/raid1/www/Hosts/bankrupt/CAR_Public/040827.mbx
C L A S S A C T I O N R E P O R T E R
Friday, August 27, 2004, Vol. 6, No. 170
Headlines
3CI COMPLETE: Shareholders Seek Certification For LA Fraud Suit
3M CORPORATION: PA Judge Grants Certification To Antitrust Suit
ACCEPTANCE INSURANCE: Plaintiffs Appeal Summary Judgment in Suit
AFG INVESTMENT: Unitholder Files Stock, Derivative Lawsuit in DE
AIG SUNAMERICA: Faces Market Timing Activities Suit in IL Court
AMERICAN SKANDIA: Plaintiffs Seek Rehearing of Appeal in NY Suit
AMERICAN SKANDIA: Shareholder Fraud Lawsuits Consolidated in MD
ARVIDA/JMB: Reaches Settlement For Homeowner Lawsuit in FL Court
ARVIDA/JMB: FL Court Refuses To Dismiss Homeowner Fraud Lawsuit
ASCONI CORPORATION: Seeks Dismissal of FL Securities Fraud Suits
BROKER-DEALERS: Seven Firms Pay $3.65M To Settle SEC Actions
CINTAS CORPORATION: CA Court Orders Arbitration For ERISA Suit
CINTAS CORPORATION: Employees Launch Race Bias Suit in N.D. CA
COMMUNITY BANKSHARE: Consumers Lodge Securities Fraud Suit in GA
CUTTER & BUCK: SEC Files Fraud Suit V. Ex-Controller Athena Diaz
ENRON CORPORATION: Ex-EVP Settles Charges, To Pay 1.49M Fine
FLORIDA: SEC Launches Administrative Proceedings V. Residents
G & L REALTY: Reaches Settlement For Securities Fraud Lawsuits
GLS CAPITAL: Some Issues in PA Taxpayer Lawsuit Placed On Hold
HANGER ORTHOPEDIC: Shareholders Launch Fraud Lawsuits in VA, NY
ILX RESORTS: Discovery Commences in Unfair Trade Practices Suit
METRETEK TECHNOLOGIES: Reaches Settlement For CO Investor Suit
MONY LIFE: Continues To Face Suits For Deceptive Sales Practices
MONY LIFE: Suit Fairness Hearing Set September 2004 in DE Court
MOTOROLA INC.: IL Judge Denies Request To Dismiss Holders' Suit
NATIONAL CLEARING: SEC Files Fraud Suit V. Parent, Executives
NETHERLANDS: Court Dismisses Suit V. Dexia's Share-Lease Program
NORTH DAKOTA: Judge Expands Suit V. Labor Unit, Certifies Class
OHIO: SEC Fines Derrick McKinney, Rick Malizia For Ponzi Scheme
ONEOK GAS: Jury Selection Begins in Hutchinson Landowners Suit
PARADIGM MEDICAL: Plaintiffs File Consolidated Stock Suit in UT
PROTECTION ONE: Parties Commence Arbitration For Consumer Suit
SERVICE CORPORATION: Reaches Settlement For TX Securities Suit
SERVICE CORPORATION: Faces Shareholder Fraud Suits Filed in TX
SERVICE CORPORATION: Settlement Fairness Hearing Set Sept. 2004
SINGING MACHINE: Court Grants Final Approval To Suit Settlement
SKYTERRA COMMUNICATIONS: Discovery Commences in CA Overtime Suit
TEXAS: ETMC Consumer Suit Settlement Hearing Set October 18,2004
TRINITY HOMES: Homeowners Mull Over Proposed IN Suit Settlement
WASHINGTON: Brokers File Antitrust Suit V. Membership Conditions
WORLDCOM INC.: Ex-Directors Agree To Settle Shareholders' Suit
WESTWOOD GROUP: DE Court Halts Briefing on Stock Suit Dismissal
Asbestos Alert
ASBESTOS LITIGATION: James Hardie Withdraws Letter on Asbestos
ASBESTOS LITIGATION: Australian Trade Union Council Seeks Talks
ASBESTOS LITIGATION: Australian Road Workers Exposed to Asbestos
ASBESTOS LITIGATION: Reform Groups to Fight Asbestos Legislation
ASBESTOS LITIGATION: Hawaii Evacuation Due to Asbestos Release
ASBESTOS LITIGATION: IL Beach Shut Down After Finding Asbestos
ASBESTOS LITIGATION: Eli Lilly Seeks Funding For Cancer Drug
ASBESTOS LITIGATION: Law Firm Criticizes Proposed Asbestos Act
ASBESTOS LITIGATION: Hercules Inc. Settlement Agreement Reached
ASBESTOS LITIGATION: Veterans with Cancer Seek Needed Support
ASBESTOS LITIGATION: Worker Dead of Cancer, Asbestos Exposure
ASBESTOS LITIGATION: Australia To Propose New Asbestos Law
ASBESTOS LITIGATION: Asbestos Dumping Suspected in D.C. Sidewalk
ASBESTOS LITIGATION: Park Official Fired Over Asbestos Violation
ASBESTOS LITIGATION: OSHA Cites Contractors for Asbestos Hazards
ASBESTOS LITIGATION: AK Steel Corp. Appeal Dismissed in Kentucky
ASBESTOS LITIGATION: CSXT, Railroads Sued For Wrongful Death
ASBESTOS LITIGATION: Commercial Union, EMLICO Disputing GE Costs
ASBESTOS LITIGATION: GM Ex-Employee Loses Appeal Against Company
ASBESTOS LITIGATION: LA Olin Subsidiary Case Remanded
ASBESTOS LITIGATION: Viacom Corp. Sues Insurer, Loses On Appeal
ASBESTOS LITIGATION: U.S. Military Veteran Makes Exposure Claim
ASBESTOS ALERT: Bearfoot Corp. Prevails Against OH Appeal
ASBESTOS ALERT: Insulating Services' Verdict Upheld In NC
ASBESTOS ALERT: LaGrand Industrial Will Not Face New Trial
New Securities Fraud Cases
BIOLASE TECHNOLOGY: Weiss & Yourman Lodges Securities Suit in CA
KONGZHONG CORPORATION: Schatz & Nobel Lodges NY Securities Suit
PETMED EXPRESS: Baron & Budd Lodges Securities Fraud Suit in FL
PETMED EXPRESS: Wechsler Harwood Lodges Securities Lawsuit in FL
SALOMON SMITH: Stull Stull Lodges Securities Fraud Lawsuit in MD
SYNOPSYS INC.: Schiffrin & Barroway Lodges Securities Suit in CA
TECO ENERGY: Lerach Coughlin Lodges Securities Fraud Suit in FL
TECO ENERGY: Schatz & Nobel Lodges Securities Fraud Suit in FL
*********
3CI COMPLETE: Shareholders Seek Certification For LA Fraud Suit
---------------------------------------------------------------
Plaintiffs asked the First Judicial District Court for the Cado
Parish, Louisiana to grant class certification to a lawsuit
filed on behalf of 3CI Complete Compliance Corporation, styled
"Robb et al. v. Stericycle, Inc. et al., cause no. 467704-A."
On June 20, 2002, Larry F. Robb, individually, on behalf of a
class comprised of the Company's minority stockholders, and
derivatively on behalf of the Company, filed the suit. In this
suit, the Louisiana Plaintiffs assert numerous claims of
minority stockholder oppression, breach of fiduciary duty and
unjust enrichment against Stericycle, the four affiliates of
Stericycle who are or were directors of the Company, and the
President and Chief Executive Officer of the Company.
The Louisiana Plaintiffs contend that since Stericycle's
acquisition of Waste Systems, Inc. (WSI) in September 1998,
Stericycle has unfairly and improperly exercised control over
the Company to the detriment of the Company's s minority
stockholders in contravention of various contractual, common law
and statutory duties. Among other things, the Louisiana
Plaintiffs allege that the Louisiana Defendants have:
(1) deprived the Company of revenues by imposing
unfavorable loan obligations and avoidable expenses on
the Company;
(2) usurped 3CI's business and business opportunities and
diverted its assets for Stericycle's benefit; and
(3) depressed the value of the Common Stock
The Louisiana Plaintiffs further allege that Stericycle has
breached an agreement entered into for the protection of 3CI's
minority stockholders in connection with Stericycle's
acquisition of WSI.
Based on these and other allegations, the Louisiana Plaintiffs
seek to recover actual and punitive damages and a variety of
equitable and other relief, including forfeiture or rescission
of various disputed transactions, a constructive trust of all
benefits Stericycle has derived on business usurped from the
Company or not offered to the Company and an order requiring
Stericycle to buy the capital stock of the minority stockholders
of the Company at the relative value of the Company's shares to
Stericycle's shares at the time Stericycle gained control over
the Company, i.e. one share of Stericycle common stock for every
five shares of the Company's Common Stock.
On October 27, 2003, the Louisiana Plaintiffs filed their First
Amended Petition adding the Company as a derivative defendant.
The Company has not yet answered this petition.
As of January 8, 2004, the Board expanded the authority of the
Special Committee such that the Special Committee now has the
exclusive power and authority on behalf of the Company to:
(1) make all inquiries, conduct all investigations and
gather all information related to the Louisiana Suit,
the 1995 Action and the 2003 Action, or any actions or
proceedings related to any of the foregoing;
(2) make or approve all decisions of the Company related
to the Louisiana Suit, the 1995 Action and the 2003
Action, including the Company's filing, amending,
maintaining, prosecuting or settling of any legal
proceedings related to such suits; and
(3) exercise such other power and authority that may be
exercised by the full Board with regard to the
foregoing.
The Special Committee is composed of Stephen B. Koenigsberg and
Kevin J. McManus, who are the independent directors on the Board
not affiliated with Stericycle or WSI. Robert M. Waller,
previously a member of the Special Committee, for personal
reasons, resigned from the Board of Directors on March 11, 2004.
The Special Committee has appointed legal counsel to assist it
in its investigation of the Louisiana Plaintiffs' allegations
and to gather all information related to the Louisiana Suit.
In June 2004, the Louisiana Plaintiffs filed a motion to certify
the Louisiana Suit as a class action and served discovery
relating to the request for class certification on all parties,
including the Company. In response, the Company, at the
direction of the Special Committee, filed a motion with the
Louisiana court to stay all proceedings in the litigation
(including discovery) pending the completion of the Special
Committee's investigation. After a hearing on the motion in
June 2004, the court extended the Company's deadline for
responding to the Louisiana Plaintiffs' discovery pending
completion of the Special Committee's investigation, but allowed
the other parties to proceed with discovery in the interim.
3M CORPORATION: PA Judge Grants Certification To Antitrust Suit
---------------------------------------------------------------
In his 58-page ruling U.S. District Judge John R. Padova of
Pennsylvania certified a class action lawsuit against St. Paul,
Minnesota-based 3M Corporation on behalf of businesses that
bought 3M's Scotch and Highland brand tapes, the Legal
Intelligencer reports.
Though denied class certification Judge Padova in April 2004,
since the proposed class suffered from potential conflicts, the
Bradburn Parent/Teacher Store Inc. of St. Louis, Missouri, a
family-owned school supplies store has had their suit certified
as class action thanks to a plaintiff's lawyer's ingenuity of
narrowing the class.
The Bradburn suit, which was filed in late 2002 is an offspring
of a lawsuit brought by a Pittsburgh tape-maker, Le Page that
won a judgment of nearly $70 million over allegations that 3M
had violated antitrust laws by implementing rebate programs and
exclusive dealing arrangements that penalized stores for buying
tape from competitors.
In the April 2004 hearing, the Plaintiffs represented by Robert
S. Berry, J. Daniel Leftwich and Gregory Baruch of Berry &
Leftwich in Washington, D.C., and Charles M. Jones of Jones
Osteen Jones & Arnold in Huntsville, Ga., originally sought
certification of a broad class that would include anyone who
directly purchased any transparent tape from 3M from October
1998 to the present.
However, 3M's lawyers, attorneys John G. Harkins Jr., Eleanor
Illoway and David Engstrom of Harkins Cunningham in
Philadelphia, along with Brent N. Rushforth, Kit A. Pierson,
Martina M. Stewart and Paul Alexander of Heller Ehrman White &
McAuliffe in Washington, D.C. -- opposed certification, arguing
that the class suffered from serious conflicts and that the lead
plaintiff would have significantly different interests that
would directly conflict with the interests of large-volume
retailers.
Judge Padova agreed with 3M's arguments, finding that "the
conflict between large-volume retailers and plaintiff is neither
speculative nor hypothetical, but is rather apparent, imminent
and on an issue at the heart of this litigation."
In a renewed motion for class certification, the plaintiff's
lawyers narrowed the class to cover only those who directly
purchased 3M tape products and who had not purchased any
"private label" tape from 3M or any of its competitors, so the
judge granted class action status.
ACCEPTANCE INSURANCE: Plaintiffs Appeal Summary Judgment in Suit
----------------------------------------------------------------
Plaintiffs appealed the United States District Court for the
District of Nebraska's ruling granting summary judgment in favor
of Acceptance Insurance Companies, Inc. in the securities class
action filed against the Company.
The suit alleges that the Company knowingly and intentionally
understated the Company's liabilities in order to maintain the
market price of the Company's common stock at artificially high
levels and made untrue statements of material fact. The suit
seeks compensatory damages, interest, costs and attorney fees.
Plaintiffs sought to represent a class consisting of all persons
who purchased either Company common stock between March 10, 1998
and November 16, 1999, or AICI Capital Trust Preferred
Securities between the July 29, 1997 public offering and
November 25, 1999. In the consolidated complaint, plaintiffs
alleged violation of Section 11 of the Securities Act of 1933
through misrepresentation or omission of a material fact in the
registration statement for the Trust Preferred Securities, and
violation of Section 10b of the Securities Exchange Act of 1934
and Rule 10b5 of the U.S. Securities and Exchange Commission
through failure to disclose material information between March
10, 1998 and November 16, 1999. The Company, three of its
former officers, the Company's Directors and independent
accountants and other individuals, as well as the financial
underwriters for the Company's Trust Preferred Securities, were
defendants in the consolidated action.
On March 2, 2001, the Court entered an order dismissing all
claims alleging violations of Section 11 of the Securities Act,
and dismissing the Company's Directors, financial underwriters,
independent accountants and others as defendants in this action.
The Court also ruled that certain of Plaintiffs' allegations
regarding the remaining defendants' alleged failure to properly
report contingent losses attributable to the "Montrose"
decision, a California Supreme Court decision creating a new
basis for liability coverage under years of previously issued
policies, did not state a claim under Section 10b and Rule 10b-
5.
In two subsequent rulings, the Court and Magistrate Judge
clarified the March 2, 2001 ruling to specify which of
Plaintiffs' "Montrose"-related allegations failed to state a
Section 10b and Rule 10b-5 claim. These three rulings reduced
the litigation to a claim that the Company and three of its
former officers, during the period from August 14, 1997 to
November 16, 1999, failed to disclose adequately information
about various aspects of the Company's operations, including
information relating to the Company's exposure after January 1,
1997 to losses resulting from the "Montrose" decision.
Nevertheless, Plaintiffs continue to seek compensatory damages,
reasonable costs and expenses incurred in this action.
On August 6, 2001, the Magistrate Judge granted Plaintiffs'
Motion for Class Certification. Plaintiffs' fact discovery was
concluded July 31, 2002 in accordance with a schedule
established by the Court. On September 16, 2002 Plaintiffs
sought the Court's permission to reinstate certain previously
dismissed claims under Section 11 and 15 of the Securities Act.
The Court denied Plaintiffs' request in its entirety on February
27, 2003. The Company filed a motion to decertify the class and
a motion for summary judgment.
On March 31, 2004, the Court granted the defendants' motion for
summary judgment in full, dismissing all of the plaintiffs'
remaining claims against all of the remaining defendants, and
denied all other pending motions as moot. The plaintiffs have
appealed the Court's decision.
AFG INVESTMENT: Unitholder Files Stock, Derivative Lawsuit in DE
----------------------------------------------------------------
AFG Investment Trust C faces a class and derivative action filed
in the Court of Chancery of the State of Delaware, styled
"Robert Lewis v. Gary D. Engle, James A. Coyne, AFG ASIT
Corporation, Equis II Corporation, Semele Group Inc., PLM MILPI
Holdings LLC, Defendants, and AFG Investment Trust C."
The suit was filed on behalf of a proposed class of investors
holding units of beneficial interest in AFG Investment Trust C,
against a number of its affiliates, including AFG ASIT
Corporation, its managing trustee, as defendants, and the Trust
as a nominal defendant.
The plaintiff has alleged, among other things, claims against
the defendants on behalf of the Trust for breaches of fiduciary
duty and a duty to disclose, as well as breach of the trust
agreement that governs the Trust. These allegations relate to a
consent solicitation statement mailed by the Trust to its
unitholders on or about June 2, 2004, and the MILPI sale
transaction and the proposed amendments to the trust agreement
described therein.
Specifically, Plaintiff has alleged that the MILPI sale
transaction and the amendments are unfair to the Trust and the
minority interest holders in the Trust and represent conflicts
of interest with respect to the defendants since, among other
things, the sale price is allegedly unfairly low and the
amendments allegedly permit the managing trustee to unilaterally
determine the value of the assets for making in-kind
distributions and the terms of asset sales by the Trust to the
defendants.
The plaintiff also has alleged, among other things, that a
fairness opinion delivered with respect to the fairness from a
financial point of view of the aggregate consideration to be
received by the Trust and an affiliated trust in the MILPI sale
transaction does not support the purchase price and is
inadequate, misleading, and stale. The plaintiff also has
alleged that the defendants have breached their fiduciary duty
of disclosure in that the consent solicitation statement, among
other things, allegedly is materially misleading and failed to
disclose the conflicting self-interests of the defendants in the
MILPI sale and the amendments and how the managing trustee chose
or arrived at the MILPI sale price. In addition, the plaintiff
alleges that the managing trustee has breached the trust
agreement by acting to dissolve the Trust prior to the
occurrence of certain events described in the trust agreement as
conditions precedent to the liquidation of the Trust.
The plaintiff has requested that the court certify the lawsuit
as a class action and the plaintiff as representative of the
class; preliminarily and permanently enjoin the liquidation of
the Trust, the consent solicitation and the MILPI sale
transaction and the amendments; order corrective supplemental
disclosures; award unspecified damages; and such other relief as
the court may grant.
AIG SUNAMERICA: Faces Market Timing Activities Suit in IL Court
---------------------------------------------------------------
AIG SunAmerica Life Assurance Company faces a class action filed
in the Circuit Court of the Twentieth Judicial District in St.
Clair County, Illinois, styled "Nitika Mehta, as Trustee of the
N.D. Mehta Living Trust vs. AIG SunAmerica Life Assurance
Company, Case 04L0199."
The lawsuit alleges certain improprieties in conjunction with
alleged market timing activities. The probability of any
particular outcome cannot be reasonably estimated at this time,
the Company stated in a disclosure to the Securities and
Exchange Commission.
AMERICAN SKANDIA: Plaintiffs Seek Rehearing of Appeal in NY Suit
----------------------------------------------------------------
Plaintiffs petitioned for its appeal of the dismissal of the
nationwide class action filed against American Skandia Life
Assurance Corporation to be reheard en banc by the United States
Second Circuit Court of Appeals.
The suit, initially filed in the United States District Court
for the Southern District of New York, is styled "Donovan v.
American Skandia Life Ass. Corp. et al." The complaint alleges
that the Company and certain of its affiliates violated federal
securities laws in marketing variable annuities and seeks
injunctive relief and compensatory damages in unspecified
amounts.
In July 2003, the court granted the Company's motion to dismiss
the complaint with prejudice. Plaintiffs filed a notice of
appeal of that decision with the United States Court of Appeals
for the Second Circuit, which upheld the dismissal by Order
issued on May 14, 2004.
AMERICAN SKANDIA: Shareholder Fraud Lawsuits Consolidated in MD
---------------------------------------------------------------
The nationwide class actions filed against American Skandia,
Inc. and others have been consolidated in the United States
District Court in Maryland.
Several suits were initially filed, alleging that the Company
and others violated federal securities laws in connection with
late trading and market timing activities. The suits seek
remedies, including compensatory and punitive damages in
unspecified amounts. The cases are:
(1) Lowinger v. Invesco Advantage Health Sciences Fund, et
al., filed in the United States District Court for the
Southern District of New York in December 2003 and
served on the Company in February 2004;
(2) Russo, et al. v. Invesco Advantage Health Sciences
Fund, et al., filed in the United States District Court
for the Southern District of New York in December 2003,
this suit has not been served on the Company;
(3) Lori Weinrib v. Invesco Advantage Health Sciences Fund,
et al., filed in the United States District Court for
the Southern District of New York in January 2004, this
suit has not been served on ASI;
(4) Erhlich v. Invesco Advantage Health Sciences Fund et
al., filed in the United States District Court for the
District of Colorado in December 2003, this suit was
served on ASI in February 2004;
(5) Fattah v. Invesco Advantage Health Sciences Fund, et
al., filed in the United States District Court for the
District of Colorado in December 2003, this suit has
not been served on ASI.
The Company is also aware that it may be a defendant designated
as one of "Does 1-500" in a suit filed in October 2003 in the
United States District Court for the Central District of
California entitled "Mike Sayegh v. Janus Capital Corporation,
et al."
This suit alleges that various defendants engaged in improper
late trading and market timing activities in various funds also
named as defendants. The complaint further alleges that such
activities were in violation of California Business and
Professional Code Section 17200. This suit has not been served
on ASI.
ARVIDA/JMB: Reaches Settlement For Homeowner Lawsuit in FL Court
----------------------------------------------------------------
Arvida/JMB Partners, L.P. reached settlements with plaintiffs in
the class action filed against it and Walt Disney World Company,
styled "Lakes of the Meadow Village Homes Condominium Nos. One,
Two, Three, Four, Five, Six, Seven, Eight and Nine Maintenance
Associations, Inc., v. Arvida/JMB Partners, L.P. and Walt Disney
World Company, Case No. 95-23003-CA-08.
The suit, filed in the Circuit Court of the Eleventh Judicial
Circuit in and for Miami-Dade County, Florida, sought
unspecified damages, attorneys' fees and costs, recission of
specified releases, and all other relief that plaintiffs might
be entitled to at equity or at law on behalf of the 460 building
units they allegedly represented for, among other things,
alleged damages discovered in the course of making Hurricane
Andrew repairs.
Plaintiffs alleged that Walt Disney World Company was
responsible for liabilities that might arise in connection with
approximately 80% of the buildings at the Lakes of the Meadow
Village Homes and that the Partnership was potentially liable
for the approximately 20% remaining amount of the buildings. In
the three count amended complaint, plaintiffs alleged breach
of building codes and breach of implied warranties.
In addition, plaintiffs sought rescission and cancellation of
various general releases obtained by the Partnership allegedly
in the course of the turnover of the Community to the residents.
Plaintiffs indicated that they might seek to hold the
Partnership responsible for the entire amount of alleged damages
owing as a result of the alleged deficiencies existing
throughout the entire development.
The Partnership tendered this matter to Disney pursuant to the
Partnership's indemnification rights and filed a third-party
complaint against it pursuant to the Partnership's rights of
contractual indemnity. The Partnership also answered the
amended complaint and filed a cross-claim against Disney's
affiliate, Walt Disney World Company, for common law indemnity
and contribution. The Partnership completed settlements in this
case with the condominium associations and their members during
the second quarter of 2004. The Partnership was defended by
counsel paid for by U.S. Fire as well as additional counsel
engaged by the Partnership.
In a matter related to the Lakes of the Meadow development, the
Miami-Dade County Building Department ("Building Department")
retained the services of an engineering firm, All State
Engineering, to inspect the condominiums that are the subject of
the lawsuit. On February 27, 2002, the Building Department
apparently advised condominium owners throughout the development
that it found serious life-safety building code violations in
the original construction of the structures and on May 29, 2002,
issued notices of violation under the South Florida Building
Code. The condominium owners were further advised that the
notices of violation would require affirmative action on their
part to respond to the notices through administrative
proceedings and/or by addressing the alleged deficiencies.
On August 8, 2002, the Partnership attended a mediation with
representatives of Lakes of the Meadow Village Homes Condominium
Nos. One through Seven and Nine Maintenance Associations
(collectively, "Association Nos. 1-7 and 9"). As a result of
this and subsequent mediation sessions and other discussions
among the parties, and without admitting any liability, the
Partnership entered into an agreement with Association Nos. 1-7
and 9 and their members for a settlement that received
preliminary approval of the Court on February 12, 2004. On
April 30, 2004, the Court gave its final approval of the
settlement as fair, reasonable and adequate and in the best
interest of Association Nos. 1-7 and 9 and their members. The
Court's order giving its final approval was subject to the
filing of an appeal during the 30-day period following the entry
of the order of approval, and that 30-day period expired without
an appeal being filed. The settlement was completed in June
2004.
The settlement agreement provides, among other things, for a
release by Association Nos. 1-7 and 9 and their members of all
manner of actions, claims, and damages arising out of or
relating to:
(1) the subject matters of the lawsuit;
(2) any order of the Miami-Dade County, Florida Unsafe
Structures Board relating to the units in the
condominiums of Association Nos. 1-7 and 9;
(3) any remediation action undertaken in regard to those
units;
(4) the failure of any of Association Nos. 1-7 and 9 to
undertake appropriate or timely remediation; or
(5) the past, present or future governance of Association
Nos. 1-7 and 9
Each of Association Nos. 1-7 and 9, on behalf of itself and its
members, also entered into separate agreements indemnifying the
Partnership and its affiliates under certain circumstances
against certain claims, including claims released in the
settlement, claims for subrogation and claims of former
condominium owners. In addition, the Court dismissed the claims
of Association Nos. 1-7 and 9 and their members against the
Partnership, each side bearing its own fees and costs. The
Partnership paid $5.5 million to Association Nos. 1-7 and 9 as
part of the settlement.
The Partnership continues to reserve its right to pursue claims
for indemnity or contribution against Disney or its affiliates
in connection with the condominium units that were constructed
in whole or in part prior to September 10, 1987 (the date that
the Partnership acquired the assets of Arvida Corporation from
Disney) but were sold by the Partnership on or after that date.
The Partnership's claims for indemnity and contribution have
been severed for separate proceedings and trial from the
remaining case-in-chief in the Lakes of the Meadow litigation.
During 2001, the Partnership settled the claims brought in the
lawsuit by Lakes of the Meadow Village Homes Condominium No.
Eight Maintenance Association, Inc. ("Association No. 8") for a
payment of $155,000 funded by U.S. Fire. Representatives of the
Partnership discussed with representatives of Association No. 8
issues raised by the Building Department's notices of violations
for that Association's condominium units. Association No. 8
submitted construction plans to address the issues raised by the
Building Department notices of violations and comments received
by the plan reviewers for that Association's units. On February
7, 2003, Association No. 8 received permits approving its plans
for most of its condominium units. Association No. 8 asked the
Partnership to pay the cost to remediate the units in its
condominium.
On March 9, 2004, the Partnership entered into a separate
settlement agreement with Association No. 8 and its members.
This settlement was completed in May 2004 with the Partnership
paying $1,385,000 in exchange for a release of all of the claims
of Association No. 8 and its members. Association No. 8, on
behalf of itself and its members, also entered into an agreement
indemnifying the Partnership and its affiliates under certain
circumstances against certain claims, including claims released
in the settlement, claims for subrogation and claims of former
condominium owners. In addition, the Court entered an order
dismissing the claims of Association No. 8 and its members in
the lawsuit, and the time for appealing that order has expired.
ARVIDA/JMB: FL Court Refuses To Dismiss Homeowner Fraud Lawsuit
---------------------------------------------------------------
The Circuit Court of the 17th Judicial Circuit in and for
Broward County, Florida refused to dismiss the class action
filed against Arvida/JMB Partners L.P., its General Partner
Arvida/JMB Managers, Inc. and certain related parties as
well as other unrelated parties, styled "Rothal v. Arvida/JMB
Partners Ltd. et al, Case No. 03010709."
The plaintiff purports to bring a class action allegedly arising
out of construction defects occurring during the development of
Camellia Island in Weston, which has approximately 150 homes.
Plaintiff has filed a fourteen count complaint seeking
unspecified general damages, special damages, statutory damages,
prejudgment and post-judgment interest, costs, attorneys' fees,
and such other relief as the court may deem just and proper.
Plaintiff complains, among other things, that:
(1) the homes were not built of high quality and adequate
construction,
(2) the homes were not built in conformity with the South
Florida Building Code and plans on file with Broward
County, Florida,
(3) the roofs were not properly attached or were
inadequate,
(4) the truss systems and installation were improper, and
(5) the homes suffer from improper shutter storm protection
systems.
ASCONI CORPORATION: Seeks Dismissal of FL Securities Fraud Suits
----------------------------------------------------------------
Asconi Corporation asked the United States District Court for
the Middle District of Florida to dismiss the securities class
actions filed against it and:
(1) Constantin Jitaru, its President, CEO and Chairman of
the Board, and
(2) Anatolie Sirbu, its CFO, Treasurer and Secretary
On April 16, 2004, one of the Company's shareholders filed a
class action complaint, styled "Maureen E. Alfred et al. vs.
Constantin Jitaru, Anatolie Sirbu and Asconi Corp, Case 04-CV-
534", alleging the defendants violated certain federal
securities laws.
The complaint, which seeks unspecified damages, alleges, among
other things, that the defendants made material
misrepresentations and omissions of material facts concerning
the Company's business performance and financial condition and
failed to disclose certain related party transactions, thereby
overstating the Company's financial condition during a period
from May 2003 to March 2004.
The complaint specifically cites the Company's March 23, 2004
press release in which the Company disclosed that it would be
restating its financial statements for the fiscal quarters ended
June 30, 2003 and September 30, 2003. The complaint alleges
violations of Section 10(b) of the Exchange Act, and Rule 10b-5
promulgated thereunder against all of the defendants, as well as
Section 20(a) violations against Mr. Jitaru and Mr. Sirbu.
Subsequent to the filing of the Alfred complaint, seven
additional complaints, which seek unspecified damages, were
filed, six of which are pending in the United States District
Court for the Middle District of Florida (one of the complaints
was voluntarily dismissed on July 14, 2004). These complaints
contain allegations that are substantially similar in nature to
those in the Alfred complaint, except that while the proposed
Class Period in the Alfred complaint is from May 15, 2003 to
March 23, 2004, the other complaints' proposed Class Period is
from June 11, 2001 to March 23, 2004. The Company has been
served with five of the lawsuits, one of which has been
voluntarily dismissed.
On June 15, 2004 the law firms of Milberg Weiss Bershad &
Schumlan LLP and Vianale & Vianale LLP, respectively, filed
motions for Consolidation, Appointment as Lead Plaintiffs and
Approval / Selection of Lead Counsel each on behalf of five
shareholders, to which the Company responded on June 28, 2004.
On July 2, 2004, the Court denied both Lead Plaintiff Motions.
Thereafter, Milberg Weiss filed a motion for reconsideration of
the Court's denial of its motion, and, on July 22, 2004 the
Court denied Milberg Weiss' motion for reconsideration. Milberg
Weiss then filed a renewed motion for reconsideration and the
Company filed its response. The Court has not yet ruled on
Milberg Weiss's renewed motion for reconsideration.
In addition, four shareholders derivative actions, which seek
unspecified damages, have been filed in the United States
District Court, Middle District of Florida, naming seven of the
Company's directors and certain executive officers as
defendants, and naming the Company as a nominal defendant. The
four shareholders derivatives suits allege, among other things,
breaches of fiduciary duty and other alleged common law
violations by such directors and officers. The shareholder
derivative actions contain allegations substantially similar to
the pending class actions, and claim that the Company has been
injured as a result of the pending class actions and the conduct
that is alleged in the pending class actions. Two of the
shareholders derivative suits have been served upon the Company.
The Court has directed that the Company respond to the two
shareholders derivative suits that have been served by August
17, 2004. The Company anticipates seeking dismissal of these
two shareholders derivative suits.
On August 5, 2004, the Court held a status conference in the
seven pending class actions. At the status conference, the
Court issued a schedule for briefing of the Company's four
pending motions to dismiss in the class action cases where the
complaint has been served on the Company. The Court directed
that plaintiffs in each of the four cases respond to the
Company's motion to dismiss within thirty (30) days, and the
Company has thirty (30) days thereafter to reply. The Court
also issued an Order to Show Cause in three of the class actions
where no counsel appeared at the Status Conference as to why
sanctions should not be imposed on plaintiffs in such cases for
failure of plaintiff's counsel to appear at the Status
Conference. On August 6, 2004, attorneys for plaintiff in one
of these three actions advised the Court that such plaintiff
wished to voluntarily discontinue such action.
BROKER-DEALERS: Seven Firms Pay $3.65M To Settle SEC Actions
------------------------------------------------------------
The Securities and Exchange Commission settled enforcement
actions against seven broker-dealers for failing to disclose
they had received payments for providing research coverage of
certain public companies, in violation of Section 17(b) of the
Securities Act of 1933. The seven firms are:
(1) Needham & Company, Inc. (Needham)
(2) Janney Montgomery Scott LLC (Janney)
(3) Morgan Keegan & Co., Inc. (Morgan Keegan)
(4) Prudential Equity Group, LLC f/k/a Prudential
Securities Inc. (Prudential Equity)
(5) Adams Harkness, Inc. f/k/a Adams Harkness & Hill, Inc.
(Adams Harkness)
(6) Friedman, Billings, Ramsey & Co., Inc. (Friedman
Billings)
(7) SG Cowen & Co., LLC f/k/a SG Cowen Securities
Corporation (SG Cowen).
The Commission found that during the period 1999 through 2002,
these firms received payments for research from other broker-
dealers that were underwriting securities offerings for certain
public, or soon-to-be public, companies. The underwriting
broker-dealers paid the firms to issue research or "cover" their
issuer clients. None of the firms disclosed in their published
research reports the receipt and amount of the payments, as
required by Section 17(b) of the Securities Act.
Antonia Chion, Associate Director of the Division of
Enforcement, said, "If a firm receives a payment, any portion of
which is for research, that firm must disclose the receipt and
amount of the payment when it publishes the research. Failure to
do so violates the securities laws and deprives investors of
information relating to the objectivity of the research."
In connection with the settlement, the SEC found that:
(i) During 1999 through 2001, Needham received four
payments ranging from $75,000 to $100,000 for issuing
research.
(ii) During 1999 and 2000, Janney received three payments
ranging from $23,800 to $50,000 for issuing research.
(iii) During 1999 through 2002, Morgan Keegan received three
payments ranging from $49,000 to $200,000 for issuing
research.
(iv) During 1999 and 2000, Adams Harkness received three
payments ranging from $25,000 to $200,000 for issuing
research.
(v) During 1999 through 2000, Prudential Equity received
three payments ranging from $50,000 to $200,000 for
issuing research.
(vi) In 2001, Friedman Billings and SG Cowen each received
one payment of $100,000 for issuing research.
Without admitting or denying the findings, the seven firms have
consented to orders finding that they willfully violated Section
17(b) of the Securities Act and ordering them to cease and
desist from committing any violations and any future violations
of Section 17(b).
In addition, the SEC fined four of the firms for willfully
violating the record-keeping requirements of Section 17(a) of
the Securities Exchange Act of 1934 and Rule 17a-4 thereunder,
for having failed to retain business-related internal e-mail
communications during the period July 1999 through June 2001.
Each of the four firms - Adams Harkness, Janney, Morgan Keegan,
and Needham - consented, without admitting or denying the
findings, to a cease-and-desist order. The firms also have
consented to undertakings to ensure that they are in compliance
with the record-keeping requirements of Section 17(a) and Rule
17a-4 of the Exchange Act.
Pursuant to the enforcement actions, the seven firms will pay
penalties totaling $3,650,000. Following is a chart detailing
the penalties paid by each firm:
Firm; Penalty
Janney; $875,000
Morgan Keegan; $875,000
Needham; $700,000
Adams Harkness; $575,000
Prudential Equity; $375,000
Friedman Billings; $125,000
SG Cowen; $125,000
===========================
Total; $3,650,000
CINTAS CORPORATION: CA Court Orders Arbitration For ERISA Suit
--------------------------------------------------------------
The United States District Court for the Northern District of
California, Oakland Division ordered arbitration for all
potential plaintiffs except for those that fall into one of four
narrowly defined exceptions in the class action filed against
Cintas Corporation, styled "Paul Veliz, et al., v. Cintas
Corporation."
The suit alleges that the Company violated certain federal and
state wage and hour laws applicable to its service sales
representatives, whom the Company considers exempt employees,
and asserting additional related Employee Retirement Income
Security Act (ERISA) claims. The plaintiffs are seeking
unspecified monetary damages, injunctive relief, or both.
As a result of the order, the Company believes that a majority
of the potential plaintiffs will be required to arbitrate their
claims. No determination has been made by the court or an
arbitrator regarding class certification.
CINTAS CORPORATION: Employees Launch Race Bias Suit in N.D. CA
--------------------------------------------------------------
Cintas Corporation faces a class action filed in the United
States District Court for the Northern District of California,
San Francisco Division, styled "Robert Ramirez, et al., v.
Cintas Corporation."
The case was brought on behalf of all past and present female,
African-American and Hispanic employees of the Company and its
subsidiaries. The complaint alleges that the Company has
engaged in a pattern and practice of discriminating against
women and minorities in recruitment, hiring, promotions,
transfers, job assignments and pay. The complaint seeks
injunctive relief, compensatory damages, punitive damages and
attorney's fees, among other things.
COMMUNITY BANKSHARE: Consumers Lodge Securities Fraud Suit in GA
----------------------------------------------------------------
Community Bankshare, Inc. faces a class action filed in the
United States District Court for the Middle District of Georgia,
on behalf of owners of self-directed individual retirement
accounts at the Company's Georgia bank subsidiary that included
investments in securities issued by Stewart Finance Company,
National Finance Company or D& E Acquisitions, Inc.
These issuing companies are bankrupt and have defaulted on the
securities. The plaintiff claims that the Company aided and
abetted and conspired with the issuing companies in issuing
unregistered securities, committing acts in violation of the
Georgia racketeering statute and in committing common law fraud.
Although the plaintiff has not made a specific claim for
damages, he is claiming that the proposed class is entitled to
the amount of the lost investment in the securities and treble
and punitive damages.
CUTTER & BUCK: SEC Files Fraud Suit V. Ex-Controller Athena Diaz
----------------------------------------------------------------
The Securities and Exchange Commission filed fraud charges
against Athena Diaz, the former controller of Cutter & Buck
Inc., a sportswear company based in Seattle, Washington. The
Commission's complaint alleges that Diaz assisted in a scheme by
Cutter's management to fraudulently inflate its financial
results for the fiscal quarter and year ended April 30, 2000.
Diaz assisted in the scheme by allowing the improper revenue
recognition of $5.7 million in shipments to distributors
functioning as Company warehouses and concealing the improper
transactions from the Company's auditors and shareholders.
Simultaneously with the filing of the complaint, Diaz agreed to
settle the charges without admitting or denying the Commission's
allegations, consenting to orders permanently enjoining her from
violations of the antifraud and other provisions of the federal
securities laws.
The Commission's complaint, filed in the U.S. District Court for
the Western District of Washington, alleges that Cutter was
encountering declining sales as it approached the final days of
its fiscal year ended April 30, 2000. In late April, a vice
president of sales negotiated deals with three distributors
under which Cutter would ship them a total of $5.7 million in
products, where they had no obligation to pay for any of the
goods until customers located by Cutter paid the distributors.
Because of Cutter's ongoing obligation to complete the sales,
revenue recognition was improper under generally accepted
accounting principles (known as "GAAP"). In press releases and
in filings with the Commission that were distributed to the
public, Cutter announced revenue of $54.6 million for the fourth
quarter of Fiscal 2000 and $152.5 million for the entire fiscal
year. However, because these figures included $5.7 million in
improperly recognized revenue on the distributor sales, they
overstated Cutter's true quarterly and annual revenue by 12% and
4%, respectively.
The complaint also charges that Diaz, age 47, of Seattle,
Washington, knew or was reckless in not knowing that these
distributors were operating as Cutter warehouses and that
revenue recognition had been improper. Rather than take steps to
ensure that revenue was not recognized, Diaz sought to conceal
the agreements by hiding the distributor invoices from the
Company's auditors. Diaz also divided product returns among
multiple company sales divisions in order to hide the magnitude
of the returns, knowing that this was improper.
Diaz was terminated by the Company in August 2002. On Aug. 12,
2002, Cutter, which had undergone a change in management,
announced that it would restate its financial statements for
fiscal years 2000 and 2001 as a result of the improper
distributor transactions. The announcement caused Cutter's stock
price to drop from $4.02 to $3.44, or 14%, the following day.
The complaint charges Diaz with aiding and abetting securities
fraud (Section 10(b) of the Securities Exchange Act of 1934
(Exchange Act) and Rule 10b-5 thereunder), aiding and abetting
Cutter's reporting of false financial information to the
Commission (Section 13(a) of the Exchange Act and Rules 12b-20
and 13a-1) and aiding and abetting Cutter's failure to maintain
accurate books and records and internal controls (Sections
13(b)(2)(A) and 13(b)(2)(B) of the Exchange Act). The complaint
additionally charges Diaz with lying to accountants (Rule 13b2-2
under the Exchange Act) and falsifying the company's books and
records (Section 13(b)(5) of the Exchange Act and Rule 13b2-1
thereunder). The action is titled, SEC v. Athena Diaz, USDC, WD
Washington, Seattle Division, Civil Action No. CV 04-1837 Zilly
(LR-18848; AAE Rel. 2087)
ENRON CORPORATION: Ex-EVP Settles Charges, To Pay 1.49M Fine
------------------------------------------------------------
The Securities and Exchange Commission charged Mark E. Koenig, a
former Executive Vice-President and Director of Investor
Relations at Enron Corp., with violating the antifraud
provisions of the federal securities laws. Without admitting or
denying the allegations of the Complaint, Koenig has agreed to
be enjoined permanently from violating Section 10(b) of the
Securities Exchange Act of 1934 and Exchange Act Rule 10b-5, and
to be barred from acting as an officer or director of a public
company. As part of the settlement agreement, which is subject
to the approval of the U.S. District Court, Koenig will pay
disgorgement and a civil penalty totaling $1,493,572. The
Commission brought this action in coordination with the U.S.
Department of Justice Enron Task Force, which filed a related
criminal charge against Koenig. Koenig agreed to enter into a
guilty plea in connection with that charge and to cooperate with
the government's continuing investigation.
As alleged in the Complaint, Koenig participated in a scheme to
defraud in violation of the federal securities laws when he
disseminated, and approved the dissemination of, false and
misleading information to the public about Enron's business in
earnings releases and analyst calls.
Specifically, the Commission's Complaint alleges that in his
role as Executive Vice-President and Director of Investor
Relations, Koenig was responsible for drafting and preparing
portions of Enron's earnings releases and analyst call scripts.
Koenig reviewed and edited Enron's First, Second and Third
Quarter 2001 earnings releases, and scripts for the March 23,
2001 Analyst Call and the First, Second and Third Quarter 2001
Analyst Calls. During his efforts, Koenig learned specific
information about Enron's retail energy business unit, Enron
Energy Service (EES), and its telecommunications business unit,
Enron Broadband Services (EBS), revealing that EES and EBS were
not the successful business units described in the earnings
releases and scripts, and as described by Enron in the analyst
calls. Nevertheless, Koenig did not correct the false and
misleading information provided to analysts and investors in the
earnings releases and analyst calls, and affirmatively made
false and misleading statements about these two businesses
during the calls.
The Commission's investigation is continuing. The action is
titled, SEC v. Mark E. Koenig, Civil Action No. H-04-33670,
SDTX] (LR-18849; AAE Rel. 2088).
FLORIDA: SEC Launches Administrative Proceedings V. Residents
-------------------------------------------------------------
The Securities and Exchange Commission instituted a public
administrative proceeding against Matthew Brenner and Darren
Silverman, and issued an Order Instituting Administrative
Proceedings Pursuant to Section 15(b) of the Securities Exchange
Act of 1934 and Section 203(f) of the Investment Advisers Act of
1940, Making Findings, and Imposing Remedial Sanctions as to
Matthew Brenner and Darren Silverman (the Order). The Commission
based the Order on the entry of injunctions against Brenner and
Silverman in a lawsuit it filed in the United States District
Court for the Southern District of Florida on February 19, 2004.
Brenner, age 31, resides in Boca Raton, Florida, and Silverman,
age 32, resides in Coral Springs, Florida. Simultaneously with
the Commission instituting its proceeding, Brenner and Silverman
submitted Offers of Settlement in which, while neither admitting
nor denying the Commission's findings, Brenner and Silverman
consented to the entry of the Order, which bars them from
association with any investment adviser, broker, or dealer.
In the Order, Brenner and Silverman admit that the U.S. District
Court entered injunctions against them in SEC v. Darren
Silverman and Matthew Brenner, Case No. 04-80153-Civ-Cohn/Snow
(S.D. Fla.). The U.S. District Court based the injunctions on
the Commission's District Court complaint, which alleged that,
in connection with the sale of shares in several hedge funds,
the merger of those hedge funds, and the later merger of the
hedge funds' successor entity with another company, Brenner and
Silverman deceived individuals into investing in those funds
through, among other things, misrepresenting the return on those
investments, the risks of those investments, and whether
investors could oppose proposed mergers. The complaint also
alleged that Brenner and Silverman engaged in a variety of other
conduct that operated as a fraud and deceit on investors and
sold unregistered securities.
The U.S. District Court's judgment by consent against Brenner
and Silverman, permanently enjoins them from serving as officers
or directors of public companies and from violating Sections
5(a), 5(c) and 17(a) of the Securities Act of 1933, Section 10b
of the Securities Exchange Act of 1934 and its implementing Rule
10b-5, and Sections 206(1) and 206(2) of the Investment Advisers
Act.
G & L REALTY: Reaches Settlement For Securities Fraud Lawsuits
--------------------------------------------------------------
G & L Realty Corporation reached a settlement for the securities
class actions filed against it and its directors in California
and Maryland courts. The suits arose out of the proposal by
Daniel M. Gottlieb, the Chief Executive Officer of the Company,
and Steven D. Lebowitz, the President of the Company, to acquire
all of the outstanding shares of the Company's common stock not
then owned by them.
The first suit, "Lukoff v. G & L Realty Corp. et al., case
number BC 241251," was filed in the Superior Court for the State
of California, County of Los Angeles, on December 4, 2000. A
second suit, "Abrons v. G & L Realty Corp. et al., case number
24-C-00-006109," was filed in the Circuit Court for Baltimore
City, Maryland, on December 14, 2000. This suit was voluntarily
dismissed without prejudice on June 7, 2001, and re-filed in the
Superior Court for the State of California, County of Los
Angeles, case number BC 251479, on May 31, 2001.
"Morse v. G & L Realty Corp. et al.," case number 221719-V, was
filed in the Circuit Court for Montgomery County, Maryland, on
May 17, 2001. Another suit, "Harbor Finance Partners v. Daniel
M. Gottlieb et al., case number BC 251593," was filed in the
Superior Court for the State of California, County of Los
Angeles, on June 1, 2001.
All these actions assert claims for breach of fiduciary duty and
seek compensatory damages and other relief. The Lukoff, Abrons
and Harbor Finance actions have been consolidated for all
purposes, with Lukoff designated as the lead action. The Morse
action has been stayed pending the conclusion of the California
class actions.
In addition, on April 4, 2002, a group of four former common
stockholders of the Company filed an individual suit against the
Company and its directors arising from the same conduct alleged
in the putative class actions and the merger proposals made by
those four stockholders in 2001. The suit, styled "Lyle
Weisman, et al. v. G & L Realty Corp., et al., case number BC
271401," pending in the Superior Court of California, County of
Los Angeles, asserts claims against the individual directors for
breach of fiduciary duty, fraud and violations of the California
Corporations Code, sections 25400-25403 and 25500-25502. The
fourth amended complaint also asserts a claim for unjust
enrichment against Mr. Gottlieb and Mr. Lebowitz and a claim for
unfair competition under Business and Professions Code sections
17200 et seq. against Mr. Gottlieb and Mr. Lebowitz and the
Company. The Court previously dismissed with prejudice
Plaintiffs' claims for negligent and intentional interference
with prospective economic advantage.
On January 17, 2003, the Company, Mr. Gottlieb and Mr. Lebowitz
jointly filed a cross-complaint against the Weisman plaintiffs
alleging that their acquisition proposals were made with no real
intent to acquire the Company, but simply to disrupt the
Company's existing merger agreement with Mr. Gottlieb and
Mr. Lebowitz. The cross-complaint asserts causes of action for,
among other things, intentional interference with contract,
intentional interference with prospective economic advantage,
and fraud.
The Weisman suit has been consolidated with the Lukoff class
actions for purposes of discovery. The Company and the
director defendants have reached a preliminary settlement of the
California class actions providing for a class settlement and
release of claims and entry of judgment dismissing the action
with prejudice. The Company and its directors have also reached
a preliminary settlement of the Weisman suit also providing for
a release of claims and entry of judgment dismissing the action
with prejudice. The total payment in settlement of these suits
would be $1.25 million, of which approximately $1 million would
be paid from insurance. The class settlement would be subject
to court approval, and it is contemplated under the preliminary
agreement that the settlement of the Weisman suit would be
conditioned on obtaining court approval for the class
settlement.
GLS CAPITAL: Some Issues in PA Taxpayer Lawsuit Placed On Hold
--------------------------------------------------------------
The issues in the taxpayers' class action filed against GLS
Capital, Inc. and the County of Allegheny, Pennsylvania remanded
to the Pennsylvania state court are currently on hold.
The suit, filed in the Commonwealth Court of Pennsylvania, the
appellate court of the state of Pennsylvania, was filed by two
local businesses seeking status to represent as a class,
delinquent taxpayers in Allegheny County whose delinquent tax
liens had been assigned to the Company.
Plaintiffs challenged the right of Allegheny County and GLS to
collect certain interest, costs and expenses related to
delinquent property tax receivables in Allegheny County, and
whether the County had the right to assign the delinquent
property tax receivables to GLS and therefore employ procedures
for collection enjoyed by Allegheny County under state statute.
This lawsuit was related to the purchase by GLS of delinquent
property tax receivables from Allegheny County in 1997, 1998,
and 1999. In July 2001, the Commonwealth Court issued a ruling
that addressed, among other things:
(1) the right of GLS to charge to the delinquent taxpayer a
rate of interest of 12% per annum versus 10% per annum
on the collection of its delinquent property tax
receivables,
(2) the charging of a full month's interest on a partial
month's delinquency;
(3) the charging of attorney's fees to the delinquent
taxpayer for the collection of such tax receivables,
and
(4) the charging to the delinquent taxpayer of certain
other fees and costs
The Commonwealth Court in its opinion remanded for further
consideration to the lower trial court items (1), (2) and (4)
above, and ruled that neither Allegheny County nor GLS had the
right to charge attorney's fees to the delinquent taxpayer
related to the collection of such tax receivables. The
Commonwealth Court further ruled that Allegheny County could
assign its rights in the delinquent property tax receivables to
GLS, and that plaintiffs could maintain equitable class in the
action.
In October 2001, GLS, along with Allegheny County, filed an
Application for Extraordinary Jurisdiction with the Supreme
Court of Pennsylvania, Western District appealing certain
aspects of the Commonwealth Court's ruling. In March 2003, the
Supreme Court issued its opinion as follows:
(i) the Supreme Court determined that GLS can charge
delinquent taxpayers a rate of 12% per annum;
(ii) the Supreme Court remanded back to the lower trial
court the charging of a full month's interest on a
partial month's delinquency;
(iii) the Supreme Court revised the Commonwealth Court's
ruling regarding recouping attorney fees for collection
of the receivables indicating that the recoupment of
fees requires a judicial review of collection
procedures used in each case; and
(iv) the Supreme Court upheld the Commonwealth Court's
ruling that GLS can charge certain fees and costs,
while remanding back to the lower trial court for
consideration the facts of each individual case.
Finally, the Supreme Court remanded to the lower trial court to
determine if the remaining claims can be resolved as a class
action. In August 2003, the Pennsylvania legislature signed a
bill amending and clarifying certain provisions of the
Pennsylvania statute governing GLS' right to the collection of
certain interest, costs and expenses. The law is retroactive to
1996, and amends and clarifies that as to items (ii)-(iv) noted
above by the Supreme Court, that GLS can charge a full month's
interest on a partial month's delinquency, that GLS can charge
the taxpayer for legal fees, and that GLS can charge certain
fees and costs to the taxpayer at redemption. The issues
remanded back to the Trial Court are currently on hold as the
Court addresses the challenge made to the retroactive components
of the legislation.
The test case being used to decide this issue is one that is
unrelated to GLS. Specific damages related to the issues
remanded back to the Trial Court have not been determined.
HANGER ORTHOPEDIC: Shareholders Launch Fraud Lawsuits in VA, NY
---------------------------------------------------------------
Hanger Orthopedic Group, Inc. and certain of its executive
officers and directors face substantially similar class actions
filed on behalf of certain shareholders of the Company in the
U.S. District Court for the Eastern District of New York and the
U.S. District Court for the Eastern District of Virginia.
A suit captioned "Twist Partners vs. Hanger Orthopedic Group,
Inc., Thomas F. Kirk, George E. McHenry and Ivan R. Sabel, (Case
No. CV 04 2585)" was filed on June 22, 2004 in the U.S. District
Court for the Eastern District of New York. Mr. Kirk is
President and a director of the Company, Mr. McHenry is Chief
Financial Officer of the Company and Mr. Sabel is the Chairman
of the Board and Chief Executive Officer of the Company.
The complaint alleges that throughout the class period (July 29,
2003 through June 14, 2004), the defendants engaged in "an
illegal scheme to bill the Medicaid and Medicare programs, the
Veterans Administration and private insurers," and alleges that
the improperly booked sales artificially inflated the Company's
reported revenues and earnings. The complaint also alleges that
the defendants were motivated to engage in the fraud so that the
Company's insiders could effect sales of their shares of the
Company's common stock at artificially inflated prices, citing
the sale of a total of 120,270 shares for total proceeds of
$1,931,198.
The suit alleges violations of the anti-fraud provision
contained in Section 10(b) of the Securities Exchange Act of
1934 and Rule 10b-5 thereunder, and asserts violations of
Section 20(a) against the individual defendants as controlling
persons. The suit seeks an unspecified amount of compensatory
damages against all defendants, jointly and severally for all
damages sustained, including interest thereon, as well as
reasonable costs and expenses incurred, including counsel and
expert fees.
Three substantially identical suits, captioned "Robert
Imperato vs. Hanger Orthopedic Group, Inc., Ivan R. Sabel,
Thomas Kirk, and George E. McHenry (Civil Action No. CV 04
2736)," "Kenneth Walters vs. Hanger Orthopedic Group, Inc.,
Thomas F. Kirk, George E. McHenry, and Ivan R. Sabel (Civil
Action No. CV 04 2826)," and "Adam Shapiro vs. Hanger Orthopedic
Group, Inc., Ivan R. Sabel and George E. McHenry (Case CV 04
2681)," were filed on June 29, 2004, July 6, 2004 and June 28,
2004, respectively, in the U.S. District Court for the Eastern
District of New York.
A suit captioned "Curt Browne vs. Hanger Orthopedic Group, Inc.,
Ronald N. May, Thomas P. Cooper, Jason P. Owen, Ivan R. Sabel,
Richard J. Taylor, George E. McHenry, Glenn M. Lohrmann and Risa
J. Lavizzo-Mourey, (Case No. 1:04 cv 715)," was filed in the
U.S. District Court for the Eastern District of Virginia on June
23, 2004. Mr. May is the President of Southern Prosthetic
Supply (the Company's distribution division), Mr. Cooper is a
director of the Company, Mr. Owen is Treasurer of the Company,
Mr. Taylor is Executive Vice President of the Company, Mr.
Lohrmann is Vice President and Secretary of the Company and Ms.
Lavizzo-Mourey is a former director of the Company.
The complaint's allegations are substantially similar to those
set forth in the above-referenced action and specifies a class
period of February 26, 2003 through June 14, 2004. The
complaint alleges sales by the individual defendants of a total
of 167,270 shares for total proceeds of $2.4 million. The
complaint seeks damages in an unspecified amount, including
interest, and reasonable costs, including attorneys' fees.
ILX RESORTS: Discovery Commences in Unfair Trade Practices Suit
---------------------------------------------------------------
Discovery has commenced in the class action filed against ILX
Resorts, Inc. and its Sedona Vacation Club and Premiere Vacation
Club businesses by two individuals claiming damages for
deceptive and abusive practices on behalf of a purported class
of purchasers of vacation ownership interests. The suit was
filed in Arizona state court
The Company, Sedona Vacation Club and Premiere Vacation Club
received amended complaints in May and June 2004. In both
instances, named plaintiffs were added and deleted. The amended
complaints are considerably more narrow in scope than the
initial complaint. The suit alleges claims for breach of the
Arizona Consumer Fraud Act, the Arizona Real Estate Timeshare
Act, breach of contract and unjust enrichment. Plaintiffs seek
to have their claims certified for class action treatment.
The Company responded to the complaint, asserted counterclaims
and filed certain motions in May 2004 and filed a disclosure
statement in July 2004.
METRETEK TECHNOLOGIES: Reaches Settlement For CO Investor Suit
--------------------------------------------------------------
The settlement of the class action filed against Metretek
Technologies, Inc. has become effective after it was granted
approval by the District Court for the City and County of
Denver, Colorado in June 2004.
In January 2001, Douglas W. Heins, individually and on behalf of
a class of other persons similarly situated, filed a complaint
against the Company and:
(1) Marcum Midstream 1997-1 Business Trust (the "1997
Trust"),
(2) Marcum Midstream-Farstad, LLC ("MMF"),
(3) Marcum Gas Transmission, Inc. (MGT),
(4) Marcum Capital Resources, Inc. ("MCR"),
(5) W. Phillip Marcum,
(6) Richard M. Wanger and
(7) Daniel J. Packard
The foregoing, collectively, are designated as the "Metretek
Defendants." The suit also names as defendants Farstad Gas &
Oil, LLC ("Farstad LLC") and Farstad Oil, Inc. ("Farstad Inc."
and, collectively with Farstad LLC, the "Farstad Entities"), and
Jeff Farstad ("Farstad" and, collectively with the Farstad
Entities, the "Farstad Defendants").
On March 27, 2003, the Company, along with the Class Action
Plaintiff, filed a Stipulation of Settlement, which contains the
terms and conditions of a proposed settlement intended to fully
resolve all claims by the Class Action Plaintiff against the
Company and the other Metretek Defendants in the Class Action.
On March 2, 2004, the Company and the Class Action Plaintiff
filed a revised Stipulation of Settlement, which revises certain
terms of the settlement (as revised, the "Heins Settlement").
The Heins Settlement was granted final approval by the Denver
Court on June 11, 2004 and became effective on July 26, 2004.
The Heins Settlement creates a settlement fund (the "Heins
Settlement Fund") for the benefit of the Class. In settlement
of the Interpleader Action discussed below, $2,375,000 in
proceeds of the Company's directors' and officers' insurance
policy (the "Policy") was used in the Heins Settlement.
Pursuant to the Heins Settlement, the Company has paid $375,000,
and has issued a note payable to the Heins Settlement Fund in
the amount of $3.0 million (the "Heins Settlement Note"), and
commenced payments thereunder on June 30, 2004. The Heins
Settlement Note bears interest at the rate of prime plus three
percent (prime + 3%), payable in 16 quarterly installments, each
of $187,500 principal plus accrued interest, and is guaranteed
by the 1997 Trust and all of the Company's subsidiaries.
On March 28, 2003, Gulf Insurance Company ("Gulf"), who issued
the Policy, filed an interpleader complaint against the Metretek
Defendants, the Farstad Defendants and the Class Action
Plaintiff (the "Interpleader Action") in the Denver Court,
seeking a determination by the Denver Court as to the proper
beneficiaries of the Policy.
In March 2004, the Company settled the Interpleader Action with
Gulf and the Farstad Defendants (the "Interpleader Settlement").
Pursuant to the terms of the Interpleader Settlement, Gulf paid
$2,375,000 for use in the Heins Settlement, and has paid the
remainder of the Policy proceeds to the Farstad Defendants. In
exchange, the Company and the Farstad Defendants have fully
released Gulf from all further claims under the Policy. The
Interpleader Action was dismissed on April 2, 2004.
MONY LIFE: Continues To Face Suits For Deceptive Sales Practices
----------------------------------------------------------------
MONY Life Insurance Company and MONY Life Insurance Company of
America continue to face litigation in various state and federal
courts alleging that they engaged in deceptive sales practices
in connection with the sale of whole and universal life
insurance policies from the early 1980s through the mid 1990s.
Although the claims asserted in each case are not identical,
they seek substantially the same relief under essentially the
same theories of recovery (i.e., breach of contract, fraud,
negligent misrepresentation, negligent supervision and training,
breach of fiduciary duty, unjust enrichment and violation of
state insurance and/or deceptive business practice laws).
Plaintiffs in these cases seek primarily equitable relief (e.g.,
reformation, specific performance, mandatory injunctive relief
prohibiting MONY Life and MLOA from canceling policies for
failure to make required premium payments, imposition of a
constructive trust and creation of a claims resolution facility
to adjudicate any individual issues remaining after resolution
of all class-wide issues) as opposed to compensatory damages,
although they also seek compensatory damages in unspecified
amounts. MONY Life and MLOA have answered the complaints in each
action (except for one being voluntarily held in abeyance).
On June 7, 1996, the New York State Supreme Court certified one
of those cases, Goshen v. The Mutual Life Insurance Company of
New York and MONY Life Insurance Company of America (now known
as DeFilippo, et al v. The Mutual Life Insurance Company of New
York and MONY Life Insurance Company of America), the first of
the class actions filed, as a nationwide class consisting of all
persons or entities who have, or at the time of the policy's
termination had, an ownership interest in a whole or universal
life insurance policy issued by MONY Life and MLOA and sold on
an alleged "vanishing premium" basis during the period January
1, 1982 to December 31, 1995. On March 27, 1997, MONY Life and
MLOA filed a motion to dismiss or, alternatively, for summary
judgment on all counts of the complaint.
All of the other putative class actions have been consolidated
and transferred by the Judicial Panel on Multidistrict
Litigation to the United States District Court for the District
of Massachusetts. While most of the cases before the District
Court have been held in abeyance pending the outcome in Goshen,
in June 2003, the Court granted plaintiffs in two of the
constituent cases (the McLean and Snipes cases) leave to amend
their complaints to delete all class action claims and
allegations other than (in the case of McLean) those predicated
on alleged violations of the Massachusetts and Illinois consumer
protection statutes.
On November 19, 2003, the Court in McLean entered an order
granting defendants' motion for summary judgment on res judicata
grounds as to the individual claims of the proposed class
representatives of the putative statewide class comprised of
Massachusetts purchasers, but denied defendants' motion for
summary judgment on statute of limitations grounds as to the
individual claims of the proposed class representatives of the
putative state-wide class of Illinois purchasers only.
On October 21, 1997, the New York State Supreme Court granted
MONY Life's and MLOA's motion for summary judgment and dismissed
all claims filed in the Goshen case against MONY Life and MLOA.
On December 20, 1999, the New York State Court of Appeals
affirmed the dismissal of all but one of the claims in the
Goshen case (a claim under New York's General Business Law),
which has been remanded back to the New York State Supreme Court
for further proceedings consistent with the opinion. The New
York State Supreme Court subsequently reaffirmed that, for
purposes of the remaining New York General Business Law claim,
the class is now limited to New York purchasers only.
On July 2, 2002, the New York Court of Appeals affirmed the New
York State Supreme Court's decision limiting the class to New
York purchasers. In addition, the New York State Supreme Court
has further held that the New York General Business Law claims
of all class members whose claims accrued prior to November 29,
1992 are barred by the applicable statute of limitations. On
September 25, 2002 in light of the New York Court of Appeals'
decision, MONY Life and MLOA filed a motion to decertify the
class with respect to the sole remaining claim in the case.
By orders dated April 16, and May 6, 2003, the New York State
Supreme Court denied preliminarily the motion for
decertification, but held the issue of decertification in
abeyance pending appeals by plaintiffs in related cases and
a hearing on whether the present class, or a modified class, can
satisfy the requirements of the class action statute in New
York. MONY Life and MLOA have appealed from the denial of their
motion for decertification, which appeal is presently pending in
the Appellate Division, First Department.
MONY LIFE: Suit Fairness Hearing Set September 2004 in DE Court
---------------------------------------------------------------
Final fairness hearing for the settlement of the consolidated
securities class action filed against The MONY Group, Inc. is
set for September 28, 2004 in the Court of Chancery of the State
of Delaware.
Between September 22 and October 8, 2003, ten substantially
similar putative class action lawsuits were filed against the
Company, its directors, AXA Financial and/or AIMA Delaware,
styled:
(1) Beakovitz v. AXA Financial, Inc., et al., C.A. No.
20559-NC (September 22, 2003);
(2) Belodoff v. The MONY Group Inc., et al., C.A. No. 20558-
NC (September 22, 2003);
(3) Brian v. The MONY Group Inc., et al., C.A. No. 20567-NC
(September 23, 2003);
(4) Bricklayers Local 8 and Plasterers Local 233 Pension
Fund v. The MONY Group Inc., et al., C.A. No. 20599-NC
(October 8, 2003);
(5) Cantor v. The MONY Group Inc., et al., C.A. No. 20556-
NC (September 22, 2003);
(6) E.M. Capital, Inc. v. The MONY Group Inc., et al., C.A.
No. 20554-NC (September 22, 2003);
(7) Garrett v. The MONY Group Inc., et al., C.A. No. 20577-
NC (September 25, 2003);
(8) Lebedda v. The MONY Group Inc., et al., C.A. No. 20590-
NC (October 3, 2003);
(9) Martin v. Roth, et al., C.A. No. 20555-NC (September
22, 2003); and
(10) Muskal v. The MONY Group Inc., et al., C.A. No. 20557-
NC (September 22, 2003)
By order dated November 4, 2003, Vice Chancellor Stephen P.
Lamb, to whom the cases had been assigned, consolidated all ten
actions under the caption "In re The MONY Group Inc.,
Shareholders Litigation, Consolidated C.A. No. 20554-NC," and
ordered plaintiffs to file a consolidated amended complaint.
On November 5, 2003, plaintiffs filed a Consolidated Class
Action Complaint on behalf of a putative class consisting of all
MONY Group stockholders, excluding the defendants and their
affiliates. The consolidated complaint alleges that the $31.00
cash price per share to be paid to MONY Group stockholders in
connection with the proposed merger is inadequate and that MONY
Group's directors breached their fiduciary duties in negotiating
and approving the merger agreement by, among other things:
(i) failing to maximize stockholder value,
(ii) improperly diverting merger consideration from MONY
Group's stockholders to MONY Group's management by
amending and extending management's change-in-control
agreements,
(iii) failing to comply with Delaware law in determining the
"fair value" of MONY Group's stock and
(iv) disseminating incomplete and inaccurate information
regarding the proposed merger.
The consolidated amended complaint alleges that AXA Financial
and AIMA aided and abetted the alleged breaches of fiduciary
duty by MONY Group and its directors. The complaint seeks
various forms of relief, including damages and injunctive
relief that would, if granted in its entirety, prevent
completion of the merger.
In addition, MONY Group, its directors and AXA Financial have
been named in two putative class action lawsuits filed in New
York State Supreme Court in Manhattan, entitled "Laufer v. The
MONY Group, et al., Civ. No. 602957-2003 (September 19, 2003)"
and "North Border Investments v. Barrett, et al., Civ. No.
602984-2003 (Sept. 22, 2003)."
The complaints in these actions contain allegations
substantially similar to those in the original consolidated
complaint in the Delaware cases, and likewise purport to assert
claims against MONY Group and its directors for breach of
fiduciary duty and against AXA Financial for aiding and abetting
a breach of fiduciary duty. The "Laufer" and "North Border"
complaints also seek various forms of relief, including damages
and injunctive relief that would, if granted, prevent the
completion of the merger.
On January 16, 2004, after the filing and mailing of the
definitive proxy statement on January 8, 2004, the Delaware
plaintiffs sought and were granted leave to further amend their
complaint to include additional allegations relating to the
accuracy and/or completeness of information provided by MONY
Group in such proxy statement. Thereafter, the Delaware
plaintiffs requested a hearing on their motion for a preliminary
injunction to enjoin the stockholder vote, which had been
scheduled to occur at the special meeting on February 24, 2004.
A hearing on the Delaware plaintiffs' motion for a preliminary
injunction was held on February 13, 2004. By order dated March
1, 2004, and an opinion released on February 17, 2004, Vice
Chancellor Lamb granted the Delaware plaintiffs' motion to the
limited extent of enjoining MONY Group from taking any action in
furtherance of the stockholder vote until MONY Group provides
supplemental disclosure to its stockholders relating to the
amount of the benefits that the MONY Group executives would
receive under the change-in-control agreements relative to the
18 other transactions as to which the independent directors and
their advisors had been provided information by E&Y. Vice
Chancellor Lamb otherwise rejected the Delaware plaintiffs'
arguments in support of an injunction based on the directors'
purported breach of fiduciary duty, the associated aiding and
abetting claims and the Delaware plaintiffs' other disclosure
claims.
On March 9, 2004, the Delaware plaintiffs filed a second amended
complaint which included, among other things, allegations that:
(a) the MONY Group board of directors' decision to
reschedule the special meeting and set a new record
date reflects an attempt by MONY Group to manipulate
the vote by disenfranchising its long-term
stockholders,
(b) MONY Group selectively communicated its intent to c
change the record date to certain investors so as to
enable them to acquire voting power prior to the public
announcement of the new record date,
(c) the press release issued in connection with the board's
decision to reschedule the meeting and record dates was
materially false and misleading in that it failed to
disclose and/or misrepresented the manipulation of the
voting process and the true reason for the changing of
such dates and
(d) the rescheduling of the meeting and record dates
constitutes a breach of fiduciary duty by the MONY
Group defendants.
The second amended complaint seeks an order directing that MONY
Group reinstate the record date of January 2, 2004 or,
alternatively, denying voting power with respect to MONY Group
shares allegedly purchased with knowledge of the prospect of a
new record date. The Delaware plaintiffs thereafter moved for a
second preliminary injunction seeking, among other things, to
prohibit MONY Group from voting proxies previously submitted by
MONY Group stockholders in connection with the February 24, 2004
meeting that are not subsequently revoked and to require all
stockholders of record as of April 8, 2004 to submit new
proxies. A hearing on the Delaware plaintiffs' second motion
for a preliminary injunction motion was held on April 6, 2004.
By opinion released on April 9, 2004, Vice Chancellor Lamb
denied the Delaware plaintiffs' motion for a preliminary
injunction in its entirety, held that the MONY Group board's
determination to change the record date from January 2, 2004 to
April 8, 2004 was a valid exercise of the board's judgment and
entered summary judgment in favor of MONY Group with respect to
the legal validity of voting at the May 18, 2004 meeting
unrevoked proxies previously submitted by MONY Group
stockholders in connection with the February 24, 2004 meeting
date. Vice Chancellor Lamb noted that there was no factual
record to evaluate the Delaware plaintiffs' equitable claims
against the validity of voting at the May 18, 2004 meeting of
the unrevoked proxies previously submitted by MONY Group
stockholders in connection with the February 24, 2004 meeting
date and that he therefore was not ruling on those claims.
A stipulation of settlement contemplating the dismissal of the
action with prejudice as to all defendants was executed and
filed with the Delaware Chancery Court on July 13, 2004. The
terms of the proposed settlement consist entirely of non-
monetary consideration and an agreement by the defendants not to
oppose plaintiffs' application for attorneys' fees up to a
specified amount, which amount would not have a material impact
on the financial condition of the Company. On July 19, 2004,
the Delaware Chancery Court entered an order, among other
things, certifying a class for settlement purposes only and
scheduling a hearing on the fairness of the proposed settlement
for September 28, 2004 at 2:00 p.m.
MOTOROLA INC.: IL Judge Denies Request To Dismiss Holders' Suit
---------------------------------------------------------------
U.S. District Judge Rebecca Pallmeyer in Chicago has denied
Motorola Inc.'s motion to dismiss a class action lawsuit filed
in January 2003 that accuses it's executives of fraudulently
inflating the company's stock by releasing misleading
information about its dealings with a Turkish telecom company,
the Chicago Tribune reports.
The judge however, dismissed without prejudice the suit's claims
against three top Motorola executives including former Chief
Executive Officer Christopher Galvin.
In a ruling recently upheld by a U.S. Court of Appeals in New
York, Motorola and Finland's Nokia were victims of a "huge
fraud" by five members of Turkey's wealthy Uzan family.
Currently Motorola is still trying to recover more than $2
billion in loans to five members of Turkey's wealthy Uzan family
for equipment to build Turkey's second-biggest mobile phone
network, operated by Telsim Mobil Telekomunikasyon Hizmetleri, a
Turkish telecom company.
The class action, which was filed by Plaintiffs attorneys
Milberg Weiss Bershad Hynes & Lerach LLP in New York and Miller
Faucher and Cafferty LLP in Chicago alleges that Motorola misled
investors by touting its equipment sales to Telsim without
disclosing that Motorola had loaned Telsim the money to buy the
equipment.
The suit also alleges that Mr. Galvin, former Chief Financial
Officer Carl Koenemann and former Chief Operating Officer Robert
Growney schemed to fraudulently inflate Motorola's stock by
improperly recognizing more than $1 billion in Telsim revenues
that were financed by Motorola.
The class action covers holders of Motorola securities for the
period between February 3, 2000 and May 14, 2001. New Jersey
Department of Treasury is the lead plaintiff.
NATIONAL CLEARING: SEC Files Fraud Suit V. Parent, Executives
-------------------------------------------------------------
The Securities and Exchange Commission filed civil fraud charges
against Beverly Hills, California-based broker-dealer National
Clearing Corporation (NCC), its parent company, JB Oxford
Holdings, Inc. (JBOH), and three NCC executives for facilitating
late trading and market timing by certain NCC customers. The
SEC's complaint alleges that from June 2002 until September
2003, the defendants fraudulently facilitated thousands of
market timing and late trades in over 600 mutual funds.
In addition to the charges against NCC and JBOH, the
Commission's complaint names James G. Lewis, age 39, of Santa
Monica, Calif., who was JBOH's former president and chief
operating officer and NCC's former president and chief executive
officer; Kraig L. Kibble, age 44, of La Crescenta, Calif., who
is NCC's director of operations; and James Y. Lin, age 46, of
Rancho Palos Verdes, Calif., who is NCC's vice president of
correspondent services.
The SEC's complaint, filed in United States District Court in
Los Angeles, alleges as follows:
(1) "Late trading" refers to the practice of placing orders
to buy or sell mutual fund shares after 4:00 p.m.
Eastern time, the time as of which mutual funds
typically calculate their net asset value (NAV), but
receiving the price based on the NAV already determined
as of 4:00 p.m. Late trading enables the trader to
profit from market events that occur after 4:00 p.m.
but that are not reflected in that day's price.
(2) Market timing includes (a) frequent buying and selling
of shares of the same mutual fund or (b) buying or
selling mutual fund shares in order to exploit
inefficiencies in mutual fund pricing. Market timing,
while not illegal per se, can harm other mutual fund
shareholders because it can dilute the value of their
shares, if the market timer is exploiting pricing
inefficiencies, or disrupt the management of the mutual
fund's investment portfolio and cause the targeted
mutual fund to incur costs borne by other shareholders
to accommodate frequent buying and selling of shares by
the market timer.
(1) From June 2002 until September 2003, NCC facilitated
thousands of late mutual fund trades in more 600
different mutual funds on behalf of select
institutional customers. NCC routinely received trading
instructions from customers after 4:00 p.m. EST and
executed those trades at the current day's NAV. NCC
facilitated the late trading with the knowledge and at
the direction of Lewis, Kibble, and Lin.
(2) NCC entered into written agreements with institutional
customers who engaged in late trading and market
timing. These agreements included up to a 1% custodial
fee in exchange for facilitating market timing and late
trading in mutual funds.
(3) NCC received approximately $1 million in compensation
from the scheme while its customers reaped profits in
excess of $8 million at the expense of long-term mutual
fund shareholders.
(4) NCC received hundreds of "kick-out letters" from
various mutual funds, which rejected individual market
timing trades and attempted to restrict NCC's
customers' ongoing market timing activities. In
response to these restrictions, NCC perpetrated a
number of deceptive practices to conceal their
customers' fraudulent market timing. When a mutual fund
restricted market-timing activities, NCC, at the
direction of Lewis, Kibble, and Lin, used deceptive
means such as opening additional accounts and using new
account numbers instead of the previously restricted
account numbers; using additional registered
representative codes for the same previously restricted
representatives; and using additional office
identification numbers for the same previously
restricted offices.
(5) JBOH reported its financial statements included within
its Forms 10-Q and 10-K on a consolidated basis.
Therefore, JBOH reported as revenues the proceeds NCC received
from the fraudulent scheme. Lewis served simultaneously as an
executive at JBOH and NCC and signed JBOH's 2002 and 2003 Forms
10-K.
The Commission's complaint charges JBOH, NCC, Lewis, Kibble, and
Lin with violating the antifraud provisions of the federal
securities laws, Section 17(a) of the Securities Act of 1933 and
Section 10(b) of the Securities Exchange Act of 1934 and Rule
10b-5 thereunder. NCC is also charged with violating Rule 22c-1,
promulgated under Section 22(c) of the Investment Company Act of
1940. This provision prohibits the purchase or sale of mutual
fund shares except at a price based on the current NAV of such
shares that is next calculated after receipt of a buy or sell
order. The SEC seeks an order that permanently enjoins the
defendants from future violations of the above provisions;
requires the defendants to disgorge all their ill-gotten gains
plus prejudgment interest; requires the defendants to pay civil
penalties; and prohibits Lewis from serving as an officer or
director of a public company. The action is titled, SEC v. JB
Oxford Holdings, Inc., National Clearing Corporation, James G.
Lewis, Kraig L. Kibble, and James Y. Lin, Civil Action No. CV
04-7084 PA (VBKx) (C.D. Cal.) (LR-18850).
NETHERLANDS: Court Dismisses Suit V. Dexia's Share-Lease Program
----------------------------------------------------------------
An Amsterdam district court dismissed a costly class-action suit
against the Dexia Group over a share-lease program however the
court's decision has opened the door to thousands of individual
claims against the French-Belgian bank, the International Herald
Tribune reports.
The suits is about the so-called Legio Lease contracts, which
enabled people to borrow money to buy Dutch blue-chip shares and
then use the stock as collateral on the loans. Lucrative while
stock markets were rising, it eventually left customers with
huge losses when the markets began to drop in 2001.
In its ruling that court rejected the class-action suit, which
seeks to have the contracts declared null and void, pointing out
that Dutch law did not provide for a collective suit in such
cases. Dexia had inherited the contracts when it bought Bank
Labouchere from the Dutch insurer Aegon in 2000.
However, the court allowed some individual claims to advance,
creating a blueprint for potential lawsuits by Dexia clients in
a similar position.
According to Rob Goedhart of the Dutch consumer interest group
Consumentenbond, one of the plaintiffs in the collective suit,
said there were probably tens of thousands of people covered by
the ruling. Erik Oversier, a lawyer representing more than 40
Dexia clients adds, "There could be an avalanche of individual
lawsuits."
Though setting aside E444 million or $536.5 million, for legal
costs stemming from the suits some analysts have estimated that
the potential liability for Dexia is more than E450 million.
NORTH DAKOTA: Judge Expands Suit V. Labor Unit, Certifies Class
---------------------------------------------------------------
East Central District Judge Douglas Herman has ruled that
individuals who are awaiting decisions on the merits of
discrimination complaints filed with the North Dakota's Labor
Department should be included in a class action lawsuit against
the agency, the Grand Folk Herald reports.
According to Mark Schneider, a Fargo attorney who is handling
the lawsuit, the judge's decision could encompass more than 100
people, all of whom have filed complaints with the Labor
Department, but do not have agency decisions - called findings
of probable cause - about whether their claims have merit. The
attorney believes that the department, which handles job and
housing discrimination claims has wasted time in making specific
findings about the merits of each
Judge Herman's decision seems to reinforce attorney Schneider's
belief. In his ruling the judge wrote, "Despite scores
(hundreds?) of charges being filed, the department has only
issued probable cause notices to eight claimants, This pattern
of inaction, even if from lack of funding (or) staffing, is
contrary to the legislative mandate and the remedial nature of
the North Dakota Human Rights Act."
However assistant attorney general Doug Bahr, who is
representing the Labor Department, said that the agency has
worked diligently on discrimination claims and has tried to
resolve complaints through talks with the people involved before
making probable cause findings. He even pointed out, "The judge
is not saying that the department has done anything wrong."
Attorney Schneider had asked Herman to certify the lawsuit as a
class action to represent all present and future filers of
discrimination complaints with the Labor Department. However,
the judge only agreed to a more limited class action, which
would only include people who have filed discrimination
complaints and are awaiting the department's decision on whether
they have merit.
Regarding the judge's order, Mr. Bahr said that the agency's
handling of discrimination complaints is already in complying
with the order. He however said that no decision has been made
on whether to appeal the decision to grant class action status,
which has confused them, since certifying the class seems to
serve no purpose.
OHIO: SEC Fines Derrick McKinney, Rick Malizia For Ponzi Scheme
---------------------------------------------------------------
The Securities and Exchange Commission issued an Order
Instituting Administrative Proceedings Pursuant to Section 15(b)
of the Securities Exchange Act of 1934 (the Order) against
Derrick N. McKinney (McKinney), a resident of Lewis Center,
Ohio, and Rick R. Malizia (Malizia), a resident of Weston,
Florida, based upon the entry of a permanent injunction against
them in SEC v. Steven E. Thorn, et al., Civ Action No. C2-01-290
(S.D. Ohio).
On October 14, 2003, the Honorable Edmund A. Sargus, Jr. of the
U.S. District Court for the Southern District of Ohio granted
summary judgment in favor of the Commission and against McKinney
and Malizia, among others, holding them liable for raising
approximately $75 million from investors in a series of
fraudulent prime bank schemes and using investor funds to
conduct a massive Ponzi scheme. The Court found that McKinney
and Malizia had violated Section 17(a) of the Securities Act of
1933 (Securities Act) and Sections 10(b), 15(a) and 15(c)(1) of
the Securities Exchange Act of 1934 (Exchange Act) and Rules
10b-5 and 15c1-2 thereunder.
In granting the Commission's motion for summary judgment, the
Court ruled in part that McKinney and Malizia should be
permanently enjoined from future violations of the antifraud and
broker-dealer registration provisions of the securities laws.
The Court further ordered McKinney to disgorge $54,200 plus
$16,499 of pre-judgment interest and held him jointly and
severally liable for $1,434,757 of disgorgement and $294,632 of
pre-judgment interest imposed against his company, International
Trading Partners, Ltd., pursuant to a previous Court order.
Malizia was ordered to disgorge an amount to be determined later
by the Court. Lastly, the Court ordered Malizia and McKinney to
pay civil penalties in amounts to be determined at a later
hearing.
A hearing will be scheduled before an administrative law judge
to determine whether the allegations contained in the Order are
true, to provide McKinney and Malizia an opportunity to dispute
these allegations, and to determine what, if any, remedial
sanctions are appropriate and in the public interest.
The Order requires the Administrative Law Judge to issue an
initial decision no later than 210 days from the date of service
of this Order, pursuant to Rule 360(a)(2) of the Commission's
Rules of Practice. (Rel.34-50255; File No. 3-11605)
ONEOK GAS: Jury Selection Begins in Hutchinson Landowners Suit
--------------------------------------------------------------
Years after gas explosions depreciated the value of their
Hutchinson properties landowners and their attorneys are hoping
to convince a jury in their class action lawsuit against the
ONEOK gas company that it should be held responsible, KBSD
reports.
The class action lawsuit was related to an incident that
happened three years ago, when gas from ONEOK's underground
storage facility sparked two separate explosions, which filled a
block area of downtown Hutchinson with searing flames.
ONEOK successfully argued it couldn't get a fair trial in Reno
County, and thus the case was moved to Wyandotte County, Kansas
City, KS.
According to legal experts jury selection starts on Thursday
with opening statements following thereafter on Monday morning.
PARADIGM MEDICAL: Plaintiffs File Consolidated Stock Suit in UT
---------------------------------------------------------------
Plaintiffs filed a consolidated securities class action against
Paradigm Medical Industries, Inc. in the United States District
Court for the District of Utah.
On June 2, 2003, a complaint captioned "Michael Marrone v.
Paradigm Medical Industries, Inc., Thomas Motter, Mark Miehle
and John Hemmer, Case No. 2:03 CV00513 PGC," was filed. On July
11, 2003, a complaint was filed in the same United States
District Court, captioned "Lidia Milian v. Paradigm Medical
Industries, Inc., Thomas Motter, Mark Miehle and John Hemmer,
Case No. 2:03 CV00617PGC."
These cases are substantially similar in nature and contend that
as a result of allegedly false statements regarding the Blood
Flow Analyzer(TM) and the purchase order from Westland Financial
Corporation and Valdespino Associates Enterprises, the price of
the Company's common stock was artificially inflated and the
persons who purchased the Company's common shares during the
class period suffered substantial damages.
In a press release dated July 11, 2003, captioned "Milberg Weiss
announces the filing of a class action suit against Paradigm
Medical Industries, Inc. on behalf of investors," the law firm
of Milberg Weiss Bershad Hynes & Lerach LLP, which represents
purchasers of Company securities in the class action suit filed
on July 11, 2003, stated that the Company's alleged
misrepresentations caused the market price of the stock to be
artificially inflated during the class period. As a result, it
is alleged that investors suffered millions of dollars in
damages from the Company's alleged misstatements.
The cases request judgment for unspecified damages, together
with interest and attorney's fees. These cases have now been
consolidated with the Meyer case into a single action, captioned
"In re: Paradigm Medical Industries Securities Litigation, Case
No. 03-CV-448TC." The law firm of Milberg Weiss Bershad &
Schulman LLP is representing purchasers of the Company's
securities in the consolidated class action.
On June 28, 2004, a consolidated amended class action complaint
was filed on behalf of purchasers of the Company's securities.
The consolidated complaint is similar to the three class action
complaints and alleges that the Company made false
representations regarding the CPT code for the Blood Flow
Analyzer(TM), but it includes additional allegations that the
Company failed to disclose in a timely manner that doctors were
being denied reimbursement for procedures performed with the
Blood Flow Analyzer(TM).
The consolidated complaint also alleges the Company made false
statements regarding the purchase order from Westland Financial
Corporation and Valdespino Associates Enterprises.
PROTECTION ONE: Parties Commence Arbitration For Consumer Suit
--------------------------------------------------------------
Parties in the class action filed against Protection One Alarm
Monitoring, Inc. held a "clause construction" hearing on August
10,2004, in relation to arbitration proceedings for the suit, in
the Los Angeles Superior Court in California.
On May 20, 2003, Joseph G. Milstein filed a putative class
action suit against the Company, styled "Milstein v. Protection
One Alarm Services, Inc., John Does 1-100, including Protection
One Alarm Monitoring, Inc., Case No. BC296025." The complaint
alleges that Mr. Milstein and similarly situated Protection One
customers in California should not be required to continue to
pay for alarm services during the term of their contracts if the
customer moves from the monitored premises. The complaint seeks
money damages and disgorgement of profits based on several
purported causes of action.
On May 29, 2003, the plaintiff added the Company as a defendant
in the lawsuit. On October 28, 2003, the Court granted the
Company's motion to compel arbitration of the dispute pursuant
to the terms of the customer contract. The case is now before
the American Arbitration Association (AAA). The parties have
fully briefed the "Clause Construction" phase of the
arbitration, which requires the arbitrator to determine, as a
threshold matter, whether the arbitration clause in the contract
between the parties permits the arbitration to proceed on a
class-wide basis. The arbitrator has taken the matter under
advisement and requested written submissions from the parties on
certain issues.
SERVICE CORPORATION: Reaches Settlement For TX Securities Suit
--------------------------------------------------------------
Service Corporation International reached a settlement for the
consolidated securities class action filed against it in the
United States District Court for the Southern District of Texas,
Houston Division, styled "In Re Service Corporation
International; Cause No.H-99-0280."
The Consolidated Lawsuit was filed in January 1999 and includes
numerous separate lawsuits that were filed in various United
States District Courts in Texas. The Consolidated Lawsuit has
been certified as a class action and names as defendants the
Company and three of the Company's current or former executive
officers or directors. The Consolidated Lawsuit has been
brought on behalf of all persons and entities who:
(1) acquired shares of Company common stock in the merger
of a wholly-owned subsidiary of the Company into Equity
Corporation International (ECI);
(2) purchased shares of Company common stock in the open
market during the period from July 17, 1998 through
January 26, 1999 (the Class Period);
(3) purchased Company call options in the open market
during the Class Period;
(4) sold Company put options in the open market during the
Class Period;
(5) held employee stock options in ECI that became options
to purchase Company common stock pursuant to the
merger; and
(6) held Company employee stock options to purchase Company
common stock under a stock plan during the Class
Period
Excluded from the class definition categories are the Individual
Defendants, the members of their immediate families and all
other persons who were directors or executive officers of the
Company or its affiliated entities at any time during the Class
Period.
The plaintiffs in the Consolidated Lawsuit alleged that
defendants violated federal securities laws by making materially
false and misleading statements and failing to disclose material
information concerning the Company's preneed funeral business
and other financial matters, including in connection with the
ECI merger. The Consolidated Lawsuit sought recovery of an
unspecified amount of monetary damages.
A Motion to Dismiss the Consolidated Lawsuit filed by the
Company and the Individual Defendants has been pending before
the Court. On April 20, 2004, the Company announced that it had
entered into a memorandum of understanding to settle the
Consolidated Lawsuit. The terms of the proposed settlement call
for the Company to cause to be created a settlement fund in May
2004 totaling $65 million in settlement of the claims.
The Company and its insurance carriers have also entered into an
agreement providing for the payment by the Company's insurance
carriers of $30 million towards this settlement, which resulted
in direct payments made by the Company of approximately $35
million.
The proposed settlement is subject to court approval following
notice to members of the class, an opportunity for class members
to object or opt out of the proposed settlement and other
conditions. The Company is not obligated to proceed with the
proposed settlement if more than a specified percent of the
class members opt out and elect to bring separate legal actions.
Accordingly, if less than such specified percent of the class
members opt out, the Company could have additional potential
liability for such opt out claims and still be obligated to
carry out the proposed settlement. The quantification of this
additional potential liability is not able to be determined by
the Company at this time.
SERVICE CORPORATION: Faces Shareholder Fraud Suits Filed in TX
--------------------------------------------------------------
Service Corporation International and other individual
defendants continue to face several suits filed in Texas state
courts by former Company and Equity Corporation International
(ECI) shareholders.
The suit styled ">Charles Fredrick v. Service Corp.
International;" was filed in the District Court of Angelina
County, Texas, on February 16, 1999. A second suit, styled
"Thomas G. Conway, John T Conway and Trust U/W/O George M.
Conway, Jr. v. Service Corporation International," was filed in
the 12th Judicial District Court of Harris County, Texas, on May
28, 2004. Another suit, styled "T. Rowe Price Balanced Fund,
Inc., et al. v. Service Corporation International, et al," was
commenced in the 270th Judicial District Court, Harris County,
Texas, on June 7, 2004 (the T. Rowe Price Lawsuit).
These lawsuits allege, among other things, violations of Texas
securities law and statutory and common law fraud, and seek
compensatory and exemplary damages. In these lawsuits, no
discovery has occurred and the Company is unable to determine
whether an adverse outcome is probable.
The plaintiffs in the T. Rowe Price Lawsuit consist of
investment companies and trust funds who were former ECI and SCI
shareholders. They allege that the Company and the Individual
Defendants violated the Texas Securities Act by making
materially false and misleading statements and failing to
disclose material information concerning the Company's business
and other financial matters, including in connection with the
ECI merger. The T. Rowe Price Lawsuit seeks recovery of at
least $32 million in actual damages plus unspecified exemplary
damages.
The Conway plaintiffs in the second Texas securities lawsuit,
previously filed an arbitration styled "Thomas G. Conway et al
v. Service Corporation International, et al; Cause No. 70 Y 168
00748 02" before the American Arbitration Association (AAA)
(Conway action). The defendants in the Conway action are the
Company, ECI and SCI Delaware Funeral Services, Inc., a
subsidiary of the Company (SCI Delaware). The arbitration is
scheduled to take place in February 2005 in Houston, Texas.
The plaintiffs in the Conway action owned funeral homes in
Queens County and Suffolk County, New York, which were sold and
merged into a subsidiary of ECI in July 1998. In the Conway
action, plaintiffs assert that ECI failed to disclose that ECI
was negotiating the merger with the Company in breach of
covenants in the agreements between ECI and the plaintiffs. ECI
purchased the plaintiffs' funeral homes with ECI stock and cash,
and the plaintiffs' ECI stock was exchanged for stock in the
Company in the merger of January 1999.
The plaintiffs seek to recover compensatory damages alleged at a
minimum of $8 million and punitive damages alleged at a minimum
of $14 million. The plaintiffs allege that SCI and SCI Delaware
are liable as the alleged "successor" entities to ECI.
SERVICE CORPORATION: Settlement Fairness Hearing Set Sept. 2004
---------------------------------------------------------------
Fairness hearing for the settlement of the consumer class action
filed against Service Corporation International is set for
September 2004 in the Circuit Court of the 17th Judicial Circuit
in and for Broward County, Florida, General Jurisdiction
Division.
The suit is styled "Joan Light, Shirley Eisenbert and Carol
Prisco v. SCI Funeral Services of Florida, Inc. d/b/a Menorah
Gardens & Funeral Chapels, and Service Corporation
International; Case No. 01-21376 CA 08" and named the Company, a
subsidiary and other related entities as defendants.
On August 19, 2003, the Court certified a class comprising all
persons with burial plots or family members buried at Menorah
Gardens & Funeral Chapels in Florida. Excluded from the class
definition were persons whose claims had been reduced to
judgment or had been settled as of the date of class
certification. The defendants appealed the trial court's order
regarding class certification.
The plaintiffs alleged that defendants had failed to exercise
reasonable care in handling remains by secretly:
(1) dumping remains in a wooded area;
(2) burying remains in locations other than the ones
purchased;
(3) crushing vaults to make room for other vaults;
(4) burying remains on top of the other or head to foot
rather than side-by-side;
(5) moving remains; and
(6) co-mingling remains
The plaintiffs in the Consumer Lawsuit alleged that the above
conduct constituted negligence, tortious interference with the
handling of dead bodies, infliction of emotional distress, and
violation of industry specific state statutes, as well as the
state's Deceptive and Unfair Trade Practices Act. The
plaintiffs sought an unspecified amount of compensatory and
punitive damages.
The Court granted plaintiffs' motion for leave to amend their
complaint to include punitive damages. Plaintiffs also sought
equitable/injunctive relief in the form of a permanent
injunction requiring defendants to fund a court supervised
program that provides for monitoring and studying of the
cemetery and any disturbed remains to insure their proper
disposition.
Counsel for plaintiffs in the Consumer Lawsuit also represented
individuals who filed numerous separate lawsuits setting forth
individual claims similar to those in the Consumer Lawsuit.
These lawsuits include "Sheldon Cohen, surviving son of Hymen
Cohen, deceased v. SCI Funeral Services of Florida, Inc., d/b/a
Menorah Gardens & Funeral Chapels and Service Corporation
International; Case No. 02014679;" filed in the Circuit Court of
the 17th Judicial Circuit in and for Broward County, Florida,
and "Marian Novins, surviving daughter of Harold Wells deceased
v. SCI Funeral Services of Florida, Inc. d/b/a/ Menorah Gardens
& Funeral Chapels, and Service Corporation International; Case
No. 0307886;" filed in the Circuit Court of the 17th Judicial
Circuit, in and for Broward County, Florida, General
Jurisdiction Division.
In December 2003, the Company entered into an agreement in
principle to settle the Consumer Lawsuit and the above
individual related lawsuits. A settlement agreement pertaining
specifically to the Consumer Lawsuit was filed with the court on
March 2, 2004 and the court preliminarily approved the
settlement agreement in March 2004. A fairness hearing is
scheduled in September 2004 at which time the court will hear
any objections to the settlement and determine whether final
approval will be granted. All claims under the Consumer Lawsuit
will be dismissed if final court approval of the settlement is
obtained and other conditions are met. The terms of the
proposed settlement call for the Company to make payments
totaling approximately $100 million in settlement of these
claims.
On April 21, 2002, additional plaintiffs filed a lawsuit styled
"Sol Guralnick, Linda Weinr, Joan Nix, Gilda Schwartz, Paul
Schwartz, Ann Ferrante, Steve Schwartz, Nancy Backlund, Jamie
Osit, Corey King, Marc King, Barbara Feinberg Clark v. SCI
Funeral Services of Florida, Inc. d/b/a Menorah Gardens and
Funeral Chapels and Service Corporation International" in the
Circuit Court in the 15th Judicial Circuit, Palm Beach County,
Florida; Case number CA024815AE (Guralnick Lawsuit), making
essentially the same allegations as the Consumer Lawsuit with
the exception that it does not contain class allegations. In
addition to the Guralnick Lawsuit, counsel filed a lawsuit
containing cemetery mismanagement allegations styled "Diane
Wolff, Arlene Benowitz, Michael Wolff, Randee Wolff Blumstein,
and Martha Freedberg v. SCI, Funeral Services of Florida, Inc. a
Florida corporation d/b/a Menorah Gardens & Funeral Chapels,
Service Corporation International, a Texas Corporation, Menorah
Partnership, a Florida General Partnership, and Sharon Gardens
Limited Partnership, a Florida Limited Partnership," in the
Circuit Court in the Fifteenth Judicial Circuit in and for Palm
Beach County, Florida, Case No. 2003CA013025 (Wolff Lawsuit).
The Company also faces two suits, styled "Edgar Neufeld v.
Service Corporation International, et.al,; Cause No. CV-S-03-
1561-HDM-PAL," filed in the United States District Court for the
District of Nevada and "Rujira Srisythemp v. Service Corporation
International, et. al; Cause No. CV-S-03-1392-LDG-LRL" filed in
the United States District for the District of Nevada, filed
November 10, 2003, (collectively, the Nevada actions).
The Nevada actions are purported class actions filed in
connection with the circumstances surrounding the Consumer
Lawsuit. The plaintiffs in the Nevada actions allege that the
Company failed to disclose, or falsely stated, material
information relating to the circumstances surrounding the
Consumer Lawsuit. Since the Nevada actions are in their
preliminary stages, no discovery has occurred, and the Company
cannot quantify its ultimate liability, if any, for the payment
of damages. On June 22, 2004, the Judicial Panel on
Multidistrict Litigation transferred the Nevada actions to the
United States District Court for the Southern District of Texas
for pretrial proceedings.
Another suit, styled "Joshua Ackerman v. Service Corporation
International, et. al.; Cause No. 04-CV-20114," was filed in the
United States District Court for the Southern District of
Florida court on January 15, 2004 (Miami action). The Miami
action is a purported class action filed in connection with the
circumstances surrounding the Consumer Lawsuit and is similar to
the Nevada actions. The plaintiffs in the Miami action allege
that the Company failed to disclose, or falsely stated, material
information relating to the circumstances surrounding the
Consumer Lawsuit. Since the Miami action is in its preliminary
stages, no discovery has occurred, and the Company cannot
quantify its ultimate liability, if any, for the payment of
damages. On June 22, 2004, the Judicial Panel on Multidistrict
Litigation transferred the Miami action to the United States
District Court for the Southern District of Texas for pretrial
proceedings.
SINGING MACHINE: Court Grants Final Approval To Suit Settlement
---------------------------------------------------------------
The United States District Court for the Southern District of
Florida granted final approval to the settlement for the
consolidated securities class action and shareholder derivative
suit filed against The Singing Machine Co., Inc. and certain of
its officers and directors.
From July 2, 2003 through October 2, 2003, seven securities
class action lawsuits and a shareholder's derivative action were
filed on behalf of all persons who purchased the Company's
securities during the various class action periods specified in
the complaints. On September 18, 2003, United States District
Judge William J. Zlock entered an order consolidating the seven
(7) purported class action law suits and one (1) purported
shareholder derivative action into a single action case styled
"Frank Bielansky v. the Company, Salberg & Company, P.A., et al
- Case Number: 03-80596 - CIV - ZLOCK."
The complaints that were filed allege violations of Section
10(b) and Section 20(a) of the Securities Exchange Act of 1934
and Rule 10(b)-5. The complaints seek compensatory damages,
attorney's fees and injunctive relief.
The Company entered into a settlement agreement with the
plaintiffs in the Class Action in March 2004. At a hearing in
April 2004, the Court gave preliminary approval for the
settlement and directed that notices be sent to shareholders
pursuant to the Settlement Agreement. The notices advised
shareholders of their rights and responsibilities concerning the
settlement. The Court set a hearing on July 30, 2004 before
Judge Zlock to consider final approval of the settlement. At
the hearing, Judge Zlock signed the order giving final approval
to the settlement. The terms of the settlement will be
implemented after all final appeals period have expired.
Pursuant to the terms of the settlement agreement, the Company
is required to make a cash payment of $800,000 and Salberg &
Company, P.A., its former auditor, is required to make a payment
of $475,000. The Company's cash payment of $800,000 is covered
by the Company's liability insurance and its insurer has placed
this payment in an escrow account. In addition, the Company is
obligated to issue 400,000 shares of its common stock to the
plaintiff. The settlement obligates it to implement certain
corporate governance changes, including an expansion or the
Company's Board of Directors to six members with independent
directors comprising at least 2/3 of the total Board seats.
SKYTERRA COMMUNICATIONS: Discovery Commences in CA Overtime Suit
----------------------------------------------------------------
Discovery has commenced in the class action filed against
Skyterra Communications, Inc. (formerly Rare Medium Group,
Inc.), Rare Medium, Inc. and certain other former subsidiaries
that were merged into Rare Medium, Inc. in Los Angeles County
Superior Court captioned "Joe Robuck, individually and on behalf
of all similarly situated individuals v. Rare Medium Group,
Inc., Rare Medium L.A., Inc., Rare Medium, Inc., and Rare Medium
Dallas, Inc., Case No. BC300310."
The plaintiff filed the action as a putative class action and
putative representative action asserting that:
(1) certain payments were purportedly due and went unpaid
for overtime for employees with five job titles;
(2) certain related violations of California's overtime
statute were committed when these employees were not
paid such allegedly due and unpaid overtime at the time
of their termination; and
(3) certain related alleged violations of California's
unfair competition statute were committed.
Plaintiff seeks to recover for himself and all of the putative
class, alleged unpaid overtime, waiting time penalties (which
can be up to 30 days' pay for each person not paid all wages due
at the time of termination), interest, attorneys' fees, costs
and disgorgement of profits garnered as a result of the alleged
failure to pay overtime.
TEXAS: ETMC Consumer Suit Settlement Hearing Set October 18,2004
----------------------------------------------------------------
Lawyers for both parties have corroborated that a judge is set
to consider the terms of a proposed settlement in a class-action
lawsuit against East Texas Medical Center (ETMC) on October 18,
2004 in the Henderson County Third District Court, the Tyler
Morning Telegraph reports.
According to Michael E. Jones, ETMC attorney, the proposed
settlement does not imply acknowledgement by ETMC that the
health care system had done anything wrong and that the
hospitals "strongly deny any wrongdoing" and would defend the
lawsuit if the court does not approve the proposed settlement.
Filed about three years ago by Nathan L. Jackson on behalf of
himself and others in the class, the lawsuit alleges that ETMC
hospitals had routinely billed patients and their insurance
companies since January 1996, and this had resulted in
overpayment of patient accounts and credit balances. The suit
further alleges that the actions of ETMC violated the Texas
Deceptive Trade Practices-Consumer Protection Act and the Texas
Debt Collections Practices Act, and they constituted fraud,
conversion and a conspiracy to defraud.
However, Mr. Jackson's attorney, D. Brent Lemon of Dallas,
stated that most of the people involved in the lawsuit have
already been reimbursed. Attorney Lemon further adds, "What
happened was the suit was filed and the hospital paid back the
money to most of the people, if not all of them, and they set up
a procedure to make sure nobody fell through the cracks, I think
it was a win-win situation for people out in your area."
Under the proposed settlement, which was agreed upon by both
parties, the hospital must not maintain a credit balance on any
person's account for more than 180 days. It must put in place
policies and procedures requiring refunds of credit balances
within the 180 days. It must also establish a committee to
review all accounts that still have credit balances after 180
days and determine how the balance will be resolved.
The settlement also call for ETMC to pay the costs associated
with the publishing of the public notice in regional newspapers
as well as to pay Mr. Jackson's attorney fees amounting to
$155,000.
TRINITY HOMES: Homeowners Mull Over Proposed IN Suit Settlement
---------------------------------------------------------------
Homeowners who claim poor construction helped produce mold in
their houses are considering a proposed settlement to their
class-action lawsuit filed against Trinity Homes, which is owned
by Atlanta-based Beazer Homes USA, Inc. (NYSE: BZH), the
Indychannel.com reports.
Filed in August 2003 after hundreds of homeowners' complaints
alleged that water seeped under some exterior brick veneers,
causing extensive damage and mold.
Once approved, the settlement would require Trinity Homes to pay
for the repairs and allow the law firm representing the owners
to hire an independent engineering company to oversee the work.
The settlement would also require Trinity to guarantee all
repairs for 2 years and if work extends beyond an agreed upon
completion date, homeowners would receive $60 per day until it's
done. Aside from the aforementioned prerequisites the settlement
also calls for the establishment of a dispute resolution panel
that would address any conflicts that develop between the
builder and the homeowners.
Those affected by the suit are scheduled to receive a 10-page
synopsis of the settlement document with a full copy of the
proposal available from Hamilton Superior Court No. 2 at a cost
of $80. A hearing on the proposed settlement is scheduled Oct.
18, 2004.
According to company officials, Beazer, which has denied any
wrongdoing in the suit, has set aside $24 million to address any
problems in relation to the settlement.
WASHINGTON: Brokers File Antitrust Suit V. Membership Conditions
----------------------------------------------------------------
Real estate brokers led by San Francisco-based attorney David
Barry initiated a lawsuit seeking class action status against
the Spokane Association of Realtors in federal district court in
Spokane, Washington for allegedly forcing local real estate
agents to buy memberships in the association as a stipulation of
belonging to the MLS, the Inman News reports.
The 19-page complaint seeks up to $8.7 million in damages as
well as an injunction ordering the association to sell MLS
memberships to agents whether or not they join the association.
The suit named as defendants 12 directors of the Spokane
association. On the other hand real estate brokers Mathew
Prencipe and William Koshman of Prencipe Realty and Robert Cooke
of R.H. Cooke & Associates were named as lead plaintiffs.
The suit alleges that the practice of forcing agents to purchase
memberships in order to purchase access to the MLS violates
antitrust law, it even cites six other states where courts have
declared it illegal to tie the sale of trade association
services to the sale of MLS membership including California,
Colorado, New Jersey, Florida, Alabama and Georgia.
According attorney Barry, the $8.7 million figure is calculated
under rules of the Sherman Antitrust Act, which allows
plaintiffs, if successful, to triple damages. He further stated
that the suit, which is seeking class action status, could
consist of about 4,000 past MLS users as class members.
WORLDCOM INC.: Ex-Directors Agree To Settle Shareholders' Suit
--------------------------------------------------------------
According to David Neustadt, a spokesman for the New York State
Common Retirement Fund, a group of ex-WorldCom Inc. directors
agreed to settle claims that they failed to properly control the
telephone company's finances, which eventually led to its
collapse, Bloomberg.com reports.
The pension fund, which is leading the lawsuit on behalf of
WorldCom bondholders and shareholders, stated that most of the
directors agreed "in principle" to settle agreeing to pay $50
million to settle the charges.
Mr. Neustadt states that the settlement allows the plaintiffs to
focus on preparing for a January 2005 trial against the dozen
investment banks that underwrote WorldCom securities. The case
is In Re WorldCom Securities Litigation, 02-cv-3288, U.S.
District Court for the Southern District of New York.
WorldCom, which filed for bankruptcy protection July 2002,
restated $11 billion in earnings after disclosing misstatements
of its finances and would later emerge from bankruptcy in April
as MCI Inc.
WESTWOOD GROUP: DE Court Halts Briefing on Stock Suit Dismissal
---------------------------------------------------------------
The Court of Chancery in the State of Delaware suspended
briefing on Westwood Group, Inc.'s motion to dismiss the class
action filed against it and its Board of Directors.
The suit seeks to enjoin the proposed reverse stock split on the
basis that is not fair to the stockholders and that the proxy
statement omits information alleged to be "material." As a
result of the Administrative Complaint filed by the Securities
Division, the proposed 1,500-to-1 reverse stock split was
indefinitely suspended.
On April 8, 2003, the Company filed an answer in response to the
Securities Division's complaint, which denied each of the
allegations set forth in the complaint, and between April and
June 2003, the Company and the Securities Division negotiated a
settlement.
On June 17, 2003, the Company filed a Motion to Dismiss the
Court of Chancery class action lawsuit on the grounds that the
previously proposed going private transaction was never
completed. On October 23, 2003, the same plaintiffs filed a
supplemented and amended complaint with the Court of
Chancery in the State of Delaware alleging that the proposed
reverse stock split described in this proxy statement is not
fair to the stockholders of the Company and that the proxy
statement omits information that the plaintiffs allege to be
"material."
The plaintiffs amended the complaint to include Mr. Cassin, as a
co-defendant. The plaintiffs allege that the $4.00 pre-share
price valuation of the Company's Common Stock and Class B Common
Stock being paid to stockholders being redeemed in the proposed
reverse stock split is not fair and allege that the fair value
of the Company's Common Stock exceeds $5.00 per share; the Board
of Directors of the Company breached its fiduciary duties to the
stockholders; and the Company is violating Delaware corporate
law by proposing to issue fractional shares to some stockholders
and paying other stockholders cash in lieu of fractional shares.
In addition, the plaintiffs allege that this proxy statement
fails to disclose all material facts regarding the description
of the Company's real estate, the RM Bradley appraisal reports,
the lobbying expenses and the reasons for the proposed 500-for-1
stock split. The plaintiffs are seeking an injunction that
would prevent the Company from completing the proposed reverse
stock split and damages.
The Company disputes all of the allegations set forth in the
complaint, and on November 10, 2003, it filed a Motion to
Dismiss for failure to state a claim. The Company's opening
brief in support of its Motion to Dismiss was filed on February
3, 2004, and the plaintiffs' answering brief in opposition to
the Motion to Dismiss was filed on March 1, 2004. The Court of
Chancery suspended briefing in this case until after the
definitive proxy statement was finalized and filed with the
Securities and Exchange Commission.
Asbestos Alert
ASBESTOS LITIGATION: James Hardie Withdraws Letter on Asbestos
--------------------------------------------------------------
Under threat of court action, James Hardie Industries has agreed
to withdraw a letter that it sent to customers downplaying its
role in the manufacture of asbestos and its liability for
claims. The Australian Council of Trade Unions describes the
letter as false and misleading. The letter was a defense of
James Hardie Industries record on asbestos, issued in response
to union bans and consumer boycotts.
It included this statement minimizing James Hardie's role in
asbestos manufacture and liability. "Former James Hardie group
subsidiaries, Amaba and Amaca, are two of around 150 defendants
who are brought into legal process by claimants. It has been
estimated that they will be liable for around 15 per cent of
future claims in the Australian environment."
This draws a sharp comment from ACTU Secretary, Greg Combet.
"That's just patently false, and in fact, Peter Macdonald, the
CEO of James Hardie was cross examined about that issue in the
Jackson Inquiry, and conceded that really that's a publicity
claim, and that the company represents about 40-45 per cent of
claims overall."
The letter says that it phased out the use of asbestos
altogether well before the Government finally banned it last
year. It doesn't say that James Hardie companies continued to
manufacture asbestos products for many decades after health
risks were clear.
The ACTU wrote to James Hardie the week before, threatening
proceedings in the Federal Court unless the company withdrew the
letter.
The company's General Manager, James Chilcoff, wrote back,
denying allegations that the claims were false and misleading.
Nevertheless, he stated that the company will no longer publish
the contentious statements.
ASBESTOS LITIGATION: Australian Trade Union Council Seeks Talks
---------------------------------------------------------------
Last August 13, the Australian Council of Trade Unions Secretary
Greg Combet appealed for negotiations between unions, asbestos
support groups, the Medical Research and Compensation Foundation
and James Hardie to come up with a resolution to the chaos
created by James Hardie when it restructured its operations.
A NSW Special Commission of Inquiry has heard extensive evidence
that James Hardie reorganized its operations and took assets
offshore in an attempt to escape its compensation obligations to
Australian victims of James Hardie asbestos products. The move
overseas meant that the offshore parent is now legally protected
from having to contribute to an estimated shortfall of roughly
$1,500,000,000 for asbestos victims.
Mr. Combet said that the company had indicated that it was now
prepared to compensate all victims of its asbestos products into
the future, but that it was still seeking a statutory
compensation scheme which would limit the levels of compensation
available.
The recognition that all victims must be compensated is
important, but the unions and asbestos support groups do not
want limits placed on the levels of compensation available.
Mr. Combet now is expecting a discussion between the relevant
parties to evaluate the company's commitment.
"The Medical Research and Compensation Foundation and ourselves
have already outlined ways in which the current arrangements for
compensating victims can be streamlined. We do not believe there
is a case for statutory change which limits the level of
compensation," concludes Mr. Combet.
ASBESTOS LITIGATION: Australian Road Workers Exposed to Asbestos
----------------------------------------------------------------
Australia's Road and Traffic Authority could face fines of more
than $200,000 for subcontracting an operator to demolish more
than 40 asbestos-riddled homes.
Union officials closed down the Blacktown site last August 10
after it was discovered untrained workers were demolishing some
47 homes without proper safety equipment. These homes were being
torn down to clear the area for the northwest bus transitway.
The Construction Forestry Mining and Energy Union said last
August 20 that the RTA had illegally subcontracted the job to a
company, which had in turn contracted another operator. The
second contractor then let the job to another company who hired
Vietnamese-speaking workers, earning just $70 a day.
Operational health and safety guidelines were clearly violated
as asbestos sheeting had been smashed exposing the fibers to
workers and passers-by.
The RTA said it had engaged the subcontractor for asbestos
removal but had nevertheless already terminated its contract
with them.
ASBESTOS LITIGATION: Reform Groups to Fight Asbestos Legislation
----------------------------------------------------------------
Opponents of Ohio's new asbestos lawsuit-reform law have gone to
court and filed a suit last August 18 to challenge its
constitutionality, a tactical change from their pursuit of a
ballot measure to let voters decide the fate of the law in a
November referendum.
The enactment of this law makes Ohio the first state in the
country to require plaintiffs to provide medical evidence
proving that exposure to asbestos was a substantial factor in
causing their illness. Under the new law, plaintiffs looking to
sue for asbestos damage will need to show actual damage caused
by asbestos in order to move forward with their case. If they're
not able to do so, their lawsuits would be set aside, but they
would be allowed to file them later if impairment were to
develop.
The law takes effect September 2 and not only affects future
asbestos lawsuits, but is retroactive, so all asbestos lawsuits
already filed would be subject to it. The opposing lawsuit,
filed on behalf of local labor unions and individuals, is a
constitutional challenge to that retroactive provision in the
new asbestos law. They contend the state constitution doesn't
allow retroactive enforcement of laws "that eliminate pending
claims or make it more difficult for plaintiffs to pursue their
claims," according to a copy of the complaint, which cites a
specific section of the state constitution for this argument.
The bill's supporters were bracing for a petition drive by
opponents from the trial bar. Ballot signatures would need to be
submitted by Sept. 2, 2004, in order to put the issue before the
electorate.
Ohio trial lawyers may have shifted strategy because they've
calculated that even if they won a referendum vote, they would
still face a new silica lawsuit-reform bill, on which they
haven't pursued a referendum, as well as the prospects for a
broader tort-reform bill.
Ohio has been hailed by tort-reform supporters for passing a
bill that includes medical criteria. A decision by its high
court could be important to other states considering similar
measures.
The alliance, still developing its strategy for responding to
the court challenge, was confident it would have been successful
fighting the referendum effort because of the support the bill
has from physicians, labor, business, government leaders and
others in Ohio.
The number of pending asbestos cases in Cuyahoga County puts it
among the five most-congested asbestos dockets in the nation,
according to the alliance. To date, seven Ohio companies have
declared bankruptcy because of asbestos litigation, and at least
150 companies with some 150,000 Ohio employees now face asbestos
claims.
ASBESTOS LITIGATION: Hawaii Evacuation Due to Asbestos Release
--------------------------------------------------------------
Firefighters at the Honolulu Fire Department's Kakaako Station
were evacuated last August 23 to protect them from an accidental
release of asbestos at their station.
A construction crew was installing new lights when it
accidentally drilled into a ceiling containing encapsulated
asbestos.
"The firefighters were looking up. They saw what was going on
and they stopped the contractor from going any further and they
called our chief and they stopped the project right there. And
we made sure they got out safely," HFD Capt. Kenison Tejada
said.
Firefighters drove the ladder vehicle to the Kalihi Kai Station,
where it will be in service until the asbestos is cleaned up.
Mr. Tejada said they expect the station to reopen Wednesday
after getting the go-ahead from the cleanup crew.
ASBESTOS LITIGATION: IL Beach Shut Down After Finding Asbestos
--------------------------------------------------------------
A portion of Illinois Beach State Park was reopened this month
after it was shut down when asbestos debris was found on the
beach, according to the state agency that oversees state parks.
The beach was closed from August 4 to 7 after the Illinois
Department of Natural Resources found asbestos in a section on
the north side of the park, said Joe Bauer, a natural resources
department spokesman.
The park was reopened after the contaminated area was cleaned
and inspectors determined there was no risk to public health.
Traces of airborne asbestos near the debris were determined to
be low-level and harmless.
An environmental group, which has called for shutting down the
park to assess the asbestos situation, said the latest
discoveries are troubling and underscore the safety risks.
But Jonathan Furr, the natural resources department chief
attorney, said there was no human health concern.
``If there is ever a determination made by appropriate public
health agencies and environmental protection agencies that
having that park open is a risk to users, we won't hesitate to
shut down the beach,'' Furr said. ``In fact, the proclamations
we've been given have insisted there isn't a public health
risk."
ASBESTOS LITIGATION: Eli Lilly Seeks Funding For Cancer Drug
------------------------------------------------------------
Pharmaceutical company Eli Lilly will apply for funding this
September to subsidize a newly approved drug that provides
relief for those with asbestos-related lung cancer.
Alimta (Pemetrexed) has been shown to extend the life expectancy
of patients with malignant pleural mesothelioma an average of 12
months, compared with six to eight months on existing
treatments. But it costs more than $4,000 a cycle.
The drug tackles malignant pleural mesothelioma, a cancer of the
lung lining, which gradually surrounds the lung, making deep
breathing difficult. The condition eventually spreads to other
vital organs.
Eli Lilly's hospital business manager Carolyn Cameron says a
funding application is underway and is a priority at the
company.
Up to 15,000 people around the world are diagnosed with
mesothelioma each year. Approximately 60 people in New Zealand
are diagnosed annually with the condition, the majority being
men exposed to asbestos through a previous work environment.
New Zealand is in the midst of an epidemic of asbestos cancer
deaths and thousands of people, particularly men, are expected
to die over the next decade.
ASBESTOS LITIGATION: Law Firm Criticizes Proposed Asbestos Act
--------------------------------------------------------------
An interstate law firm has advised that a proposed Limitations
Act amendment may be pointless for Tasmanian asbestos victims
wanting to get compensation.
The State Opposition and lobby group Asbestos Disease Tasmania
released this statement last August 20, saying the State
Government's proposed amendments would only continue the
exclusion of sufferers.
Asbestos Diseases Tasmania President Lawrence Appleby has been
asking the Government to adopt a model similar to NSW that helps
victims by dropping all limits to actions. The legal advice
stated that because the proposed change would not be
retrospective, it would only apply to people suffering asbestos-
related illness after the new legislation commenced, leaving out
the current victims.
Victims have struggled for compensation from manufacturers
because of limitation laws that prevent claims being made years
after initial exposure, despite the disease having a dormancy
lasting decades.
Queensland law firm Turner and Freeman said: "The proposed
amendment is meaningless. The discrimination against asbestos
victims will only be perpetuated by this amendment."
The firm recommended the amendment either adopt the NSW model by
dropping all limitations to asbestos claims or the West
Australian and Victorian models that apply a limitation from
when the disease was first discovered in a claimant.
It also proposed a 12-month amnesty, allowing victims to begin
an action within a year of the new legislation commencing.
Attorney-General Judy Jackson said criticism of the proposal was
premature with amendments still in a consultation phase and not
drafted. She said Asbestos Diseases Tasmania had made a
submission to the Government and it was being considered.
ASBESTOS LITIGATION: Hercules Inc. Settlement Agreement Reached
---------------------------------------------------------------
Hercules Inc. has come up with a comprehensive agreement,
effective August 23, 2004, to settle the Company's claims for
insurance coverage for asbestos-related liabilities with respect
to those insurance policies issued by certain underwriters at
Lloyd & London and reinsured by Equitas Limited and related
entities. While many of the specific terms of that settlement
agreement are confidential, the settlement agreement generally
provides for the payment of money to the Company in exchange for
the release by the Company of past, present and future claims
under those policies and the cancellation of those policies;
agreement by the Company to indemnify the underwriters from any
such claims asserted under those policies; and provisions
addressing the impact on the settlement should federal asbestos
reform legislation be enacted on or before January 3, 2007.
Under the agreement, in the third quarter of 2004, Equitas will
pay $30 million to the Company and will place $67 million into a
trust. The trust funds may be used to reimburse the Company for
a portion of costs it incurs in the future to resolve certain
asbestos claims. The Company's ability to use any of the trust
funds is subject to specified confidential criteria, as well as
limits on the amount that may be drawn from the trust in any one
month. If federal asbestos reform legislation is enacted into
law on or prior to January 3, 2007, under the agreement, the
Company would be required to return any funds remaining in the
trust to Equitas should certain criteria be met. If such
legislation is not enacted by that date, any funds remaining in
the trust will be available to the Company to pay asbestos-
related liabilities or for other purposes.
In addition, on August 24, 2004, the Company executed a
confidential agreement in principle with many of its excess
insurers whereby a significant portion of the costs incurred by
the Company with respect to future asbestos product liability
claims will be reimbursed to the Company, subject to those
claims meeting certain criteria. This agreement in principle is
subject to the terms and conditions of a confidential Settlement
Agreement to be finalized and executed by the parties.
Once final, this Settlement Agreement will provide a mechanism
under which the costs incurred by the Company in connection with
certain asbestos product liability claims will be allocated to
certain insurance policies and policy periods, and portions of
those costs will be reimbursed to the Company. While the
obligations of the insurers under the Settlement Agreement will
not commence until certain underlying limits of insurance are
exhausted, which is not expected to occur for at least several
years, if and when that exhaustion occurs, the Company believes
that, based on the current status of its asbestos-related
liabilities as described in more detail in its Form 10-K and
other periodic SEC filings, this settlement, when combined with
other settlements and/or judgments, should ultimately provide
Coverage for the majority of costs to be incurred by the Company
in connection with asbestos product liability claims.
Settlement discussions continue with the Company's other excess
insurers, and trial of the Company's insurance coverage action
is scheduled to commence on October 12, 2004.
ASBESTOS LITIGATION: Veterans with Cancer Seek Needed Support
-------------------------------------------------------------
Treatment for asbestos-related disease is a crucial need of
those who have served, yet it has long been overlooked by the
federal government. Larry W. Rivers, past Louisiana and National
Commander of the group, Veterans of Foreign Wars, is leading a
battle to secure relief for a large group of veterans that he
says are suffering and dying from asbestos-related illnesses.
From World War II through Vietnam, asbestos was heavily used in
the military. For decades, Rivers says, deadly asbestos was
widely used to insulate Navy ships and in military construction.
"In the period from World War II through the Vietnam war, tens -
if not hundreds - of thousands of soldiers were probably exposed
to this substance during their tours of duty."
Because asbestos-related illnesses can remain dormant for many
years, many veterans who fought in wars 30 years ago or more are
only now learning they are sick and in some cases dying of these
diseases, he says.
These veterans have almost no place to turn for relief or
compensation. They worked for their government when they were
exposed and are legally restricted from seeking compensation
from their employer. Many companies that supplied asbestos to
the military went out of business years ago. Courts are so
overwhelmed with asbestos lawsuits that many victims die before
they get their day in court.
The need reaches beyond veterans of past wars. According to a
recent news report, more than 500 members of the 877th
Engineering Battalion were exposed to asbestos while they were
in Iraq. Roofing tiles found at their campsite contained
asbestos.
Citizens should urge passage of a bill to relieve those harmed.
An important proposal currently making its way through the U.S.
Senate would compensate those veterans or their survivors for
the diseases they have suffered.
ASBESTOS LITIGATION: Worker Dead of Cancer, Asbestos Exposure
-------------------------------------------------------------
A floor polisher died from cancer caused by asbestos he inhaled
while working at a brewery, an inquest heard.
Lawrence Freeman, 83, who lived at Ersham House Nursing Home in
Hailsham, worked professionally with marble and terrazzo
flooring. In the early 1960s, he worked briefly at the Harp
Lager brewery in the Midlands.
Coroner Alan Craze heard that dust-like asbestos fibers from
fireproof lagging and insulation were known to circulate in the
air at the brewery. Pathologist Dr. Keith Ramesar, who carried
out a post mortem, said Mr. Freeman's left lung had been invaded
by a huge tumor which had attached itself to the chest wall and
filled virtually the entire left cavity.
"Mesothelioma is a particularly nasty type of tumor for which
there is no treatment or cure," said Dr. Ramesar.
Mr. Craze added that around 90% of mesotheliomas are caused by
asbestos, and that they usually take about forty years to
establish themselves.
"Given the strong connection between mesothelioma and asbestos
exposure, and Mr. Freeman's highly relevant employment at the
brewery about 40 years ago, I can just about say that there was
an occupational exposure," said Mr. Craze.
ASBESTOS LITIGATION: Australia To Propose New Asbestos Law
----------------------------------------------------------
The Australian Capital Territory is about to instigate new
legislation regulating the treatment of asbestos in older
buildings.
Not only does the bill include plans for a taskforce to design a
system for dealing with asbestos but also to impose a duty of
care on building owners to warn trades people of any suspected
asbestos and to obtain a certificate at the time of sale.
"Every jurisdiction has probably got a keen eye on the act today
watching how our law goes through the debate that surrounds it
and how it's welcomed by industry and of course those groups
that are lobbying for reform in this area," says Occupational
Health and Safety Minister Katy Gallagher.
ASBESTOS LITIGATION: Asbestos Dumping Suspected in D.C. Sidewalk
----------------------------------------------------------------
Environmental officers are looking for the culprit who dumped
bags full of insulation that may contain asbestos on a busy city
sidewalk. A police officer who specializes in environmental
crimes found the bags along the 100 block of Q Street in
Southwest D.C. The hazardous materials unit of the fire
department was called to remove the bags. Samples were taken to
a lab to determine if the insulation does contain asbestos.
Criminal charges will be instigated if the test comes back
positive.
ASBESTOS LITIGATION: Park Official Fired Over Asbestos Violation
----------------------------------------------------------------
Kentucky Commerce Cabinet attorney Sarah Hall said she would aim
to prove that a former Jenny Wiley State Resort Park manager
recklessly exposed employees to asbestos when he had them make
unauthorized renovations to his office.
Jenny Wiley was cited by the state for workplace safety
violations after a section of the manager's office was found to
contain asbestos. The violations carried maximum fines of almost
$17,000.
Mr. Slone admitted that he had employees remodel parts of his
office without getting prior approval from his superiors. He
further testified that he did not know whether those employees
were exposed to asbestos.
Attorney Paul Fauri said Slone did not intend to disregard the
parks department's policies. During a personnel hearing
yesterday, Ms. Hall said in her opening statement that Slone
ignored his employees' questions about potential exposure.
Mr. Slone was said to have a "very good record" and his firing
was not justified. He was put on paid leave in February and was
fired in March after problems with asbestos were found in his
office.
"The Department of Parks in this matter has obviously acted
excessively and erroneously by issuing a dismissal letter to my
client. At no time did he intend to try to hide anything from
anybody," Mr. Fauri told hearing officer Stephen McMurtry.
Mr. McMurtry will be making a recommendation to the personnel
board for consideration.
ASBESTOS LITIGATION: OSHA Cites Contractors for Asbestos Hazards
----------------------------------------------------------------
The Occupational Safety and Health Administration has cited 11
contractors including AKJ, Inc., d/b/a Martin Enterprises, Inc.
and Marous Brothers Construction for hazards involving asbestos
removal and other alleged safety and health violations
identified at the construction site of the conversion from an
industrial complex to loft apartments in Pittsburgh,
Pennsylvania.
Marous Brothers, an integrated construction firm headquartered
in Willoughby, Ohio, is general contractor for the project, and
has 30 employees working at the site. Martin Enterprises is an
excavation and demolition contractor located in Cleveland, Ohio,
and has 20 employees working at the project site.
OSHA initiated the inspection in February 2004 in response to a
complaint alleging the improper removal of asbestos-containing
material from piping on the project. The project site was also
inspected in October 2003 and citations were issued to both
Martin Enterprises and Marous Brothers Construction.
As a result of the most recent inspection, two Failure-to-Abate
Notices were issued to Martin Enterprises with a total penalty
of $56,000 for not abating violations previously identified.
Citations were also issued for 16 serious violations with a
penalty of $36,400; three repeat violations, with a penalty of
$24,000; and one other-than-serious violation, which carries no
penalty.
Marous Brothers received one Failure to Abate Notice with a
total penalty of $25,000. Citations were also issued for eight
serious violations, with a penalty of $18,500, two repeat
violations, with a penalty of $17,500; and three other-than-
serious violations, with no penalty.
"These companies were notified of the problems in its safety and
health program and of the risk to workers," said U.S. Secretary
of Labor Elaine L. Chao. "OSHA's first commitment is to protect
workers from tragic workplace accidents. We stand ready to
assist employers to make their workplaces safe, but we will
fully enforce standards when we must."
Serious violations are those in which a substantial probability
that death or serious physical harm could result from a hazard
about which the employer knew or should have known.
The company has 15 working days to contest the OSHA citations
and proposed penalties before the independent Occupational
Safety and Health Review Commission.
ASBESTOS LITIGATION: AK Steel Corp. Appeal Dismissed in Kentucky
----------------------------------------------------------------
On August 20, 2004 the Court of Appeals of Kentucky ruled to
dismiss AK Steel Corporation's appeal of the Workers'
Compensation Board decision regarding the claim filed against
the company by the widow of a former employee who died due to
asbestos-related causes. Earl Moore was employed at AK Steel
from 1979 until his retirement at the age of 62 in 1994. Soon
after retiring, Mr. Moore began experiencing breathing problems.
His lungs progressively worsened, a condition that resulted in
his death in March 2002. His widow, Carolyn Moore, sought an
autopsy. Dr. James A. Dennis, a pathologist who reviewed the
autopsy report, reported that Mr. Moore had suffered from
asbestosis and that his death was caused by pulmonary fibrosis
secondary to asbestosis.
Mrs. Moore accordingly notified AK Steel that her husband had
contracted asbestosis. She also filed a claim for occupational
disease benefits based on his exposure to asbestos during his
employment at AK Steel. In its defense, AK Steel argued that it
had not received timely notice of Mr. Moore's condition, and
presented expert evidence to contradict the opinions of Dr.
Dennis, and of Dr. Scott Nelson, Mr. Moore's treating pulmonary
physician, both of whom believed that his death was caused by
asbestosis. The Administrative Law Judge (ALJ) found that Mr.
Moore had contracted the occupational disease of asbestosis as a
result of his exposure to asbestos fibers at work, that the lung
condition had caused his death, that Mrs. Moore had given AK
Steel timely notice that her husband had contracted the disease,
and that he was totally disabled due to the effects of the
disease on April 30, 1994, the date of his last exposure.
The ALJ awarded Mr. Moore income benefits of $415.94 per week
beginning on the date of his last exposure and continuing until
his death in March of 2002. Pursuant to the Kentucky Revised
Statute, the ALJ awarded Mrs. Moore benefits of $207.97 per week
(50% of her husband's average weekly wage) commencing with his
death. Liability for the awards was apportioned as follows: 40%
to the Special Fund (now the Workers' Compensation Funds) and
60% to AK Steel. In a subsequent order overruling AK Steel's
petition for reconsideration, the ALJ directed that the benefits
that had accrued during Mr. Moore's lifetime be paid to his
widow.
AK Steel argued that the ALJ erred in rejecting its notice
defense, in finding that Mr. Moore was permanently and totally
disabled at the time that he retired in April 1994, and in
awarding permanent total disability benefits to his estate. The
Board concluded that the ALJ was correct in finding that the
employer had received timely notice of his condition; that there
was sufficient evidence to support the ALJ's decisions with
respect to the extent and duration of his disability; and that
the ALJ was authorized to make an award of income benefits for
permanent total disability even though Mr. Moore had not filed a
claim for benefits during his lifetime. This appeal followed.
ASBESTOS LITIGATION: CSXT, Railroads Sued For Wrongful Death
----------------------------------------------------------------
The Court of Appeals of Kentucky reversed in part a Campbell
Circuit Court order entered on April 16, 2003 granting summary
judgment in favor of Cincinnati, New Orleans and Pacific Railway
Co.; CSX Transportation Inc.; and Norfolk Southern Railway Co.
("the Railroads"), in the appeal from Dennis Heizer,
representative of the estate of James Heizer. At various times
in the 1940's and 1950's, James Heizer worked either for the
Railroads or for their predecessor companies. On December 26,
1998, James died from mesothelioma, a cancer almost exclusively
connected to prolonged exposure to asbestos. On January 19,
2001, Dennis Heizer, one of James's sons and the executor of his
estate, filed a wrongful death claim against the Railroads
alleging that they had negligently exposed James to asbestos.
On December 19, 2002, the Railroads collectively filed a motion
for summary judgment. The trial court concluded that, no later
than January of 1997, James possessed constructive knowledge
that he had cancer and it was work-related. Thus, the trial
court granted summary judgment in favor of the Railroads.
ASBESTOS LITIGATION: Commercial Union, EMLICO Disputing GE Costs
----------------------------------------------------------------
Commercial Union Insurance Co. appealed the order of the U.S.
District Court for the Southern District of New York denying its
motion to vacate in part an arbitration award and enjoin further
arbitration between the Company and Electric Mutual Liability
Insurance Co. Ltd. (EMLICO). The order affirmed the arbitration
award in its entirety. The U.S. Court of Appeals, Second
Circuit vacated the district court's order and remanded for
further proceedings.
Beginning in 1992, General Electric Co. (GE), EMLICO's only
commercial policyholder, sought to recover from EMLICO its
asbestos and environmental clean-up costs; in turn, EMLICO
sought to recover these costs from Commercial Union under the
reinsurance contracts Commercial Union issued to EMLICO from
1975 to 1979. Pursuant to the arbitration clauses in those
contracts, the parties thereafter mutually took steps to proceed
to arbitration. Then, in February 1995, EMLICO submitted to the
Massachusetts Commissioner of Insurance a reorganization
proposal that included a transfer of domicile to Bermuda.
According to Commercial Union, EMLICO accomplished the
redomestication through fraud, misrepresenting that it was
solvent to the Massachusetts Commissioner of Insurance, the
Bermuda Registrar of Companies and the Bermuda Minister of
Finance in order to accomplish redomestication, and then shortly
after redomesticating, declaring insolvency and initiated
liquidation proceedings. EMLICO contends that the relevant
regulatory bodies were aware that future insolvency was a
possibility. In any case, Commercial Union and EMLICO agreed to
arbitrate this fraud issue as well.
The parties proceeded to arbitration in November 1996. After
more than four years of arbitration proceedings, the arbitration
panel issued an award on October 31, 2001, denying Commercial
Union's claims for rescission of the reinsurance contracts. In
January 2002, Commercial Union brought suit in the district
court to enjoin further arbitration. Respondents cross-moved
for, among other things, an order confirming the award. After
the district court denied Commercial Union's motion and affirmed
the arbitration award, Commercial Union appealed.
ASBESTOS LITIGATION: GM Ex-Employee Loses Appeal Against Company
----------------------------------------------------------------
The Court of Appeals of Ohio affirmed the judgment of the Allen
County Court of Common Pleas granting summary judgment in favor
of Powertrain Division General Motors Corp. (GMC), finding no
error prejudicial to the appellant, a former GMC employee. Joe
L. Harmon was employed with Powertrain from around 1955 to 1975,
during the course of which he was exposed to asbestos. In 2001,
appellant filed an application with the Bureau of Workers'
Compensation (BWC) to participate in the Workers' Compensation
Fund, alleging he had contracted the occupational disease of
asbestosis.
Appellant's claim hearing was scheduled before an Industrial
Commission District Hearing Officer on May 16, 2002. On May 13,
2002, appellant's counsel sent a letter to the District Hearing
Officer, informing him that the appellant was in the process of
"obtaining additional medical information to facilitate the
referral of this matter to a BWC medical specialist." The
letter, however, did not request a continuance, and further
informed the District Hearing Officer that neither appellant nor
appellant's counsel would appear at the hearing. On the day of
hearing, neither appellant nor appellant's counsel appeared and
additional medical evidence was not submitted. Due to the
appellant's failure to provide the medical evidence required,
the District Hearing Officer denied appellant's claim.
Mr. Harmon appealed his claim to the Staff Hearing Officer and a
hearing was scheduled for July 24, 2002. On July 16, 2002,
appellant's counsel mailed a letter to the Staff Hearing Officer
that was nearly identical to the one sent to the District
Hearing Officer. At the hearing before the Staff Hearing
Officer, neither appellant nor appellant's counsel appeared and
additional medical evidence was not submitted. The Staff
Hearing Officer denied appellant's claim.
Mr. Harmon appealed his claim to the Industrial Commission,
which declined to hear the appeal. Appellant, therefore,
appealed the matter to the Allen County Common Pleas Court.
After filing an answer to appellant's complaint, Powertrain
filed a motion for summary judgment claiming appellant failed to
exhaust his administrative remedies, based on appellant's
failure to obtain the mandatory qualified medical specialist
examination. The trial court subsequently granted Powertrain's
motion for summary judgment, finding that the failure to obtain
a qualified medical specialist examination precludes appellant
from participation in the benefits of workers' compensation.
ASBESTOS LITIGATION: LA Olin Subsidiary Case Remanded
-----------------------------------------------------
The Court of Appeal of Louisiana remanded a case against Olin
Corp. subsidiary Riverwood International Corp. back to the
Fourth Judicial District Court for the Parish of Ouachita,
Louisiana.
Walter T. Graves Jr. worked at the West Monroe paper mill from
1943 to 1985. In early 2000, he was diagnosed with malignant
mesothelioma, a disease commonly resulting from exposure to and
ingestion of asbestos fibers. In April 2000 Mr. Graves filed
suit against Riverwood International Corp., the then-current
name of the mill, and 13 other companies that allegedly made or
supplied asbestos products used in the mill over the years.
Graves's claims were based on negligence and strict liability.
In June 2000, Mr. Graves died; his widow and two adult children
filed a petition substituting themselves as parties plaintiff,
and naming Olin Corp. as the owner of the mill.
Olin initially filed a motion for summary judgment claiming the
exclusive remedy of workers' compensation. The district court
granted this motion in June 2001, dismissing all negligence and
intentional tort claims, but giving the plaintiffs leave to
amend the petition to allege contract claims.
The plaintiffs' "second supplement and amendment to original
petition," filed June 29, 2001, added 13 subparagraphs alleging
Olin's contractual liability. They alleged that Olin, or its
corporate predecessors, owned and operated the West Monroe mill
from 1925 until January 1, 1967. Effective that date, Olin
transferred ownership and operation of the mill to a wholly
owned subsidiary called Olinkraft Inc. According to the
plaintiffs, Olinkraft then contracted with Olin to provide
industrial hygiene services to Olinkraft, and Olinkraft's direct
employees, including Graves, were third-party beneficiaries of
that contract.
ASBESTOS LITIGATION: Viacom Corp. Sues Insurer, Loses On Appeal
----------------------------------------------------------------
Judge Thomas J. Brown III of the Circuit Court for Cole County
applied Missouri law and denied the claims filed by Viacom Inc.
(as the successor-in-interest to Westinghouse Electric Corp.)
against Transit Casualty Co. based on pro rata, time-on-the-risk
allocation among policies. The insured appealed, and case was
transferred from the Court of Appeals. The Supreme Court of
Missouri held that Pennsylvania law applied, and the "all sums"
method was proper allocation among excess liability policies.
It reversed and remanded the appeal.
Pennsylvania law (which controls this case) where excess
liability policies were delivered, rather than Missouri where
insurer was in receivership, governed receivership court's
allocation of asbestos-related claims against insured among the
policies; Pennsylvania was state of insured's incorporation and
place where policies were negotiated, the parties could expect
that the insured risk was predominantly located in Pennsylvania
although it was spread over several states, the insolvency code
did not address choice of law, and the insured was not
attempting to seize the insurer's property through non-
insolvency law and gain preference, but was working within the
insolvency proceedings to have the appropriate law applied.
Under Pennsylvania law, the "all sums" method was proper
allocation among excess liability policies covering claims
against insured manufacturer of asbestos products.
The underlying allegations involve Westinghouse products that
resulted in toxic tort bodily injury, arising predominantly from
asbestos exposure, and steam generator claims. Plaintiffs in
those suits contend that their injuries occurred because of
exposure to asbestos in various products manufactured by
Westinghouse.
Transit issued three excess-liability policies to Westinghouse
for 1980, 1981, and 1982, which pay $15,000,000 per occurrence
after payment of $100,000,000 by the underlying or primary
policy. Westinghouse claimed indemnity, defense, and settlement
agreement costs exceeding $528 million for all claims against
it, noting other settlement agreements of hundreds of millions
of dollars. Westinghouse claims the full amount of the 1980 and
1981 policies: $30,000,000. Transit denied, asserting that none
of its policies were impaired "applying a continuous trigger pro
rata allocation methodology."
ASBESTOS LITIGATION: U.S. Military Veteran Makes Exposure Claim
----------------------------------------------------------------
The U.S. Court of Appeals for Veterans Claims denied what it
construed as a petition for extraordinary relief made by a
veteran who alleged asbestos exposure to military personnel. On
May 10, 2004, the Court received correspondence in which
petitioner James M. Maltbie requests that the Court intervene in
dispute between the petitioner and the United States, and
various of its departments, including the Department of Defense,
Veterans Affairs (VA), and the military service departments,
over the issue of asbestos exposure. The petitioner states that
the Court's intervention is in "reference to asbestos exposure
to all active duty military personnel dating back to the
1950s...and may include German civilians that may have come in
contact with [asbestos] used during the European theater between
1970-1983, by the United States Army, Air Force and Marines."
The petitioner further states that he filed a claim with VA in
October 2001, but that "despite [his] best efforts the hearing
before the Board of Veterans' Appeals continues to elude [him]."
The petitioner asserts that the Court must intervene immediately
to address statute of limitations problems and asserts that the
evidence that he has attached to his petition is conclusive in
his favor. The Court will construe the petitioner's
correspondence as a petition for extraordinary relief in the
nature of a writ of mandamus to the extent that he is alleging
that VA has failed to adjudicate his claim in a timely manner.
The appellant included a copy of a September 3, 2003, letter to
him from the Houston, Texas, VA Regional Office (RO), explaining
that the appellant's claim for service connection for
cardiomyopathy with congestive heart failure, claimed as due to
asbestos exposure in service, was denied on August 15, 2002;
that the petitioner had filed a Notice of Disagreement on April
22, 2003; that a hearing had been held before a decision review
officer on May 1, 2003; and that a Statement of the Case was
issued on August 29, 2003. The correspondence from the RO
further advised the petitioner that he needed to submit a VA
Form 9, before October 29, 2003, in order for his appeal to
continue. To the extent that the petitioner's correspondence
could be construed as a motion to establish a class action
procedure in "reference to asbestos exposure to all active duty
military personnel...," the Court has declined in the past to
establish a class-action procedure.
ASBESTOS ALERT: Bearfoot Corp. Prevails Against OH Appeal
---------------------------------------------------------
On August 10, 2004, the Court of Appeals of Ohio denied a
request for a writ of mandamus brought by Delbert L. Harris in
his lawsuit against the Industrial Commission of Ohio and
Bearfoot Corp. Mr. Harris commenced the original action
requesting a writ of mandamus that orders the Industrial
Commission of Ohio to vacate its order denying him permanent
total disability compensation and to enter an order granting
said compensation. This matter was referred to a magistrate,
who issued a decision that the court deny Mr. Harris' request.
Mr. Harris filed an objection to the magistrate's conclusions,
asserting that the July 22, 2002 report of Dr. Jerry W. Scott
cannot be considered evidence "because it failed to consider all
of the allowed conditions of relator's industrial claim" and
that "Dr. Scott disregarded the claim allowance for asbestosis
by causally relating his pulmonary disability to non-allowed
conditions." On October 7, 1999, Mr. Harris was also examined
by Dr. Robert B. Altmeyer, who specializes in pulmonary medicine
and wrote that Mr. Harris had "a significant exposure" to
asbestos at Flintcote Co. in Ravenna, OH. This was a company
that made asbestos pipes. Mr. Harris had extensive exposure to
asbestos and even personally opened up bags containing asbestos
many times. On September 25, 2001, Mr. Harris was examined by
Dr. Fred K. Branditz, a pulmonary medicine specialist, who wrote
that his findings did not indicate the development of
asbestosis. On July 1, 2002, Mr. Harris was examined at the
Industrial Commission's request by Dr. Scott, an assistant
professor at the Joan C. Edwards School of Medicine, Marshall
University. Dr. Scott concluded that the claimant was capable
of doing "light work" but was "not likely a good candidate for
rehabilitation and retraining."
The Court of Appeals found that the magistrate properly
determined the pertinent facts and applied the salient law to
them. Accordingly, it adopted the magistrate's decision as its
own. In accordance with the magistrate's decision, the
requested writ of mandamus was denied, and the objection
overruled.
COMPANY PROFILE
Bearfoot Corp.
First & Water Sts
Wadsworth, OH 44281
ASBESTOS ALERT: Insulating Services' Verdict Upheld In NC
---------------------------------------------------------
The Court of Appeals of North Carolina held that competent
evidence supported the Industrial Commission's decision that
workers' compensation claimant Harry Eugene Vaughn did not meet
his burden of proving that he was injuriously exposed to the
hazards of asbestosis during his employment with Insulating
Services Inc. At the time of the hearing before the deputy
commissioner, plaintiff was 64 years old. Plaintiff began
working in the insulation industry in 1952, and continued
working until 1959, at which time he joined the Army. The
majority of the work plaintiff performed between 1952 and 1959
involved insulation containing asbestos. Plaintiff left the
Army in 1980 and subsequently worked for various insulation
companies.
Plaintiff began his employment with Insulating Services in 1983.
He worked for defendant-employer until his retirement in
February 2000. Plaintiff spent much of his time working at a
facility in Charlotte now owned by B.F. Goodrich.
Dr. Douglas G. Kelling, the examining physician for the
Industrial Commission's Advisory Medical Committee, examined
plaintiff on April 12, 1996. Plaintiff provided Dr. Kelling
with a written employment history, which indicated that he
worked as an insulator from 1954 until 1982, during which time
he was exposed to asbestos without benefit of a respirator.
Plaintiff did not mention any specific exposure to asbestos
during his employment with defendant-employer. Dr. Kelling
diagnosed plaintiff with asbestosis.
The Plaintiff was also examined by Dr. Patrick Kelly, a Board
certified pulmonologist, on November 19, 1999. Dr. Kelly noted
that "[plaintiff] reports exposure to asbestos [during his
employment with defendant-employer] although it is somewhat
unclear exactly in what form." Plaintiff did not advise Dr.
Kelly of any specific incidents of exposure to asbestos dust
while working for defendant-employer. Dr. Kelly diagnosed
plaintiff with asbestosis.
On May 16, 1997, plaintiff filed for workers' compensation
benefits from defendant-employer, alleging asbestosis.
Travelers Insurance, USF & G (Hartford), Kemper, Royal
Insurance, Massachusetts Bay, Aetna Life & Casualty, and
Harleysville Mutual Insurance are the insurance companies that
provided worker's compensation insurance for employer during the
course of plaintiff's employment. Defendants denied liability.
In an opinion filed March 27, 2003, the Commission denied
plaintiff's claim for compensation. Plaintiff gave notice of
appeal to the Court on April 4, 2003.
COMPANY PROFILE
Insulating Services Inc.
10709-H Granite Street
Charlotte, NC 28273
Phone: 800-637-2309
Fax: 704-588-1219
http://www.insulatingservices.com
Employees : 200+
(As of December 31, 2003)
Description: Insulating Services Inc. was formed in 1973 to
provide industrial and commercial insulation to the
manufacturing and construction industries. From working out of
a small rented garage, the company now has seven locations
across the southeast United States that service customers on a
nationwide basis.
ASBESTOS ALERT: LaGrand Industrial Will Not Face New Trial
----------------------------------------------------------
The Court of Appeals of Oregon affirmed the Multnomah County
Circuit Court denial of plaintiff Robert Hill's motion for a new
trial against LaGrand Industrial Supply Co. Plaintiff brought
this action for product liability and negligence based on his
exposure to asbestos-containing products distributed and sold by
defendant. The jury returned a special verdict, finding that
defendant's product was defective; that it was not a substantial
factor in causing plaintiff's injury; and that defendant was not
negligent. Plaintiff moved for a new trial based on what he
characterized as juror misconduct. The trial court denied his
motion, and he appealed.
COMPANY PROFILE
LaGrand Industrial Supply Co.
2620 Southwest 1st Avenue
Portland, OR 97201
Phone: 503-224-5800
Fax: 503-224-0639
http://www.lagrandindustrial.net
Description: LaGrand Industrial Supply Co. is categorized as a
manufacturer of safety clothing & equipment, sandblasting
equipment & supplies, abrasives & abrasive products, and
refractory materials.
New Securities Fraud Cases
BIOLASE TECHNOLOGY: Weiss & Yourman Lodges Securities Suit in CA
----------------------------------------------------------------
The law firm of Weiss & Yourman announced today that a class
action lawsuit has been filed in the United States District
Court for the Central District of California, Case No. CV-04-
7125 AHM, entitled Ezell v. Biolase Technology, Inc., on behalf
of persons who acquired the securities of Biolase Technology,
Inc., ("Biolase" or the "Company") (Nasdaq: BLTI) between
October 29, 2003 and July 16, 2004, inclusive (the "Class
Period").
Biolase designs, manufactures and markets advanced dental,
cosmetic and surgical laser and related products. Its primary
products are the Waterlase system -- a dental precision cutting
tool -- and LaserSmile, a system designed to complement the
Waterlase in soft tissue and tooth whitening procedures.
The complaint alleges that Biolase and certain of its officers
violated federal securities laws by causing Biolase's shares to
trade at artificially inflated levels through the issuance of
false and misleading statements and the omission of key
information that would make those statements not misleading.
As more fully detailed in the complaint, it is alleged that
throughout the Class Period, in press releases, conference
calls, Securities and Exchange Commission filings, and
communications with analysts, defendants continually touted the
strength of the Company and the success of its expansion
efforts. It is also alleged that during this period, however,
defendants knew, but failed to disclose, that demand for the
Company's products was weak, and that sales growth would be
lower than previously announced. When this information
ultimately came to light at the end of the Class Period, the
Company's shares immediately tumbled 27% on unusually high
volume.
For more details, contact Vahn Alexander, Esq. of Weiss &
Yourman - Los Angeles by Phone: (800) 437-7918 by E-mail:
info@wyca.com or visit their Web site: http://www.wyca.com
KONGZHONG CORPORATION: Schatz & Nobel Lodges NY Securities Suit
---------------------------------------------------------------
The law firm of Schatz & Nobel, P.C., initiated a lawsuit
seeking class action status in the United States District Court
for the Southern District of New York on behalf of all persons
who purchased the American depository shares ("ADS") of
KongZhong Corporation (Nasdaq: KONG) ("KongZhong") between July
9, 2004 and August 17, 2004 (the "Class Period"), including
anyone who purchased in the Initial Public Offering ("IPO").
The complaint alleges that the Prospectus filed with the SEC in
connection with KongZhong's July 9, 2004 IPO was materially
false and misleading as evidenced by recent sanctions imposed by
China Mobile Communications Corporation ("China Mobile"). On
August 18, 2004, KongZhong issued a press release disclosing
that China Mobile had imposed sanctions because KongZhong had
carried inappropriate content on its interactive voice response
service. The sanctions include the suspension of KongZhong's new
applications for new products and services on all platforms and
joint promotions with China Mobile until the end of 2004, and
the suspension of KongZhong's applications to operate in new
platforms until June 30, 2005.
For more details, contact Wayne T. Boulton of Schatz & Nobel,
P.C. by Phone: (800) 797-5499 by E-mail: sn06106@aol.com or
visit their Web site: http://www.snlaw.net
PETMED EXPRESS: Baron & Budd Lodges Securities Fraud Suit in FL
---------------------------------------------------------------
The law firm of Baron & Budd, P.C. initiated a class action
lawsuit in the United States District Court for the Southern
District of Florida on behalf of purchasers of PetMed Express,
Inc. (Nasdaq: PETS) ("PetMed" or the "Company") securities
during the period between June 18, 2003 and July 26, 2004,
inclusive (the "Class Period").
PetMed has consistently promoted itself as an affordable source
of everyday brand-name pharmaceutical and non-pharmaceutical
products to treat dogs and cats afflicted with fleas, ticks and
heartworm, among other ailments. During the Class Period
however, the Complaint alleges that PetMed and its executives
failed to disclose that PetMed was failing in its business and
resorting to threatening practices aimed at veterinarians to
force them to authorize the refill of PetMed prescriptions.
Further, the Complaint charges that PetMed could not guarantee
the quality, safety or efficacy of PetMed drugs because, as an
unauthorized reseller of many products, the Company had to
obtain such products through unauthorized channels, which indeed
prompted veterinarians to refuse refilling prescriptions through
PetMed. Additionally and in support of the Complaint's alleged
fraudulent scheme, the Company's executives are alleged to have
sold $65 million of their personal holdings in PetMed stock
while the stock was performing at artificially inflated levels
due to the Defendants' concealment of material information from
the investing public.
On July 26, 2004, defendants stunned the market when they
belatedly disclosed that the Company was operating well below
defendants' previous guidance and that PetMed revenues and
earnings were well below plan. Shares of PetMed fell $2.07 per
share or 29.70 percent, on July 26, 2004, to close at $4.90 per
share.
For more details, contact Randall K. Pulliam, Esq. of BARON &
BUDD, P.C. by Phone: 1-800-222-2766 by E-mail:
info@baronbudd.com or visit their Web site:
http://www.baronandbudd.com
PETMED EXPRESS: Wechsler Harwood Lodges Securities Lawsuit in FL
----------------------------------------------------------------
The law firm of Wechsler Harwood LLP initiated a Federal
Securities fraud class action suit on behalf of all securities
purchasers of PetMed Express, Inc. (Nasdaq:PETS) ("PetMed" or
the "Company") from June 18, 2003 through July 26, 2004,
inclusive (the "Class Period").
The action, entitled Malonek v. PetMed Express, Inc., et al.,
Case No.04-CV-80784, is pending in the United States District
Court for the Southern District of Florida and names as
defendants, the Company, its Chief Executive Officer and a
Director, Menderes Akdag, its President and Chairman of the
Board of Directors, Marc Puleo, and its Chief Financial Officer,
Bruce S. Rosenbloom.
The complaint charges defendants with violations of the
Securities Exchange Act of 1934. More specifically, the
Complaint alleges that the Company failed to disclose and
misrepresented the following material adverse facts which were
known to defendants or recklessly disregarded by them:
(1) that the Company's business model enabled the company
to experience sustained financial growth since the
model shifted costs to veterinarians (who are the
Company's competitors);
(2) that the business model made the Company dependent on
the cooperation of veterinarians to fill prescriptions;
(3) that the defendants could not guarantee the quality,
safety or efficacy of PetMed drugs because, as an
unauthorized reseller of many products, the Company had
to obtain such products through unauthorized channels,
prompting veterinarians to refuse refilling
prescriptions through PetMed; and
(4) that as a result, the Company's financial results were
not sustainable, causing the stock to trade at
artificially high prices.
During the Class Period, while PetMed's stock price was
inflated, defendants and Company insiders sold almost $65
million in privately held PetMed's stock.
On July 26, 2004, defendants shocked the market when they
belatedly disclosed that the Company was operating well below
defendants' previous guidance and that PetMed revenues and
earnings were well below plan. News of this shocked the market.
Shares of PetMed fell $2.07 per share or 29.70 percent, on July
26, 2004, to close at $4.90 per share.
For more details, contact Virgilio Soler, Wechsler Harwood
Shareholder Relations Department of Wechsler Harwood LLP by
Mail: 488 Madison Avenue, 8th Floor, New York, NY 10022 by
Phone: (877) 935-7400 or by E-mail: vsoler@whesq.com
SALOMON SMITH: Stull Stull Lodges Securities Fraud Lawsuit in MD
----------------------------------------------------------------
The law firm of Stull, Stull & Brody initiated a class action
lawsuit in the United States District Court for the District of
Maryland, on behalf of persons who purchased or otherwise
acquired or hold shares of several Salomon Smith Barney mutual
funds ("SSB Funds") between January 1, 1999 and July 1, 2003,
inclusive (the "Class Period"). The lawsuit was filed against
certain Salomon Smith Barney entities, certain Canary Capital
entities, and John Does 1-100 ("Defendants") The Complaint
alleges that Defendants violated the federal securities laws and
engaged in a course of business, which operated as a fraud and
deceit on members of the class, as defined above, in the
following SSB Funds:
(1) Salomon Brothers All Cap Value Fund (Sym: SUBAX, SUBBX,
SUBZX)
(2) Salomon Brothers Balanced Fund (Sym: STRAX, STRBX,
STRCX)
(3) Salomon Brothers California Tax Free Bond Fund (Sym:
CCAIX, SCUBX, SCULX)
(4) Salomon Brothers Capital Fund (Sym: SCCAX, SPABX,
SACPX, SCCCX)
(5) Salomon Brothers High Yield Bond (Sym: SAHYX, SBHYX,
SHYOX, SHYCX)
(6) Salomon Brothers International Equity Fund (Sym: SAIEX,
SAIBX, SAICX)
(7) Salomon Brothers Investors Value Fund (Sym: SINAX,
SBINX, SAIFX, SINOX)
(8) Salomon Brothers Large Cap Growth Fund (Sym: SLCAX,
SALBX, SALCX)
(9) Salomon Brothers Mid Cap Fund (Sym: SMDAX, SMDBX,
SMDZX)
(10) Salomon Brothers National Tax Free Bond Fund (Sym:
CFNIX, SNABX, SNALX)
(11) Salomon Brothers New York Tax Free Bond Fund (Sym:
CFTNX, SNFBX, SNFLX)
(12) Salomon Brothers SB Adjustable Rate Income Fund (Sym:
SJRAX, SJRBX, SJRZX)
(13) Salomon Brothers SB Capital and Income Fund (Sym:
SOLAX, SOLBX, SOLZX)
(14) Salomon Brothers SB Convertible Fund (Sym: SVEAX,
SVEBX, SCEZX)
(15) Salomon Brothers SB Growth & Income Fund (Sym: SSWAX,
SSWBX, SSWZX)
(16) Salomon Brothers Short/Intermediate U.S. Government
Fund (Sym: SUSAX, SUSBX, SUSCX)
(17) Salomon Brothers Small Cap Growth (Sym: SASMX, SBSMX,
SCSMX)
(18) Salomon Brothers Strategic Bond Fund (Sym: SSTAX,
SBSBX, SSTCX)
(19) Smith Barney Aggressive Growth Fund (Sym: SHRAX, SAGBX,
SAGCX)
(20) Smith Barney All Cap Growth and Value Fund (Sym: SPAAX,
SPBBX, SPBLX)
(21) Smith Barney Appreciation Fund (Sym: SHAPX, SAPBX,
SAPCX, SAPYX)
(22) Smith Barney Arizona Municipals Fund (Sym: SLAZX,
SAZBX, SAZLX)
(23) Smith Barney Balanced Portfolio (Sym: SBBAX, SCBBX,
SCBCX)
(24) Smith Barney California Municipals Fund (Sym: SHRCX,
SCABX, SCACX)
(25) Smith Barney Classic Values Fund (Sym: SCLAX, SCLBX,
SCLLX)
(26) Smith Barney Conservative Portfolio (Sym: SBCPX, SBCBX,
SBCLX)
(27) Smith Barney Diversified Large Cap Growth Fund (Sym:
CFLGX, CLCBX, SMDLX)
(28) Smith Barney Diversified Strategic Income Fund (Sym:
SDSAX, SLDSX, SDSIX)
(29) Smith Barney Dividend and Income Fund (Sym: SUTAX,
SLSUX, SBBLX)
(30) Smith Barney Financial Services Fund (Sym: SBFAX,
SBFBX, SFSLX)
(31) Smith Barney Florida Portfolio (Sym: SBFLX, FLABX,
SFLLX)
(32) Smith Barney Fundamental Value Fund (Sym: SHFVX, SFVBX,
SFVCX)
(33) Smith Barney Georgia Portfolio (Sym: SBGAX, SBRBX,
SGALX)
(34) Smith Barney Global All Cap Growth and Value Fund (Sym:
SPGAX, SPGGX, SPGLX)
(35) Smith Barney Global Government Bond Portfolio (Sym:
SBGLX, SBGBX, SGGLX)
(36) Smith Barney Global Portfolio (Sym: CAGAX, CAGBX,
SGPLX)
(37) Smith Barney Government Securities Fund (Sym: SGVAX,
HGVSX, SGSLX)
(38) Smith Barney Group Spectrum Fund (Sym: SGSAX, SGSBX,
SFTLX)
(39) Smith Barney Growth Portfolio (Sym: SCGRX, SGRBX,
SCGCX)
(40) Smith Barney Hansberger Global Value Fund (Sym: SGLAX,
SGLBX, SGLCX)
(41) Smith Barney Health Sciences Fund (Sym: SBIAX, SBHBX,
SBHLX)
(42) Smith Barney High Growth Portfolio (Sym: SCHAX, SCHBX,
SCHCX)
(43) Smith Barney High Income Fund (Sym: SHIAX, SHIBX,
SHICX)
(44) Smith Barney Income Portfolio (Sym: SCAAX, SCIAX,
SCILX)
(45) Smith Barney Intermediate Maturity CA Municipals Fund
(Sym: ITCAX, STDBX, SIMLX)
(46) Smith Barney Intermediate Maturity NY Municipals Fund
(Sym: IMNYX, SNMBX, SINLX)
(47) Smith Barney International All Cap Growth Portfolio
(Sym: SBIEX, SBIBX, SBICX)
(48) Smith Barney International Large Cap Fund (Sym: CFIPX,
SILCX, SILLX)
(49) Smith Barney Investment Grade Bond Fund (Sym: SIGAX,
HBDIX, SBILX)
(50) Smith Barney Large Cap Core Fund (Sym: GROAX, GROBX,
SCPLX)
(51) Smith Barney Large Cap Growth and Value Fund (Sym:
SPSAX, SPSBX, SPSLX)
(52) Smith Barney Large Cap Value Fund (Sym: SBCIX, SBCCX,
SBGCX)
(53) Smith Barney Large Capitalization Growth Fund (Sym:
SBLGX, SBLBX, SLCCX, SBLYX)
(54) Smith Barney Limited Term Portfolio (Sym: SBLTX, STMBX,
SMLLX)
(55) Smith Barney Managed Governments Fund (Sym: SHMGX,
MGVBX, SMGLX)
(56) Smith Barney Managed Municipals Fund (Sym: SHMMX,
SMMBX, SMMCX)
(57) Smith Barney Massachusetts Municipals Fund (Sym: SLMMX,
SMABX, SMALX)
(58) Smith Barney Mid Cap Core Fund (Sym: SBMAX, SBMDX,
SBMLX, SMBYX)
(59) Smith Barney Municipal High Income Fund (Sym: STXAX,
SXMT, SMHLX)
(60) Smith Barney National Portfolio (Sym: SBBNX, SBNBX,
SBNLX)
(61) Smith Barney New Jersey Municipals Fund (Sym: SHNJX,
SNJBX, SNJLX)
(62) Smith Barney New York Portfolio (Sym: SBNYX, SMNBX,
SBYLX)
(63) Smith Barney Oregon Municipals Fund (Sym: SHORX, SORBX,
SORLX)
(64) Smith Barney Pennsylvania Portfolio (Sym: SBPAX, SBPBX,
SPALX)
(64) Smith Barney S & P 500 Index Fund (Sym: SBSPX)
(65) Smith Barney SB Adjustable Rate Income Fund (Sym:
ARMZX, ARMBX, ARMGX)
(66) Smith Barney SB Capital and Income Fund (Sym: SOPAX,
SOPTX, SBPLX)
(67) Smith Barney SB Convertible Fund (Sym: SCRAX, SCVSX,
SMCLX, SCVYX)
(68) Smith Barney SB Growth & Income Fund (Sym: GRIAX,
GRIBX, SGAIX)
(69) Smith Barney Short Duration Municipal Income Fund (Sym:
SHDAX, SHDBX, SHDLX)
(70) Smith Barney Short-Term Investment Grade Bond Fund
(Sym: SBSTX, SHBBX, SSTLX)
(71) Smith Barney Small Cap Core Fund (Sym: SBDSX, SBDBX,
SBDLX)
(72) Smith Barney Small Cap Growth Fund (Sym: SBSGX, SBYBX,
SBSLX)
(73) Smith Barney Small Cap Growth Opportunities Fund (Sym:
CFSGX, SMOBX, SGOLX)
(74) Smith Barney Small Cap Value Fund (Sym: SBVAX, SBVBX,
SBVLX)
(75) Smith Barney Social Awareness Fund (Sym: SSIAX, SESIX,
SESLX)
(76) Smith Barney Technology Fund (Sym: SBTAX, SBTBX, SBQLX)
(77) Smith Barney Total Return Bond Fund (Sym: TRBAX, TRBBX,
SBTLX)
(78) Smith Barney U.S. Government Securities Fund (Sym:
SBCGX, SBUBX, SBULX)
The Complaint alleges that Defendants violated Sections 10(b) of
the Securities Exchange Act of 1934 and Rule 10b-5 promulgated
thereunder, Section 11 and Section 15 of the Securities Act of
1933, Sections 206 of the Investment Advisors Act, Sections
34(b), 36(a) and 48(a) of the Investment Company Act and several
common law causes of action. Specifically, the Complaint charges
Defendants with engaging in an unlawful and deceitful course of
conduct designed to improperly financial advantage Defendants.
The Defendants, in clear contravention of their fiduciary
responsibilities, and disclosure obligations, failed to properly
disclose that select favored customers were improperly allowed
to "time" their mutual fund trades. Such timing improperly
allowed favored investors to trade in and out of a mutual fund
to exploit short-term moves and inefficiencies in the manner in
which mutual funds price their shares. Defendants' improper acts
caused damage to the Funds themselves and persons who purchased
shares of the funds during the Class Period.
This matter is related to In re Mutual Fund Timing Litigation,
MDL-1586, now pending in the United States District Court for
the District of Maryland before the Honorable J. Frederick Motz,
the Honorable Frederick P. Stamp, the Honorable Catherine C.
Blake and the Honorable Andre Davis. In re Mutual Fund Timing
Litigation is a consolidated and coordinated group of cases
brought against eighteen separate mutual fund families, all
involving allegations of "late trading" and "market timing" in
the mutual fund industry.
For more details, contact Tzivia Brody, Esq. of Stull, Stull &
Brody by Mail: 6 East 45th Street, New York, NY 10017 by Phone:
1-800-337-4983 by Fax: 212/490-2022 by E-mail: SSBNY@aol.com or
visit their Web site: http://www.ssbny.com
SYNOPSYS INC.: Schiffrin & Barroway Lodges Securities Suit in CA
----------------------------------------------------------------
The law firm of Schiffrin & Barroway, LLP initiated a class
action lawsuit in the United States District Court for the
Northern District of California on behalf of all securities
purchasers of Synopsys, Inc. (Nasdaq: SNPS) ("Synopsys" or the
"Company") from December 3, 2003 through August 18, 2004,
inclusive (the "Class Period").
The complaint charges Synopsys, Aart J. de Geus, Steven K.
Shevick, and Richard T. Rowley with violations of Sections 10(b)
and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5
promulgated thereunder. More specifically, the Complaint alleges
that the Company failed to disclose and misrepresented the
following material adverse facts, which were known to defendants
or recklessly disregarded by them:
(1) that defendants knew or recklessly disregarded the fact
that renewals of up-front license bookings, which the
Company had touted as being strong, were not
materializing and were in fact becoming substantially
more averse to its customer base due to the large up-
front cash payments that the Company required;
(2) that the Company was not able to achieve substantial
growth and was not able to capture market share gains
through the technological advancements in the Company's
products, which defendants touted as a means for
achieving such an end;
(3) that defendants knew or recklessly disregarded the fact
that demand for the Company's products would not
continue to be strong despite a conservative spending
environment; and
(4) that as a result of the above, the defendants' positive
statements about the Company were lacking in any
reasonable basis when made.
On August 2, 2004, Synopsys announced preliminary results for
its third fiscal quarter ended July 31, 2004. The Company
expected total revenues to be $279 million to $283 million,
compared to its previous target range of $300 million to $320
million. Then on August 18, 2004, Synopsys reported fiscal
third-quarter earnings that were slightly ahead of reduced
estimates, and it also warned that results for the current
period and fiscal year would fall far short of Wall Street's
expectations. News of this shocked the market. Shares of
Synopsys fell $6.63 per share, or 31.16 percent, to close at
$14.65 per share.
For more details, contact Marc A. Topaz, Esq. or Darren J.
Check, Esq. of Schiffrin & Barroway, LLP by Mail: Three Bala
Plaza East, Suite 400, Bala Cynwyd, PA 19004 by Phone:
1-888-299-7706 or 1-610-667-7706 or by E-mail:
info@sbclasslaw.com
TECO ENERGY: Lerach Coughlin Lodges Securities Fraud Suit in FL
---------------------------------------------------------------
The law firm of Lerach Coughlin Stoia Geller Rudman & Robbins
LLP ("Lerach Coughlin") initiated a class action in the United
States District Court for the Middle District of Florida on
behalf of purchasers of TECO Energy, Inc. ("TECO") (NYSE:TE)
publicly traded securities during the period between October 30,
2001 and February 4, 2003 (the "Class Period").
The complaint charges TECO and certain of its officers and
directors with violations of the Securities Exchange Act of
1934. TECO is a holding company for regulated utilities and
other unregulated businesses.
The complaint alleges that during the Class Period, defendants
concealed problems with several independent power plant
construction ventures for which TECO would ultimately be fully
responsible, including the Company's full exposure to the demise
of Enron Corporation and the vulnerability of the Company's
large cash dividend, causing TECO shares to trade at
artificially inflated levels, permitting defendants to sell over
$4.2 million of their own personally held stock and to raise
over $792 million selling equity securities in the capital
markets. Then, through a series of events in late 2002 and early
2003, the Company's complex financing scheme began to unravel as
several of these large projects and their liabilities were "put"
to TECO, moving hundreds of millions of dollars of off-balance
sheet debt onto TECO's balance sheet, resulting in the Company
taking over a billion dollars in impairment charges and causing
the price of its common stock to plummet from a Class Period
high of over $28 per share on April 23, 2002 to below $13 per
share on February 4, 2003, erasing hundreds of millions of
dollars in market capitalization.
For more details, contact William Lerach or Darren Robbins of
Lerach Coughlin Stoia Geller Rudman & Robbins LLP by Phone:
800-449-4900 by E-mail: wsl@lerachlaw.com or visit their Web
site: http://www.lerachlaw.com/cases/tecoenergy/
TECO ENERGY: Schatz & Nobel Lodges Securities Fraud Suit in FL
--------------------------------------------------------------
The law firm of Schatz & Nobel, P.C., initiated a lawsuit
seeking class action status has been filed in the United States
District Court for the Middle District of Florida on behalf of
all persons who purchased the securities of TECO Energy, Inc.
(NYSE: TE) ("TECO") between October 30, 2001 and February 4,
2003 (the "Class Period"), including anyone who purchased in the
October 10, 2002 or June 5, 2002 equity offerings or the January
10, 2002, May 8, 2002 or January 10, 2002 debt offerings.
The complaint alleges that during the Class Period, TECO
concealed problems with several independent power plant
construction ventures for which it would ultimately be fully
responsible, including the exposure to the demise of Enron
Corporation and the vulnerability of the its large cash
dividend, causing TECO shares to trade at artificially inflated
levels. The individual defendants sold over $4.2 million of
their own stock and raised over $792 million selling equity
securities in the capital markets.
Through a series of events in late 2002 and early 2003, several
large projects and their liabilities were "put" to TECO, moving
hundreds of millions of dollars of off-balance sheet debt onto
TECO's balance sheet, resulting in TECO taking over a billion
dollars in impairment charges and causing the price of its
common stock to fall from a Class Period high of over $28 per
share on April 23, 2002, to below $13 per share on February 4,
2003.
For more details, contact Wayne T. Boulton of Schatz & Nobel,
P.C. by Phone: (800) 797-5499 by E-mail: sn06106@aol.com or
visit their Web site: http://www.snlaw.net
*********
A list of Meetings, Conferences and Seminars appears in each
Wednesday's edition of the Class Action Reporter. Submissions
via e-mail to carconf@beard.com are encouraged.
Each Friday's edition of the CAR includes a section featuring
news on asbestos-related litigation and profiles of target
asbestos defendants that, according to independent researches,
collectively face billions of dollars in asbestos-related
liabilities.
*********
S U B S C R I P T I O N I N F O R M A T I O N
Class Action Reporter is a daily newsletter, co-published by
Bankruptcy Creditors' Service, Inc., Fairless Hills,
Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland
USA. Glenn Ruel Se¤orin, Aurora Fatima Antonio and Lyndsey
Resnick, Editors.
Copyright 2004. All rights reserved. ISSN 1525-2272.
This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding, electronic
re-mailing and photocopying) is strictly prohibited without
prior written permission of the publishers.
Information contained herein is obtained from sources believed
to be reliable, but is not guaranteed.
The CAR subscription rate is $575 for six months delivered via
e-mail. Additional e-mail subscriptions for members of the same
firm for the term of the initial subscription or balance thereof
are $25 each. For subscription information, contact Christopher
Beard at 240/629-3300.
* * * End of Transmission * * *