/raid1/www/Hosts/bankrupt/CAR

/raid1/www/Hosts/bankrupt/CAR_Public/040528.mbx C L A S S A C T I O N R E P O R T E R Friday, May 28, 2004, Vol. 6, No. 105 Headlines ALAMOSA DELAWARE: Plaintiffs File Consolidated Securities Suit CENTRAL GARDEN: AZ Court Approves Settlement of 2000 Fire Suit CHEMED CORPORATION: OH Appeals Court Revokes Class Certification GAYLORD CHEMICAL: Final Hearing For LA Injury Suit Set Aug. 2004 HANOVER DIRECT: Seeks Oral Argument on OK Lawsuit Certification HANOVER DIRECT: Appeals CA Ruling on Two Issues in Consumer Suit HANOVER DIRECT: Files Summary Judgment Motion in Consumer Suit IDS LIFE: Dropped as Defendant in American Express Consumer Suit JAVITS CENTER: NY Court Grants Certification To Race Bias Suit OIL COMPANIES: Florida AG Subpoenas Info Over Gasoline Pricing PORTLAND GENERAL: Partial Summary Judgment Sought in OR Lawsuit RAYOVAC CORPORATION: WI Court Grants Approval To Suit Settlement REMEDYTEMP INC.: CA Court Grants Approval To Lawsuit Settlement RUBIO'S RESTAURANTS: Plaintiffs Lodge Amended CA Overtime Suit SEARS ROEBUCK: IL Securities Suit Trial Set For April 4, 2005 SEARS ROEBUCK: Discovery Proceeds in ERISA Violations Suit in IL SEARS ROEBUCK: Plaintiffs Appeal Stay of IL Derivative Lawsuit SEARS ROEBUCK: Asks IL Court To Dismiss Securities Fraud Lawsuit TELLABS INC.: Plaintiffs Appeal Dismissal of IL Securities Suit TEXAS: AG Launches Medicaid Fraud Whistleblower Suit V. 3 Firms TROPICAL SPORTSWEAR: Plaintiffs File Consolidated Lawsuit in FL Asbestos Alert ASBESTOS LITIGATION: ABI And Congoleum Still Fighting Lawsuits ASBESTOS LITIGATION: Bucyrus Plaintiff Numbers Increase To 1,478 ASBESTOS LITIGATION: Cleco Corp. Workers' Asbestos Cases Ongoing ASBESTOS LITIGATION: Citigroup Pays TPC Excess Asbestos Charges ASBESTOS LITIGATION: ISP Subsidiary Tackling Asbestos Bankruptcy ASBESTOS LITIGATION: Magnetek Inc. Seeking Dismissal From Suits ASBESTOS LITIGATION: Millennium Chemicals Exposure Cases Remain ASBESTOS LITIGATION: Oglebay Norton Makes Agreement With Insurer ASBESTOS LITIGATION: Reunion Subsidiary ORC Named in Lawsuits ASBESTOS LITIGATION: Rogers Corp. Asbestos Lawsuits Carrying On ASBESTOS LITIGATION: Royal & Sun Forges Compensation Agreement ASBESTOS LITIGATION: TriMas Corp. Pending Cases Increase to 890 ASBESTOS ALERT: Celanese, CNA Holdings Defend Against 620 Cases ASBESTOS ALERT: EMC Insurance Group Reveals IBNR For Asbestos ASBESTOS ALERT: Empire State Asbestos Lawsuit Stalled In Court ASBESTOS ALERT: PepsiAmericas Obligated In Pneumo Abex Claims ASBESTOS ALERT: Rhodia Receives Claims Due To Asbestos in Plants ASBESTOS ALERT: Universal Auto Not To Pay Kelsey-Hayes Claims New Securities Fraud Cases ALLOS THERAPEUTICS: Dyer & Shuman Lodges Securities Suit in CO ALLOS THERAPEUTICS: Wolf Haldenstein Files Securities Suit in CO ALLOS THERAPEUTICS: Lerach Coughlin Lodges Securities Suit in CO BALLY TOTAL: Lerach Coughlin Lodges Securities Suit in N.D. IL BALLY TOTAL: Geller Rudman Lodges Securities Lawsuit in N.D. IL BALLY TOTAL: Schiffrin & Barroway Files N.D. IL Securities Suit DAIMLERCHRYSLER AG: Milberg Weiss Files Securities Lawsuit in DE DAIMLERCHRYSLER AG: Seeger Weiss Lodges Securities Lawsuit in DE GENTA INC.: Bull Lifshitz Lodges Securities Fraud Lawsuit in NJ GENTA INC.: Wechsler Harwood Lodges Securities Fraud Suit in NJ GENTA INC.: Spector Roseman Lodges Securities Fraud Suit in NJ KRISPY KREME: Spector Roseman Lodges Securities Suit in M.D. NC LANCER CORPORATION: Brodsky & Smith Lodges Stock Suit in W.D. TX LEXAR MEDIA: Charles Piven Lodges Securities Lawsuit in N.D. CA MERRILL LYNCH: Charles Piven Files Securities Lawsuit In S.D. NY ODYSSEY HEALTHCARE: Wolf Haldenstein Lodges TX Securities Suit SALTON INC.: Spector Roseman Lodges Securities Suit in N.D. IL SALTON INC.: Milberg Weiss Lodges Securities Lawsuit in N.D. IL VASO ACTIVE: Bernstein Liebhard Lodges Securities Lawsuit in MA ********** ALAMOSA DELAWARE: Plaintiffs File Consolidated Securities Suit -------------------------------------------------------------- Plaintiffs filed a consolidated securities class action against Alamosa Holdings, Inc. in the United States District Court for the Northern District of Texas, Lubbock Division. The suit also names as defendants: (1) David E. Sharbutt, Chairman and Chief Executive Officer, (2) Kendall W. Cowan, Chief Financial Officer, (3) Steven Richardson, Chief Operating Officer The suit was filed on behalf of a putative class of persons who and/or entities that purchased Company securities between January 9, 2001 and June 13, 2002, inclusive, and seeks recovery of compensatory damages, fees and costs. The suit alleges violations of Sections 10(b) and 20(a) of the Exchange Act, and Rule 10b-5 promulgated thereunder. The suit also alleges violations of Sections 11, 12(a) and 15 of the Securities Act and seeks rescission or rescissory damages in connection with the Company's November 2001 common stock offering. The suit alleges, among other things, that Alamosa Holdings' filings with the SEC and press releases issued during the relevant period were false and misleading because they failed to disclose and/or misrepresented that the Company allegedly: (i) was increasing its subscriber base by relaxing credit standards for new customers, (ii) had been experiencing high involuntary disconnections from high credit risk customers that allegedly produced tens of millions of dollars of impaired receivables on its financial statements, and (iii) had experienced lower subscription growth due to tightened credit standards that required credit- challenged customers to pay deposits upon the initiation of services. In March 2004, the Court appointed the Massachusetts State Guaranteed Annuity Fund to serve as lead plaintiff and approved its selection of lead counsel for the consolidated action. No discovery has been taken at this time, and the ultimate outcome is not currently predictable. CENTRAL GARDEN: AZ Court Approves Settlement of 2000 Fire Suit -------------------------------------------------------------- The Superior Court of Arizona, Maricopa County approved the settlement for the class action filed against Central Garden & Pet Company, alleging bodily injury and property damage as a result of an August 2, 2000 fire that destroyed the Company's leased warehouse space in Phoenix, Arizona, and an adjoining warehouse space leased by a third party. This lawsuit has now been settled as to all parties, and has received Court approval. As part of the settlement, the Company's liability insurers will pay $7,825,000 on behalf of Central in May 2004. CHEMED CORPORATION: OH Appeals Court Revokes Class Certification ---------------------------------------------------------------- The Eighth District Ohio Court of Appeals has decertified the class action filed against Chemed Corporation by Michael Linn on behalf of a nationwide group of consumers who paid a miscellaneous parts charge to Roto-Rooter Services Company from October 1999 to July 2002. The case was originally certified by the Cuyahoga County Court of Common Pleas in February 2003. The Court of Appeals reversed the trial court's certification, holding common questions of fact did not predominate. The case has thus been reversed and remanded to the trial court for proceeding on Mr. Linn's individual claim. GAYLORD CHEMICAL: Final Hearing For LA Injury Suit Set Aug. 2004 ---------------------------------------------------------------- The Washington Parish, Louisiana State Court will hold a final fairness hearing for the settlement of a personal injury class action against Gaylord Chemical Corporation on August 6, 2004. On October 23, 1995, a rail tank car of nitrogen tetroxide exploded at the Bogalusa, Louisiana plant of Gaylord Chemical Corporation, a wholly owned, independently-operated subsidiary of Gaylord. Following the explosion, more than 160 lawsuits were filed against the Company, Gaylord Corporation, and third parties alleging personal injury, property damage, economic loss, related injuries and fear of injuries. Plaintiffs sought compensatory and punitive damages, an earlier Class Action Reporter story (February 26,2004) reports. In 1997, the Washington Parish, Louisiana, trial court certified these consolidated cases as a class action. By the deadline to file proof of claim forms, 16,592 persons had filed and 3,978 persons had opted out of the Louisiana class proceeding. All but 12 of the-opt out claimants were also plaintiffs in a class action filed against Gaylord Corporation, the Company, and other third-parties filed in Hinds County, Mississippi State Court. The suit alleged claims and damages similar to those in Louisiana state court. In 1999, 20 of the approximately 4,000 Mississippi cases went to trial in Hinds County, Mississippi. After a three-month trial, Gaylord Chemical was held to be 50 percent at fault for the incident, and none of the 20 plaintiffs was awarded any damages. At trial in the Louisiana class action held during the second half of 2003, 18 randomly selected plaintiffs presented evidence of their claims. The jury found Gaylord Chemical was 35 percent responsible for the accident and that other co-defendants shared 65 percent of the fault. Seven of the 18 plaintiffs were found to have suffered no damages. The remaining 11 plaintiffs were awarded a total of $22,832 in compensatory damages. The jury also determined that the Company's parent was not responsible for its conduct. On December 9, 2003, Gaylord and Gaylord Chemical agreed in principle to settle all claims, including claims for compensatory and punitive damages, arising from this accident. In exchange for payments by certain insurance carriers and assignment of the Company's insurance coverage rights against the non-settling carriers, Gaylord and Gaylord Chemical received full releases and/or dismissals of all claims for damages, including punitive damages. Neither Gaylord nor Gaylord Chemical contributed to the settlement. HANOVER DIRECT: Seeks Oral Argument on OK Lawsuit Certification --------------------------------------------------------------- Plaintiffs asked the State Court of Oklahoma, District Court in and for Sequoyah County to conduct oral arguments relating to the certification for a class action filed against Hanover Direct, Inc., styled "Edwin L. Martin v. Hanover Direct, Inc. and John Does 1 through 10, bearing case no. CJ2000-177." Plaintiff commenced the action on behalf of himself and a class of persons who have at any time purchased a product from the Company and paid for an "insurance charge." The complaint sets forth claims for: (1) breach of contract, (2) unjust enrichment, (3) recovery of money paid absent consideration, (4) fraud and (5) a claim under the New Jersey Consumer Fraud Act The complaint alleges that the Company charges its customers for delivery insurance even though, among other things, the Company's common carriers already provide insurance and the insurance charge provides no benefit to the Company's customers. Plaintiff also seeks a declaratory judgment as to the validity of the delivery insurance. The damages sought are: (i) an order directing the Company to return to the plaintiff and class members the "unlawful revenue" derived from the insurance charges, (ii) declaring the rights of the parties, (iii) permanently enjoining the Company from imposing the insurance charge, (iv) awarding threefold damages of less than $75,000 per plaintiff and per class member, and (v) attorneys' fees and costs On April 12, 2001, the Court held a hearing on plaintiff's class certification motion. Subsequent to the April 12, 2001 hearing on plaintiff's class certification motion, plaintiff filed a motion to amend the definition of the class. On July 23, 2001, plaintiff's class certification motion was granted, defining the class as "All persons in the United States who are customers of any catalog or catalog company owned by Hanover Direct, Inc. and who have at any time purchased a product from such company and paid money that was designated to be an insurance charge." On August 21, 2001, the Company filed an appeal of the order with the Oklahoma Supreme Court and subsequently moved to stay proceedings in the district court pending resolution of the appeal. The appeal has been fully briefed. At a subsequent status hearing, the parties agreed that issues pertaining to notice to the class would be stayed pending resolution of the appeal, that certain other issues would be subject to limited discovery, and that the issue of a stay for any remaining issues would be resolved if and when such issues arise. On January 20, 2004, the plaintiff filed a motion for oral argument with the Court. HANOVER DIRECT: Appeals CA Ruling on Two Issues in Consumer Suit ---------------------------------------------------------------- Hanover Direct, Inc. appealed the Superior Court of the State of California, City and County of San Francisco's decision on two issues in the class action filed against its subsidiary Brawn of California, Inc. dba International Male and Undergera, and Does 1-100. The suit was commenced on February 13, 2002 entitled "Jacq Wilson, suing on behalf of himself, all others similarly situated, and the general public v. Brawn of California, Inc. dba International Male and Undergear, and Does 1-100." Does 1-100 are Internet and catalog direct marketers offering a selection of men's clothing, sundries, and shoes who advertise within California and nationwide. The complaint alleges that: (1) for at least four years, members of the class have been charged an unlawful, unfair, and fraudulent insurance fee and tax on orders sent to them by Brawn; (2) Brawn was engaged in untrue, deceptive and misleading advertising in that it was not lawfully required or permitted to collect insurance, tax and sales tax from customers in California; and (3) Brawn has engaged in acts of unfair competition under the state's Business and Professions Code Plaintiff and the class seek: (i) restitution and disgorgement of all monies wrongfully collected and earned by Brawn, including interest and other gains made on account of these practices, including reimbursement in the amount of the insurance, tax and sales tax collected unlawfully, together with interest, (ii) an order enjoining Brawn from charging customers insurance and tax on its order forms and/or from charging tax on the delivery, shipping and insurance charges, (iii) an order directing Brawn to notify the California State Board of Equalization of the failure to pay the correct amount of tax to the state and to take appropriate steps to provide the state with the information needed for audit, and (iv) compensatory damages, attorney's fees, pre-judgment interest, and costs of the suit The claims of the individually named plaintiff and for each member of the class amount to less than $75,000. On April 15, 2002, the Company filed a Motion to Stay the Wilson action in favor of the previously filed Martin action. On May 14, 2002, the Court denied the Motion to Stay. The Wilson case proceeded to trial before the Honorable Diane Elan Wick of the Superior Court of California for the County of San Francisco, and the Judge, sitting without a jury, heard evidence from April 15-17, 2003. On November 25, 2003, the Court, after hearing evidence and considering post-trial submissions from the parties, entered judgment in plaintiff's favor, requiring Brawn to refund insurance fees collected from consumers for the period from February 13, 1998 through January 15, 2003 with interest from the date paid by June 30, 2004. Plaintiff did not prevail on the tax issues. On January 12, 2004, plaintiff filed a motion requesting approximately $740,000 in attorneys' fees and costs. On February 27, 2004, the Company filed its response to that motion. Plaintiff filed a reply brief on March 13, 2004. A hearing was held on plaintiff's motion on March 18, 2004. The judge ruled on that motion on April 14, 2004, awarding plaintiff's counsel approximately $445,000. The Company has appealed the trial court's decision on the merits of the insurance fees issue as well as the decision on the attorneys' fees issue. The two appeals will likely be consolidated with briefing expected to begin in late May 2004. The Company will be required to post a bond in the amount of approximately $750,000 while the appeal of the attorneys' fees award is proceeding but its counsel does not believe the Company will be required to do so while the appeal on the insurance fees decision is proceeding. HANOVER DIRECT: Files Summary Judgment Motion in Consumer Suit -------------------------------------------------------------- Hanover Direct, Inc. filed a motion for summary judgment for the amended class action filed against it in the Superior Court of New Jersey, Bergen County, Law Division, styled "John Morris, individually and on behalf of all other persons & entities similarly situated v. Hanover Direct, Inc., and Hanover Brands, Inc., No. L 8830-02." The plaintiff brings the action individually and on behalf of a class of all persons and entities in New Jersey who purchased merchandise from Hanover within six years prior to filing of the lawsuit and continuing to the date of judgment. On the basis of a purchase made by plaintiff in August 2002 of certain clothing from Hanover (which was from a men's division catalog, the only ones which retained the insurance line item in 2002), Plaintiff claims that for at least six years, Hanover maintained a policy and practice of adding a charge for "insurance" to the orders it received and concealed and failed to disclose its policy with respect to all class members. Plaintiff claims that Hanover's conduct was: (1) in violation of the New Jersey Consumer Fraud Act, as otherwise deceptive, misleading and unconscionable; (2) such as to constitute Unjust Enrichment of Hanover at the expense and to the detriment of plaintiff and the class; and (3) unconscionable per se under the Uniform Commercial Code for contracts related to the sale of goods. Plaintiff and the class seek damages equal to the amount of all insurance charges, interest thereon, treble and punitive damages, injunctive relief, costs and reasonable attorneys' fees, and such other relief as may be just, necessary, and appropriate. On December 13, 2002, the Company filed a Motion to Stay the Morris action in favor of the previously filed Martin action. Plaintiff then filed an Amended Complaint adding International Male as a defendant. Hearing on the Motion to Stay took place on June 5, 2003. The Court granted the Company's Motion to Stay the action and the case was stayed first until December 31, 2003 and subsequently until March 31, 2004. The stay was lifted on March 31, 2004. On April 30, 2004, the Company responded to plaintiff's Amended Complaint by filing a Motion for Summary Judgment that is currently scheduled before the Court on June 11, 2004. IDS LIFE: Dropped as Defendant in American Express Consumer Suit ---------------------------------------------------------------- IDS Life Insurance Company removed as a defendant in the amended class action filed in the United States District Court for the District of Arizona, styled "John Haritos, et al. v. American Express Financial Advisors, Inc. et al., No. 02 2255." The complaint originally named the Company as a defendant, but the Company was dismissed when plaintiffs chose to file an Amended Complaint. This action alleges that defendants violated the Investment Advisors Act of 1940, 15 U.S.C., in the sale of financial plans and various products including those of the Company. The complaint seeks certification of a nationwide class, restitution, injunctive relief, and punitive damages. Defendants have moved to dismiss the action and that motion is pending. JAVITS CENTER: NY Court Grants Certification To Race Bias Suit -------------------------------------------------------------- The United States District Court for the Southern District of New York certified as a class action the race discrimination suit filed against the Jacob K. Javits Convention Center. The suit includes all minority employees who worked at the Javits Center from July 1, 1992 to the present. The case is captioned David Cokely, et al., v. The New York Convention Center Operating Corporation d/b/a Jacob K. Javits Convention Center of New York, et al., E.D.N.Y., No. 00 Civ. 4637 (CBM). In the lawsuit, plaintiffs allege that a work environment in which pervasive racism not only cripples earning potential, partly through dishonest manipulation of a supposedly random system of work assignment, and jeopardizes the jobs of those who are subjected to retaliation and/or discriminatory discipline, but also infects the work environment, manifesting itself in the form of vicious verbal slurs, physical attacks, and death threats. Were those allegations to prove true, reform would be urgent, and long overdue for those who allege that they have suffered ongoing retaliation in response to their complaints. The plaintiffs' complaint also alleges that the Caucasian males who operate the Javits Center have discriminated against Black and Hispanic carpenters, freight handlers and part-time housekeepers by: (1) manipulating the job allocation and promotion system to give Caucasian male employees preferences with respect to the type and amount of work assigned, and greater opportunities to obtain higher paying jobs at the Javits Center; (2) denying these Black and Hispanic employees various privileges of employment and singling them out for reprimand because of their race; and (3) subjecting these Black and Hispanic employees to retaliation for complaining to management about this discrimination. In addition, the action includes three individual Caucasian plaintiffs who claim that they have been retaliated against for complaining about pervasive and overt racism at the Javits Center. Plaintiffs allege that the Javits Center's employment policies and practices violate various federal and state civil rights laws, and seek both injunctive and monetary relief. In support of their motion for class certification, plaintiffs provided the court with affidavits of several Javits Center employees describing the discrimination and retaliation they have endured and observed at the Javits Center. The plaintiffs also provided other materials supporting class certification, including union grievance forms alleging discrimination, prior complaints to the New York State Division of Human Rights, complaints filed with the U.S. Equal Employment Opportunity Commission, and statistical evidence demonstrating that the plaintiffs and class members received fewer work calls and earned less than their Caucasian counterparts. For more details, visit the Web Sites of plaintiff law firms Milberg Weiss Bershad & Schulman LLP and Leeds Morelli & Brown, P.C.: http://www.milberg.comor http://www.lmblaw.com OIL COMPANIES: Florida AG Subpoenas Info Over Gasoline Pricing -------------------------------------------------------------- Florida Attorney General Charlie Crist subpoenaed eight major oil companies for information and documentation pertaining to the cost, production, inventory and pricing of gasoline. These subpoenas are the beginning of a formal investigation into the rising cost of gasoline in Florida. "We must make sure that these companies are not unfairly taking advantage of Floridians at the pump. The price of filling up has become ridiculous," said AG Crist. "We will do whatever is necessary to find out if the companies violating the law while they reap huge profits year after year." The subpoenas request information and records pertaining to the cost of acquisition, production, inventory, and the wholesale and retail pricing of gasoline. The companies have until June 30 to respond to the subpoenas. This is the latest development in AG Crist's inquiry into the rising cost of gasoline. In March, he met with representatives of seven major oil companies to discuss the problem. Shortly thereafter, AG Crist urged the Legislature to repeal a 1985 anti-competitive gas law and unveiled an internet tool on the agency web site, both in hopes of increasing gas-price competition in Florida. A sample of the subpoenas can be found at http://myfloridalegal.com/GasSubpoena.pdf The companies issued subpoenas are: (1) BP Products North America, Inc., c/o The Prentice-Hall Corporation System, Inc., Hays Street, Suite 105, Tallahassee, FL 32301 (2) Chevron-Texaco Corporation, c/o The Prentice-Hall Corporation System, Inc., 1201 Hays Street, Suite 105, Tallahassee, FL 32301 (3) Citgo Petroleum Corporation, c/o CT Corporation System 1200 S. Pine Island Road, Plantation, FL 33324 (4) Conoco-Phillips Company, c/o United States Corporation Company, 1201 Hays Street, Suite 105, Tallahassee, FL 32301 (5) Exxon-Mobil Corporation, c/o Corporation Service Company, 1201 Hays Street, Suite 105, Tallahassee, FL 32301 (6) Marathon Ashland Petroleum, LLC, c/o CT Corporation System, 1200 S. Pine Island Road, Plantation, FL 33324 (7) Motiva Enterprises, LLC (Shell), c/o CT Corporation System, 1200 S. Pine Island Road, Plantation, FL 33324 (8) Amerada Hess Corporation, c/o CT Corporation System 1200 S. Pine Island Road, Plantation, FL 33324 PORTLAND GENERAL: Partial Summary Judgment Sought in OR Lawsuit --------------------------------------------------------------- Plaintiffs filed a motion for partial summary judgment in two class actions filed in Marion County Circuit Court in Oregon against Portland General Electric Co. (PGE) on behalf of two classes of electric service customers. One case seeks to represent current PGE customers that were customers during the period from April 1, 1995 to October1, 2001 (Current Class) and the other case seeks to represent PGE customers that were customers during the period from April 1, 1995 to October 1, 2001, but who are no longer customers (Former Class). The suits seek damages of $190 million for the Current Class and $70 million for the Former Class, from the inclusion of a return on investment of Trojan in the rates PGE charges its customers. RAYOVAC CORPORATION: WI Court Grants Approval To Suit Settlement ---------------------------------------------------------------- The United States District Court for the Western District of Wisconsin granted preliminary approval for the settlement of the class action filed against Rayovac Corporation and several of its current and former officers and directors, styled "Eli Friedman v. Rayovac Corporation, Thomas H. Lee Partners, LP, Kenneth V. Biller, Kent J. Hussey, David A. Jones, Scott A. Schoen, Stephen P. Shanesy, Thomas R. Shepherd, Randall J. Steward, Warren C. Smith, Jr., and Merrell Tomlin, Case No. 02 C 0308 C." The parties have agreed to a settlement in which Rayovac will pay plaintiff class $4 million in consideration for dismissal of all claims brought under this suit. The parties filed a Stipulation of Settlement with the Court to this effect in March, 2004 and the Court granted its preliminary approval of this Stipulation in April, 2004. The settlement is subject to final approval of the Court. REMEDYTEMP INC.: CA Court Grants Approval To Lawsuit Settlement --------------------------------------------------------------- The Superior Court of the State of California, County of Los Angeles granted preliminary approval to the settlement of the class action filed against RemedyTemp, Inc. by GLF Holding Company, Inc. and Fredrick S. Pallas. The suit also names as defendants: (1) Remedy Intelligent Staffing, Inc., (2) Remedy Temporary Services, Inc., (3) Karin Somogyi, (4) Paul W. Mikos, and (5) Greg Palmer The Complaint purports to be a class action brought by the individual plaintiffs on behalf of all of the Company's franchisees. The Complaint alleges claims for: (i) fraud and deceit, (ii) negligent misrepresentation, (iii) negligence, (iv) breach of contract, (v) breach of warranty, (vi) conversion, (vii) an accounting, (viii) unfair and deceptive practices, (ix) restitution and (x) equitable relief On December 3, 2002, plaintiffs filed an Amended Complaint alleging these same causes of action, but adding additional facts to the Complaint particularly with respect to the Company's workers' compensation program and adding claims regarding unfair competition on behalf of the general public in addition to their existing class action claim. The plaintiffs claim that Remedy wrongfully induced its franchisees into signing franchise agreements and took other action that caused the franchisees damage. The Company believes that plaintiffs' claims fall within the arbitration clause contained in the franchise agreements signed by plaintiffs. As a result, immediately after plaintiffs filed suit, the Company filed arbitration demands against plaintiffs with the American Arbitration Association. On April 1, 2003, the Company amended its arbitration demands to add claims against plaintiffs relating to workers' compensation. The Company denies and continues to deny the allegations in the Complaint. There has been no finding of wrongdoing by the Company. Nevertheless, to avoid costly, disruptive, and time- consuming litigation, and without admitting any wrongdoing or liability, the Company negotiated and agreed to a settlement with plaintiffs and stipulated to the certification of a settlement class comprised of all individuals or entities that entered into a Franchise Agreement (including renewals or amendments thereof) with RemedyTemp., Inc. and/or Remedy Intelligent Staffing, Inc. anytime prior to March 29, 2004, the Company revealed in a disclosure to the Securities and Exchange Commission. On April 6, 2004, the Court preliminarily approved the parties' settlement agreement and conditionally certified the Settlement Class. All discovery and other proceedings in this action are stayed until further order of this Court, except as may be necessary to implement the Settlement Agreement. A hearing on final approval of the settlement is set forth for September 9, 2004. RUBIO'S RESTAURANTS: Plaintiffs Lodge Amended CA Overtime Suit -------------------------------------------------------------- Plaintiffs filed a consolidated securities class action against Rubio's Restaurants, Inc. in the California Superior Court for Orange County. On June 28, 2001, a complaint was filed by a former employee, who worked in the position of general manager. A second similar class action complaint was filed in Orange County, California Superior Court on December 21, 2001, on behalf of another former employee who worked in the positions of general manager and assistant manager. The Company classifies both positions as exempt. The former employees each purport to represent a class of former and current employees who are allegedly similarly situated. These cases currently involve the issue of whether employees and former employees in the general and assistant manager positions who worked in the California restaurants during specified time periods were misclassified as exempt and deprived of overtime pay. In addition to unpaid overtime, these cases seek to recover waiting time penalties, interest, attorneys' fees and other types of relief on behalf of the current and former employees that these former employees purport to represent. The suit is in the early stages of discovery, and the status of the class action certification is yet to be determined. SEARS ROEBUCK: IL Securities Suit Trial Set For April 4, 2005 ------------------------------------------------------------- Trial in the securities class action filed against Sears Roebuck & Co. is set for April 4,2005 in the United States District Court for the Northern District of Illinois. The consolidated suit also names certain of the Company's current and former officers as defendants. The suit alleges that certain public announcements by the Company concerning its domestic credit card business violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. Discovery is underway. SEARS ROEBUCK: Discovery Proceeds in ERISA Violations Suit in IL ---------------------------------------------------------------- Discovery is proceeding in the consolidated class action filed against Sears Roebuck & Co. in the United States District Court for the Northern District of Illinois. The suit also names as defendants certain of the Company's officers and directors, and alleged fiduciaries of Sears 401(k) Savings Plan. The suit seeks damages and equitable relief under the Employee Retirement Income Security Act of 1974 (ERISA). The plaintiffs purport to represent participants in the Plan, and allege breaches of fiduciary duties under ERISA in connection with the Plan's investment in the Company's common shares and alleged communications made to Plan participants regarding the Company's financial condition. SEARS ROEBUCK: Plaintiffs Appeal Stay of IL Derivative Lawsuit -------------------------------------------------------------- Plaintiffs appealed the stay of the shareholder derivative lawsuit filed against Sears Roebuck & Co. (as a nominal defendant) and certain of its current and former directors in the United States District Court for the Northern District of Illinois, seeking damages on behalf of the Company. On October 23, 2002, a purported derivative action was filed in the Supreme Court of the State of New York, purporting to allege a breach of fiduciary duty by the directors with respect to the Company's management of the domestic credit card business. A motion to dismiss has been and remains pending. Two similar actions were subsequently filed in the Circuit Court of Cook County, Illinois, and a third was filed in the United States District Court for the Northern District of Illinois. These actions have been and remain stayed pending disposition of the action in New York. The plaintiffs in the Northern District of Illinois action have appealed the stay order to the United States Court of Appeals for the Seventh Circuit. That appeal has been briefed and argued but has not yet been decided. SEARS ROEBUCK: Asks IL Court To Dismiss Securities Fraud Lawsuit ---------------------------------------------------------------- Sears Roebuck & Co. asked the United States District Court for the Northern District of Illinois to dismiss the class action filed against it and certain officers, purportedly on behalf of a class of all persons who, between June 21, 2002 and October 17, 2002, purchased the 7% notes that Sears Roebuck Acceptance Corporation (sRAC) issued on June 21, 2002. The suit also names as defendants certain of the Company's former officers, SRAC and several investment banking firms who acted as underwriters for SRAC's March 18, May 21 and June 21, 2002 notes offerings. The amended complaint alleges that the defendants made misrepresentations or omissions concerning its domestic credit card business during the class period and in the registration statements and prospectuses relating to the offerings. The amended complaint alleges that these misrepresentations and omissions violated Sections 10(b) and 20(a) of the Securities Exchange Act and Rule 10b-5 promulgated thereunder, and Sections 11, 12 and 15 of the Securities Act of 1933 and purports to be brought on behalf of a class of all persons who purchased any security of SRAC between October 24, 2001 and October 17, 2002, inclusive. TELLABS INC.: Plaintiffs Appeal Dismissal of IL Securities Suit --------------------------------------------------------------- Plaintiffs appealed the dismissal of the consolidated securities class action filed against Tellabs, Inc. in the United States District Court of the Northern District of Illinois. The suit also names as defendant Michael Birck, Richard Notebaert (former CEO, President and Director of the Company) and certain other of the Company's current or former officers and/or directors. The consolidated amended complaint alleged that during the class period (December 11, 2000 to June 19, 2001) the defendants violated the federal securities laws by making materially false and misleading statements, including, among other things, allegedly: (1) providing revenue forecasts that were false and misleading, (2) misrepresenting demand for the Company's products, and (3) reporting overstated revenues for the fourth quarter 2000 in the Company's financial statements Further, certain of the individual defendants were alleged to have violated the federal securities laws by trading the Company's securities while allegedly in possession of material, non-public information about the Company pertaining to these matters. On January 17, 2003, the Company and the other named defendants filed a motion to dismiss the consolidated amended class action complaint in its entirety. On May 19, 2003, the Court granted the motion and dismissed all counts of the consolidated amended complaint, while affording plaintiffs an opportunity to re- plead. On July 11, 2003, plaintiffs filed a second consolidated amended class action complaint against the Company, Mr. Birck and Mr. Notebaert, and many (although not all) of the other previously named individual defendants, re-alleging claims similar to those contained in the previously dismissed consolidated amended class action complaint. The Company filed a second motion to dismiss on August 22, 2003, seeking the dismissal with prejudice of all claims alleged in the second consolidated amended class action complaint. On February 19, 2004, the Court issued an order granting that motion and dismissed the action with prejudice. On March 18, 2004, the plaintiffs filed a Notice of Appeal to the United States Federal Court of Appeal for the Seventh Circuit appealing the dismissal. TEXAS: AG Launches Medicaid Fraud Whistleblower Suit V. 3 Firms --------------------------------------------------------------- Texas Attorney General Greg Abbott filed a fresh Medicaid fraud "whistleblower" lawsuit against three major drug manufacturers on the heels of an earlier $27 million settlement with other large companies engaged in the same type of Medicaid fraud scheme. The suit alleges that Abbott Laboratories Inc. and Baxter Healthcare Corporation, both of Illinois, and B. Braun Medical Inc. of Pennsylvania, engaged in a deliberate scheme to falsely report the wholesale prices of specific drugs and devices prescribed for Medicaid patients. The suit requests three times the actual damages, estimated currently at $8 million, plus civil penalties, attorneys' fees and costs from the defendants as reimbursement to the state for systematically defrauding Medicaid. "We are using the Texas whistleblower law to rectify wrongs committed against the Medicaid health care program for the needy," said Attorney General Abbott. "We have taken the lead in recovering these funds on behalf of taxpayers, and I take pride in knowing other states have followed suit." The lawsuit alleges that the companies' erroneous reporting of prices for various intravenous fluids and other products led state and federal Medicaid programs to reimburse clinics, pharmacies, distributors, wholesalers and other of the defendants' customers at vastly inflated rates. This windfall, dating at least to 1995, induced these customers to favor business relations with these drug manufacturers, creating a long-term, but illegal, market niche for them. Ven-a-Care of the Florida Keys Inc. brought the scheme to the state's attention, as it did in 1999 with drug giant Schering- Plough Corporation, which settled its lawsuit with the state earlier in May for $27 million. Another co-defendant, Dey Inc., settled with the state last June for $18.5 million. With the passage of stronger amendments to the Texas Medicaid Prevention Act, the Texas Legislature in 1997 paved the way for whistleblower lawsuits involving credible industry insiders, such as Ven-a-Care. Under the law, whistleblowers may be eligible for a percentage of damages recovered. TROPICAL SPORTSWEAR: Plaintiffs File Consolidated Lawsuit in FL --------------------------------------------------------------- Plaintiffs filed a consolidated amended securities class action against Tropical Sportswear International Corporation in the United States District Court for the Middle District of Florida, Tampa Division, on behalf of all persons who purchased or otherwise acquired the securities of the company during the period from April 17, 2002 through January 20, 2003. The suit also names as defendants certain of the Company's current and former officers and directors. The suit alleges that during the Class Period, the defendants materially misled the investing public by publicly issuing false and misleading statements and omitting to disclose material facts concerning the company's operations and performance and the retail market for its goods. Asbestos Alert ASBESTOS LITIGATION: ABI And Congoleum Still Fighting Lawsuits -------------------------------------------------------------- American Biltrite Inc. (ABI) is a co-defendant with many other manufacturers and distributors of asbestos containing products in around 1,963 pending claims involving around 3,467 individuals as of March 31, 2004. The claimants allege personal injury or death from exposure to asbestos or asbestos-containing products. Activity related to ABI's asbestos claims is as follows: Three Months Ended Year Ended Mar. 31, 2004 Dec. 31, 2003 ------------------------------------- Beginning claims 1,954 884 New claims 113 1,367 Settlements (8) (14) Dismissals (96) (283) ------------------------------------- Ending claims 1,963 1,954 The total indemnity costs incurred to settle claims during the three months ended March 31, 2004 and twelve months ended December 31, 2003 were $472,500 and $270,000, respectively, all of which were paid by ABI's insurance carriers pursuant to ABI's relevant insurance policies, as were the related defense costs. The average indemnity cost per resolved claim was about $4,500 for the three months ended March 31, 2004 and $900 for the year ended December 31, 2003. On December 31, 2003, Congoleum Corp. (a 55% owned consolidated subsidiary of ABI) and two of its subsidiaries each filed their respective voluntary petitions commencing cases for reorganization relief under Chapter 11 of the Bankruptcy Code with the U.S. Bankruptcy Court for the District of New Jersey. These Chapter 11 cases are being jointly administered as Case No. 03-51524 (KCF), styled In re Congoleum Corporation, et al., and were commenced in order to resolve Congoleum's asbestos-related liabilities and any future asbestos-related liability that might be asserted against Congoleum. During 2003, Congoleum obtained the asbestos personal injury claimant votes necessary for approval of a proposed pre-packaged Chapter 11 plan of reorganization, and, in January 2004, filed its pre- packaged plan of reorganization and disclosure statement with the Bankruptcy Court. The Bankruptcy Court approved the disclosure statement and a confirmation hearing is scheduled for July 22, 2004. Congoleum is also involved in litigation with certain insurance carriers related to disputed insurance coverage for asbestos related liabilities, and certain insurance carriers have filed various objections to Congoleum's pre- packaged plan of reorganization and related matters. The pre-packaged plan, if confirmed, would leave most of Congoleum's non-asbestos creditors unimpaired and would resolve all pending and future asbestos claims against Congoleum. The plan of reorganization would provide for, among other things, an assignment of, or grant a security interest in, certain rights in, and proceeds of, Congoleum's applicable insurance to a plan trust established under Section 524(g) of the Bankruptcy Code that would fund distributions to pending and future asbestos claimants and provide for the issuance of an injunction that would protect Congoleum from all future asbestos-related litigation and liabilities by channeling all current and future asbestos claims to the plan trust. Congoleum's general unsecured creditors would be unimpaired under the plan. As part of Congoleum's plan of reorganization, ABI expects that Congoleum's indemnification obligations to ABI with respect to current and future asbestos personal injury claims related to ABI's former tile division operations not covered by ABI insurance will be channeled to the plan trust established under Section 524(g) of the Bankruptcy Code. ABI and Congoleum expect to contribute, among other things, to the plan trust that would be established pursuant to Congoleum's Chapter 11 reorganization $250 thousand in cash from ABI and a note from Congoleum in an initial aggregate principal amount of $2,700,000 with payment of such note contribution secured by a pledge by ABI of both the common stock of Congoleum that it owns as well as certain of its rights to receive certain indemnity payments from Congoleum. ABI does not expect that Congoleum's note contribution to the plan trust would have a material adverse effect on ABI's liquidity or capital resources. The principal amount of the note that Congoleum will contribute to the trust under the proposed plan is expected to be subject to future increase in an amount equal to the amount by which 51% of the equity value of Congoleum as of the last trading day of the 90 consecutive trading day period commencing on the first anniversary of the effective date of Congoleum's confirmed Chapter 11 plan of reorganization exceeds $2,700,000. This adjustment amount could result in the principal amount of the note increasing materially. The adjusted principal amount of the note would be effective as of the measurement date of the adjustment. The proposed pre-packaged plan also provides for a possible additional contribution by ABI to the plan trust in the event ABI sells its interest in Congoleum before the third anniversary of the date as of which the principal amount of the note contributed by Congoleum to the plan trust is measured for purposes of determining whether the principal amount is to be increased. The expected amount of any additional contribution by ABI would be equal to 50% of any amount by which 51% of the equity value of Congoleum implied by ABI's sale of its interest in Congoleum exceeds the aggregate principal amount of the note contributed by Congoleum to the plan trust outstanding as of the measurement date for determining whether the principal amount of that note would be increased and after taking into account any such increase in the principal amount. While Congoleum believes its plan is feasible and in the best interest of all its constituents, there are sufficient risks and uncertainties such that no assurances of the outcome of Congoleum's pre-packaged Chapter 11 case can be given. Congoleum expects that its remaining costs to confirm and effect its proposed pre-packaged plan, consisting principally of legal and advisory fees and contributions to the plan trust to be established upon confirmation of the plan will be about $8,700,000 at a minimum. During 2003, Congoleum paid $5,300,000 in defense and indemnity costs related to asbestos-related claims and $13,500,000 in fees and expenses related to implementation of its planned reorganization under Chapter 11 and litigation with certain insurance companies. During the first quarter of 2004, Congoleum spent $1,100,000 (compared to $4,200,000 in 2003, which contributed to the increase in cash) and during the balance of 2004, expects to spend a further $8,700,000 at a minimum in fees, expenses, and trust contributions in connection with obtaining confirmation of its plan. Congoleum also expects to recover $3,600,000 from the Collateral Trust or its successor pursuant to terms of the Claimant Agreement and related documents, which provide for the Collateral Trust or Plan Trust to reimburse certain expenses of Congoleum. Timing of such recovery will depend on when the trust receives funds from insurance settlements or other sources. ASBESTOS LITIGATION: Bucyrus Plaintiff Numbers Increase To 1,478 ---------------------------------------------------------------- Bucyrus International Inc. is named as a co-defendant in around 290 personal injury liability cases alleging damages due to exposure to asbestos and other substances, involving around 1,478 plaintiffs. There is an increase from 285 cases (1,400 plaintiffs) as stated in the CAR edition for December 5, 2003. The cases are pending in courts in nine states. In all of these cases, insurance carriers have accepted or are expected to accept defense. These cases are in various pre-trial stages. The Company does not believe that costs associated with these matters will have a material effect on its financial position, results of operations or cash flows, although no assurance to that effect can be given. ASBESTOS LITIGATION: Cleco Corp. Workers' Asbestos Cases Ongoing ---------------------------------------------------------------- Cleco Corp. is involved in regulatory, environmental, and legal proceedings regarding matters arising in the ordinary course of business, some of which involve substantial amounts. In several lawsuits, Cleco has been named as a defendant by individuals who claim injury due to exposure to asbestos while working at sites in central Louisiana. Most of the claimants were workers who participated in the construction of various industrial facilities, including power plants, and some of the claimants have worked at locations owned by Cleco. Cleco's management regularly analyzes current information and, as necessary, provides accruals for probable liabilities on the eventual disposition of these matters. Cleco's management believes that the disposition of these matters will not have a material adverse effect on the Registrants' financial condition, results of operations, or cash flows. ASBESTOS LITIGATION: Citigroup Pays TPC Excess Asbestos Charges --------------------------------------------------------------- Travelers Property Casualty Corp. (TPC) (an indirect wholly owned subsidiary of Citigroup on December 31, 2001) sold 231,000,000 shares of its class A common stock representing around 23.1% of its outstanding equity securities in an initial public offering (IPO) on March 27, 2002. In 2002, Citigroup recognized an after-tax gain of $1,158,000,000 as a result of the IPO. In connection with the IPO, Citigroup entered into an agreement with TPC that provides that, in any fiscal year in which TPC records asbestos-related income statement charges in excess of $150,000,000, net of any reinsurance, Citigroup will pay to TPC the amount of any such excess up to a cumulative aggregate of $520,000,000 after-tax. A portion of the gross IPO gain was deferred to offset any payments arising in connection with this agreement. During 2002 and 2003, $159,000,000 and $361,000,000, respectively, was paid under this agreement. On August 20, 2002, Citigroup completed the distribution to its stockholders of a majority portion of its remaining ownership interest in TPC. This non-cash distribution was tax-free to Citigroup, its stockholders and TPC. The distribution was treated as a dividend to stockholders for accounting purposes that reduced Citigroup's Additional Paid-In Capital by about $7,000,000,000. Following the distribution, Citigroup remains a holder of around 9.9% of TPC's outstanding equity securities, which are carried at fair value in the Proprietary Investment Activities segment and classified as available-for-sale within Investments on the Consolidated Balance Sheet. The Company is required to sell these securities within five years of the distribution in order to maintain the tax-free status. Following the August 20, 2002 distribution, Citigroup reported the TPC's results separately as discontinued operations for all periods presented. TPC represented the primary vehicle by which Citigroup engaged in the property and casualty insurance business. ASBESTOS LITIGATION: ISP Subsidiary Tackling Asbestos Bankruptcy ---------------------------------------------------------------- International Specialty Holdings Inc. reported that the predecessor of International Specialty Products Inc. (ISP) and certain of ISP's domestic subsidiaries were parties to tax sharing agreements with members of a consolidated group for Federal income tax purposes that included G-I Holdings Inc. in certain prior years. Until January 1, 1997, ISP and its domestic subsidiaries were included in the consolidated Federal income tax returns of the G-I Holdings Group and, accordingly, would be severally liable for any tax liability of the G-I Holdings Group in respect of those prior years. Those tax- sharing agreements are no longer applicable with respect to the tax liabilities of ISP for periods subsequent to January 1, 1997, because neither the Company nor any of its domestic subsidiaries are members of the G-I Holdings Group for periods after January 1, 1997. In January 2001, G-I Holdings filed a voluntary petition for reorganization under Chapter 11 of the U.S. Bankruptcy Code due to its asbestos-related bodily injury claims relating to the inhalation of asbestos fiber. On September 15, 1997, G-I Holdings received a notice from the Internal Revenue Service of a deficiency in the amount of $84,400,000 (after taking into account the use of net operating losses and foreign tax credits otherwise available for use in later years) in connection with the formation in 1990 of Rhone- Poulenc Surfactants and Specialties, L.P., a partnership in which G-I Holdings held an interest. On September 21, 2001, the IRS filed a proof of claim with respect to such deficiency in the G-I Holdings bankruptcy against G-I Holdings and ACI Inc., a subsidiary of G-I Holdings, which also held an interest in the surfactants partnership and also has filed a voluntary petition for reorganization under Chapter 11 of the U.S. Bankruptcy Code. If the proof of claim were sustained, ISP and/or certain of its subsidiaries together with G-I Holdings and several current and former subsidiaries of G-I Holdings would be severally liable for taxes and interest in the amount of about $285,000,000, computed as of April 4, 2004. On May 7, 2002, G-I Holdings, together with ACI Inc., filed an objection to the proof of claim, which objection will be heard by the United States District Court for the District of New Jersey overseeing the G-I Holdings bankruptcy. G-I Holdings has advised the Company that it believes that it will prevail in this tax matter involving the surfactants partnership, although there can be no assurance in this regard. The Company believes that the ultimate disposition of this matter will not have a material adverse effect on its business, financial position or results of operations. ASBESTOS LITIGATION: Magnetek Inc. Seeking Dismissal From Suits --------------------------------------------------------------- Magnetek Inc. is named, along with numerous other defendants, in asbestos-related lawsuits. The Company has never produced asbestos-containing products and is either contractually indemnified against liability for asbestos-related claims or believes that it has no liability for such claims, all of which arise from business operations the Company acquired but no longer owns. While the outcome of these cases cannot be predicted with certainty, the Company is seeking to be dismissed from the proceedings and does not believe the proceedings, individually or in the aggregate, will have a material adverse effect on its results of operations or financial position. ASBESTOS LITIGATION: Millennium Chemicals Exposure Cases Remain --------------------------------------------------------------- In a recent filing with the Securities and Exchange Commission, Millennium Chemicals Inc. made mention of legal proceedings relating to present and former operations (including proceedings based on alleged exposure to asbestos and other materials). It was mentioned in the October 25, 2002 edition of the CAR that the Company is one of a number of defendants in fewer than 100 active, premises-based asbestos cases, and 40 asbestos cases in connection with operations of its predecessors at other facilities, which also typically involve multiple plaintiffs. ASBESTOS LITIGATION: Oglebay Norton Makes Agreement With Insurer ---------------------------------------------------------------- During the third quarter of 2003, Oglebay Norton Co. agreed with one of its insurers to fund a settlement insurance trust to cover a portion of settlement and defense costs arising out of asbestos litigation. The Company will have access to Trust funds to cover settlements and defense costs and will not have the obligation to cover such costs from its own funds. Additionally, the agreement provides that the Company may use up to $4,000,000 ($3,576,000 used as of March 31, 2004) of the Trust's assets to cover the cost of any insurable or insurance related expenses. The Company believes that both the asbestos and silica product liability claims are covered by multiple layers of insurance policies and an insurance trust from multiple sources. At March 31, 2004, the Company was a co-defendant in cases alleging asbestos-induced illness involving claims of around 72,000 claimants. The Company has been and will continue to be responsible for funding a small percentage of all settlements and defense costs. Management believes that its share of settlements on an annual basis is not significant, although the Company continues to maintain a reserve on its balance sheet to address this contingency. Several of the Company's subsidiaries have been and continue to be named as defendants in a large number of cases relating to the exposure of people to asbestos and silica. The plaintiffs in the cases generally seek compensatory and punitive damages of unspecified sums based upon the Jones Act, common law or statutory product liability claims. Some of these cases have been brought by plaintiffs against the Company (or its subsidiaries) and other marine services companies or product manufacturer co-defendants. Considering the Company's past and present operations relating to the use of asbestos and silica, it is possible that additional claims may be made against the Company and its subsidiaries based upon similar or different legal theories seeking similar or different types of damages and relief. ASBESTOS LITIGATION: Reunion Subsidiary ORC Named in Lawsuits ------------------------------------------------------------- Since July 10, 2001, various legal actions, some involving multiple plaintiffs, alleging personal injury/wrongful death from asbestos exposure have been filed in multiple states, including California, Oregon, Washington, New York and Mississippi, against a large number of defendants, including Oneida Rostone Corporation (ORC), pre-merger Reunion's Plastics subsidiary and the Company's Plastics segment. In October 2001, Allen-Bradley Co., a former owner of the Rostone business of ORC, accepted Reunion Industries' tender of its defense and indemnification in the first such lawsuit filed, pursuant to a contractual obligation to do so. Subsequent to the acceptance of the tender of defense and indemnification in the first lawsuit, Allen-Bradley Co. has accepted the Company's tender of defense and indemnification in a total of 124 separate actions, all of which have been or will be defended by Allen-Bradley Co. The Company has been named in around 1,600 separate asbestos suits filed since January 1, 2001 by three plaintiffs' law firms in Wayne County, Michigan; Kanawah County, West Virginia; Cuyahoga County, Ohio; and Cambria and Northhampton Counties in Pennsylvania. The claims allege that cranes from the Company's former crane manufacturing location in Alliance, Ohio were present in various parts of steel mills and heavy industrial sites in the aforementioned counties, and that those cranes contained asbestos to which plaintiffs were exposed over a 40 year span. Counsel for the Company has filed an answer to each complaint, denying liability by the Company and asserting all affirmative defenses permitted under the Court's Case Management Order. Counsel for the Company has successfully resolved over 650 cases with little or no cost to the Company. Cases that are not dismissed typically are settled for modest amounts, paid in large part through applicable insurance coverage. The Company denies that it manufactured any products containing asbestos. It has been further denied that component part manufacturers otherwise advised the Company that component parts could be hazardous, or otherwise constitute a health risk. The Company intends to continue to vigorously defend against these lawsuits. ASBESTOS LITIGATION: Rogers Corp. Asbestos Lawsuits Carrying On --------------------------------------------------------------- Rogers Corp. has been named, along with hundreds of other industrial companies, as a defendant in asbestos-related cases. The Company strongly believes it has valid defenses to these claims and intends to defend itself vigorously. In addition, the Company believes that it has sufficient insurance to cover all material costs associated with these claims. Based upon past claims experience and available insurance coverage, management believes that the resolution of these matters will not have a material adverse effect on the consolidated financial position, results of operations, or cash flows of the Company. ASBESTOS LITIGATION: Royal & Sun Forges Compensation Agreement -------------------------------------------------------------- Regarding the High Court ruling against Royal & Sun Alliance Insurance Group plc and in favor of Turner & Newell in 2003 (which was mentioned in the April 16, 2004 CAR newsletter) the Group confirmed that Royal & Sun Alliance, in conjunction with other former employers' liability insurers of T&N, were able to reach agreement in principle with T&N's administrators that a sum of money will be made available towards compensating workers exposed to asbestos by T&N during the years covered by the policies. This will conclude the insurers' involvement in any asbestos liabilities of the T&N companies. It is the Group's policy not to comment on its reserving for individual incidents. However, it is adequately reserved for the proposed agreement within its overall asbestos reserves, which are subject to regular review and within an appropriate range. ASBESTOS LITIGATION: TriMas Corp. Pending Cases Increase to 890 --------------------------------------------------------------- As of May 10, 2004, TriMas Corp. is party to around 890 pending cases involving around 35,327 claimants alleging personal injury from exposure to asbestos containing materials formerly used in gaskets (both encapsulated and otherwise) manufactured or distributed by certain of our subsidiaries for use in the petrochemical refining and exploration industries. There is an increase from the 612 cases (30,427 claimants) mentioned in the CAR edition for August 29, 2003. The Company believes that many of the pending cases relate to locations at which none of our gaskets were distributed or used. In addition, TriMas acquired various companies to distribute the Company's products that distributed gaskets of other manufacturers prior to acquisition. Total settlement costs (exclusive of defense costs) for all such cases, some of which were filed over 12 years ago, have been about $2,000,000. Based upon the Company's experience to date and other available information (including the availability of excess insurance), the Company does not believe that these cases will have a material adverse effect on its financial condition or future results of operations. However, the Company may be subjected to significant additional claims in the future, the cost of settling cases in which product identification can be made may increase and we may be subjected to further claims with respect to the former activities of our acquired gasket distributors. The Company has provided reserves based upon its present knowledge and, subject to future legal and factual developments, does not believe that the ultimate outcome of any of the aforementioned litigations will have a material adverse effect on its consolidated financial position and future results of operations and cash flows. ASBESTOS ALERT: Celanese, CNA Holdings Defend Against 620 Cases --------------------------------------------------------------- Celanese AG reported that Celanese Ltd. and/or CNA Holdings, Inc., both U.S. subsidiaries of Celanese, are defendants in around 620 asbestos cases, the majority of which are premises- related. Celanese has reserves for defense costs related to claims arising from these matters. Celanese believes it does not have any significant exposure in these matters. COMPANY PROFILE Celanese AG (NYSE: CZ, German: CZZ) Frankfurter Stra e 111 61476 Kronberg im Taunus, Germany Phone: +49-69-305-16000 Fax: +49-69-305-16006 http://www.celanese.com Employees : 9,500 Revenue : $ 5,123,000,000.00 Net Income : $ 165,000,000.00 Assets : $ 6,788,000,000.00 Liabilities : $ 4,213,000,000.00 (As of December 31, 2003) Description: Celanese AG comprises the chemical businesses spun off by Hoechst (now Aventis), operating through four units. Its chemical products division makes acetic acid and vinyl acetate monomer (VAM) used to make other chemicals and pharmaceuticals as well as acrylic acid (for paints, polymers, and water treatment). The acetate products unit makes filaments for fashion apparel and acetate tow. Its subsidiary Ticona makes technical polymers, and the performance products unit makes polypropylene films and food additives. Kuwait Petroleum owns about 29% of Celanese. The Blackstone Group offered to buy out all the shares of Celanese for about $2,000,000,000. ASBESTOS ALERT: EMC Insurance Group Reveals IBNR For Asbestos ------------------------------------------------------------- EMC Insurance Group Inc. reported that the majority of the adverse development reported in the first quarter of 2003 came from property pro rata and ocean marine business, in addition to about $330,000 from the MRB reinsurance pool and $326,000 of additional incurred but not reported reserves established in response to the findings of an independent study conducted on the Company's asbestos exposures. The Company also said that the adequacy of loss and settlement expense reserves, including asbestos claims, might affect the Company's results. COMPANY PROFILE EMC Insurance Group Inc. (NASDAQ: EMCI) 717 Mulberry St. Des Moines, IA 50309 Phone: 515-280-2902 Fax: 515-280-2895 http://www.emcinsurance.com Employees : NaN Revenue : $ 362,400,000.00 Net Income : $ 20,300,000.00 Assets : $ 899,700,000.00 Liabilities : $ 719,000,000.00 (As of December 31, 2003) Description: EMC Insurance Group's subsidiaries EMCASCO Insurance, Illinois EMCASCO, and Dakota Fire Insurance sell property and casualty lines, including automobile, property, liability, and workers' compensation insurance. Farm and City Insurance offers high-risk private automobile insurance, and EMC Underwriters offers excess and surplus lines of insurance. EMC Reinsurance sells property and casualty treaty reinsurance. The group operates throughout the US, primarily in the Midwest; Iowa accounts for more than 15% of premiums. Employers Mutual Casualty, a multiple-line property and casualty insurance company, owns almost 80% of EMC Insurance Group. ASBESTOS ALERT: Empire State Asbestos Lawsuit Stalled In Court -------------------------------------------------------------- Empire State Building Associates and numerous other New York City Building owners are defendants in an action entitled Stanislawa Staniszek v. A.C.&S. Inc., et al., which is part of the New York City Asbestos Litigation pending before the New York State Supreme Court. It is alleged that plaintiff, now deceased, suffered from mesothelioma and other related conditions as a result of being exposed to asbestos and asbestos-related products while employed as a project supervisor at various locations, including the Empire State Building. While a Note of Issue was filed in this matter last year, placing the case on the Court's trial calendar, the matter has since been removed from any trial cluster assigned by the Court and no new trial date has been set. Company is awaiting further activity in the case by plaintiff's counsel, before pressing for further discovery. COMPANY PROFILE Empire State Building Associates c/o Wien & Malkin LLP 60 East 42nd Street New York, NY 10165 Phone: 212-687-8700 Description: Empire State Building Associates, an investment syndicate created by Lawrence A. Wien, purchased a 114-year master leasehold of the land and Building for $36,000,000 on December 27, 1961. At the same time, the Prudential Insurance Company of America bought the Building for $29,000,000. Colonel Crown, as sellers, received the total of $65,000,000, at that time, the highest price ever paid for a New York property. Principals in the closing include Lawrence A. Wien and Peter L. Malkin, general partners of Empire State Building Associates; Col. Henry Crown, Chairman and principal stockholder of the Empire State Building Corporation; Harry B. Helmsley, principal broker in the transaction; and Louis B. Menagh, President of Prudential Insurance Company. ASBESTOS ALERT: PepsiAmericas Obligated In Pneumo Abex Claims ------------------------------------------------------------- PepsiAmericas Inc. reported that it has certain indemnification obligations related to product liability and toxic tort claims, which come out of a 1988 agreement with Pneumo Abex Corp. Other companies not owned by or associated with PepsiAmericas also are responsible to Pneumo Abex for the financial burden of all asbestos product liability claims filed against Pneumo Abex after a certain date in 1998, except for certain claims indemnified by PepsiAmericas. The sites and product liability and toxic tort claims included in the aggregate accrued liabilities the Company has recorded are described in its Annual Report on Form 10-K for the fiscal year 2003. No significant changes in the status of those sites or claims occurred and the Company was not notified of any significant new sites or claims during the first quarter of 2004. COMPANY PROFILE PepsiAmericas Inc. (NYSE: PAS) 4000 Dain Rauscher Plaza 60 South Sixth Street Minneapolis, MN 55402 Phone: 612-661-4000 Fax: 612-661-3737 http://www.pepsiamericas.com Employees : 14,500 Revenue : $ 3,236,800,000.00 Net Income : $ 157,600,000.00 Assets : $ 3,580,700,000.00 Liabilities : $ 2,015,600,000.00 (As of December 31, 2003) Description: PepsiAmericas Inc. (formerly Whitman) is the world's #2 Pepsi bottler (behind Pepsi Bottling Group). Besides Pepsi beverages, the company also distributes Dr Pepper, Lipton Iced Teas, Welch's and Ocean Spray fruit drinks, Seagrams (tonic water, ginger ale), Starbucks Frappuccino, and bottled water. PepsiAmericas operates in 18 U.S. states and holds about 19% of the U.S. market for Pepsi products. It also distributes drinks in the Bahamas, Barbados, the Czech Republic, Hungary, Jamaica, Poland, Puerto Rico, Slovakia, and Trinidad and Tobago. Soft- drink giant PepsiCo owns about 40% of PepsiAmericas. ASBESTOS ALERT: Rhodia Receives Claims Due To Asbestos in Plants ---------------------------------------------------------------- Rhodia currently owns or operates plants previously owned successively by Stauffer Chemicals and Rh"ne-Poulenc where asbestos was used in piping and industrial installations like boilers and furnaces, but not in the manufacturing of its products. As a consequence, Rhodia has received a limited number of claims relating to alleged asbestos exposure. In addition, one of the Company's former sites in France is on the official list of industrial facilities that have previously manufactured asbestos-containing materials and which could give workers the right to claim early retirement. While it is not possible to determine the ultimate outcome of all claims that may be brought against Rhodia, the Company believes that its future risk related to asbestos exposure is limited based on available information and its experience with these claims. COMPANY PROFILE Rhodia (NYSE: RHA; Euronext Paris: RHA) 26 Quai Alphonse Le Gallo Boulogne-Billancourt Cedex, France 92512 Phone: 011-331-5538-4000 Fax: 011-331-5538-4471 http://www.rhodia.com Employees : 23,059 Revenue : $ 6,856,000,000.00 Net Income : $ 1,721,000,000.00 Assets : $ 8,208,000,000.00 Liabilities : $ 7,892,000,000.00 (As of December 31, 2003) Description: Rhodia is a specialty chemicals company that has been hit hard by high prices for raw materials and the weakened dollar. Its largest unit (Food and Consumer Care) makes chemicals used in personal care products (surfactants, emulsifiers), acetate tow for cigarette filters, and food ingredients. Rhodia's other units include Automotive, Electronics, and Fibers, Agrochemicals and Pharmaceuticals (aspirin and pharmaceutical ingredients), and Industrial Care and Services (water treatment, waste management). Chairman and CEO Jean-Pierre Tirouflet (in charge since the company's inception) resigned in October 2003 amid the prolonged slump. ASBESTOS ALERT: Universal Auto Not To Pay Kelsey-Hayes Claims ------------------------------------------------------------- Universal Automotive Industries Inc. said that in its asset purchase liability for the wrongful death claims relating to Kelsey-Hayes Co. auto specialty business' sale of any asbestos- containing products prior to the Closing Date will be retained by Kelsey-Hayes Co., which would be solely responsible for such claims. COMPANY PROFILE Kelsey-Hayes Co. 11878 Hubbard Road Livonia, MI 48150 Phone: 313-513-5000 Description: In 1927 Clarence B. Hayes and John Kelsey, who led separate businesses in the successful switch from carriage to car wheels, merged to form Kelsey-Hayes Co., now part of Buffalo-based Varity Corp. Varity recently agreed to sell its stake in Hayes Wheels International Inc. to facilitate a Hayes Wheels merger with Motor Wheel Corp. New Securities Fraud Cases ALLOS THERAPEUTICS: Dyer & Shuman Lodges Securities Suit in CO -------------------------------------------------------------- The law firm of Dyer & Shuman, LLP initiated a class action lawsuit in the United States District Court for the District of Colorado on behalf of purchasers of Allos Therapeutics, Inc. securities (NASDAQ: ALTH) during the period between April 23, 2003 and May 3, 2004, inclusive, against the Company and Michael E. Hart. The case has been assigned Civil Action No. 04-M-1057 (CBS). Plaintiff alleges that Defendants issued materially false and misleading statements about Allos's lead drug for improving cancer treatments (called, "RSR13"), in violation of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. Throughout the Class Period, Defendants issued positive statements regarding the results of various trial tests of RSR13 and the likelihood that RSR13 would receive FDA approval. Defendants' statements were materially false and misleading because they failed to disclose material adverse facts, which were known to defendants or recklessly disregarded by them. For example: (1) the Company conducted only one pivotal efficacy study, where according to the usual requirement of the FDA for approval and marketing a new drug, the sponsor needs to demonstrate the efficacy of the new drug in at least two independent well-controlled clinical trials; and (2) that observed apparent survival advantage in a single small subgroup of patients with primary breast cancer based on post-hoc analysis was attributable solely to the treatment effect and not due to imbalances in known and unknown prognostic factors. These material misstatements and omissions, among others, had the cause and effect of creating in the market an unrealistically positive assessment of Allos and its business, prospects and operations, thus causing the Company's securities to be overvalued and artificially inflated during the Class Period. For more details, contact Dyer & Shuman, LLP (Kip B. Shuman, Esq.) by Phone: 1-800-711-6483 or 1-303-861-3003 or by E-Mail: kshuman@dyershuman.com ALLOS THERAPEUTICS: Wolf Haldenstein Files Securities Suit in CO ---------------------------------------------------------------- Wolf Haldenstein Adler Freeman & Herz LLP filed a securities class action in the United States District Court for the District of Colorado, on behalf of all persons who purchased the securities of Allos Therapeutics, Inc. ("Allos" or the "Company") (Nasdaq: ALTH) between April 23, 2003 and May 3, 2004, inclusive, (the "Class Period") against defendants Allos and Michael Hart, the Chief Executive Officer, President, Chief Financial Officer, and a Director of Allos at all relevant times. The case name and index number are Neuman v. Allos Therapeutics, Inc., et al. The complaint alleges that defendants violated the federal securities laws by issuing materially false and misleading statements throughout the Class Period that had the effect of artificially inflating the market price of the Company's securities. The statements made by the defendants were materially false and misleading because the actual results concerning their Phase III Efaproxiral breast cancer subset were insufficient to support the positive conclusions made by defendants due to numerous flaws in the study. When making the statements, defendants failed to disclose and misrepresented the following adverse facts: (1) the Company's positive statements regarding its RSR13 New Drug Application and the results for the breast cancer subset in its first Phase III trial were misleading because the test subjects were not a representative set but rather a skewed subset of the patients, designed to produce false glowing results; (2) the purported results for the breast cancer subset patients in the first Phase III trial were not representative because the patients in the treatment group were afflicted less severely than the control group as a whole. Therefore, the results were skewed in favor of the treatment group; (3) the results of the study could not be used to support the positive conclusions made by defendants regarding the breast cancer subset because the study was not defined to specifically test the breast cancer subset. Thus, any results related to any post-hac subset could not appropriately be used to support the statements made by defendants; (d) the Company had used an unusually low number of patients in the treatment group and thus could not support its statistical projections; (e) the study was "open label," meaning that both patients and researchers knew they were receiving the treatment. In addition to the above-mentioned shortcomings in the study and statistical evidence, this made the study even more suspect and exposed the study to an increased level of FDA scrutiny, as open label studies tend to skew results in favor of the treatment group; (f) that, as a result of the foregoing, defendants lacked a reasonable basis for their positive statements about the Company and their earnings projections. For more details, contact Fred Taylor Isquith, Esq., Christopher S. Hinton, Esq., George Peters, or Derek Behnke of Wolf Haldenstein Adler Freeman & Herz LLP by Mail: 270 Madison Avenue, New York, New York 10016 by Phone: (800) 575-0735 by E- Mail: classmember@whafh.com or visit their Web Site: http://www.whafh.com/cases/allos.htm ALLOS THERAPEUTICS: Lerach Coughlin Lodges Securities Suit in CO ---------------------------------------------------------------- Lerach Coughlin Stoia & Robbins LLP initiated a securities class action in the United States District Court for the District of Colorado on behalf of purchasers of Allos Therapeutics, Inc. (NASDAQ:ALTH) securities during the period between April 23, 2003 and May 3, 2004. The complaint charges Allos and its chief executive officer with violations of the Securities Exchange Act of 1934. Allos is a biopharmaceutical company focused on developing and commercializing small molecule drugs for improving cancer treatments. The complaint alleges that during the Class Period defendants materially misled the investing public, thereby inflating the price of Allos securities, by publicly issuing false and misleading statements about Allos's business, prospects and operations. The statements were materially false and misleading when made because they failed to disclose or indicate the following: (1) that the Company's study failed to demonstrate benefits of its lead clinical candidate, RSR13, plus whole brain radiation therapy ("WBRT") over WBRT alone for patients with brain metastases; (2) that the Company conducted only one pivotal efficacy study, where, according to the usual requirements of the FDA for approval and marketing of a new drug, the sponsor needs to demonstrate the efficacy of the new drug in at least two independent well-controlled clinical trials; and (3) that the observed apparent survival advantage in a single small subgroup of patients with primary breast cancer based on post-hoc analysis was attributable solely to the treatment effect and not due to imbalances in known and unknown prognostic factors. On May 3, 2004, Allos announced that the FDA Oncologic Drugs Advisory Committee did not recommend approval of RSR13 as an adjunct to WBRT for the treatment of patients with brain metastases originating from breast cancer. On this news, shares of Allos fell $5.83 per share or 40% on April 30, 2004 to close at $8.60 per share. For more details, contact William Lerach or Darren Robbins of Lerach Coughlin Stoia & Robbins LLP by Phone: 800-449-4900 by E- Mail: wsl@lcsr.com or visit their Web Site: http://www.lcsr.com/cases/allos/ BALLY TOTAL: Lerach Coughlin Lodges Securities Suit in N.D. IL -------------------------------------------------------------- Lerach Coughlin Stoia & Robbins LLP initiated a securities class action in the United States District Court for the Northern District of Illinois, Eastern Division on behalf of purchasers of Bally Total Fitness Holding Corporation ("Bally") (NYSE:BFT) securities during the period between August 3, 1999 and April 28, 2004 (the "Class Period"). The complaint charges Bally and certain of its officers and directors with violations of the Securities Exchange Act of 1934. Bally is a commercial operator of fitness centers, with approximately four million members and 420 facilities located in 29 states, Canada, Asia, the Caribbean and Mexico. The complaint alleges that throughout the Class Period defendants issued numerous positive statements and filed quarterly and annual reports with the SEC which described the Company's increasing financial performance. These statements were materially false and misleading because they failed to disclose and/or misrepresented the following adverse facts, among others: (1) that the Company had violated Generally Accepted Accounting Principles ("GAAP") and its own internal policies by prematurely recognizing revenue on certain non-obligatory prepaid membership dues; (2) that the Company lacked adequate internal controls and was therefore unable to ascertain the true financial condition of the Company; and (3) that, as a result, the value of the Company's reported revenues during the Class Period was materially overstated. On April 28, 2004, the Company issued a press release announcing that its Chief Financial Officer and Director, John W. Dwyer, had resigned and that the Division of Enforcement of the SEC had commenced an investigation in connection with the Company's announced restatement regarding the timing of recognition of certain prepaid dues. The Company also stated that it had modified its existing internal controls structure, which it believes is now effective. In response to these disclosures, shares of the Company's stock fell approximately 17%, to close at $4.50 per share, on extremely heavy trading volume. For more details, contact William Lerach or Darren Robbins of Lerach Coughlin Stoia & Robbins LLP by Phone: 800/449-4900 by E- Mail: wsl@lcsr.com or visit their Web Site: http://www.lcsr.com/cases/bally/ BALLY TOTAL: Geller Rudman Lodges Securities Lawsuit in N.D. IL --------------------------------------------------------------- The Law Firm of Geller Rudman, PLLC initiated a class action lawsuit in the United States District Court for the Northern District of Illinois, Eastern Division on behalf of purchasers of Bally Total Fitness Holding Corporation (NYSE: BFT) ("Bally" or the "Company") publicly traded securities during the period between August 3, 1999 and April 28, 2004, inclusive (the "Class Period"). The Complaint alleges that defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 by issuing a series of materially false and misleading statements to the public which described the Company's increasing financial performance. As alleged in the complaint, these statements were materially false and misleading because they failed to disclose and/or misrepresented the following adverse facts, among others: (1) that the Company had violated Generally Accepted Accounting Principles ("GAAP") and its own internal policies by prematurely recognizing revenue on certain non-obligatory prepaid membership dues; (2) that the Company lacked adequate internal controls and was therefore unable to ascertain the true financial condition of the Company; and (3) that, as a result, the value of the Company's reported revenues during the Class Period was materially overstated. On April 28, 2004, the Company issued a press release announcing that its Chief Financial Officer and Director, John W. Dwyer, had resigned and that the Division of Enforcement of the Securities & Exchange Commission had commenced an investigation in connection with the Company's announced restatement regarding the timing of recognition of certain prepaid dues. The Company also stated that it had modified its existing internal controls structure, which it believes is now effective. In response to these disclosures, shares of the Company's stock fell approximately 17%, to close at $4.50 per share, on extremely heavy trading volume. For more details, contact GELLER RUDMAN, PLLC (Samuel H. Rudman, Esq. or David A. Rosenfeld, Esq.) by Mail: Client Relations Department, 200 Broadhollow, Suite 406, Melville, NY 11747 by Phone: 631-367-7100 or 1-877-992-2555 by Fax: 1-631-367-1173 by E-Mail: info@geller-rudman.com or visit their Web Site: http://www.geller-rudman.com/case_signup_sec.asp?cID=294 BALLY TOTAL: Schiffrin & Barroway Files N.D. IL Securities Suit --------------------------------------------------------------- The law firm of Schiffrin & Barroway, LLP initiated a class action lawsuit in the United States District Court for the Northern District of Illinois on behalf of all purchasers of the common stock of Bally Total Fitness Holding Corporation (NYSE: BFT) ("Bally" or the "Company") from August 3, 1999 through April 28, 2004, inclusive (the "Class Period"). The complaint charges Bally, Paul A. Tobak, Lee S. Hillman, and John W. Dwyer violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 by issuing a series of materially false and misleading statements to the public which described the Company's increasing financial performance. As alleged in the complaint, these statements were materially false and misleading because they failed to disclose and/or misrepresented the following adverse facts, among others: (1) that the Company had violated Generally Accepted Accounting Principles ("GAAP") and its own internal policies by prematurely recognizing revenue on certain non-obligatory prepaid membership dues; (2) that the Company lacked adequate internal controls and was therefore unable to ascertain the true financial condition of the Company; and (3) that, as a result, the value of the Company's reported revenues during the Class Period was materially overstated. On April 28, 2004, the Company issued a press release announcing that its Chief Financial Officer and Director, John W. Dwyer, had resigned and that the Division of Enforcement of the Securities & Exchange Commission had commenced an investigation in connection with the Company's announced restatement regarding the timing of recognition of certain prepaid dues. The Company also stated that it had modified its existing internal controls structure, which it believes is now effective. In response to these disclosures, shares of the Company's stock fell approximately 17%, to close at $4.50 per share, on extremely heavy trading volume. For more details, contact Schiffrin & Barroway, LLP (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 or 1-610-667-7706 by E-Mail: info@sbclasslaw.com DAIMLERCHRYSLER AG: Milberg Weiss Files Securities Lawsuit in DE ---------------------------------------------------------------- The law firm of Milberg Weiss Bershad & Schulman LLP initiated a securities class action on behalf of all persons and entities who are NOT citizens or residents of the United States who purchased or otherwise acquired the securities of DaimlerChrysler AG (NYSE:DCX) between November 17, 1998 and November 17, 2000, including those former shareholders of Chrysler Corporation who surrendered their Chrysler shares in connection with the merger of Chrysler by and into the Company on or about November 17, 1998, on or through a securities exchange NOT based in the United States. The action seeks to pursue remedies under Sections 10(b), 20(a) and 14(a) of the Securities Exchange Act of 1934 and Rules 10b-5 and 14a-9 promulgated thereunder, and Sections 11, 12(a)(2) and 15 of the Securities Act of 1933. The action, numbered 04-331, is pending in the United States District Court for the District of Delaware, against defendants DaimlerChrysler, Daimler-Benz AG, Jurgen E. Schrempp, Eckhard Cordes, Manfred Gentz, Jurgen Hubbert, Manfred Bischoff, Kurt Lauk, Klaus Mangold, Heiner Tropitzsch, Klaus-Dieter Vohringer, Dieter Zetsche and Thomas Sonennberg. The complaint alleges that defendants issued a number of materially false and misleading statements in order to get shareholder approval for the proposed merger of Chrysler and Daimler-Benz. For example, defendants misrepresented that the transaction would be structured as a "merger-of-equals" that would result in a newly formed entity with dual headquarters in the U.S. and Germany, whose officers and directors would be comprised of the officers and directors of the former constituent companies equally. Defendants characterized the transaction as a merger-of-equals, as opposed to an "acquisition," because, pursuant to applicable law, an acquisition requires the acquiror to pay a sizable "control premium" for the shares of the company being acquired whereas a merger-of-equals requires no such premium, or a much smaller one. Defendants misrepresented that the transaction would be a merger-of-equals in order to purchase Chrysler on the cheap. In fact, as investors would learn only after the end of the Class Period, the transaction was not a merger-of-equals, but rather, a takeover of Chrysler by Daimler-Benz, with former Daimler-Benz executives taking control, over time, of the newly formed DaimlerChrysler and Chrysler relegated to the status of a subordinate division. In addition, defendants continued to falsely tout the success of the merger and the growth that the Company supposedly was experiencing. In fact, defendants had artificially inflated the reported results by prematurely recognizing revenues and understating costs in the quarter preceding the merger. The truth was revealed on November 17, 2000, when the Company reported financial results that fell well below defendants' guidance. Then, on, March 5, 2001, a former Chrysler executive was quoted in Forbes as stating that defendants had prematurely recognized revenues in the quarter preceding the merger to drum up support. Class members acquired their shares at artificially inflated prices and were damaged by defendants' conduct. For more details, contact Steven G. Schulman, Peter E. Seidman or Andrei V. Rado by Mail: One Pennsylvania Plaza, 49th fl., New York, NY, 10119-0165 Phone: (800) 320-5081 or 212-594-5300 by E- Mail: sfeerick@milbergweiss.com or visit their Web Site: http://www.milbergweiss.com DAIMLERCHRYSLER AG: Seeger Weiss Lodges Securities Lawsuit in DE ---------------------------------------------------------------- The law firm Seeger Weiss LLP has initiated a class action lawsuit on May 24, 2004, filed in the United States District Court for the District of Delaware against defendants DaimlerChrysler AG, Daimler-Benz AG and various of DiamlerChrylser's top executives for securities fraud in violation of the federal securities laws. The lawsuit was filed on behalf of non-United States citizens and non-United States residents ("foreign investors") who owned shares of Chrysler that were converted to DaimlerChrysler AG shares during the 1998 merger of the companies and such persons who purchased or otherwise acquired shares of DaimlerChrysler AG, Inc. ("DaimlerChrysler" or the "Company")(NYSE:DCX) during the period from on or about November 17, 1998 through November 17, 2000, inclusive (the "Class Period"), and were damaged thereby. The lawsuit charges that Defendants misrepresented the nature of the 1998 merger between Daimler-Benz AG and the Chrysler Corporation. According to plaintiffs, defendants framed the transaction as a "merger of equals", rather than an acquisition, in order to avoid paying an "acquisition premium". Plaintiffs' Complaint alleges that Defendants made this representation to Chrysler shareholders in the Registration Statement, Prospectus, and Proxy, leading 97% of Chrysler shareholders to approve the merger. The Complaint further alleges that the Defendants made various misrepresentations after the merger to further their scheme. For more details, contact Stephen A. Weiss, Esq. or Eric T. Chaffin, Esq. of Seeger Weiss LLP by Mail: One William Street, New York, New York 10004 by Phone: (212) 584-0700 or (877) 539-4125 or by E-Mail: sweiss@seegerweiss.com or echaffin@seegerweiss.com GENTA INC.: Bull Lifshitz Lodges Securities Fraud Lawsuit in NJ --------------------------------------------------------------- Bull & Lifshitz, LLP initiated a securities class action in the United States District Court for the District of New Jersey on behalf of a class consisting of all persons who purchased or otherwise acquired securities of Genta, Inc. (Nasdaq:GNTA) between September 10, 2003 and May 3, 2004, inclusive. The Complaint charges Genta and certain of the Company's executive officers with violations of federal securities laws. Among other things, plaintiff claims that defendants' omissions and material misrepresentations concerning Genta's operations and financial prospects artificially inflated the Company's stock price, inflicting damages on investors. Genta is a biopharmaceutical company dedicated to the identification, development and commercialization of novel drugs for cancer and related diseases. The Complaint alleges that defendants failed to disclose and/or falsely represented to the investing public that Genta's anti-cancer drug, Genasense, did not appear to be associated with serious adverse reactions in its Phase 3 clinical trial. In fact, defendants knew that the use of Genasense was associated with increased toxicity and discontinuation due to adverse events and that Food & Drug Adminsitration ("FDA") approval of the Genasense New Drug Application was unlikely because the increased toxicity and adverse events associated with the use of Genasense outweighed its marginal benefits. On April 30, 2004, Genta announced that the FDA had posted on its website briefing documents for the FDA's Oncologic Drugs Advisory Committee meeting on May 3, 2004, which suggested that Genasense would fail to win FDA approval. News of this shocked the market. On April 30, 2004, Shares of Genta fell $5.83 per share, or 40%, to close at $8.60 per share. On May 3, 2004, Genta, in fact, failed to win FDA Panel support for Genasense, the news of which sent shares of Genta falling another $3.49 per share, or 40.5%, to close that day at $5.11. Plaintiff seeks to recover damages on behalf of Class members and is represented by Bull & Lifshitz LLP, a law firm with significant experience in prosecuting class actions, and substantial expertise in actions involving corporate fraud. For more details, contact Joshua M. Lifshitz, Esq. of Bull & Lifshitz LLP by Mail: 18 East 41st Street, NY, NY 10017 by Phone: (212) 213-6222 by E-Mail: counsel@nyclasslaw.com or visit their Web Site: http://www.nyclasslaw.com/infopackage.html GENTA INC.: Wechsler Harwood Lodges Securities Fraud Suit in NJ --------------------------------------------------------------- Wechsler Harwood LLP commenced a securities class action lawsuit in the United States District Court for the District of New Jersey on behalf of a class (the "Class") consisting of all persons who purchased or otherwise acquired securities of Genta, Inc. ("Genta" or the "Company") (Nasdaq:GNTA) between September 10, 2003 and May 3, 2004, inclusive (the "Class Period"). Plaintiff alleges that Genta and certain of the Company's executive officers with violations of federal securities laws. Among other things, plaintiff claims that defendants' omissions and material misrepresentations concerning Genta's operations and financial prospects artificially inflated the Company's stock price, inflicting damages on investors. Genta is a biopharmaceutical company dedicated to the identification, development and commercialization of novel drugs for cancer and related diseases. Plaintiff alleges that during the Class Period defendants artificially inflated the price of Genta stock by concealing material information about the safety and efficacy of Genasense, a potential blockbuster anti-cancer agent that was being reviewed for approval by the Food and Drug Administration ("FDA"). Plaintiff alleges that: (1) defendants did not maintain sufficient documentation to support the Company's repeated claims that Genasense could demonstrate an "overall survival benefit"; (2) the Genasense data submitted by the Company to the FDA was unclear, and that much of the improvement noted by the Company in its studies was not documented and could not be isolated and identified; (3) defendants lacked a good faith basis to claim that approval of Genasense was reasonably foreseeable; and (4) as a result of the deficiencies in the Genasense FDA application, it was not foreseeable at any time during the Class Period that Genta would be able to achieve profitability in the near-term. On April 30, 2004, Genta shareholders learned that the FDA advisory panel had voted 13-3 in favor of recommending that the FDA reject the Genasense application for Genta's failure to demonstrate that Genasense's benefits outweighed its risks and side effects. That day, the FDA issued a statement regarding Genasense stating the advisory panel determined that Genta had failed to demonstrate either that Genasense performed as promised or that the Company maintained the data to support its claims of efficacy. In reaction to this announcement, the price of Genta common stock plummeted, falling almost $6.00 per share, to below $8.45 per share. In the days that followed shares of the Company continued to trade lower as investors digested the news, trading to below $5.00 by May 4, 2004. For more details, contact Virgilio Soler of Wechsler Harwood LLP Shareholder Relations Department by Mail: Wechsler Harwood LLP, 488 Madison Avenue, 8th Floor, New York, New York 10022 by Phone: (877) 935-7400 ext. 283 or by E-Mail: vsoler@whesq.com GENTA INC.: Spector Roseman Lodges Securities Fraud Suit in NJ -------------------------------------------------------------- The law firm of Spector, Roseman & Kodroff, P.C. commenced a securities class action in the United States District Court for the District of New Jersey, on behalf of purchasers of the common stock of Genta, Inc. (Nasdaq: GNTA) between September 10, 2003 through May 3, 2004, inclusive. The Complaint alleges that defendants violated the federal securities laws by issuing materially false and misleading statements contained in press releases and filings with the Securities and Exchange Commission during the Class Period concerning Genta's operations and financial prospects. Genta is a biopharmaceutical company dedicated to the identification, development and commercialization of novel drugs for cancer and related diseases. The Complaint specifically alleges that defendants failed to disclose and/or falsely represented to the investing public that Genta's anti-cancer drug, Genasense, did not appear to be associated with serious adverse reactions in its Phase 3 clinical trial. In fact, defendants knew that the use of Genasense was associated with increased toxicity and discontinuation due to adverse events and that Food & Drug Administration ("FDA") approval of the Genasense New Drug Application was unlikely because the increased toxicity and adverse events associated with the use of Genasense outweighed its marginal benefits. On April 30, 2004, Genta announced that the FDA had posted on its website briefing documents for the FDA's Oncologic Drugs Advisory Committee meeting on May 3, 2004, which suggested that Genasense would fail to win FDA approval. On April 30, 2004, shares of Genta fell $5.83 per share, or 40%, to close at $8.60 per share. On May 3, 2004, Genta reported that it failed to win FDA Panel support for Genasense, the news of which sent shares of Genta falling another $3.49 per share, or 40.5%, to close that day at $5.11. For more details, contact Robert M. Roseman by Phone: 888-844-5862 by E-Mail|: classaction@srk-law.com or visit their Web Site: http://www.srk-law.com KRISPY KREME: Spector Roseman Lodges Securities Suit in M.D. NC --------------------------------------------------------------- The law firm of Spector, Roseman & Kodroff, P.C. initiated a securities class action lawsuit in the United States District Court for the Middle District of North Carolina, against Krispy Kreme Doughnuts, Inc. ("Krispy Kreme" or the "Company") (NYSE: KKD), Scott Livengood (President, Chief Executive Officer and Chairman), Michael Phalen (Chief Financial Officer), Randy S. Casstevens (Former Chief Financial Officer) and John Tate (Chief Operating Officer) on behalf of all purchasers of the common stock of Krispy Kreme between August 21, 2003 through May 7, 2004, inclusive (the "Class Period"). The Complaint alleges that defendants violated the federal securities laws by issuing materially false and misleading statements contained in press releases and filings with the Securities and Exchange Commission during the Class Period. Specifically, the Complaint alleges that the Company failed to disclose and misrepresented the following material adverse facts which were known to defendants or recklessly disregarded by them: (1) that the Company used aggressive bookkeeping to boast its earnings when it acquired its Michigan franchise in 2003; (2) that Krispy Kreme's core businesses were actually underperforming; (3) that the Company expanded too quickly, and would now be forced to shut down six factory stores and three Doughnut and Coffee shops in an effort to improve productivity; (4) that the Company's future strategic development plans with respect to Montana Mills were flawed, as the Company now plans to divest the Montana Mills operations in order to focus on its core business; (5) that the Company would face stiff competition from Dunkin' Donuts, which sells high-quality coffee and a more diverse line of breakfast foods than Krispy Kreme; and (6) that, as a result of the foregoing, defendants lacked a reasonable basis for their positive statements about the Company and their earnings projections. On May 7, 2004, Krispy Kreme announced that it expects fiscal 2005 diluted earnings per share from continuing operations, excluding certain charges, to be 10% lower than previously announced guidance. As a result of this disclosure, shares of Krispy Kreme fell $9.29 per share or 29.21 percent on May 7, 2004 to close at $22.51 per share. For more details, contact Robert M. Roseman by Phone: 888-844-5862 by E-Mail|: classaction@srk-law.com or visit their Web Site: http://www.srk-law.com LANCER CORPORATION: Brodsky & Smith Lodges Stock Suit in W.D. TX ---------------------------------------------------------------- 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 Lancer Corporation (AMEX:LAN), between October 26, 2000 and April 4, 2004, inclusive. The class action lawsuit was filed in the United States District Court for the Western District of Texas. 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 Lancer Corp. securities. No class has yet been certified in the above action. For more details, contact Marc L. Ackerman, Esquire or Evan J. Smith, Esq. of Brodsky & Smith, LLC by Mail: Two Bala Plaza, Suite 602, Bala Cynwyd, PA 19004 by Phone: 877-LEGAL-90 or by E- Mail: clients@brodsky-smith.com LEXAR MEDIA: Charles Piven Lodges Securities Lawsuit in N.D. CA --------------------------------------------------------------- The Law Offices Of Charles J. Piven, P.A. initiated a securities class action on behalf of shareholders who purchased, converted, exchanged or otherwise acquired the common stock of Lexar Media, Inc. (Nasdaq:LEXR) between July 17, 2003 and April 16, 2004, inclusive. The case is pending in the United States District Court for the Northern District of California against defendant Lexar, Eric Stang and Brian McGee. The action charges that defendants violated federal securities laws by issuing a series of materially false and misleading statements to the market throughout the Class Period which statements had the effect of artificially inflating the market price of the Company's securities. No class has yet been certified in the above action. For more details, contact the Law Offices Of Charles J. Piven, P.A. by Mail: The World Trade Center-Baltimore, 401 East Pratt Street, Suite 2525, Baltimore, Maryland 21202 by Phone: 410/986-0036 or by E-Mail: hoffman@pivenlaw.com MERRILL LYNCH: Charles Piven Files Securities Lawsuit In S.D. NY ---------------------------------------------------------------- Law Offices Of Charles J. Piven, P.A. initiated a securities class action on behalf of a class consisting of all persons who purchased or otherwise acquired shares or other ownership units of any of the mutual funds carrying the "Merrill Lynch" brand name (the "MLIM Funds") through Merrill Lynch, Pierce, Fenner & Smith Incorporated ("MLPF&S") acting as broker between May 20, 1999 to the present and who were damaged thereby, seeking to pursue remedies under the Securities Exchange Act of 1934. The MLIM Funds, and the symbols for the respective MLIM Funds named below, are as follows: (1) ML Aggregate Bond Index Fund (Sym: MDABX, MAABX) (2) ML Balanced Capital Fund, Inc. (Sym: MDCPX, MBCPX, MCCPX) (3) ML Basic Value Fund, Inc. (Sym: MDBAX, MBBAX, MCBAX) (4) ML Bond Fund, Inc. -- Core Bond Portfolio (Sym: MDHQX, MBHQX, MCHQX) (5) ML Bond Fund, Inc. -- High Income Portfolio (Sym: MDHIX, BHIX, MCHIX, MAHIX) (6) ML Bond Fund, Inc. -- Intermediate Term (Sym: MDCTX, MBCTX, MCCTX, MACTX) (7) ML California Insured Municipal Bond Fund (Sym: MDCMX, MBCMX, MCCMX, MACMX) (8) ML Developing Capital Markets Fund, Inc. (Sym: MDDCX, MBDCX, MCDCX, MADCX) (9) ML Disciplined Equity Fund, Inc. (Sym: MDDGX, MBDGX, MCDGX, MADGX) (10) ML Dragon Fund, Inc. (Sym: MDDRX, MBDRX, MCDRX, MADRX) (11) ML Equity Dividend Fund (Sym: MDDVX, MBDVX, MCDVX, MADVX) (12) ML EuroFund (Sym: MDEFX, MBEFX, MCEFX, MAEFX) (13) ML Florida Municipal Bond Fund (Sym: MDFMX, MBFMX, MAFMX) (14) ML Focus Twenty Fund, Inc. (Sym: MDFOX, MBFOX, MCFOX, MAFOX) (15) ML Focus Value Fund, Inc. (Sym: MDPNX, MBPNX, MCPNX, MAPNX) (16) ML Fundamental Growth Fund, Inc. (Sym: MDFGX, MBFGX, MCFGX, MAFGX) (17) ML Global Allocation Fund, Inc. (Sym: MDLOX, MBLOX, MCLOX, MALOX) (18) ML Global Balanced Fund (Sym: MDGNX, MBGNX, MCGNX, MAGNX) (19) ML Global Financial Services Fund, Inc. (Sym: MDFNX, MBFNX, MCFNX, MAFNX) (20) ML Global Growth Fund, Inc. (Sym: MDGGX, MBGGX, MCGGX, MAGGX) (21) ML Global SmallCap Fund, Inc. (Sym: MDGCX, MBGCX, MCGCX, MAGCX) (22) ML Global Technology Fund, Inc. (Sym: MDGTX, MBGTX, MCGTX, MAGTX) (23) ML Global Value Fund, Inc. (Sym: MDVLX, MBVLX, MCVLX, MAVLX) (24) ML Healthcare Fund, Inc. (Sym: MDHCX, MBHCX, MCHCX, MAHCX) (25) ML International Equity Fund (Sym: MDIEX, MBIEX, MCIEX, MAIEX) (26) ML International Fund (Sym: MDILX, MBILX, MCILX, MAILX) (27) ML International Index Fund (Sym: MAIIX) (28) ML International Value Fund (Sym: MDIVX, MBIVX, MCIVX, MAIVX) (29) ML Internet Strategies Fund (Sym: MANTX, MBNTX, MCNTX, MDNTX) (30) ML Large Cap Core Fund (Sym: MDLRX, MBLRX, MCLRX, MALRX) (31) ML Large Cap Growth Fund (Sym: MDLHX, MBLHX, MCLHX, MALHX) (32) ML Large Cap Value Fund (Sym: MDLVX, MBLVX, MCLVX, MALVX) (33) ML Latin America Fund, Inc. (Sym: MDLTX, MBLTX, MCLTX, MALTX) (34) ML Low Duration Fund (Sym: MDDUX, MBDUX, MCDUX, MADUX) (35) ML Mid Cap Value Fund (Sym: MDRFX, MBRFX, MCRFX, MARFX) (36) ML Municipal Bond Fund, Inc. -- Insured (Sym: MDMIX, MBMIX, MCMIX, MAMIX) (37) ML Municipal Bond Fund, Inc. -- Limited Maturity (Sym: MDLMX, MBLMX, MCLMX, MALMX) (38) ML Municipal Bond Fund, Inc. -- National (Sym: MDNLX, MBNLX, MCNLX, MANLX) (39) ML Municipal Intermediate Term Fund (Sym: MDMTX, MBMTX, MCMTX, MAMTX) (40) ML Resources Trust (Sym: MDGRX, MBGRX, MCGRX, MAGRX) (41) ML New Jersey Municipal Bond Fund (Sym: MDNJX, MBNJX, MCNJX, MANJX) (42) ML New York Municipal Bond Fund (Sym: MDNKX, MBNKX, MCNKX, MANKX) (43) ML Pacific Fund, Inc. (Sym: MDPCX, MBPCX, MCPCX, MAPCX) (44) ML Pan-European Growth Fund (Sym: MDPEX, MBPEX, MCPEX, MAPEX) (45) ML Pennsylvania Municipal Bond Fund (Sym: MDPYX, MBPYX, MCPYX, MAPYX) (46) ML S&P 500 Index Fund MDSRX (Sym: MASRX, MDUGX) (47) ML Short Term U.S. Government Fund, Inc. (Sym: MDAJX, MBUGX, MBAJX, MCUGX, MCAJX) (48) ML Small Cap Growth Fund (Sym: MRUSX, MBSWX, MCSWX, MASWX) (49) ML Small Cap Index Fund (Sym: MDSKX, MASKX) (50) ML Small Cap Value Fund, Inc. (Sym: MDSPX, MBSPX, MCSPX, MASPX) (51) ML Strategy All-Equity Fund (Sym: MDAEX, MBAEX, MCAEX, MAAEX) (52) ML Strategy Growth and Income Fund (Sym: MDTGX, MBTGX, MCTGX, MATGX) (53) ML Strategy Long-Term Growth Fund (Sym: MDYLX, MBYLX, MCYLX, MAYLX) (54) ML U.S. Government Mortgage Fund (Sym: MDFSX, MBFSX, MCFSX, MAFSX) (55) ML U.S. High Yield Fund, Inc. (Sym: MDCHX, MBCHX, MCCHX, MACHX) (56) ML Utilities and Telecommunications Fund (Sym: MDGUX, MBGUX, MCGUX, MAGUX) (57) ML World Income Fund, Inc. (Sym: MDWIX, MBWIX, MCWIX, MAWIX) The action, numbered 04-cv-3759, is pending before the Honorable Richard Owen in the United States District Court for the Southern District of New York against defendants Merrill Lynch & Co. ("ML&Co.") (NYSE: MER), Merrill Lynch Pierce Fenner & Smith Incorporated ("MLPF&S") and Merrill Lynch Investment Managers L.P ("MLIM LP"). The action charges defendants with engaging in an unlawful and deceitful course of conduct designed to improperly financially advantage defendants to the detriment of plaintiffs and other members of the Class. As part and parcel of defendants' unlawful conduct, defendants, in contravention of their disclosure obligations, fiduciary responsibilities and National Association of Securities Dealers ("NASD") Rules, failed to properly disclose that defendants systematically applied incentives and demerits to induce and compel MLPF&S's mid-level managers to maximize sales of mutual funds carrying the MLIM brand name. In turn, these mid-level managers --- Regional Directors, Directors and Resident Managers --- brought intense pressure to bear on the Financial Advisors under their supervision to steer the Financial Advisors' clients away from mutual funds owned and managed by other entities and into MLIM Funds. By investing in the MLIM Funds, plaintiffs and other members of the Class received a return on their investment that was substantially less than the return on investment that they would have received had they invested the same dollars in a comparable fund. MLPF&S's undisclosed plan and scheme has operated as a wrongful and deceptive exploitation of the misplaced trust of its clients. For more details, contact the Law Offices Of Charles J. Piven, P.A. by Mail: The World Trade Center-Baltimore, 401 East Pratt Street, Suite 2525, Baltimore, Maryland 21202 by Phone: 410/986-0036 or by E-Mail: hoffman@pivenlaw.com ODYSSEY HEALTHCARE: Wolf Haldenstein Lodges TX Securities Suit -------------------------------------------------------------- The law firm of Wolf Haldenstein Adler Freeman & Herz LLP initiated a class action in the United States District Court for the Northern District of Texas, on behalf of all persons who purchased the securities of Odyssey Healthcare, Inc. ("Odyssey Healthcare" or the "Company") (Nasdaq: ODSY) between May 5, 2003 to February 23, 2004, inclusive, (the "Class Period") against defendants Odyssey Healthcare and certain officers and directors of the Company. The case name and index number are Schaufuss v. Odyssey Healthcare, Inc., et al. The complaint alleges that defendants violated the federal securities laws by issuing materially false and misleading statements throughout the Class Period that had the effect of artificially inflating the market price of the Company's securities. The complaint alleges that the statements made by the defendants during the Class Period were materially false and misleading because they failed to disclose and misrepresented the following adverse facts: (1) that the Company's strategy for increasing revenues was based on providing substandard care and services that fell below applicable guidelines; (2) that Odyssey Healthcare's reported results included revenues from Medicare reimbursements that it could not retain because it had been billing Medicare in excess of their applicable spending caps; (3) that the Company was having material operation problems that they did not disclose, such as citing by health officials of their San Diego program for providing substandard service; (4) that, as a result of the foregoing, defendants lacked a reasonable basis for their positive statements about Odyssey Healthcare and their earnings projections. For more details, contact Fred Taylor Isquith, Esq., Christopher S. Hinton, Esq., George Peters, or Derek Behnke of Wolf Haldenstein Adler Freeman & Herz LLP by Mail: 270 Madison Avenue, New York, New York 10016 by Phone: (800) 575-0735 by E- Mail: classmember@whafh.com or visit their Web Site: http://www.whafh.com.http://www.whafh.com/cases/odysseyhealthcar e.htm SALTON INC.: Spector Roseman Lodges Securities Suit in N.D. IL -------------------------------------------------------------- The law firm of Spector, Roseman & Kodroff, P.C. initiated a securities class action lawsuit in the United States District Court for the Northern District of Illinois, against Salton, Inc. ("Salton" or the "Company") (NYSE: SFP), Leonhard Dreimann (CEO, Director) and David M. Mulder (Chief Administrative and Senior Financial Officer) on behalf of all purchasers of the common stock of Salton between November 11, 2002 through May 11, 2004, inclusive (the "Class Period"). The Complaint alleges that defendants violated the federal securities laws by failing to disclose the following adverse factors that were having a materially negative impact on Salton's business: (1) the Company's main revenue and growth driver, the Foreman Grill, had saturated the market such that it was entirely foreseeable that sales had stalled and would continue to stall and/or could not be counted on for continued and sustainable revenues in the near term; (2) without the Company's illegal price support scheme, Salton could not maintain its market position or profit margin; and (3) throughout much of the Class Period, Salton was either in violation of the Company's debt agreements or was foreseeably going to be in breach of those agreements. On May 10, 2004, after the close of trading, defendants issued a release announcing that Salton was performing much worse than the Company had led investors to believe, that the Company was in violation of its senior secured revolving credit facility for the month ended March 27, 2004, and that defendants anticipated near-term non-compliance with certain financial covenants. As a result of this announcement, the price of Salton common stock plummeted, from $6.69 per share on May 10, 2004, to $3.35 per share on May 11, 2004, a one-day drop of 50% on unusually large trading volume. For more details, contact Robert M. Roseman by Phone: 888-844-5862 by E-Mail|: classaction@srk-law.com or visit their Web Site: http://www.srk-law.com SALTON INC.: Milberg Weiss Lodges Securities Lawsuit in N.D. IL --------------------------------------------------------------- The law firm of Milberg Weiss Bershad & Schulman LLP initiated a securities class action on behalf of purchasers of the securities of Salton, Inc. (NYSE: SFP) between November 11, 2002 and May 11, 2004, inclusive, seeking to pursue remedies under the Securities Exchange Act of 1934. The action is pending in the United States District Court for the Northern District of Illinois, Eastern Division, against defendants Salton, Leonhard Dreimann (CEO, Director) and David M. Mulder (Chief Administrative and Senior Financial Officer). The complaint charges defendants with violations of the Exchange Act. More specifically, the complaint alleges that Salton's Class Period press releases and quarterly and annual reports filed with the SEC were materially false and misleading because they failed to disclose the following adverse factors (among others particularized in the complaint) that were having a materially negative impact on Salton's business: (1) at the inception of the Class Period, the Company's main revenue and growth driver, the Foreman grill, had saturated the market such that it was entirely foreseeable that sales had stalled and would continue to stall and/or could not be counted on for continued and sustainable revenues in the near term; (2) without the Company's illegal price support scheme, ended immediately prior to the Class Period by the aggressive efforts of many State Attorneys General, Salton could not maintain its market position or profit margin; and (3) throughout much of the Class Period, Salton was either in violation of the Company's debt agreements or was foreseeably going to be in breach of those agreements. On May 10, 2004, after the close of trading, defendants issued a release announcing that Salton was performing much worse than the Company had led investors to believe, that the Company was in violation of its senior secured revolving credit facility for the month ended March 27, 2004, and that defendants anticipated near-term non-compliance with certain financial covenants. In response to this announcement, the price of Salton common stock plummeted, from $6.69 per share on May 10, 2004, to $3.35 per share on May 11, 2004, a one day drop of 50% on unusually large trading volume. For more details, contact Steven G. Schulman, Peter E. Seidman or Andrei V. Rado by Mail: One Pennsylvania Plaza, 49th fl., New York, NY, 10119-0165 by Phone: (800) 320-5081 or E-Mail: sfeerick@milbergweiss.com or visit their Web Site: www.milbergweiss.com VASO ACTIVE: Bernstein Liebhard Lodges Securities Lawsuit in MA --------------------------------------------------------------- The Law Firm of Bernstein Liebhard & Lifshitz, LLP commenced a securities class action in the United States District Court for the District of Massachusetts on behalf of all persons who purchased or acquired securities of Vaso Active Pharmaceuticals, Inc. (OTC: VAPH) between December 11, 2003 through March 31, 2004, inclusive, seeking to pursue remedies under the Securities Exchange Act of 1934. According to the complaint, defendants violated sections 10(b) and 20(a) of the Exchange Act, and Rule 10b-5, by issuing a series of material misrepresentations to the market during the Class Period. The complaint alleges that throughout the Class Period, Vaso issued press releases, and filed financial reports with the SEC, touting the Company's clinical trial of its anti- fungal product as being "revolutionary," and stated that the trial was supervised by a team of independent physicians, analyzed by the New England Medical Center of Boston, and endorsed by the American Association of Medical Foot Specialists. The complaint charges that defendants' assertions were grossly misleading because: (1) the New England Medical Center had nothing to do with the study associated with the trial, it was not involved in the selection of patients for the trial, and it had not analyzed the trial results or drawn any conclusions of its effectiveness; (2) the trial was supervised by one podiatrist, not a group of independent physicians, who was selected by the Company's majority shareholder and compensated by the Company; (3) the Company's so-called "clinical trial" was more than half a decade old; (4) the Association of Medical Foot Specialists is not widely known in the medical community, and its endorsement of Vaso's product was bargained for in exchange for a donation by Vaso to the Association's scholarship program; and (5) there was little, if any, institutional demand for Vaso's securities. On April 1, 2004, before the market opened, the SEC issued a press release announcing the temporary suspension of trading of Vaso stock because of "questions regarding the accuracy of assertions by VAPH (Vaso) and by others... concerning, among other things: (i) FDA approval of certain key products, and (ii) the regulatory consequences of the future application of their primary product." Moreover, on April 7, 2004, Vaso announced that the Company had received a letter from the Nasdaq Listing Investigations department regarding Vaso's compliance with Nasdaq listing requirements. In response to the Nasdaq letter, Vaso stated "In view of the substantial administrative and cash burdens being borne by the Company at this time, the Company has determined that it is in the best interest of shareholders to voluntarily cause its shares to be removed from Nasdaq." For more details, contact Bernstein Liebhard & Lifshitz, LLP by Mail: 10 East 40th Street, New York, New York 10016 by Phone: (800) 217-1522 or (212) 779-1414 by E-Mail: VAPH@bernlieb.com or visit their Web Site: http://www.bernlieb.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. Glenn Ruel Seorin, 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 * * *