it would be possible to estimate the cost of disposing
pending claims in light of both past and recent loss history,
and to assist in determining whether future asbestos-related
claims reasonably expected to be filed against Bondex were
measurable, given recent changes of law.
As of May 31, 2003, the consultants concluded that it was not
possible to currently estimate the full range of the cost of
resolving future asbestos-related claims against Bondex because
of various uncertainties associated with those potential future
claims. These uncertainties included
(1) the bankruptcies in the years 2000 through 2002 of
other companies facing large asbestos liability were a
likely contributing cause of a sharp increase in
filings against many defendants, including Bondex,
(2) the recent state law changes in states wherein the vast
majority of the Company's claims are pending and have
been historically filed are expected to materially
affect future losses and future claim filing activity
and resolution costs, and
(3) the currently proposed federal legislative initiative
aimed at establishment of a federal asbestos trust fund
has influenced and changed the demand behavior of
plaintiffs from that of historic levels, creating
further uncertainty in the estimation process.
At this time, RPM cannot estimate the liability that will result
from all pending or future claims. The Company established a
reserve at May 31, 2003 for those pending cases that had
progressed to a stage where the cost to dispose of these cases
could reasonably be estimated. The estimation of even pending
cases is difficult due to the dynamic nature of asbestos
litigation. The reserve was established by taking an asbestos
charge to fiscal 2003 operations of $140,000,000 for measurable
known claims as of May 31, 2003 and a provision for some claims
that were estimable. RPM believes this asbestos reserve will be
sufficient to cover its Subsidiaries' asbestos-related cash flow
requirements into fiscal 2006. The estimates for the
$140,000,000 asbestos charge were developed in consultation with
the Company's outside consulting firm and defense counsel,
taking into account both historical and current settlement
values. The Company recognizes that future facts, events,
litigation outcomes, and legislation, both state and/or federal,
may affect the bases for the reserve, including the Company's
assumptions, and therefore alter estimates of some future
asbestos-related claims that were measurable. The Company
cannot estimate possible liabilities in excess of those accrued
because it cannot predict the number of additional claims that
may be filed in the future, the grounds for such claims, the
damages that may be demanded, the probable outcome, or the
impact of recent state and pending federal legislation on
prospective asbestos claims.
In conjunction with outside advisors, the Company continues to
study asbestos-related exposure and evaluate the adequacy of
this reserve and the related cash flow implications in light of
actual claims experience, the impact of state law changes and
the evolving nature of federal legislative efforts to address
asbestos litigation. As of February 29, 2004, the underlying
facts and assumptions supporting establishment of the
$140,000,000 reserve (an amount adequate to cover around three
years of cash flow requirements) have undergone no significant
change, other than passage of time.
Based on information presently available, future costs are not
expected to have a material adverse effect on the Company's
competitive or financial position or ongoing results of
operations.
ASBESTOS LITIGATION: Selas Corporation Dealing With 101 Lawsuits
----------------------------------------------------------------
Selas Corp. of America is a defendant along with a number of
other parties in around 101 lawsuits as of December 31, 2003
alleging that plaintiffs have or may have contracted asbestos-
related diseases as a result of exposure to asbestos products or
equipment containing asbestos sold by one or more named
defendants. This is a decrease from 143 lawsuits as of
September 30, 2003 mentioned in the November 28, 2003 edition of
the CAR newsletter. Due to the non-informative nature of the
complaints, the Company does not know whether any of the
complaints state valid claims against the Company. In addition,
the Company expects that claims could continue to be asserted
against it.
The lead insurance carrier has informed the Company that the
primary policy for the period July 1, 1972 - July 1, 1975 has
been exhausted and that the lead carrier will no longer provide
a defense under that policy. While the Company has requested
that the lead carrier substantiate this situation, there can be
no assurance that this primary policy and the Company's other
insurance policies will cover all or any portion of the costs
and any awards associated with the asbestos-related lawsuits.
In light of the significant uncertainty associated with asbestos
lawsuits, there is no guarantee that these lawsuits will not
materially adversely affect the Company's financial position,
results of operations or liquidity. In addition, the asbestos
litigation may have an unfavorable impact on the Company's
ability to sell its remaining Heat Technology business on terms
favorable to the Company if a buyer were to view the litigation
as a possible liability of the business being sold.
ASBESTOS ALERT: Bayer AG Named As Premises Defendant In WV, TX
--------------------------------------------------------------
Bayer Aktiengesellschaft reported that it is currently involved
in asbestos litigation in the United States, primarily as a
premises defendant, predominantly in the states in which Bayer
has industrial sites. The overwhelming majority of cases
involving Bayer have been filed in West Virginia and Texas and
involve allegations of exposure at Bayer's sites. There are
also some asbestos cases pending against Bayer in Indiana and
California. Texas law and West Virginia law permit consolidated
asbestos actions in which multiple plaintiffs can sue multiple
defendants for asbestos-related conditions without specifying
which plaintiff has a claim against which defendant. While Bayer
may be named as a defendant, each plaintiff does not have to
assert a claim against Bayer.
The allegations as to Bayer and numerous other premises
defendants are that Bayer employed many contractors on its
industrial sites, yet failed to warn them or protect them from
the known hazards of asbestos exposure throughout the 1960's,
1970's and 1980's. Since premises owners now form a new group
of targeted corporate defendants in these litigations, these
types of actions may have an adverse impact on results of
operations, financial position or cash flows.
One of Bayer AG's U.S. subsidiaries, Bayer CropScience Inc., is
the legal successor to entities that sold asbestos-containing
products from the 1940's until 1976 and is named as a defendant
in asbestos-related litigation. Bayer CropScience is and has
been fully indemnified for its costs and exposure in relation to
this litigation by Union Carbide. Union Carbide continues to
accept Bayer CropScience's tender of these cases, and it defends
and settles them in Bayer CropScience's name, in its own name
and in the name of the several predecessor companies to Bayer
CropScience.
Bayer AG believes that it has meritorious defenses in these
actions and is defending them vigorously. Without acknowledging
any liability, the Company has settled a number of these cases
in the past. Bayer AG may, on a case-by-case basis, settle
additional cases for reasonable amounts when, in its judgment,
settlement is economically feasible given the risks and costs
inherent in the litigation. Bayer AG has made what it believes
to be appropriate provisions should these suits result in
judgments in favor of the plaintiffs.
COMPANY PROFILE
Bayer Aktiengesellschaft (NYSE: BAY)
51368 Leverkusen, Building W 1
Bayerwerk, Germany
Phone: 800-269-2377
Fax: 212-571-3050
http://www.bayer.com
Employees : 115,400
Revenue : $32,172,327,000.00
Net Income : $ 1,338,679,000.00
Assets : $45,172,295,000.00
Liabilities : $27,630,043,000.00
(As of December 31, 2003)
Description: Bayer AG is a global company offering a wide range
of products, including ethical pharmaceuticals, diagnostics and
other healthcare products; agricultural products; polymers, and
chemicals. The Company is comprised of the parent company,
Bayer AG of Leverkusen, Germany, and its consolidated
subsidiaries, which include Bayer HealthCare AG, Bayer
CropScience AG, Bayer Polymers AG and Bayer Chemicals AG. The
Company also has three additional subsidiaries, Bayer Technology
Services GmbH, Bayer Business Services GmbH and Bayer Industry
Services GmbH & Co. oHG, which act as service companies that
support the four operating subsidiaries, as well as the Company.
Bayer is organized into seven business segments: pharmaceutical
and biological products; consumer care and diagnostics; animal
health; crop science; plastics and rubber; polyurethanes,
coatings and fibers, and chemicals.
ASBESTOS ALERT: Curtiss-Wright Settles Claims Due To Components
---------------------------------------------------------------
Curtiss-Wright Corp. stated that some of its products previously
sold contained asbestos components that were acquired from third
parties and incorporated into the Corporation's products.
Although the Corporation has never been the subject of an
adverse judgment nor settled a claim for more than immaterial
amounts, it may be subject to potential liabilities relating to
claims alleging personal injury as a result of exposure to such
products.
COMPANY PROFILE
Curtiss-Wright Corp. (NYSE: CW)
4 Becker Farm Road
Roseland, NJ 07068
Phone: 973-597-4700
Fax: 973-597-4799
http://www.curtisswright.com
Employees : 4,655
Revenue : $ 746,071,000.00
Net Income : $ 52,268,000.00
Assets : $ 973,665,000.00
Liabilities : $ 494,784,000.00
(As of December 31, 2003)
Description: Curtiss-Wright Corp. operates as a designer and
manufacturer of motion control, metal treatment and flow control
products for the aerospace, defense, automotive, construction,
oil, petrochemical, metal working and other industries. The
Company operates in three Segments, Motion Control, Flow Control
and Metal Treatment.
ASBESTOS ALERT: Duke Capital LLC Named in Personal Injury Claims
----------------------------------------------------------------
Duke Capital LLC reported that personal injury claims alleged to
have arisen from the exposure to asbestos in the Company's
plants, along with future developments in government
investigations and litigation impacting the energy industry,
including litigation regarding performance, contracts and other
matters arising in the ordinary course of its business, could be
materially adverse to it by affecting its operations and
diverting its attention and resources to addressing such
actions. Furthermore, future declines in the availability, or
increases in the cost, of the Company's insurance policies and
charges to self-insurance reserves with respect to such
litigation could cause material liabilities and costs, which
could have a material adverse effect on results of operations or
financial position in the future.
COMPANY PROFILE
Duke Capital LLC (NYSE: DUK)
1105 North Market St., Ste. 1300
Wilmington, DE 19801
Phone: 704-594-6200
http://www.duke-energy.com/investors/llc
Description: Duke Capital LLC, formerly known as Duke Capital
Corp., is a subsidiary of Duke Energy. It changed its form of
organization from a Delaware corporation to a Delaware limited
liability company.
The conversion to an LLC will provide greater tax efficiency at
the state level but will have no further impact on the company
or holders of securities in Duke Energy or Duke Capital. Duke
Capital retained all of its rights, obligations and assets.
Duke Energy is a diversified energy company with a portfolio of
natural gas and electric businesses, both regulated and
unregulated, and an affiliated real estate company. Duke Energy
supplies, delivers and processes energy for customers in North
America and selected international markets. In 2004, the
company celebrates the 100th anniversary of its electric utility
Duke Power. Headquartered in Charlotte, NC, Duke Energy is a
Fortune 500 company.
ASBESTOS ALERT: Dismissal of Genlyte Asbestos Claim Affirmed
------------------------------------------------------------
The Keene Creditors Trust claimed that when Genlyte Group Inc.
had purchased certain lighting assets from Keene in 1984,
Genlyte failed to pay fair value for the assets. After Keene
filed for bankruptcy in 1992 due to mounting asbestos claims
against it, a Creditors Trust was appointed on behalf of
asbestos claimants to gather funds from Keene's liquidation to
pay asbestos claims. The Trust decided to question numerous
previous Keene transactions, among them the Genlyte asset
purchase in 1984, on the grounds that Keene was already
insolvent then and should have been paid more for assets it sold
to other companies, including Genlyte. After nearly ten years
of litigation, the claim against Genlyte was dismissed in 2003,
which dismissal has now been affirmed.
COMPANY PROFILE
Genlyte Group Inc. (NasdaqNM: GLYT)
10350 Ormsby Park Place, Suite 601
Louisville, KY 40223
Phone: 502-420-9500
Fax: 502-895-6618
http://www.genlyte.com
Employees : 5,201
Revenue : $ 1,033,899,000.00
Net Income : $ 46,349,000.00
Assets : $ 773,725,000.00
Liabilities : $ 416,357,000.00
(As of December 31, 2003)
Description: Genlyte Group Inc. designs, manufactures, markets
and sells lighting fixtures and controls for various
applications in the commercial, residential and industrial
markets in North America. The Company operates in these three
industry segments through the following divisions: Capri/Omega,
Chloride Systems, Controls, Crescent, Day-Brite, Gardco, Hadco,
Lightolier, Stonco, Thomas Residential and Wide-Lite, which are
based in the United States, and Canlyte, Ledalite, Lumec and
Thomas Lighting Canada, which are based in Canada. The
Company's products primarily utilize incandescent, fluorescent,
light emitting diodes and high-intensity discharge light
sources. They are marketed primarily to distributors that
resell the products for use in new commercial, residential and
industrial construction, as well as in remodeling existing
structures.
ASBESTOS ALERT: Mine Safety Facing Possible Product Litigation
--------------------------------------------------------------
Mine Safety Appliances Co. reported that it faces an inherent
business risk of exposure to product liability claims arising
from the alleged failure of its products to prevent the types of
personal injury or death against which they are designed to
protect. Although the company has not experienced any material
uninsured losses due to product liability claims, it is possible
that it could experience material losses in the future.
The company is named as a defendant in around 1,850 lawsuits
primarily involving respiratory protection products it allegedly
manufactured and sold. Collectively, these lawsuits represent a
total of around 30,000 plaintiffs. Around 85% 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 by us. Consistent with the
experience of other 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.
Mine Safety Appliances Co. cannot determine its potential
liability, if any, for such claims, in part because the
defendants in these lawsuits are often numerous, the claims
generally do not specify the amount of damages sought and its
product's involvement is speculative. With some limited
exceptions, the Company maintains insurance against product
liability claims and reserves for uninsured product liability
claims, but it is possible that its insurance coverage will not
continue to be available on terms acceptable to the company or
that such coverage or the company's reserves, as the case may
be, will not be adequate for liabilities actually incurred.
In addition, in the event any of the company's products prove to
be defective, MSA Co. could be required to recall or redesign
such products. A successful claim brought against the company
in excess of available insurance coverage, or any claim or
product recall that results in significant expense or adverse
publicity against the company, could have a material adverse
effect on its business, operating results and financial
condition.
Various lawsuits and claims arising in the normal course of
business are pending against the company. These lawsuits are
primarily product liability claims. Pending claims include
several multi-party asbestosis or silicosis suits, generally as
a result of the presence of safety equipment supplied by MSA and
other manufacturers at locations named in the suits. While the
amounts claimed may be substantial, the ultimate liability of
the company is not determinable because of uncertainties,
including the number of defendants in each suit and the
jurisdiction.
The company maintains a reserve for uninsured product liability
based on expected settlement charges for pending claims and an
estimate of unreported claims derived from experience, sales
volumes, and other relevant information. The company
reevaluates its exposures on an ongoing basis and makes
adjustments to reserves as appropriate. Based on information
currently available, management believes that the disposition of
matters that are pending will not have a materially adverse
effect on the financial position of the company.
COMPANY PROFILE
Mine Safety Appliances Co. (AMEX: MSA, OTC BB: MNESP)
121 Gamma Drive, RIDC Industrial Park
Pittsburgh, PA 15238
Phone: 412-967-3000
Fax: 412-967-3326
http://www.msanet.com
Employees : 4,300
Revenue : $ 698,197,000.00
Net Income : $ 65,267,000.00
Assets : $ 643,885,000.00
Liabilities : $ 336,027,000.00
(As of December 31, 2003)
Description: Mine Safety Appliances Co. is primarily engaged in
the manufacture and sale of products designed to protect the
safety and health of people throughout the world. The Company's
principal products include respiratory protective equipment,
head protection, eye and face protection, hearing protectors,
safety clothing, industrial emergency care products, mining
safety equipment, thermal imaging cameras and monitoring
instruments. In addition, the Company manufactures and sells
specialty chemicals, including boron-based chemicals. Many of
the Company's products have wide application for workers in
industries that include manufacturing, municipal and volunteer
fire departments, public utilities, mining, chemicals,
petroleum, construction, transportation, the military and
hazardous materials clean-up. Consumer products target the do-
it-yourself market and are available through select home center
retail outlets under the MSA Safety Works brand.
ASBESTOS ALERT: Pullman Co. Subject to Asbestos Exposure Cases
--------------------------------------------------------------
Pullman Co. reported in a regulatory filing that it is subject
to a number of lawsuits initiated by a significant number of
claimants alleging health problems as a result of exposure to
asbestos. Many of these cases involve significant numbers of
individual claimants. Many of these cases also involve numerous
defendants, with the number of each in some cases exceeding 200
defendants from a variety of industries. The Company is
experiencing an increasing number of these claims, likely due to
bankruptcies of major asbestos manufacturers.
The Company cannot, however, assure that the costs, charges and
liabilities associated with these matters will not be material,
or that those costs, charges and liabilities will not exceed any
amounts reserved for them in our financial statements.
COMPANY PROFILE
Pullman Co.
500 North Field Drive
Lake Forrest, IL 60045
Phone: 847-482-5000
Description: Pullman Co., formerly known as Pullman's Palace Car
Co., is an Illinois corporation, engaged in furnishing to
railroad companies under contract, parlor, dining, and sleeping
cars in Florida and other states.
New Securities Fraud Cases
ADOLOR CORPORATION: Milberg Weiss Lodges Securities Suit in PA
--------------------------------------------------------------
Milberg Weiss Bershad Hynes & Lerach LLP initiated a securities
class action on behalf of an institutional investor in the
United States District Court for the Eastern District of
Pennsylvania on behalf of purchasers of Adolor Corporation
(NASDAQ:ADLR) common stock during the period between September
23, 2003 and January 14, 2004.
The complaint charges Adolor and certain of its officers and
directors with violations of the Securities Exchange Act of
1934. Adolor is a development stage biopharmaceutical
corporation that discovers, develops and plans to commercialize
products to relieve pain while reducing the side effects of
currently marketed narcotics.
The complaint alleges that during the Class Period, defendants
disseminated materially false and misleading information
regarding Adolor's flagship product candidate EnteregT and the
clinical trials for EnteregT for the management of postoperative
ileus. The true facts, which were known by each of the
defendants but concealed from the investing public during the
Class Period, were as follows:
(1) the clinical trial failure in the EnteregT Phase III
302 study for postoperative ileus was directly related
to objective failure of the therapy in certain patient
subgroups, particularly those patients treated for
simple hysterectomy;
(2) additional EnteregT Phase III clinical trials composed
of patient subgroups similar to the 302 study would
risk repetition of the same therapy failures;
(3) the 302 study failure at the 12 mg dosage was due to
therapy failures in certain patient subgroups,
particularly those patients treated for simple
hysterectomy, and not "limited power" or insufficient
numbers of patients in the study as defendants claimed;
(4) despite representations to the contrary, defendants
were in a position to make meaningful comparisons for
the data and results between patient subgroups, for the
302 and 313 studies, from the very beginning of the
Class Period;
(5) despite defendants' expressions of disbelief at
suggestions by analysts that distinctly different
results for certain patient subgroups had somehow
impacted the quality of results for the 302 and 313
clinical studies, defendants were fully aware of these
differences and that the clinical program was indeed
adversely impacted from the very beginning of the Class
Period;
(6) the EnteregT Phase III 313 clinical study met the
primary efficacy endpoint, at both dosage levels,
because it excluded certain patient subgroups already
known by defendants prior to the Class Period to
produce disappointing results for the treatment of
postoperative ileus;
(7) the EnteregT Phase III 308 prospective study was at
great risk of failing to achieve statistically
significant results for the primary efficacy endpoint,
at both dosage levels, because it would include a large
number of certain patient subgroups already known to
produce disappointing results for the treatment of
postoperative ileus;
(8) elimination of certain patient subgroups already known
to produce disappointing results for the treatment of
postoperative ileus from the 313 study created an
opportunity to present highly encouraging clinical
results to the investment community at the very
beginning of the Class Period, while deferring the
prospect of disappointing results from the prospective
308 study; and
(9) since the EnteregT Phase III pivotal studies were
designed to study two different dosages across a number
of patient subgroups in three separate trials,
defendants were aware, from the very beginning of the
Class Period, that the mixed results within the patient
subgroups for the 302 and 313 studies confounded the
results, making it difficult for the FDA to approve an
EnteregT NDA based on the prospect of disappointing
results from the prospective 308 study.
As a result of the defendants' false statements, Adolor's stock
price traded at inflated prices during the Class Period, causing
millions of dollars of damages to the Class. On November 12,
2003, as shares traded at prices as high as $18.14, the company
sold 6,900,000 shares of its common stock for gross proceeds of
approximately $119 million.
On January 13, 2004, the company reported shocking news about
the third in the series of Phase III clinical trials for the
company's new drug application submission. On this news, the
price of Adolor's stock plunged 37%, trading as low as $13.73
per share, on an unprecedented volume of 12.7 million shares.
For more details, contact William Lerach or Darren Robbins of
Milberg Weiss by Phone: 800-449-4900 by E-mail: wsl@mwbhl.com or
visit the firm's Website: http://www.milberg.com/cases/adolor/.
ASCONI CORPORATION: Marc Henzel Lodges Securities Lawsuit in FL
---------------------------------------------------------------
The Law Offices of Marc S. Henzel initiated a securities class
action in the United Stated District Court for the Middle
District of Florida on behalf of behalf of all persons who
purchased the securities of Asconi Corp. (AMEX: ACD) in the
period from May 15, 2003 to March 23, 2004.
The complaint alleges that the defendants made material
misrepresentations and omissions of material facts concerning
the company's business performance during the relevant time.
According to the complaint, throughout the relevant time period,
defendants misrepresented the financial condition of the Asconi
and failed to disclose certain related party transactions,
thereby overstating the financial condition of Asconi. The
company has delayed the filing of its annual Report on Form 10-K
with the SEC, its stock price has collapsed and the stock has
ceased trading.
For more details, contact Marc S. Henzel by Mail: 273 Montgomery
Ave., Suite 202, Bala Cynwyd, PA 19004 by Phone: 610-660-8000 or
888-643-6735 by Fax: 610-660-8080 or by E-Mail:
mhenzel182@aol.com
BOSTON COMMUNICATIONS: Marc Henzel Lodges Securities Suit in MA
---------------------------------------------------------------
The Law Offices of Marc S. Henzel initiated a securities class
action in the United States District Court for the District of
Massachusetts on behalf of purchasers of Boston Communications
Group, Inc. (Nasdaq: BCGI) publicly traded securities during the
period between June 12, 2003 and July 16, 2003, inclusive.
The complaint alleges that Defendants violated Sections 10(b)
and 20(a) of the Securities and Exchange Act of 1934, and Rule
10b-5 promulgated thereunder, by issuing false and misleading
statements concerning the Company's business. Specifically, the
complaint alleges that the Defendants issued false and
misleading statements and had a duty to correct such statements
concerning Boston Communications' relationship with Verizon
Wireless.
In particular, analysts had raised concerns regarding the
Company's ability to maintain relationships with its primary
customers, which accounted for the majority of the Company's
revenue. Moreover, such concerns included the propensity for its
customers to take services outsourced to Boston Communications,
in-house. To allay investor fears concerning Boston
Communications' customer concentration, the Company attempted to
reassure investors that contract negotiations with Verizon
Wireless, and other customers, were continuing as planned,
despite a company policy not to do so.
On July 17, 2003, Verizon Wireless announced its intention to
"insource" the company's services. Announcement of the news
caused shares of Boston Communications to plummet, falling 40%
on heavy volume.
For more details, contact Marc S. Henzel by Mail: 273 Montgomery
Ave., Suite 202, Bala Cynwyd, PA 19004 by Phone: 610-660-8000 or
888-643-6735 by Fax: 610-660-8080 or by E-Mail:
mhenzel182@aol.com
CANADIAN IMPERIAL: Stull Stull Lodges Securities Suit in S.D. NY
----------------------------------------------------------------
Stull Stull & Brody initiated a securities class action in the
United States District Court for the Southern District of New
York, on behalf of purchasers of the securities of the MFS
family of mutual funds (the "MFS Mutual Funds"), including, but
not limited to MFS Capital Opportunities Fund (Nasdaq: MCOFX,
MCOBX, MCOCX, MFCRX, MCOTX, EACOX, EBCOX, ECCOX); MFS Core
Growth Fund (Nasdaq: MFCAX, MFCBX, MFCCX, MCFRX, MCRRX); MFS
Emerging Growth Fund (Nasdaq: MEGRX, MEGBX, MFECX, MFERX, EAGRX,
EBEGX, ECEGX); and MFS Growth Opportunities Fund (Nasdaq: MGOFX,
MGOBX), between January 1, 2001 and September 30, 2003,
inclusive.
The following MFS Mutual Funds are subject to this lawsuit:
(1) MFS Capital Opportunities Fund (Sym: MCOFX, MCOBX,
MCOCX, MFCRX, MCOTX, EACOX, EBCOX, ECCOX, MCOIX)
(2) MFS Core Growth Fund (Sym: MFCAX, MFCBX, MFCCX, MCFRX,
MCRRX, MFCIX)
(3) MFS Emerging Growth Fund (Sym: MEGRX, MEGBX, MFECX,
MFERX, MEGRX, EAGRX, EBEGX, ECEGX, MFEGX, MFEIX)
(4) MFS Growth Opportunities Fund (Sym: MGOFX, MGOBX
(5) MFS Large Cap Growth Fund (Sym: MCGAX, MCGBX)
(6) MFS Managed Sectors Fund (Sym: MMNSX, MSEBX, MMNCX)
(7) MFS Mid Cap Growth Fund (Sym: OTCAX, OTCBX, OTCCX,
MMCRX, MCPRX, EAMCX, EBCGX, ECGRX, OTCIX)
(8) MFS New Discovery Fund (Sym: MNDAX, MNDBX, MNDCX,
MFNRX, MNDRX, EANDX, EBNDX, ECNDX, MNDIX)
(9) MFS New Endeavor Fund (Sym: MECAX, MECBX, MECCX, MNERX,
MENRX, MECIX)
(10) MFS Research Fund (Sym: MFRFX, MFRBX, MFRCX, MFRRX,
MSRRX, EARFX, EBRFX, ECRFX)
(11) MFS Strategic Growth Fund (Sym: MFSGX, MSBGX, MFGCX,
MSGRX, MSTRX, EASGX, EBSGX, ECSGX, MSGIX)
(12) MFS Technology Fund (Sym: MTCAX, MTCBX, MTCCX, MTQRX,
MTERX, MTCIX)
(13) Massachusetts Investors Growth Stock (Sym: MIGFX,
MIGBX, MIGDX, MIGRX, MIRGX, EISTX, EMIVX, EMICX, MGTIX)
(14) MFS Mid Cap Value Fund (Sym: MVCAX, MCBVX, MVCCX,
MMVRX, MCVRX, EACVX, EBCVX, ECCVX, MCVIX)
(15) MFS Research Growth and Income Fund (Sym: MRGAX, MRGBX,
MRGCX, MGIRX, RERX, MRGRX)
(16) MFS Strategic Value Fund (Sym: MSVTX, MSVCX, MQSVX,
MSVRX, MVSRX, EASVX, EBSVX, ECSVX, MSVLX, MISVX)
(17) MFS Total Return Fund (Sym: MSFRX, MTRBX, MTRCX, MFTRX,
MTRRX, EATRX, EBTRX, ECTRX, MTRIX)
(18) MFS Union Standard Equity Fund (Sym: MUEAX, MUSBX,
MUECX, MUSEX)
(19) MFS Utilities Fund (Sym: MMUFX, MMUBX, MMUCX, MMURX,
MURRX, MMUIX)
(20) MFS Value Fund (Sym: MEIAX, MFEBX, MEICX, MFVRX, MVRRX,
EAVLX, EBVLX, ECVLX, MEIIX)
(21) Massachusetts Investors Trust (Sym: MITTX, MITBX,
MITCX, MITRX, MIRTX, EAMTX, EBMTX, ECITX, MITIX)
(22) MFS Aggressive Growth Allocation Fund (Sym: MAAGX,
MBAGX, MCAGX, MAARX, MAWAX, EAGTX, EBAAX, ECAAX, MIAGX)
(23) MFS Conservative Allocation Fund (Sym: MACFX, MACBX,
MACVX, MACRX, MCARX, ECLAX, EBCAX, ECACX, MACIX)
(24) MFS Growth Allocation Fund (Sym: MAGWX, MBGWX, MCGWX,
MGARX, MGALX, EAGWX, EBGWX, ECGWX, MGWIX)
(25) MFS Moderate Allocation Fund (Sym: MAMAX, MMABX, MMACX,
MAMRX, MARRX, MAMDX, EBMDX, ECMAX, MMAIX)
(26) MFS Bond Fund (Sym: MFBFX, MFBBX, MFBCX, MFBRX, MBRRX,
EABDX, EBBDX, ECBDX, MBDIX)
(27) MFS Emerging Markets Debt Fund (Sym: MEDAX, MEDBX,
MEDCX, MEDIX)
(28) MFS Government Limited Maturity Fund (Sym: MGLFX,
MGLBX, MGLCX)
(29) MFS Government Mortgage Fund (Sym: MGMTX, MGTBX, MGMIX)
(30) MFS Government Securities Fund (Sym: MFGSX, MFGBX,
MFGDX, MGSRX, MGVSX, EAGSX, EBGSX, ECGSX)
(31) MFS High Income Fund (Sym: MHITX, MHIBX, MHICX, EAHIX,
EMHBX, EMHCX, MHIIX, MHIRX)
(32) MFS High Yield Opportunities Fund (Sym: MHOAX, MHOBX,
MHOCX, MHOIX)
(33) MFS Intermediate Investment Grade Bond Fund (Sym:
MGBFX, MGBVX, MGBCX, MGBEX, MIBRX)
(34) MFS Limited Maturity Fund (Sym: MQLFX, MQLBX, MQLCX,
EALMX, EBLMX, ELDCX, MLDRX)
(35) MFS Research Bond Fund (Sym: MRBFX, MRBBX, MRBCX,
EARBX, EBRBX, ECRBX, MRBIX, MRBRX)
(36) MFS Strategic Income Fund (Sym: MFIOX, MIOBX, MIOCX,
MFIIX)
(37) MFS Alabama Municipal Bond Fund (Sym: MFALX, MBABX)
(38) MFS Arkansas Municipal Bond Fund (Sym: MFARX, MBARX)
(39) MFS California Municipal Bond Fund (Sym: MCFTX, MBCAX,
MCCAX)
(40) MFS Florida Municipal Bond Fund (Sym: MFFLX, MBFLX)
(41) MFS Georgia Municipal Bond Fund (Sym: MMGAX, MBGAX)
(42) MFS Maryland Municipal Bond Fund (Sym: MFSMX, MBMDX)
(43) MFS Massachusetts Municipal Bond Fund (Sym: MFSSX,
MBMAX)
(44) MFS Mississippi Municipal Bond Fund (Sym: MISSX, MBMSX)
(45) MFS Municipal Bond Fund (Sym: MMBFX, MMBBX)
(46) MFS Municipal Limited Maturity Fund (Sym: MTLFX, MTLBX,
MTLCX)
(47) MFS New York Municipal Bond Fund (Sym: MSNYX, MBNYX,
MCNYX)
(48) MFS North Carolina Municipal Bond Fund (Sym: MSNCX,
MBNCX, MCNCX)
(49) MFS Pennsylvania Municipal Bond Fund (Sym: MFPAX,
MBPAX)
(50) MFS South Carolina Municipal Bond Fund (Sym: MFSCX,
MBSCX)
(51) MFS Tennessee Municipal Bond Fund (Sym: MSTNX, MBTNX)
(52) MFS Virginia Municipal Bond Fund (Sym: MSVAX, MBVAX,
MVACX)
(53) MFS West Virginia Municipal Bond Fund (Sym: MFWVX,
MBWVX)
(54) MFS Emerging Markets Equity Fund (Sym: MEMAX, MEMCX,
MEMIX, MEMBX)
(55) MFS Global Equity Fund (Sym: MWEFX, MWEBX, MWECX,
MWEIX, MGERX)
(56) MFS Global Growth Fund (Sym: MWOFX, MWOBX, MWOCX,
MWOIX, MGLRX)
(57) MFS Global Total Return Fund (Sym: MFWTX, MFWBX, MFWCX,
MFWIX, MGRRX)
(58) MFS International Growth Fund (Sym: MGRAX, MGRBX,
MGRCX, MQGIX)
(59) MFS International New Discovery Fund (Sym: MIDAX,
MIDBX, MIDCX, EAIDX, EBIDX, ECIDX, MWNIX, MINRX)
(60) MFS International Value Fund (Sym: MGIAX, MGIBX, MGICX,
MINIX)
(61) MFS Research International Fund (Sym: MRSAX, MRIBX,
MRICX, EARSX, EBRIX, ECRIX, MRSIX, MRIRX)
The Complaint alleges that defendants, Canadian Imperial Bank
("CIBC"), Canadian Imperial Holdings, Inc. ("CIHI"), and Paul A.
Flynn ("Flynn") violated Sections 10(b) and 20(a) of the
Securities Exchange Act of 1934 and Rule 10b-5 promulgated
thereunder. More specifically, this action concerns a fraudulent
scheme and course of action which was intended to and indeed did
benefit the defendants at the expense of the MFS Mutual Fund
investors.
In connection therewith, defendants violated their fiduciary
duties to their customers in return for substantial fees and
other income for themselves and their affiliates. From 2001 to
2003, defendant Flynn, while employed as a Managing Director of
Equity Investments at CIBC, substantially assisted STC and the
Hedge Funds in engaging in late trading and deceptive market
timing. Defendant Flynn knew or was reckless in not knowing that
the Hedge Funds were engaging in late trading and deceptive
market timing. Defendant Flynn arranged for the Hedge Funds to
receive financing from a CIBC affiliate, CIHI. Defendant Flynn
negotiated and structured swaps and loan agreements that
provided the Hedge Funds with leverage of at least 3:1 to trade
in mutual fund shares.
Defendant Flynn used his position at CIBC to arrange financing
for illegal late trading and deceptive market timing of mutual
funds by two hedge funds, Samaritan and Canary. The Hedge Funds'
trades were placed through Security Trust Company, N.A. ("STC"),
which disguised the hedge fund orders as being those of
retirement and pension plans when placing them with mutual
funds. The effect of the disguise was to allow the Hedge Funds
to engage both in illegal late trading and in market timing of
the mutual funds, and to thwart them from enforcing their anti-
timing rules. Mutual funds that were illegally traded using
defendant Flynn's financing include MFS' Emerging Growth Fund
and Artisan International Fund.
Moreover, in furtherance of arranging CIBC's financing,
defendant Flynn wrote a memorandum explaining how the scheme
works. As to late trading, after noting that trades could be
submitted up until midnight, he wrote: "A pricing list is
prepared by the company and submitted to our clients who are
then able to run their timing models against actual closing
prices instead of the previous day before they submit trades.
Standard platforms require trades to be into (sic) before 4:00
p.m. submitted by specific account number and broker reference."
As to timing, the complaint quotes Flynn's memo in describing
how STC disguised the trades of the Hedge Funds (CIBC's clients)
"to reduce the chance that they would appear to be timing a
specific mutual fund."
For more details, contact Aaron Brody, Esq. by Mail: 6 East 45th
Street, New York NY 10017 by Phone: 1-800-337-4983, by E-mail:
SSBNY@aol.com or visit the firm's Website: http://www.ssbny.com.
DVI INC.: Marc Henzel Lodges Securities Fraud Lawsuit in E.D. PA
----------------------------------------------------------------
The Law Offices of Marc S. Henzel initiated a securities class
action on behalf of purchasers of the securities of DVI, Inc.
(OTC: DVIX.PK) between November 7, 2001 and August 13, 2003,
inclusive, seeking to pursue remedies under the Securities
Exchange Act of 1934.
The action is pending in the United States District Court for
the Eastern District of Pennsylvania, against Defendants Michael
A. O'Hanlon, former President and Chief Executive Officer and
Director of DVI, and Steven R. Garfinkel, DVI's former Chief
Financial Officer.
The Complaint alleges that defendants violated Sections 10(b)
and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5
promulgated thereunder, by issuing a series of material
misrepresentations to the market between November 7, 2001 and
August 13, 2003.
According to the complaint, throughout the Class Period,
Defendants engaged in a fraudulent scheme to deceive the public
as to DVI's true financial condition. Defendants allegedly
issued positive statements regarding DVI's business and
operations, and overall growth in publicly disseminated press
releases and SEC filings and claimed that they were a fair
presentation of DVI's business. According to the complaint,
Defendants failed to disclose material adverse facts, including,
but not limited to, the Company's failure to write down the
value of certain impaired assets; its failure to properly
account for and report non-recurring transactions; its failure
to adopt adequate internal controls; and its material
overstatement of its assets and earnings.
As a result of Defendants' fraudulent scheme, DVI stock became
artificially inflated during the Class Period, trading as high
as $20.99 per share on June 17, 2002, thereby causing damages to
Class Period purchasers of DVI securities.
On August 13, 2003, after the market closed, Defendants issued a
press release revealing DVI's intention to file for Chapter 11
Bankruptcy protection and that the Company had not yet secured
debtor-in-possession financing. The Company blamed its dire
situation on the "recent discovery of apparent improprieties in
its prior dealings with lenders involving misrepresentations as
to the amount and nature of collateral pledged to lenders." In
the same release, Defendants announced that DVI's Chief
Financial Officer, Defendant Steven Garfinkel, had been placed
on administrative leave. This revelation came after Defendants
announced that DVI's auditor, Deloitte & Touche LLP, had
resigned over a dispute concerning the Company's accounting for
certain transactions; that the Company had depleted all
availability on its credit facilities; that DVI failed make
interest payments on its 9 7/8 percent Senior Notes due to
severe liquidity constraints; and that the SEC had rejected the
Company's filing of its quarterly report for the third quarter
of 2003. Immediately following the Company's announcement that
it would file for bankruptcy, on August 14, 2003, the New York
Stock Exchange suspended trading of DVI stock and Senior Notes,
pending delisting. On the same day, DVI stock closed at $0.30
per share, representing a one-day decline of 62.50 percent.
For more details, contact Marc S. Henzel by Mail: 273 Montgomery
Ave., Suite 202, Bala Cynwyd, PA 19004 by Phone: 610-660-8000 or
888-643-6735 by Fax: 610-660-8080 or by E-Mail:
mhenzel182@aol.com
EMCOR GROUP: Marc Henzel Lodges Securities Fraud Lawsuit in NY
--------------------------------------------------------------
The Law Offices of Marc S. Henzel initiated a securities class
action in the United States District Court for the District of
New York on behalf of purchasers of Nortel Networks Corporation
(NYSE: NT) publicly traded securities during the period between
January 7, 2004 and March 15, 2004, inclusive.
The complaint charges Nortel, Frank A. Dunn, Douglas C. Beatty
and Michael J. Gollogly with 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, shortly before the start of the Class Period, Nortel
advised investors that it would be restating its financial
results for 2000, 2001 and 2002 and the first and second
quarters of 2003.
Then, after reporting solid fourth quarter results during the
Class Period that far surpassed analysts' expectations, the
Company shocked investors by announcing that it would be
restating its financial results yet again, this time for the
just-reported fourth quarter of 2003 as well.
Subsequently, in a clear indication of the severity of the
Company's problems, the Company announced that it would be
placing defendants Beatty and Gollogly on paid leave of absence,
pending the completion of the Company's independent review being
undertaken by its audit committee. Following this announcement,
shares of Nortel common stock fell $1.19 per share, or 18.5%, to
close at $5.24 per share on extremely high trading volume.
For more details, contact Marc S. Henzel by Mail: 273 Montgomery
Ave., Suite 202, Bala Cynwyd, PA 19004 by Phone: 610-660-8000 or
888-643-6735 by Fax: 610-660-8080 or by E-Mail:
mhenzel182@aol.com
NORTEL NETWORKS: Berger & Montague Lodges Securities Suit in NY
---------------------------------------------------------------
Berger & Montague, P.C. filed a securities class action in the
United States District Court for the Southern District of New
York (Civ. Action No. 04-CV-3056) against Nortel Networks
Corporation, on behalf of purchasers of publicly traded
securities of Nortel (NYSE:NT) (TSE:NT) between December 23,
2003 and March 15, 2004 inclusive.
On April 5, 2004, Nortel announced that it was the target of a
"formal" investigation by the United States Securities and
Exchange Commission (the "SEC"). The announcement further
confirms the seriousness of Nortel's accounting problems which
had led the Company to announce last month that it intends to
restate its results for 2003 and one or more earlier periods as
a result of an ongoing examination of "certain accruals and
provisions" in connection with Nortel's first restatement last
fall of its financials for the first half of 2003 and prior
years, and to suspend its Chief Financial Officer and its
Controller. A "formal" investigation is serious because it
gives the SEC the power to issue subpoenas for documents and
information.
In connection with the April 5, 2004 announcement, a Nortel
spokeswoman was quoted as saying that the Company had previously
been the subject of an SEC "informal" inquiry since October
2003. The news that the SEC had ordered a formal investigation
immediately caused the price of Nortel shares to fall further,
by 3.7%, or 23 cents, at $6.06, on heavy volume, making Nortel
the most heavily traded stock on the NYSE for the day.
The Complaint charges defendants Nortel, Frank A. Dunn, Douglas
C. Beatty, and Michael J. Gollogly, with violations of Sections
10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule
10b-5 promulgated thereunder. The Complaint alleges that
defendants' financial reports and statements which they publicly
announced and/or filed with the SEC beginning on December 23,
2003 and throughout the Class Period were false and misleading.
On March 10, 2004, Nortel suddenly announced that it would need
to delay filing its 2003 annual financial statements with the
SEC and that, as a result of its ongoing review of previously-
issued financial results, the Company would need to revise its
just-announced results for the full-year and certain quarters of
2003, and would likely restate its previously-filed financial
results for one or more earlier periods as well because it was
re-examining the bookkeeping surrounding "certain accruals and
provisions in prior periods." The Company admitted that the
delay in filing its 2003 annual financial statements would
violate the Company's debt covenants and could, therefore, have
a serious adverse impact on the Company.
Then, in a highly unusual move, the Company announced on March
15, 2004 that, "effective immediately", it was placing
defendants Beatty (Nortel's CFO) and Gollogly (Nortel's
Controller) on a "paid leave of absence pending the completion
of the independent review being undertaken by the Company's
Audit Committee." Following this announcement, shares of the
Company's stock fell by $1.19 per share on the NYSE, or 18.5%,
to close at $5.24, in extremely heaving trading, and continued
to slide further in after-hours trading. On March 29, 2004,
Nortel announced that it would delay filing its first quarter
results for 2004 and that it would release "limited preliminary
unaudited" financial results for the first quarter of 2004 on
April 29th and hold a conference call. Furthermore, the Company
announced that the Annual Shareholders' Meeting originally
scheduled for April 29, 2004 would be postponed to a later date.
Then, on April 5, 2004, Nortel announced that the SEC had
initiated a "formal" order of investigation targeting the
Company.
For more details, contact Sherrie R. Savett, Esquire, Phyllis M.
Parker, Esquire or Diane R. Werwinski, Investor Relations
Manager by Mail: Berger & Montague, P.C., 1622 Locust Street,
Philadelphia, PA 19103 by Phone: 888-891-2289 or 215-875-3000 by
Fax: 215-875-5715 by E-mail: InvestorProtect@bm.net or visit the
firm's Website: http://www.bergermontague.com
NORTEL NETWORKS: Marc Henzel Lodges Securities Fraud Suit in NY
---------------------------------------------------------------
The Law Offices of Marc S. Henzel initiated a securities class
action in the United States District Court for the District of
New York on behalf of purchasers of Nortel Networks Corporation
(NYSE: NT) publicly traded securities during the period between
January 7, 2004 and March 15, 2004, inclusive.
The complaint charges Nortel, Frank A. Dunn, Douglas C. Beatty
and Michael J. Gollogly with 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, shortly before the start of the Class Period,
Nortel advised investors that it would be restating its
financial results for 2000, 2001 and 2002 and the first and
second quarters of 2003.
Then, after reporting solid fourth quarter results during the
Class Period that far surpassed analysts' expectations, the
Company shocked investors by announcing that it would be
restating its financial results yet again, this time for the
just-reported fourth quarter of 2003 as well. Subsequently, in a
clear indication of the severity of the Company's problems, the
Company announced that it would be placing defendants Beatty and
Gollogly on paid leave of absence, pending the completion of the
Company's independent review being undertaken by its audit
committee. Following this announcement, shares of Nortel common
stock fell $1.19 per share, or 18.5%, to close at $5.24 per
share on extremely high trading volume.
For more details, contact Marc S. Henzel by Mail: 273 Montgomery
Ave., Suite 202, Bala Cynwyd, PA 19004 by Phone: 610-660-8000 or
888-643-6735 by Fax: 610-660-8080 or by E-Mail:
mhenzel182@aol.com
NOVASTAR FINANCIAL: Johnson & Perkinson Lodges Stock Suit in MO
---------------------------------------------------------------
The law firm of Johnson & Perkinson initiated a securities class
action on behalf of purchasers NovaStar Financial, Inc.'s,
(NYSE: NFI) common stock during the period of October 28, 2003
through April 12, 2004, inclusive, seeking to pursue remedies
under the Securities Exchange Act of 1934. The suit is pending
in the United States District Court for the Western District of
Missouri.
After the close of trading on Monday, April 19, 2004, NovaStar
announced that it is the subject of an informal inquiry by the
Securities and Exchange Commission into certain business
practices. NovaStar stock fell $7.21 on Tuesday, April 20, 2004,
to close at $31.80.
For more details, contact Peter J. McDougall, Esq., at Johnson &
Perkinson, by Mail: 1690 Williston Road, P.O. Box 2305, South
Burlington, VT 05403 by Phone: 1-877-266-2133 by E-mail:
email@jpclasslaw.com or visit the firm's Website:
http://www.jpclasslaw.com.
NOVASTAR FINANCIAL: Weiss & Yourman Lodges Securities Suit in MO
----------------------------------------------------------------
Weiss & Yourman initiated a securities class action against
NovaStar Financial, Inc. (NYSE:NFI) and its officers in the
United States District Court, Western District of Missouri, on
behalf of purchasers of NovaStar securities between October 29,
2003 and April 20, 2004.
The complaint charges the defendants with violations of the
Securities Exchange Act of 1934, alleging that defendants issued
false and misleading statements during the October 29, 2003 to
April 20, 2004 Class Period.
For more details, contact Mark D. Smilow, Jack I. Zwick, or
James E. Tullman by Mail: Weiss & Yourman, The French Building,
551 Fifth Avenue, Suite 1600, New York, New York 10176 by
Phone: (888) 593-4771 or (212) 682-3025
ODYSSEY HEALTHCARE: Schiffrin & Barroway Files Stock Suit in TX
---------------------------------------------------------------
Schiffrin & Barroway, LLP initiated a securities class action in
the United States District Court for the Northern District of
Texas on behalf of all purchasers of the securities of Odyssey
Healthcare, Inc. (Nasdaq: ODSY) between May 5, 2003 and February
23, 2004, inclusive.
The complaint charges that Odyssey, Richard R. Burnham, David C.
Gasmire, and Douglas B. Cannon violated sections 10(b) and 20(a)
of the Exchange Act, and Rule 10b-5 promulgated thereunder, by
issuing a series of material misrepresentations to the market
between May 5, 2003 and February 23, 2004.
More specifically, the complaint alleges that defendants'
statements during the Class Period failed to disclose and
misrepresented the following material adverse facts which were
then known to defendants or recklessly disregarded by them:
(1) that the Company's financial results were materially
inflated because at least six of its Hospice programs
exceeded the amounts they were entitled to receive in
Medicare reimbursements;
(2) that the Company admitted patients to its Hospice
programs who were not eligible for Medicare yet claimed
that such patients were;
(3) the Company's financial results were a result of
providing a level of care and services below the
standards set forth under government guidelines because
the Company's caseloads were heavier than industry
norms;
(4) that the Company could not keep up with its heady
growth due to higher labor costs - especially in
California, which represented 13 percent to 15 percent
of Odyssey's revenues;
(5) that higher drug costs were hurting the Company's
margins; and
(6) that Odyssey was suffering from negative cash-flows.
On February 23, 2004, Odyssey announced that its first-quarter
profits would be below analysts' estimates. According to the
Company, it expected its 2004 earnings per share results to
reflect a 23 to 25 percent increase over 2003, or $1.03 to $1.05
for the year. For the first quarter of 2004, Odyssey expected
earnings per share of $0.20 to $0.22, (analysts' expected the
Company to earn earnings per share of $0.25) compared to $0.19
for the first quarter of 2003. News of this shocked the market
with shares of Odyssey falling $7.11 per share, or 26 percent,
to close at $20.32 per share on February 24, 2004.
In its April 12, 2004 edition, Barron's published an article
highlighting the Company's operational issues. Therein, Barron's
articulated that there are signs that the Company can't keep up
with its heady growth. "Higher labor costs -- especially in
California, which represents 13%-15% of its revenues -- as well
as higher drug costs hurt Odyssey's margins in last year's
fourth quarter. In reporting those results on Feb. 23, the
company forecast lower- than-expected earnings for this year.
Another red flag: Odyssey disclosed that, in its most recent
quarter, six of its programs exceeded the amounts they were
entitled to receive in Medicare reimbursements, raising
questions about whether patients admitted to its programs are
truly eligible." Additionally, the article pointed out: "There
are also suggestions that some of Odyssey's strong growth is the
result of providing a level of care and services below the
standards set forth under government guidelines, including
providing adequate bereavement services for patients' families."
For more details, contact Marc A. Topaz, Esq. or Stuart L.
Berman, Esq. 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
PMA CAPITAL: Marc Henzel Launches Securities Lawsuit in E.D. PA
---------------------------------------------------------------
The Law Offices of Marc S. Henzel initiated a securities class
action in the United States District Court for the Eastern
District of Pennsylvania on behalf of all persons who purchased
the securities of PMA Capital Corporation (NasdaqNM: PMACA)
(AMEX: PMK) between November 13, 1998 and November 3, 2003
seeking remedies under the Securities Exchange Act of 1934
(NasdaqNM: PMACA) and on behalf of all persons who purchased
securities of PMA issued in public offerings dated October 16,
2002, 4.25% Convertible Senior Debentures Due 2022 (the ``4.25%
Debentures'') and June 5, 2003, 8.5% Monthly Income Senior Notes
due 2018 (the ``8.5% Notes'') (AMEX:PMK)( collectively: the
``Offerings'') seeking remedies under Sections 11, 12 (a), 20
and 15 of the Securities Act of 1933.
On November 4, 2003, before the market opened, PMA disclosed in
a press release and a concurrent SEC filing on Form 8-K, that it
would record a pre-tax charge of $150 million primarily to
compensate for PMA Re's inadequate loss reserves. Defendants
stated that an internal review of the Company's reserves
revealed that the material charge ``relates to higher than
expected underwriting losses in PMA Re's reinsurance operations,
primarily from casualty business written in accident years 1997
to 2000.''
As a result of this charge, the Company suspended its common
stock dividend, and has engaged Banc of America Securities LLC
to explore ``strategic alternatives.'' On the same day, PMA
announced that it was in discussions with the Pennsylvania
Insurance Department over the Company's insurance operations.
Immediately following this announcement, the price of PMA common
stock plummeted $8.11, or 61.7 percent, from its previous day's
trading, to close at $5.03 per share. On November 6, 2003, PMA
revealed that the write down will effectively force the Company
to withdraw from the reinsurance business, and that defendant
John W. Smithson had resigned as President and Chief Executive
Officer of PMA.
For more details, contact Marc S. Henzel by Mail: 273 Montgomery
Ave., Suite 202, Bala Cynwyd, PA 19004 by Phone: 610-660-8000 or
888-643-6735 by Fax: 610-660-8080 or by E-Mail:
mhenzel182@aol.com
SPEAR & JACKSON: Lodges Securities Fraud Lawsuit in S.D. Florida
----------------------------------------------------------------
Spear & Jackson initiated a securities class action in the
United States District Court for the Southern District of
Florida on behalf of purchasers of Spear & Jackson, Inc.
(OTC:SJCK.OB) publicly traded securities during the period
between July 14, 2003 and April 15, 2004.
The complaint charges SJCK and certain of its officers and
directors with violations of the Securities Exchange Act of
1934. SJCK manufactures and distributes tools, garden tools,
metrology equipment, woodworking tools and magnetic equipment.
The complaint alleges that during the Class Period defendants
disseminated materially false and misleading information to the
investing public that artificially inflated SJCK's share price.
According to the complaint, the true facts which were known by
each of the defendants, but concealed from the investing public
during the Class Period, were as follows:
(1) that defendants orchestrated a "pump-and-dump" scheme
to manipulate the share price of SJCK stock by issuing
false information to tout SJCK stock to registered
representatives and broker-dealers around the country;
(2) that defendants used nominee companies based in the
British Virgin Islands illegally to obtain over 1.2
million shares of SJCK stock during 2002, some of which
was obtained through the filing of a fraudulent Form S-
8 registration statement;
(3) that the Company's repurchase of shares was not in
compliance with applicable rules;
(4) that the Company never had any intention of making open
market purchases as suggested in its January 16, 2004
release; and
(5) that the Company was not on track to achieve earnings
of $0.50 to $0.55 per share for 2004.
As a result of the defendants' false statements, SJCK's stock
price traded at inflated levels during the Class Period,
increasing to as high as $9.55 on July 15, 2003, whereby the
Company's top officers and directors sold more than $3 million
worth of their own shares. On April 16, 2004, it was announced
that U.S. securities regulators had sued SJCK Chief Executive
Dennis Crowley, alleging he used false information to boost the
Company's stock price while secretly selling $3 million in
shares. SJCK shares fell $0.52 to $1.85 on this news.
For more details, contact Marc S. Henzel by Mail: 273 Montgomery
Ave., Suite 202, Bala Cynwyd, PA 19004 by Phone: 610-660-8000 or
888-643-6735 by Fax: 610-660-8080 or by E-Mail:
mhenzel182@aol.com
SPEAR & JACKSON: Brodsky & Smith Commences Securities Suit in FL
----------------------------------------------------------------
The Law offices of Brodsky & Smith, LLC initiated a securities
class action on behalf of shareholders who purchased the common
stock and other securities of Spear & Jackson, Inc.
(OTCBB:SJCK), between July 14, 2003 and April 15, 2004,
inclusive. The class action lawsuit was filed in the United
States District Court for the Southern District of Florida.
The Complaint alleges that defendants violated federal
securities laws by issuing a series of material
misrepresentations to the market during the Class Period,
thereby artificially inflating the price of Spear & Jackson
securities.
For more details, contact Marc L. Ackerman, Esquire or Evan J.
Smith, Esquire by Mail: Brodsky & Smith, LLC, Two Bala Plaza,
Suite 602, Bala Cynwyd, PA 19004, by Phone: 877-LEGAL-90 or by
E-mail: clients@brodsky-smith.com.
WATSON PHARMACEUTICALS: Marc Henzel Lodges Stock Suit in C.D. CA
----------------------------------------------------------------
The Law Offices of Marc S. Henzel initiated a securities class
action in the United States District Court for the Central
District of California on behalf of purchasers of Watson
Pharmaceuticals, Inc. (NYSE: WPI) common stock during the period
between November 2, 1999 and November 13, 2001, inclusive.
The complaint alleges that Watson and certain of its officers
and directors violated U.S. securities laws (Sections 10(b) and
20(a) of the Securities and Exchange Act of 1934, and Rule 10b-5
promulgated thereunder), by issuing materially false and
misleading statements. These alleged false statements include:
(1) that Watson was materially overstating its financial
results by failing to write down the value of its
inventories and the value of certain of the Company's
assets;
(2) that Watson was experiencing significantly increased
competition for generic drugs and was also experiencing
manufacturing difficulties; and
(3) that defendants' positive statements about the Company
were lacking in a reasonable basis at all times and
were therefore materially false and misleading.
Defendants used millions of shares of Watson common stock to
acquire other businesses before these facts were disclosed to
the investing public.
On November 13, 2001, Watson disclosed its financial results for
the third quarter 2001 which were well below expectations.
Additionally, the Company announced that it was writing off
almost all of its investment in Dilacor XR and that the Company
was writing off over $20 million in additional impaired
inventory. In response the price of Watson common stock
plummeted, trading down almost $20 per share, to close trading
at $28.54 per share, compared to the prior day's close of $47.15
per share, on volume of over 15.3 million shares traded --
almost 20 times the average trading volume for Watson shares.
For more details, contact Marc S. Henzel by Mail: 273 Montgomery
Ave., Suite 202, Bala Cynwyd, PA 19004 by Phone: 610-660-8000 or
888-643-6735 by Fax: 610-660-8080 or by E-Mail:
mhenzel182@aol.com
*********
A list of Meetings, Conferences and Seminars appears in each
Wednesday's edition of the Class Action Reporter. Submissions
via e-mail to carconf@beard.com are encouraged.
Each Friday's edition of the CAR includes a section featuring
news on asbestos-related litigation and profiles of target
asbestos defendants that, according to independent researches,
collectively face billions of dollars in asbestos-related
liabilities.
*********
S U B S C R I P T I O N I N F O R M A T I O N
Class Action Reporter is a daily newsletter, co-published by
Bankruptcy Creditors' Service, Inc., Fairless Hills,
Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland
USA. Roberto Amor, Aurora Fatima Antonio and Lyndsey Resnick,
Editors.
Copyright 2004. All rights reserved. ISSN 1525-2272.
This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding, electronic
re-mailing and photocopying) is strictly prohibited without
prior written permission of the publishers.
Information contained herein is obtained from sources believed
to be reliable, but is not guaranteed.
The CAR subscription rate is $575 for six months delivered via
e-mail. Additional e-mail subscriptions for members of the same
firm for the term of the initial subscription or balance thereof
are $25 each. For subscription information, contact Christopher
Beard at 240/629-3300.
* * * End of Transmission * * *