/raid1/www/Hosts/bankrupt/CAR

/raid1/www/Hosts/bankrupt/CAR_Public/040806.mbx C L A S S A C T I O N R E P O R T E R Friday, August 6, 2004, Vol. 6, No. 155 Headlines AMERICAN EXPRESS: Consumers Launch Unfair Trade Practices Suit AMERICAN HONDA: Recalls 19,572 Accords Due To Defective Lights AMERICAN HONDA: Recalls 130,617 CR-Vs Due To Defective Air Bags BAYERISCHE MOTOREN: Recalls 99 BMW R12-00 GSs Due To Oil Leaks BAYERISCHE MOTOREN: Recalls 181 Motorcycles Due To Crash Hazard BENNETT ENVIRONMENTAL: Shalov Stone Launches Litigation Website BRISTOL-MYERS: Agrees To Pay $150M Settlement For SEC Fraud Suit BLUE MARTINI: Plaintiffs Seek Approval of NY Lawsuit Settlement BRISTOL-MYERS: Agrees To Pay $150M Settlement For SEC Fraud Suit CHUBB CHILE: Offers New Insurance Products To Cover Litigation DAIMLERCHRYSLER: Recalls 438,391 PT Cruisers Due To Fire Hazard DAIMLERCHRYSLER: Recalls 8,108 Vehicles Due To Fuel Pump Defects DEAN FOODS: SEC Lodges, Settles Insider Trading Suit V. Officers FERRARI NORTH: Recalls 487 Vehicles Due To Steering Hose Defects FLEETWOOD ENTERPRISES: Recalls 3,426 Vehicles For Wheel Defects GENERAL MOTORS: Recalls 281 Pontiac Grand Prix Due To Crash Risk GENERAL MOTORS: Recalls 670 Saturn IONs Due To Fuel Pipe Defects GLOBIX CORPORATION: Reaches Settlement For NY Securities Lawsuit HENRY SCHEIN: Individual Claims Remain in TX Consumer Fraud Suit HENRY SCHEIN: Asks Court To Dismiss Class Claims in Fraud Suit IMS HEALTH: Reaches Settlement For Prescription Data Lawsuits INTERNATIONAL TRUCK: Recalls 81,883 Vehicles Due To Crash Hazard INTERNATIONAL TRUCK: Recalls 18,545 Vehicles Due To Fire Hazard KIA MOTORS: Recalls 262,636 Vehicles Due To Seat Belt Defects KPNQWEST N.V.: Asks NY Court To Dismiss Securities Fraud Lawsuit KWIKEE PRODUCTS: Recalls 2,442 Hydraulic Jacks For Injury Hazard LANCER CORPORATION: TDH Partners Voluntarily Dismisses Lawsuit MAZDA NORTH: Recalls 20T Minivans Due To FMVSS 120 Noncompliance MERCEDES-BENZ: Recalls 16,690 Vehicles Due To Lid Spring Defects MERCEDES-BENZ: Recalls 143,387 Vehicles Due To System Defects MIDAMERICAN ENERGY: Asks NY Court To Dismiss Natural Gas Lawsuit MITSUBISHI MOTORS: Recalls 29,330 AWD SUVs Due To Injury Hazard MITSUBISHI MOTORS: Recalls 1,211 Vehicles Due To Injury Hazard PRG SCHULTZ: Discovery Proceeds in Securities Lawsuit in N.D. GA QWEST COMMUNICATIONS: Asks CO Court To Dismiss Securities Suit QWEST COMMUNICATIONS: Asks CO Court To Rule on Issues in Lawsuit QWEST COMMUNICATIONS: Plaintiffs Oppose Right-of-Way Settlements NEW JERSEY: Residents Lodge Suit V. Privately Owned Dams, State OSRAM SYLVANIA: Recalls 5.6M B10 Light Bulbs Due To Injury Risks SUBARU OF AMERICA: Recalls 1,959 Vehicles Due To Injury Hazard TOYOTA NORTH: Recalls 1,959 Lexus LS 430 Due To Crash Hazard TRIUMPH MOTORCYCLES: Recalls 2,792 Motorcycles Due To Fire Risks TYSON FOODS: Discovery Completed in FLSA Violations Suit in AL TYSON FOODS: Reissues Notices To Class Members in PA FLSA Suit TYSON FOODS: FLSA Violations Suit Trial Set September 7, 2004 TYSON FOODS: TN Court To Rule on Summary Judgment in Worker Suit TYSON FOODS: Files Petition in OK High Court V. Certification TYSON FOODS: DE Court Modifies Summary Judgment Ruling in Suit TYSON FRESH: AL Court Grants JMOL Motion in Cattle Growers' Suit UNITED STATES: SCAS Identifies More Than $5.55B in Settlements UNITED STATES: Study Uncovers Less Securities Suits, Added Costs Asbestos Alerts ASBESTOS LITIGATION: Ace Ltd. Survival Ratios Adversely Affected ASBESTOS LITIGATION: Albany International Claims Show Increase ASBESTOS LITIGATION: American Standard Has 120T Claims Pending ASBESTOS LITIGATION: CNA Financial Has $1.741M Expense Reserves ASBESTOS LITIGATION: CSX Corp. Sea-Land Claims Increased In 2004 ASBESTOS LITIGATION: CSXT Inc. Reserve For Asbestos Decreased ASBESTOS LITIGATION: Corning Inc. Discloses Settlement Charges ASBESTOS LITIGATION: Crane Co. Facing Various Asbestos Lawsuits ASBESTOS LITIGATION: Crum & Forster's Rating Outlook Negative ASBESTOS LITIGATION: Cytec Asbestos Liability At $70M As Of June ASBESTOS LITIGATION: Dow Chemical Insurance Receivables Lowered ASBESTOS LITIGATION: FDMLQ Injury Trust To Own 50.1% Of Stock ASBESTOS LITIGATION: Hanson Charges Include GBP19.2M Exposure ASBESTOS LITIGATION: HPC Litigation Creates More Liabilities ASBESTOS LITIGATION: Honeywell Paid $9M Charge For Bendix Claims ASBESTOS LITIGATION: ISG Expects $5M Asbestos Removal in 2004 ASBESTOS LITIGATION: LECO Facing 37,552 Asbestos Plaintiffs ASBESTOS LITIGATION: SEE Posts $512.5M Settlement Liability ASBESTOS LITIGATION: U.S. Steel Says Active Cases To Be Reduced ASBESTOS ALERT: Potomac Insurance Noted Asbestos-Related Loss ASBESTOS ALERT: USG Subsidiaries Reorganize To Resolve Claims New Securities Fraud Cases GEXA CORPORATION: Milberg Weiss Files Securities Suit in S.D. TX INVISION TECHNOLOGIES: Schiffrin & Barroway Lodges NY Stock Suit TARO PHARMACEUTICAL: Charles J. Piven Lodges NY Securities Suit TARO PHARMACEUTICAL: Murray Frank Files Securities Lawsuit in NY THORATEC CORPORATION: Charles J. Piven Lodges CA Securities Suit THORATEC CORPORATION: Federman & Sherwood Files Stock Suit in CA ********* AMERICAN EXPRESS: Consumers Launch Unfair Trade Practices Suit -------------------------------------------------------------- The law firm of Roxborough, Pomerance & Nye initiated a class action lawsuit against American Express (AMEX) for unfair business practices, claiming that cardholders are denied the 20- day grace period to make payments as stipulated in their agreements, resulting in late payments and subsequent finance charges for many consumers. In Pomerance v. American Express, Civil Case BC318328, the plaintiff alleges that AMEX intentionally delays mailing its monthly billing statements to account holders so that statements are not received until at least approximately one week after the billing period closes. Furthermore, the fact that AMEX does not consider a payment made until it is received--rather than the postmark date that the payment is sent--provides account holders with even less time to make timely payments. These billing practices virtually deprive account holders of any meaningful grace period, forcing them to mail their payments almost immediately upon receipt of the billing statements in order to avoid a finance charge and/or a late fee. "In essence, the 20-day grace period is illusory as most people have far less than that to pay the balance of their bills," explains Drew Pomerance, a partner of Los Angeles based Roxborough, Pomerance & Nye LLP who filed the case on behalf of the plaintiff. The lawsuit also claims that AMEX intentionally mails its billing statements in envelopes without postmarks to hide its delayed billing practices, making it impossible for cardholders to determine whether or not the delays are due to AMEX or the post office. "We are seeking an injunction, requiring American Express to change its billing practices by sending out billing statements as soon as the billing period closes and to postmark its billing statement envelopes," adds Pomerance. "Furthermore, the lawsuit seeks restitution for all cardholders who have been paying charges due to the company's fraudulent billing practices." Mr. Pomerance estimates that hundreds of thousands of cardholders in California have been paying finance charges without real cause, and that restitution can reach millions of dollars for class members. The lawsuit joins other class actions alleging a variety of wrongdoing in AMEX's billing practices. In one case, Boehr v. American Express, the plaintiff alleges that when American Express receives a payment after 10 a.m. on the day it is due, the company does not post the payment until the next day, thereby incurring one day of finance charges on that account. "Clearly, something should be done to correct American Express' billing practices and protect consumers from paying out unnecessary fees," concludes Mr. Pomerance. For more details, contact Drew E. Pomerance of Roxborough, Pomerance & Nye LLP by Mail: Westwood Place, 10866 Wilshire Boulevard, Suite 1200, Los Angeles, CA 90024-4336 (Los Angeles Co.) by Phone: 310-470-1869 or 310-474-2251 by Fax: 310-470-9648 or 310-474-5741 or by E-mail: dep@rpnlaw.com AMERICAN HONDA: Recalls 19,572 Accords Due To Defective Lights --------------------------------------------------------------- American Honda Motor Co., Inc. is cooperating with the National Highway Traffic Safety Administration (NHTSA) by issuing a June 2004 voluntary recall for about 19,572 units of Year 2000-2001 Honda Accord passenger vehicles. Manufactured from May 1999 to October 2000, the NHTSA has determined that on certain passenger vehicles, the dimmer control for the instrument panel lights could fail due to heat buildup. If this occurs, the instrument lights may fail and, at night, the driver may not be able to see the instrument panel gauges, such as the speedometer. Dealers will replace a multiplex control unit for the instrument panel lights. The manufacturer has reported that owner notification is expected to begin during July 2004. Owners may contact Honda at 1-800-999-1009. AMERICAN HONDA: Recalls 130,617 CR-Vs Due To Defective Air Bags --------------------------------------------------------------- American Honda Motor Co., Inc. is cooperating with the National Highway Traffic Safety Administration (NHTSA) by issuing a June 2004 voluntary recall for about 130,617 units of Year 2002-2004 Honda CR-V SUVs. Manufactured from April 2002 to April 2004, the NHTSA has determined that on certain sport utility vehicles, the wiring harness of the driver's front air bag was incorrectly wired. In the event of a crash, the air bag inflation rate will be incorrect, which could increase the risk of injury. Dealers will repair the wiring. The manufacturer has reported that owner notification is expected to begin during July 2004. Owners may contact Honda at 1-800-999-1009. BAYERISCHE MOTOREN: Recalls 99 BMW R12-00 GSs Due To Oil Leaks -------------------------------------------------------------- Bayerische Motoren Werke is cooperating with the National Highway Traffic Safety Administration (NHTSA) by issuing a June 2004 voluntary recall for about 99 units of Year 2005 BMW R12-00 GS motorcycles. Manufactured from January to March 2004, the NHTSA has determined that on certain motorcycles, the Integral Anti-lock Brake System (IABS) sensor sealing O-ring connection at the rear axle housing may have been damaged during the assembly process, causing oil leakage. If this happens, oil could contact the rear wheel and the rear wheel brake disk. The rider may not be able to control the motorcycle, which could result in a crash. Dealers will replace the rear wheel IABS sensor sealing O-ring. The manufacturer has reported that owner notification is expected to begin during July 2004. Owners may contact BMW at 1-800-831-1117. BAYERISCHE MOTOREN: Recalls 181 Motorcycles Due To Crash Hazard --------------------------------------------------------------- Bayerische Motoren Werke is cooperating with the National Highway Traffic Safety Administration (NHTSA) by issuing a June 2004 voluntary recall for about 181 units of Year 2005 BMW K1200 LT and Year 2004 BMW R1150 RT motorcycles. Manufactured since April 2004, the NHTSA has determined that on certain motorcycles, an incorrect sealing ring was mounted to the piston of the rear brake master cylinder. If only the rear brake were applied during riding, insufficient braking pressure would be available to slow the motorcycle, which could increase the risk of a crash. Dealers will replace the rear brake master cylinder. The manufacturer has reported that owner notification is expected to begin during July 2004. Owners may contact BMW at 1-800-831-1117. BENNETT ENVIRONMENTAL: Shalov Stone Launches Litigation Website --------------------------------------------------------------- In response to the large demand for information about the Bennett Class Action, the law firm of Shalov Stone & Bonner LLP opened a new website, www.bennettclassaction.com to address investor interest and to facilitate joining the class action. On July 28, 2004, Shalov Stone & Bonner LLP filed a class action on behalf of all persons who purchased the securities of Bennett Environmental, Inc. (AMEX: BEL; TSX: BEV) in the period from June 2, 2003 to July 22, 2004. The new website includes information about the class action as well as new evidence strongly supporting the claims in the lawsuit. Following the publicity generated by Shalov Stone & Bonner LLP's lawsuit, several lawyers will issue press releases about lawsuits, even though they have not investigated them or filed them, in an effort to solicit clients. Shalov Stone & Bonner LLP has filed the first lawsuit relating to Bennett Environmental, Inc. and is continuing to conduct a significant investigation of the company. The Shalov Stone & Bonner LLP investigation is only available to its clients and is not available to other law firms. Shalov Stone & Bonner LLP has developed significant information concerning numerous other alleged disclosure violations committed by the defendants. The lawsuit was filed in the United States District Court for the Southern District of New York, and includes American and Canadian investors. For more detaisl, contact Thomas G. Ciarlone, Jr. of Shalov Stone & Bonner LLP by Mail: 485 Seventh Avenue, Suite 1000, New York, NY 10018 by Phone: (212) 239-4340 by E-mail: tciarlone@lawssb.com or visit http://www.bennettclassaction.com BRISTOL-MYERS: Agrees To Pay $150M Settlement For SEC Fraud Suit ---------------------------------------------------------------- The Securities and Exchange Commission and Bristol-Myers reached $150 million settlement for a civil action that the Commission has filed against the New York-based pharmaceutical company for perpetrating a fraud scheme to overstate its results from the first quarter of 2000 through the fourth quarter of 2001. Bristol-Myers overstated its results primarily by: (1) engaging in channel-stuffing near the end of every quarter in amounts sufficient to meet sales and earnings targets set by officers (channel-stuffing); and (2) improperly recognizing about $1.5 billion in revenue from consignment-like sales associated with the channel-stuffing contrary to generally accepted accounting principles (GAAP). When Bristol-Myers' results fell short of Wall Street analysts' earnings estimates, the Company used improper accounting, including "cookie jar" reserves, to further inflate its earnings. Simultaneous with the filing of the civil action, Bristol-Myers agreed to the following relief without admitting or denying the allegations in the Commission's Complaint, except as to jurisdiction, which is admitted: (i) a permanent injunction against future violations of certain antifraud, reporting, books and records and internal controls provisions of the federal securities laws; (ii) monetary relief for the benefit of shareholders, including a civil penalty of $100 million plus a $50 million shareholder fund; and (iii) various remedial measures, including the appointment of an independent advisor to review Bristol-Myers' accounting practices and internal control systems and periodically assess the status of remedial actions undertaken or planned by the Company in those and other areas, such as financial reporting. The action is titled, SEC v. Bristol-Myers Squibb Company, Civil Action No. 04-3680 (D.N.J.) (Hochberg, J.) BLUE MARTINI: Plaintiffs Seek Approval of NY Lawsuit Settlement --------------------------------------------------------------- Plaintiffs asked the United States District Court for the Southern District of New York to approve the settlement of a consolidated securities class action filed against Blue Martini Software, Inc. and: (1) Monte Zweben, (2) William Zuendt, (3) Andrew Verhalen, (4) certain of its former officers and directors, (5) Goldman Sachs and (6) the other underwriters of the Company's initial public offering, or IPO Several suits were initially filed and were later consolidated under the title "In re Blue Martini Initial Public Offering Securities Litigation." Plaintiffs claim that the defendants violated the federal securities laws because the Company's IPO registration statement and prospectus allegedly contained untrue statements of material fact or omitted material facts regarding the compensation to be received by, and the stock allocation practices of, the IPO underwriters. The plaintiffs seek unspecified monetary damages and other relief. Similar complaints were filed in the same Court against hundreds of other public companies that conducted IPOs of their common stock since the mid-1990s. On August 8, 2001, all IPO-related lawsuits were consolidated for pretrial purposes before United States Judge Shira Scheindlin of the Southern District of New York. In accordance with Judge Scheindlin's orders, the Company did not answer the complaint, and no discovery was served. Also in accordance with Judge Scheindlin's orders, plaintiffs filed amended consolidated complaints on April 19, 2002. The Company joined in a global motion to dismiss the IPO Lawsuits on July 15, 2002. On October 9, 2002, the Company's directors and officers were dismissed without prejudice pursuant to a stipulated dismissal and tolling agreement between the plaintiffs and certain individual defendants. On November 1, 2002, Judge Scheindlin presided over an all-day hearing on the global motions to dismiss. On February 19, 2003, Judge Scheindlin issued a ruling on the global motion to dismiss; with respect to the Company, the motion was granted in part and denied in part. In June 2003, the Company joined in a tentative global settlement that would, among other things, result in the dismissal with prejudice of all claims against all issuers and their officers and directors in the IPO-related lawsuits, and the assignment to plaintiffs of certain potential claims that the issuers may have against their IPO underwriters. The tentative settlement provides that, in the event that the plaintiffs ultimately recover less than $1 billion in settlement or judgment against the underwriter defendants in the IPO- related lawsuits, the plaintiffs would be entitled to payment by each participating Issuer's insurer of a pro rata share of any shortfall in the plaintiffs' guaranteed recovery. The tentative settlement does not involve any payment or admission of wrongdoing by the Company. In July 2003, pursuant to the authorization of a special litigation committee of the Company's Board of Directors, the Company entered into a non-binding memorandum of understanding reflecting the settlement terms. In September 2003, in connection with the possible settlement, the Company's officers and directors described above who had entered tolling agreements with plaintiffs agreed to extend those agreements so that they would not expire prior to any settlement being finalized. In July 2004, the IPO underwriter defendants filed a response opposing the motion for approval. Though Blue Martini executed the final settlement agreement in May 2004, it remains subject to a number of procedural conditions, as well as formal approval by the court. BRISTOL-MYERS: Agrees To Pay $150M Settlement For SEC Fraud Suit ---------------------------------------------------------------- The Securities and Exchange Commission and Bristol-Myers reached $150 million settlement for a civil action that the Commission has filed against the New York-based pharmaceutical company for perpetrating a fraud scheme to overstate its results from the first quarter of 2000 through the fourth quarter of 2001. Bristol-Myers overstated its results primarily by: (1) engaging in channel-stuffing near the end of every quarter in amounts sufficient to meet sales and earnings targets set by officers (channel-stuffing); and (2) improperly recognizing about $1.5 billion in revenue from consignment-like sales associated with the channel-stuffing contrary to generally accepted accounting principles (GAAP). When Bristol-Myers' results fell short of Wall Street analysts' earnings estimates, the Company used improper accounting, including "cookie jar" reserves, to further inflate its earnings. Simultaneous with the filing of the civil action, Bristol-Myers agreed to the following relief without admitting or denying the allegations in the Commission's Complaint, except as to jurisdiction, which is admitted: (i) a permanent injunction against future violations of certain antifraud, reporting, books and records and internal controls provisions of the federal securities laws; (ii) monetary relief for the benefit of shareholders, including a civil penalty of $100 million plus a $50 million shareholder fund; and (iii) various remedial measures, including the appointment of an independent advisor to review Bristol-Myers' accounting practices and internal control systems and periodically assess the status of remedial actions undertaken or planned by the Company in those and other areas, such as financial reporting. The action is titled, SEC v. Bristol-Myers Squibb Company, Civil Action No. 04-3680 (D.N.J.) (Hochberg, J.) CHUBB CHILE: Offers New Insurance Products To Cover Litigation -------------------------------------------------------------- Chubb Chile plans to offer new products to cover class actions, which recently became legal in Chile, technical/commercial manager Guillermo Garc�a of the Chilean subsidiary of the U.S.- based insurance group Chubb (NYSE: CB) told BNamericas. In the past only individuals could file suit under Chilean consumer law, however recent amendments have made it possible for groups of people to file class action complaints. According to Mr. Garcia, "Class actions are common in the US and other developed countries, therefore Chubb, as a North American company, has experience dealing with this type of contingency, or subsidiary, Chubb Chile already provides insurance coverage to local companies including vineyards, which will most likely be effected by the new class action legislation, Chubb will therefore need to upgrade its coverage in this area." Mr. Garcia further told BNAmericas, "Since the legislation is new to Chile there are many different points to consider, and for now our lawyers are analyzing the impacts regarding how it would affect insurance companies, we do not, however, expect class actions to have an immediate effect on the market." With the new consumer law affecting many segments in the insurance industry, Chubb according to Mr. Garcia is considering all possible changes in the market in order to revamp their product line. DAIMLERCHRYSLER: Recalls 438,391 PT Cruisers Due To Fire Hazard --------------------------------------------------------------- DaimlerChrysler Corporation is cooperating with the National Highway Traffic Safety Administration (NHTSA) by issuing a June 2004 voluntary recall for about 438,391 units of Year 2001-2005 Chrysler PT Cruisers. Manufactured from January 2000 to April 2004, the NHTSA has determined that on certain vehicles equipped with 2.4L non-turbo engines and automatic transaxles, the high pressure power steering hose routing could allow contact with the automatic transaxle differential cover, potentially damaging the hose. Power steering fluid leakage in the presence of an ignition source can result in an under hood fire. Dealers will inspect and relocate, or replace as necessary, the power steering hose and confirm the torque of the hose fastener at the steering gear end. The manufacturer has not yet provided an owner notification schedule for this campaign. Owners may contact DaimlerChrysler at 1-800-853-1403. DAIMLERCHRYSLER: Recalls 8,108 Vehicles Due To Fuel Pump Defects ---------------------------------------------------------------- DaimlerChrysler Corporation is cooperating with the National Highway Traffic Safety Administration (NHTSA) by issuing a June 2004 voluntary recall for about 8,108 units of Year 2004 Chrysler Sebring and Stratus. Manufactured from April to June 2004, the NHTSA has determined that on certain 2-door coupe passenger vehicles, the fuel return line hose fitting on the electric fuel pump may be improperly molded. Breakage could result in a leakage of fuel, and in the presence of an ignition source, it could result a fire. Dealers will replace the fuel pump. The manufacturer has not yet provided an owner notification schedule for this campaign. Owners may contact DaimlerChrysler at 1-800-853-1403. DEAN FOODS: SEC Lodges, Settles Insider Trading Suit V. Officers ---------------------------------------------------------------- The Securities and Exchange Commission filed a settled complaint against Michael J. McCloskey, Rance C. Miles, Luis E. Vallejo and Daniel Harris for engaging in insider trading in the securities of Dean Foods Company (Dean Foods) in advance of the April 5, 2001, announcement that Suiza Foods Corporation would merge with Dean Foods. The Commission's complaint, filed in the U.S. District Court for the District of Columbia, alleges that McCloskey and Miles were officers of a dairy business that had entered into a confidential milk supply contract with Dean Foods in early 2001. According to the complaint, McCloskey and Miles obtained material nonpublic information from Dean Foods which they used to purchase Dean Foods securities the day before the Dean Foods-Suiza Foods merger announcement and to tip others including Vallejo, McCloskey's long-time friend, and Harris, Miles' broker. Collectively, the four defendants realized illegal profits totaling $113,801. The Commission alleges McCloskey and Miles received the last piece of material nonpublic information on April 4, 2001, when they were given the "green light" to make public their previously confidential milk supply agreement. McCloskey, in light of this and other information known to him, concluded that this meant the Suiza Foods-Dean Foods merger was "coming down." After receiving the information, McCloskey purchased 3,000 shares of Dean Foods stock on margin for $97,500. McCloskey also tipped others, including his long-time friend Luis Vallejo. Vallejo purchased 7,000 shares of Dean Foods stock the same day for $229,170. According to the complaint, Miles also purchased 500 shares of Dean Foods stock and 250 out-of-the-money call options contracts for $43,050 after receiving the information about the "green light" from McCloskey. Miles also tipped others, including his broker, Harris. Harris purchased 100 shares of Dean Foods stock for $3,259. He also tipped one of his clients, recommending that he sell short Suiza Foods stock. After the public announcement of the merger on April 5, 2001, Dean Foods stock increased from its April 4, 2001 close of $32.50 to as high as $38.80 on April 5, 2001, or a 19% increase. Following the announcement, the four individuals sold their Dean Foods securities and realized substantial illegal profits. McCloskey sold his stock on April 5, 2001, realizing one-day illegal profits of $15,900. Miles sold his Dean Foods stock and options between April 5 and April 11, 2001, earning illegal profits of $60,530. Vallejo sold his stock on April 5, 2001, earning $36,830 in illegal profits. Harris sold his stock on April 5, 2001, realizing one-day profits of $541. McCloskey, Miles, and Harris each tipped others. Collectively, the tippees (other than Vallejo) earned $10,799.05. Simultaneous with the filing of this action, the Commission has agreed to accept the individuals' offers to settle this matter. Each of them has agreed, without admitting or denying the allegations in the complaint, to the entry of a final judgment permanently enjoining them from future violations of Section 10(b) of the Securities Exchange Act of 1934 and Exchange Act Rule 10b-5. In addition, McCloskey has consented to pay $92,730.45, representing full disgorgement of his illegal profits and his tippees' profits (except Vallejo) in the amount of $25,930.65, prejudgment interest of $4,039.15, and a one- time civil penalty of $62,760.65 on his own profits and those of his tippees. Miles has consented to pay $133,311.34, representing full disgorgement of his and his tippees' illegal profits of $61,839.40, prejudgment interest of $9,632.54, and a one-time civil penalty of $61,839.40 on his own profits and those of his tippees. Vallejo has consented to pay $79,396.62, representing full disgorgement of his illegal profits of $36,830.00, prejudgment interest of $5,736.92, and a one-time civil penalty of $36,830.00. Harris has consented to pay $624.00, representing one dollar in disgorgement and a one-time civil penalty of $623 on his own profits and those of his tippee. In addition, Harris has agreed, based upon the anticipated entry of the injunction in this matter, to a Commission Order barring him from association with any broker or dealer with the right to reapply after two years. The Commission also would like to acknowledge the assistance of the Pacific Exchange in this matter. The action is titled, SEC v. Michael J. McCloskey, Rance C. Miles, Luis E. Vallejo and Daniel Harris, Case No. 1:04CV01294, D.D.C. (LR-18819) FERRARI NORTH: Recalls 487 Vehicles Due To Steering Hose Defects ---------------------------------------------------------------- Ferrari North America Inc. is cooperating with the National Highway Traffic Safety Administration (NHTSA) by issuing a June 2004 voluntary recall for about 487 units of the following vehicles: (1) Ferrari 360 Modena, 2003 (2) Ferrari 360 Spider, 2003 (3) Ferrari 360 Challenge Stradale, 2004 The NHTSA has determined that on certain passenger vehicles, an oil leak in the hydraulic steering delivery pipe from the pump to the steering rack may occur, which could lead to a gradual reduction of the assisted steering function. Such circumstances could lead to loss of vehicle control and could result in a crash. Dealers will replace the steering delivery hoses from the pump to the steering rack. The manufacturer has reported that owner notification is expected to begin during July 2004. Owners may contact Ferrari at 1-201-816-2651. FLEETWOOD ENTERPRISES: Recalls 3,426 Vehicles For Wheel Defects --------------------------------------------------------------- Fleetwood Enterprises, Inc. is cooperating with the National Highway Traffic Safety Administration (NHTSA) by issuing a June 2004 voluntary recall for about 3,426 units of the following vehicles: Fleetwood Mallard, model 2004 Fleetwood Pioneer, model 2004 Fleetwood Prowler, model 2004 Fleetwood Terry, model 2004 Fleetwood Wilderness, model 2004 Fleetwood Pride, models 2002-2004 Fleetwood Triumph, models 2002-2004 Manufactured from January 2002 to April 2004, the NHTSA has determined on conventional and fifth wheel travel trailers equipped with aluminum wheels, the wheels may not have had the proper wheel lug nut torque applied. Additionally, paint applied to the mating surface of the hub may cause the lug nuts to loosen, particularly after the wheel has been removed for service. Dealers will inspect, repair, or replace any damaged wheels, lug nuts, lug studs, and mating surfaces. Dealers will also remove paint film from the mating surfaces. The manufacturer has reported that owner notification is expected to begin during July 2004. Owners may contact Fleetwood at 1-800-509-3418. GENERAL MOTORS: Recalls 281 Pontiac Grand Prix Due To Crash Risk ---------------------------------------------------------------- General Motors Corporation is cooperating with the National Highway Traffic Safety Administration (NHTSA) by issuing a June 2004 voluntary recall for about 281 units of Year 2004 Pontiac Grand Prix passenger vehicles. Manufactured since May 2004, the NHTSA has determined that on certain passenger vehicles have a condition where the front frame rear body mount bracket may fracture and degrade to the point where the intermediate steering shaft could separate, resulting in loss of steering control, which increases the risk of a crash. Dealers will inspect the front frame assembly and replace it if necessary. The manufacturer has reported that owner notification is expected to begin during August 2004. Owners may contact Pontiac at 1-800-620-7668. GENERAL MOTORS: Recalls 670 Saturn IONs Due To Fuel Pipe Defects ---------------------------------------------------------------- General Motors Corporation is cooperating with the National Highway Traffic Safety Administration (NHTSA) by issuing a June 2004 voluntary recall for about 670 units of the Year 2004 Saturn ION passenger vehicles: Manufactured from March to May 2004, the NHTSA has determined that certain passenger vehicles equipped with supercharged 2.0l 4-cylinder (LSJ) engines were built with a fuel feed pipe that could crack and leak fuel near the fuel rail. Fuel leakage, in the presence of an ignition source, could result in a fire. Dealers will replace the fuel feed pipe assembly. The manufacturer has reported that owner notification began on June 9, 2004. Owners may contact Saturn at 1-800-972-8876. GLOBIX CORPORATION: Reaches Settlement For NY Securities Lawsuit ---------------------------------------------------------------- Globix Corporation reached a tentative settlement for the putative class action filed against it in the United States District Court for the Southern District of New York, entitled "In re Globix Corp Securities Litigation, No. 02-CV-00082." This lawsuit also names as defendants its former officers: (1) Marc Bell, (2) Peter Herzig (who remains a director of Globix) and (3) Brian Reach The suit asserts claims under sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder on behalf of all persons or entities who purchased the Company's securities between November 16, 2000 and December 27, 2001. A consolidated amended complaint was filed in this lawsuit on June 28, 2002. The Company filed a motion to dismiss the consolidated amended complaint, but withdrew this motion without prejudice in the course of settlement discussions with the parties. On March 31, 2004, the parties entered into an agreement in principle to settle all claims against the defendants for $3,500, all of which would be covered by insurance. The proposed settlement is subject to the approval of the court. If the settlement is not approved by the court, the Company intends to re-file its motion to dismiss. HENRY SCHEIN: Individual Claims Remain in TX Consumer Fraud Suit ---------------------------------------------------------------- Only individual claims asserted on behalf of the named plaintiffs remain in the class action filed against Henry Schein, Inc. and one of its subsidiaries in the District Court in Travis County, Texas, styled "Shelly E. Stromboe and Jeanne Taylor, on Behalf of Themselves and all others Similarly Situated vs. Henry Schein, Inc., Easy Dental Systems, Inc. and Dentisoft, Inc., Case No. 98-00886." The petition alleges, among other things, negligence, breach of contract, fraud, and violations of certain Texas commercial statutes involving the sale of certain practice management software products sold prior to 1998 under the Easy Dental name. In October 1999, the trial court, on motion, certified both a Windows sub-class and a DOS sub-class to proceed as a class action pursuant to Tex. R. Civ. P. 42. It is estimated that approximately 5,000 Windows customers and approximately 10,000 DOS customers were covered by the class action that was certified by the trial court. On September 14, 2000, the Court of Appeals affirmed the trial court's certification order. On January 5, 2001, the Company filed a Petition for Review in the Texas Supreme Court. On October 31, 2002, the Texas Supreme Court issued an opinion in the case finding that the trial court's certification of the case as a class action was improper. The Texas Supreme Court reversed the Court of Appeals' judgment in its entirety, and remanded the case to the trial court for further proceedings consistent with its opinion. On August 29, 2003, class counsel filed amended papers seeking certification of an amended Windows class and an amended DOS class. The only claim asserted for class certification by the Windows class was for the alleged breach of the implied warranty of merchantability. The only claims asserted for class certification by the DOS class were for alleged violations of the Texas Unsolicited Goods Statute and the Federal Unordered Merchandise Act. By Order dated December 10, 2003, the trial court granted Defendants' Motion for Partial Summary Judgment on the DOS Class claims. By granting summary judgment on the claims asserted on behalf of the DOS class, the DOS motion for class certification became moot because certain class claims asserted by the named class representatives for the DOS class were found to be without merit. By Order dated January 13, 2004, the trial court denied the amended motion for class certification filed by the Windows Class in its entirety. The deadline for the Windows Class to file an interlocutory appeal of the denial of the amended motion for class certification was February 2, 2004. No appeal was filed on or before that date. HENRY SCHEIN: Asks Court To Dismiss Class Claims in Fraud Suit -------------------------------------------------------------- Henry Schein, Inc. asked the Superior Court of New Jersey, Law Division, Morris County to dismiss the class action claims in the lawsuit filed against it, styled "West Morris Pediatrics, P.A. and Avenel-Iselin Medical Group, P.A. vs. Henry Schein, Inc., doing business as Caligor, Case No. MRS-L-421-02." The complaint purports to be on behalf of a nationwide class, but there has been no court determination that the case may proceed as a class action. Plaintiffs seek to represent a class of all physicians, hospitals and other healthcare providers throughout New Jersey and across the United States. This complaint, as amended in August 2002, alleges relating to sales of a vaccine product in the year 2001, among other things: (1) breach of oral contract, (2) breach of implied covenant of good faith and fair dealing, (3) violation of the New Jersey Consumer Fraud Act, (4) unjust enrichment, (5) conversion, and (6) promissory estoppel The class action discovery period ended on February 23, 2004. The plaintiffs also requested a class action determination. The motions will be heard in August 2004. IMS HEALTH: Reaches Settlement For Prescription Data Lawsuits ------------------------------------------------------------- IMS Health, Inc. reached a settlement for the litigation pending against it and approximately 60 software vendors from which the Company purchased prescription data in the 1990's (and, for many of these vendors, from which the Company continues to purchase data). The litigation alleged the Company misappropriated the trade secrets (i.e., prescription data) of thousands of pharmacies in the United States and used this information either without authorization or outside the scope of any authorization. This same conduct was alleged to breach contracts between the Company and the software vendors from which the Company had purchased this prescription data. One action was brought in state court in southern Illinois (Circuit Court of the 20th Judicial Circuit) by two pharmacies. Plaintiffs sought class action status, representing all pharmacies whose data was sold to the Company by their pharmacy dispensary software vendors from 1990 to the present. The pharmacies were seeking $100,000 in actual damages plus an unspecified amount of unjust enrichment damages (i.e., share of the Company profits) derived from use of the prescription data by the Company and the other defendants, or, in the alternative, a reasonable royalty paid for the use of the prescription data. However, the Company believed and continues to believe that its practices with respect to the acquisition and use of this prescription data are consistent with applicable law and industry practices, and that the claims were without merit. Another suit, filed in the same court, was originally brought in 1994 against Mayberry Systems, a small developer of pharmacy dispensary software in the Midwest. Two pharmacy customers alleged Mayberry Systems was taking prescription data from their systems without authorization, and selling it to others (including the Company). The Company was subsequently added to the lawsuit in 1996, alleging that the Company knew or should have known that Mayberry Systems was taking the data and selling it without authorization (i.e., misappropriation of trade secrets). The lawsuit was later certified as a class action on behalf of all former and current customers of Mayberry Systems (approximately 350 pharmacies). Plaintiffs were demanding damages in the amount of $20,000 plus punitive damages and attorney's fees. Although the Company believed the two actions were without merit, it pursued a joint settlement of the cases. During the third quarter of 2003, the Company proposed a preliminary settlement agreement with the plaintiffs' counsel on both the actions, subject to several significant contingencies. On February 17, 2004, the Illinois state court approved the proposed settlement. The period for the filing of appeals and motions for rehearing expired on March 18, 2004. Under the settlement, the Company will make certain cash payments, provide certain product credits and enter into certain agreements for the purchase of data originating from the independent pharmacy plaintiffs. This will provide the Company the opportunity to acquire new data for new offerings while eliminating the costs and risks of litigation. During the first half of 2004, the Company paid approximately $7,400 related to this settlement and received $5,500 from insurance coverage. INTERNATIONAL TRUCK: Recalls 81,883 Vehicles Due To Crash Hazard ---------------------------------------------------------------- International Truck & Engine Corporation is cooperating with the National Highway Traffic Safety Administration (NHTSA) by issuing a June 2004 voluntary recall for about 81,883 units of the following vehicles: International 1552, 1999-2004 International 1652, 1999-2004 International 3000, 1999-2004 International 3400, 1999-2004 International 3800, 1999-2004 International 4700, 1999-2004 International 4900, 1999-2004 International CE, 1999-2004 International FE, 1999-2004 International RE, 1999-2004 Manufactured from February 1999 to April 2004, the NHTSA has determined that on certain school buses and heavy-duty trucks, the anti-lock brake system (ABS) electronic control unit (ECU) may misinterpret a wheel speed signal. The signal may improperly activate the ABS, instead of deactivating the ABS. This may result in the driver experiencing a hard pedal feel and a decrease in deceleration at the end of the stop, resulting in extended stopping distances that could cause a crash. Dealers will inspect and repair the affected vehicles. The manufacturer has reported that owner notification to school bus owners began on June 11, 2004, and to truck owners on August 13, 2004. Owners may contact International at 1-800-448-7825. INTERNATIONAL TRUCK: Recalls 18,545 Vehicles Due To Fire Hazard --------------------------------------------------------------- International Truck & Engine Corporation is cooperating with the National Highway Traffic Safety Administration (NHTSA) by issuing a June 2004 voluntary recall for about 18,545 units of the following vehicles: International 4300, 2000-2001 International 4400, 2000-2001 International 7300, 2000-2004 International 7400, 2000-2004 International 7500, 2000-2004 International 7600, 2002-2004 International 7700, 2003-2004 International 8500, 2001-2004 International 8600, 2002-2004 Manufactured from November 2000 to May 2004, the NHTSA has determined that on certain heavy duty trucks equipped with International DT540, Cummins, or Caterpillar I-6 engines, the positive battery cable between the batteries and the starter may rub against an electrical ground cable between the starter and frame rail, resulting in an electrical short and/or fire. Dealers will inspect for chafing. If there is no evidence of chafing, a saddle clamp will be installed. If there is evidence of chafing, the damaged cables will be replaced and a saddle clamp installed. The manufacturer has reported that owner notification is expected to begin during August 2004. Owners may contact International at 1-800-448-7825. KIA MOTORS: Recalls 262,636 Vehicles Due To Seat Belt Defects ------------------------------------------------------------- Kia Motors America, Inc. is cooperating with the National Highway Traffic Safety Administration (NHTSA) by issuing a June 2004 voluntary recall for about 262,636 units of the following vehicles: Kia Sephia, 1999-2000 Kia Sportage, 1999-2000 Kia Spectra, 2000 Manufactured from March 1998 to November 2000, the NHTSA has determined that on certain passenger and sport utility vehicles, certain front safety belt buckles may emit a "click" sound during the buckling process that is similar to the sound emitted when a buckle is being latched. This might indicate to the user that it is latched, when it is not. The latch can then pull out of the buckle when tension is applied. In the event of a crash, the seat occupant may not be properly restrained, increasing the risk of injury. Dealers will replace both front seat belt buckles. The manufacturer has reported that owner notification is expected to begin during August 2004. Owners may contact Kia at 1-800-333-4542. KPNQWEST N.V.: Asks NY Court To Dismiss Securities Fraud Lawsuit ---------------------------------------------------------------- KPNQwest N.V. asked the United States District Court for the Southern District of New York to dismiss the amended securities class action filed against it and certain of its officers and former executives, on behalf of certain purchasers of KPNQwest securities. The suit alleges that Willems Ackermans, former Executive Vice President and Chief Financial Officer, engaged in a fraudulent scheme and deceptive course of business in order to inflate KPNQwest revenue and securities. Mr. Ackermans was the only defendant named in the original complaint. On January 9, 2004, plaintiffs filed an amended complaint adding as defendants the Company, certain of its former executives who were also on the supervisory board of KPNQwest, and others. Plaintiffs seek compensatory damages and/or rescission as appropriate against defendants, as well as an award of plaintiffs' fees and costs. KWIKEE PRODUCTS: Recalls 2,442 Hydraulic Jacks For Injury Hazard ---------------------------------------------------------------- Kwikee Products Company, Inc. is cooperating with the National Highway Traffic Safety Administration (NHTSA) by issuing a June 2004 voluntary recall for about 2,442 units of Kwikee Level Best 3010 hydraulic jacks. Manufactured from January 2000 to May 2004, the NHTSA has determined that on certain hydraulic jacks installed as original equipment on 2000-2004 Alfa Leisure brand "See Ya" and "Gold" motor homes, it is possible that prolonged vibration and/or unusual jack loading will result in the footpad retaining bolt(s) loosening to point the steel footpad may be lost. Using the jack without the footpad could result in personal injury to the operator or others. Kwikee will provide replacement of all footpad retaining bolts. Owners can contact the nearest authorized dealer or warranty service center to arrange for the free installation of improved bolts. The manufacturer has reported that owner notification began during June 2004. Owners may contact Kwikee at 1-800-736-9961. LANCER CORPORATION: TDH Partners Voluntarily Dismisses Lawsuit -------------------------------------------------------------- TDH Partners voluntarily dismissed, without prejudice a purported class action lawsuit filed on May 14, 2004 against the Lancer Corporation (Amex: LAN). The filing of the lawsuit by TDH Partners had resulted in the issuance of several press releases by other plaintiff law firms attempting to participate in the single lawsuit. Lancer was never served with the lawsuit. To Lancer's knowledge, no other class action litigation or shareholder lawsuit has been filed against the Company. The voluntary dismissal of the purported class action by the plaintiffs follows the news that BDO Seidman, LLP, Lancer's independent auditor, had completed its reaudit of Lancer's financial statements for the years ended December 31, 2000, 2001 and 2002, and that the reaudit did not result in any change in the previously disclosed financial statements. The results of the reaudit were originally disclosed by Lancer in a news release dated July 1, 2004. MAZDA NORTH: Recalls 20T Minivans Due To FMVSS 120 Noncompliance ---------------------------------------------------------------- Mazda North American Operations is cooperating with the National Highway Traffic Safety Administration (NHTSA) by issuing a June 2004 voluntary recall for about 20,000 units of Year 2003-2004 Mazda MPV minivans. Manufactured from August 2003 to May 2004, The NHTSA has determined that certain minivans fail to conform to the requirements of Federal Motor Vehicle Safety Standard No. 120, "Tire Selection and Rims for Motor Vehicles Other than Passenger Cars." The tire inflation pressure indicated on the vehicle certification label is not correct. The labels show the maximum tire pressure as 240 KPA/32 psi when it should be shown as 240 KPA/35 psi. As a result of this error, the load ratios for the 205/65R15 94H and the 215/60R16 95H tires exceed the levels permitted by FMVSS No. 120. If the tire is operated in an under- inflated condition, the load carrying capacity of the vehicle may be compromised, increasing the risk of a crash. Owners will be provided with a corrected label that they can apply to their vehicle, or they can have a dealer install the label, if desired. The manufacturer has reported that owner notification is expected to begin during July 2004. Owners may contact Mazda at 1-800-222-5500. MERCEDES-BENZ: Recalls 16,690 Vehicles Due To Lid Spring Defects ---------------------------------------------------------------- Mercedes-Benz USA, LLC is cooperating with the National Highway Traffic Safety Administration (NHTSA) by issuing a June 2004 voluntary recall for about 16,690 units of Year 2003-2004 Mercedes Benz CL and S classes of passenger vehicles. Manufactured from November 2002 to October 2003, the NHTSA has determined on certain passenger vehicles, the trunk lid springs could fail. If the trunk lid is manually lifted, it may not remain in the up position and could cause injury if it comes down while someone is reaching into the trunk. Dealers will replace both trunk lid springs. The manufacturer has reported that owner notification is expected to begin during July 2004. Owners may contact Mercedes-Benz at 1-800-367-6372. MERCEDES-BENZ: Recalls 143,387 Vehicles Due To System Defects ------------------------------------------------------------- Mercedes-Benz USA, LLC is cooperating with the National Highway Traffic Safety Administration (NHTSA) by issuing a June 2004 voluntary recall for about 143,387 units of Year 2003-2004 Mercedes Benz SL Class passenger vehicles. Manufactured from October 2001 to May 2004, the NHTSA determined that on certain passenger vehicles, the electronic monitoring system of the Sensotronic Brake Control (SBC) is designed to monitor the pressure gradient within the high-pressure line of the brake system. If an unacceptable pressure gradient is detected, the system will switch, as it is designed to do, into the hydraulic function mode. If vehicles are not routinely serviced and have extremely high mileage combined with a high number of brake actuations, or a high brake actuation frequency, the pump motor of the SBC may run out of permissible tolerances, thereby triggering the hydraulic function mode. Dealers will inspect the SBC hydraulic unit, replacing it if necessary. The manufacturer has not yet provided an owner notification schedule for this campaign. Owners may contact Mercedes-Benz at 1-800-367-6372. MIDAMERICAN ENERGY: Asks NY Court To Dismiss Natural Gas Lawsuit ---------------------------------------------------------------- MidAmerican Energy Holdings Co. asked the United States District Court for the Southern District of New York to dismiss the consolidated class action filed against it and other natural gas companies. The suit alleges that the defendants have engaged in unlawful manipulation of the prices of natural gas futures and options contracts traded on the New York Mercantile Exchange (NYMEX) during the period January 1, 2000 to December 31, 2002. MidAmerican Energy is mentioned as a company that has engaged in wash trades on Enron Online (an electronic trading platform) that had the effect of distorting prices for gas trades on the NYMEX. The plaintiffs to the class action do not specify the amount of alleged damages. The original complaint in this matter, styled "Cornerstone Propane Partners, L.P. v. Reliant, et al.," was filed on August 18, 2003 in the United States District Court, Southern District of New York naming MidAmerican Energy and MidAmerican Energy Holdings Company. On October 1, 2003, a second complaint, Roberto, E. Calle Gracey, et al., was filed in the same court but did not name MidAmerican Energy or MidAmerican Energy Holdings Company. On November 14, 2003, a third complaint, Dominick Viola, et al., was filed in the same court and named MidAmerican Energy and MidAmerican Energy Holdings Company as defendants. On November 19, 2003, an Order of Voluntary Dismissal Without Prejudice of MidAmerican Energy Holdings Company was entered by the court dismissing MidAmerican Energy Holdings Company from the Cornerstone and Viola complaints and MidAmerican Energy Holdings Company was dismissed from the suit. On December 5, 2003, the court entered Pretrial Order No. 1, which among other procedural matters, ordered the consolidation of the Cornerstone, Calle Gracey and Viola complaints and permitted plaintiffs to file an amended complaint in this matter. On January 20, 2004, plaintiffs filed "In Re: Natural Gas Commodity Litigation," as the amended complaint reasserting their previous allegations. On February 19, 2004, MidAmerican Energy filed a Motion to Dismiss and joined with several other defendants to file a joint Motion to Dismiss. The plaintiffs filed a response on May 19, 2004, contesting both Motions to Dismiss. MITSUBISHI MOTORS: Recalls 29,330 AWD SUVs Due To Injury Hazard --------------------------------------------------------------- Mitsubishi Motors North America, Inc. is cooperating with the National Highway Traffic Safety Administration (NHTSA) by issuing a June 2004 voluntary recall for about 29,330 units of Year 2004 Mitsubishi AWD Endeavors. Manufactured from January 2003 to May 2004, the NHTSA has determined that on certain AWD sport utility vehicles, the retaining bolts that attach the drive shaft to the center bearing flange and/or the rear differential flange may be missing, not sufficiently tightened, or over tightened. If the retaining bolts were to fall out, the drive to the rear wheels may be interrupted. In the worst case, the driver shaft may fall down, increasing the potential for a vehicle crash. Dealers will inspect the assembly and replace the bolts if necessary. The manufacturer has reported that owner notification is expected to begin during August 2004. Owners may contact Mitsubishi at 1-888-648-7820. MITSUBISHI MOTORS: Recalls 1,211 Vehicles Due To Injury Hazard --------------------------------------------------------------- Mitsubishi Motors North America, Inc. is cooperating with the National Highway Traffic Safety Administration (NHTSA) by issuing a June 2004 voluntary recall for about 1,211 units of Year 2004 Mitsubishi Endeavors. Manufacture from March to April 2004, the NHTSA has determined that on certain sport utility vehicles, the foot of the driver's seat riser may develop a crack, resulting in reduced strength of the seat anchorage. In the event of a crash, the seat could become detached, increasing the risk of occupant injury. Dealers will inspect the driver's seat bracket to determine whether it requires replacement. If so, the dealer will replace it with a new, improved part. The manufacturer has reported that owner notification is expected to begin during July 2004. Owners may contact Mitsubishi at 1-888-648-7820. PRG SCHULTZ: Discovery Proceeds in Securities Lawsuit in N.D. GA ---------------------------------------------------------------- Discovery is proceeding in the consolidated securities class action filed against PRG Schultz International, Inc. and certain of its present and former officers in the United States District Court for the Northern District of Georgia, Atlanta Division, styled "In re Profit Recovery Group International, Inc. Sec. Litig., Civil Action File No.1:00-CV-1416-CC." Plaintiffs allege that the Company, John M. Cook, Scott L. Colabuono, the Company's former Chief Financial Officer, and Michael A. Lustig, the Company's former Chief Operating Officer, violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule10b-5 promulgated thereunder by allegedly disseminating false and misleading information about a change in the Company's method of recognizing revenue and in connection with revenue reported for a division. Plaintiffs purport to bring this action on behalf of a class of persons who purchased the Company's stock between July 19, 1999 and July 26, 2000. Plaintiffs seek an unspecified amount of compensatory damages, payment of litigation fees and expenses, and equitable and/or injunctive relief. On January 24, 2001, Defendants filed a Motion to Dismiss the Complaint for failure to state a claim under the Private Securities Litigation Reform Act, 15U.S.C. 78u-4 et seq. The Court denied Defendant's Motion to Dismiss on June 5, 2001. Defendants served their Answer to Plaintiffs' Complaint on June 19, 2001. The Court granted Plaintiffs' Motion for Class Certification on December 3, 2002. QWEST COMMUNICATIONS: Asks CO Court To Dismiss Securities Suit -------------------------------------------------------------- Qwest Communications International, Inc. asked the United States District Court in Colorado to dismiss the consolidated securities class action filed against it, alleging violations of federal securities laws. Since July 27, 2001,13 putative class actions were filed against the company. One of those cases has been dismissed. By court order, the remaining actions have been consolidated into a consolidated securities action. On August 21, 2002, plaintiffs in the consolidated securities action filed their Fourth Consolidated Amended Class Action Complaint, or the Fourth Consolidated Complaint, which defendants moved to dismiss. On January 13, 2004, the United States District Court for the District of Colorado granted the defendants' motions to dismiss in part and denied them in part. In that order, the court allowed plaintiffs to file a proposed amended complaint seeking to remedy the pleading defects addressed in the court's dismissal order and ordered that discovery, which previously had been stayed during the pendency of the motions to dismiss, proceed regarding the surviving claims. On February 6, 2004, plaintiffs filed a Fifth Consolidated Amended Class Action Complaint, or the Fifth Consolidated Complaint. The Fifth Consolidated Complaint attempts to expand the putative class period previously alleged in the Fourth Consolidated Complaint, seeks to restore the claims dismissed by the court, including claims against certain individual defendants who were dismissed as defendants by the court's dismissal order, and to add individual defendants who were not named as defendants in plaintiffs' previous complaints. The Fifth Consolidated Complaint also advances allegations related to a number of matters and transactions that were not pleaded in the earlier complaints. The Fifth Consolidated Complaint is purportedly brought on behalf of purchasers of publicly traded securities of Qwest between May 24, 1999 and July 28, 2002, and names as defendants the Company and: (1) former Chairman and Chief Executive Officer Joseph P. Nacchio, (2) former Chief Financial Officers Robin R. Szeliga and Robert S. Woodruff, (3) former Qwest officers and current directors and (4) Arthur Andersen LLP The Fifth Consolidated Complaint alleges, among other things, that during the putative class period, Qwest and certain of the individual defendants made materially false statements regarding the results of Qwest's operations in violation of section 10(b) of the Securities Exchange Act of 1934, or the Exchange Act, that certain of the individual defendants are liable as control persons under section 20(a) of the Exchange Act, and that certain of the individual defendants sold some of their shares of Qwest's common stock in violation of section 20A of the Exchange Act. The Fifth Consolidated Complaint further alleges Qwest and certain other defendants violated section 11 of the Securities Act of 1933, as amended, or the Securities Act, by preparing and disseminating false registration statements and prospectuses for the registration of Qwest common stock to be issued to U S WEST shareholders in connection with the merger of the two companies, and for the exchange of $3 billion of Qwest's notes pursuant to a registration statement dated January 17, 2001, $3.25 billion of Qwest's notes pursuant to a registration statement dated July 12, 2001, and $3.75 billion of Qwest's notes pursuant to a registration statement dated October 30, 2001. Additionally, the Fifth Consolidated Complaint alleges certain of the individual defendants are liable as control persons under section 15 of the Securities Act by reason of their stock ownership, management positions and/or membership or representation on the Company's Board of Directors, or the Board. The Fifth Consolidated Complaint seeks unspecified compensatory damages and other relief. However, counsel for plaintiffs has indicated that the purported class will seek damages in the tens of billions of dollars. QWEST COMMUNICATIONS: Asks CO Court To Rule on Issues in Lawsuit ---------------------------------------------------------------- Qwest Communications International, Inc. asked the Denver District Court to rule on certain discrete issues of law affecting the class action filed against it and certain current and former officers and directors on behalf of stockholders of U S WEST. The complaint alleges Qwest had a duty to pay a quarterly dividend to U S WEST stockholders of record as of June 30, 2000. Plaintiffs further claim that the defendants attempted to avoid paying the dividend by changing the record date from June 30, 2000 to July 10, 2000, a claim the Company denied. In September 2002, Qwest filed a motion for summary judgment on all claims. Plaintiffs filed a cross-motion for summary judgment on their breach of contract claims only. On July 15, 2003, the court denied both summary judgment motions. Plaintiffs' claims for breach of fiduciary duty and breach of contract remain pending. The case is now in the class certification stage, which Qwest is challenging. QWEST COMMUNICATIONS: Plaintiffs Oppose Right-of-Way Settlements ---------------------------------------------------------------- Several plaintiffs' counsels opposed the settlement proposed by Qwest Communications International, Inc. for the right-of-way suits filed against it on behalf of landowners in: (1) Alabama, (2) California, (3) Colorado, (4) Georgia, (5) Illinois, (6) Indiana, (7) Kansas, (8) Louisiana, (9) Mississippi, (10) Missouri, (11) North Carolina, (12) Oregon, (13) South Carolina, (14) Tennessee and (15) Texas Class certification was denied in the Louisiana proceeding and, subsequently, summary judgment was granted in Qwest's favor. A new Louisiana class action complaint has recently been filed. Class certification was also denied in the California proceeding, although plaintiffs have filed a motion for reconsideration. Class certification was granted in the Illinois proceeding. Class certification has not been resolved yet in the other proceedings. The complaints challenge Qwest's right to install its fiber optic cable in railroad rights-of-way and, in Colorado, Illinois and Texas, also challenge Qwest's right to install fiber optic cable in utility and pipeline rights-of-way. In Alabama, the complaint challenges Qwest's right to install fiber optic cable in any right-of-way, including public highways. The complaints allege that the railroads, utilities and pipeline companies own a limited property right-of-way that did not include the right to permit Qwest to install Qwest's fiber optic cable on the plaintiffs' property. The Indiana action purports to be on behalf of a national class of landowners adjacent to railroad rights-of-way over which Qwest's network passes. The Alabama, California, Colorado, Georgia, Kansas, Louisiana, Mississippi, Missouri, North Carolina, Oregon, South Carolina, Tennessee and Texas actions purport to be on behalf of a class of such landowners in those states, respectively. The Illinois action purports to be on behalf of landowners adjacent to railroad rights-of-way over which Qwest's network passes in Illinois, Iowa, Kentucky, Michigan, Minnesota, Nebraska, Ohio and Wisconsin. Plaintiffs in the Illinois action have filed a motion to expand the class to a nationwide class. The complaints seek damages on theories of trespass and unjust enrichment, as well as punitive damages. Together with some of the other telecommunication carrier defendants, in September 2002, Qwest filed a proposed settlement of all these matters (except those in Louisiana) in the United States District Court for the Northern District of Illinois. On July 25, 2003, the court granted preliminary approval of the settlement and entered an order enjoining competing class action claims, except those in Louisiana. Accordingly, with the exception of the Louisiana actions, all other right of way actions are stayed. NEW JERSEY: Residents Lodge Suit V. Privately Owned Dams, State --------------------------------------------------------------- Fifteen Lumberton residents who suffered damage from last month's flooding that resulted from several private dams breaking that sent water down the Rancocas Creek initiated a lawsuit seeking class action status in a New Jersey Superior Court, the Courier Post Online reports. Named in the suit are four municipalities namely Medford Lakes, Medford Township, Tabernacle and Evesham, the state, private dam owners and the engineers for the owners. Filed by Plaintiffs attorney Edward Petkevis, the suit alleges negligence by the defendants caused the dams to burst during record rains July l2 causing floods, which the state estimates to have caused $40 million in property damages. According to Mr. Petkevis, the dams and their classifications violated the state Safe Dam Act because of the improper construction, inspection, maintenance and repair. Though not mentioned in the suit, the exact number of property owners affected by the flooding is estimated by Mr. Petkevis at about 800. The suit also seeks a restraining order to halt construction of new dams until each can be fully investigated, however Mr. Petkevis told the Courier Post that he is not pressing for such an order. The suit also claims that the municipalities bear some of the responsibility, since they have roads or utility easements on some of the dams, which are mostly privately owned. The suit also blamed the state, since it is responsible for raising the hazard classification of the dams due to the fact that suburban growth along the creek increased the potential for more damage. According to Mr. Petkevis, 11 dams and their owners, such as the Birchwood Colony Club and YMCA Camp Ockanickon in Medford, which could not be reached for comment, are named in the suit. The attorney also expects to add other dams, including Upper and Lower Aetna in Medford Lakes. The latest state Department of Environmental Protection figures indicate 19 dams failed and others were damaged. For more details, contact Edward R. Petkevis by Mail: 1380 Hornberger Ave., Roebling, New Jersey (Burlington Co.) OSRAM SYLVANIA: Recalls 5.6M B10 Light Bulbs Due To Injury Risks ---------------------------------------------------------------- Osram Sylvania Products Inc., of Danvers, Massachusetts is cooperating with the United States Consumer Product Safety Commission by voluntarily recalling about 5.6 million of 60 watt B10 D�cor Light Bulbs. The glass bulb can separate from its base and break during use. The broken glass can present a laceration injury to consumers, the hot broken bulb can present a burn injury to consumers, and an exposed bulb filament can present a shock hazard if handled while power remains applied to the fixture. Osram Sylvania has received 119 reports of the glass bulbs breaking, including 29 reports of minor cuts or burns from consumers picking up broken glass from a hot bulb. The recalled 60-watt B10 medium base light bulbs were sold in packages of two or four units. The bulbs are clear. Some were packaged as "Ceiling Fan" and "Double Life" light bulbs. "SYLVANIA" is printed on the front of the packaging and on the bulb base. The bulbs involved have a UPC bar code on the back of the package ending in the following five digits: 13323, 13329, 13333, 13442, 13445, 13454, 13565, 13650, and 13721. Manufactured in the United States, the light bulbs were sols at all Home improvement centers, grocery, drug and discount department stores from September 2002 through June 2004 for between $2 and $4. If the bulb is broken, consumers should first unplug the light fixture or turn off the main circuit breaker before attempting to remove the bulb. Cloth or leather gloves should also be worn to prevent cuts or scratches during bulb removal. Remove the light bulbs from any fixture where they are installed and contact OSRAM Sylvania for free replacement bulbs. For more details, contact Osram Sylvania Products Inc. by Phone: (877) 423-3772 between 8 a.m. and 6 p.m. ET Monday through Friday. SUBARU OF AMERICA: Recalls 1,959 Vehicles Due To Injury Hazard -------------------------------------------------------------- Subaru of America, Inc. is cooperating with the National Highway Traffic Safety Administration (NHTSA) by issuing a June 2004 voluntary recall for about 1,959 units of Year 2005 Subaru Legacy and Outback vehicles. Manufactured from October 2003 to June 2004, the NHTSA has determined that the left and right side curtain air bags in certain vehicles may not fully deploy rapidly enough when activated in a side impact collision. This may result in failure to provide the intended head protection, increasing the risk of injury. Dealers will replace the left and right side curtain air bag modules. The manufacturer has reported that owner notification began on June 11, 2004. Owners may contact Subaru at 1-800-782-2783. TOYOTA NORTH: Recalls 1,959 Lexus LS 430 Due To Crash Hazard ------------------------------------------------------------ Toyota Motor North America, Inc. is cooperating with the National Highway Traffic Safety Administration (NHTSA) by issuing a June 2004 voluntary recall for about 14,259 units of Year 2004 Lexus LS 430 passenger vehicles. Manufactured from July 2003 to January 2004, the NHTSA has determined that on certain passenger vehicles, the impeller inside the fuel pump may have been improperly molded. Alcohol in some fuels may deform the impeller and cause it to come into contact with the pump housing. The fuel pump could seize, which may result in engine stalling, thereby increasing the possibility of a crash. Dealers will replace the fuel pump. The manufacturer has reported that owner notification is expected to begin during July 2004. Owners may contact Lexus at 1-800-255-3987. TRIUMPH MOTORCYCLES: Recalls 2,792 Motorcycles Due To Fire Risks ---------------------------------------------------------------- Triumph Motorcycles (America) Ltd. is cooperating with the National Highway Traffic Safety Administration (NHTSA) by issuing a June 2004 voluntary recall for about 2,792 units of Year 2002-2003 Triumph Bonneville America and Year 2003-2004 Triumph Speedmaster motorcycles. Manufactured from June 2001 to March 2004, the NHTSA has determined that on certain motorcycles, the electrical power supply cable to the starter motor may come into direct contact with the oil cooler return pipe due to improper assembly. This could cause the insulation on the starter cable to degrade. Should the starter motor cable insulation become worn, an electrical short could occur, increasing the risk of a fire or not allowing the motorcycle to start. Dealers will examine the cable for signs of contact with the oil cooler pipe. The cable will be re-positioned. The manufacturer has reported that owner notification is expected to begin during July 2004. Owners may contact Triumph at 1-678-854-2010. TYSON FOODS: Discovery Completed in FLSA Violations Suit in AL -------------------------------------------------------------- Discovery in the class action filed against Tyson Foods, Inc. in by 11 of its current and former employees of the Company in the United States District Court for the Northern District of Alabama has been largely completed. The suit, styled "M.H. Fox, et al. v. Tyson Foods, Inc. (Fox)," alleges the Company violated requirements of the Fair Labor Standards Act (FLSA). The suit alleges the Company failed to pay employees for all hours worked and/or improperly paid them for overtime hours. The suit specifically alleges that employees should be paid for time taken to put on and take off certain working supplies at the beginning and end of their shifts and breaks and the use of "mastercard" or "line" time fails to pay employees for all time actually worked. Plaintiffs seek to represent themselves and all similarly situated current and former employees of the Company, and plaintiffs seek reimbursement for an unspecified amount of unpaid wages, liquidated damages, attorney fees and costs. At filing, 159 current and/or former employees consented to join the lawsuit and, to date, approximately 5,100 consents have been filed with the court. Plaintiff's motion for conditional collective treatment and court-supervised notice to additional putative class members was denied on February 27, 2004. The plaintiffs re-filed their motion for conditional collective treatment and court-supervised notice to additional putative class members on April 2, 2004. No trial date has been set. TYSON FOODS: Reissues Notices To Class Members in PA FLSA Suit -------------------------------------------------------------- Tyson Foods, Inc. reissued notice of their potential claims under the Fair Labor Standards Act (FLSA) to approximately 2,170 employees who did not previously receive notice, in relation to the class action filed against it by seven employees, in compliance with the United States Ninth Circuit Court of Appeals. The suit, styled "De Asencio v. Tyson Foods, Inc.," was initially filed in the U.S. District Court for the Eastern District of Pennsylvania. The suit alleges that the employees claim violations of the FLSA for allegedly failing to pay for time taken to put on, take off and sanitize certain working supplies, and violations of the Pennsylvania Wage Payment and Collection Law. Plaintiffs seek to represent themselves and all similarly situated current and former employees of the poultry processing plant in New Holland, Pennsylvania, and plaintiffs seek reimbursement for an unspecified amount of unpaid wages, liquidated damages, attorney fees and costs. Currently, there are approximately 500 additional current or former employees who have filed consents to join the lawsuit. The court, on January 30, 2001, ordered that notice of the lawsuit be issued to all potential plaintiffs at the New Holland facilities. On July 17, 2002, the court granted the plaintiffs' motion to certify the state law claims. On September 23, 2002, the Third Circuit Court of Appeals agreed to hear the Company's petition to review the court's decision to certify the state law claims. On September 8, 2003, the Court of Appeals reversed the district court's certification of a class under the Pennsylvania Wage Payment & Collection Law, ruling that those claims could not be pursued in federal court. The appellate court further ruled that the Company must reissue notice of their potential FLSA claims to approximately 2,170 employees who did not previously receive notice. The Court of Appeals remanded the matter to the district court to proceed accordingly on September 30, 2003. Any additional opt-ins should be received by mid-September 2004, the Company said in a regulatory filing. Further proceedings in the district court are pending. TYSON FOODS: FLSA Violations Suit Trial Set September 7, 2004 ------------------------------------------------------------- Trial in the class action filed against Tyson Foods, Inc., and its subsidiary Tyson Fresh Meats, Inc. (TFM, formerly IBP, Inc.) styled "Maria Chavez, et al. vs. IBP, Lasso Acquisition Corporation and Tyson Foods, Inc." is set for September 7,2004 in the U.S. District Court for the Eastern District of Washington. Several employees of TFM's Pasco, Washington beef slaughter and processing facility filed the suit alleging various violations of the Fair Labor Standards Act (FLSA), 29 U.S.C. Sections 201 - 219, as well as violations of the Washington State Minimum Wage Act, RCW chapter 49.46, Industrial Welfare Act, RCW chapter 49.12, and the Wage Deductions-Contribution-Rebates Act, RCW chapter 49.52. The lawsuit alleges TFM and/or the Company required employees to perform unpaid work related to the donning and doffing of certain personal protective clothing, both prior to and after their shifts, as well as during meal periods. Plaintiffs further allege that similar prior litigation entitled "Alvarez, et al. vs. IBP (Alvarez)," which resulted in a $3.1 million final judgment against TFM, supports a claim of collateral estoppel and/or is res judicata as to the issues raised in this new litigation. Plaintiffs are seeking reimbursement for an unspecified amount of damages, exemplary damages, liquidated damages, prejudgment interest, attorney fees and costs. TFM filed a timely Notice of Appeal in the suit and plaintiffs filed a timely notice of Cross-Appeal. On August 5, 2003, the Ninth Circuit Court of Appeals affirmed the lower court's decision in part and reversed the lower court's decision in part, and remanded the case to the lower court for recalculation of damages. If the ruling of the Ninth Circuit Court of Appeals is upheld in its entirety, TFM will have additional exposure in Alvarez of approximately $5 million. TFM filed a petition for rehearing by the panel of the Ninth Circuit Court of Appeals that heard Alvarez or, in the alternative, a rehearing en banc, which was denied on December 2, 2003. TFM also filed a petition to certify state law claims to the Washington Supreme Court which was denied on September 23, 2003. On December 5, 2003, TFM filed a Petition to Stay the Mandate indicating that it will be filing a Petition for Certiorari with the U.S. Supreme Court seeking the Court's review of the Ninth Circuit's adverse opinion. A Stay of the Mandate was ordered by the Ninth Circuit on December 10, 2003. A Petition for Certiorari was filed with the U.S. Supreme Court on February 26, 2004. Briefing on the Petition is now complete, and, on May 3, 2004, the Court invited the U.S. Solicitor General to express its views on the pending Petition. A decision from the U.S. Supreme Court is expected sometime after the Solicitor files its briefing. "Chavez" was initially pursued as an opt-in, collective action under 29 U.S.C. 216(b), but the U.S. District Court for the Eastern District of Washington granted plaintiff's motion seeking certification of a class of opt-out, state law plaintiffs under Federal Rule of Civil Procedure 23 and notice was sent to potential state law claim class members. The state- law class is closed and contains approximately 3,900 class members, including approximately 1,200 on the federal claim. TYSON FOODS: TN Court To Rule on Summary Judgment in Worker Suit ---------------------------------------------------------------- The United States District Court for the Middle District of Tennessee has yet to rule on Tyson Foods, Inc.'s motion for summary judgment in the class in the lawsuit filed against it and Tyson Fresh Meats, Inc. (TFM) in the United States District Court for the Middle District of Tennessee, styled "Emily D. Jordan, et al. v. IBP, Inc. and Tyson Foods, Inc." Ten current and former hourly employees of TFM's case-ready facility in Goodlettsville, Tennessee filed a complaint on behalf of themselves and other unspecified, allegedly "similarly situated" employees, claiming that the defendants have violated the overtime provisions of the Fair Labor Standards Act (FLSA). The suit alleges that the Company has failed to pay employees for all hours worked from the plant's commencement of operations under TFM's control in April 2001. The Company acquired the plant as part of its acquisition of TFM. In particular, the suit alleges that employees should be paid for the time it takes to collect, assemble, and put on, take off and wash their health, safety, and production gear at the beginning and end of their shifts and during their meal period. The suit also alleges that the Company deducts 30 minutes per day from employees' paychecks regardless of whether employees obtain a full 30-minute period for their meal. Plaintiffs are seeking a declaration that the defendants did not comply with the FLSA, and an award for an unspecified amount of back pay compensation and benefits, unpaid entitlements, liquidated damages, prejudgment and post-judgment interest, attorney fees and costs. On January 10, 2003, another 31 employees from Tennessee filed consents to join the lawsuit as plaintiffs. On January 15, 2003, the Company filed an answer to the complaint denying any liability. On January 14, 2003, the named plaintiffs filed a motion for expedited court-supervised notice to prospective class members. The motion sought to conditionally certify a class of similarly situated employees at all of TFM's non-union facilities that have not been the subject of FLSA litigation. Plaintiffs then withdrew a request for conditional certification of similarly situated employees at all of TFM's non-union facilities and rather sought to include all non-exempt employees that have worked at the Goodlettsville facility since its opening on April 1, 2001. On June 9, 2003, the Company filed a Motion for Summary Judgment seeking the applicability of the injunction entered by the U.S. District Court for the District of Kansas and affirmed by the U.S. Court of Appeals for the Tenth Circuit, (Metzler v. IBP, inc. 127 F. 3rd 959, 10th Cir. 1997), which the Company contends has a preclusive effect as to plaintiff's claims based on pre- and post-shift activities. The Plaintiffs conducted discovery limited to that issue and responded to said Motion on June 18, 2004. The Company filed its reply on July 2, 2004, and the Motion is now pending a decision from the District Court. On November 17, 2003, the district court conditionally certified a collective action composed of similarly situated current and former employees at the Goodlettsville facility based upon clothes changing and washing activities and unpaid production work during meal periods, since the plant operations began in April 2001. Class Notices to approximately 4,500 prospective class members were mailed on January 21, 2004. Presently, approximately 500 current and former employees have opted into the class. TYSON FOODS: Files Petition in OK High Court V. Certification ------------------------------------------------------------- Tyson Foods, Inc. challenged the certification of a putative class action filed against it in the District Court for Mayes County, Oklahoma by R. Lynn Thompson and Deborah S. Thompson on behalf of all owners of Grand Lake O' the Cherokee's littoral (lakefront) property. The suit alleges the Company "or entities over which it has operational control" conduct operations in such a way as to interfere with the putative class action plaintiffs' use and enjoyment of their property, allegedly caused by diminished water quality in the lake. Plaintiffs are seeking injunctive relief and an unspecified amount of compensatory damages, punitive damages, attorney fees and costs. Simmons Foods, Inc. ("Simmons") and Peterson Farms, Inc. ("Peterson") have been joined as defendants. The Company and Simmons are seeking leave to file a third party complaint against entities that contribute wastes and wastewater into Grand Lake. The class certification hearing was held in October 2003. On December 11, 2003, the trial court entered an order which granted class certification. The Company, Simmons and Peterson then filed a Petition in Error (the "Petition") in the Oklahoma Supreme Court which challenges and seeks appellate level review of the trial court's certification order. The Oklahoma Supreme Court has not yet scheduled proceedings on the Petition. TYSON FOODS: DE Court Modifies Summary Judgment Ruling in Suit -------------------------------------------------------------- The United States District Court for the District of Delaware agreed to modify its order of summary judgment in favor of Tyson Foods, Inc., to include judgment in defendants' favor against the class, in the lawsuit filed against the Company, Don Tyson, John Tyson and Les Baledge, alleging violations of federal securities laws. Several suits were initially filed between June 22 and July 20, 2001, seeking monetary damages on behalf of a purported class of those who sold IBP, Inc. (IBP) stock from March 29, 2001, when the Company announced its intention to terminate its merger agreement with IBP, through June 15, 2001, when a Delaware state court rendered its Post-Trial Opinion ordering the merger to proceed. Plaintiffs in the various actions alleged that the defendants violated federal securities laws by making, causing or allowing to be made, certain allegedly false and misleading statements in a March 29, 2001, press release issued in connection with the Company's attempted termination of the Merger Agreement. The plaintiffs alleged that, as a result of the defendants' alleged conduct, purported class members were harmed by an alleged artificial deflation in the price of IBP's stock during the proposed class period. The various actions were subsequently consolidated under the caption "In re Tyson Foods, Inc. Securities Litigation." On December 4, 2001, the plaintiffs in the consolidated action filed a Consolidated Class Action. On January 22, 2002, the defendants filed a motion to dismiss the consolidated complaint. By memorandum order dated October 23, 2002, the court granted in part and denied in part the defendants' motion to dismiss. On October 6, 2003, the court certified a class consisting of those who purchased IBP securities on or before March 29, 2001, and subsequently sold such securities from March 30 through June 15, 2001, inclusive, and sustained damages as a result of such transaction. Following the conclusion of discovery in the case, plaintiffs and defendants each filed motions for summary judgment. On June 17, 2004, the court rendered an opinion in favor of defendants and against plaintiffs on all of plaintiffs' claims, and entered an order to that effect. TYSON FRESH: AL Court Grants JMOL Motion in Cattle Growers' Suit ---------------------------------------------------------------- The United States District Court for the Middle District of Alabama granted Tyson Fresh Meats, Inc.'s (TFM, formerly IBP, Inc.) motion for a judgment as a matter of law (JMOL) in the class action filed against it by certain cattle producers. The suit, styled "Henry Lee Pickett, et al. vs. IBP, inc.," seeks certification of a class of all cattle producers. The complaint alleged that the Company used its market power and alleged "captive supply" agreements to reduce the prices paid by TFM on purchases of cattle in the cash market in alleged violation of the Packers and Stockyards Act (PSA). Plaintiffs sought injunctive and declaratory relief, as well as actual and punitive damages. Plaintiffs submitted an amended expert report on November 19, 2003, showing alleged damages on all cash market purchases by TFM of approximately $2.1 billion. Trial of this matter began on January 12, 2004, and concluded on February 10, 2004. On February 17, 2004, a jury returned a verdict against TFM on liability and gave an "advisory" verdict on damages that estimated the impact on the cash market (i.e., a group larger than the class) to be $1.28 billion. On February 25, 2004, TFM filed a renewed motion requesting the Court to enter a judgment as a matter of law (JMOL) for TFM. On March 1, 2004, the plaintiffs filed motions asking the Court to enter the $1.28 billion advisory verdict as an award of damages to the plaintiffs and requesting prejudgment interest. On March 22, 2004, the Court denied the plaintiff's motions for entry of a damages award. On April 23, 2004, the Court granted TFM's JMOL motion, and held: (1) TFM had legitimate business reasons for using "captive supplies," (2) there was "no evidence before the Court to suggest that (TFM's) conduct is illegal," and (3) "plaintiffs failed to present evidence at trial to sustain their burden with respect to liability and damages." The plaintiffs have appealed the Court's entry of judgment in favor of TFM to the 11th Circuit Court of Appeals. Management believes, consistent with the Court's opinion, that TFM's use of marketing agreements and other contracts for the purchase of cattle do not violate the PSA and that TFM has acted properly and lawfully in its dealings with cattle producers, the Company asserted in a regulatory filing. UNITED STATES: SCAS Identifies More Than $5.55B in Settlements -------------------------------------------------------------- The Securities Class Action Services (SCAS), a wholly-owned subsidiary of the Institutional Shareholder Services (ISS), the world leader proxy voting and corporate governance services, identified more than $5.55 billion in total dollar amounts of pending and tentative settlements in securities class actions for which investors' claim deadline has not passed. ISS' Settlement Pipeline, which will be updated regularly and available publicly, was designed to help institutional investors manage the settlement awards they or their clients are due. "Many investors, including many institutions, are unaware of the magnitude of the recoveries that are now coming due through securities class action settlements," said Bruce Carton, executive director of SCAS. "Drawing upon our database, the Settlement Pipeline permits us to quantify the settlement dollars that investors can and should be taking action to recover." ISS' Securities Class Action Services maintains the industry's most comprehensive database on securities class action litigation and provides professional monitoring and claims filing services to investment managers whose clients have a stake in class action suits. As of July 31, 2004, the Settlement Pipeline shows that settlement dollars totaling more than $5.55 billion are now, or will soon be, available for investors to file claims on to recover investment losses. The largest pending settlements in which shareholders may currently file claims include WorldCom/Citigroup ($2.65 billion), Global Crossing ($245 million), Symbol Technologies ($102 million) and Honeywell International ($100 million). The largest tentative settlements that have been announced but in which claims cannot yet be filed include the IPO Securities Litigation ($1 billion), Raytheon Company ($410 million) and Bristol-Myers Squibb Company ($300 million). UNITED STATES: Study Uncovers Less Securities Suits, Added Costs ---------------------------------------------------------------- In a recently conducted study by PricewaterhouseCoopers, the No. 1 issue that is fueling securities lawsuits is corporate accounting it also stated that costs have reached record levels thanks to blockbuster "mega-settlements," the Dow Jones Newswires reports. The PricewaterhouseCoopers study found out that accounting matters fueled more than 60% of securities litigation cases filed in 2003 and 57% of those filed through July 2004 with No. 1 allegation in such cases involving revenue recognition, continuing a trend seen in prior years. An annual study according to the annual study by the Big Four accounting firms also confirmed that allegations based on corporate accounting estimates and internal controls also are being lodged in nearly half the cases. The study also noted that the average settlements jumped 20% in 2003, with an average price tag of $23.2 million with some of those settlements topping the $100 million mark while three exceeded $300 million and one by Lucent Technologies Inc. (LU) settled for more than $500 million. Although a total of 175 securities lawsuits were filed in 2003, down from 218 in 2002, the report pointed out that the securities litigation plaintiffs' bar is as energetic and tenacious as ever. However the study also reiterated that even though the filing of securities lawsuits have gone down the costs are escalating, thanks to multimillion-dollar settlements by DaimlerChrylser AG (DCX), Oxford Health Plans Inc. (OXM), and others. Excluding a recent $2.65 billion partial settlement by WorldCom Inc., now MCI Inc. (MCIP), and other partial settlements, PricewaterhouseCoopers calculates the average settlement in the first six months of 2004 surged to more than $32 million. The average for settled accounting cases was more than $38 million. The median price for accounting case settlements exceeded $7 million, compared with a $6.3 million median for other settled cases. Companies now face the prospect of "triple jeopardy" from private, class-action lawsuits, civil lawsuits by the Securities and Exchange Commission, and criminal probes by the U.S. Department of Justice. In 2003, PricewaterhouseCoopers found eight such cases, down sharply from more than 40 seen in 2002, perhaps as cases take longer to work their way through the pipeline. Preliminary research indicates at least 13 companies are facing "triple jeopardy" this year, according to the report. In a prepared statement, PricewaterhouseCoopers partner for investigations and forensic services, Charles Hacker stated that; "The fines and penalties meted out in recent SEC and DOJ settlements with companies also facing securities litigation have risen dramatically, and criminal prosecutions and convictions for corporate fraud offenses are ratcheting up." According to the study, labor unions and public pension plans are the leaders in filing securities suits, which more likely targets pharmaceutical companies and financial firms. Technology firms though accounted for 26% of all securities litigation cases brought in 2003, down from 55% just two years earlier. The study also revealed that lawsuits targeting Fortune 500 companies are declining, with just 20 brought in 2003, down from 60 the prior year. For more details, visit: http://www.10b5.com Asbestos Alerts ASBESTOS LITIGATION: Ace Ltd. Survival Ratios Adversely Affected ---------------------------------------------------------------- Ace Ltd. says in a recent filing with the Securities and Exchange Commission that its survival ratios are adversely affected by the timing of certain previously agreed upon settlements. These payments were anticipated in the Company's 2002 asbestos study. As of December 31, 2003 the Company's gross 3-year survival ratio is 10.3x while gross 1-year survival ratio is 9.9x. Through subsidiaries, ACE Ltd. (based in tax-friendly Bermuda) sells property/casualty insurance and reinsurance in the U.S. and about 50 other countries. ACE International (which is subdivided into Asia Pacific, Europe, Far East, and Latin America) sells property/casualty lines to personal and commercial clients. ACE Global Reinsurance, primarily through its Tempest Re unit, provides catastrophe reinsurance to personal and commercial clients. Through ACE Global Markets, the firm owns four Lloyd's of London managing agencies. ACE USA provides US commercial and casualty insurance. The company has also moved into health insurance. ASBESTOS LITIGATION: Albany International Claims Show Increase -------------------------------------------------------------- Around 23,569 of the claims pending against Albany International Corp. are filed in various counties in Mississippi. The Registrant expects that only a portion of these claimants will be able to demonstrate time spent in a paper mill to which Albany supplied asbestos-containing products during a period in which Albany's asbestos-containing products were in use. Based on past experience, communications from certain plaintiffs' counsel and the advice of the Registrant's Mississippi counsel, the Registrant expects the percentage of claimants with paper mill exposure in the Mississippi proceedings to be considerably lower than the total number of claims asserted. It is the position of Albany and the other paper machine clothing defendants that there was insufficient exposure to asbestos from any paper machine clothing products to cause asbestos-related injury to any plaintiff. Furthermore, asbestos contained in Albany's synthetic products was encapsulated in a resin-coated yarn woven into the interior of the fabric, further reducing the likelihood of fiber release. While the Company believes it has meritorious defenses to these claims, it has settled certain of these cases for amounts it considers reasonable given the facts and circumstances of each case. The Company's insurer, Liberty Mutual, has defended each case under a standard reservation of rights. As of February 13, 2004, the Registrant had resolved, by means of settlement or dismissal, 6,168 claims, and had reached tentative agreement to resolve an additional 4,563 claims reported above as pending. The total cost of resolving all 10,731 such claims was $5,201,500. Of this amount, $5,166,500, or 99%, was paid by the Company's insurance carrier. The Company has more than $130,000,000 in confirmed insurance coverage that should be available with respect to current and future asbestos claims, as well as additional insurance coverage that it should be able to access. ASBESTOS LITIGATION: American Standard Has 120T Claims Pending -------------------------------------------------------------- Through June 30, 2004, there have been 145,181 claims filed against American Standard Companies Inc. At June 30, 2004, there were 120,896 pending claims, compared with 116,020 at the end of 2003, and 96,463 and 52,171 at the end of 2002 and 2001, respectively, reflecting updated information for all prior periods. Since receipt of its first asbestos claim more than 15 years ago, through June 30, 2004, the Company has resolved 24,285 claims, and settlements of $47,300,000 have been made, for an average payment per claim of $1,948. These settlement payments have substantially been paid or reimbursed or are expected to be substantially reimbursed by insurance. The Company has recorded an obligation of $70,000,000 as of June 30, 2004, that represents the Company's estimated payments to claimants associated with pending asbestos claims. It also has recorded a related asset of $47,000,000 that represents the probable recoveries from insurance companies for such payments to claimants. ASBESTOS LITIGATION: CNA Financial Has $1.741M Expense Reserves --------------------------------------------------------------- As of June 30, 2004 and December 31, 2003, CNA Financial Corp. carried about $1,741,000,000 and $1,767,000,000 of claim and claim adjustment expense reserves, net of reinsurance recoverables, for reported and unreported asbestos-related claims. The Company recorded $40,000,000 of unfavorable asbestos-related net claim and claim adjustment expense reserve development for the six months ended June 30, 2004 and no asbestos-related net claim and claim adjustment expense development for the same period in 2003. The unfavorable net prior year development was primarily related to a commutation loss related to The Trenwick Group Ltd. The Company paid asbestos-related claims, net of reinsurance recoveries, of $66,000,000 and $70,000,000 for the six months ended June 30, 2004 and 2003. Some asbestos-related defendants have asserted that their policies issued by CNA are not subject to aggregate limits on coverage. CNA has such claims from a number of insureds. Some of these claims involve insureds facing exhaustion of products liability aggregate limits in their policies, who have asserted that their asbestos-related claims fall within so-called "non-products" liability coverage contained within their policies rather than products liability coverage, and that the claimed "non-products" coverage is not subject to any aggregate limit. It is difficult to predict the ultimate size of any of the claims for coverage purportedly not subject to aggregate limits or predict to what extent, if any, the attempts to assert "non-products" claims outside the products liability aggregate will succeed. The Company has attempted to manage its asbestos exposure by aggressively seeking to settle claims on acceptable terms. Where CNA cannot settle a claim on acceptable terms, the Company aggressively litigates the claim. On February 13, 2003, CNA announced it had resolved asbestos related coverage litigation and claims involving A.P. Green Industries, A.P. Green Services and Bigelow - Liptak Corp. Under the agreement, CNA is required to pay $74,000,000, net of reinsurance recoveries, over a ten-year period. The settlement resolves CNA's liabilities for all pending and future asbestos claims involving A.P. Green Industries, Bigelow - Liptak Corp. and related subsidiaries, including alleged "non-products" exposures. The settlement has received initial bankruptcy court approval and CNA expects to procure confirmation of a bankruptcy plan containing an injunction to protect CNA from any future claims. CNA is engaged in insurance coverage litigation with underlying plaintiffs who have asbestos bodily injury claims against the former Robert A. Keasbey Co. in New York state court (Continental Casualty Co. v. Nationwide Indemnity Co. et al., No. 601037/03 (N.Y. County)). Keasbey, a currently dissolved corporation, was a seller and installer of asbestos-containing insulation products in New York and New Jersey. Thousands of plaintiffs have filed bodily injury claims against Keasbey; however, Keasbey's involvement at a number of work sites is a highly contested issue. Therefore, the defense disputes the percentage of valid claims against Keasbey. CNA issued Keasbey primary policies for 1970-1987 and excess policies for 1972- 1978. CNA has paid an amount substantially equal to the policies' aggregate limits for products and completed operations claims. Claimants against Keasbey allege, among other things, that CNA owes coverage under sections of the policies not subject to the aggregate limits, an allegation CNA vigorously contests in the lawsuit. CNA has insurance coverage disputes related to asbestos bodily injury claims against Burns & Roe Enterprises Inc. Originally raised in litigation, now stayed, these disputes are currently part of In re: Burns & Roe Enterprises, Inc., pending in the U.S. Bankruptcy Court for the District of New Jersey, No. 00- 41610. Burns & Roe provided engineering and related services in connection with construction projects. At the time of its bankruptcy filing, Burns & Roe faced around 11,000 claims alleging bodily injury resulting from exposure to asbestos as a result of construction projects in which Burns & Roe was involved. CNA allegedly provided primary liability coverage to Burns & Roe from 1956-1969 and 1971-1974, along with certain project-specific policies from 1964-1970. CIC issued certain primary and excess policies to Bendix Corp., now part of Honeywell International Inc. Honeywell faces around 76,800 pending asbestos bodily injury claims resulting from alleged exposure to Bendix friction products. CIC's primary policies allegedly covered the period from at least 1939 (when Bendix began to use asbestos in its friction products) to 1983, although the parties disagree about whether CIC's policies provided product liability coverage before 1940 and from 1945 to 1956. CIC asserts that it owes no further material obligations to Bendix under any primary policy. Honeywell alleges that two primary policies issued by CIC covering 1969-1975 contain occurrence limits but not product liability aggregate limits for asbestos bodily injury claims. CIC has asserted, among other things, which even if Honeywell's allegation is correct, which CNA denies, its liability is limited to a single occurrence limit per policy or per year, and in the alternative, a proper allocation of losses would substantially limit its exposure under the 1969-1975 policies to asbestos claims. These and other issues are being litigated in Continental Insurance Co., et al. v. Honeywell International Inc., No. MRS-L-1523-00 (Morris County, New Jersey). Policyholders have also initiated litigation directly against CNA and other insurers in four jurisdictions: Ohio, Texas, West Virginia and Montana. In the two Ohio actions, plaintiffs allege the defendants negligently performed duties undertaken to protect workers and the public from the effects of asbestos (Varner v. Ford Motor Co., et al. (Cuyahoga County, Ohio) and Peplowski v. Ace American Ins. Co., et al. (U.S.D.C. N.D. Ohio)). The state trial court recently granted insurers, including CNA, summary judgment against a representative group of plaintiffs, ruling that insurers had no duty to warn plaintiffs about asbestos. Similar lawsuits have also been filed in Texas against CNA, and other insurers and non-insurer corporate defendants asserting liability for failing to warn of the dangers of asbestos (Boson v. Union Carbide Corp., et al. (District Court of Nueces County, Texas)). Many of the Texas claims have been dismissed as time-barred by the applicable statute of limitations. In other claims, the Texas court recently ruled that the carriers did not owe any duty to the plaintiffs or the general public to advise on the effects of asbestos thereby dismissing these claims. The time period for filing an appeal of this ruling has not expired and it remains uncertain whether the plaintiffs' will continue to pursue their causes of action. CNA has been named in Adams v. Aetna, Inc., et al. (Circuit Court of Kanawha County, West Virginia), a purported class action against CNA and other insurers, alleging that the defendants violated West Virginia's Unfair Trade Practices Act in handling and resolving asbestos claims against their policy holders. A direct action has also been filed in Montana (Pennock, et al. v. Maryland Casualty, et al. First Judicial District Court of Lewis & Clark County, Montana) by eight individual plaintiffs (all employees of W.R. Grace Co.) and their spouses against CNA, Maryland Casualty and the State of Montana. This action alleges that the carriers failed to warn of or otherwise protect W.R. Grace employees from the dangers of asbestos at a W.R. Grace vermiculite mining facility in Libby, Montana. The Montana direct action is currently stayed as to CNA because of W.R. Grace's pending bankruptcy. The Company has resolved a number of its large asbestos accounts by negotiating settlement agreements. Structured settlement agreements provide for payments over multiple years as set forth in each individual agreement. At June 30, 2004, CNA had eleven structured settlement agreements with a reserve net of reinsurance of $180,000,000. As to the eleven structured settlement agreements existing at June 30, 2004, payment obligations under those settlement agreements are projected to terminate by 2016. At December 31, 2003, CNA had structured settlement agreements with nine of its policyholders for which it has future payment obligations with a reserve, net of reinsurance, of $188,000,000. In 1985, 47 asbestos producers and their insurers, including CIC, executed the Wellington Agreement. The agreement intended to resolve all issues and litigation related to coverage for asbestos exposures. Under this agreement, signatory insurers committed scheduled policy limits and made the limits available to pay asbestos claims based upon coverage blocks designated by the policyholders in 1985, subject to extension by policyholders. CIC was a signatory insurer to the Wellington Agreement. At June 30, 2004, CNA had remaining payment obligations for four accounts. With respect to these four remaining unpaid Wellington obligations, CNA has evaluated its exposure and the expected reinsurance recoveries under these agreements and has a recorded reserve of $19,000,000, net of reinsurance. At December 31, 2003, CNA had fulfilled its Wellington Agreement obligations as to all but five accounts and had a recorded reserve of $23,000,000, net of reinsurance. CNA has also used coverage in place agreements to resolve large asbestos exposures. Coverage in place agreements are typically agreements between CAN and its policyholders identifying the policies and the terms for payment of asbestos related liabilities. Claims payments are contingent on presentation of adequate documentation showing exposure during the policy periods and other documentation supporting the demand for claims payment. Coverage in place agreements may have annual payment caps. As of June 30, 2004, CNA had negotiated 31 coverage in place agreements. The Company has evaluated these commitments and the expected reinsurance recoveries under these agreements and has recorded a reserve of $90,000,000, net of reinsurance as of June 30, 2004. As of December 31, 2003, CAN had negotiated 32 such agreements and had established a reserve of $109,000,000, net of reinsurance. The Company categorizes active asbestos accounts as large or small accounts. CNA defines a large account as an active account with more than $100,000 of cumulative paid losses. The Company has made closing large accounts a significant management priority. At June 30, 2004, the Company had 174 large accounts and had established reserves of $393,000,000, net of reinsurance. At December 31, 2003, CNA had 160 large accounts with reserves of $405,000,000, net of reinsurance. Large accounts are typically accounts that have been long identified as significant asbestos exposures. Small accounts are defined as active accounts with $100,000 or less cumulative paid losses. At June 30, 2004, the Company had 1,117 small accounts, around 83% of its total active asbestos accounts, with reserves of $162,000,000, net of reinsurance. At December 31, 2003, CNA had 1,065 small accounts and established reserves of $147,000,000, net of reinsurance. Small accounts are typically representative of policyholders with limited connection to asbestos. The Company also evaluates its asbestos liabilities arising from its assumed reinsurance business and its participation in various pools. At June 30, 2004, CNA's reserve was $156,000,000, net of reinsurance, related to these liabilities, and unassigned IBNR reserve for asbestos was $687,000,000, net of reinsurance. At December 31, 2003, CNA's unassigned IBNR reserve was $684,000,000, net of reinsurance. This IBNR reserve relates to potential development on accounts that have not settled and potential future claims from unidentified policyholders. ASBESTOS LITIGATION: CSX Corp. Sea-Land Claims Increased In 2004 ---------------------------------------------------------------- Around 5,600 of the open claims against CSX Corp. at June 25, 2004 are asbestos claims against the Company's previously owned international container-shipping business, Sea-Land. There were 5,500 open claims against Sea-Land at December 26, 2003. The Company had about $13,000,000 reserved for the Sea-Land claims at June 25, 2004 and December 26, 2003. The remaining open claims have been asserted against CSX Transportation Inc. In the third quarter of 2003, CSX changed its estimate of casualty reserves to include an estimate of incurred but not reported claims for asbestos and other occupational injuries. In conjunction with the change in estimate, the Company recorded a charge of $232,000,000 ($145,000,000 after tax, 68 cents per share) in the third quarter of 2003 to increase its provision for casualty claims. ASBESTOS LITIGATION: CSXT Inc. Reserve For Asbestos Decreased ------------------------------------------------------------- CSX Transportation Inc.'s reserve for asbestos and other occupational claims on an undiscounted basis amounted to $313,000,000 at June 25, 2004, compared to $331,000,000 at December 26, 2003. CSX Transportation operates the largest rail network in the eastern United States and also provides intermodal, container shipping and international terminal management services. The Fortune 200 corporation was officially formed in 1980 by the merger of two major eastern railroads, the Chessie System and Seaboard Coast Line. The merged railroads began operating as CSX Transportation in 1986. In July 1998, the federal Surface Transportation Board approved the joint acquisition of Conrail by CSX and Norfolk Southern Corp., and CSXT began operating over newly acquired rail lines in 1999. ASBESTOS LITIGATION: Corning Inc. Discloses Settlement Charges -------------------------------------------------------------- For the three and six months ended June 30, 2004, Corning Inc. recorded charges of $47,000,000 and $66,000,000, respectively, related to the quarterly mark-to-market of its common stock associated with the asbestos settlement agreement. For the three and six months ended June 30, 2003, the Company recorded charges of $39,000,000 and $337,000,000, respectively, as part of its asbestos settlement, the latter of which included $298,000,000 associated with the initial settlement. Corning and PPG Industries Inc. each own 50% of the capital stock of Pittsburgh Corning Co. (PCC). Over a period of more than two decades, PCC and several other defendants have been named in numerous lawsuits involving claims alleging personal injury from exposure to asbestos. On April 16, 2000, PCC filed for Chapter 11 reorganization in the U.S. Bankruptcy Court for the Western District of Pennsylvania. As of the bankruptcy filing, PCC had in excess of 140,000 open claims and had insufficient remaining insurance and assets to deal with its alleged current and future liabilities. More than 100,000 additional claims have been filed with PCC after its bankruptcy filing. At the time PCC filed for bankruptcy protection, there were around 12,400 claims pending against Corning in state court lawsuits alleging various theories of liability based on exposure to PCC's asbestos products and typically requesting monetary damages in excess of $1,000,000 per claim. Corning has defended those claims on the basis of the separate corporate status of PCC and the absence of any facts supporting claims of direct liability arising from PCC's asbestos products. Corning is also named in around 11,300 other cases (around 42,300 claims) alleging injuries from asbestos and similar amounts of monetary damages per claim. Those cases have been covered by insurance without material impact to Corning. Corning's settlement will require the contribution, when the Plan becomes effective, of its equity interest in PCC, its one- half equity interest in Pittsburgh Corning Europe N.V., and 25,000,000 shares of Corning common stock. Corning also will be making cash payments of $140,000,000 (net value as of June 30, 2004) in six installments beginning one year after the Plan is effective. In addition, Corning will assign policy rights or proceeds under primary insurance from 1962 through 1984, as well as rights to proceeds under certain excess insurance, most of which falls within the period from 1962 through 1973. In return for these contributions, Corning expects to receive a release and an injunction channeling asbestos claims against it into a settlement trust under the PCC Plan. ASBESTOS LITIGATION: Crane Co. Facing Various Asbestos Lawsuits --------------------------------------------------------------- As of June 30, 2004, Crane Co. was a defendant, among a number of defendants, typically over 50 and frequently in the hundreds, in cases filed in various state and federal courts alleging injury or death as a result of exposure to asbestos. These filings generally do not provide meaningful information with respect to the alleged sources of the claimants' asbestos exposure, and a significant proportion of such cases are typically dismissed for lack of credible product identification against the Company. ASBESTOS LITIGATION: Crum & Forster's Rating Outlook Negative ------------------------------------------------------------- Crum & Forster Holdings Corporation's insurance operating subsidiaries have an "A-" financial strength rating, with a negative outlook, from A.M. Best and a "BBB" financial strength rating from Standard & Poor's. A.M. Best has advised the Company that although it is encouraged by improved underlying trends exhibited in the Company's recent underwriting performance, the ratings outlook is negative, and contingent upon management's ability to ultimately achieve overall earnings stability, specifically with regard to adequacy of asbestos reserves, and improved financial flexibility of the Company's ultimate parent, Fairfax Financial. Crum & Forster Holdings Corp. is a Delaware holding company 100% owned by Fairfax Inc., a Wyoming holding company. Fairfax is wholly owned by FFHL Group Ltd., a Canadian holding company, which is owned by Fairfax Financial Holdings Ltd., a Canadian financial services holding company publicly traded on the Toronto Stock Exchange and the New York Stock Exchange. The Company, through its subsidiaries, provides commercial property and casualty insurance distributed through an independent producer force located across the United States. Crum & Forster was established for the purpose of holding the capital stock of Crum & Forster Holding Inc., another wholly owned subsidiary of Fairfax, and had no operations prior to becoming the parent of Holding. ASBESTOS LITIGATION: Cytec Asbestos Liability At $70M As Of June ---------------------------------------------------------------- Cytec Industries Inc. says that as of June 30, 2004 and December 31, 2003, the aggregate self-insured and insured contingent liability was $70,300,000 and $72,500,000, respectively. The asbestos liability included in the amounts at June 30, 2004 and December 31, 2003 were $53,400,000 and $54,000,000, respectively, and the related insurance receivable was $28,100,000 at June 30, 2004 and $29,100,000 at December 31, 2003. The Company anticipates receiving a net tax benefit for payment of those claims to which full insurance recovery is not realized. The following table presents information about the asbestos claims against the Company: Six Months Ended Year Ended June 30, December 31, 2004 2003 ------------ ------------ Claims closed in period 2,452 7,601 Claims filed in period 3,188 7,648 Claims open at end of period 27,691 26,955 ASBESTOS LITIGATION: Dow Chemical Insurance Receivables Lowered --------------------------------------------------------------- The Dow Chemical Co. and subsidiaries recently said in a regulatory filing with the Securities and Exchange Commission that its unaudited non-current asbestos-related insurance receivables were $1,086,000,000 at June 30, 2004 and $1,176,000,000 at December 31, 2003. Unaudited non-current asbestos-related liabilities were $1,696,000,000 at June 30, 2004 and $1,791,000,000 at December 31, 2003. ASBESTOS LITIGATION: FDMLQ Injury Trust To Own 50.1% Of Stock ------------------------------------------------------------- Federal-Mogul Corp. (OTC BB: FDMLQ) said in a filing with the Securities and Exchange Commission that its proposed joint reorganization plan for itself and its respective debtor subsidiaries provides that a trust for the benefit of the holders of Asbestos Claims shall receive 50.1% of the shares of Common Stock to be issued by the Applicant, and the remaining shares shall be distributed pro rata to the holders of Allowed Noteholder Claims. Based solely on documents filed with the Bankruptcy Court, the Federal-Mogul Personal Injury Trust is expected to own 10% or more (50.1%) of Federal-Mogul's voting securities (50,100,000 units Class B Common Stock) from and after the effective date of the plan. On June 4, 2004, the Third Amended Joint Plan of Reorganization for the Company and other U.S. and U.K. Debtors was filed with the Bankruptcy Court. The Plan was jointly proposed by the Company, the Unsecured Creditors Committee, the Asbestos Claimants Committee, the Future Asbestos Claimants Representative, the Agent for the Prepetition Bank Lenders and the Equity Security Holders Committee (collectively referred to as the "Plan Proponents"). Also on June 4, 2004, a Disclosure Statement to be used in soliciting votes to accept or reject the Plan was approved by the Bankruptcy Court and a hearing to determine whether the Bankruptcy Court should approve the Plan was set for December 9, 2004. ASBESTOS LITIGATION: Hanson Charges Include GBP19.2M Exposure ------------------------------------------------------------- Hanson plc's pre-tax exceptional items totaled a net charge of GBP18,800,000 (GBP66,100,000), which includes a charge of GBP19,200,000 (GBP65,200,000) in respect of the group's exposure to asbestos liabilities. An exceptional net tax credit of GBP6,800,000 (GBP76,000,000) includes a GBP7,500,000 credit (GBP25,400,000) in relation to taxation recoverable in respect of this asbestos related charge. New asbestos claimants in the period totaled around 11,700 compared to 7,900 in the second half of last year and 21,000 in the first half of last year. Claims representing around 3,500 claimants were resolved (of which around 70% were dismissed). At the end of June 2004, outstanding claimants totaled around 132,400 (124,200 at December 2003). Over 90,000 of these claimants, as well as the majority of new claimants filed in the period, are in Mississippi and Ohio. The gross cost of resolving asbestos claims during the period was $32,000,000, $8,200,000 higher than the second half of last year. This has been driven largely by plaintiff lawyers in reaction to the deliberations that have taken place in the U.S. Senate aimed, currently unsuccessfully, at achieving a Federal asbestos reform bill. The net first half cost for 2004 (after insurance recoveries and before tax) was $2,600,000. Included in the loss on disposal and termination of operations is a charge of GBP19,200,000 in respect of the group's exposure to asbestos liabilities. A credit of GBP7,500,000, representing the taxation recoverable in respect of this charge, is included within the exceptional taxation items. Included in the loss on disposal and termination of operations of GBP18,800,000 (June 2003 GBP62,600,000) within exceptional items, is a charge of GBP19,200,000 (June 2003 GBP65,200,000) in respect of the group's exposure to asbestos liabilities arising from former business activities. The exceptional tax credit of GBP6,800,000 (June 2003 GBP76,000,000) includes a credit of GBP7,500,000 (June 2003 GBP25,400,000) which represents the taxation recoverable in respect of the asbestos related charge and a release of GBP nil (June 2003 GBP50,000,000) relating to prior years. The net asbestos charge of GBP11,700,000 maintains a gross cost provision for asbestos of GBP175,600,000 ($319,800,000). This level of provision will be reassessed at the year-end based on underlying gross cost trends. Expectations for the second half of 2004, based on current court schedules, are that the gross cost should return to a level more in line with last year's second half. Consequently, Hanson has maintained a balance sheet provision for gross asbestos costs of about $320,000,000 ($316,800,000 at December 2003) by taking a pre-tax, non-operating exceptional charge of $35,000,000 (around GBP12,000,000 post tax) at the half year. Any requirement for an increase in the level of gross provision will be assessed at the year end based on underlying gross cost trends. Assumed available insurance, which offsets the gross cost provision, reduced from $73,000,000 at December 31, 2003 to $43,000,000 at June 30, 2004 through first half utilization. Hanson continues to seek to improve its available insurance cover through a combination of negotiation and litigation, although this remains a complicated process. ASBESTOS LITIGATION: HPC Litigation Creates More Liabilities ------------------------------------------------------------ For the three months ended June 30, 2004, Hercules Inc. (NYSE: HPC) states that its asbestos litigation (insurance carriers) incurred $2,000,000 net income, $20,000 basic and diluted earnings per share, and $3,000,000 EBITDA. All amounts are unaudited. Hercules Inc. supplies water-treatment chemicals and services to the pulp and paper industry. Its Aqualon subsidiary makes thickeners. In a move to raise cash, Hercules sold its BetzDearborn water treatment business to GE Specialty Materials for about $1,800,000,000. Hercules also has sold most of its resins operations and formed a food gums joint venture with Lehman Brothers Holdings called CP Kelco. ASBESTOS LITIGATION: Honeywell Paid $9M Charge For Bendix Claims ---------------------------------------------------------------- Honeywell International Inc. recognized a charge of $9,000,000 for asbestos claims filed, which were related to its Bendix Friction Materials business, and defense costs incurred during the second quarter of 2004 including an update of expected resolution values with respect to claims pending as of June 30, 2004. The charge is net of probable Bendix related insurance recoveries and an additional $47,000,000 of North American Refractories Co. insurance deemed probable of recovery. Honeywell owned NARCO from 1979 to 1986. From 1981 through June 30, 2004, Honeywell resolved around 69,000 Bendix related asbestos claims including trials covering 120 plaintiffs, which resulted in 115 favorable verdicts. Beginning with claim payments made in the third quarter of 2002, Honeywell began advancing indemnity and defense claim costs. During the first six months of 2004, those indemnity and defense costs were about $72,000,000. Honeywell has about $1,900,000,000 of insurance coverage remaining with respect to pending and future Bendix related asbestos claims. Based on the Company's analysis, at June 30, 2004 it had amounts receivable from its insurers of about $300,000,000 representing probable reimbursements associated with its liability for pending claims as well as amounts due to it for previously settled and paid claims related to the estimated liabilities for pending claims. During the first six months of 2004, Honeywell paid $323,000,000 in indemnity and defense costs related to NARCO and Bendix claims, and expects to make additional asbestos related payments of about $370,000,000 during the remainder of 2004. The Company had $48,000,000 of asbestos related insurance recoveries during the first six months of 2004. Honeywell expects to receive about $80,000,000 in asbestos related insurance recoveries during the remainder of 2004. ASBESTOS LITIGATION: ISG Expects $5M Asbestos Removal in 2004 ------------------------------------------------------------- International Steel Group Inc. (NYSE: ISG) anticipates spending about $57,000,000 over the next 40 years, including $5,000,000 in 2004, to address the removal and disposal of PCB equipment and asbestos material utilized in operations applications at its facilities. International Steel Group is an integrated United States-based steel manufacturing company that owns and operates 11 major steel producing and finishing facilities in six states. The Company was formed by WL Ross & Co. LLC (WLR) to acquire and operate globally competitive steel facilities. Since its formation, ISG has grown to become an integrated steel producer in North America by acquiring, out of bankruptcy, the steel making assets of LTV, Acme Steel Corp. and Bethlehem Steel Corp. ASBESTOS LITIGATION: LECO Facing 37,552 Asbestos Plaintiffs ----------------------------------------------------------- At June 30, 2004, Lincoln Electric Holdings Inc. (NasdaqNM: LECO) was a co-defendant in cases alleging asbestos induced illness involving claims by around 37,552 plaintiffs, which is a net increase of 1,079 claims from those previously reported. In each instance, the Company is one of a large number of defendants. The asbestos claimants seek compensatory and punitive damages, in most cases for unspecified sums. Since January 1, 1995, the Company has been a co-defendant in other similar cases that have been resolved as follows: 12,995 of those claims were dismissed, 9 were tried to defense verdicts, 3 were tried to plaintiff verdicts and 252 were decided in favor of the Company following summary judgment motions. On May 12, 2004, a Pennsylvania state court jury in Philadelphia County in an asbestos trial involving a single claimant returned a verdict against the Company and another co-defendant. The verdict amount was a total of $525,000, which would be shared between the two defendants and a substantial portion of which would be covered by insurance. The Company has appealed or will appeal judgments based on verdicts against the Company and believes it will prevail on the merits. ASBESTOS LITIGATION: SEE Posts $512.5M Settlement Liability ----------------------------------------------------------- Sealed Air Corp. (NYSE: SEE) said in a regulatory filing with the Securities and Exchange Commission that its unaudited asbestos settlement liability amounted to $512,500,000 at both June 30, 2004 and December 31, 2004. In calculations for diluted earnings per common share, the weighted average number of common shares for the quarters and six months ended June 30, 2004 and 2003 assumes the issuance of 9,000,000 shares of common stock reserved for the Company's asbestos settlement discussed in its annual report on Form 10-K for the year ended December 31, 2003, and the exercise of dilutive stock options, net of assumed treasury stock repurchases. In addition, for the quarter and six months ended June 30, 2003, the weighted average number of common shares assumes the effect of the weighted average conversion of repurchased shares of preferred stock. ASBESTOS LITIGATION: U.S. Steel Says Active Cases To Be Reduced --------------------------------------------------------------- United States Steel Corp. says that a recent agreement, which will result in the dismissal of a significant number of cases and claims in one jurisdiction, will reduce its number of active cases alleging injury from asbestos exposure. After taking into account this agreement, U.S. Steel is a defendant in around 1,000 active cases, involving around 12,500 plaintiffs. Almost all of these cases involve multiple defendants (typically from fifty to more than one hundred defendants). More than 11,000, or around 90 percent, of these claims are pending in jurisdictions which permit filings with massive numbers of plaintiffs. Based on U.S. Steel's experience in such cases, it believes that the actual number of plaintiffs who ultimately assert claims against U.S. Steel will likely be a small fraction of the total number of plaintiffs. U.S. Steel is a defendant in cases in which a total of around 215 plaintiffs allege that they are suffering from mesothelioma. The Class Action Reporter previously noted 200 such plaintiffs on March 12, 2004. The potential for damages against defendants may be greater in cases in which the plaintiffs can prove mesothelioma. In many such cases in which claims have been asserted against U.S. Steel, the plaintiffs have been unable to establish any causal relationship to U.S. Steel or its products or premises. In addition, in many asbestos cases, the plaintiffs have been unable to demonstrate that they have suffered any identifiable injury or compensable loss at all; that any injuries that they have incurred did in fact result from alleged exposure to asbestos; or that such alleged exposure was in any way related to U.S. Steel or its products or premises. ASBESTOS ALERT: Potomac Insurance Noted Asbestos-Related Loss ------------------------------------------------------------- Specialty Underwriters Alliance Inc. said in an regulatory filing that OneBeacon (Potomac Insurance Company of Illinois' predecessor) reported a $1,200,000 pre-tax loss for the five months ended May 31, 2001. These results include the impact of two reinsurance covers that provide Potomac with reinsurance protection against unanticipated increases in recorded reserves for insurance losses and LAE with respect to asbestos and certain other latent exposures. As described in the Notes to Potomac's Audited Financial Statements, effective June 1, 2001 OneBeacon entered into reinsurance agreements with National Indemnity Co., or NICO Cover, and General Reinsurance Corp., or GRC Cover, which provide reinsurance protection against unanticipated increases in recorded reserves for insurance losses and LAE. Under the NICO Cover, an affiliate of OneBeacon is entitled to recover up to $2,500,000 for asbestos claims arising from business written by the Pool and ceded to the affiliate pertaining to years prior to 1992, environmental claims arising from business written by the Pool and ceded to the affiliate pertaining to years prior to 1987 and certain other exposures, all net of third party reinsurance recoveries. The GRC Cover provides up to $570,000,000 in excess of loss reinsurance protection against adverse development on accident year 2000 and prior losses. Effective June 1, 2001, the Pool entered into a reinsurance agreement with an affiliate of OneBeacon which provides Potomac with reinsurance protection against unanticipated increases in recorded reserves for insurance losses and LAE with respect to asbestos, environmental and certain other latent exposures and excess of loss reinsurance protection against adverse development on accident year 2000 and prior losses. Effective June 1, 2001 and concurrent with the Agreement, the Affiliate entered into reinsurance agreements with National Indemnity Co. (NICO) and General Reinsurance Corp. (GRC) which provide reinsurance protection against unanticipated increases in recorded reserves for insurance losses and LAE. Under the NICO Cover, the Affiliate paid a premium of $1,250,000,000 and is entitled to recover up to $2,500,000,000 for asbestos claims arising from business written by the Pool and ceded to the Affiliate pertaining to years prior to 1992, environmental claims arising from business written by the Pool and ceded to the Affiliate pertaining to years prior to 1987 and certain other exposures, all net of third party reinsurance recoveries. The GRC Cover, for which the Affiliate paid $275,000,000, provides up to $570,000,000 in excess of loss reinsurance protection against adverse development on accident year 2000 and prior losses. The NICO Cover and the GRC Cover, which were contingent on, and occurred contemporaneously with White Mountains' acquisition of OneBeacon, qualify for prospective reinsurance accounting treatment under the Emerging Issues Task Force Topic D-54 which characterizes the protections as an indemnification by the seller for increases in the liabilities for losses and loss adjustment expenses that existed at the acquisition date. COMPANY PROFILE Potomac Insurance Company of Illinois 8585 Stemmons Fwy., Ste. 200, South Tower Dallas, TX 75247 Phone: 469-547-3035 http://www.onebeacon.com Employees : 10 Revenue : $ 0.00 Net Income : $ 600,000.00 Assets : $ 4,900,000.00 Liabilities : $ 5,500,000.00 (As of December 31, 2003) Description: Potomac Insurance Company of Illinois (which Specialty Underwriters' Alliance is acquiring from OneBeacon Insurance Group, and though which it plans to conduct business) is licensed to do business in some 40 U.S. states. ASBESTOS ALERT: USG Subsidiaries Reorganize To Resolve Claims ------------------------------------------------------------- As of June 30, 2004, USG Corporation's liabilities subject to compromise in its consolidated and debtor-in-possession balance sheets include asbestos reserve amounting to $1,061,000,000 (unchanged from the amount as of December 31, 2004). For the six months ended June 30, 2004, USG's change in asbestos receivable amounted to $11,000,000, compared to $19,000,000 at June 30 last year. USG Corp. and ten of its United States subsidiaries (collectively, the "Debtors") are operating under chapter 11 of the U.S. Bankruptcy Code to resolve asbestos claims. As a result of the bankruptcy filing, all pending asbestos lawsuits against the Debtors are stayed, and no party may take any action to pursue or collect on such asbestos claims absent specific authorization of the Bankruptcy Court. In the second quarter of 2004, Judge Judith K. Fitzgerald, the bankruptcy judge presiding over the Debtors' Chapter 11 Cases, entered an order directing the parties to enter into non-binding mediation relating to the Debtors' asbestos personal injury liability and the potential terms of a plan of reorganization. Judge Fitzgerald appointed David Geronemus as mediator. It is expected that the mediation will begin in the third quarter of 2004. The legal representative for future asbestos claimants raised the issue of whether USG and its subsidiaries may be liable for asbestos personal injury claims arising from the asbestos- containing products of A.P. Green Industries Inc. before 1967, when A.P. Green was acquired by merger into U.S. Gypsum Co. In 1985 A.P. Green became a wholly owned subsidiary of USG Corp., and in 1988 it became publicly traded when its shares were distributed to the USG Corp. shareholders. In February 2002, A.P. Green, its parent company, and other affiliates filed voluntary petitions for reorganization to resolve asbestos- related liabilities. The A.P. Green reorganization proceeding is pending in the U.S. Bankruptcy Court for the Western District of Pennsylvania and is captioned In re: Global Industrial Technologies, Inc. (Case No. 02-21626). The Corporation cannot predict whether any plan of reorganization in the Debtors' Chapter 11 Cases might address any asbestos-related liability based on sales of asbestos-containing products by A.P. Green. The legal representative for future asbestos claimants and the Official Committee of Asbestos Personal Injury Claimants also raised the issue of whether the assets and liabilities of all Debtors should be temporarily consolidated for purposes of the treatment of claims under a plan of reorganization. Under this theory, the liabilities based on sales of asbestos-containing products by USG subsidiary United States Gypsum Co. would be paid from the pooled assets of U.S. Gypsum and all other Debtors subject to consolidation. If applied, substantive consolidation could materially and adversely affect the recovery rights of creditors of Debtors other than U.S. Gypsum and the holders of the Corporation's equity. U.S. Gypsum is among many defendants in more than 100,000 asbestos lawsuits alleging personal injury or property damage liability. In addition to Personal Injury Cases pending against U.S. Gypsum, one of the Corporation's subsidiaries and a Debtor in the bankruptcy proceeding, L&W Supply Corp., is a named defendant in around 21 pending Personal Injury Cases. L&W Supply, a distributor of building products manufactured by U.S. Gypsum and other building products manufacturers, has not made any payments in the past to resolve Personal Injury Cases. One of U.S. Gypsum's subsidiaries and a Debtor in the bankruptcy proceeding, Beadex Manufacturing LLC, is a named defendant in around 40 Personal Injury Cases pending primarily in Washington and Oregon. Beadex has about $11,000,000 in primary or umbrella insurance coverage available to pay asbestos-related costs, as well as $15,000,000 in available excess coverage. The Corporation expects that any asbestos-related liability of Beadex will be addressed in the plan of reorganization. However, because of, among other things, the small number of Personal Injury Cases pending against Beadex and L&W, and the lack of development of the cases against L&W Supply, the Corporation does not have sufficient information to predict how any plan of reorganization will address any asbestos-related liability of Beadex and L&W Supply. COMPANY PROFILE Beadex Manufacturing LLC 401 C St NW Auburn, WA 98001-3908 Phone: 253-931-6600 Fax: 253-931-0601 Description: Beadex Manufacturing manufactured and sold joint compound containing asbestos from 1963 through 1978. Distribution of products that contained asbestos is believed to have been limited to Washington, Oregon, Idaho, Alaska, and possibly Colorado. COMPANY PROFILE L&W Supply Corp. 125 S. Franklin St. Chicago, IL 60606 Phone: 312-606-5400 Fax: 312-606-5323 http://www.lwsupply.com Description: L&W Supply Corp. is the distribution subsidiary of USG Corp., which manufactures such building products as gypsum wallboard, joint compound, and acoustical ceilings. L&W Supply also distributes building products made by other manufacturers through about 190 locations in more than 35 states. Besides wallboard, L&W Supply's products include metal framing and insulation. Customers are primarily builders and contractors. It distributes 28% of USG's gypsum wallboard production. L&W Supply also provides such services as delivery of less-than- truckload quantities and stocking. USG organized L&W Supply in 1971. New Securities Fraud Cases GEXA CORPORATION: Milberg Weiss Files Securities Suit in S.D. TX ---------------------------------------------------------------- The law firm of Milberg Weiss Bershad & Schulman LLP announces that a class action lawsuit was filed on July 15, 2004, on behalf of purchasers of the securities of Gexa Corporation Gexa Corp. ("Gexa" or the "Company") (NASDAQ: GEXA) between August 14, 2003 and March 30, 2004, inclusive (the "Class Period"), seeking to pursue remedies under the Securities Exchange Act of 1934 (the "Exchange Act"). The action is pending in the United States District Court for the Southern District of Texas, against defendants Gexa Corporation, a Texas retail electricity provider, Neil Liebman (CEO), Marcie Zlotnik (Director) and Sarah Veach (Chief Accounting Officer). 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, defendants materially overstated Gexa's financial results in connection with its power delivery business. On March 30, 2004, after the market closed, the Company issued a press release which admitted that its previously reported revenues had been overstated estimates, not measurable earned revenues based upon power delivered to customers or proceeds from energy sales as previously reported. Defendants also revealed that in connection with the completion of the audit for fiscal year 2003, the Company's independent auditors identified certain material weaknesses in the Company's systems of internal controls. Based upon this press release, the price of the Company's stock dropped more than 25% falling from a closing price of 6.64 per share on March 30, 2004 to a closing price of 4.90 per share on March 31, 2004. 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 by E-mail: sfeerick@milbergweiss.com OR Maya Saxena or Joseph E. White by Mail: 5355 Town Center Road, Suite 900, Boca Raton, FL 33486 by Phone: (561) 361-5000 by E-mail: msaxena@milbergweiss.com or visit their Web site: http://www.milbergweiss.com INVISION TECHNOLOGIES: Schiffrin & Barroway Lodges NY Stock Suit ---------------------------------------------------------------- The law firm of Schiffrin & Barroway, LLP initiated a class action lawsuit in the United States District Court for the Southern District of New York on behalf of all purchasers of the common stock of InVision Technologies Inc. (Nasdaq: INVN) ("InVision" or the "Company") from March 15, 2004 through July 30, 2004 inclusive (the "Class Period"). The complaint charges InVision, Giovanni Lanzara, Sergio Magistri, and Ross Mulholland with violations of the Securities Exchange Act of 1934. More 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's foreign distributors were engaging in questionable and potentially illegal activities; (2) that its foreign distributors made improper payments in connection with foreign sales activities, which were in violation of the Foreign Corrupt Practices Act; (3) that InVision improperly accounted for the funds used in these payments; and (4) that as a result, InVision's improper accounting for such payments allowed InVision to enter into a definitive merger agreement with General Electric Company. On July 30, 2004, InVision announced that it had met with the Department of Justice and the SEC concerning its voluntary disclosure of an internal investigation of certain possible offers of improper payments by distributors in connection with foreign sales activities. The news shocked the market. Shares of InVision fell $6.39 or 12.87 percent per share, on August 2, 2004, to close at $6.39 per share. For more details, contact Marc A. Topaz, Esq. or Darren J. Check, Esq. of Schiffrin & Barroway, LLP by Phone: 1-888-299-7706 or 1-610-667-7706 by E-mail: info@sbclasslaw.com TARO PHARMACEUTICAL: Charles J. Piven Lodges NY Securities Suit --------------------------------------------------------------- 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 Taro Pharmaceutical Industries Ltd. (Nasdaq:TARO) between February 17, 2004 and July 28, 2004, inclusive (the "Class Period"). The case is pending in the United States District Court for the Southern District of New York against defendant Taro and one or more of its officers and/or directors. 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, MD 21202 by Phone: 410/986-0036 or by E-mail: hoffman@pivenlaw.com TARO PHARMACEUTICAL: Murray Frank Files Securities Lawsuit in NY ---------------------------------------------------------------- The law firm of Murray, Frank & Sailer LLP initiated a class action lawsuit on behalf of purchasers of the securities of Taro Pharmaceutical Industries, Ltd. ("Taro" or the "Company") (Nasdaq:TARO) between February 20, 2003 and July 29, 2004, inclusive (the "Class Period"). The action is pending in the United States District Court for the Southern District of New York against defendants Taro, Barrie Levitt (Executive Chairman), Aaron Levitt (President), Daniel Moros (Vice Chairman), Samuel Rubenstein (General Manager) and Kevin Connelly (Chief Financial Officer). According to the complaint, defendants violated sections 10(b) and 20(a) of the Exchange Act, and Rule 10b-5, by knowingly or recklessly issuing a series of material misrepresentations to the market during the Class Period. The complaint alleges that Taro presented itself as a pharmaceutical company that develops, manufactures and markets generic drugs, and that the Company claimed throughout the Class Period that it had successfully expanded its product line to include proprietary drugs and novel drug delivery systems. Unbeknownst to investors, the Company suffered from undisclosed adverse factors that were having a negative impact on Taro's financial performance and condition including but not limited to the following: (1) defendants were unable to maintain profitability in Taro's generic drug division or generate free cash flow from the introduction of higher margin proprietary products sufficient to offset the expense of its new product launches; (2) defendants had failed to properly record the full expense of developing new proprietary drug products, such that it was materially false and misleading for defendants to state that the roll-out of Taro's new proprietary drugs was not and would not adversely affect the Company's near- or long-term profitability; (3) defendants understated the negative effects of increasing competition on the Company's financial performance; and (4) as a result of the foregoing, defendants lacked any reasonable basis to claim that Taro was operating according to plan or that Taro could maintain profitability in the near-term. The truth emerged on July 29, 2004. On that date, the Company announced a second-quarter loss of $0.31 per share, far below the Company-guided analyst consensus estimate of $0.44 per share earnings, and that drug sales had dropped to $49.1 million from $74.8 million in the prior second quarter. On this news, Taro's share price fell more than $11.50 per share to a new multi-year low of $18.68 per share. For more details, contact Eric J. Belfi or Aaron D. Patton of Murray, Frank & Sailer LLP by Phone: (800) 497-8076 or (212) 682-1818 by Fax: (212) 682-1892 or by E-mail: info@murrayfrank.com THORATEC CORPORATION: Charles J. Piven Lodges CA Securities Suit ---------------------------------------------------------------- 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 Thoratec Corporation (Nasdaq:THOR) between April 28, 2004 and June 29, 2004, inclusive (the "Class Period"). The case is pending in the United States District Court for the Northern District of California against defendant Thoratec and one or more of its officers and/or directors. 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, MD 21202 by Phone: 410/986-0036 or by E-mail: hoffman@pivenlaw.com THORATEC CORPORATION: Federman & Sherwood Files Stock Suit in CA ---------------------------------------------------------------- The law firm of Federman & Sherwood initiated a class action lawsuit against Thoratec Corporation (Nasdaq: THOR) ("Thoratec") in the United States District Court for the Northern District of California on behalf of purchasers of the Company's publicly traded securities during the period between April 28, 2004 and June 29, 2004 (the "Class Period"). The complaint alleges violations of federal securities laws, Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5, including allegations of issuing a series of material misrepresentations to the market which had the effect of artificially inflating the market price. For more details, contact William B. Federman of FEDERMAN & SHERWOOD by Mail: 120 N. Robinson, Suite 2720, Oklahoma City, OK 73102 by Phone: (405) 235-1560 by Fax: (405) 239-2112 by E-mail: wfederman@aol.com or visit their Web site: http://www.federmanlaw.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 Se�orin, 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 * * *