/raid1/www/Hosts/bankrupt/CAR

/raid1/www/Hosts/bankrupt/CAR_Public/040813.mbx C L A S S A C T I O N R E P O R T E R Friday, August 13, 2004, Vol. 6, No. 160 Headlines AEGON N.V.: NY Court Dismisses Lawsuit, Period To Appeal Lapses ALLEGHENY ENERGY: Plaintiffs Appeal Dismissal of CA Energy Suits ALLEGHENY ENERGY: Asks MD Court To Dismiss Securities Fraud Suit ALLEGHENY ENERGY: Asks MD Court To Dismiss Securities Fraud Suit AMERICA ONLINE: Volunteers Launch Several FLSA Violations Suits BRINKER RESTAURANT: Settles Salmonella Suits, Terms Not Divulged COCA-COLA CO.: Discovery Proceeds in GA Securities Fraud Lawsuit COMPETITIVE TECHNOLOGIES: SEC Lodges Stock Fraud Lawsuit in CT CONSOL ENERGY: Plaintiffs File Amended Securities Lawsuit in PA FEN-PHEN LITIGATION: Sides Reach Agreement, $1.275B Fund Created FLORIDA: A.G. Crist Sets Up Toll-Free Hotline to Aid Residents HALLIBURTON CO.: AMS Fund Opposes Securities Fraud Settlement HERBALIFE INTERNATIONAL: Reaches Settlement For Distributor Suit HERBALIFE INTERNATIONAL: Faces Suit V. Telemarketing in WV Court KEYSPAN CORPORATION: Reaches Agreement To Settle Securities Suit LINKNET INC.: Administrative Proceedings Started V. Ex-Employee MASTERCARD INC.: Plaintiffs Appeal Antitrust Settlement Approval MEDICAL STAFFING: Shareholders Launch Securities Fraud Lawsuits MURRAY INTERNATIONAL: Recalls Flowers Due To Undeclared Sulfites NEOFORMA INC.: Suit Settlement Submitted To Court For Approval PALMONE INC.: Reaches Settlement For DE Securities Fraud Suits PALMONE INC.: CA Settlement Fairness Hearing Set September 2004 PALMONE INC.: Asks IL Court To Dismiss Amended Consumer Lawsuit PALMONE INC.: CA Court Approves Consumer Fraud Suit Settlement PFGI CAPITAL: Ohio Court Dismisses Lawsuit For Securities Fraud PJ SLEEP SHOP: Recalls 337 Wooden Bunk Beds Due To Injury Hazard PRICEWATERHOUSECOOPERS: SEC Suspends Partner For Anicom Auditing STAN LEE: SEC Lodges Securities Fraud Suit V. Ex-Officials in CA TIME WARNER: Plaintiffs To File Amended Securities Lawsuit in NY TIME WARNER: Asks TX Court To Dismiss Securities Fraud Lawsuit TIME WARNER: Plaintiffs Appeal CA Securities Lawsuit Dismissal TIME WARNER: Plaintiffs Lodge Amended NV PurchasePro Stock Suit TIME WARNER: Faces Consolidated Suit Over AOL Sosa Program in CA TIME WARNER: NY Court Yet To Rule on ERISA Suit Dismissal Motion TIME WARNER: Appeals Denial of Arbitration in Consumer Lawsuit TIME WARNER: Plaintiffs Ask For NY Consumer Suit Certification TREX CO.: NJ Court Grants Certification To Consumer Fraud Suit WASHINGTON: Settles Foster Care Suit, Costs Could Reach $50M WEYERHAUSER CO.: Faces Linerboard Antitrust Suit in Canada Court WILLIAMS COMPANIES: Plaintiffs File Motion For Summary Judgment WILLIAMS COMPANIES: Asks OK Court To Dismiss ERISA Fraud Suits Asbestos Alert ASBESTOS LITIGATION: 3M Asbestos Claimants Decrease Since March ASBESTOS LITIGATION: Albany Intl Still Fighting Claims In MS ASBESTOS LITIGATION: CG&E, PSI Pending Lawsuits Increase To 85 ASBESTOS LITIGATION: Collins & Aikman Pact Costs Show Increase ASBESTOS LITIGATION: CMCO Liability Through 2013 May Reach $4 M ASBESTOS LITIGATION: CEG Subsidiary BGE Resolves 299 Lawsuits ASBESTOS LITIGATION: CCK Asbestos Payments Show $7M Decrease ASBESTOS LITIGATION: EnPro Says New Claims Filings Decreased ASBESTOS LITIGATION: Entergy Companies Battle Over 10,000 Claims ASBESTOS LITIGATION: Everest Group Posts Reserve Adjustments ASBESTOS LITIGATION: FWLRF Has $1.7M 2Q04 Settlement Gain ASBESTOS LITIGATION: Goodyear Expends $8.9M In Claims Charges ASBESTOS LITIGATION: HIG Evaluation Indicates No Gross Changes ASBESTOS LITIGATION: ITT, Ace Property Agree To Resolve Cases ASBESTOS LITIGATION: IR-NJ Continues To Pay Off Asbestos Costs ASBESTOS LITIGATION: Midwest Generation to Repay ConEd, Exelon ASBESTOS LITIGATION: Noland Lawsuits in VA Increase To 2,100 ASBESTOS LITIGATION: Owens Corning Posts $2M Fibreboard Reserve ASBESTOS LITIGATION: UCC Posts $864 Mil Of Insurance Receivables ASBESTOS ALERT: SDG&E Co. Expected To Pay $750,000 Settlement New Securities Fraud Cases ALLIED WASTE: Charles J. Piven Files Securities Fraud Suit in AZ ALLIED WASTE: Brian M. Felgoise Lodges AZ Securities Fraud Suit CERIDIAN CORPORATION: Brain M. Felgoise Files MN Securities Suit CERIDIAN CORPORATION: Lasky & Rifkind Lodges MN Securities Suit EXPRESS SCRIPTS: Lasky & Rifkind Lodges Securities Lawsuit in MO GEXA CORPORATION: Brian M. Felgoise Lodges Securities Suit in TX GEXA CORPORATION: Brodsky & Smith Files Stock Fraud Suit in TX GEXA CORPORATION: Vianale & Vianale Files Stock Fraud Suit in TX INVISION TECHNOLOGIES: Brodsky & Smith Lodges CA Securities Suit LIGAND PHARMACEUTICALS: Brian M. Felgoise Files Stock Suit in CA LIGAND PHARMACEUTICALS: Lasky & Rifkind Files CA Securities Suit SYNOVIS LIFE: Wolf Popper Lodges Securities Fraud Lawsuit in MN WHITE ELECTRONIC: Wolf Haldenstein Lodges Securities Suit in AZ WIRELESS FACILITIES: Shalov Stone Lodges Securities Suit in CA ********* AEGON N.V.: NY Court Dismisses Lawsuit, Period To Appeal Lapses --------------------------------------------------------------- The United States District Court for the Southern District of New York dismissed the class action lawsuit that was filed against AEGON NV and several of its current and former Executive Board members. The period for appeal has lapsed and therefore the class action has definitively been dismissed, the Company said in a statement. The suit, filed on January 24, 2003 against Aegon, Don Shepard, Kees Storm and Jos B.M. Streppel, charges that defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder, by issuing a series of materially false and misleading statements to the market between August 9, 2001 to July 22, 2002. Aegon, through its member companies, is an international insurer. During the years preceding the Class Period, and during the Class Period, as stock markets suffered substantial declines, increasing numbers of investors gravitated from variable products to fixed products. Aegon distinguished itself from its competitors with the claim that its purportedly broad product mix better enabled it to take advantage of this market shift while it simultaneously assured investors that it had sufficient reserves to fund the sharply increasing guaranteed payout obligations required by its fixed products. The complaint further alleges that Aegon also assured investors that it was less vulnerable to the vicissitudes of the equity and credit markets than competitors because the Company matched "high quality investment assets . . . in an optimal way to the corresponding insurance liability, taking into account currency, yield and maturity characteristics," The Company claimed that, for the foregoing reasons, "consistency and reliability in earnings forecasting is a particular source of pride" and that, while not immune to equity and real estate market shifts, the Company was not subject to sharp downward variations in annual net income. Accordingly, the Company reduced its earnings guidance for 2002 but at all relevant times maintained its forecast that 2002 net income would at least equal 2001 net income. The complaint also alleges that, on that date, the Company shocked the market, announcing that 2002 net income would not equal 2001 net income but, on the contrary, would be 30% to 35% lower than 2001 net income. On this news, Aegon shares declined from a closing price of $16.99 on Friday, July 19, 2002 to a closing price of $13.25 on Monday, July 22, 2002, when trading resumed. For more details, contact AEGON N.V. - Baltimore, MD, by Phone: +1-877-548-9668 (Analysts & investors) or +1-410-576-4577 or +1 410-576-4526 (Media) or by E-mail: ir@aegonusa.com ALLEGHENY ENERGY: Plaintiffs Appeal Dismissal of CA Energy Suits ---------------------------------------------------------------- Plaintiffs appealed the United States District Court for the Southern District of California's dismissal of eight class actions filed against Allegheny Energy Supply Company, LLC and more than two dozen other named defendant power suppliers. Nine suits were initially filed in various California superior courts during 2002. These class actions were removed from state court and transferred to the U.S. District Court for the Southern District of California. Eight of the suits were commenced by wholesale electricity consumers in California. The ninth, "Millar v. Allegheny Energy Supply Co., et al.," was filed on behalf of California consumers and taxpayers. The complaints allege, among other things, that the Company and the other defendant power suppliers violated California's antitrust statute and the California unfair business practices statute by manipulating the California electricity market. The suits also challenge the validity of various long-term power contracts with the State of California, including the CDWR contract. On August 25, 2003, the court granted the Company's motion to dismiss seven of the eight consumer class actions with prejudice. The plaintiffs have appealed to the United States Court of Appeals for the Ninth Circuit. The Company was never served in the eighth consumer class action, "Kurtz v. Duke Energy Trading and Marketing, LLC." The allegations in this complaint were substantively identical to those in the dismissed actions. On February 18, 2004, plaintiffs in Kurtz voluntarily dismissed the action without prejudice. The District Court separately granted plaintiffs' motion to remand in the ninth action, Millar, on July 9, 2003. On December 18, 2003, the plaintiffs filed an amended complaint, solely on behalf of consumers, naming certain additional defendants, including The Goldman Sachs Group, Inc. (Goldman Sachs) in California Superior Court, San Francisco County. The case was transferred back to the U.S. District Court for the Southern District of California in early 2004. In May 2004, plaintiffs moved to remand the case to state court. The defendants have opposed the motion and it remains outstanding. Under the terms of the agreement relating to the sale of the CDWR contract, AE Supply and one of its affiliates have agreed to indemnify Goldman Sachs and its affiliate J. Aron & Company, under certain conditions, for any losses arising out of the class action litigation up to the amount of the purchase price. ALLEGHENY ENERGY: Asks MD Court To Dismiss Securities Fraud Suit ---------------------------------------------------------------- Allegheny Energy, Inc. asked the United States District Court for the Southern District of Maryland to dismiss the consolidated securities class action filed against it and several of its former senior managers on behalf of purchasers of the Company's stock. From October 2002 through December 2002, several suits were filed in U.S. District Courts for the Southern District of New York and the District of Maryland. The complaints alleged that the Company and senior management violated federal securities laws when the Company purchased Merrill Lynch's energy marketing and trading business with the knowledge that the business was built on illegal wash or round-trip trades with Enron, which the complaints alleged artificially inflated trading revenue, volume and growth. The complaints asserted that the Company's fortunes fell when Enron's collapse exposed what plaintiffs claim were illegal trades in the energy markets. All of the securities cases were transferred to the District of Maryland and consolidated. The plaintiffs filed an amended complaint on May 3, 2004 that alleged that the defendants violated federal securities laws by failing to disclose weaknesses in Merrill Lynch's energy marketing and trading business, as well as other internal control and accounting deficiencies. The amended complaint seeks unspecified compensatory damages and equitable relief. The plaintiff's response to the motion to dismiss is due on August 16, 2004. ALLEGHENY ENERGY: Asks MD Court To Dismiss Securities Fraud Suit ---------------------------------------------------------------- Allegheny Energy, Inc. asked the United States District Court for the District of Maryland to dismiss the consolidated class action filed against it, alleging violations of the Employee Retirement Income Security Act (ERISA). The suit alleges that the Company and a senior manager violated ERISA by: (1) failing to provide complete and accurate information to plan beneficiaries regarding the energy trading business, among other things; (2) failing to diversify plan assets; (3) failing to monitor investment alternatives; (4) failing to avoid conflicts of interest and (5) violating fiduciary duties On April 26, 2004, the plaintiffs in the ERISA cases filed an amended complaint, adding a number of individuals as defendants and clarifying the nature of their claims. On June 25, 2004, the defendants filed a motion to dismiss the amended complaint. AMERICA ONLINE: Volunteers Launch Several FLSA Violations Suits --------------------------------------------------------------- America Online faces three lawsuits alleging violations of the Fair Labor Standards Act (FLSA) in various federal courts. On May 24, 1999, two former AOL Community Leader volunteers filed a suit, styled "Hallissey et al. v. America Online, Inc.," in the U.S. District Court for the Southern District of New York. This lawsuit was brought as a collective action under the Fair Labor Standards Act (FLSA) and as a class action under New York state law against America Online and AOL Community, Inc. The plaintiffs allege that, in serving as Community Leader volunteers, they were acting as employees rather than volunteers for purposes of the FLSA and New York state law and are entitled to minimum wages. On December 8, 2000, defendants filed a motion to dismiss on the ground that the plaintiffs were volunteers and not employees covered by the FLSA. The motion to dismiss is pending. A related case was filed by several of the Hallissey plaintiffs in the U.S. District Court for the Southern District of New York alleging violations of the retaliation provisions of the FLSA. This case has been stayed pending the outcome of the Hallissey motion to dismiss. Three related class actions have been filed in state courts in New Jersey, California and Ohio, alleging violations of the FLSA and/or the respective state laws. The New Jersey and Ohio cases were removed to federal court and subsequently transferred to the U.S. District Court for the Southern District of New York for consolidated pretrial proceedings with Hallissey. The California action was remanded to California state court and on January 6, 2004, the court denied plaintiffs' motion for class certification. Plaintiffs in that case have filed an appeal of the order denying class certification, and the trial court has stayed proceedings pending that appeal. BRINKER RESTAURANT: Settles Salmonella Suits, Terms Not Divulged ---------------------------------------------------------------- The law firm of Marler Clark, LLP, PS and the Brinker Restaurant Corporation agreed to settle the claims of 49 individuals who were infected with Salmonella after eating at the Vernon Hills Chili's Grill & Bar in late June and early July of 2003. Attorneys Denis Stearns and William Marler negotiated the settlements for all of Marler Clark's clients, including Bill and Jennifer Lussow, Kimberly Fields, Angela Bond, Matt and Anna Miller, Elizabeth Pusch, and Claude McDermott, each of whom had previously filed suit against Brinker, the owner and operator of the Chili's restaurant. These lawsuits, along with a class action lawsuit that sought punitive damages on behalf of all outbreak victims, will be dismissed as part of the settlement. The amount of the settlement is confidential. "We were far along in the process of preparing these cases for trial when settlement discussions finally seemed to turn serious," said Marler Clark partner Denis Stearns. "We believed strongly in our case, and the importance of the point we were trying to make about food safety and corporate responsibility. This was a case my partners and I really wanted to take to trial. But when finally faced with the chance to not only fully compensate our clients, but to do so in a way that showed the clients that, `We really did send a message with this one'-that was something we had to recommend accepting." The Lake County Health Department's outbreak investigation revealed that the Vernon Hills Chili's had been under operation despite having a broken dish-machine and a lack of hot water for at least one day, and a lack of any water at all during most of the lunch-rush one day when infected food workers were preparing and serving food to patrons. The Lake County Health Department reported that 305 Chili's patrons reported having symptoms of Salmonella infection that could be traced to Chili's. Among other things, the lawsuits filed had alleged that Chili's "acted in a grossly negligent manner" and that "wanton and willful acts were committed with a conscious and reckless indifference to existing circumstances and conditions, and to the rights and safety of others, with such acts including, but not limited to, preparing and serving food to the public despite having a broken dish-washing machine without sanitizer in it, having no hot water available for employees to wash their hands on one day, and no water at all for part of a second day. Such acts were also violations of the law." "In a way it is too bad that the amount of the settlement is confidential," added Bill Marler. "I think that more than most settlements we have achieved in the past, this one would really have made the restaurant industry sit up and take notice." For more details, contact Denis Stearns or Bill Marler of MARLER CLARK, LLP, PS by Phone: 206-346-1888 or 1-800-884-9840 by Fax: 1-206-346-1898 or by E-mail: dstearns@marlerclark.com or bmarler@marlerclark.com COCA-COLA CO.: Discovery Proceeds in GA Securities Fraud Lawsuit ---------------------------------------------------------------- Discovery is proceeding in the consolidated securities class action filed against Coca-Cola Co. in the United States District Court for the Northern District of Georgia, alleging violations of federal securities laws. On October 27, 2000, a class action lawsuit, styled "Carpenter's Health & Welfare Fund of Philadelphia & Vicinity v. The Coca- Cola Company, et al.," was filed, alleging that the Company, M. Douglas Ivester, Jack L. Stahl and James E. Chestnut violated antifraud provisions of the federal securities laws by making misrepresentations or material omissions relating to the Company's financial condition and prospects in late 1999 and early 2000. A second, largely identical lawsuit, styled "Gaetan LaValla v. The Coca-Cola Company, et al.," was filed in the same court on November 9, 2000. The Complaints allege that the Company and the individual named officers: (1) forced certain Coca-Cola system bottlers to accept "excessive, unwanted and unneeded" sales of concentrate during the third and fourth quarters of 1999, thus creating a misleading sense of improvement in the Company's performance in those quarters; (2) failed to write down the value of impaired assets in Russia, Japan and elsewhere on a timely basis, again resulting in presentation of misleading interim financial results in the third and fourth quarters of 1999; and (3) misrepresented the reasons for Mr. Ivester's departure from the Company and then misleadingly reassured the financial community that there would be no changes in the Company's core business strategy or financial outlook following that departure. Damages in an unspecified amount are sought in both Complaints. On January 8, 2001, an order was entered by the United States District Court for the Northern District of Georgia consolidating the two cases for all purposes. The Court also ordered the plaintiffs to file a Consolidated Amended Complaint. On July 25, 2001, the plaintiffs filed a Consolidated Amended Complaint, which largely repeated the allegations made in the original Complaints and added Douglas N. Daft as an additional defendant. On September 25, 2001, the defendants filed a Motion to Dismiss all counts of the Consolidated Amended Complaint. On August 20, 2002, the Court granted in part and denied in part the defendants' Motion to Dismiss. The Court also granted the plaintiffs' Motion for Leave to Amend the Complaint. On September 4, 2002, the defendants filed a Motion for Partial Reconsideration of the Court's August 20, 2002 ruling, which motion was denied by the Court on April 15, 2003. On June 2, 2003, the plaintiffs filed an Amended Consolidated Complaint. The Company moved to dismiss that Complaint on June 30, 2003. On March 31, 2004, the Court granted in part and denied in part the defendants' Motion to Dismiss the Amended Complaint. In its order, the Court dismissed a number of the plaintiffs' allegations, including the claim that the Company made knowingly false statements to financial analysts. The Court permitted the remainder of the allegations to proceed to discovery. The Court denied the plaintiffs' request for leave to further amend and replead their Complaint. COMPETITIVE TECHNOLOGIES: SEC Lodges Stock Fraud Lawsuit in CT -------------------------------------------------------------- The Securities and Exchange Commission initiated a lawsuit against Competitive Technologies, Inc. (CTT), a Connecticut technology company, its former CEO, and six brokers, alleging that they engaged in a fraudulent scheme to inflate CTT's stock price in United States District Court for the District of Connecticut. Defendant Chauncey Steele allegedly orchestrated the scheme as a broker at Prudential Securities in Massachusetts, acting with Richard Kwak in California, John Glushko in Nevada, Stephen Wilson in Massachusetts, Thomas Kocherhans in Utah and Sheldon Strauss in Ohio. Frank McPike, while acting as CTT's CEO, allegedly made purchases in the company's stock repurchase plan as part of the manipulative scheme. According to the Commission's complaint, from at least 1998 through 2001, the defendants "painted the tape," that is, created a misleading market appearance. Most commonly they "marked the close," by placing numerous orders at or near the close of the market to inflate the reported closing price. They also pre-arranged purchases to match sales, offsetting any impact sales would otherwise have on CTT's price. Employing these devices, defendants placed hundreds of purchase orders, and made the closing trade in CTT stock on almost 300 trading days during the period. On more than 90% of those days, they succeeded in raising the reported closing price of the stock. Because of defendants' fraud, CTT traded at far above its true value. The complaint alleges that defendants violated Section 17(a) of the Securities Act of 1933, Sections 9(a) and 10(b) and Rule 10b-5 of the Securities Exchange Act of 1934, which prohibit fraudulent conduct. The Commission is seeking injunctive relief, disgorgement, and civil penalties, and a permanent officer and director bar against McPike. The action is titled, SEC v. Competitive Technologies, Inc., Chauncey Steele, John Glushko, Thomas Kocherhans, Richard Kwak, Sheldon Strauss, Stephen Wilson, and Frank McPike in the United States District Court for the District of Connecticut, Civil Action No. 304 CV 1331 JCH. CONSOL ENERGY: Plaintiffs File Amended Securities Lawsuit in PA --------------------------------------------------------------- Plaintiffs filed an amended securities class action against CONSOL Energy, Inc., J. Brett Harvey and William J. Lyons in the United States District Court for the Western District of Pennsylvania. The amended complaint alleges, among other things, that the defendants violated Sections 10(b) and 20(a) of the Exchange Act and Rule 10b-5 promulgated under the Exchange Act and that during the period between January 24, 2002, and July 18, 2002, the defendants issued false and misleading statements to the public that failed to disclose or misrepresented the following, among other things that: (1) CONSOL Energy utilized an aggressive approach regarding its spot market sales by reserving 20% of its production to that market, and that by increasing its exposure to the spot market, CONSOL Energy was subjecting itself to increased risk and uncertainty as the price and demand for coal could be volatile; (2) CONSOL Energy was experiencing difficulty selling the production that it had allocated to the spot market, and, nonetheless, CONSOL Energy maintained its production levels which caused its coal inventory to increase; (3) CONSOL Energy's increasing coal inventory was causing its expenses to rise dramatically, thereby weakening the company's financial condition; and (4) based on the foregoing, defendants' positive statements regarding CONSOL Energy's earnings and prospects were lacking in a reasonable basis at all times and therefore were materially false and misleading. The amended complaint asks the court to award unspecified damages to plaintiff and the purported class members and award reasonable costs and expenses incurred in connection with this action, including counsel fees and expert fees. One other purported class action complaint has been filed in the United States District Court for the Western District of Pennsylvania against CONSOL Energy and certain officers and directors. This complaint was filed on December 12, 2003 by William A. McMahen and the allegations are essentially the same as the Moorhead/Karozos complaint. None of the named defendants have been served with the McMahen complaint. FEN-PHEN LITIGATION: Sides Reach Agreement, $1.275B Fund Created ---------------------------------------------------------------- Majority Counsel, a coalition of more than 45 firms and 150 attorneys representing the rights of over 45,000 victims who have been damaged by Fen-Phen drugs, announced that the amendment to the Fen-Phen Trust, labeled the 7th Amendment, has been approved by both sides and is filed before US District Judge Harvey Bartle III in Philadelphia. The 7th Amendment will allow Wyeth to pay reduced settlements to more than 40,000 Fen- Phen victims. The 7th Amendment creates a $1.275 billion fund for a new class of Trust members who opt to receive reduced settlements upon final Court approval of the Amendment, leaving what remains of the original $3.75 billion Trust to help the victims who have ongoing health problems in years to come. "The 7th Amendment is a real and meaningful solution to the Fen- Phen Trust where payments are essentially nonexistent for the vast majority of claimants. This solution preserves funding in the event claimants injured by diet drugs progress to heart valve surgery or similarly serious conditions and allows Wyeth to pay reduced settlements to more than 40,000 Fen-Phen victims with non-surgical conditions," said Jerry Alexander, a victim representative and member of the 7th Amendment Liaison Committee. Representatives from Wyeth and the 7th Amendment Liaison Committee have been working with Michael Fishbein, one of the attorneys representing the victim class action, for more than one year on this agreement which is designed to resolve up to 90% of the pending matrix-level claims currently filed with the Wyeth Fen-Phen Trust. "Thousands and thousands of Fen-Phen victims have been locked in a system where they can't get the help they were promised. Now, some of those victims have a way out -- a choice to settle immediately and know that there will be funds available if their health declines," said Wayne Spivey, Chairman of the 7th Amendment Liaison Committee. "If this passes, it's a start. Unfortunately this isn't a cure-all for everyone and we still have a long way to go toward curing the problems of the Wyeth Fen-Phen Trust." This agreement now requires judicial approval, and the stay on Trust claims processing will continue during this process. For more details, visit: http://www.majoritycounsel.com FLORIDA: A.G. Crist Sets Up Toll-Free Hotline to Aid Residents -------------------------------------------------------------- Florida Attorney General Charlie Crist activated a toll-free hotline and urged Florida consumers to report suspected price gouging associated with Tropical Storms Bonnie and Charley. The Attorney General's action follows Governor Bush's official declaration of an emergency for the State of Florida. "It is important for Floridians to know that they will be protected from any potential price gouger during either of these storms, Bonnie or Charley," said AG Crist. "Safety is the first priority, then we need to take care of our property and possessions." Those who suspect price gouging should call the hotline at 1-800-646-0444. Investigators will then look into the complaint. Florida law prohibits extreme increases in the price of such commodities as food, water, hotels, ice, gasoline, lumber and equipment necessary for use as a direct result of an officially declared emergency. "We know that our fellow citizens can be devastated by what is happening and they will need our help," said AG Crist. "Unfortunately, there are those who would seek to profit from the misery of others. Anyone who seeks to charge unconscionable prices for vital goods should be warned that they will face the full force of Florida law. We encourage Floridians to report suspicious price increases to the hotline. Price gouging will not be tolerated." Florida law states that a commodity price is unconscionable if it represents a "gross disparity" from the average price of that commodity during the 30 days immediately prior to the emergency. This applies unless the increase is attributable to additional costs incurred by the seller or to national or international market trends. Violators of the price gouging statute are subject to civil penalties of $1,000 per violation up to a total of $25,000 for multiple violations committed in a single 24-hour period. The Attorney General also cautioned consumers to be wary of business scams that might arise in the wake of Tropical Storms Bonnie and Charley, including itinerant building repair and tree removal services. AG Crist said residents should deal whenever possible with local established companies for repairs or for financing to pay for any repairs that might not be covered by insurance. Consumers should be wary about a "contractor" who knocks on the door with an offer to fix a roof or windows. Before signing any contracts, they should check the contractor's license, payment terms and other provisions. HALLIBURTON CO.: AMS Fund Opposes Securities Fraud Settlement ------------------------------------------------------------- Court-appointed Lead Plaintiff AMS Fund, Inc., a non-profit charitable organization represented by Scott + Scott, LLC, voiced its opposition to the present proposed/preliminarily approved Halliburton (NYSE: HAL) securities fraud settlement. The AMS Fund and Scott + Scott LLC also reminds interested parties that August 18, 2004 is the final date to object to the proposed settlement. Lead Plaintiff AMS Fund opposes both this proposed settlement and the manner in which it was reached for the following reasons, among others: Lead Plaintiff, AMS Fund, contends the proposed settlement was negotiated on an uninformed basis by class counsel as to the strength of the Class's claims against defendants and without input from all Court-appointed Lead Plaintiffs. It has been claimed in Court papers that the actual damages suffered by Halliburton shareholders amounted to hundreds of millions to billions of dollars, significantly more than the de minimis proposed settlement. The AMS Fund and its counsel were not consulted prior to Lead Counsel's agreement to the settlement. After being presented with the proposed settlement as a fait accompli, the AMS Fund took it upon itself to undertake its own further investigation. The result of this further investigation was that significant facts exist -- facts undeveloped by Lead Counsel and the other two Executive Committee firms -- which corroborate the Class's claims and illustrate the inadequacy of the proposed settlement to remedy defendants' alleged wrongs. The proposed settlement does not fairly compensate the Class for the claims against defendants. After deduction of class and derivative counsel's requested fees and realistically expected settlement administration and other expenses of approximately $3,000,000, Class members might receive something between $0.005 or $0.006 per share. For more details, contact Neil Rothstein of Scott + Scott by Phone: 800/404-7770 or 860/537-3818 (EDT) or or 800/332-2259 or 619/233-4565 (PDT) or by E-mail: nrothstein@scott-scott.com HERBALIFE INTERNATIONAL: Reaches Settlement For Distributor Suit ---------------------------------------------------------------- Herbalife International, Inc. reached a settlement for the class action lawsuit filed in the U.S. District Court of California, styled "Jacobs v. Herbalife International, Inc., et al." The suit challenges marketing practices of several distributors and the Company under various state and federal laws. Without in any way admitting liability or wrongdoing, the Company has reached a binding settlement with the plaintiffs, subject to final court approval. Under the terms of the settlement, the Company will: (1) pay $3 million into a fund to be distributed to former Supervisor-level distributors who had purchased Newest Way to Wealth materials from the other defendants in this matter, (2) up to a maximum aggregate amount of $1 million, refund to former Supervisor-level distributors the amounts they had paid to purchase such Newest Way to Wealth materials from the other defendants in this matter, and (3) up to a maximum aggregate amount of $2 million, offer rebates on certain new purchases of Herbalife products to those current Supervisor-level distributors who had purchased Newest Way to Wealth materials from the other defendants in this matter. HERBALIFE INTERNATIONAL: Faces Suit V. Telemarketing in WV Court ---------------------------------------------------------------- Herbalife International, Inc. and certain of its distributors have been named as defendants in a purported class action lawsuit filed in the United States District Court in West Virginia, styled "Mey v. Herbalife International, Inc., et al." The complaint alleges that certain telemarketing practices of certain Herbalife distributors violate the Telephone Consumer Protection Act and seek to hold Herbalife liable for the practices of its distributors, the Company revealed in a disclosure to the Securities and Exchange Commission. KEYSPAN CORPORATION: Reaches Agreement To Settle Securities Suit ---------------------------------------------------------------- KeySpan Corporation reached an agreement to settle a consolidated securities class action filed in the United States District Court for the Eastern District of New York against it and certain of its current and former officers and directors. The lawsuit alleges, among other things, violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, as amended, in connection with disclosures relating to or following the acquisition of the Roy Kay companies. The proposed settlement provides for the Company to make certain payments to plaintiffs, all of which is to be funded by the insurance carrier providing liability coverage for KeySpan's directors and officers. LINKNET INC.: Administrative Proceedings Started V. Ex-Employee --------------------------------------------------------------- The Securities and Exchange Commission instituted administrative proceedings against Joseph W. Isaac pursuant to Section 15(b) of the Securities Exchange Act of 1934 (Exchange Act). The Division of Enforcement (Division) alleges that on July 19, 2004 Isaac was enjoined from future violations of Sections 5(a), 5(c) and 17(a) of the Securities of 1933 Act and Sections 10(b) and 15(a) of the Exchange Act and Rule 10b-5 thereunder. The Order alleges that the Complaint in the underlying injunctive action alleged that LinkNet, Inc. (LinkNet) and LinkNet de America Latina, Ltd. (Latina), companies that employed Isaac, had conducted a fraudulent offering scheme, collectively raising over $17 million and defrauding more than 1,900 investors located throughout the United States. The Complaint alleged that LinkNet and Latina hired Isaac and others to organize and operate a boiler room to solicit investors to purchase securities in LinkNet and Latina. It further alleged that Isaac directed the activities of the boiler room and that Isaac and others made numerous misrepresentations to investors, including: that a public offering of LinkNet stock was imminent; that LinkNet's stock would shortly be listed on Nasdaq; and that LinkNet and Latina had contracts for the sale of hundreds of millions of minutes of long distance service that would generate millions of dollars in revenue to the companies. It also alleged that Isaac and others also failed to disclose that at least thirty percent of the offering proceeds were paid as commissions to the boiler room operations. Finally, the Complaint alleged that Isaac acted as an unregistered broker in connection with sales of the stock of LinkNet and Latina and through the boiler room operations of those issuers. A hearing will be scheduled before an administrative law judge to determine whether the allegations contained in the Order are true, to provide Isaac an opportunity to dispute these allegations, and to determine what sanctions, if any, are appropriate and in the public interest. The Commission directed that an initial decision shall be issued by the administrative law judge within 210 days from service of the Order Instituting Proceedings upon Isaac. MASTERCARD INC.: Plaintiffs Appeal Antitrust Settlement Approval ---------------------------------------------------------------- Plaintiffs appealed the United States District Court for the Eastern District of New York's approval of the settlement of the consolidated class action filed a number of U.S. merchants against MasterCard International and Visa U.S.A., Inc. challenging certain aspects of the payment card industry under U.S. federal antitrust law. The plaintiffs challenged MasterCard's "Honor All Cards" rule (and a similar Visa rule), which requires merchants who accept MasterCard cards to accept for payment every validly presented MasterCard card. Plaintiffs claimed that MasterCard and Visa unlawfully tied acceptance of debit cards to acceptance of credit cards. In essence, the merchants desired the ability to reject off- line, signature-based debit transactions (for example, MasterCard card transactions) in favor of other payment forms including on-line, PIN-based debit transactions (for example, Maestro or regional ATM network transactions), which generally impose lower transaction costs for merchants. The plaintiffs also claimed that MasterCard and Visa conspired to monopolize what they characterized as the point-of-sale debit card market, thereby suppressing the growth of regional networks such as ATM payment systems. Plaintiffs alleged that the plaintiff class had been forced to pay unlawfully high prices for debit and credit card transactions as a result of the alleged tying arrangement and monopolization practices. On June4, 2003, MasterCard International signed the Settlement Agreement to settle the claims brought by the plaintiffs in this matter, which the Court approved on December 19, 2003. A number of class members have appealed the district court's approval of the settlement to the Second Circuit Court of Appeals. These appeals are largely focused on the court's attorneys' fees award as well on the court's ruling on the scope of the release. The Second Circuit has scheduled oral argument on these appeals for August 25, 2004. Several lawsuits have been commenced by merchants who have opted not to participate in the plaintiff class in the U.S. merchant lawsuit, including Best Buy Stores, CVS, Giant Eagle, Home Depot, Toys `R' Us and Darden Restaurants. The majority of these cases were filed in the U.S. District Court for the Eastern District of New York and the Company expects that all of these cases will be tried in that Court for, at minimum, pretrial issues. On December 31, 2003, MasterCard entered into an agreement to settle claims brought by an "opt out" merchant. On March 19, 2004, the opt out merchants amended their complaints to include allegations, among other things, that MasterCard's (and Visa's) interchange fees contravene the Sherman Act and that the opt out merchants were harmed by MasterCard's CPP. MasterCard filed its response to the amended complaints on April 21, 2004. On July 1, 2004, MasterCard and CVS entered into a settlement and release resolving CVS's claims against MasterCard. On July 9, 2004, the District Court entered an order dismissing with prejudice CVS's complaint against MasterCard. MasterCard continues to be involved in court- ordered mediation with the remaining opt out merchant plaintiffs while discovery continues to proceed. In addition, there are currently related actions against MasterCard International in 19 different state courts and the District of Columbia. In a number of state courts there are multiple complaints against MasterCard International brought under state unfair competition statutes on behalf of putative classes of consumers. The claims in these actions mirror the allegations made in the U.S. merchant lawsuit and assert that merchants, faced with excessive merchant discount fees, have passed these overcharges to consumers in the form of higher prices on goods and services sold. While these actions are in their early stages, MasterCard has filed motions to dismiss the complaints in a number of state courts for failure to state a cause of action. The Supreme Court in the State of New York and the Circuit Court for the State of Michigan have granted MasterCard's motion to dismiss with prejudice. On June 21, 2004, the plaintiffs in the New York case filed a notice of appeal. The plaintiffs' time in which to file an appeal of the Michigan court's ruling is currently running. MasterCard is awaiting decisions on its motions to dismiss in the other state courts. In July 2002, a purported class action lawsuit was filed by a group of merchants in the U.S. District Court for the Northern District of California against MasterCard International, Visa U.S.A., Inc., Visa International Corp. and several member banks in California alleging, among other things, that MasterCard's and Visa's interchange fees contravene the Sherman Act. The suit seeks treble damages in an unspecified amount, attorney's fees and injunctive relief, including the divestiture of bank ownership of MasterCard and Visa, and the elimination of MasterCard and Visa marketing activities. On March 4, 2004, the court dismissed the lawsuit with prejudice in reliance upon the approval of the Settlement Agreement in the U.S. merchant lawsuit by the U.S. District Court for the Eastern District of New York, which held that the settlement and release in that case extinguished the claims brought by the merchant group in the present case. The plaintiffs have appealed the U.S. District Court for the Eastern District of New York’s approval of the U.S. merchant settlement and release to the Second Circuit Court of Appeals and have also appealed the U.S. District Court for the Northern District of California's dismissal of the present lawsuit to the Ninth Circuit Court of Appeals. MEDICAL STAFFING: Shareholders Launch Securities Fraud Lawsuits --------------------------------------------------------------- Medical Staffing Network Holdings, Inc. faces several securities class actions filed on behalf of purchasers of the Company's common stock pursuant to or traceable to the Company's initial public offering in April 2002. On February 20, 2004, Joseph and Patricia Marrari, and on April 16, 2004, Tommie Williams, filed class action lawsuits in the United States District Court for the Southern District of Florida. These lawsuits also named as defendants certain of the Company's directors and executive officers. The complaints allege that certain disclosures in the Registration Statement/Prospectus filed in connection with the Company's initial public offering on April 17, 2002 were materially false and misleading in violation of the Securities Act of 1933. The complaints seek compensatory damages as well as costs and attorney fees. On March 29, 2004, a third class action lawsuit brought on behalf of the same class of the Company's stockholders making claims similar to those in the lawsuits filed by Plaintiffs Joseph and Patricia Marrari and Tommie Williams was commenced by Plaintiff Haddon Zia in the Florida Circuit Court of the Fifteenth Judicial Circuit in and for Palm Beach County, Florida. Defendants have removed this case to the United States District Court for the Southern District of Florida and Plaintiff has moved to remand the case back to the Florida Circuit Court of the Fifteenth Judicial Circuit, which motion Defendants have opposed. The Zia complaint seeks rescission or damages as well as certain equitable relief and costs and attorney fees. On March 2, 2004, another class action complaint was filed against Medical Staffing Network and certain of the Company's directors and executive officers in the United States District Court for the Southern District of Florida by Jerome Gould, individually and on behalf of a class of Medical Staffing Network's stockholders who purchased stock during the period from April 18, 2002 through June 16, 2003. The complaint alleges that certain of the Company's public disclosures during the class period were materially false and misleading in violation of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder. The complaint seeks compensatory damages, costs and attorney fees. Subsequent to quarter end, on July 2, 2004, the Marrari, Gould, Williams and Zia actions were consolidated, Plaintiff Thomas Greene was appointed Lead Plaintiff of the consolidated action and the law firm of Cauley Geller Bowman & Rudman LLP was appointed Lead Counsel for Plaintiffs. MURRAY INTERNATIONAL: Recalls Flowers Due To Undeclared Sulfites ---------------------------------------------------------------- Murray International Trading, Inc., 908 Dean Street, Brooklyn, N.Y. 11238 is recalling Wing Shing Dried Lily Flower because it may contain undeclared sulfites. People who have severe sensitivity to sulfites run the risk of serious or life threatening allergic reactions if they consume this product. The recalled Wing Shing Dried Lily Flower was sold in a clear, uncoded, 6oz plastic package and is a product of China. The product was sold throughout New York State. The recall was initiated after routine sampling by New York State Department of Agriculture and Markets Food Inspectors revealed the presence of undeclared sulfites in Wing Shing Dried Lily Flower in packages which did not declare sulfites on the labels. The consumption of 10 milligrams of sulfites per serving has been reported to elicit severe reactions in some asthmatics. Anaphylactic shock could occur in certain sulfite sensitive individuals upon ingesting 10 milligrams or more of sulfites. No illnesses have been reported to date in connection with this problem. Consumers who have purchased Wing Shing Dried Lily Flower should return it to the place of purchase. Consumers with questions may contact the company at 718-230-7888. NEOFORMA INC.: Suit Settlement Submitted To Court For Approval -------------------------------------------------------------- The settlement of the consolidated securities class action filed against Neoforma, Inc. has been submitted to the United States District Court for the Southern District of New York for preliminary approval. In July 2001, the Company, along with Merrill Lynch, Pierce, Fenner & Smith, Bear Stearns and FleetBoston Robertson Stephens (certain of the underwriters of the Company's initial public offering (IPO)), as well as its Chairman and Chief Executive Officer, Robert Zollars, and its former Chief Financial Officer, Frederick Ruegsegger, were named as defendants in two securities class action lawsuits filed in federal court in the Southern District of New York (No. 01 CV 6689 and No. 01 CV 6712) on behalf of those who purchased shares of the Company's common stock from January 24, 2000 to December 6, 2000. These actions have since been consolidated, and a consolidated amended complaint was filed on April 24, 2002. The amended complaint alleges that the underwriters solicited and received "undisclosed compensation" from investors in exchange for allocations of stock in the Company's IPO, and that some investors in the IPO allegedly agreed with the underwriters to buy additional shares in the aftermarket to artificially inflate the price of the Company's stock. The Company, Mr. Zollars and Mr. Ruegsegger are named in the suits pursuant to Section 11 of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder, for allegedly failing to disclose in the Company's IPO registration statement and prospectus that the underwriters had entered into the arrangements described above. The complaints seek unspecified damages. Approximately 300 other issuers and their underwriters have had similar suits filed against them, all of which are included in a single coordinated proceeding in the Southern District of New York. On July 1, 2002, the underwriter defendants moved to dismiss all of the IPO allocation litigation complaints against them, including the action involving the Company. On July 15, 2002, the Company, along with the other non-underwriter defendants in the coordinated cases, also moved to dismiss the litigation. Those motions were fully briefed on September 13 and September 27, 2002, respectively, and in February 2003, the Court denied the Company's motion to dismiss. On October 9, 2002, all of the individual defendants, including Mr. Zollars and Mr. Ruegsegger, were dismissed from the action without prejudice. On June 30, 2003, the Company's board of directors approved a proposed settlement for this matter, which is part of a larger global settlement between the issuers and plaintiffs. The acceptance of the settlement by the plaintiffs is contingent on a number of factors, including the percentage of issuers who approve the proposed settlement. The Company has agreed to undertake other responsibilities under the proposed settlement, including agreeing to assign away, not assert, or release certain potential claims the Company may have against its underwriters. Any direct financial impact of the proposed settlement is likely to be borne by the Company's insurers. PALMONE INC.: Reaches Settlement For DE Securities Fraud Suits -------------------------------------------------------------- palmOne, Inc. reached a tentative settlement for the two putative class actions filed in the Court of Chancery in the State of Delaware in and for the County of New Castle against it, Handspring, Inc. and various officers and directors of Handspring, captioned "Goldhirsch v. Handspring, Inc., et. al," and "Majarian v. Handspring, Inc., et. al." The Majarian complaint was amended on June 23, 2003 to, among other things, delete certain previously named officer defendants. Both complaints allege that the officers and directors of Handspring breached their fiduciary duties to Handspring stockholders by, among other things, failing to undertake an appropriate evaluation of Handspring's net worth as a merger or acquisition candidate and failing to maximize Handspring stockholder value by not engaging in a meaningful auction of Handspring. The Majarian complaint also alleges, among other things, that the officers and directors of Handspring breached their fiduciary duties by failing to act independently so that the interests of Handspring's public stockholders would be protected and enhanced. Both complaints allege that Palm aided and abetted the alleged breaches of fiduciary duty of Handspring's officers and directors. Both complaints seek, among other things, a preliminary and permanent injunction against the transaction, a rescission of the transaction if it is consummated and unspecified damages. The Goldhirsch complaint also requests, among other things, that the Court order Handspring's officers and directors to take all necessary steps to maximize stockholder value, including open bidding and/or a market check. The cases were consolidated and a tentative settlement was reached in October 2003 subject to appropriate documentation, confirmatory discovery and Court approval. All preliminary steps to obtain Court approval have been completed and the parties are anticipating a hearing date. PALMONE INC.: CA Settlement Fairness Hearing Set September 2004 --------------------------------------------------------------- Final fairness hearing for the settlement of the consumer class action filed against palmOne, Inc. and 3Com, styled "Connelly v. Palm and 3Com," is set for September 30,2004 in California Superior Court for San Francisco County. The suit alleges breach of warranty and violation of California's Unfair Competition Law. The amended complaint, filed on behalf of purchasers of Palm III, IIIc, V and Vx handhelds, alleges that certain Palm handhelds may cause damage to PC motherboards by permitting an electrical charge, or "floating voltage," from either the handheld or the cradle to be introduced into the PC via the serial and/or USB port on the PC due to a design defect in the Palm products. The complaint seeks restitution, rescission, damages, an injunction mandating corrective measures to protect against future damage as well as notifying users of potential harm. The parties engaged in mediation and reached settlement, which received preliminary Court approval in December 2003. The terms of the settlement will result in a resolution that is not material to palmOne's financial position, the company said in a disclosure to the Securities and Exchange Commission. PALMONE INC.: Asks IL Court To Dismiss Amended Consumer Lawsuit --------------------------------------------------------------- palmOne, Inc. asked the Illinois Circuit Court, Cook County to dismiss in part a second amended consumer class action filed against it, styled "Goldstein v. Palm." The case alleges consumer fraud regarding Palm's representations that its m100, III, V, and VII handheld personal digital assistant, as sold, would provide wireless access to the Internet and email accounts, and would perform common business functions including data base management, custom form creation and viewing Microsoft Word and Excel documents, among other tasks. The case seeks unspecified actual damages and indemnification of certain costs. PALMONE INC.: CA Court Approves Consumer Fraud Suit Settlement -------------------------------------------------------------- The California Superior Court, Santa Clara County granted preliminary approval to the settlement of a purported consumer class action lawsuit was filed against Palm, Inc., styled "Hemmingsen et al v. Palm, Inc." The unverified complaint, filed on behalf of purchasers of Palm m515 handhelds, alleges that such handhelds fail at unacceptably high rates, and in particular that instant updating and synchronization of data with PCs often will not occur. The complaint further alleges that, upon learning of the problem, Palm did not perform proper corrective measures for individual customers as set forth in the product warranty, among other things. The complaint alleges that the Company's actions violate California's Unfair Competition Law and constitute a breach of warranty. The complaint seeks restitution, disgorgement, damages, an injunction mandating corrective measures including a full replacement program for all allegedly defective m515s or, alternatively mandating a refund to all purported class members of the full purchase price for their m515s and attorneys' fees. A hearing seeking final approval of the settlement is scheduled for October 5, 2004. The terms of the settlement will result in a resolution that is not material to palmOne's financial position, the Company stated in a disclosure to the Securities and Exchange Commission. PFGI CAPITAL: Ohio Court Dismisses Lawsuit For Securities Fraud --------------------------------------------------------------- The United States District Court for the Southern District of Ohio dismissed several claims in the class action filed against PFGI Capital Corporation, and: (1) Provident Financial Group, (2) former President Robert L. Hoverson and (3) former Chief Financial Officer Christopher J. Carey The suit, filed on behalf of all purchasers of PRIDES in or traceable to a June 6, 2002 offering of those securities registered with the Securities and Exchange Commission and extending to March 5, 2003, is based upon circumstances involved in a restatement of earnings announced by Provident on March 5, 2003. It alleges violations of securities laws by the defendants in Provident's financial disclosures during the period from March 30, 1998 through March 5, 2003 and in the June 2002 offering. It seeks an unspecified amount of compensatory damages. The consolidated suit was filed before Judge S. Arthur Spiegel of the United States District Court for the Southern District of Ohio under the caption, "Merzin v. Provident Financial Group, Inc., consolidated Civil Action Master File No. C-1-03-165." PFGI Capital and other Defendants filed a Motion to Dismiss the Complaint on November 5, 2003. The motion was granted on March 9, 2004 and the Court dismissed all claims except those relating to the June 6, 2002 offering of 6,600,000 PRIDE securities. However, the Court's order confined any later finding of damages to $0.70 per PRIDE security. PJ SLEEP SHOP: Recalls 337 Wooden Bunk Beds Due To Injury Hazard ---------------------------------------------------------------- PJ Sleep Shop of Portland, Oregon is cooperating with the U.S. Consumer Product Safety Commission (CPSC) by voluntarily recalling about 337 units of Wooden bunk beds: Twin/Twin, Twin/Double, and Loft Bunk. These bunk beds have gaps between parts of the upper bunk end structure that violate the federal safety standard because they pose entrapment or strangulation hazards to children. The spaces exceed that allowed by the federal bunk bed safety standard, which is designed to protect children from entrapment and strangulation. The recalled models of wooden bunk beds are Twin/Twin #1000; Twin/Double #2000; and Loft Bunk #3000. There are no model numbers on the bunk beds, but the manufacturer's label is located on the inside of the upper bunk's end structure. The Twin/Twin #1000 has top and bottom bunks of equal size. The Twin/Double #2000 has a twin top bunk and a double bottom bunk that is 15 inches wider. The Loft Bunk #3000 has the bottom bunk perpendicular to the top bunk, making an "L" shape. Manufactured in the USA, the bunk beds were sold at the PJ Sleep Shop in Portland, Oregon, and Banner Furniture stores in Portland and Hillsboro, Oregon, between June 1, 2000, and February 29, 2004. Model #1000 sold for about $199, Model #2000 sold for about $325, and Model #3000 sold for about $349. Stop using the recalled bunk beds and get a free repair kit from the manufacturer to cover up the entrapment hazards. Consumers can install the repair kit easily at home. For more details, contact PJ Sleep Shop by Phone: (888) 232-5225 between 9 a.m. and 6 p.m. PT Monday through Friday, and from 10 a.m. to 5 p.m. on Saturday OR Media Contact - Mike Finerty by Phone: (888) 232-5225 PRICEWATERHOUSECOOPERS: SEC Suspends Partner For Anicom Auditing ---------------------------------------------------------------- The Securities and Exchange Commission issued a cease-and-desist order and instituted administrative proceedings against Gary A. Seidelman, a certified public accountant and former audit engagement partner in the Chicago office of PricewaterhouseCoopers, LLC (PwC). The Commission ordered Seidelman, age 52 of Batavia, Illinois, to cease and desist from committing or causing any violations and any future violations of Section 10A of the Securities Exchange Act of 1934 (which requires auditors to investigate and report detected illegal acts) and from causing violations of Section 13(a) of the Exchange Act and Rules 12b-20, 13a-1, and 13a-13 promulgated thereunder (which require timely and accurate financial reporting to the Commission). The Commission also denied Seidelman the privilege of appearing or practicing before the Commission as an accountant with the right to apply for reinstatement after three years. The Commission found that Seidelman engaged in improper professional conduct while conducting the 1999 year-end audit and first quarter 2000 interim review of the financial statements for Anicom, Inc. (Anicom). In 2002, the Commission sued several officers and employees of Anicom in federal district court for engaging in a fraudulent scheme to overstate Anicom's revenue by over $38 million and net income by over $20 million from 1998 to the first quarter of 2000. That case is pending. The action is titled, SEC v. Putnam, et al., No. 02 C 3235 (N.D. IL) (LR-17504). According to the Commission, Seidelman did not comply with generally accepted auditing standards (GAAS) because he failed to: (1) adequately plan the audit and exercise due care after learning of several red flags, including allegations made by former Anicom employees of fraudulent billing practices and improper sales activity perpetrated by Anicom management; (2) obtain sufficient competent evidence for several areas of the audit, including Anicom's accounts receivable and a $6.1 million restructuring charge incurred by Anicom; (3) properly supervise the audit by failing to, among other things, adequately reviewing the engagement team's audit work; and (4) document in PwC's first quarter 2000 interim review audit working papers significant communications regarding a problematic $9.5 million bill-and-hold sale booked by Anicom. The Commission also found that, during the first quarter 2000 interim review and the beginning of the 2000 Anicom audit, Seidelman learned that Anicom may have committed two illegal acts that he failed to appropriately investigate. The Commission issued its order pursuant to Section 21C of the Securities Exchange Act of 1934 and Rule 102(e) of the Commission's Rules of Practice. Seidelman consented to the order without admitting or denying the findings. STAN LEE: SEC Lodges Securities Fraud Suit V. Ex-Officials in CA ---------------------------------------------------------------- The Securities and Exchange Commission filed a complaint in federal district court in Los Angeles against three defendants for manipulating the stock of Stan Lee Media, Inc. The defendants are Peter F. Paul, the co-founder of Stan Lee Media; Stephen M. Gordon, its former executive vice president of operations, and Jeffrey L. Pittsburg, formerly an officer and part-owner of Pittsburg Institutional, Inc., a Commission- registered broker-dealer. The Commission alleges that, between October 2, 2000 and November 24, 2000, Paul, Gordon, and Pittsburg engaged in a scheme to maintain and control the price of Stan Lee Media's stock at artificially inflated levels by, among other things, concealing their trading in Stan Lee Media stock to create a false and misleading appearance of active trading. The complaint charges that Paul, Gordon, and Pittsburg violated the antifraud provisions of Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The complaint also charges Paul and Gordon with violating the credit provisions of Section 7(f) of the Exchange Act and Regulation X thereunder, and the securities reporting requirements of Section 16(a) of the Exchange Act and Rule 16a-3 thereunder. Additionally, the complaint charges Paul with violations of the stock ownership reporting requirements of Section 13(d) of the Exchange Act and Rules 13d-1 and 13d-2 thereunder. The complaint seeks an order enjoining Paul, Gordon, and Pittsburg from future violations of the securities laws, prohibiting Paul and Gordon from serving as an officer and director of a public company, directing Pittsburg to disgorge all amounts he received as a result of his violations plus prejudgment interest, and ordering each defendant to pay a civil penalty. Gordon, without admitting or denying the Commission's allegations, consented to the entry of a judgment permanently enjoining him from future violations of the antifraud provisions of Section 17(a) of the Securities Act, Section 10(b) of the Exchange Act and Rule 10b-5 thereunder, the credit provisions of Section 7(f) of the Exchange Act and Regulation X thereunder, and the securities reporting requirements of Section 16(a) of the Exchange Act and Rule 16a-3 thereunder, prohibiting him from serving as an officer or director of any reporting company, and not ordering civil penalties based on his sworn representations in his statement of financial condition. The United States Attorney's Office for the Eastern District of New York has previously charged Paul, Gordon, and Pittsburg with conspiracy to commit securities fraud and securities fraud, related to their manipulative conduct involving Stan Lee Media stock. The action is titled, SEC v. Peter F. Paul, Stephen M. Gordon and Jeffrey L. Pittsburg, Civil Action No. CV 04-6613 SVW (SSx) (C.D. Cal.) (LR-18828). TIME WARNER: Plaintiffs To File Amended Securities Lawsuit in NY ---------------------------------------------------------------- The Minnesota State Board of Investments (MSBI), lead plaintiff in the consolidated securities class action filed against Time Warner, Inc., filed a motion seeking permission to file an amended suit. As of August 4, 2004, 30 shareholder class action lawsuits have been filed naming as defendants the Company, certain current and former executives of the Company and, in several instances, America Online, Inc. (America Online). These lawsuits were filed in U.S. District Courts for the Southern District of New York, the Eastern District of Virginia and the Eastern District of Texas. The complaints purport to be made on behalf of certain shareholders of the Company and allege that the Company made material misrepresentations and/or omissions of material fact in violation of Section 10(b) of the Securities Exchange Act of 1934, Rule 10b-5 promulgated thereunder, and Section 20(a) of the Exchange Act. Plaintiffs claim that the Company failed to disclose America Online's declining advertising revenues and that the Company and America Online inappropriately inflated advertising revenues in a series of transactions. Certain of the lawsuits also allege that certain of the individual defendants and other insiders at the Company improperly sold their personal holdings of Time Warner stock, that the Company failed to disclose that the Merger was not generating the synergies anticipated at the time of the announcement of the Merger and, further, that the Company inappropriately delayed writing down more than $50 billion of goodwill. The lawsuits seek an unspecified amount in compensatory damages. As of August 4, 2004, three putative class action lawsuits have been filed alleging violations of the Employee Retirement Income Security Act (ERISA) in the U.S. District Court for the Southern District of New York on behalf of current and former participants in the AOL Time Warner Savings Plan, the AOL Time Warner Thrift Plan and/or the TWC Savings Plan. Collectively, these lawsuits name as defendants the Company, certain current and former directors and officers of the Company and members of the Administrative Committees of the Plans. The lawsuits allege that the Company and other defendants breached certain fiduciary duties to plan participants by, inter alia, continuing to offer Time Warner stock as an investment under the Plans, and by failing to disclose, among other things, that the Company was experiencing declining advertising revenues and that the Company was inappropriately inflating advertising revenues through various transactions. The complaints seek unspecified damages and unspecified equitable relief. All of these lawsuits have been centralized in the U.S. District Court for the Southern District of New York for coordinated or consolidated pretrial proceedings, under the caption "In re AOL Time Warner Inc. Securities and ERISA Litigation." Additional lawsuits filed by individual shareholders have also been consolidated for pretrial proceedings. The Minnesota State Board of Investment (MSBI) has been designated lead plaintiff for the consolidated securities actions and filed a consolidated amended complaint on April 15, 2003, adding additional defendants including additional officers and directors of the Company, Morgan Stanley & Co., Salomon Smith Barney Inc., Citigroup Inc., Banc of America Securities LLC and JP Morgan Chase & Co. Plaintiffs also added additional allegations, including that the Company made material misrepresentations in its Registration Statements and Joint Proxy Statement-Prospectus related to the Merger and in its registration statements pursuant to which debt securities were issued in April 2001 and April 2002, allegedly in violation of Section 11 and Section 12 of the Securities Act of 1933. On July 14, 2003, the defendants filed a motion to dismiss the consolidated amended complaint. On May 5, 2004, the district court granted in part the defendants' motion, dismissing all claims with respect to the registration statements pursuant to which debt securities were issued in April 2001 and April 2002 and certain other claims against other defendants, but otherwise allowing the remaining claims against the Company and certain other defendants to proceed. On June 3, 2004, MSBI filed a motion in which it proposed to file a second amended complaint, and defendants filed a response opposing such motion on July 2, 2004. On July 30, 2004, defendants filed a motion for summary judgment on the basis that plaintiffs cannot establish loss causation for any of their claims, and thus plaintiffs do not have any recoverable damages. TIME WARNER: Asks TX Court To Dismiss Securities Fraud Lawsuit -------------------------------------------------------------- Time Warner, Inc. asked the District Court of Cass County, Texas to dismiss the securities class action filed against it, styled "McClure et al. v. AOL Time Warner Inc. et al." The suit also names as defendants certain of the Company's current and former officers, directors and employees. Plaintiffs allege that the Company made material misrepresentations in its registration statements in violation of Sections 11 and 12 of the Securities Act of 1933. Plaintiffs also allege breach of fiduciary duty and common law fraud. Plaintiffs seek unspecified compensatory damages. On May 8, 2004, the Company filed a general denial and a motion to dismiss for improper venue. Also on May 8, 2004, all named individual defendants moved to dismiss the complaint for lack of personal jurisdiction. TIME WARNER: Plaintiffs Appeal CA Securities Lawsuit Dismissal -------------------------------------------------------------- Plaintiffs appealed the United States District Court for the Central District of California's dismissal of the securities class action filed against Time Warner, Inc. by the California State Teachers' Retirement System on behalf of a putative class of purchasers of stock in Homestore.com, Inc. Plaintiff alleges that Homestore engaged in a scheme to defraud its shareholders in violation of Section 10(b) of the Exchange Act. The Company and two former employees of its America Online division were named as defendants in the amended consolidated complaint because of their alleged participation in the scheme through certain advertising transactions entered into with Homestore. Motions to dismiss filed by the Company and the two former employees were granted on March 7, 2003, and a final judgment of dismissal was entered on March 8, 2004. TIME WARNER: Plaintiffs Lodge Amended NV PurchasePro Stock Suit --------------------------------------------------------------- Plaintiffs filed a second amended securities class action against Time Warner, Inc. in the U.S. District Court for the District of Nevada on behalf of a putative class of purchasers of stock in PurchasePro.com, Inc. Plaintiffs allege that PurchasePro engaged in a scheme to defraud its shareholders in violation of Section 10(b) of the Exchange Act. The Company and four former officers and employees were added as defendants in the second amended complaint and are alleged to have participated in the scheme through certain advertising transactions entered into with PurchasePro. Three similar putative class actions had previously been filed against the Company, America Online and certain former officers and employees in the U.S. District Court for the Southern District of New York. On June 9, 2004, defendants filed a motion to transfer these three actions to Nevada for consolidation, and on June 16, 2004 this motion was granted. TIME WARNER: Faces Consolidated Suit Over AOL Sosa Program in CA ---------------------------------------------------------------- Time Warner, Inc. faces a consolidated class action pending in the United States District Court for the Central District of California, relating to America Online's Spin-off a Second Account (SOSA) program. Sixteen putative consumer class action suits were initially filed in various state and federal courts naming as defendants the Company or America Online and ICT Group, Inc. All of these suits allege that America Online's SOSA program violated consumer protection acts by charging members for "spun-off"; or secondary e-mail accounts they purportedly did not agree to create. America Online removed several of the actions filed in state court to federal court. On February 27, 2004, the Judicial Panel on Multidistrict Litigation ordered the federal court cases centralized in the Central District of California for consolidated or coordinated pretrial proceedings. On January 5, 2004, the class action pending in the Superior Court of Washington, Spokane County, titled "Dix v. ICT Group and America Online," was dismissed without prejudice based on the forum selection clause set forth in SOSA's terms of service. America Online has filed or will file motions to dismiss on this and other grounds in the remaining cases. TIME WARNER: NY Court Yet To Rule on ERISA Suit Dismissal Motion ---------------------------------------------------------------- The United States District Court for the Southern District of New York has yet to rule on Time Warner, Inc.'s motion to dismiss the class action filed against it, America Online and AOL Community, Inc. by Community Leader volunteers, alleging claims under the Employee Retirement Income Security Act (ERISA). Plaintiffs allege that they are entitled to pension and/or welfare benefits and/or other employee benefits subject to ERISA. In March 2003, plaintiffs filed and served a second amended complaint, adding as defendants the Company's Administrative Committee and the AOL Administrative Committee. On May 19, 2003, the Company, America Online and AOL Community, Inc. filed a motion to dismiss and the Administrative Committees filed a motion for judgment on the pleadings. Both of these motions are pending. TIME WARNER: Appeals Denial of Arbitration in Consumer Lawsuit -------------------------------------------------------------- Time Warner, Inc. appealed the United States District Court for the Southern District of New York's ruling denying arbitration for the nationwide consumer class action filed against it and Time Warner Cable, Inc. On October 7, 2003, "Kim Sevier and Eric M. Payne vs. Time Warner Inc. and Time Warner Cable Inc.," a putative nationwide consumer class action, was filed in the U.S. District Court for the Southern District of New York, and on October 23, 2003, "Heidi D. Knight v. Time Warner Inc. and Time Warner Cable Inc.," also a putative nationwide consumer class action, was filed in the same court. In each case, the plaintiffs allege that defendants unlawfully tie the provision of high-speed cable Internet service to leases of cable modem equipment, because they do not provide a discount to customers who provide their own cable modems, in violation of Section 1 of the Sherman Act and the New York Donnelly Act, and, further, that defendants' conduct resulted in unjust enrichment. On November 19, 2003, the court ordered plaintiffs' complaints to be consolidated. Plaintiffs filed their amended consolidated class action complaint on December 17, 2003, seeking compensatory damages, disgorgement, attorneys' fees and injunctive and declaratory relief. On February 6, 2004, the Company moved to compel arbitration and to stay the matter pending arbitration or, alternatively, to dismiss the case; the court denied this motion on April 19, 2004, and the Company has filed a notice to appeal the decision on arbitration to the U.S. Court of Appeals for the Second Circuit. TIME WARNER: Plaintiffs Ask For NY Consumer Suit Certification -------------------------------------------------------------- Plaintiffs asked the United States District Court for the Eastern District of New York to grant class certification to a lawsuit filed against Time Warner Entertainment Company, L.P., styled "Andrew Parker and Eric DeBrauwere, et al. v. Time Warner Entertainment Company, L.P. and Time Warner Cable." The suit alleges that TWE sold its subscribers' personally identifiable information and failed to inform subscribers of their privacy rights in violation of the Cable Communications Policy Act of 1984 and common law. The plaintiffs are seeking damages and declaratory and injunctive relief. On August 6, 1998, TWE filed a motion to dismiss, which was denied on September 7, 1999. On December 8, 1999, TWE filed a motion to deny class certification, which was granted on January 9, 2001 with respect to monetary damages, but denied with respect to injunctive relief. On June 2, 2003, the U.S. Court of Appeals for the Second Circuit vacated the District Court's decision denying class certification as a matter of law and remanded the case for further proceedings on class certification and other matters. TREX CO.: NJ Court Grants Certification To Consumer Fraud Suit -------------------------------------------------------------- The Superior Court of New Jersey, Essex County granted class certification for the lawsuit filed against Trex Co., Inc. by Michael Kanefsky generally alleging that the Company has violated state and common law by negligently misrepresenting the characteristics of its products, by breaching contracts, by breaching implied or express warranties and/or by defrauding consumers in the sale and promotion of these products. The plaintiffs seek reformation of the Company's warranty, as well as compensatory damages in an unspecified amount. The court certified the following three class action cases against the Company: (1) a nationwide class for reformation of warranty; (2) a New Jersey class for alleged violation of the New Jersey Consumer Fraud Act; and (3) a New Jersey class for alleged breach of express and implied warranties WASHINGTON: Settles Foster Care Suit, Costs Could Reach $50M ------------------------------------------------------------ The Washington Department of Social and Health Services reached a settlement in a class action lawsuit brought on behalf of 13 foster children who accused the state of violating foster children's constitutional rights to safe and stable homes, the Seattle Post-Intelligencer reports. In the settlement, DSHS agreed to an independent five-member panel to oversee the changes. Estimated to cost the state up to $50 million, the changes include; improvements in mental health treatment; better support and training of foster parents; placing siblings together in foster care; better services for teenagers and more in-person visits from caseworkers. The ultimate goal being the reduction of the number of placements and providing foster kids stable homes. Filed by plaintiffs' attorney Tim Farris of Bellingham in 1998, the suit sought systemic changes not monetary damages. Another plaintiffs' attorney, Bill Grimm told the Seattle Post- Intelligencer, "The suit began with the belief that children deserve better than a pinball-type existence and today the state of Washington steps forward and, with this agreement, promises children we will do better." According to the lawyers the settlement reaches beyond the status quo by forcing the state to keep its promises to foster children and if the system doesn't improve, all parties involved go back to court. For more details, contact Timothy C. Farris of Brett & Daugert, PLLC by Mail: 300 North Commercial, P.O. Box 5008, Bellingham, WA 98227 (Whatcom Co.) by Phone: 360-733-0212 or by Fax: 360- 647-1902 WEYERHAUSER CO.: Faces Linerboard Antitrust Suit in Canada Court ---------------------------------------------------------------- Weyerhauser Co. and other linerboard manufacturers face a class action filed in the Superior Court of Justice in Ontario, Canada by La Cie McCormick Canada Company on behalf of all Canadians who purchased corrugated products, including sheets and containers and/or linerboard, during the period of time from 1993 and continuing until at least the end of 1995. The suit alleges that the defendants conspired to fix the price of linerboard and that the alleged conspiracy had the effect of increasing the price of corrugated containers. Relief is sought under various theories for $25 million in general damages and $10 million in punitive damages. WILLIAMS COMPANIES: Plaintiffs File Motion For Summary Judgment --------------------------------------------------------------- Plaintiffs filed a partial motion for summary judgment in the consolidated securities class actions filed against Williams Companines, Inc. in the United States District Court for the Northern District of Oklahoma. Several suits were initially filed, alleging that the Company and co-defendants, WilTel Communications (WilTel), previously an owned subsidiary known as Williams Communications, and certain corporate officers, have acted jointly and separately to inflate the stock price of both companies. Other suits alleged similar causes of action related to a public offering in early January 2002, known as the FELINE PACS offering. These cases were filed against the Company, certain corporate officers, all members of its Board of Directors and all of the offerings' underwriters. These cases have all been consolidated and an order has been issued requiring separate amended consolidated complaints by our equity holders and WilTel equity holders. The underwriters of this offering have requested indemnification from these cases. If granted, costs incurred as a result of these indemnifications will not be covered by the Company's insurance policies. The amended complaint of the WilTel securities holders was filed on September 27, 2002, and the amended complaint of the Company's securities holders was filed on October 7, 2002. This amendment added numerous claims related to Power. The partial motion for summary judgment was filed with respect to certain disclosures made in connection with the Company's public offerings during the class period. WILLIAMS COMPANIES: Asks OK Court To Dismiss ERISA Fraud Suits -------------------------------------------------------------- Williams Companies filed a motion to dismiss the consolidated class action filed against it, the members of its Board of Directors and members of our Benefits and Investment Committees in the United States District Court for the Northern District of Oklahoma. The suit makes claims under the Employee Retirement Income Security Act (ERISA) on behalf of participants in the Company's 401(k) plan. On July 14, 2003, the Court dismissed the Company and its Board from the ERISA suits, but not the members of the Benefits and Investment Committees to whom the Company might have an indemnity obligation. If it is determined that the Company has an indemnity obligation, it expects that any costs incurred will be covered by its insurance policies. The Department of Labor is also independently investigating the Company's employee benefit plans. On May 3, 2004, plaintiffs requested permission to amend their complaint to add additional Investment Committee members and to again name the Board of Directors. That permission was granted June 7, 2004, and a motion to dismiss was filed on behalf of the Board on July 15, 2004. Derivative shareholder suits have been filed in state court in Oklahoma, all based on similar allegations. On August 1, 2002, a motion to consolidate and a motion to stay was approved for the Oklahoma suits, pending action by the federal court in the shareholder suits. Asbestos Alert ASBESTOS LITIGATION: 3M Asbestos Claimants Decrease Since March --------------------------------------------------------------- As of June 30, 2004, 3M Co. is a named defendant, typically with multiple co-defendants, in numerous lawsuits in various courts that purport to assert claims by around 89,610 individual claimants and has accrued liabilities of $245,000,000 and receivables for the probable amount of insurance recoveries of $448,000,000 related to this asbestos litigation. On July 15, 2004, the Class Action Reporter noted that there were 89,800 such claimants, $267,000,000 in accrued liabilities, and $448,000,000 in probable receivables for insurance recoveries related to this litigation as of the end of March 2004. 3M is a diversified technology company with international presence in the following markets: health care, industrial, display and graphics, consumer and office, safety, security and protection services, electronics, telecommunications and electrical, and transportation. ASBESTOS LITIGATION: Albany Intl Still Fighting Claims In MS ------------------------------------------------------------ Around 24,865 of the claims pending against Albany International Corp. are filed in various counties in Mississippi. The Company 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. 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 July 23, 2004, the Company had resolved by settlement or dismissal, 6,500 claims, and had reached tentative agreement to resolve an additional 4,563 claims reported above as pending. The total cost of resolving all 11,063 such claims was $5,234,000. Of this amount, $5,199,000, or 99%, was paid by the Company's insurance carrier. Brandon Drying Fabrics Inc. (a wholly-owned subsidiary of Geschmay Corp., which the Company acquired in 1999.) is also a separate defendant in most of these cases. Brandon was defending against 9,984 claims as of July 23, 2004. This compares with 10,035 such claims as of April 23, 2004, and 10,242 claims as of December 31, 2003. In 1978, Brandon acquired certain assets from South Carolina textile manufacturer Abney Mills, including assets of Abney's wholly-owned subsidiary, Brandon Sales Inc. which, among other things, had sold dryer fabrics containing asbestos made by its parent, Abney. It is believed that Abney ceased production of asbestos- containing fabrics prior to the 1978 transaction. Because Brandon did not manufacture asbestos-containing products, and because it does not believe that it was responsible for obligations of Abney with respect to Abney products, it believes it has strong defenses to the claims that have been asserted against it. As of July 23, 2004, Brandon has resolved by settlement or dismissal, 6,529 claims for a total of $152,499. Brandon's insurance carriers initially agreed to pay 88.2% of the total indemnification and defense costs related to these proceedings, subject to the standard reservation of rights. The remaining 11.8% of the costs has been borne directly by Brandon. During July 2004, Brandon's insurance carriers agreed to cover 100% of indemnification and defense costs, subject to policy limits and the standard reservation of rights. Brandon will also be reimbursed during the third quarter of 2004 for all indemnity and defense costs paid directly by Brandon related to these proceedings. ASBESTOS LITIGATION: CG&E, PSI Pending Lawsuits Increase To 85 -------------------------------------------------------------- Union Light, Heat & Power Co. recently made mention in a regulatory filing that its fellow subsidiaries under Cinergy Corp., namely Cincinnati Gas & Electric Co. (CG&E) and PSI Energy Inc. (PSI), are named as defendants or co-defendants in lawsuits related to asbestos at their electric generating stations. There are around 85 pending lawsuits, compared to 80 cases as noted in the Class Action Reporter edition for June 18, 2004. A majority of the lawsuits to date have been brought against PSI. The impact on CG&E's and PSI's financial position or results of operations of these cases has not been material. Of these lawsuits, one case filed against PSI has been tried to verdict. The jury returned a verdict against PSI in the amount of about $500,000 on a negligence claim and a verdict for PSI on punitive damages. PSI received an adverse ruling in an initial appeal of that verdict, but the Indiana Supreme Court accepted the transfer of the case, and heard oral argument in June 2004. ASBESTOS LITIGATION: Collins & Aikman Pact Costs Show Increase -------------------------------------------------------------- As of June 30, 2004, Collins & Aikman Corp. (NYSE: CKC) was a party to around 916 pending cases alleging personal injury from exposure to asbestos containing materials used in boilers manufactured before 1966 by former operations of the Company. There were 997 cases as of March 31, 2004, as noted in the June 18, 2004 edition of the Class Action Reporter. Asbestos- containing refractory bricks lined the boilers and, in some instances, the Company's former operations installed asbestos- containing insulation around the boilers. Total settlement costs for these cases have been less than $1,200,000 or an average of less than $5,800 per settled case. Previously the costs were observed to be less than $1,100,000 or an average of less than $5,600 per settled case, as the Class Action Reporter noted on June 18, 2004. The Company's primary insurance carriers, under a claims handling agreement that expires in August 2006, have substantially covered the defense and settlement costs. They have agreed to cover around 80% of certain defense and settlement costs up to a limit of about $70,500,000 for all claims made, subject to reservations of rights. The excess insurance coverage, which varies in availability from year to year, is about $600,000,000 in aggregate for all claims made. ASBESTOS LITIGATION: CMCO Liability Through 2013 May Reach $4 M --------------------------------------------------------------- Columbus McKinnon Corp. (NasdaqNM: CMCO) actuaries estimated its asbestos-related liability to range from $2,800,000 to $12,300,000 through around March 31, 2034. The Company's estimation of its probable asbestos-related liability through 2013 ranges from $2,800,000 to $4,000,000 as of July 4, 2004. The Company has concluded that no amount within that range is more likely than any other, and therefore has reflected $3,000,000 as a liability in its consolidated financial statements. Of this amount, management expects to incur asbestos liability payments of about $200,000 over the next 12 months. Because payment of the liability is likely to extend over many years, management believes that the potential additional costs for claims will not have a material after-tax effect on the financial condition of the Company or its liquidity, although the net after-tax effect of any future liabilities recorded could be material to earnings in a future period. ASBESTOS LITIGATION: CEG Subsidiary BGE Resolves 299 Lawsuits ------------------------------------------------------------- Constellation Energy Group Inc. (NYSE: CEG) reports in a recent filing with the Securities and Exchange Commission that 299 asbestos cases, involving direct claims against its regulated business Baltimore Gas & Electric Co. (BGE), have been dismissed or resolved for amounts that were not significant. Around 30 such cases are currently scheduled for trial through the end of 2006. BGE is involved in these claims with around 70 other defendants. Around 545 individuals who were never employees of BGE each claim $6,000,000 in damages ($2,000,000 compensatory and $4,000,000 punitive). These claims are currently pending in state courts in Maryland and Pennsylvania. ASBESTOS LITIGATION: CCK Asbestos Payments Show $7M Decrease ------------------------------------------------------------ As of June 30, 2004, Crown Holdings Inc. (NYSE: CCK) claims accrual for pending and future asbestos-related claims was $232,000,000, a decrease of $7,000,000 since December 31, 2003 due to payments made during the first six months of 2004. The 2004 payments included $1,000,000 for claims that were settled in prior years. The Company estimates that its probable asbestos liability for pending and future asbestos-related claims would range between $232,000,000 and $399,000,000. The accrual balance of $232,000,000 includes $129,000,000 for unasserted claims and $21,000,000 for committed settlements that will be paid over time. Asbestos-related payments were $118,000,000 in 2001, $114,000,000 in 2002, $68,000,000 in 2003 and $7,000,000 for the first six months of 2004. The Company expects to pay about $50,000,000 for the full year of 2004. While the level of payments has declined, the Company's asbestos-related liabilities remain significant and the amount of future payments and liabilities is inherently difficult to estimate. ASBESTOS LITIGATION: EnPro Says New Claims Filings Decreased ------------------------------------------------------------ New asbestos claims filings against EnPro Industries Inc. subsidiaries in the second quarter of 2004 declined significantly from the second quarter of 2003 as well as from the first quarter of 2004. New claims totaled about 3,500, the lowest number received in any quarter since before 1990. On a trailing twelve-month basis, new claims filings were around 23,000, about half the pace of the last several years. "The continuing reduction in claims filings is encouraging," said Mr. Ernie Schaub, president and CEO of EnPro. "We are increasingly optimistic that serious cases are in decline, but we continue to see filings of cases that don't involve a recognizable disease. We believe the issue would be best resolved through asbestos reform at the national level and are encouraged by the bipartisan interest in reform. The ongoing discussions by the leadership in the U.S. Senate appear to improve the prospects for compromise. At the same time, asbestos reform continues in various states, most recently in Ohio where legislation was enacted to establish appropriate medical criteria for filing a claim in that state." Mr. Schaub also said that as a result of recent developments, the company has revised its accounting for asbestos claims. Previously, the company only recorded a liability for settled claims and actions in advanced stages of processing. However, beginning in its financial statements for the second quarter, the company will also include an estimate of claims in early procedural stages, as well as claims that may be asserted for some period in the future. This estimate is not expected to exceed the insurance available for asbestos claims. As a result, the company will record a liability for these potential claims and a corresponding receivable from its insurance carriers. The company will periodically review its estimate and adjust the liability if necessary. If in the future, the amount of the estimated liability exceeds the amount of insurance available for asbestos claims, the excess would be accounted for as a non- cash charge to earnings. Mr. Schaub emphasized that the decision to revise the company's accounting for asbestos claims does not alter the company's strategy for managing potential asbestos liabilities and insurance assets and will have no impact on the ultimate amount paid for asbestos-related claims against its subsidiaries. Payments for asbestos related claims, net of insurance proceeds, increased to $39,100,000 in the first half of 2004, reflecting delays in reimbursements from certain insurers. This compares to $18,100,000 a year ago. The company will collect about $30,000,000 in delayed reimbursements in the third quarter of 2004, and it continues to pursue other delayed reimbursements. Assuming the company is successful in collecting these reimbursements, net cash outflows for asbestos claims in 2004 should decrease from the levels of 2003. ASBESTOS LITIGATION: Entergy Companies Battle Over 10,000 Claims ---------------------------------------------------------------- Numerous lawsuits have been filed in federal and state courts in Texas, Louisiana, and Mississippi primarily by contractor employees in the 1950-1980 timeframe against Entergy Gulf States Inc., Entergy Louisiana, Entergy New Orleans, and Entergy Mississippi, as premises owners of power plants, for damages caused by alleged exposure to asbestos or other hazardous material. Generally, many other defendants are named in these lawsuits as well. There are around 480 lawsuits involving just over 10,000 claims. Reserves have been established that should be adequate to cover any exposure. Additionally, negotiations continue with insurers to recover more reimbursement, while new coverage is being secured to minimize anticipated future potential exposures. ASBESTOS LITIGATION: Everest Group Posts Reserve Adjustments ------------------------------------------------------------ Everest Reinsurance Group Ltd. (NYSE: RE) reports that the increase in its incurred losses, and loss adjustment expenses (LAE) relating to prior period reserve strengthening was $62,700,000 and $31,800,000 for the three months ended June 30, 2004 and 2003, respectively, and $108,600,000 and $70,600,000 for the six months ended June 30, 2004 and 2003, respectively, principally related to the Company's asbestos exposures. The reserve adjustments for the three months ended June 30, 2004 included asbestos and environmental (A&E) adjustments of $48,200,000. For the three months ended June 30, 2003, there were no reserve adjustments related to A&E. The U.S. Reinsurance segment accounted for $25,000,000 and $26,800,000 of the net prior period reserve adjustments for the three months ended June 30, 2004 and 2003, respectively. Asbestos exposures accounted for $3,000,000 for the three months ended June 30, 2004, but otherwise the development in both periods was principally attributable to professional liability and casualty business classes. The U.S. Reinsurance segment accounted for $38,000,000 and $47,700,000 of the net prior period reserve adjustments for the six months ended June 30, 2004 and 2003, respectively. Asbestos exposures accounted for $7,200,000 and $8,500,000 for the six months ended June 31, 2004 and 2003, respectively, with the remainder principally attributable to professional liability and casualty business classes. The Bermuda segment reflected $42,200,000 of net prior period reserve adjustments for the three months ended June 30, 2004 and had no net prior period reserve adjustments for the three months ended June 30, 2003. The development for the second quarter of 2004 is primarily the result of $45,200,000 of asbestos reserve development, with most of this development related to exposures assumed through the September 19, 2000 loss portfolio transfer from Mt. McKinley Insurance Co. The Bermuda segment reflected $63,500,000 of net prior period reserve adjustments for the six months ended June 30, 2004 and $2,900,000 of net prior reserve adjustments for the six months ended June 30, 2003. The development in the six months ended June 30, 2004 is the result of $104,200,000 of asbestos reserve development partially offset by $40,700,000 of net favorable development on other pre-1995 exposures. The $2,900,000 development for 2003 was also related to the asbestos exposures. All of the development related to asbestos exposures were assumed through the September 19, 2000 loss portfolio transfer from Mt. McKinley. With respect to Mt. McKinley, where the Company has a direct relationship with policyholders, the Company's aggressive litigation posture and the uncertainties inherent in the asbestos coverage and bankruptcy litigation have provided an opportunity to actively engage in settlement negotiations with those policyholders who have potentially significant asbestos liabilities. Those discussions are oriented towards achieving reasonable negotiated settlements that limit Mt. McKinley's liability to a given policyholder to a sum certain. Thus far in 2004, the Company has concluded such settlements or reached agreement in principle with several of its high profile policyholders. The Company has currently identified 21 policyholders based on their past or potential future liabilities and its settlement efforts are generally directed at such policyholders, in part because their exposures have developed to the point where both the policyholder and the Company have sufficient information to be motivated to settle. The Company believes that this active approach will ultimately result in a more cost-effective liquidation of Mt. McKinley's liabilities than a passive approach, although it may also introduce additional variability in Mt. McKinley's losses and cash flows as reserves are adjusted to reflect the development of negotiations and, ultimately, potentially accelerated cash settlements. ASBESTOS LITIGATION: FWLRF Has $1.7M 2Q04 Settlement Gain --------------------------------------------------------- On August 4, 2004 Foster Wheeler Ltd. (OTCBB: FWLRF) announced for the second quarter of 2004 a net pre-tax asbestos gain of $1,700,000 on settlement and release agreements that resolve asbestos coverage litigation. The company settled with additional asbestos insurance carriers during the second quarter of 2004, reversing an additional $1,700,000 of a $68,100,000 non-cash charge recorded in the fourth quarter of 2003. This brings, as anticipated, the total amount of the 2003 charge reversed to $13,400,000. The company plans to continue its strategy of settling with insurance carriers by monetizing policies or arranging coverage in place agreements. This strategy is designed to reduce future cash payments from the company to cover asbestos liabilities. The company continues to project that it will not be required to fund any asbestos liabilities from its cash flow before 2010. Asbestos-related insurance recovery receivable as of June 25, 2004 is $455,394,000 and asbestos-related liability is $472,891,000. ASBESTOS LITIGATION: Goodyear Expends $8.9M In Claims Charges ------------------------------------------------------------- Goodyear Tire & Rubber Co. general product liability - discontinued products ($12,100,000 of expense recorded in the second quarter of 2004) includes $8,900,000 worth of charges for claims related to asbestos personal injury, net of probable insurance recoveries. Of the $19,800,000 of expense recorded in the first six months of 2004, $9,900,000 relates to asbestos claims, net of probable insurance recoveries. During the second quarter of 2003, net probable insurance recoveries of $61,800,000 related to asbestos were recorded, the effects of which were partially offset by expenses of $52,700,000 related to Entran II claims. During the first six months of 2003, expense of $55,600,000 related to Entran II claims were partially offset by $45,600,000 in net probable insurance recoveries related to asbestos. Goodyear is a defendant in numerous lawsuits alleging various asbestos related personal injuries purported to result from alleged exposure to asbestos in certain rubber encapsulated products or aircraft braking systems manufactured by Goodyear in the past or to asbestos in certain Goodyear facilities. Typically, these lawsuits have been brought against multiple defendants in state and Federal courts. Goodyear has disposed of around 26,900 cases by defending and obtaining the dismissal thereof or by entering into a settlement. The sum of the Company's accrued asbestos related liability and gross payments to date, including legal costs, totaled about $222,000,000 through June 30, 2004 and around $208,000,000 through December 31, 2003. Based upon the model employed by the valuation expert, the Company's receivable related to asbestos claims is $106,000,000 at June 30, 2004. Based on the Company's asbestos claim profile, it expects that around 83% of asbestos claim related losses will be recoverable up to its accessible policy limits. The receivable recorded consists of an amount the Company expects to collect under coverage-in-place agreements with certain primary carriers as well as an amount it believes is probable of recovery from certain of its excess coverage insurance carriers. Of this amount, $20,700,000 was included in Current Assets as part of Accounts and notes receivable at June 30, 2004. The Company believes that at June 30, 2004, it had around $410,000,000 in aggregate limits of excess level policies potentially applicable to indemnity payments for asbestos products claims in addition to limits of available primary insurance policies. Some of these excess policies provide for payment of defense costs in addition to indemnity limits. A portion of the availability of the excess level policies is included in the $106,000,000 insurance receivable recorded at June 30, 2004. The Company also had about $23,000,000 in aggregate limits for products claims as well as coverage for premise claims on a per occurrence basis and defense costs available with its primary insurance carriers through coverage- in-place agreements at June 30, 2004. Goodyear was one of numerous defendants in legal proceedings in certain state and Federal courts involving around 120,100 claimants relating to their alleged exposure to materials containing asbestos in products allegedly manufactured by Goodyear or asbestos materials present in Goodyear's facilities. During the second quarter of 2004, around 3,800 new claims were filed against Goodyear and around 600 were settled or dismissed. The amounts expended on asbestos defense and claim resolution during the second quarter and first six months of 2004 were $12,700,000 and $16,900,000, respectively (before recovery of insurance proceeds). At June 30, 2004, there were around 123,300 claims pending against Goodyear relating to alleged asbestos-related diseases allegedly resulting from exposure to asbestos in products manufactured by Goodyear or in materials containing asbestos present in Goodyear facilities. ASBESTOS LITIGATION: HIG Evaluation Indicates No Gross Changes -------------------------------------------------------------- During the second quarter of 2004, Hartford Financial Services Group Inc. (NYSE: HIG) completed an evaluation of the reinsurance recoverable asset associated with older, long-term casualty liabilities reported in its Other Operations segment, including asbestos liabilities. The evaluation indicated no change in the overall required gross asbestos reserves. As a result of this evaluation, the Company reduced its net reinsurance recoverable by $181,000,000. The after-tax income effect of this action was $118,000,000. The $181,000,000 primarily relates to a reduction of the amount of liabilities, principally asbestos, that it expects to cede to reinsurers and, to a lesser extent, an increase in the allowance for uncollectible reinsurance recoverables. Other Operations underwriting result amounting to $214,000,000, includes $2,604 for the six months ended June 30, 2003 of before-tax impact of asbestos reserve addition. Net income for the six months ended June 30, 2004 increased $1,900,000,000, due primarily to $1,700,000,000, after-tax, in reserve strengthening resulting from the completion of the Company's asbestos reserve study in the first quarter of 2003. The Hartford's Chairman and CEO, Mr. Ramani Ayer said in a release, "Even as we continue to profitably grow and expand our product lines, we have remained attentive to our exposure to legacy issues. In the first quarter, we confirmed that our gross asbestos reserves were appropriate. In the second quarter, we reviewed our casualty reinsurance arrangements, and made a change in the amounts that we expect to recover from our reinsurers." ASBESTOS LITIGATION: ITT, Ace Property Agree To Resolve Cases ------------------------------------------------------------- In April 2004, ITT Industries Inc. and Ace Property & Casualty Co. entered into an agreement resolving both Cannon Electric, Inc. et al. v. Ace Property & Casualty Company et al. Superior Court, County of Los Angeles, CA., Case No. BC 290354, and Pacific Employers Insurance Company et al., v. ITT Industries, Inc., et al., Supreme Court, County of New York, N.Y., Case No. 03600463 as they relate to Ace Property & Casualty Co. ITT will pursue similar agreements with several of its other insurers. In addition, Utica National, historic insurer of ITT subsidiary Goulds Pumps Inc., filed an action in Oneida County, New York, Utica Mutual Insurance Co. Goulds Pumps, Inc., Case No. 00272103, to allocate the Goulds asbestos liabilities between insurance policies issued by Utica and those issued by others. The parties are currently considering a settlement agreement similar to the Ace agreement. The Company is continuing to receive the benefit of insurance payments during the pendency of these proceedings. ASBESTOS LITIGATION: IR-NJ Continues To Pay Off Asbestos Costs -------------------------------------------------------------- For the six months ended June 30, 2004, total costs for Ingersoll-Rand Co. (IR-New Jersey) settlement and defense of asbestos claims, after insurance recoveries and net of tax, were about $7,900,000. The Company believes that its reserves and insurance are adequate to cover its asbestos liabilities and the costs of defending against them. All claims resolved to date have been dismissed or settled, and IR-New Jersey's average settlement amount per claim has been nominal. Discontinued operations, net of tax, for the second quarter of 2004 amounted to $35,800,000 of income. This includes the retained costs of Ingersoll-Dresser Pump Co. (IDP) of $4,900,000. The retained costs of IDP, which was sold in 2000, include product liability costs, primarily related to asbestos claims of about $12,000,000. ASBESTOS LITIGATION: Midwest Generation to Repay ConEd, Exelon -------------------------------------------------------------- Midwest Generation LLC entered into a supplemental agreement with Commonwealth Edison and Exelon Generation Co. LLC on February 20, 2003 to resolve a dispute regarding interpretation of its reimbursement obligation for asbestos claims under the environmental indemnities set forth in the Asset Sale Agreement dated March 22, 1999. Under this supplemental agreement, Midwest Generation agreed to reimburse Commonwealth Edison and Exelon Generation for 50% of specific existing asbestos claims and expenses less recovery of insurance costs, and agreed to a sharing arrangement for liabilities and expenses associated with future asbestos related claims as specified in the agreement. The obligations under this agreement are not subject to a maximum liability. The supplemental agreement has a five-year term with an automatic renewal provision (subject to the right to terminate). Payments are made under this indemnity upon tender by Commonwealth Edison of appropriate proof of liability for an asbestos-related settlement, judgment, verdict, or expense. At June 30, 2004, Midwest Generation had $13,500,000 recorded as a liability related to this matter and had made $1,200,000 in payments through June 2004. ASBESTOS LITIGATION: Noland Lawsuits in VA Increase To 2,100 ------------------------------------------------------------ Noland Co. is named as one of the defendants in around 2,100 asbestos-related suits filed by one law firm in the Circuit Court for Newport News, Virginia or in the Circuit Court for Portsmouth, Virginia. The CAR newsletter mentioned on May 7, 2004 that there were 1,900 lawsuits. The Company is not aware of any relationship between it and any of the plaintiffs; nor does it have information as to the extent of any injury that may have been suffered by any of them. The Company is also named as a defendant in various asbestos- related suits within its operating footprint in which a connection to the Company was alleged. Some of these suits have been dismissed with prejudice and several have been settled through the Company's insurance carrier and some are still pending and are being defended. Management does not consider these suits, individually or in the aggregate, to be material to the Company. ASBESTOS LITIGATION: Owens Corning Posts $2M Fibreboard Reserve ---------------------------------------------------------------- Owens Corning estimates a reserve for Fibreboard Corp. in accordance with generally accepted accounting principles to reflect asbestos-related liabilities. As of June 30, 2004, a reserve of $2,309,000,000 in respect of asbestos litigation claims was reflected in Owens Corning's consolidated balance sheet under the category "Liabilities Subject to Compromise." The estimated balances of the components of the Fibreboard asbestos-related reserve were: Balance --------------- Unpaid Final Settlements (NSP and other) $ 400,000,000 Other Pending and Future Claims 1,900,000,000 Owens Corning believes that Fibreboard's reserve for asbestos claims represents at least a minimum in a range of possible outcomes of the plan negotiation process as to the amount of Fibreboard's total liability for asbestos-related claims against it as determined through the Chapter 11 process. Owens Corning notes that it expects an ongoing high level of negotiations and information exchanges with the various creditor constituencies and other parties for the duration of the Chapter 11 proceedings. Owens Corning will continue to review Fibreboard's asbestos reserve on a periodic basis and make such adjustments as may be appropriate. However, it is possible that Owens Corning will not be in a position to conclude that a further revision to the reserve is appropriate until significant additional developments occur during the course of the Chapter 11 Cases, including resolution by negotiation or the Bankruptcy Court of Fibreboard's total liability for asbestos claims. As of June 30, 2004, the remaining Insurance Settlement funds were held in and invested by the Fibreboard Settlement Trust. On an ongoing basis, the funds held in the Trust will be subject to investment earnings/losses and will be reduced if and as applied to satisfy Fibreboard asbestos-related liabilities. Under the terms of the Trust, any Trust assets that ultimately are not used to fund Fibreboard's asbestos-related liabilities must be distributed to charity. Owens Corning does not believe that any such assets will remain for distribution at the conclusion of the Chapter 11 Cases. As of June 30, 2004, Owens Corning's consolidated financial statements reflect $4,000,000 in unexhausted insurance coverage (net of deductibles and self-insured retentions) under its liability insurance policies applicable to asbestos personal injury claims. This amount represented unconfirmed potential non-products coverage with excess level insurance carriers, as to which Owens Corning had estimated its probable recoveries. Owens Corning also has other unconfirmed potential non-products coverage with excess level carriers. Owens Corning is pursuing non-products insurance recoveries under these policies. ASBESTOS LITIGATION: UCC Posts $864 Mil Of Insurance Receivables ---------------------------------------------------------------- Union Carbide Corp. (UCC) reports to the Securities and Exchange Commission that the receivable for insurance recoveries related to asbestos liability was $864,000,000 at June 30, 2004 and $1,000,000,000 at December 31, 2003. At June 30, 2004 $50,000,000 of the receivable was due from insurers that are not signatories to the 1985 Wellington Agreement and/or do not otherwise have agreements in place regarding their asbestos- related insurance coverage. The Corporation's asbestos-related liability for pending and future claims was $1,800,000,000 at June 30, 2004 and $1,900,000,000 at December 31, 2003. In addition, the Corporation had receivables of $447,000,000 at June 30, 2004 and $349,000,000 at December 31, 2003 for insurance recoveries for defense and resolution costs. The Corporation is involved in a large number of asbestos- related suits filed primarily in state courts during the past three decades. These suits mainly allege personal injury resulting from exposure to asbestos-containing products and frequently seek both actual and punitive damages. The alleged claims primarily relate to products that UCC sold in the past, alleged exposure to asbestos-containing products located on UCC's premises, and UCC's responsibility for asbestos suits filed against a former subsidiary, Amchem Products Inc. In many cases, plaintiffs are unable to demonstrate that they have suffered any compensable loss as a result of such exposure, or that injuries incurred in fact resulted from exposure to the Corporation's products. There are no personal injury cases in which only the Corporation and/or Amchem are the sole named defendants. ASBESTOS ALERT: SDG&E Co. Expected To Pay $750,000 Settlement ------------------------------------------------------------- San Diego Gas & Electric Co. (SDG&E) and the County of San Diego are negotiating the remaining terms of a settlement relating to alleged environmental law violations by SDG&E and its contractors in connection with the abatement of asbestos- containing materials during the demolition of a natural gas storage facility that was completed in 2001. The expected settlement would involve payments by SDG&E of less than $750,000. COMPANY PROFILE San Diego Gas & Electric Co. 8326 Century Park Ct. San Diego, CA 92123 Phone: 619-696-2000 Fax: 858-654-1515 http://www.sdge.com Employees : 4,441 Revenue : $ --- Net Income : $ 340,000,000.00 Assets : $ 6,643,000,000.00 Liabilities : $ 5,120,000,000.00 (As of December 31, 2003) Description: San Diego Gas & Electric is a regulated utility that serves 1,300,000 electricity customers and 800,000 natural gas customers in San Diego County and a portion of southern Orange County. The utility owns more than 21,000 miles of distribution lines, which serve about 25 communities; the California Independent System Operator manages SDG&E's 2,000 miles of transmission lines. SDG&E also has limited power generation operations. The company is a subsidiary of Sempra Energy (NYSE: SRE). New Securities Fraud Cases ALLIED WASTE: Charles J. Piven Files Securities Fraud Suit in AZ ---------------------------------------------------------------- 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 Allied Waste Industries, Inc. (NYSE:AW) between February 10, 2004 and July 27, 2004, inclusive (the "Class Period"). The case is pending in the United States District Court for the District of Arizona against defendants Allied Waste, Thomas H. Van Weelden, Peter S. Hathaway, Thomas W. Ryan and James E. Gray. 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 by Mail: P.A. at 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 ALLIED WASTE: Brian M. Felgoise Lodges AZ Securities Fraud Suit --------------------------------------------------------------- The law offices of Brian M. Felgoise, P.C. initiated a securities class action on behalf of shareholders who acquired Allied Waste Industries, Inc. (NYSE: AW) securities between February 10, 2004 and July 27, 2004, inclusive (the Class Period). The case is pending in the United States District Court for the District of Arizona, against the company and certain key officers and directors. The action charges that defendants violated the 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 Brian M. Felgoise, Esq. by Mail: 261 Old York Road, Suite 423, Jenkintown, PA 19046 by Phone: (215) 886-1900 or by E-mail: FelgoiseLaw@aol.com CERIDIAN CORPORATION: Brain M. Felgoise Files MN Securities Suit ---------------------------------------------------------------- The law offices of Brian M. Felgoise, P.C. initiated a securities class action on behalf of shareholders who acquired Ceridian Corp. (NYSE: CEN) securities between April 17, 2003 and July 19, 2004, inclusive (the Class Period). The case is pending in the United States District Court for the District of Minnesota, against the company and certain key officers and directors. The action charges that defendants violated the 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 Brian M. Felgoise, Esq. by Mail: 261 Old York Road, Suite 423, Jenkintown, PA 19046 by Phone: (215) 886-1900 or by E-mail: FelgoiseLaw@aol.com CERIDIAN CORPORATION: Lasky & Rifkind Lodges MN Securities Suit --------------------------------------------------------------- The law firm of Lasky & Rifkind, Ltd., initiated a lawsuit in the United States District Court for the District of Minnesota, on behalf of persons who purchased or otherwise acquired publicly traded securities of Ceridian Corp. ("Ceridian" or the "Company") (NYSE:CEN) between April 17, 2003 and July 19, 2004, inclusive, (the "Class Period"). The lawsuit was filed against Ceridian and certain officers and directors ("Defendants"). The complaint alleges that Defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1924 and Rule 10b-5 promulgated thereunder. Specifically, the complaint alleges that Defendants caused Ceridian's shares to trade at artificially inflated levels through the issuance of false and misleading financial statements, including the improper capitalization of assets and certain costs that should have been expensed. On July 19, 2004, the Company announced the post-ponement of its second quarter 2004 earnings release. Specifically, the Company cited that the release would be delayed to complete an internal review focusing on the capitalization and expensing of certain costs in it U.S. Human Resource Solutions business. On this news Ceridian shares dropped significantly, falling 11% to $18.20 per share on heavy volume. For more details, contact Lasky & Rifkind, Ltd. by Phone: 800-495-1868 or by E-mail: investorrelations@laskyrifkind.com EXPRESS SCRIPTS: Lasky & Rifkind Lodges Securities Lawsuit in MO ---------------------------------------------------------------- The law firm of Lasky & Rifkind, Ltd. initiated a class action lawsuit in the United States District Court for the Eastern District of Missouri, on behalf of persons who purchased or otherwise acquired publicly traded securities of Express Scripts Inc. ("Express Scripts" or the "Company") (NASDAQ:ESRX) between October 29, 2003 and August 3, 2004, inclusive, (the "Class Period"). The lawsuit was filed against Express Scripts and certain officers and directors ("Defendants"). The complaint alleges that Defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. The complaint alleges that Defendants caused Express Scripts' shares to trade at inflated prices through the issuance of false and misleading statements and other illegal practices. Express Scripts disclosed numerous investigations of these improper practices and was sued by New York State Attorney General, Elliott Spitzer. Mr. Spitzer's lawsuit alleged that the Company conducted an intricate and elaborate scheme that inflated millions of dollars of costs of prescription drugs to New York state's employee health plan. In essence the lawsuit details how Express Scripts engaged in switching a patient's prescription from one prescribed drug to another for which Express Scripts received money from the drug manufacturer. On news of these investigations, Express Scripts stock fell to $62.48 from a class period high of $79.81. For more details, contact Lasky & Rifkind, Ltd. by Phone: 800-495-1868 or by E-mail: investorrelations@laskyrifkind.com GEXA CORPORATION: Brian M. Felgoise Lodges Securities Suit in TX ---------------------------------------------------------------- The law offices of Brian M. Felgoise, P.C. initiated a securities class action on behalf of shareholders who acquired Gexa Corporation (NASDAQ: GEXA) securities between August 14, 2003 and March 30, 2004, inclusive (the Class Period). The case is pending in the United States District Court for the Southern District of Texas, against the company and certain key officers and directors. The action charges that defendants violated the 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 Brian M. Felgoise, Esq. by Mail: 261 Old York Road, Suite 423, Jenkintown, PA 19046 by Phone: (215) 886-1900 or by E-mail: FelgoiseLaw@aol.com GEXA CORPORATION: Brodsky & Smith Files Stock Fraud Suit in TX -------------------------------------------------------------- The law offices of Brodsky & Smith, LLC initiated a securities class action lawsuit on behalf of shareholders who purchased the common stock and other securities of Gexa Corporation. ("Gexa" or the "Company') (Nasdaq:GEXA), between August 14, 2003 and March 30, 2004 inclusive (the "Class Period"). The class action lawsuit was filed in the United States District Court for the Southern District of Texas. The Complaint alleges that defendants violated federal securities laws by issuing a series of material misrepresentations to the market during the Class Period, thereby artificially inflating the price of Gexa securities. No class has yet been certified in the above action. For more details, contact Marc L. Ackerman, Esq. or Evan J. Smith, Esq. of Brodsky & Smith, LLC by Mail: Two Bala Plaza, Suite 602, Bala Cynwyd, PA 19004 by Phone: 877-LEGAL-90 or by E- mail: clients@brodsky-smith.com GEXA CORPORATION: Vianale & Vianale Files Stock Fraud Suit in TX ---------------------------------------------------------------- The law firm of Vianale & Vianale LLP commenced a securities fraud class action lawsuit in Houston, Texas federal court on behalf of purchasers of the securities of Gexa Corp. ("Gexa") (NASDAQ: GEXA) between August 14, 2003 and March 30, 2004, inclusive. According to the complaint, defendants committed securities fraud when they materially overstated Gexa's financial results for its power delivery business. On March 30, 2004, after the market closed, the Company issued a press release admitting that the revenues it had previously reported were actually only overstated estimates, not earned revenues from power delivered to customers or energy sales. Gexa also revealed that the Company's outside auditors, during their fiscal 2003 audit, had identified material weaknesses in Gexa's systems of internal controls. Gexa's stock price dropped more than 25% on the news. For more details, contact Vianale & Vianale LLP by Phone: 888-657-9960 or visit their Web site: http://www.vianalelaw.com INVISION TECHNOLOGIES: Brodsky & Smith Lodges CA Securities Suit ---------------------------------------------------------------- The law offices of Brodsky & Smith, LLC initiated a securities class action lawsuit on behalf of shareholders who purchased the common stock and other securities of InVision Technologies, Inc. ("InVision Technologies" or the "Company") (Nasdaq:INVN), between March 15, 2004 and July 30, 2004 inclusive (the "Class Period"). The class action lawsuit was filed in the United States District Court for the Northern District of California. The Complaint alleges that defendants violated federal securities laws by issuing a series of material misrepresentations to the market during the Class Period, thereby artificially inflating the price of InVision Technologies securities. No class has yet been certified in the above action. For more details, contact Marc L. Ackerman, Esq. or Evan J. Smith, Esq. of Brodsky & Smith, LLC by Mail: Two Bala Plaza, Suite 602, Bala Cynwyd, PA 19004 by Phone: 877-LEGAL-90 or by E- mail: clients@brodsky-smith.com LIGAND PHARMACEUTICALS: Brian M. Felgoise Files Stock Suit in CA ---------------------------------------------------------------- The law offices of Brian M. Felgoise, P.C. initiated a securities class action on behalf of shareholders who acquired Ligand Pharmaceuticals, Inc. (NASDAQ: LGND) securities between March 3, 2004 and August 2, 2004, inclusive (the Class Period). The case is pending in the United States District Court for the Southern District of California, against the company and certain key officers and directors. The action charges that defendants violated the 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 Brian M. Felgoise, Esq. by Mail: 261 Old York Road, Suite 423, Jenkintown, PA 19046 by Phone: (215) 886-1900 or by E-mail: FelgoiseLaw@aol.com LIGAND PHARMACEUTICALS: Lasky & Rifkind Files CA Securities Suit ---------------------------------------------------------------- The law firm of Lasky & Rifkind, Ltd. initiated a class action lawsuit in the United States District Court for the Southern District of California, on behalf of persons who purchased or otherwise acquired publicly traded securities of Ligand Pharmaceuticals Inc. ("Ligand" or the "Company") (NASDAQ:LGND) between March 3, 2004 and August 2, 2004, inclusive, (the "Class Period"). The lawsuit was filed against Ligand and David E. Robinson and Paul V. Maier ("Defendants"). The complaint alleges that Defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. Specifically, the complaint alleges that the Company failed to disclose and misrepresented that Defendants knew or recklessly disregarded that inventory de- stocking at the wholesale level was occurring because the Company was unloading Avinza inventory which was about to expire, that the overall demand of the Company's products was down due to inventory de-stocking, and that Medicaid prescriptions were increasing, causing the Company to pay large rebates to Medicaid and that in fact the increase in rebates was not a one-time occurrence. On August 3, 2004, Ligand announced that its second-quarter loss increased, missing analyst expectations and that its independent auditor had resigned. Shares of Ligand fell dramatically in response to the news, falling almost 40% or $5.40 per share to close at $8.18 per share. For more details, contact Lasky & Rifkind, Ltd. by Phone: 800-495-1868 or by E-mail: investorrelations@laskyrifkind.com SYNOVIS LIFE: Wolf Popper Lodges Securities Fraud Lawsuit in MN --------------------------------------------------------------- The law firm of Wolf Popper LLP initiated a securities fraud lawsuit against Synovis Life Technologies, Inc. ("Synovis") (Nasdaq: SYNO) and certain of its officers and directors, on behalf of all persons who purchased Synovis securities on the open market from October 16, 2003 through May 18, 2004. The action was filed in the United States District Court for the District of Minnesota. The complaint can be viewed on Wolf Popper's website or obtained from the Court. The deadline for class members to file a motion to become a lead plaintiff in the case is Tuesday, August 17, 2004. The complaint alleges that during the Class Period, defendants concealed the following materially adverse facts: (1) that the Company's surgical business was not on track for year-to-year growth and was actually declining; (2) that the performance of the Company's surgical business lagged because of disappointing sales of its Peri- Strips product; (3) that the performance of the Company's interventional business had little to zero growth prospects and was suffering because Synovis' largest customers were not placing orders due to inventory build-up; and (4) that as a result, the Company's projections of fiscal 2004 EPS of $0.56-$0.60 and revenue of $75-$79 million had no reasonable basis and were false and misleading. Defendants' misrepresentations were revealed on May 19, 2004, when Synovis issued a press release reporting its revenue and earnings for fiscal 2004 which were drastically below its previously touted 2004 guidance. As a result of the news, shares of Synovis plummeted in trading on May 19, 2004, closing at $9.25 per share on trading volume of 2,121,700 shares, compared to a closing price of $14.65 on volume of 79,000 shares just the previous day. For more details, contact Michael A. Schwartz, Esq. or Renee L. Karalian, Esq. of Wolf Popper LLP by Mail: 845 Third Ave., New York, NY 10022 by Phone: 212-451-9668 or 877-370-7703 by Fax: 212-486-2093 or 877-370-7704 or by E-mail: irrep@wolfpopper.com or visit their Web site: http://www.wolfpopper.com WHITE ELECTRONIC: Wolf Haldenstein Lodges Securities Suit in AZ --------------------------------------------------------------- The law firm of Wolf Haldenstein Adler Freeman & Herz LLP initiated a class action lawsuit in the United States District Court for the District of Arizona, on behalf of all persons who purchased the common stock of White Electronic Designs Corporation ("White Electronic Designs" or the "Company") (Nasdaq: WEDC) between January 23, 2003 and June 9, 2004, inclusive, (the "Class Period") against defendants White Electronic Designs and certain officers of the Company. The case name is Anders v. White Electronic Designs Corporation, et al. The complaint alleges that defendants violated the federal securities laws by issuing materially false and misleading statements throughout the Class Period that had the effect of artificially inflating the market price of the Company's securities. The complaint further alleges that the statements made by Defendants during the class period were materially false and misleading when made as they failed to disclose and misrepresented the following material adverse facts which were then known to Defendants or recklessly disregarded by them: (1) that the Company's first quarter financial results were materially overstated due to Defendants' improper recognition of revenues in violation of the Company's publicly stated accounting policies and GAAP. Defendants have now admitted that White Electronic Designs' revenues were actually $23.356 million and not $23.604 million, as reported, that its gross profit was actually $8.295 million and not $8.433 million, and that the Company's net earnings were actually $2.136 and not $2.230 as originally reported; (2) that the Company improperly accelerated revenue recognition for products shipped to resellers prior to resale of the product to the end customer, thereby failing to give effect to White Electronic Designs' contractual obligation to accept returns of any unsold product; (3) that first quarter sales of the Company's microelectronic products for use in military weapon and procurement programs had received an extraordinary boost due to purchases by the U.S. military in the months immediately preceding the Iraq conflict, which could not be sustained; and (4) that as a result of the foregoing, Defendants' statements and opinions concerning the Company's current and future revenues, gross profits and net earnings were lacking in a reasonable basis at all relevant times. For more details, contact Fred Taylor Isquith, Esq., George Peters or Derek Behnke of Wolf Haldenstein Adler Freeman & Herz LLP by Mail: 270 Madison Avenue, New York, NY 10016 by Phone: 800-575-0735 or by E-mail: classmember@whafh.com or visit their Web site: http://www.whafh.com WIRELESS FACILITIES: Shalov Stone Lodges Securities Suit in CA -------------------------------------------------------------- The law firm of Shalov Stone & Bonner LLP initiated a class action lawsuit in the United States District Court for the Southern District of California on behalf of all persons who purchased the securities of Wireless Facilities, Inc. (NASDAQ:WFII) in the period from April 26, 2000 to August 4, 2004. The complaint alleges that the defendants made material misrepresentations and omissions of material facts concerning the company's business performance during the relevant time period. According to the complaint, throughout the relevant time period, defendants misrepresented the financial condition of the company by materially underreporting its foreign tax burden, thereby purposefully overstating the company's net income by at least $10-12 million. For more details, 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 or by E-mail: tciarlone@lawssb.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. 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