/raid1/www/Hosts/bankrupt/CAR_Public/041001.mbx
C L A S S A C T I O N R E P O R T E R
Friday, October 1, 2004, Vol. 6, No. 195
Headlines
9/11 LITIGATION: Firefighters Seek Extension For Filing Lawsuit
ABLE ENERGY: Plaintiffs Seek Certification For NJ Suit Over Fire
AETNA INC.: Appeals Court Affirms National Doctor's Suit V. HMOs
ANTIDEPRESSANTS: Link To Adult Suicidal Behavior To be Probed
BEER CARTEL: Heineken, Danone Fined For Controlling Beer Market
BELL CANADA: Plaintiff Appeals Ontario Dismissal To High Court
BFGOODRICH: Recalls 46T Tires For Ride Quality, Defective Belts
EDELBROCK CORPORATION: Reaches Settlement For DE Investor Suit
FIRST CHOICE: Ex-COO Indicted On Fraud, Money Laundering Charges
GLAVAL BUS: Recalls 95 Buses, Due To Wheelchair Locking Defect
GOLDEN STATE: SEC Files Insider-Trading Charges V. CEO, Traders
IBM CORPORATION: Agrees To Settle Some Claims in Pension Lawsuit
INTERNATIONAL BUSES: Recalls 7,068 Buses For Signal Light Defect
JUST FOR FEET: AL Judge Assesses $97.4T Penalty V. Former EVP
LANTRONIX INC.: Plaintiffs File Third Amended Stock Suit in CA
LANTRONIX INC.: Discovery Begins in Shareholder Derivative Suit
MACK TRUCKS: Recalls 4,959 Mack Trucks Due To Accident Hazard
MAZDA CARS: Recalls 42,000 Passenger Cars Due To Airbag Defect
MEDIANEWS GROUP: Faces Indemnification Claims in NY Media Suit
NEXTCARD INC.: SEC Lodges Fraud Suit V. Former CEO, Executives
QUIZNO'S CORPORATION: CO Judge Gives Final Approval To Agreement
RURAL/METRO CORPORATION: Parties Settle AZ Securities Fraud Suit
SAKS INC.: Former Salesman Lodges Complaint Over Docking Of Pay
STRANGE ENGINEERING: Recalls 553 Brake Cylinders Due To Defect
SUNLINK HEALTH: Reaches Settlement For GA Shareholder Fraud Suit
TEREX CORPORATION: Recalls 47 Aerial Devices For Injury Hazard
TOYOTA MOTORS: Recalls 109,056 Celica, Echo Cars Due To Defect
UNITED STATES: Suit Numbers Rising, Several Factors Blamed
UNITED STATES: Interior Ordered To Inform Indians Of Lawsuit
UNITED STATES: Pacific Northwest Hospitals Sued By The Uninsured
UST LIQUIDATING: Trial in CA Securities Suit Set January 24,2005
VOLVO TRUCKS: Recalls 56,154 Trucks Due To Fire, Injury Hazard
WAL-MART STORES: Appeals Ruling On CO Pharmacists' Overtime Suit
WHITEHALL JEWELLERS: Reaches Settlement For Suit, Federal Probe
Asbestos Alert
ASBESTOS LITIGATION: Eli Lilly Cancer Drug Approved for EU Sale
ASBESTOS LITIGATION: GM Settled Former Worker's Asbestos Lawsuit
ASBESTOS LITIGATION: Asymptomatic Navy Vet Still Gets Payout
ASBESTOS LITIGATION: Whitewater EST Reaches US$50,000 Settlement
ASBESTOS LITIGATION: IL Board Dismisses Complaint V. Judge Byron
ASBESTOS LITIGATION: Witness Admits Perjury in NY Asbestos Suit
ASBESTOS LITIGATION: Asbestos Exposure Feared at NM High School
ASBESTOS LITIGATION: Remembrance of Sufferers Marked by UK Group
ASBESTOS LITIGATION: ICC Approves Ameren Purchase of IL Power Co
ASBESTOS LITIGATION: Union Carbide Says Kelly is "Scapegoating"
ASBESTOS LITIGATION: Lawyers Agree to Shred Cape Suit's Evidence
ASBESTOS LITIGATION: Ameron International Faces 18,963 Claimants
ASBESTOS LITIGATION: Link in Brit Widow's Death Remains Unknown
ASBESTOS LITIGATION: Cuyahoga, OH Limits Court To Sick Claimants
ASBESTOS LITIGATION: Reform Proposal Rejected By Majority Leader
ASBESTOS LITIGATION: Scandal Forces Hardie CEO, CFO to Step Down
ASBESTOS LITIGATION: Union Probes Halliburton Over KBR's Future
ASBESTOS LITIGATION: Experts Call for Ban on Asbestos in India
ASBESTOS LITIGATION: Retired Workers Fear End of Pension from FM
ASBESTOS LITIGATION: Lloyd's Gets Shock Over GBP7.7B Liability
ASBESTOS LITIGATION: Insurers, Congress Challenge "Prepacks"
ASBESTOS LITIGATION: Jerusalem Groups Deal With Asbestos Threat
ASBESTOS LITIGATION: Aussie Govt Presents Laws On Hardie Trial
ASBESTOS LITIGATION: Tenants Urged to Do Survey or Face Penalty
ASBESTOS LITIGATION: Asbestos Delays Renovation at NY Hospital
ASBESTOS LITIGATION: MCB Camp Butler Awarded for Safety Program
ASBESTOS LITIGATION: US Agencies Deal With FL Post-storm Debris
ASBESTOS LITIGATION: Tests Reveal Carcinogens in Soil of UK Town
ASBESTOS LITIGATION: "Scan Van" Draws Criticism from UK Insurers
ASBESTOS LITIGATION: NC Jury Awards Ex-CSX Worker US$7.5 million
ASBESTOS LITIGATION: AU Town Rejects Proposed Asbestos Dumpsite
ASBESTOS ALERT: Death of Fireman Sparks Lawsuit Against UK Govt
ASBESTOS ALERT: Agencies Test Air Quality Along Michigan Trails
ASBESTOS ALERT: CA Pre-schools Close Because of Asbestos, Lead
ASBESTOS ALERT: AU Health Union Demands Proof of Hospital Safety
ASBESTOS ALERT: Canada's Metal Dump Shut Down While Testing Bags
ASBESTOS ALERT: Asbestos Sparks Walkout at Sydney Building Site
New Securities Fraud Cases
BIOLASE TECHNOLOGY: Pomerantz Haudek Files Securities Suit in CA
DIGIMARC CORPORATION: Lasky & Rifkind Lodges OR Securities Suit
DIGIMARC CORPORATION: Milberg Weiss Lodges Securities Suit in OR
DIGIMARC CORPORATION: Schatz & Nobel Files Securities Suit in OR
DIGIMARC CORPORATION: Stoll Stoll Lodges Securities Suit in OR
INTERACTIVECORP: Milberg Weiss Files Securities Fraud Suit in NY
INTERACTIVECORP: Wolf Haldenstein Files Securities Lawsuit in NY
LIGAND PHARMACEUTICALS: Bernstein Liebhard Lodges CA Stock Suit
MAXIM PHARMACEUTICALS: Lasky & Rifkind Lodges CA Securities Suit
REMEC INC.: Charles J. Piven Lodges Securities Fraud Suit in CA
REMEC INC.: Lasky & Rifkind Files Securities Fraud Lawsuit in CA
REMEC INC.: Lerach Coughlin Lodges Securities Fraud Suit in CA
*********
9/11 LITIGATION: Firefighters Seek Extension For Filing Lawsuit
---------------------------------------------------------------
Firefighters who claim they got sick while working at Ground
Zero asked the United States District Court in Manhattan, New
York federal court to extend the deadline for filing negligence
suits against the city, the New York Post reports.
The firefighters should have technically sued the city by early
2003, as a plaintiff typically has 90 days from the date of the
related incident to file a notice of claim with the city of an
intention to sue. Plaintiffs then have a 15-month deadline to
sue the city for damages.
Some city employees, however, alleged that they only recently
realized that they suffer from serious respiratory illnesses and
other maladies that were not evident before the deadline. An
example is FDNY Captain Joseph Murphy of Engine 238, who was
assigned to Ground Zero after the Twin Towers fell, the NY Post
reports.
Mr. Murphy told the Post that health tests conducted by the Fire
Department in February found he suffers from "clinical asthma
with airway hyperactivity." The Fire Department's medical board
found "his respiratory disability is permanent and related to
his 9/11-WTC exposures," court papers filed in court alleged.
Mr. Murphy, along with other uniformed officers who filed a
separate class action suit, charges that the city failed to
provide him with proper respiratory equipment. The city's Law
Department said it is reviewing the case, the NY Post reports.
ABLE ENERGY: Plaintiffs Seek Certification For NJ Suit Over Fire
----------------------------------------------------------------
Plaintiffs moved for class certification for the lawsuit filed
against Able Energy, Inc., styled "Hicks v. Able Energy, Inc.,"
Company by property owners who allegedly suffered property
damages as a result of the March 14, 2003 explosion and fire in
Newton, New Jersey.
The Company's insurance carrier is defending as related to
compensatory damages. Legal counsel is defending on the
punitive damage claim. A hearing was held on March 11, 2004 on
an application on certain matters by the Plaintiffs, which were
denied.
Per legal counsel, whether this matter is certified a Class
Action will greatly influence the Company's potential exposure.
Legal counsel is guardedly optimistic that Class Action will be
denied, the Company stated in a disclosure to the Securities and
Exchange Commission.
AETNA INC.: Appeals Court Affirms National Doctor's Suit V. HMOs
----------------------------------------------------------------
The Eleventh Circuit Court of Appeals issued an Order on
September 27, 2004 affirming Judge Federico Moreno's earlier
approval of the landmark settlement agreement between the
nation's physicians and Aetna, Inc. The Order, issued without
opinion, also overruled all remaining objections to the
settlement. The settlement agreement, signed in May of 2003,
concluded the lawsuit against Aetna involving issues dating back
to 1990 and was part of on-going multi-district litigation
currently pending against many of the nation's largest for-
profit health insurers.
The landmark settlement agreement includes industry-leading
improvements to physician-related business practices that set
new levels of transparency in paying claims, including a
National Advisory Committee of Practicing Physicians to provide
advice to Aetna on issues of importance to physicians. It also
establishes an independent foundation dedicated to improving the
quality of health care in America. The value to physicians of
the business practice improvements over the course of the
agreement is estimated at approximately $300 million. In
addition to the significant business practice commitments that
create a new a standard for the industry, Aetna has agreed to
pay $100 million to physicians and $20 million to a foundation
established by the agreement.
"The primary achievement of this agreement for physicians is
found in the fundamental recognition by Aetna of the importance
of America's physicians in the healthcare equation," said Archie
Lamb, co-lead counsel of the national class action. "Aetna's
promises memorialized in the agreement to commit to external
review, transparency, clearly defined coding guidelines and a
meaningful enforcement mechanism are truly landmark commitments.
This Order clears the way for implementation of the many
benefits to physicians and the healthcare system contained in
the agreement," Lamb concluded.
For more details, visit http://www.hmocrisis.com
ANTIDEPRESSANTS: Link To Adult Suicidal Behavior To be Probed
-------------------------------------------------------------
The Food and Drug Administration intends to examine clinical
trial data for thousands of depressed adults to see if they
suffered increased suicidal thoughts and behaviors while taking
antidepressants, the Associated Press reports.
Independent experts, working with Columbia University, earlier
released a study saying there was a definite link between
antidepressants and the worsening suicidal fixations of children
taking them, an earlier Class Action Reporter story (September
16,2004) reports.
According to the study, antidepressants taken by children will
cause an extra 2% to 3% to have increased suicidal thoughts.
Relative risks of suicidal behavior were highest among youths
taking Luvox, Effexor and Paxil and lower among youths taking
Celexa and Zoloft. Prozac, earlier thought to be the most
benign antidepressant for youth, also increases the odds of
suicidal thoughts and actions.
A panel of advisers to the FDA has recommended placing a "black
box" warning on all drugs used to treat depressed children, over
their link to increased suicidal thoughts and actions.
Dr. Janet Woodcock, acting FDA deputy commissioner, could not
say how long the exhaustive analysis would take or how much it
would cost. "It's a huge undertaking," Dr. Woodcock said
Tuesday, according to the Associated Press.
Columbia University's report examined just one-tenth of the
information contained in adult databases. The FDA now will
begin to consider the link between antidepressants and suicidal
thoughts and behaviors in depressed adults. It will start by
analyzing a few of the larger drug trials. Ultimately,
Columbia's new analysis technique will be applied to all 234
clinical trials, representing 40,000 depressed adults.
"We'll be able to see, for adults, if this type of analysis
shows any change in their thinking or expression," Dr. Woodcock
said, according to AP.
Already, the agency knows that depressed adults in clinical
trials complete suicides at the same rate, whether they're
taking antidepressants or placebos. That earlier study was
driven by the ethical dilemma raised by denying drugs to
depressed adults. Researchers worried about a spike in suicides
among the adults taking sugar pills.
"We found that wasn't the case," Dr. Woodcock said.
An analysis already conducted by the FDA found no differences in
behavior or action of depressed children and adults taking
Paxil. "I'm not sure it was done the exact Columbia way," she
added.
Dr. Wayne K. Goodman, chair of the joint meeting of two federal
advisory panels that called for the black-box warnings, said the
new analysis could make it easier to see trends among young
adults, AP reports.
"We drew the line at 18," Goodman said. "But some of the same
mechanisms that could be responsible for suicidality in a small
fraction of patients would be operative in people who are 19,
20, 21. Who is to say?"
BEER CARTEL: Heineken, Danone Fined For Controlling Beer Market
---------------------------------------------------------------
French dairy Groupe Danone and Dutch beer giant Heineken NV
faces a EUR2.5 million (US$3 million) fine for allegedly
conspiring to control the wholesale beer market in France, the
Associated Press reports. The executive European Union meted
the fine, ordering Danone to pay EUR1.5 million (US$1.8 million)
and Heineken to pay EUR1 million (US$1.2 million).
The two firms were engaged in an acquisition war of drinks
wholesalers to strengthen their distribution networks in the
hotel, restaurant and cafe markets. In March 1996, the
companies agreed to an "armistice" to control costs. As part of
the agreement, Danone and Heineken agreed to temporarily stop
acquisitions and distribute equal volumes of total and branded
beers through their networks. However, the deal never pushed
through, which the commission considered while determining the
fines. The Commission, however, retained an aggravating
circumstance against Danone, since the company already was fined
back in 1984 for market sharing agreements.
In a statement, EU regulators said this was "akin to an
agreement to partition the away-from-home market," AP reports.
Heineken spokesman Gijsbert Siertsema said the company will
review the details of the decision before deciding whether to
appeal. "We will have until December 1 to take that decision,"
he said, according to AP.
BELL CANADA: Plaintiff Appeals Ontario Dismissal To High Court
--------------------------------------------------------------
Mr. Wilfred Shaw, the plaintiff in one of two proposed class
action lawsuits brought on behalf of BCI common shareholders and
seeking $1 billion in damages against BCI and BCE Inc. ("BCE"),
has filed an application with the Supreme Court of Canada
seeking leave to appeal the decision of the Ontario Court of
Appeal dismissing both lawsuits as failing to disclose a
reasonable cause of action, according to Bell Canada
International Inc. ("BCI").
The Shaw action was originally filed in the Ontario Superior
Court of Justice (the "Court") on September 27, 2002, and sought
court approval to proceed by way of class action on behalf of
all persons who owned BCI common shares on December 3, 2001 in
connection with the issuance of BCI common shares on February
15, 2002 pursuant to BCI's Recapitalization Plan and the
implementation of BCI's Plan of Arrangement approved by the
Court on July 17, 2002. After Mr. Shaw's original action was
dismissed by the Court on May 9, 2003, Mr. Shaw filed an amended
statement of claim on June 27, 2003. On August 30, 2003, Mr.
Gillespie filed a lawsuit that was, except with respect to the
name of the plaintiff, substantially identical to Shaw's amended
statement of claim. These two actions were dismissed by the
Court on January 5, 2004 without leave to amend their claims.
Mr. Shaw and Mr. Gillespie appealed this decision to the Ontario
Court of Appeal, which dismissed the appeal on July 23, 2004.
The decision of the Ontario Court of Appeal may only be appealed
to the Supreme Court of Canada if the Supreme Court grants
permission to appeal. Mr. Shaw's application to the Supreme
Court seeks such permission. BCI and BCE intend to oppose Mr.
Shaw's leave application. The period within which Mr. Gillespie
could have sought similar leave to appeal has now expired.
BCI is operating under a court supervised Plan of Arrangement,
pursuant to which BCI intends to monetize its assets in an
orderly fashion and resolve outstanding claims against it in an
expeditious manner with the ultimate objective of distributing
the net proceeds to its shareholders and dissolving the company.
BFGOODRICH: Recalls 46T Tires For Ride Quality, Defective Belts
---------------------------------------------------------------
BFGoodrich is recalling 46,000 passenger car and light truck
tires because of poor ride quality and possible problems with
steel belts, the Associated Press reports.
The tire brands affected include BFGoodrich, Uniroyal,
Liberator, Medalist, Phantom and Prospector. These tires were
made in April at the Fort Wayne plant, the company said,
according to AP. There have been no accidents, injuries or
property damage claims filed because of the problems.
The tires have Department of Transportation tire identification
numbers that begin with DOT BF and end with the last four digits
of 1504 or 1604. The identification numbers are found on the
inner or outer sidewall of the tire just above the wheel rim.
The Company said it will replace all recalled tires for free, AP
reports. Consumers can return the tires to where they bought
them for a free inspection and replacement.
EDELBROCK CORPORATION: Reaches Settlement For DE Investor Suit
--------------------------------------------------------------
Edelbrock Corporation forged a memorandum of understanding with
respect to a proposed settlement of a consolidated shareholder
class action filed against it in the Court of Chancery for New
Castle County in Delaware.
Three suits were initially filed, namely:
(1) Robert Garfield v. O. Victor Edelbrock, et al., No.
374-N;
(2) William Steiner v. Edelbrock Corporation, et al., No.
377-N; and
(3) Roger Delgado v. Edelbrock Corporation, et al., No.
388-N
The suits were filed on behalf of a class of all the Company's
stockholders (other than the defendants) against the Company and
its directors. The suits allege that terms of the proposal
presented by Mr. Edelbrock are unfair and inadequate and that
the defendants other than Mr. Edelbrock have responded to that
proposal in a manner that violates their fiduciary duties to the
plaintiff class. The action seeks to enjoin consummation of the
transaction contemplated by the proposal or, if it has been
consummated, rescission of the transaction and/or damages, an
earlier Class Action Reporter story (May 18,2004) reports.
The complaints seek a preliminary and permanent injunction to
enjoin the merger and, if the merger is consummated, rescission
and damages. The three actions were later consolidated into a
single action.
Under the terms of the proposed settlement, the plaintiffs'
counsel will be entitled to $425,000 in fees and expenses in the
aggregate and is subject to court approval.
FIRST CHOICE: Ex-COO Indicted On Fraud, Money Laundering Charges
----------------------------------------------------------------
Gary Van Waeyenberghe of South Bend, Indiana was criminally
indicted on conspiracy, mail fraud, wire fraud and money
laundering charges by a federal grand jury convened by the
United States Attorney for the Northern District of Indiana in
connection with misconduct while he was President and Chief
Operating Officer of First Choice Management Services (First
Choice), according to the Securities and Exchange Commission.
The Commission charged Van Waeyenberghe with violations of the
federal securities laws based on related conduct in July 2000.
According to the indictment, Van Waeyenberghe was the President
and Chief Operating Officer of First Choice, which marketed and
serviced finance receivables in the form of Enhanced Automobile
Receivables (EARs) and Realty First Mortgages (RFMs). The
indictment alleges that from November 1999 through July 2000,
Van Waeyenberghe used promotional materials that contained
materially false and misleading statements to induce prospective
clients to purchase receivables through First Choice's EAR and
RFM programs and attempted to lull clients into refraining from
seeking the return of their money by sending false account
activity statements. The indictment further alleges that Van
Waeyenberghe defrauded over 600 clients of over $24 million.
The Commission brought its civil action against First Choice and
Van Waeyenberghe based on related conduct on July 26, 2000.
Shortly after the filing of the Commission's Complaint, the
Court issued a Temporary Restraining Order and subsequently a
Preliminary Injunction freezing First Choice's and Van
Waeyenberghe's assets and appointed a receiver to manage First
Choice's assets during the pendency of the litigation. On Jan.
8, 2003, by consent, the Court permanently enjoined First Choice
and Van Waeyenberghe from future violations of the antifraud and
securities registration provisions of the federal securities
laws, ordered First Choice and Van Waeyenberghe jointly and
severally to pay $31.3 million in disgorgement and prejudgment
interest and imposed a $110,000 civil penalty on Van
Waeyenberghe. On the same day, the Court entered an Order
Liquidating First Choice which required the court-appointed
receiver for First Choice to liquidate First Choice's remaining
assets in order to satisfy, at least in part, First Choice's
disgorgement obligation. The action is titled, U.S. v. Gary Van
Waeyenberghe, Case No. 3:04CR0087AS, USDC, ND Ind.; SEC v. Gary
Van Waeyenberghe, et al., Case No. 3:00CV0446RM, USDC, ND Ind.
(LR-18907).
GLAVAL BUS: Recalls 95 Buses, Due To Wheelchair Locking Defect
--------------------------------------------------------------
Glaval Bus is cooperating with the National Highway Traffic
Safety Administration (NHTSA) by voluntarily recalling 95 buses,
namely:
(1) Glaval / Apollo, model 1999-2004
(2) Glaval / Concorde, model 1999-2004
(3) Glaval / Primetime, model 1999-2004
(4) Glaval / Titan, model 1999-2004
(5) Glaval / Universal, model 1999-2004
On certain buses equipped with Sure-Lok Wheelchair Securement
Systems, the sprocket teeth of the retractor assembly are out of
alignment. In the event of a vehicle crash, the wheelchair may
not be adequately secured, possibly resulting in injuries to the
wheelchair occupant.
Dealers will inspect and replace the wheelchair securement
retractors as necessary. Sure-lock is conducting the owner
notification and remedy for this campaign. For more details,
contact Sure-lock by Phone: 1-908-231-1804, the Company by
Phone: 1-800-445-2825 or contact the NHTSA's auto safety
hotline: 1-888-DASH-2-DOT (1-888-327-4236).
GOLDEN STATE: SEC Files Insider-Trading Charges V. CEO, Traders
---------------------------------------------------------------
The Securities and Exchange Commission filed insider-trading
charges against Mark Kelly, Martin Angel, John Buck and Chad
Latvaaho. The Commission's complaint alleges that in early May
of 2002, Kelly, who was the chief financial officer of Auto One
Finance, a subsidiary of Golden State Bancorp (GSB), was asked
to assist with due diligence in advance of Citibank's
acquisition of GSB. Kelly immediately tipped his friends,
Latvaaho and Angel, about the impending acquisition.
Between May 10 and May 17, Angel purchased 330 GSB call option
contracts based on his advance knowledge that Citibank was
planning to acquire GSB. Angel also tipped his colleague, Buck,
who purchased 150 call options and 2000 shares of GSB stock for
his own account and 34,000 shares of GSB for other accounts that
he managed for his employer. During the same period, Latvaaho
purchased 100 GSB call options. The following week, Citibank and
GSB announced the news to the public, and GSB's stock price rose
nearly 9%. Angel, Buck and Latvaaho immediately sold their
respective investments in GSB securities, yielding quick profits
of nearly $250,000 collectively.
The Commission's lawsuit, brought in federal district court in
Dallas, charges Kelly with tipping, and Angel, Buck and Latvaaho
with trading, on the basis of material, nonpublic information in
violation of Section 10(b) of the Securities Exchange Act of
1934 and Rule 10b-5 thereunder. Without admitting or denying the
allegations, Latvaaho has agreed to settle the action by
disgorging his profits of $30,857 and paying a civil penalty of
$30,857. Latvaaho also consented to a judgment enjoining him
from violating Section 10(b) of the Exchange Act and Rule 10b-5
thereunder. The action is titled, SEC v. Mark Kelly, et al.,
Civil Action No. 3:04-CV-2098-M, NDTX, Dallas Div. (LR-18906).
IBM CORPORATION: Agrees To Settle Some Claims in Pension Lawsuit
----------------------------------------------------------------
IBM Corporation agreed in principle with plaintiffs to resolve
certain claims in the class action lawsuit relating to its
pension plan, Cooper et al v. The IBM Personal Pension Plan and
the IBM Corporation. Under the agreement, the District Court
will issue no rulings on remedies. The company will appeal the
cash balance pension plan claims to the Seventh Circuit Court of
Appeals and believes it is likely to be successful on appeal.
The agreement, still subject to final approval by the Court
after notice to the class, provides that plaintiffs would be
eligible to receive an incremental pension benefit worth
approximately $300 million (which includes plaintiffs' attorneys
fees to be determined by the Court) in exchange for the
settlement of certain claims and a stipulated remedy in the
event that IBM loses the remaining cash balance claims on
appeal. Under the stipulated remedy, IBM's potential liability
for the claims being appealed is capped at $1.4 billion. If IBM
prevails on the claims being appealed, there will be no
additional liability. Together with an ancillary claim that was
settled earlier, IBM will take a one-time nonrecurring charge of
approximately $320 million to 3Q earnings as a result of this
agreement.
IBM continues to believe that its pension plan formulas are fair
and legal. The company has reached this agreement in the
interest of the business and IBM shareholders, and to allow for
a review of its cash balance formula by the Court of Appeals.
"The position that cash balance plans are unlawful seriously
jeopardizes the security of an already fragile U.S. pension
system," said Randy MacDonald, IBM's senior vice president of
human resources. "While IBM has the financial strength to deal
with the ramifications of this case, many companies do not. If
the ruling in this case is upheld, many companies will be forced
to end their pensions, reduce the number of employees who
receive pensions, or become noncompetitive which could result in
job losses."
There are more than 1,200 U.S. cash balance and related plans in
operation today that would be deemed illegal under the rulings
in this court case. Since 2000, companies have terminated
approximately 7,500 pension plans, according to the Pension
Benefit Guaranty Corporation, more than 1,000 in 2004 alone.
"Anyone who thinks that a Court ruling against cash balance
plans is good for American workers misses the fact that these
plans ensure the survival of secure retirement income," said Mr.
MacDonald.
Cash balance pension formulas are defined benefit plans that
provide the employee with interest credit from the moment a
retirement benefit is earned until it is taken. Although
employees under IBM's plan earn interest credits at the same
rate regardless of their age, the U.S. District Court for the
Southern District of Illinois ruled that IBM's cash balance
formula is unlawful because a younger employee will earn more
years of interest by the time he becomes age 65 than an older
employee. The ruling effectively concluded that providing
interest is unlawful age discrimination under the Employee
Retirement Income Security Act (ERISA) of 1974, the federal law
that sets standards for voluntarily established pension plans.
This interpretation is not supported by judicial, regulatory or
legislative authority. In fact, all other federal district
courts that have reviewed claims asserting that cash balance
plans are age discriminatory have found such plans to be lawful.
On September 15, 2004, IBM and the plaintiffs advised the Court
that they had resolved an ancillary claim, a partial plan
termination claim, which affects a limited number of former
employees who worked for the company for less than five years.
INTERNATIONAL BUSES: Recalls 7,068 Buses For Signal Light Defect
----------------------------------------------------------------
International Buses is cooperating with the National Highway
Traffic Safety Administration by voluntarily recalling 7,068
buses, namely:
(1) INTERNATIONAL / 3300, model 2005
(2) INTERNATIONAL / 4000, model 2005
(3) INTERNATIONAL / CE, model 2005
The buses were manufactured between May 24 and August 17,2004.
The left turn signal light and indicator light on the instrument
panel may not illuminate during hazard operation due to an
incorrectly manufactured switch contact that causes intermittent
contact in the turn signal stalk assembly. This results in
intermittent left turn signal and indicator light operation when
the hazard switch is activated.
Intermittent light operation reduces the ability to warn other
motorists of the driver's intentions. This could cause a
vehicle crash without warning that may result in property
damage, personal injury or death.
International will notify its customers and replace the turn
signal stalk assemblies free of charge. The recall is expected
to begin by November 19, 2004. If parts do not become available
within 60 days of this report, an interim notice will be sent to
dealers and owners informing them that this recall exists.
Owners who take their vehicles to an authorized dealer on an
agreed upon service date and do not receive the free remedy
within a reasonable time should contact the NHTSA's auto safety
hotline: 1-888-DASH-2-DOT (1-888-327-4236).
JUST FOR FEET: AL Judge Assesses $97.4T Penalty V. Former EVP
-------------------------------------------------------------
The Honorable R. David Proctor, U.S. District Judge for the
Northern District of Alabama, entered a Final Judgment as to
defendant Don-Allen Ruttenberg, a former Executive Vice-
President of Just for Feet, Inc., a large shoe and sports
apparel retailer formerly headquartered in Birmingham, Alabama.
The judgment enjoined Ruttenberg from further violations of
Section 17(a) of the Securities Act of 1933, Sections 10(b) and
13(b)(5) of the Securities Exchange Act of 1934 and Rules 10b-5,
13b2-1 and 13b2-2 thereunder and his aiding and abetting
violations of Sections 13(a), 13(b)(2)(A) and 13(b)(2)(B) of the
Exchange Act and Rules 12b-20, 13a-1 and 13a-13 thereunder.
Ruttenberg consented to the entry of the judgment without
admitting or denying any of the allegations of the Commission's
complaint. The court also ordered Ruttenberg to pay disgorgement
of $40,000, together with prejudgment interest of $17,294.97.
Ruttenberg was furthered ordered to pay a civil penalty of
$50,000 and was prohibited from acting as an officer or director
of any issuer that has a class of registered securities.
The complaint alleged that, in connection with the audit of Just
for Feet, Inc.'s fiscal 1998 financial statements in the spring
of 1999, Ruttenberg caused vendors to provide fraudulent
confirmations used to confirm the validity of unearned
receivables Just for Feet had recognized from its vendors. The
complaint also alleged that Ruttenberg caused vendors to provide
other confirmations that were fraudulently used to confirm the
validity of income Just for Feet had improperly recognized
through the acquisition of merchandise display booths from its
vendors. The overstatement of income and assets resulting from
this misconduct was reflected on Just for Feet's financial
statements included in its Form 10-K filed for fiscal year 1998,
Forms 10-Q filed for the first and second quarters of fiscal
year 1999, and in its registration statements on Forms S-8 and
S-4 filed in May and June of 1999, respectively. The action is
titled, SEC v. Don-Allen Ruttenberg, USDC, NDAL, Civil Action
No. CV-04-P-0371-S (LR-18908; AAE Rel. 2113).
LANTRONIX INC.: Plaintiffs File Third Amended Stock Suit in CA
--------------------------------------------------------------
Plaintiffs filed a third amended securities class action against
Lantronix, Inc. and certain of its current directors and former
officers in the United States District Court for the Central
District of California.
On May 15, 2002, Stephen Bachman filed a class action complaint
entitled "Bachman v. Lantronix, Inc., et al., No. 02-3899,"
alleging violations of the Securities Exchange Act of 1934 and
seeking unspecified damages. Subsequently, six similar actions
were filed in the same court.
Each of the complaints purports to be a class action lawsuit
brought on behalf of persons who purchased or otherwise acquired
the Company's common stock during the period of April 25, 2001
through May 30, 2002, inclusive. The complaints allege that the
defendants caused the Company to improperly recognize revenue
and make false and misleading statements about its business.
Plaintiffs further allege that the defendants materially
overstated the Company's reported financial results, thereby
inflating its stock price during its securities offering in July
2001, as well as facilitating the use of the Company's common
stock as consideration in acquisitions.
The complaints have subsequently been consolidated into a single
action and the court has appointed a lead plaintiff. The lead
plaintiff filed a consolidated amended complaint on January 17,
2003. The amended complaint now purports to be a class action
brought on behalf of persons who purchased or otherwise acquired
the Company's common stock during the period of August 4, 2000
through May 30, 2002, inclusive.
The amended complaint continued to assert that the Company and
the individual officer and director defendants violated the 1934
Act, and also includes alleged claims that the Company and its
officers and directors violated the Securities Act of 1933
arising from the Company's Initial Public Offering in August
2000. The Company filed a motion to dismiss the additional
allegations on March 3, 2003. The Court granted the motion,
with leave to amend, on December 31, 2003.
Plaintiffs filed their second amended complaint February 6,
2004, and the Company filed a motion to dismiss the additional
allegations in the second amended complaint on March 10, 2004.
On August 19, 2004, the Court granted in part and denied in part
the motion to dismiss.
LANTRONIX INC.: Discovery Begins in Shareholder Derivative Suit
---------------------------------------------------------------
Discovery has commenced in the amended shareholder derivative
complaint filed against certain of Lantronix, Inc.'s current
directors and former officers, styled "Ivy v. Bernhard Bruscha,
et al., No. 02CC00209," in the Superior Court of the State of
California, County of Orange.
On January 7, 2003, the plaintiff filed an amended complaint.
The amended complaint alleges causes of action for breach of
fiduciary duty, abuse of control, gross mismanagement, unjust
enrichment, and improper insider stock sales. The complaint
seeks unspecified damages against the individual defendants on
our behalf, equitable relief, and attorneys' fees.
The Company filed a demurrer/motion to dismiss the amended
complaint on February 13, 2003. The basis of the demurrer is
that the plaintiff does not have standing to bring this lawsuit
since plaintiff has never served a demand on the Company's Board
that the Board take certain actions on the Company's behalf. On
April 17, 2003, the Court overruled the Company's demurrer. All
defendants have answered the complaint and generally denied the
allegations.
MACK TRUCKS: Recalls 4,959 Mack Trucks Due To Accident Hazard
-------------------------------------------------------------
Mack Trucks, Inc. is cooperating with the National Highway
Traffic Safety Administration (NHTSA) by voluntarily recalling
4,959 Mack Trucks, namely:
(1) Mack / CH, year 2003,
(2) Mack / CX, year 2003
On certain truck chassis, the steering gear mounting bolts were
made of inconsistent bolt material, which has led to bolt
failures. This inconsistent bolt material condition could
result in a failure of a steering gear mounting bolts. The
steering gear is mounted to the vehicle's frame with three
bolts. Failure of two of the three bolts could result in the
loss of steering, which could result in loss of vehicle control
and crash without warning.
Dealers will inspect vehicles. New steering gear mounting bolts
will be installed. The recall is expected to begin in October
2004.
For more details, contact the Company by Phone: 1-610-709-3337
or the NHTSA's auto safety hotline: 1-888-DASH-2-DOT
(1-888-327-4236).
MAZDA CARS: Recalls 42,000 Passenger Cars Due To Airbag Defect
--------------------------------------------------------------
Mazda Motor Corporation is cooperating with the National Highway
Traffic Safety Administration by voluntarily recalling 42,000
passenger vehicles, namely the MAZDA3, model 2004.
On certain passenger vehicles, water can get into the sensor and
cause a short circuit due to a crack in the housing of the
airbag crash zone sensor. This will illuminate the airbag
warning light. Until the problem is remedied, the air bag will
not deploy as required in a frontal crash, increasing the risk
of additional injury to a seat occupant. While the occupant is
driving and the warning light illuminates, it can distract the
occupant and could cause a crash.
Dealers will inspect and replace the housing of the air bag
crash zone sensor. The recall is expected to begin on October
2004. For more details, owners can contact the Company by
Phone: 1-800-222-5500 or contact the NHTSA's auto safety
hotline: 1-888-DASH-2-DOT (1-888-327-4236).
MEDIANEWS GROUP: Faces Indemnification Claims in NY Media Suit
--------------------------------------------------------------
Medianews Group, Inc. faces several indemnification claims from
defendants in a consolidated class action filed in the United
States District Court for the Southern District of New York,
styled "In re Literary Works in Electronic Databases Copyright
Litigation, MDL No. 1379, Consolidated Case No. 00 Civ. 8049 GBD
(S.D.N.Y. 2000)."
Several suits were initially filed against entities involved in
the electronic display of articles ("Database Entities") that
had previously appeared in newspapers and magazines
(collectively, "Media Entities") and had been authored by
individuals who were not employees of the Media Entities. These
lawsuits alleged that the Database Entities infringed upon the
copyrights owned by the freelance authors.
The Company had licensed articles from its various newspapers to
one or more of the Database Entities. Although the Company is
not a party to this litigation, various Media Entities have
asserted claims for indemnification against the Company in
respect of their potential liability in this litigation.
In 2004, the Database Entities negotiated a draft settlement of
these consolidated actions, and have invited MediaNews to
participate in the settlement process. The settlement provides
for a claims settlement process in which a claims administrator
would determine the responsibility of the participants taking
into account such factors as the availability of defenses, the
existence of a copyright registration, the date on which the
relevant article was originally published, the amount received
by the author of the freelance article for the original
publication and the total amount of claims that are compensated.
The Company is currently considering whether to participate in
the settlement process.
NEXTCARD INC.: SEC Lodges Fraud Suit V. Former CEO, Executives
--------------------------------------------------------------
The Securities and Exchange Commission filed securities fraud
charges against the former Chairman, Chief Executive Officer
(CEO) and three other senior officers of NextCard, Inc., a San
Francisco, California-based credit card issuer. NextCard, which
is now in bankruptcy, was the first major credit card issuer to
offer cards exclusively over the Internet.
According to the Commission's complaint, beginning in at least
November 2000, NextCard began to suffer higher than expected
delinquencies and losses on its credit card loans-a reflection
of customers paying their credit card bills late or not paying
them at all. Instead of revealing these problems to investors,
NextCard's senior officers made a series of undisclosed, after-
the-quarter accounting adjustments on NextCard's books. The
adjustments - which NextCard's then-CEO described in his own
handwritten notes as "accounting gimmickry" - made it appear
that NextCard's customers were paying their bills in a timely
fashion, a key indicator of the financial health of a credit
card issuer.
In fact, NextCard's business model of issuing credit cards over
the Internet resulted in NextCard issuing cards to many
customers with relatively poor credit who could not pay back
their credit card loans in a timely fashion and, in many
instances, not at all. Instead of accounting for these as bad
loans and writing them off as uncollectible, as NextCard had
done in previous quarters, NextCard simply reclassified many of
these accounts as "fraudulent accounts," which were not
separately reported to the public, and then failed to tell
anyone. Thus, defendants led stock analysts and investors to
believe falsely that NextCard was meeting its projections and
that its late-paying and uncollectible loans were rising only
moderately, when in fact they were escalating rapidly.
The Commission's complaint charges the following former NextCard
officers with financial fraud: former Chairman Jeremy Lent of
Holualoa, Hawaii; former CEO, John Hashman of Danville, Calif.;
former President and Chief Operating Officer Yinzi Cai of Palo
Alto, Calif.; former Controller, Douglas Wachtel of San
Francisco, Calif.; and former Chief Financial Officer, Bruce
Rigione of New Canaan, Conn. The complaint, which was filed in
federal district court in San Francisco, also charges
Lent, Hashman, Cai and Wachtel with insider trading, based on
their sale of NextCard stock at inflated prices during the
course of the fraud. Lent sold approximately $7 million worth of
NextCard stock, Hashman sold $321,000, Cai sold $423,000 and
Wachtel sold $105,000. Lent's stock sales were carried out
through the Lent Family Trust, which is also named in the
complaint as a relief defendant.
The complaint alleges that NextCard failed to disclose to
investors reclassifications or changes in its accounting
methodology for late paying and uncollectible loans in its
earnings releases and periodic reports for the fourth quarter of
the 2000 fiscal year and the first and second quarters of 2001.
In addition, the complaint alleges that for the second quarter
of 2001 NextCard changed its methodology for calculating
reserves for its uncollectible loans. This change reduced the
amount of reserves the company had to set aside to cover
expected losses on its loans by 15% to 25%, and artificially
inflated the company's reported net income for the second
quarter of 2001.
According to the complaint, in October 2001 the Office of the
Comptroller of the Currency (OCC), which regulated NextCard's
subsidiary, NextBank, required NextCard to reverse the
reclassifications and changes in accounting methodology. On
October 31, 2001, NextCard issued a press release stating that
it was changing its accounting for uncollectible loans and that
the OCC considered NextBank to be significantly
undercapitalized. NextCard's stock price fell 84% that day, and
the company went into bankruptcy the following year.
The Commission's complaint charges the defendants with
committing and aiding and abetting fraud in violation of Section
10(b) of the Securities Exchange Act of 1934 (Exchange Act), and
Rule 10b-5 thereunder, as well as aiding and abetting NextCard's
violations of the same statue. The complaint also charges Lent,
Hashman, Rigione and Wachtel with aiding and abetting NextCard's
violations of the reporting provisions of the Exchanges Act,
Section 13(a) and 13(b)(2)(A) of the Exchange Act and Rules 12b-
20, 13a-1 and 13a-13 thereunder. Further, Lent, Hashman, Cai and
Wachtel are charged in the complaint for violations of Section
17(a) of the Securities Act of 1933 (Securities Act) and for
insider trading in violation of Section 10(b) of the Exchange
Act and Rule 10b-5 thereunder. The complaint also charges Lent,
Hashman and Cai as control persons for NextCard's violations of
Section 10(b) of the Exchange Act and Rule 10b-5 thereunder and
Hashman and Lent as control persons for NextCard's violations of
Section 13(a) and 13(b)(2)(A) of the Exchange Act and Rules 12b-
20, 13a-1 and 13a-13 thereunder.
This is the second action brought by the Commission as a result
of the financial fraud at NextCard. In September 2003, the
Commission charged three former employees of NextCard's
independent auditors, Ernst and Young (E&Y), for altering and
destroying E&Y's working papers for the fiscal year 2000 audit
of E&Y client NextCard, Inc.
The Commission acknowledges the assistance and cooperation of
the Federal Deposit Insurance Corporation and the Office of the
Comptroller of the Currency. The action is titled, SEC v. Jeremy
Lent, et al., Case No. C-04-4088 FMS, NDCA.
QUIZNO'S CORPORATION: CO Judge Gives Final Approval To Agreement
----------------------------------------------------------------
Denver District Judge Morris B. Hoffman issued an order granting
final approval of a multimillion-dollar settlement of a class
action lawsuit against Denver-based sandwich franchiser Quizno's
Corporation, the Denver Business Journal reports.
Filed by William Nickerson in January, the class action lawsuit
alleged breach of fiduciary duty and other charges.
According to Reid Neureiter, one of the Denver lawyers
representing the class, the terms of the settlement requires
Quizno's to pay another $10 per share, minus attorney fees and
litigation costs, to members of the class of shareholders who
responded to a tender offer at $8 a share in November and
December 2000 with the net amount to be received per share by
members of the class amounting to about $7.35. The payout is
expected to be in mid-November. The judge also approved $1.9
million in legal fees for the attorneys representing the class.
Though a total of 733,438 shares were tendered pursuant to the
2000 tender offer, which would mean that the settlement
theoretically was for $7.33 million. However, the payout was
actually somewhat less because of the 50 percent response rate
from those who had to take positive steps to get their money. Of
the total shares, 159,121 shares were held directly by record
holders and they automatically will receive roughly $7.35 a
share.
Holders of the remaining shares, the 574,317 that were held
beneficially, had to take action to receive their money after
receiving notification of the settlement. Of those, holders of
about 290,032 shares, slightly more than 50 percent of the
574,317 shares made claims for their money.
Though the deadline to file claims was August 30 some claims are
still being cured for deficiencies, so a total for all claims
has not been tallied yet, Mr. Neureiter said. All in all,
Quizno's will pay out an estimated $5.27 million under the
settlement.
RURAL/METRO CORPORATION: Parties Settle AZ Securities Fraud Suit
----------------------------------------------------------------
Parties in the class action filed against Rural/Metro
Corporation in the United States District Court in Arizona
agreed on a settlement for the suit, styled "STEVEN A.
SPRINGBORN V. RURAL/METRO CORPORATION, ET AL., CIV-02-2183-PHX-
JWS." The suit also names as defendants:
(1) Arthur Andersen LLP,
(2) Cor Clement and Jane Doe Clement,
(3) Randall L. Harmsen and Jane Doe Harmsen,
(4) Warren S. Rustand and Jane Doe Rustand,
(5) James H. Bolin and Jane Doe Bolin,
(6) Jack E. Brucker and Jane Doe Brucker,
(7) Robert B. Hillier and Jane Doe Hillier,
(8) John S. Banas III and Jane Doe Banas,
(9) Louis G. Jekel and Karen Whitmer,
(10) Mary Anne Carpenter and John Doe Carpenter,
(11) William C. Turner and Jane Doe Turner,
(12) Henry G. Walker and Jane Doe Walker,
(13) Louis A. Witzeman and Jane Doe Witzeman,
(14) John Furman and Jane Doe Furman, and
(15) Mark Liebner and Jane Doe Liebner
The lawsuit was brought on behalf of employee firefighters in
Maricopa County who participated in the Company's Employee Stock
Ownership Plan (ESOP), Employee Stock Purchase Plan (ESPP)
and/or Retirement Savings Value Plan ("401(k) Plan") from July
1, 1996 through June 30, 2001.
The plaintiffs amended the Complaint on October 17, 2002, adding
Barry Landon and Jane Doe Landon as defendants and making
certain additional allegations and claims. The primary
allegations of the complaint included violations of various
state and federal securities laws, breach of contract, common
law fraud, and mismanagement of the plans.
On October 30, 2002, defendant Arthur Andersen LLP removed the
action from Maricopa County Superior Court to the United States
District Court, District of Arizona. The Company and the
individual defendants consented to this removal. On February
21, 2003, the Company and the Company's current directors and
officers moved to dismiss the amended complaint, and its former
directors and officers subsequently joined in this motion.
On July 29, 2003, the court granted the motion to dismiss, which
disposed of all claims against the Company and its current and
former officers and directors. On August 28, 2003, plaintiffs
filed a notice of appeal from the court's July 29, 2003 order to
the Ninth Circuit. The appeal was dismissed as premature on
October 27, 2003. The court dismissed the plaintiffs' remaining
claims against Arthur Andersen on January 27, 2004, and entered
final judgment. On February 10, 2004, Rural/Metro and the
Company's current directors and officers filed a motion for
attorneys' fees. On February 26, 2004, the plaintiffs appealed
the trial courts judgment to the Ninth Circuit.
Under the settlement, the plaintiffs agreed to dismiss their
appeal of the final judgment, and the Company agreed to withdraw
all motions that were pending relating to the lawsuit.
SAKS INC.: Former Salesman Lodges Complaint Over Docking Of Pay
---------------------------------------------------------------
A complaint seeking class action status has been filed against
Saks, Incorporated (NYSE: SKS) and its Fifth Avenue Enterprises
accusing it of illegally docking the pay of its sales
associates, the New York Daily News reports.
Angel Vera, a former shoe salesman at Saks' Fifth Avenue
flagship store, claims the company accepted returns without
receipts, then took the return out of the pay of all the
associates in the department, though the merchandise might have
been stolen or bought from a catalogue. Furthermore, Mr. Vera's
complaint claims that Saks violated state labor laws.
The law firm of Kern & Welsh, which represents Mr. Vera is also
pursuing similar cases against May Department stores, owner of
Lord & Taylor, and Federated, owner of Macy's and
Bloomingdale's.
The plaintiffs' lawyer, Vern Welsh told the Daily News that the
Federated case has been granted class action status and may
include up to 18,000 defendants. He however, revealed that the
court has denied class action status for the case against May,
which they are currently appealing. Mr. Welsh stated that the
size of damages being sought in any of the cases has not been
established yet.
Though increasingly becoming rampant, according to a spokeswoman
for UNITE HERE, a union that represents some retail salespeople
in New York City, the practice of store returns being factored
into employee compensation is not uncommon.
STRANGE ENGINEERING: Recalls 553 Brake Cylinders Due To Defect
--------------------------------------------------------------
Strange Engineering is cooperating with the National Highway
Traffic Safety Administration by voluntarily recalling 553 brake
master cylinders, P/N B3360, sold to customers between November
1,2003 and September 4,2004.
The Allen bolt securing the primary piston assembly will loosen
resulting in brake fluid loss and partial loss of brakes.
Partial brake loss can result in a vehicle crash without
warning, which can cause serious injury or death.
The Company will notify its customers and inspect and repair the
master cylinder free of charge. The recall is expected to begin
September 24,2004. Owners who take their vehicles to an
authorized dealer on an agreed upon service date and do not
receive the free remedy within a reasonable time should contact
the Company by Phone: 847-663-1702 or contact the NHTSA's auto
safety hotline: 1-888-DASH-2-DOT (1-888-327-4236).
SUNLINK HEALTH: Reaches Settlement For GA Shareholder Fraud Suit
----------------------------------------------------------------
Sunlink Health Systems, Inc. reached a settlement for the
remaining securities class action filed against it and certain
of its officers and directors in the Superior Court of Fulton
County, Georgia.
Two similar suits were initially filed, namely:
(1) Mary Ross v. Robert M. Thornton, Jr., Dr. Steven
J. Baileys, Michael W. Hall, Gene E. Burleson, Karen B.
Brenner, C. Michael Ford, Howard E. Turner, and SunLink
Health Systems, Inc., Case No. 2004-CV-81871, filed
February 20, 2004 (Ross); and
(2) Roger Barber v. Robert M. Thornton, Jr., Dr. Steven J.
Baileys, Michael W. Hall, Gene E. Burleson, Karen B.
Brenner, C. Michael Ford, Howard E. Turner, and SunLink
Health Systems, Inc., Case No. 2004-CV-82484, filed
March 3, 2004 (Barber)
The suits arose when the plaintiffs, who allege to be
shareholders, sued the Company and its directors, with respect
to the Company's response to a putative proposal made by
Attentus Healthcare Corporation to acquire all of the Company's
stock. The claims allege that the Company and directors
breached common law fiduciary duties owed to the shareholders by
adopting a shareholder rights plan and refusing to negotiate
with Attentus. They seek, among other things, injunctive relief
with respect to these actions and an award of attorneys' fees.
No compensatory damages are sought in either complaint.
The defendants have responded to the complaints. The Ross suit
was voluntarily dismissed on April 19, 2004 and the Company
filed a motion for attorneys' fees on May 28, 2004. On
September 27, 2004, the parties in the Barber suit reached a
settlement involving the implementation for certain enhanced
corporate measures and a nominal award of litigation expenses
and attorneys' fees to plaintiff's counsel.
TEREX CORPORATION: Recalls 47 Aerial Devices For Injury Hazard
--------------------------------------------------------------
Terex Corporation is cooperating with the National Highway
Traffic Safety Administration (NHTSA) by voluntarily recalling
47 aerial devices, namely:
(1) TEREX / HR37, model 9999
(2) TEREX / HR40, model 9999
Certain Terex aerial devices installed on trucks to transport
the aerial device to the worksite have a leveling sprocket weld
at the elbow end that may contain defective welds. Failure of
the weld may cause the platform to upset during use and cause
the occupant to be ejected. This can cause death or serious
injury.
The recall began during September 2004. Owners who take their
vehicles to an authorized dealer on an agreed upon service date
and do not receive the free remedy within a reasonable time
should contact Terex Utilities Service Department by Phone:
1-605-882-4000 or contact the NHTSA's auto safety hotline:
1-888-DASH-2-DOT (1-888-327-4236).
TOYOTA MOTORS: Recalls 109,056 Celica, Echo Cars Due To Defect
--------------------------------------------------------------
Toyota Motors Corporation is cooperating with the National
Highway Traffic Safety Administration by voluntarily recalling
109,056 passenger cars, namely:
(1) Toyota Celica, model 2000
(2) Toyota Echo, model 2000
Certain passenger vehicles have the possibility that the recess
retains a rubber seal ring, which is located at the end of the
cylinder body and may be corroded due to an improper washing
process. In this condition, brake fluid may leak from the sea,
or a small amount of air may enter the master cylinder, which
could lead to an increase of vehicle stopping distance.
Dealers will inspect the brake master cylinder and, if
necessary, replace the brake master cylinder and booster. The
recall is expected to begin in mid-October 2004.
For more details, contact the Company by Phone: 1-888-270-9371
or contact the National Highway Traffic Safety Administration
auto safety hotline: 1-888-DASH-2-DOT (1-888-327-4236).
UNITED STATES: Suit Numbers Rising, Several Factors Blamed
----------------------------------------------------------
During the past two years, the number of class action suits,
particularly employment-related cases, has jumped
astronomically, often resulting in exorbitant settlements with
companies that have huge work forces in multiple locations.
Chain retailers and restaurants are the hardest hit, the
Business Review (Albany) reports.
Most of the suits involve improper classification of employees
as "non-exempt," and therefore not entitled to overtime pay,
when in fact, they were.
Websites such as Myclassactionlawsuit.com and Bigclassaction.com
have helped increasingly aggressive workers haul their current
and former employers into court. These sites also allow visitors
to send their accusations to plaintiffs' attorneys who eagerly
seek new cases.
According to research conducted by the Business Review (Albany),
several factors are behind the mad rush to sue:
(1) Laid-off workers are retaliating against former
employers, frequently alleging sex or age
discrimination.
(2) Employees are more knowledgeable about their rights, a
result of the media covering big cases.
(3) The Internet makes it easier for workers to find
attorneys and class action suits to join.
Another factor is state labor codes, which have become more
complex and diverse, making companies with multi-state
operations targets of plaintiffs' attorneys, who then uncover
often-inadvertent noncompliance with the code requirements.
Though neglecting overtime pay obligations and altering pay
records are still the leading causes of employment class action
suits, legal experts believe there is another wave on the legal
horizon.
Experts point out recent filings of class action lawsuits over
company employment practices and policies regarding commissions,
bonuses and vacations, as well as violations of state labor
codes. Even a computer hacker gaining access to an employee's
private information can result in a class action lawsuit.
Legal experts say that if sweeping overtime rule changes
proposed by the U.S. Labor Department are enacted, employers
will need to understand and properly implement them, lest they
face a federal collective action.
UNITED STATES: Interior Ordered To Inform Indians Of Lawsuit
------------------------------------------------------------
In one of his recent rulings, U.S. District Judge Royce Lamberth
ordered the Interior Department to keep American Indians
informed about a massive class action lawsuit filed in 1996 for
more than 300,000 American Indians that accuses the Department
of mismanaging, misplacing or stealing billions of dollars from
those royalties, anytime they try to sell or exchange their
lands or other assets, the Associated Press reports.
In his ruling the judge wrote that all communications must
advise Indians of their "right to consult with class counsel
before making any decisions" that could affect their interests
in the lawsuit, and provide enough time for that to happen.
Judge Lamberth also found the Department violated his order in
December 2002 that it must not communicate with Indians in any
way that interferes with their rights under the lawsuit.
The judge had previously ordered the Department to account by
2007 for the accumulated royalties from oil, gas, timber and
grazing on American Indian lands since 1887. Congress created
the Indian trust fund that year to manage revenues from parcels
designated to each tribal member, but the money was often
uncollected, lost or stolen.
The Department acknowledges there have been major problems with
the trust, but that it has spent more than $600 million since
1996 fixing it based on instructions from Judge Lamberth and
Congress. However the Interior Department said that accounting
problems persist partly because records are scattered.
UNITED STATES: Pacific Northwest Hospitals Sued By The Uninsured
----------------------------------------------------------------
The first two class action lawsuits in the Pacific Northwest
against nonprofit hospital systems and hospitals for failing to
fulfill their obligations to provide charitable care to
uninsured patients were filed today in federal courts by
uninsured patients against Providence Health System and
Providence Health System-Oregon (collectively, "Providence"),
and against Legacy Health System, Legacy Good Samaritan Hospital
and Medical Center, and Legacy Mount Hood Medical Center
(collectively, "Legacy"), according to the Scruggs Law Firm,
P.A. The two suits are consistent with a nationwide litigation
effort by uninsured patient plaintiffs against nonprofit
hospital systems and hospitals. The lawsuits charge the
defendants Providence and Legacy with, among other wrongdoings,
breaching their obligations to provide charity care to uninsured
patients, the basis upon which they are reaping many millions of
dollars annually in tax exemptions. Providence operates many
hospitals in the States of Washington and Oregon, and Legacy
operates four hospitals in the State of Oregon.
These class action lawsuits mark the 48th and 49th lawsuits
respectively in the nationwide nonprofit hospital class action
litigations, which commenced on June 17, 2004, and now cover
approximately 370 hospitals. The lawsuit against defendant
Providence was filed in the United Sates District Court for the
Western District of Washington at Seattle. The lawsuit against
defendant Legacy was filed in the United States District Court
for the District of Oregon.
Richard F. Scruggs, a lead attorney in the nationwide
litigation, stated, "What we are learning through these
litigations are sad facts. All these defendant nonprofit
hospitals are charging the uninsured patients highly inflated
sticker prices for treatment and then dispensing only a tiny
fraction of their revenues on charity care. In effect, they are
using the public's tax dollars to finance their wrongdoings, and
the defendant hospital administrators appear to be more focused
on wallet biopsies than fulfillment of the hospital's
obligations with respect to uninsured patients. In many cases,
the defendant nonprofit hospital systems and hospitals are
engaging in Hollywood type accounting gimmicks to move funds
around to mask their wealth and enrich their executives."
As revealed in the class action lawsuit against defendant
Providence, "According to their web site,
http://www.providence.org,the mission of Defendants Providence
Health System and Providence Health System-Oregon is to provide
'universal access to health care, social justice and compassion
for all members of our society' with 'special concern for the
poor and vulnerable.'
"In fact, contrary to these representations, Providence
discriminates against the very patients who are supposed to
benefit most from its charity care by engaging in a pattern and
practice of charging inordinately inflated rates to its
uninsured patients, including Plaintiffs and the Class they seek
to represent, that are far higher than the rates it charges its
insured patients for the same services.
"Providence publicly represents itself as a 'not-for-profit
medical care provider,' and it receives millions of dollars each
year in tax exemptions under Section 501(c)(3) of the federal
tax code, 26 U.S.C. SS 501(c)(3), as a charitable, 'non-profit'
organization that is required by law to engage in exclusively
charitable purposes. Providence Oregon is similarly exempt from
Oregon property taxes based on its charitable, 'non-profit'
status.
"In fact, again contrary to its representations, Providence is
extremely profitable. For example, in 2002, which is the most
recent year for which the data are available, Providence Oregon
obtained over $1.2 billion in revenue, it held over $250 million
in cash and investment securities, and the cost of its physical
plant (land, buildings and equipment) was over $1.1 billion.
"The same year, Providence Oregon's President and CEO, Henry G.
Walker, received over $1.4 million in compensation and benefits,
its four Vice Presidents received an average of over $565,000 in
compensation and benefits, and the average compensation and
benefits of its five highest paid employees other than its
officers and directors was $460,000.
"These exorbitant 'non-profit' salaries have caught the
attention of the Internal Revenue Service, which is expected in
the near future to conduct an investigation of a number of
purported 'non-profit' charitable organizations around the
country, including Providence, according to an article in the
September 2, 2004 issue of the Puget Sound Business Journal
(Nonprofit Payoff: Generous Compensation for Execs Draws
Scrutiny).
"While Providence gives private insurance companies and
governmental payors like Medicaid and Medicare large discounts
from these gross or 'full sticker' prices, it charges its
uninsured patients, including Plaintiffs and the Class, 100% of
the gross, full sticker amounts. As a result, Providence's
uninsured patients can be charged as much as twice the amount
charged to the insured for the same services. Providence has
thus realized substantial revenues from this discriminatory
charging practice."
The class action lawsuit against Legacy discloses, among other
things, "Legacy publicly represents itself as a 'not-for-profit
community benefit corporation,' and it receives millions of
dollars each year in tax exemptions under Section 501(c)(3) of
the federal tax code, 26 U.S.C. ss 501(c)(3), as a charitable,
'non-profit' corporation that is required by law to engage in
exclusively charitable purposes.
"In fact, again contrary to its representations, Legacy is
highly profitable. In its tax year from April 1, 2002 to March
31, 2003, for example, which is the most recent period for which
the data are available, Legacy obtained over $700 million in
revenue, it held over $208 million in cash and investment
securities, and the cost of its physical plant (land, buildings
and equipment) was over $550 million.
"During the same period, Legacy's President and CEO, Robert J.
Pallari, received over $1.4 million in compensation and
benefits."
"... In essence, Legacy has enjoyed the benefits of its tax-
exempt, charitable 'non-profit' status while failing to fully
comply with its obligations to provide affordable or charitable
medical care to its uninsured patients, including Plaintiffs and
the Class.
"Plaintiffs and the Class are the intended beneficiaries of the
federal Emergency Medical Treatment and Active Labor Act, 42
U.S.C. ss 1395dd ("EMTALA"), which requires Legacy to provide
emergency medical care without regard to the ability of
individuals to pay for such care. Legacy has violated this
federal law by requiring all uninsured patients, including
Plaintiffs and the Class, to sign a written agreement agreeing
to pay all medical charges not covered by insurance before it
will provide them any emergency medical care. Legacy benefits
from this violation not only by obtaining an agreement from the
uninsured to pay for emergency medical care that they may not be
required to pay for, but also by intimidating others from even
pursuing emergency medical care at Legacy that they are entitled
to receive under EMTALA. Plaintiffs and the Class have suffered
personal harm as a result of these violations by Legacy."
The lawsuit alleges that defendant Legacy "...has amassed
hundreds of millions of dollars in cash and marketable
securities that should be available, but it has not provided, to
ensure affordable or charitable care for the uninsured whose
care was contemplated by the provision of the charitable, non-
profit tax exemption that Legacy enjoys."
The suit highlights, "Legacy engages in discriminatory pricing
practices that have a significant detrimental impact on its
uninsured patients ... While Legacy gives private insurance
companies and governmental payors like Medicaid and Medicare
large discounts from these gross or 'full sticker' prices, it
charges its uninsured patients, including Plaintiffs and the
Class, 100% of the gross, full sticker amounts. As a result,
Legacy's uninsured patients can be charged as much as twice the
amount charged to the insured for the same services. Legacy has
thus realized substantial revenues from this discriminatory
charging practice."
The attorneys representing the plaintiffs in the class action
suit against Providence are John W. Phillips and Phillips Law
Group, PLLC, (206) 382-6163, http://www.jphillipslaw.com,and in
the class action suit against Legacy are John W. Phillips and
Phillips Law Group, PLLC, (206) 382-6163,
http://www.jphillipslaw.com,and Michael L. Williams and
Williams, Love, O'Leary, Craine & Powers P.C., (503) 295-2924,
http://www.wdolaw.com.
For more details, contact Richard Scruggs of the Scruggs Law
Firm, P.A. by Phone: (662) 281-1212 or visit the litigation Web
site: http://www.nfplitigation.com
UST LIQUIDATING: Trial in CA Securities Suit Set January 24,2005
----------------------------------------------------------------
Trial in the shareholder class action filed against UST
Liquidating Corporation has been set for January 24,2005 in
California State Court.
In June 2000, a class action complaint was filed against the
Company and certain other parties on behalf of certain common
shareholders of the Company, alleging that the Company and other
parties breached their fiduciary duty to the Company's common
shareholders in connection with the Veeder-Root sale
transaction.
After filing the complaint, the Plaintiffs sought a preliminary
injunction, which was denied. Subsequently, defendants'
demurrer to the complaint was sustained, without leave to amend.
The Court of Appeal reversed, though it did limit the scope of
the Plaintiffs' case, and the parties have been litigating the
case following the appellate court reversal. The parties
stipulated to class certification, and the case is currently
stayed pending the Court of Appeal's decision on certain
discovery issues.
VOLVO TRUCKS: Recalls 56,154 Trucks Due To Fire, Injury Hazard
--------------------------------------------------------------
Volvo Trucks - Global is cooperating with the National Highway
Traffic Safety Administration (NHTSA) by voluntarily recalling
56,154 trucks, namely:
(1) Volvo VHD, model 2000-2004
(2) Volvo / VN, model 2000-2004
On certain trucks equipped with Valeo Wiper Systems, the wiper
motor may be susceptive to salt intrusion that could possibly
lead to a condition where the connector could ignite. If this
occurs, excessive heat and smoke could result in an under hood
fire.
Dealers will inspect and replace the connector plate on the
windshield wiper motor. The recall is expected to begin on
November 15,2004.
For more details, contact the Company by Phone: 1-800-528-6586
or contact the NHTSA auto safety hotline: 1-888-DASH-2-DOT
(1-888-327-4236).
WAL-MART STORES: Appeals Ruling On CO Pharmacists' Overtime Suit
----------------------------------------------------------------
Attorneys for the Wal-Mart Stores, Inc., told an appeals court
that a recent ruling, which could cost the Arkansas-based
retail-giant millions of dollars in overtime pay should be
reconsidered, since the judge didn't hear all the evidence, The
Associated Press reports.
Wal-Mart attorney Steve Merker asked a three-judge panel of the
10th U.S. Circuit Court of Appeals to order a new hearing in the
case after Denver federal court Judge Zita Weinshienk ruled in
1999 that the company had violated the law by failing to pay
overtime to pharmacists. Mr. Merker told the panel that evidence
about U.S. Department of Labor rulings that companies can adjust
salaried employees' pay if economic conditions warrant was not
heard during trial.
However, Gerald Bader Jr., an attorney for 900 pharmacists, who
have been challenging the company's overtime rules since 1995,
countered that there was no need for a hearing because the Labor
Department has ruled that companies cannot arbitrarily change
salaries for recurring events, such as seasonal declines in
business during the off season in Florida.
Mr. Bader also pointed out for the panel that when Wal-Mart
opens a store in Florida, they have to know there are fewer
people there in the summer than there are in the winter.
Current estimates for the cost of unpaid overtime for the
pharmacists have ranged up to $140 million. Former Wal-Mart
pharmacist Jerry Archuleta of Alamosa and two other southern
Colorado pharmacists initially brought the class-action lawsuit
in 1995.
WHITEHALL JEWELLERS: Reaches Settlement For Suit, Federal Probe
---------------------------------------------------------------
Specialty retailer Whitehall Jewellers, Inc. reached a $13
million settlement for a lawsuit and a government investigation,
charging it with helping former gem supplier Cosmopolitan Gem
Corporation to commit accounting fraud, the Associated Press
reports.
Financing company Capital Factors, Inc. filed the suit against
the Chicago-based jeweler, charging it with misrepresenting its
finances. The company also faces a probe by the U.S. Attorney's
office in New York and the Securities and Exchange Commission
over the allegations in the lawsuit.
Under the settlement, the Company will pay Capital Factors
$10.85 million and the government $350,000, according to the
filing. It also agreed to pay $1.93 million to a jewelry seller
affiliated with Cosmopolitan that had also filed a lawsuit, AP
reports.
In the settlement, the company agreed to implement several
corporate governance steps, including hiring a general counsel
who will serve as a chief compliance officer, and hiring a
president and chief operating officer with "significant public
company experience," chief financial officer John Desjardins
said, according to AP.
Company officials said the settlement will let them focus on the
upcoming holiday sales season. "It has been an arduous process,
very complicated, taking a lot of time," chairman and chief
executive Hugh Patinkin said in a conference call, AP reports.
Asbestos Alert
ASBESTOS LITIGATION: Eli Lilly Cancer Drug Approved for EU Sale
---------------------------------------------------------------
The Eli Lilly and Co. cancer drug Alimta has been approved for
sale in the European Union. Alimta recently was approved for
sale in the United States.
The drug, in combination with cisplatin, becomes the first
approved treatment for a rare cancer of the lung lining linked
to asbestos exposure. It also was approved as a second-line
treatment for a common form of lung cancer.
ASBESTOS LITIGATION: GM Settled Former Worker's Asbestos Lawsuit
----------------------------------------------------------------
A retired General Motors worker received an undisclosed amount
of money as settlement for the case filed by an Edwardsville law
firm in behalf of its client.
The first clue that something was wrong with Floyd Bryson's
lungs came in 2001. "I was the kind of guy who could lift
anything he wanted. And here I was almost passing out from
carrying laundry," said Mr. Bryson.
Mr. Bryson, who worked at the GM plant in Wentzville, Missouri
for 43 years, got his lungs tested at a screening for asbestos
diseases held at his union hall. The results signified that he
had asbestosis, a lung disease caused by asbestos exposure that
can take decades to develop.
The screenings were arranged by the law firm of Goldenberg,
Miller, Heller & Antognoli. The firm subsequently filed a suit
on Bryson's behalf against General Motors and dozens of other
companies.
Mr. Bryson, 63 years old, may have inhaled asbestos fibers
decades earlier at the old GM plant on Goodfellow Boulevard. The
microscopic fibers were in dust that swirled at the plant when
asbestos-coated pipes were repaired. Mr. Bryson had prided
himself on his health and dependability. Before he got
asbestosis, he had had only two absences for illness in nearly
four decades at GM. The disease forced him to retire earlier
this year.
He recalled when the Goldenberg firm began offering asbestos
screenings to United Auto Workers at the GM plant in the late
1990s. He felt fine and did not get tested. "I had never sued
anyone in my life and wasn't going to start with GM; I raised a
family on that job," he said.
He later learned that GM knew about the asbestos problem a long
time ago and had ignored the red flags. He is trying to hold
his illness at bay with a regimen that includes the drug gamma-
interferon. Designed to slow down the progression of asbestosis,
the drugs cost about US$5,000 a month. He remains grateful for
GM and UAW insurance that allows him to pay only US$10 for the
medicine.
In the long term, however, his best hope may be a lung
transplant. Although family members had wanted to donate their
lungs, he rejected their offers. "I've had a good life," he
said.
ASBESTOS LITIGATION: Asymptomatic Navy Vet Still Gets Payout
------------------------------------------------------------
Critics of asbestos litigation say that only a small minority of
cases involves people who are actually sick. Most claims, they
say, are like that of Rodell Jarden of Marine, in eastern
Madison County.
Mr. Jarden, 65, said that he had never felt any of the classic
symptoms of asbestos-related diseases, such as shortness of
breath or pains in his chest. In fact, he said, he felt fine
when he responded several years ago to an advertisement about
asbestos exposure paid for by The Simmons Firm, now
SimmonsCooper. He signed on as a client in 2000.
He had worked with asbestos, when he was in the navy from 1957
to 1961 on the USS Dealey, a destroyer escort, in the engine
room where the pipes were covered with asbestos. The government
didn't provide him with a respirator.
The law firm sent Jarden a form to fill out, then called and
told him to get his lungs screened at a clinic in Alton. There,
he was diagnosed with pleural plaques, a benign scarring of the
lining of the lung caused by asbestos.
Mr. Jarden worked as a composing room supervisor at The Wall
Street Journal's printing plant in Highland until the early
1980s. After that, he became a self-employed painter and
contractor. He admits that he had been in other businesses after
the Navy where asbestos was in the materials like paint, drywall
compound, and insulation.
Last year, Mr. Jarden began getting settlement checks from such
defendants as Union Carbide, MetLife and the Johns-Manville
Trust. So far, he said, he has received about US$18,000. He
said he had called his lawyers to find out how much more money
he had coming, but he couldn't get an answer.
"I'm not satisfied with what I've gotten. They [SimmonsCooper]
said they took 33 and one-third [percent commission] plus
expenses, but I can't figure out what they actually settled for.
I can't get that out of them," he said.
He continued that he was grateful that the firm took his case.
"My point is that the government won't help us; the corporations
sure as hell won't. These guys [the plaintiffs lawyers] are the
only ones who will," he said.
ASBESTOS LITIGATION: Whitewater EST Reaches US$50,000 Settlement
----------------------------------------------------------------
Whitewater Gresham Estates L.L.C. and two of its principals have
agreed to pay US$50,000 to settle an environmental enforcement
lawsuit by the state for violations related to the firm's
handling of asbestos-contaminated material, said the Wisconsin
Department of Justice.
The company, which is based in Bonduel, allegedly failed to
remove asbestos-containing material from the Alexian Brothers
Novitiate building in Shawano County prior to the building's
demolition. The material then remained onsite for a period of
time following demolition and had only been cleaned up after the
state filed suit in January.
The lawsuit, filed in Dane County Circuit Court at the request
of the Wisconsin Department of Natural Resources, charged
Whitewater with violating state environmental laws. The
defendants, represented by Russell Obermeier and Daniel
DeCaster, will pay US$45,000 in fines for mismanagement of the
debris, and another US$5,000 for the state's attorney fees.
In a related criminal case brought by the attorney general, the
defendants were ordered to pay US$150,000 in fines, penalties
and assessments for mismanaging the contaminated debris.
ASBESTOS LITIGATION: IL Board Dismisses Complaint V. Judge Byron
----------------------------------------------------------------
The Illinois Judicial Inquiry Board will not take action against
Madison County Circuit Judge Nicholas G. Byron over comments he
was reported to have made regarding the law firm of former U.S.
Attorney General Griffin Bell.
The Washington Legal Foundation, a public policy advocacy group,
cited reports that last April 16, Judge Byron barred former
Attorney General Griffin Bell's law firm from his Madison County
courtroom.
On April 14, at a forum at the Washington University School of
Law, Mr. Bell had called for a U.S. Justice Department
investigation of how the Madison County court handles civil
litigation, particularly asbestos cases. Judge Byron ran the
asbestos docket at that time.
The inquiry board's letter, dated September 14, does not name
Judge Byron. It states, "The board has concluded its
investigation of the allegations raised in your complaint
against an Illinois State court judge. As a result of its
findings and determinations, the Board has closed its file."
The letter went on to state that the board was barred by the
state constitution from disclosing any specifics related to the
matter.
According to a transcript of the April 16 docket, Judge Byron
asked if there was an attorney from King & Spalding of Atlanta
present. No one came forward. Later in the proceedings, Judge
Byron demanded to know if any of the lawyers in his courtroom
were from Atlanta. "The reason being, folks, I'm going to bar a
certain firm from practicing in this jurisdiction," he said,
according to the transcript.
King & Spalding has many corporations as clients, some of which
have been sued over asbestos. The firm said it does not handle
asbestos litigation and has no cases before Judge Byron.
David Price, senior vice president at the Washington Legal
Foundation, said he was "frustrated" by Judge Byron's refusal to
publicly clarify his comments about Bell's firm. "The judge is
a public official," he said. "And when there's an issue about a
public official's conduct, you hope to hear an explanation."
ASBESTOS LITIGATION: Witness Admits Perjury in NY Asbestos Suit
---------------------------------------------------------------
A former asbestos worker acknowledged making false claims about
safety policies when he was called as a key defense witness in
what federal authorities called the largest asbestos-removal
case in the nation's history.
William Kinch Jr., who was the witness at the criminal trial of
a Loudonville father-son team, pleaded guilty to federal perjury
charges in Syracuse while testifying that AAR Contractor Inc, a
Latham-based asbestos company, never violated safety rules.
Mr. Kinch faces up to five years in prison and a US$250,000
fine. He was one of dozens of witnesses called to the stand
during the nearly five-month trial of Raul and Alexander
Salvagno, who were convicted by a federal jury in March of
widespread conspiracies related to racketeering and Clean Air
Act violations.
The Salvagnos were found guilty of 14 felonies following what
prosecutors said was the longest environmental criminal trial on
record. Alexander Salvagno, 39, faces up to 79 years in prison
and a US$3.25 million fine. His father, Raul, 72, of
Loudonville, who is currently living in Florida, faces up to 35
years in prison and a US$750,000 fine.
Mr. Kinch worked for several years at the Salvagno company. He
testified he never observed or took part in any illegal asbestos
removal activities or saw workers removing the dangerous
material without wearing respirators.
According to a news release issued by the U.S. Attorney's
Office, Mr. Kinch admitted that he regularly removed asbestos
dry, had observed indoor snowstorms of asbestos and saw workers
not wearing respirators at every project he was involved.
Prosecutors said they suspect other witnesses also committed
perjury and that the defense teams relied on testimony they may
have known was suspect.
"The United States is continuing its investigations of perjury
by witnesses who testified in the trial," said Assistant U.S.
Attorney Craig A. Benedict, adding jurors saw through the
alleged lies.
The corruption stemmed from the company's efforts to rush
cleanup jobs at 1,555 buildings, most in the Capital Region. The
Salvagnos ordered crews to do "rip and run" asbestos cleanups,
exposing their crews to potentially deadly fibers. They secretly
owned a testing lab, Analytical Laboratories of Albany, which
faked test results to show the jobs were done properly.
The Salvagnos remain free on a US$1 million bond. Thirteen
former managers for AAR and the lab, many of whom testified in
the trial, have pleaded guilty to crimes relating to the
asbestos scam. U.S. officials have called the criminal case the
most significant prosecution on record against the asbestos
industry.
ASBESTOS LITIGATION: Asbestos Exposure Feared at NM High School
---------------------------------------------------------------
The possibility of asbestos exposure to their students prompted
the officials of a New Mexico High School to take action.
Albuquerque Public Schools spokesman Rigo Chavez said that
officials from the Career Enrichment Center were informed that
there was possible asbestos release at the charter school due to
plumbing repairs conducted recently.
Students and faculty were in the building when construction
workers discovered the asbestos. The parents were immediately
informed that their children might have been exposed to this
harmful substance.
"These levels were below [Environmental Protection Agency]
limits, so, at this point, we don't believe any students or
staff members were exposed to any harmful level of asbestos,"
Mr. Chavez said.
Mr. Chavez said air-quality controllers sealed off the problem
area and are cleaning out the asbestos. He said APS wanted to
inform the public about the possible contamination purely on a
precautionary basis. He reiterated that the air quality test did
not show any harmful level of asbestos.
ASBESTOS LITIGATION: Remembrance of Sufferers Marked by UK Group
----------------------------------------------------------------
A church service to remember people who have died from asbestos-
related illness and those who are suffering from its effects was
held on Sunday. The service, at the old railway church of St
Marks, Swindon, was a service of thanksgiving.
It marked the first anniversary of the South West Asbestos
Group, a charity aiming to raise awareness of asbestos-related
diseases and provide support for asbestos sufferers and their
families. It also provides advice on benefits, compensation and
treatments available.
ASBESTOS LITIGATION: ICC Approves Ameren Purchase of IL Power Co
----------------------------------------------------------------
The Illinois Commerce Commission unanimously approved Ameren
Corp.'s proposed US$2.3 billion purchase of Decatur-based
Illinois Power Co.
Several groups brought up concerns that the purchase could lead
to higher-than-necessary electricity rates. The Illinois
attorney general's office and the Citizens Utility Board, a non-
profit consumer watchdog group, had raised objections to the
ICC. Several ICC staffers were critical. The Citizens Utility
Board also objected to Ameren's request to impose an "asbestos
rider."
The rider is a surcharge to cover asbestos-related claims from
employees at coal-fired power plants once owned by Illinois
Power. Those plants are now owned by Illinois Power's parent
company, Dynegy Inc. of Houston.
Ameren modified its proposal, and agreed to restrict the use of
a surcharge. Ameren and Dynegy will put US$20 million into a
fund to compensate asbestos claims. Last month, the Citizens
Utility Board and the attorney general formally signed off on
the changes, and agreed to support Ameren.
Two weeks ago, the ICC issued a proposed order supporting the
sale. That order is virtually identical to the final order
issued and incorporates the changes sought by the board and the
attorney general. In addition, ICC approval requires Ameren to
abide by several pledges it made in February:
(1) Keep the Decatur headquarters open for at least five
years;
(2) Spend US$275 million to US$325 million on capital
improvements in Ameren's first two years of ownership;
(3) Contribute at least US$1.5 million a year to charities
and civic groups in the Illinois Power territory;
(4) Lay off no more than 25 employees for four years after
the Illinois Power deal closes.
With the ICC's approval, Ameren has only one regulatory hurdle
remaining, the Securities and Exchange Commission. Ameren
officials expect to complete the Illinois Power deal in less
than two months.
ASBESTOS LITIGATION: Union Carbide Says Kelly is "Scapegoating"
---------------------------------------------------------------
As the last former asbestos-producer standing, Union Carbide, a
part of the Dow Chemical Co. empire since 2001, asserts that it
has become a convenient target, first for individuals and now
for manufacturers who used the mineral in their products.
These corporate customers are a new type of plaintiff in a
litigation blame game that has prompted more than 60 companies
to seek bankruptcy protection.
Kelly-Moore, the Paints company, claims that Union Carbide
fraudulently promoted Calidria as a uniquely safe alternative to
potentially deadly type of asbestos marketed by competitors such
as the Johns-Manville Corp. It says that Union Carbide had
evidence linking the product to cancer and asbestosis but
withheld it.
However, Union Carbide Corp. was only one of the companies that
supplied Kelly-Moore Paint Co. of San Carlos, California, with
the asbestos used as a thickening agent in its products.
Nonetheless, Kelly-Moore is asking the Texas jury to order the
chemical giant to take responsibility for a huge chunk of the
paint company's 48,000 asbestos injury suits. Kelly-Moore wants
actual damages of US$1.3 billion plus punitive damages of US$3.9
billion. If Kelly-Moore loses, it could go bankrupt. If Kelly-
Moore wins, the verdict could wipe out Union Carbide's insurance
coverage and encourage other companies that bought Calidria to
take Union Carbide to court.
Union Carbide denies giving misleading statements and says their
customers were warned of Calidria's potential health hazards.
Even so, Union Carbide's lawyers say, Kelly-Moore had a
responsibility to determine independently whether ingredients in
its paints were toxic. By the time Union Carbide began selling
Calidria to Kelly-Moore in 1964, they contend, there was plenty
of information linking asbestos with lung disease and cancer.
"This case is about scapegoating Union Carbide because both
Union Carbide and Kelly-Moore are involved in more asbestos
lawsuits than we'd like to even think about," Union Carbide
lawyer Scott Lassetter said.
In the 1950s, Union Carbide partly commissioned a study that
linked chrysotile, the type of asbestos sold by the company, to
cancer. But then the group publicly reported just the opposite.
Kelly-Moore's lawyer, Mark Lanier said, a few years after Union
Carbide discovered the world's largest cache of asbestos in
California, its own tests indicated that Calidria caused more
damage to the lungs of rats than the asbestos sold by Johns-
Manville.
"Instead of telling companies and people and stopping the
asbestos market right there, they hide it," Mr. Lanier told
jurors.
Today, however, Union Carbide says recent research shows that
its asbestos doesn't cause lung disease or cancer because its
fibers are so short that they are swiftly expelled after a
person inhales them.
The trial in Texas is expected to run for at least six weeks.
Many of the memos and documents that have surfaced in other
cases are starting to come into evidence in this one. Mr.
Lassetter said. "You'll find bad paper in any big corporation.
But we never, ever did the things that we're being accused of in
this courtroom."
ASBESTOS LITIGATION: Lawyers Agree to Shred Cape Suit's Evidence
----------------------------------------------------------------
The London firm, Leigh, Day & Co, signed an agreement with Cape
plc to destroy documents that could be used by workers to claim
compensation for asbestos-related illnesses.
The company also insists on keeping the agreement confidential
and resisting any legal action to disclose the evidence. After
claimants in other cases protested against the deal, Leigh, Day
told Cape that instead of destroying the documents it would
return them to the company.
During negotiations in reaching an out-of-court settlement at
the High Court in London, Cape had initially told the solicitors
that it would refuse to pay GBD7.5 million compensation to 7,500
South African asbestos workers unless the evidence was shredded.
Although the company says that it will keep original copies of
the papers, it could take prolonged litigation for a new set of
claimants to obtain them.
Tony Worthington, the Labor MP for Clydebank and Milngavie, said
that although Leigh, Day deserved credit for claiming the
compensation for South African workers, all the documents should
still be made publicly available. Mr. Worthington said he will
raise the matter in the Commons and had already written to the
Lord Chancellor, Lord Falconer of Thoroton, urging him to
intervene in the case.
The Clydebank asbestos group, representing workers with the
disease, said it was "deeply concerned" about the agreement
signed by Leigh, Day.
In a letter to Mr. Worthington, Robert Dickie, the chairman of
the group, said, "We consider this to be against the public
interest. It is totally unacceptable to destroy documents which
may have value in future cases. The deal may be a breach of
human rights."
Sally Moore of Leigh, Day said that documents belonged to the
company because the claim was settled out of court. Only papers
disclosed at a legal hearing are regarded as "in the public
domain."
ASBESTOS LITIGATION: Ameron International Faces 18,963 Claimants
----------------------------------------------------------------
As of August 29, 2004, the Company was a defendant in asbestos-
related cases involving 18,963 claimants, compared to 18,998
claimants as of May 31, 2004.
There were new claims involving two claimants, dismissals and
settlements involving 37 claimants and no judgments. Net costs
and expenses incurred by the Company for the quarter ended
August 29, 2004 in connection with asbestos-related claims were
approximately US$164,000.
The Company is one of numerous defendants in various asbestos-
related personal injury lawsuits. These cases generally seek
unspecified damages for asbestos-related diseases based on
alleged exposure to products previously manufactured by the
Company and others.
At this time the Company is not aware of the extent of injuries
allegedly suffered by the individuals or the facts supporting
the claim that injuries were caused by the Company's products.
Based upon the information available, the Company is not in a
position to evaluate its potential exposure, if any, as a result
of such claims. Hence, no amounts have been accrued for loss
contingencies related to these lawsuits. The Company is also not
in a position to estimate the number of additional claims that
may be filed against it in the future. The Company continues to
vigorously defend all such lawsuits.
ASBESTOS LITIGATION: Link in Brit Widow's Death Remains Unknown
---------------------------------------------------------------
An inquest recorded an open verdict in the death of an elderly
widow from New Eltham.
Joan Rose, 86 years old, died of the asbestos-related disease
mesothelioma last June 6. The death could be linked to the death
of her son four years ago. Her son Alan, who worked at Turner's
Asbestos Company near his mother's home, died of the same
disease in 2000.
Mrs. Rose may have breathed in the fibers after handling her
son's clothing. Croyden Coroner Roy Palmer speculated that she
might have picked up the asbestos dust at the Ordinance Depot in
Berkshire, where she worked for 20 years. And there was also the
possibility she caught the dust simply by living so close to the
asbestos firm. Only one thing is certain, pathologist Adam
Coumbe said Mrs. Rose died from bronchial pneumonia as a result
of having contracted mesothelioma.
ASBESTOS LITIGATION: Cuyahoga, OH Limits Court To Sick Claimants
----------------------------------------------------------------
In an attempt to clear the overflowing docket in Cuyahoga
County's asbestos court, the presiding judge says the court will
only hear the claims of those who have been sickened by the
material. The ruling from Judge Harry Hanna effectively sets
aside more than 80% of the 41,000 pending claims in one of the
nation's largest asbestos courts.
Critics say the asbestos docket is full of people who were
exposed to asbestos but are not exhibiting any symptoms of an
asbestos-related illness.
Greg LaCost, senior counsel and regional manager of the Property
Casualty Insurers Association of America, said, "It is the
fairest solution for all parties, including the sick whose
claims haven't been heard because of the congested judicial
system."
At least one plaintiff's lawyer, Michael Kelley, has asked the
judge to reconsider. Kelley's firm represents 32,000 asbestos
clients in the court.
Judge Hanna says if some of the people whose cases have been
temporarily dismissed end up developing asbestos-related
illness, they can have their claims reinstated. No time limit
exists for the reinstatement of the cases.
ASBESTOS LITIGATION: Reform Proposal Rejected By Majority Leader
----------------------------------------------------------------
Senate Majority Leader Bill Frist, R-Tenn., has rejected the
latest Democratic asbestos compensation reform proposal.
In a Sept. 27 letter to Senate Minority Leader Tom Daschle, D-
S.D., Sen. Frist said that he would still like to reach
agreement before the end of this congressional session on the
creation of a national no-fault trust fund to replace the
current litigation-based system for compensating victims of
asbestos-related diseases. He praised Sen. Daschle's Sept. 15
offer to accept a US$140 billion trust fund paid for by
defendant companies and their insurers rather than a larger one
that the Democrats had initially supported.
But Sen. Frist said that Sen. Daschle's insistence that the
trust fund be operational within 90 days of enactment of the law
creating it or have cases revert to the tort system is
unacceptable. He also wrote that Sen. Daschle's plan for dealing
with cases already in the court system would keep in the courts
far too many cases that should fall under the jurisdiction of
the trust fund.
The outlook dimmed further for establishing a fund to compensate
asbestos victims this year after the Senate majority leader
failed to include it in the list of priorities for the few days
left in the legislative period.
His priorities for the eight or nine remaining legislative
working days are intelligence reform, spending bills and other
bills already at the "conference" level of negotiations between
the Senate and House.
Both senators have been trying to set parameters of a fund, to
be financed by asbestos defendant companies and insurers, that
would compensate victims, while ending their right to sue in
courts. However, they had not agreed on details such as how many
existing asbestos injury claims could stay in court once the
fund had been created.
Time constraints and continued disagreement among lawmakers have
left observers doubtful a bill can be passed this year.
ASBESTOS LITIGATION: Scandal Forces Hardie CEO, CFO to Step Down
----------------------------------------------------------------
The top two executives of James Hardie Industries NV stepped
down in the wake of the findings of a government inquiry that
found that the company broke the law and lied to asbestos
victims and financial markets.
Both have been under pressure to resign or be terminated by the
board after Commissioner David Jackson found that Chief
Executive Peter Macdonald and Chief Financial Officer Peter
Shafron engaged in "misleading and deceptive" conduct by
underestimating its asbestos liabilities by up to AUD$2 billion
or US$1.4 billion. Mr. Jackson also found that both Mr.
Macdonald and Mr. Shafron had breached the Trade Practices Act
and the Fair Trading Act as well as their duties as officers of
a company.
The Australian Securities and Investments Commission are
currently investigating the conduct of both men.
James Hardie said it would appoint an acting chief executive and
chief financial officer but to preserve business continuity,
both men would remain working at the company until "matters
surrounding the Commissioner's report and the ASIC investigation
become clearer."
Mr. Macdonald has agreed to be responsible for the business
operations. Mr. Shafron's future role with the company is
currently under consideration but it is planned that he will
undertake a number of projects for the company, outside the
CFO's function.
Mr. Macdonald issued a statement, in which he apologized for the
"anxiety and distress" that the funding shortfall may have
caused.
He said, "It is my intention to vigorously defend myself against
allegations made by Commissioner Jackson, at the appropriate
time and in the proper forum..."
James Hardie has volunteered to provide extra funds for a
statutory scheme to handle the future compensation claims. This
is a proposal the commissioner said could be a "starting point"
for resolving the funding crisis.
James Hardie chairman Meredith Hellicar, said, "We will seek to
work with the ACTU, as requested by [NSW] Premier [Bob] Carr, to
develop a solution that is in the interests of claimants,
shareholders and all parties that rely on James Hardie for their
livelihood, income or well-being."
The news sent the company's shares up 14c, or 2.4%, to AUD$5.92.
However, the stock is still more than a fifth below a record
high of AUD$7.81 struck last October, before the foundation the
company set up said it faced a shortfall in cash to meet future
claims.
ASBESTOS LITIGATION: Union Probes Halliburton Over KBR's Future
----------------------------------------------------------------
A North Sea union will ask American oil service giant
Halliburton to spell out exactly its plans for its Kellogg Brown
& Root engineering and construction division.
The loss-making performance of KBR has weighed down the parent
company Halliburton. At an investors' conference, Halliburton
chief financial officer Christopher Gaut said that if the
group's shares do not trade at a rate comparable to its peers
once it settles 400,000 asbestos and 21,000 silica claims in a
GBP2.3billion plan, it could consider selling or spinning off
KBR.
KBR and a second Halliburton unit, DII Industries, filed for
Chapter 11 bankruptcy protection in December as part of the
settlement of asbestos and silica claims against Halliburton. A
U.S. District Court judge in July approved the settlement, which
is subject to appeals by insurance companies.
Driving the decision to keep or separate KBR is Halliburton's
eagerness to close the valuation gap between itself and its
peers in the oilfield services sector, Mr. Gaut said.
"If Halliburton continues to trade at a discount [after the
asbestos settlement is out of the way], we need to look at what
we can do to improve value for our shareholders," he said.
While he wouldn't provide a specific timeframe for when the
settlement might be completed, he said the company wouldn't
allow the discounted stock price to go on indefinitely, citing
frustration among the management team and investors.
Mr. Gaut said Halliburton is discussing with plaintiffs' lawyers
how to share insurance proceeds that will be awarded starting
next year. Although those discussions could drag out, he expects
an agreement to be reached in the very near term. The US$1
billion insurance payment that Halliburton is scheduled to
receive in the first six months of 2005 will be put toward the
US$2.3 billion Halliburton has in remaining settlement
obligations.
The Houston company's stock has been under pressure for a couple
years stemming from a combination of concerns about onerous
asbestos litigation exposure and increased scrutiny of alleged
overcharges and accounting improprieties in connection with
KBR's military contracts in Iraq and Kuwait.
Mr. Gaut said Halliburton's improving operating margins since
2001 and plan to drive up Returns On Capital Employed, warranted
a stronger valuation. In the future, Halliburton will ensure
that ROCE at least equals costs of capital in a down year and
approach 20% in a good year, he said.
John Gibson, president and chief executive of the Energy
Services Group, said his unit would be "willing to give up a few
points of market share to improve the quality of our revenue."
Graham Tran, regional officer for the Amicus union, said, "This
is news to me and I find the situation worrying. I would be
concerned for my members and for the northeast economy if
Halliburton was to get rid of KBR. I will be contacting the
company to find out what exactly is going on."
After KBR's plan of reorganization to implement its proposed
asbestos and silica settlement becomes effective, Halliburton
expects to make a decision on whether to separate the KBR unit
through a sale, spin-off or initial public offering.
Halliburton employs more than 100,000 people in over 120
countries working in five major operating groups. KBR is the
largest of the five, with 83,000 employees in 43 countries.
ASBESTOS LITIGATION: Experts Call for Ban on Asbestos in India
--------------------------------------------------------------
Top international environment consultants have called upon the
Union Government in Kolkata, India to act fast on restricting,
if not imposing a total ban on the use of asbestos and its
products, which have been proved to be highly carcinogenic.
Dr. Barry Casteman, a US-based environmentalist, recently
participated in an interactive session on "Asbestos: Corporate
Response to Industrial Health Hazards," organized by the
Institution of Engineers, West Bengal State Center.
As a researcher on health issues and a world authority on the
dangers of asbestos, he said the fibrous product, contrary to
the views of sections of industry, cannot be used in a safe
manner, and should be banned, as already done in the UK and many
other countries. World-over, the use of asbestos-based products
has now come down to a trickle, and in developing countries like
India, it is only the local capital that has moved into
asbestos-based industries after the multinational corporations
have exited a long time ago.
Asked what has been the corporate response to this industrial
hazard globally, he said it was varied and presented an
"interesting phenomena between corporate conscience and
commercial exploitation."
Pointing out that the days of asbestos-based industries in the
country were numbered, Mr. Castleman said Japan was banning it
next month and China has already put into effect a partial ban
on commercial use.
India now follows a regulatory approach based on the provisions
and rules of the Environment (Protection) Act, 1986, and
policies evolved by the Ministry of Industry (Department of
Industrial Policy and Promotion). Occupational health studies
have indicated significant adverse impact on workers in asbestos
industries.
Dr. Castleman said because of the diverse nature of its
applications, asbestos reaches everyone - from the miner to the
ultimate consumer of products.
According to the paper published by the Institution of
Engineers, asbestos is used in over 3,000 products in the
country with 95% of mined asbestos used for manufacturing of
asbestos cement products.
Describing asbestos as a naturally occurring mineral fiber, he
said all types tend to break into very tiny fibers, almost
microscopic, with some 700 times smaller than human hair and
virtually indestructible. These fibers stay airborne for long
periods of time, being resistant to heat and chemicals, and
extremely stable in the environment, with good friction and wear
and tear characteristics, he pointed out.
According to Mr. Lyle Hargrove, Director, Health and Safety
Fund, Canada, the exposure mainly occurs owing to the wear and
tear of asbestos products, which actually represents the true
public health exposure risk.
ASBESTOS LITIGATION: Retired Workers Fear End of Pension from FM
----------------------------------------------------------------
There are new fears for the future of hundreds of Wigan
pensioners from Turner Brothers Asbestos, formerly the largest
asbestos textile factory in the world.
Unions representing the retired workers were left disappointed
after crisis talks in New York with American parent company
Federal Mogul over the future of the pension scheme. Unions
including Amicus, the Transport and General and GMB are angry
that the firm's shareholders have not improved on their offer of
boosting the top-up payment of GBP71 million they originally
offered.
Administrators in a controversial bankruptcy protection move,
froze the fund three years ago because of the potentially-
crippling level of asbestosis claims now being filed against
them.
This move could mean an end to their annual cost of living
allowance increase - or the pension being canceled altogether.
The unions are now insisting that the firm needs to make minimum
annual contributions of GBP29 million on top of the employers'
existing contribution rate of 11.4% for the next eight years to
guarantee its future.
TBA had employed more than 1,000 Wigan workers but there are now
growing fears that surviving members could lose up to three
quarters of their pension because of the UK scheme's GBP300
million shortfall.
The unions said that Alexander Forbes, the independent trustee
for the pension scheme, is considering if the offer made by the
major Michigan-based US conglomerate shareholders is workable.
The news of the deadlock is a further worry to pensioner Graham
Bent, 67, who completed more than 40 years service at Hindley
Green.
He said, "Everybody knows about the compensation cases mounting
up against Turners, asbestosis is at the back of your mind for
every ex-worker, all the time, of course. I can count on the
fingers of one hand the number of my particular ex-workmates
that are still with us.
"The scheme has always honored cost of living rises each year
and is a very important part of our finances like it is for all
ex-workers and widows. It would be a real blow if it goes."
ASBESTOS LITIGATION: Lloyd's Gets Shock Over GBP7.7B Liability
--------------------------------------------------------------
Underwriters at insurer Lloyd's of London have run up long-term
liabilities of GBP7.7 billion in the past ten years - more than
the total for Equitas, the vehicle set up to handle all its
outstanding claims for before 1993.
This is the first time that "long tail" liabilities in the "new"
Lloyd's market have exceeded those of Equitas. They stem from
huge claims for issues such as asbestos and pollution.
Accountant KPMG, which carried out the research, said the gap
would almost certainly widen as Equitas settled claims.
It said much of the GBP7.7 billion of liabilities related to
accounts for 2001. Lloyd's operates a three-year accounting
system and syndicates should have been able to close their books
on 2001 at the end of last year. However, many of these
liabilities may be settled at the end of this year.
ASBESTOS LITIGATION: Insurers, Congress Challenge "Prepacks"
------------------------------------------------------------
A promising strategy for handling claims is coming under fire.
The use of prepackaged bankruptcies, or "prepacks", is raising
concerns among lawmakers about equitable treatment of claimants,
while insurers are waging court challenges on the grounds that
their interests are being ignored.
Prepackaged deals, worked out by bankrupt firms and creditors,
including asbestos claimants, let companies emerge from
bankruptcy fast. These are negotiated agreements that allow
firms to speed through Chapter 11 bankruptcy proceedings while
retaining significant assets and shedding asbestos liabilities.
Since 2001, eight businesses have filed prepacks, and dozens
more are preparing to file.
Some lawmakers are concerned that prepacks are unfair because
some plaintiffs, including future claimants, aren't included.
Prepacks are also under attack in the courts from insurers,
which aren't included in prepack negotiations that force them to
pay out millions of dollars to settle claims.
Court decisions on whether insurers have the right to be
included in bankruptcy negotiations have been mixed. In several
cases, judges rejected insurers' challenges, ruling that they
don't have standing because they aren't creditors of the
company. But in other cases, insurers have been allowed to
participate.
The court challenges are diminishing one of the chief
attractions of prepacks for companies - a speedy resolution.
Until a higher court resolves the issue, many firms will hold
back on prepacks.
The House Judiciary Committee held a hearing this summer, and
legislators expect to draft a bill to rein in prepacks next
year.
Companies are also waiting to see what happens with
congressional negotiations over a proposed national trust fund
to pay out asbestos claims. A trust fund would remove claims
from the courts entirely, providing a much better deal for a
company than any prepack. So far, congressional advocates of a
fund to pay off asbestos claims haven't been able to forge a
consensus.
At the same time, several states also will consider proposals
requiring medical criteria for lawsuits thereby effectively
preventing individuals who are not sick from getting
compensation.
ASBESTOS LITIGATION: Jerusalem Groups Deal With Asbestos Threat
---------------------------------------------------------------
The Head of the Ra'anana Committee for the Environment Vered
Molko recently convened a meeting of the city engineer, the head
of the engineering department, and the chairman of the City
Planning and Building Committee to discuss the matter of
asbestos in the city's buildings.
The meeting allowed the group members to focus on the lack of
formal lists to indicate buildings that used asbestos. They said
they would like to take measures to emphasize the danger that
asbestos, specifically cracked asbestos, has on anyone who is in
the vicinity of the substance.
"I don't think that it's necessary to destroy existing
buildings, if they are not damaged, but from today, we will not
allow the continued use of asbestos," Ms. Molko said.
ASBESTOS LITIGATION: Aussie Govt Presents Laws On Hardie Trial
--------------------------------------------------------------
The NSW government will introduce special legislation to hasten
the possible prosecution of James Hardie Chief Executive Peter
Macdonald, as calls grow condemning the company for not sacking
the executive because of his role in the underfunding of
asbestos disease compensation.
Asbestos Diseases Foundation of Australia President Bernie
Banton labeled the move a "disgrace" while Premier Bob Carr
appealed to board members to fire the executives.
ACTU Secretary Greg Combet said, "Both of these officers of the
company should be dismissed if they don't resign."
Mr. Carr today described laws that, if enacted, could speed up
the Australian Securities and Investments Commission
investigation into Mr. Macdonald and Mr. Shafron by up to a
year. These laws will give ASIC immediate access to all
documentation held by the Jackson inquiry as well as ensuring
the commission can share the information with other
international regulators, including the US Securities and
Exchange Commission.
The legislation will be introduced to parliament as soon as it
resumes next month.
Mr. Carr also made an immediate decision to forward Commissioner
David Jackson's report to the SEC and possibly authorities in
the Netherlands, where James Hardie is based. He also sent the
report to the US, where the company reaps 80% of its revenue.
Mr. Carr would also seek out the full spectrum of union and
government shareholders in James Hardie to pressure the company
from within. While the total share value of such investments was
unknown, with the NSW government owning 2.3% and Victorian
WorkCover alone has 4%, Mr. Carr said indications were that the
overall holding was "considerable."
The ACTU, ADFA and the government welcomed the company's
commitment to negotiating with sufferers and the unions to
deliver compensation.
James Hardie's dilemma is still not easing up as the trust it
set up for asbestos disease victims plans to sue the company
under US anti-racketeering laws enacted to fight the mafia.
Lawyer Nancy Milne said the suit could be filed under the US
Racketeer Influenced and Corrupt Organization Act, passed by the
US Congress in 1970. In recent years the so-called RICO act has
been taken up by plaintiff lawyers, as it provides for a
trebling of damages if a civil damages suit is won and
racketeering proved.
ASBESTOS LITIGATION: Tenants Urged to Do Survey or Face Penalty
----------------------------------------------------------------
Solicitors are urging business tenants to check their premises
for asbestos or risk being caught violating the new regulations,
which could leave them facing large fines or even prison
sentences.
The call comes from experts at Button & Co Solicitors, in Manor
Road, Coventry City center, as new regulations place the
responsibility on business tenants to assess and manage any
asbestos in their premises.
Commercial lawyer Neil Ireland said business tenants should get
an asbestos survey of their premises done, but warned that they
could be liable to fix problems if the poisonous material was
found to be in a poor or dangerous condition.
Part of the Control of Asbestos at Work Regulations which have
come into force have a major bearing on commercial leases as
anyone responsible for business premises must check for asbestos
and, if it is found must take appropriate action to manage the
risk.
It is estimated that about 500,000 buildings in Britain still
contain asbestos, which was used in buildings in various forms
between 1950 and 1999.
Mr. Ireland said, "The onus is now on tenants to manage the risk
of their premises containing asbestos so businesses should take
even greater care when moving into premises, as an awful lot of
buildings still contain asbestos in their ceilings and roof
structures."
ASBESTOS LITIGATION: Asbestos Delays Renovation at NY Hospital
--------------------------------------------------------------
Asbestos is holding up the completion of the US$12 million
construction and renovation project at A.O. Fox Memorial
Hospital in Oneonta. Before the Medical Arts building can be
demolished, asbestos needs to be removed from the building
first, spokeswoman Maggie Barnes said in May.
"We knew there was asbestos in the building. There's a small
quantity in the insulation that surrounds the pipes," said Gary
Smith, vice president of long-term care at Fox Hospital.
The US$20,000 cost involved in removing the asbestos was built
into the original budget for the entire renovation and
construction project. Mr. Smith added that in May, construction
was slated to start September 1 and expected to take about a
year to complete in seven phases.
Now, the timeline is dependent on when the asbestos can be
removed from the building. Even though a company is in place for
asbestos removal, the Department of Labor has to approve the
work, and the city will have to issue a separate demolition
permit.
ASBESTOS LITIGATION: MCB Camp Butler Awarded for Safety Program
---------------------------------------------------------------
Marine Corps Base Camp Smedley D. Butler has been recognized as
having the best safety program in the Marine Corps and for its
accomplishments as a leader in promoting operational excellence
through effective risk management processes and hazard
recognition and correction for fiscal year 2003.
MCB Camp Butler, the catch-all name for all Marine Corps bases
on Okinawa with Camp Fuji and Iwakuni Marine Corps Air Station
on mainland Japan, won the Department of the Navy 2004 Marine
Corps Center of Safety Excellence Award.
The secretary of the Navy created the award, open to Marine
installations worldwide, three years ago. This is the first time
MCB Butler has won.
Charles Roberts, MCB Butler safety director, accepted the award
in a Sept. 9 Pentagon ceremony. Mr. Roberts presented the award
to MCB Butler commander Brig. Gen. James F. Flock during a
ceremony on Sept. 17.
An award memorandum stated that Butler was recognized for its
many safety programs and initiatives, particularly the
development of a streamlined asbestos data information network
to reduce exposure to asbestos in work areas; a "flash report"
program for immediate mishap notification; and an automated
safety deficiency program to track safety problems in base
buildings.
"It's fair to say that winning the award is a significant
accomplishment," said Mr. Roberts.
Gen. Flock stated, "It's a reflection of what our priorities are
as a command. A lot of people worked hard for this award and I
very much appreciate their efforts."
ASBESTOS LITIGATION: US Agencies Deal With FL Post-storm Debris
---------------------------------------------------------------
As hurricanes do inflict serious environmental consequences, the
Environmental Protection Agency helped local and state
authorities respond to a number of disasters that unfolded after
every storm.
Apart from chemical spills, state departments of environmental
protection must also contend with the potentially toxic
hurricane debris. Asbestos cleanup, appliance disposal, and
other problems caused by power outages are all problems in the
wake of major storms.
The Florida Department of Environmental Protection released an
Emergency Final Order after each of the state's hurricanes this
season. The order "provides relief from the DEP's regulatory and
proprietary requirements for obtaining permits and
authorizations" for actions such as hazardous disposal, repairs
to wastewater facilities, and asbestos cleanup.
The most recent order for Hurricane Jeanne lasts until November
26.
ASBESTOS LITIGATION: Tests Reveal Carcinogens in Soil of UK Town
----------------------------------------------------------------
Cancer-causing chemicals and toxic materials could be poisoning
Seaford residents as tests were carried out on a sample taken
from a pile of rubble outside Corsica Hall, it has been claimed.
The report showed the toxic heap contained asbestos and several
types of poly hydrocarbons, including benzo-a-pyrene, which can
cause cancer if breathed in. It also revealed a high level of
lead and amounts of arsenic, cyanide and mercury.
A soil expert, who was concerned about the material dumped
outside the historic building, commissioned the test. He said
the results of the test were "wholly unacceptable."
The man, who does not want to be named, said, "I had a second
opinion on the results which prove they're above safe levels.
Asbestos has got to be disposed of properly, not just dumped."
A spokesperson from the Environment Agency confirmed they were
looking at the results of the tests.
She said, "It does appear there are unstable waste materials
from what the person has sent us. We will make sure it's removed
in the correct manner."
On hearing the results of the soil expert's test, Seaford MP
Norman Baker, requested a meeting with Lewes District Council
for them to look into it and see if there are any provisions
under the planning act that would allow the District to protect
the property. A spokesperson for Eagle Estates said they were
working closely with the Environment Agency.
The rubble was placed on the land following the arrival of
travelers to the site at the beginning of August.
ASBESTOS LITIGATION: "Scan Van" Draws Criticism from UK Insurers
----------------------------------------------------------------
A claims management firm using mobile "scan vans" to target
people who may have been exposed to asbestos has been criticized
by the industry.
FreeClaim IDC, which uses the vans, is looking to expand its CT
screening program to target people negligently exposed to
asbestos. To its clients, this company boasts of removing the
financial risks from compensation claims. It is designed so that
claimants do not need to outlay fees and expenses during the
course of their claim.
David Towler, managing director of FreeClaim IDC, said, "We are
pleased to confirm our expanding CT screening program offered to
individuals negligently exposed to asbestos over prolonged
periods, in many cases for as much as 30 years.
"The high-resolution scan will identify any asbestos-related
injury or disease caused by the client's exposure to the
substance, including a condition called pleural plaques."
Mr. Towler said that medical consultants in the areas where they
have already used the scans have welcomed the service.
However, Malcolm Tarling, spokesman for the Association of
British Insurers, commented, "It is important not to build up
expectations and make everyone think they are entitled to
compensation."
David Hooker, director of claims (public affairs) at Norwich
Union, agreed, "Much like claims management companies and
solicitors offering doctors referral fees, these vans perpetuate
the myth that making claims is simple and easy, and fail to
inform that claimants have to go through checks to see if there
is a liability."
ASBESTOS LITIGATION: NC Jury Awards Ex-CSX Worker US$7.5 million
----------------------------------------------------------------
A Scotland County jury awarded a US$7.5 million verdict for a
retired railroad worker suffering from mesothelioma, a form of
cancer caused by asbestos exposure, according to the Raleigh law
firm of Martin & Jones.
The multimillion-dollar verdict returned was the largest in the
history of Scotland County and one of the largest single
mesothelioma verdicts in North Carolina, said lawyer Forest
Horne, who represented retired CSX employee Raymond Williams,
60.
"Unfortunately, I don't think Mr. Williams will live to see that
payment," Mr. Horne said.
He thought CSX would appeal the decision and would do "anything
they can" to prevent Williams from receiving the payment. Misty
Skipper, a spokeswoman for CSX, said the railroad company was
reviewing the decision and considering its appellate options.
Mr. Horne and his partner, Spencer Parris, filed the lawsuit on
behalf of Mr. Williams in September 2003. During the legal
proceedings, they showed the jury documents from the 1930s that
demonstrated CSX knew asbestos was toxic and hazardous to
employees. The documents also showed that CSX knew precautions
could be taken to protect railroad workers exposed to asbestos
dust in boilers, pipes and construction materials.
The Scotland County jury hearing the case also learned how in
the 1950s, CSX knew asbestos could cause lung cancer, and how in
the 1960s, the railroad company learned that asbestos could
cause mesothelioma. The company did not take measures to protect
or warn its employees about asbestos until the late 1980s, Mr.
Horne said.
Mr. Williams retired in 1999 after holding several different
positions such as utility clerk, freight clerk and train master
in the Hamlet railroad station.
In 2002, Mr. Williams was diagnosed with malignant pleural
mesothelioma, an illness commonly caused by occupational
asbestos exposure. He underwent surgery to remove his entire
left lung and his stomach, which had migrated into his chest
cavity after his cancerous lung was removed, his attorney said.
Despite three separate courses of chemotherapy, the cancer has
metastasized into his lymph nodes.
Mr. Horne said his client had loved working at the railroad and
now felt betrayed by his employer of 38 years.
ASBESTOS LITIGATION: AU Town Rejects Proposed Asbestos Dumpsite
---------------------------------------------------------------
Attempts to allow asbestos to be accepted at the Nuriootpa
rubbish tip have been scrapped.
Following pressure from the community, Remove All Rubbish, which
operates the tip, withdrew its application, which sought to
allow asbestos to be dumped at the site.
Light Regional Council chief executive officer Peter Beare said
he had numerous discussions with Remove All's general manager
Pat Gillman before the application was eventually pulled.
"I told him there was a very strong resentment of any
possibility of asbestos being dumped in the Barossa Valley. I
explained to him the value of the Brand Barossa and the impact
that this [asbestos dumping] would have on the national and
international image of the Barossa as being clean and green,"
Mr. Beare said.
Several vineyards that are near the dumpsite have recently
invested considerable money to improve their production,
including Yalumba Wines and Southcorp. Barossa Regional Resident
Association president Allan Catlin said the immediate concern
was whether there would be wash-off from asbestos dumping,
causing fibers to leak into the vineyards.
"I believe they [Remove All Rubbish] have other options
available to them that are much more appropriate, sites that are
more remote."
The council received the application two weeks ago but after an
initial assessment deemed that it fell under the jurisdiction of
the State Government's Development Assessment Commission because
of the seriousness of the application.
Council is still determined to submit an application to DAC,
voicing its concerns.
ASBESTOS ALERT: Death of Fireman Sparks Lawsuit Against UK Govt
---------------------------------------------------------------
Merseyside Fire Service is suing the Government over the death
of one of its officers due to asbestos exposure, in a case that
could set the precedent for a surge of compensation claims.
One of its firefighters, William Melling, died in July 2002 from
an asbestos-related illness. The brigade admitted liability for
his death, but now says the government is equally to blame for
not issuing guidelines early enough.
The Fire Chiefs are claiming the Office of the Deputy Prime
Minister failed to issue safety guidelines warning of the threat
posed by asbestos. This material was used in fireproofing
millions of buildings in the 1950s and 1960s before its dangers
were recognized and its use was banned.
The fire service is believed to have paid Mr. Melling's family
about GBD100,000 in damages after his death, and it wants the
government to reimburse it. It is now seeking GBD100,000 to
GBD150,000 damages from the ODPM. The force believes the ODPM
was negligent in not issuing guidelines on asbestos sooner and
wants it to accept at least partial liability for Mr. Melling's
death.
Dave Wright, legal services director of Merseyside Fire Service,
said, "Historically, the ODPM have taken it on themselves to
give guidelines on health and safety to fire authorities but
they never gave us any advice in relation to asbestos until much
later on . This is nothing vindictive against the ODPM. It's
just we have to protect our financial position on behalf of the
people of Merseyside."
It is thought around 10 firefighters nationally are involved in
legal battles over contracting asbestosis through work but
industry experts claim that more cases of firefighters suffering
asbestos-related diseases could now come to light, and prompt
more claims.
ASBESTOS ALERT: Agencies Test Air Quality Along Michigan Trails
----------------------------------------------------------------
Federal officials are analyzing the results of air quality tests
taken along state recreational trails. The tests will determine
the presence and amount of asbestos and other heavy metals. The
trails near the former Quincy Smelter Works site as well as the
area above the Portage Lake Shipping Canal and along a proposed
alternate trail route are being studied. The U.S. Environmental
Protection Agency collected the air samples last month.
In a move that could seriously hurt tourism, the Michigan
Department of Natural Resources decided to close the popular
snowmobiling trail in July over the possibility of asbestos
contamination. The Michigan Department of Community Health and
the U.S. Agency for Toxic Substances and Disease Registry are
analyzing the test data.
"I feel confident that before snowmobile season, there'll be a
decision on whether we can get the trail open," said Debbie
Begalle, the DNR's Western Upper Peninsula district supervisor.
ASBESTOS ALERT: CA Pre-schools Close Because of Asbestos, Lead
--------------------------------------------------------------
The site of two day-care centers in Seal Beach was closed after
the presence of asbestos and lead-based paint was detected in
the buildings in a routine environment assessment.
These were ordered closed by the City Council until further
testing can be done to see whether the levels of the chemicals
are hazardous, said Mark Vukojevic, interim director of the Seal
Beach Public Works Department.
The closure affects 85 to 100 kids served by "Sun N Fun' and
"Under the Rainbow." The city has offered the day care operators
use of city facilities and is inquiring about available space at
area churches, Mr. Vukoievic said.
The site is owned by the Los Alamitos Unified School District,
which has leased it to the city of Seal Beach. The school
district says it plans to conduct its own review and
environmental tests at the site.
"We are going to try to work with the city to figure out what's
going on," said Ruben Frutos, business manager for the district.
ASBESTOS ALERT: AU Health Union Demands Proof of Hospital Safety
----------------------------------------------------------------
The Health Services Union gave the officials of Echuca Regional
Health an ultimatum to prove the hospital is asbestos-free.
Last week, the proposed demolition work at the hospital raised
concerns regarding the risk of asbestos exposure to hospital
staff and patients. The Union, represented by state secretary
Jeff Jackson, demanded to verify documentation of the hospital's
asbestos elimination procedure, following a meeting between the
parties. "We will stay on alert until we have got all those
documents," Mr. Jackson said.
He said the meeting was fruitful in initiating an agreement
between the union and hospital on issues surrounding the
renovation work. It allowed the union to get information on the
steps taken to ensure safety.
The State Government spokeswoman said it was satisfied asbestos
posed no risk to its patients and staff at the hospital. Echuca
Hospital acting chief executive Shaun Eldridge said the hospital
was confident it had correctly complied with asbestos
regulations. He said an asbestos audit had been completed on
August 18. The demolition and asbestos-removal plans have been
laid down in areas tagged to contain asbestos.
"If the documentation is not up to scratch, there will be more
the union will do to ensure a safe work place," said Mr.
Jackson.
ASBESTOS ALERT: Canada's Metal Dump Shut Down While Testing Bags
----------------------------------------------------------------
Workers at Iqaluit's old metal dump have been ordered to shut
down operations while a possible asbestos contamination is
investigated. Until the material in the bags can be identified,
no heavy equipment or construction activities will be allowed in
the area.
Several workers were crushing gravel on the site for
construction projects when 200 to 300 bags suspected to contain
asbestos were found last week. Officials believe the bags have
been there for up to 25 years.
Derek Dinham of the Nunavut-N.W.T. Workers Compensation Board
said, "We're not 100% sure that any asbestos got into the gravel
or the crushing machines. We knew that it was uncovered but we
did a detailed inspection of the crushers and the sites over the
weekend and at this point in time the crushers are safe."
Mr. Dinham added that if the bags do contain asbestos, these
would be covered with sand and gravel until proper disposal can
be accomplished.
ASBESTOS ALERT: Asbestos Sparks Walkout at Sydney Building Site
---------------------------------------------------------------
Refurbishment work was halted abruptly on a government building
in central Sydney after 60 construction workers walked out of
the job fearing exposure to asbestos dust. Workers at the
Department of Commerce building had drilled into fire doors
containing asbestos.
Construction Forestry Mining and Energy Union NSW secretary
Andrew Ferguson acknowledged that the construction company
failed to pass on information to workers about asbestos risks on
site, but said government was also at fault.
"We're very concerned by the lack of effort by government, in
particular, in setting standards for work on refurbishment jobs
where there's asbestos.
"The government's got to ensure there are systems where the
client can make sure there are proper safety procedures on jobs
rather than simply give out contracts and hope for the best."
A spokesman for Commerce Minister John Della Bosca said the
construction company was previously briefed and even provided
documents regarding the asbestos in the fire doors. They are in
the process of assessing the damage but they believe that it's
"basically an error by the contractor."
The union said it met with Hansen and Yuncken representatives
who agreed to continue paying workers' wages during the safety
audit. An onsite asbestos register also would be established,
the CFMEU said.
CFMEU organizer Joe McGahan said return to work would depend on
the results of the safety audit.
All employees of the construction company Hansen and Yuncken, as
well as subcontractors, had been registered with the NSW Dust
Diseases Board, according to Mr. McGahan.
"They [Hansen and Yuncken] have put their hands up all round and
acknowledged that their management is inexperienced and need
further training," Mr. McGahan said.
Company Profile:
Hansen Yuncken Inc
360 Richmond Road
NETLEY
South Australia 5037
Phone: 08 8352 2099
Fax: 08 8352 2974
http://www.hansenyuncken.com.au
Employees : 310
Revenue : $ 335,000,000
(As of June 2004)
Description:
Hansen Yuncken Pty Ltd is a locally-owned proprietary company
that is ranked number 845 out of the top 2000 companies in
Australia. The company generates the majority of its income from
the Building Construction in Australia industry.
New Securities Fraud Cases
BIOLASE TECHNOLOGY: Pomerantz Haudek Files Securities Suit in CA
----------------------------------------------------------------
The law firm of Pomerantz Haudek Block Grossman & Gross LLP
initiated a class action lawsuit in the United States District
Court for the Central District of California against Biolase
Technology, Inc. ("Biolase" or the "Company") (Nasdaq:BLTI) and
two of the Company's senior officers, on behalf of investors who
purchased the securities of Biolase during the period between
October 29, 2003 through July 16, 2004, inclusive (the "Class
Period").
The lawsuit charges that Biolase made material omissions and
misrepresentations concerning its financial performance, causing
Biolase's financial results to be inflated. As a result of this
inflation, the Company was able to complete a secondary stock
offering of 2.8 million shares in February 2004 at $18.80 per
share.
Thereafter, on July 16, 2004, after the close of the market,
Biolase reported preliminary results for the second quarter of
2004, which were below analysts' expectations. As a result of
this news, the Company's stock declined to $8.78.
According to the Complaint, defendants knew that Biolase was not
performing nearly as well as represented. It is alleged that
defendants concealed from investors that,
(1) Waterlase was not gaining market share and demand for
the product was not increasing at the rates represented
by defendants;
(2) Biolase had introduced a lower priced entry level laser
which was cannibalizing sales such that Biolase's
reported earnings were false and misleading;
(3) defendants were concealing this decreasing demand by
granting extended payment terms and price breaks; and
(4) Biolase would not achieve the earnings growth
forecasted.
For more details, contact Andrew G. Tolan, Esq. of Pomerantz
Haudek Block Grossman & Gross LLP by Phone: (888) 476-6529 or by
E-mail: agtolan@pomlaw.com
DIGIMARC CORPORATION: Lasky & Rifkind Lodges OR Securities Suit
---------------------------------------------------------------
The law firm of Lasky & Rifkind, Ltd. initiated a lawsuit in the
United States District Court for the District of Oregon, on
behalf of persons who purchased or otherwise acquired publicly
traded securities of Digimarc Corporation ("Digimarc" or the
"Company") (NASDAQ:DMRC) between April 17, 2002 and July 28,
2004, inclusive, (the "Class Period"). The lawsuit was filed
against Digimarc, Bruce Davis, and E.K. Ranjit ("Defendants").
The complaint alleges that Defendants violated Sections 10(b)
and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5
promulgated thereunder. Specifically, the complaint alleges that
the Company inflated its financial results by improperly
accounting for software development costs and project
capitalization at its Digimarc ID Systems unit in violation of
Generally Accepted Accounting Principles ("GAAP"). In order to
rectify its financial statements, the Company indicated that it
will need to restate its financial reports for 2003 and 2004 and
perhaps earlier periods as well.
On July 28, 2004, Digimarc announced that its earnings results
would be meaningfully below expectations. Its shares reacted
negatively to the news, falling 25.1% to close at $9.04 per
share on July 29, 2004.
For more details, contact Lasky & Rifkind, Ltd. by Phone:
800-495-1868 or visit their Web site:
investorrelations@laskyrifkind.com
DIGIMARC CORPORATION: Milberg Weiss Lodges Securities Suit in OR
----------------------------------------------------------------
The law firm of Milberg Weiss Bershad & Schulman LLP initiated a
class action lawsuit on behalf of purchasers of Digimarc
Corporation ("Digimarc" or the "Company") securities (NASDAQ:
DMRC) between April 17, 2002 and July 28, 2004 inclusive, (the
"Class Period"), seeking to pursue remedies under the Securities
Exchange Act of 1934 (the "Exchange Act").
The action is pending in the United States District Court of
Oregon against defendants Digimarc Corp., Bruce Davis (Chairman
of the Board of Directors and CEO) and E.K. Ranjit (Former CFO).
The complaint alleges that throughout the Class Period,
Defendants issued, or caused to be issued, false and misleading
statements in violation of Sections 10(b) and 20(a) of the
Exchange Act, in order to artificially inflate the value of
Digimarc stock while they sold millions of dollars of their
personal holdings for tremendous personal gain. Under the
direction of CFO E.K. Ranjit, the Company inflated its
profitability during the class period by maintaining
insufficient accounting controls, which created the environment
where improper accounting could be used to manipulate Company
financial results. The Company now admits that it improperly
accounted for software development costs and project
capitalization at its Digimarc ID Systems business unit. In
order to correct the misleading financial statements previously
issued, the Company has indicated that it will need to restate
all its financial reports for 2003 and 2004, and may also be
required to restate earlier periods as well. Without the
improper accounting manipulations, the restatement of which the
Company indicates will be in the millions of dollars, the
Company may not have been able to meet analysts' earnings per
share estimates during the class period. In addition, while the
accounting manipulations were ongoing, Company insiders sold
over $10 million of Digimarc stock. When the Company
substantially missed its earnings expectations on July 28, 2004,
Digimarc's stock plummeted on usually high trading volume of
653,600 shares, from its closing price of $12.07 on July 28,
2004, to a closing price of $9.04 on July 29, 2004. Analysts
from Morgan Keegan & Co., D.A. Davidson & Co. and Janney
Montgomery Scott, LLP all downgraded the Company.
For more details, contact Steven G. Schulman by Mail: One
Pennsylvania Plaza, 49th fl., New York, NY 10119-0165 by Phone:
(800) 320-5081 or by E-mail: sfeerick@milbergweiss.com OR Lori
G. Feldman by Mail: 1001 Fourth Avenue, Suite 2550, Seattle, WA
98154 by Phone: (206) 839-0730 or by E-mail:
lfeldman@milbergweiss.com OR Maya Saxena or Joseph E. White by
Mail: 5355 Town Center Road, Suite 900, Boca Raton, FL 33486 by
Phone: (561) 361-5000 by E-mail: msaxena@milbergweiss.com or
visit their Web site: http://www.milbergweiss.com
DIGIMARC CORPORATION: Schatz & Nobel Files Securities Suit in OR
----------------------------------------------------------------
The law firm of Schatz & Nobel, P.C. initiated a lawsuit seeking
class action status in the United States District Court for the
District of Oregon on behalf of all persons who purchased the
publicly traded securities of Digimarc (Nasdaq: DMRC)
("Digimarc") between April 17, 2002 and July 28, 2004, inclusive
(the "Class Period").
The Complaint alleges that Digimarc and certain of its officers
and directors issued materially false statements. Specifically,
Digimarc inflated its profitability during the class period by
maintaining insufficient accounting controls, which created the
environment where improper accounting could be used to
manipulate Digimarc's financial results. Digimarc now admits
that it improperly accounted for software development costs and
project capitalization at its Digimarc ID Systems business unit.
In order to correct the misleading financial statements
previously issued, the Company has indicated that it will need
to restate all its financial reports for 2003 and 2004, and may
also be required to restate earlier periods in addition. Without
the improper accounting manipulations, the restatement of which
the Company indicates will be in the millions of dollars, the
Company may not have been able to meet analysts' earnings per
share estimates during the class period. Throughout the Class
Period, Company insiders sold over $10 million of Digimarc
stock. When the Company substantially missed its earnings
expectations on July 28, 2004, Digimarc's stock plummeted, from
its closing price of $12.07 on July 28, 2004, to a close of
$9.04 on July 29, 2004. Analysts from Morgan Keegan & Co., D.A.
Davidson & Co. and Janney Montgomery Scott, LLP all downgraded
the Company.
For more details, contact Nancy A. Kulesa or Justin S. Kudler by
Phone: (800) 797-5499 by E-mail: sn06106@aol.com or visit the
Web site: http://www.snlaw.net
DIGIMARC CORPORATION: Stoll Stoll Lodges Securities Suit in OR
--------------------------------------------------------------
The law firm of Stoll Stoll Berne Lokting & Shlachter P.C.
initiated a class action lawsuit in the United States District
Court for the District of Oregon on behalf of all purchasers of
the common stock of Digimarc Corporation (NASDAQ: DMRC) between
April 17, 2002 and July 28, 2004, inclusive (the "Class
Period").
The complaint charges Digimarc and certain of its officers and
directors with issuing false and misleading statements,
including false financial statements. Digimarc improperly
boosted its reported income by millions of dollars by
capitalizing costs that should have been expensed. Digimarc's
false and misleading statements about its business and financial
results had the effect of artificially raising the price of
Digimarc stock so that insiders could sell millions of dollars
worth of Digimarc stock during the Class Period. Investors who
purchased Digimarc shares during the Class Period did so at
inflated prices and were thereby damaged.
On July 28, 2004, Digimarc revealed to the market that, contrary
to its public statements that its business and financial
performance was accelerating, in fact the company had posted a
loss of $0.10 per share for the period ending June 30, 2004, it
expected a loss in the third quarter of 2004, and was
withdrawing all guidance for earnings for the full year of 2004.
In response, Digimarc stock dropped more than 25% in one day
from $12.07 to $9.04.
For more details, contact David F. Rees of Stoll Stoll Berne
Lokting & Shlachter P.C. by Phone: 503-227-1600 or by E-mail:
drees@ssbls.com
INTERACTIVECORP: Milberg Weiss Files Securities Fraud Suit in NY
----------------------------------------------------------------
The law firm of Milberg Weiss Bershad & Schulman LLP announces
that a class action lawsuit was filed on September 29, 2004, on
behalf of persons who acquired the securities of IAC /
InterActive Corporation ("IAC" or the "Company") (NASDAQ:IACI)
(formerly, USA Interactive) between March 19, 2003 and August 3,
2004, inclusive (the "Class Period"), including open market
purchasers and those who received IAC (or USA Interactive) stock
in exchange for tendering stock of other publicly traded
companies including Hotels.com, Expedia.com, LendingTree.com,
and UDate.com, seeking to pursue remedies under the Securities
Exchange Act of 1934 (the "Exchange Act").
The action is pending in the United States District Court for
the Southern District of New York against defendants IAC, Barry
Diller (CEO, Chairman) and Dara Khosrowshahi (CFO).
The complaint alleges that during the Class Period defendants
artificially inflated the price of IAC securities by issuing
press releases and other statements touting the strength of the
Company's business, its rise to the status of an Internet
commerce power house and its ability to continue to grow its
business successfully in 2004 and beyond. Such statements were
materially false and misleading because they failed to disclose
that:
(1) the Company's Expedia.com and Hotels.com businesses were
inaccurately representing to customers that hotel rooms
were sold out, when, in fact, rooms were available,
albeit at lower profit margins to IAC. These
misrepresentations led to confrontations between IAC and
hotel chains that Expedia.com and Hotels.com depended
on;
(2) the Company had been charging consumers service fees
that were not fully identified. At least one of IAC's
hotel-chain partners requested that IAC detail all of
its fees to consumers, which IAC refused to do, thereby
(unbeknownst to investors) jeopardizing an important
revenue stream;
(3) certain hotel chains and airlines had threatened to, and
did, decrease the number of rooms made available to IAC
because of the Company's unscrupulous practices, thereby
jeopardizing the Company's business;
(4) hotel chains were aggressively pushing their own
booking sites and encouraging potential customers to
book directly through them rather than through
Expedia.com or Hotels.com, thereby posing a serious
threat to IAC's business; and
(5) given the unsustainable nature of the Company's
practices and/or the inevitable consequences of those
practices, the Company's statements with respect to its
growth prospects were lacking in any reasonable basis
when made.
On August 3, 2004, the Company issued a press release announcing
that net income for the second quarter of 2004 fell by 24% from
the comparable period in 2003. Later in the same day, IAC held a
conference call wherein defendant Diller stated that the Company
would not be able to grow as fast as it had represented during
the class period and that the 30% growth it had discussed at
that time was years away. In response to these disclosures, the
price of IAC common stock dropped precipitously, falling from
$27.03 per share on August 3, 2004, to $22.80 per share on
August 4, 2004--a one day drop of 15.6% on unusually heavy
trading volume of 87 million shares.
For more details, contact Steven G. Schulman by Mail: One
Pennsylvania Plaza, 49th fl., New York, NY 10119-0165 by Phone:
(800) 320-5081 or by E-mail: sfeerick@milbergweiss.com OR Lori
G. Feldman by Mail: 1001 Fourth Avenue, Suite 2550, Seattle, WA
98154 by Phone: (206) 839-0730 or by E-mail:
lfeldman@milbergweiss.com OR Maya Saxena or Joseph E. White by
Mail: 5355 Town Center Road, Suite 900, Boca Raton, FL 33486 by
Phone: (561) 361-5000 by E-mail: msaxena@milbergweiss.com or
visit their Web site: http://www.milbergweiss.com
INTERACTIVECORP: Wolf Haldenstein Files Securities Lawsuit in NY
----------------------------------------------------------------
The law firm of Wolf Haldenstein Adler Freeman & Herz LLP
initiated a class action lawsuit in the United States District
Court for the Southern District of New York, on behalf of all
persons who purchased or acquired the securities of IAC /
INTERACTIVECORP ("IAC" or the "Company") (Nasdaq: IACI) between
July 16, 2001 and August 3, 2004, inclusive, (the "Class
Period") against defendants IAC and certain officers and
directors of the Company.
The case name and index number is Stewart v. IAC /
INTERACTIVECORP, et al and 04cv7718.
The complaint alleges that defendants violated the federal
securities laws by issuing materially false and misleading
statements throughout the Class Period that had the effect of
artificially inflating the market price of the Company's
securities.
The Class Period commences on July 16, 2001 when USA Networks
("USA"), predecessor in interests to IAC, announced plans to
become, "the leader in interactive travel" by acquiring
privately held National Leisure Group and a majority interest in
publicly traded Expedia. USA announced that with these
acquisitions it would handle 16% of all online travel
transactions and was predicting 40% year over year growth. The
complaint alleges that these numbers were false and misleading
because they did not account for the Company's improper booking
of revenues and lacked a reasonable basis for the positive
statements about the Company's true growth and progress.
The complaint also alleges that the statements made by
defendants during the class period were materially false and
misleading when made because failed to disclose or indicate the
following:
(1) that the Company knew or recklessly disregarded the
fact that its profits were being adversely impacted by
the decreases in available discounted inventory, such
as discount hotel rooms and airline tickets;
(2) that IAC had to expend additional resources in order to
market its products and brands in the maturing Internet
industry;
(3) that the favorable performance of the Expedia and the
Hotels.com divisions were largely dependent on the
improper booking of revenue; and
(4) that as a result of the foregoing, the defendants
lacked a reasonable basis for their positive statements
about the Company's growth and progress.
For more details, contact Fred Taylor Isquith, Esq., Gregory M.
Nespole, Esq., Gustavo Bruckner, Esq., or Derek Behnke of Wolf
Haldenstein Adler Freeman & Herz LLP by Mail: 270 Madison
Avenue, New York, NY 10016 by Phone: (800) 575-0735 by E-mail:
classmember@whafh.com or visit their Web site:
http://www.whafh.com
LIGAND PHARMACEUTICALS: Bernstein Liebhard Lodges CA Stock Suit
---------------------------------------------------------------
The law firm of Bernstein Liebhard & Lifshitz, LLP initiated a
securities class action lawsuit in the United States District
Court for the Southern District of California on behalf of all
persons who purchased or acquired securities of Ligand
Pharmaceuticals, Inc. (NASDAQ: LGND) ("Ligand" or the "Company")
between October 31, 2003 and August 2, 2004, inclusive (the
"Class Period"), seeking to pursue remedies under the Securities
Exchange Act of 1934 (the "Exchange Act").
The Complaint alleges that throughout the Class Period
Defendants failed to disclose and misrepresented the following
material adverse facts, which were known to defendants or
recklessly, disregarded by them:
(1) defendants had stuffed the wholesale channel with
product in order to show strong demand for Avinza and
to meet sales expectations that they had set, causing
Avinza to be returned because it had expired in the
wholesale channel;
(2) that overall demand of the Company's products,
including Avinza, was down;
(3) that Medicaid prescriptions were increasing and thereby
causing the Company to pay excessive amounts of rebates
to Medicaid;
(4) that the defendants knew or recklessly disregarded the
fact that increases in Medicaid rebates were not a one-
time occurrence but were a trend that was going to
continue to have a negative effect on the overall sales
of Avinza; and
(5) that as a result of the above, the Company's positive
statements concerning its financial outlook was lacking
in any reasonable basis when made.
On August 3, 2004, Ligand shocked investors with two unexpected
announcements: First, the Company stated that it had missed
analysts' expectations by huge margins for the second quarter
due to widening losses; and second, that its independent
auditor, Deloitte & Touche LLP ("D&T"), resigned after four
years with the Company. Immediately following the Company's
releases, Ligand's stock plummeted 40% from its closing price of
$13.58 on August 2, 2004, to a closing price of $8.18 on August
3, 2004.
For more details, contact the Shareholder Relations Department
of Bernstein Liebhard & Lifshitz, LLP by Mail: 10 East 40th
Street, New York, NY 10016 by Phone: (800) 217-1522 or
(212) 779-1414 or by E-mail: LGND@bernlieb.com
MAXIM PHARMACEUTICALS: Lasky & Rifkind Lodges CA Securities Suit
----------------------------------------------------------------
The law firm of Lasky & Rifkind, Ltd. initiated a lawsuit in the
United States District Court for the Southern District of
California, on behalf of persons who purchased or otherwise
acquired publicly traded securities of Maxim Pharmaceuticals,
Inc. ("Maxim" or the "Company") (NASDAQ:MAXM) between November
11, 2002 and September 17, 2004, inclusive, (the "Class
Period"). The lawsuit was filed against Maxim and certain
officers and directors ("Defendants").
The complaint alleges that Defendants violated Sections 10(b)
and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5
promulgated thereunder. Specifically the complaint alleges that
Defendants issued materially false statements concerning the
Company's leading drug candidate, Celpene, a treatment for
malignant melanoma. More specifically, Defendants concealed
positive reports that survival rates and the status of malignant
during its original Phase III study were rooted in a failed,
fundamentally deficient trial, that Defendants representations
that "Maxim Pharmaceuticals Receives FDA Approval" was meant to
convey the view that Celpene was safe and approved, that as
Maxim represented that the drug was approved by the Food & Drug
Administration, no new clinical data demonstrating its
effectiveness had been provided to the FDA since 2001.
On September 19, 2004, Defendants announced the failure of
Celpene to demonstrate an improvement of patient survival, its
primary endpoint. Shares dropped dramatically, falling $2.90 per
share, representing approximately 49% decline in value.
For more details, contact Lasky & Rifkind, Ltd. by Phone:
800-495-1868 or visit their Web site:
investorrelations@laskyrifkind.com
REMEC INC.: Charles J. Piven Lodges Securities Fraud Suit in CA
---------------------------------------------------------------
The law offices of Charles J. Piven, P.A. today announced that a
securities class action was commenced on behalf of shareholders
who purchased, converted, exchanged or otherwise acquired the
common stock of Remec Inc. (NASDAQ:REMC) between September 8,
2003 and September 8, 2004, inclusive (the "Class Period"). Also
included are those who acquired Remec's shares through its
acquisition of Paradigm Wireless Systems.
The case is pending in the United States District Court for the
Southern District of California against defendant Remec and one
or more of its officers and/or directors. The action charges
that defendants violated federal securities laws by issuing a
series of materially false and misleading statements to the
market throughout the Class Period, which statements had the
effect of artificially inflating the market price of the
Company's securities. No class has yet been certified in the
above action.
For more details, contact the Law Offices Of Charles J. Piven,
P.A. by Mail: The World Trade Center-Baltimore, 401 East Pratt
Street, Suite 2525, Baltimore, MD 21202 by Phone: 410/986-0036
or by E-mail: hoffman@pivenlaw.com
REMEC INC.: Lasky & Rifkind Files Securities Fraud Lawsuit in CA
----------------------------------------------------------------
The law firm of Lasky & Rifkind, Ltd. initiated a lawsuit in the
United States District Court for the Southern District of
California, on behalf of persons who purchased or otherwise
acquired publicly traded securities of Remec Inc. ("Remec" or
the "Company") (NASDAQ:REMC) between September 8, 2003 and
September 8, 2004, inclusive, (the "Class Period"). The lawsuit
was filed against Remec and certain officers and directors
("Defendants").
The complaint alleges that Defendants violated Sections 10(b)
and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5
promulgated thereunder. Specifically the complaint alleges that
during the class period Defendants issued a series of false and
misleading statements concerning the Company's prospects and
financials. The Company repeatedly touted its positive business
trends.
On September 8, 2004, Defendants announced that the Company
would have to take a significant goodwill impairment charge of
$62.4 million for its wireless operations, the same operations
which Defendants repeatedly assured investors was on a track to
achieve profitability. In addition, the following day, despite
statements to the contrary, the Company revealed that it had
identified "potential control deficiencies" and that certain tax
authorities were reviewing Remec's tax filings. Following these
revelations, Remec's shares traded to $4.30 per share from a
class period high of $12.86 per share.
For more details, contact Lasky & Rifkind, Ltd. by Phone:
800-495-1868 or visit their Web site:
investorrelations@laskyrifkind.com
REMEC INC.: Lerach Coughlin Lodges Securities Fraud Suit in CA
--------------------------------------------------------------
The law firm of Lerach Coughlin Stoia Geller Rudman & Robbins
LLP ("Lerach Coughlin") initiated a class action commenced in
the United States District Court for the Southern District of
California on behalf of purchasers of REMEC, Inc. ("REMEC")
(Nasdaq:REMC) common stock during the period between September
8, 2003 and September 8, 2004 (the "Class Period").
The complaint charges REMEC and certain of its officers and
directors with violations of the Securities Exchange Act of
1934. REMEC designs and manufactures microwave and millimeter
wave subsystems used in the transmission of voice, video and
data traffic over wireless communications networks, and also
provides advanced integrated microwave subsystem solutions for
defense and space electronics applications.
The complaint alleges that during the Class Period, defendants
made false and misleading statements about the Company's
business and prospects. Each of the positive statements about
REMEC's business made during the Class Period was materially
false and misleading when made and also failed to disclose,
inter alia, the following adverse information which was then
known only to defendants due to their access to internal REMEC
data and disclosure of which was required to be made to make the
statements made not misleading:
(1) that the Company was experiencing materially higher
expenses as a result of defendants' attempts to
transition business from Finland to China, compounded
by high costs related to establishing support for its
OEM customers in China;
(2) that the Company's gross margins were decaying at a
rate exceeding 130 basis points per month;
(3) that the Company was dependent upon the sale of
previously written off inventory with a zero cost basis
to stave off the appearance of imminent disaster;
(4) that the Company's assets were grossly overstated,
especially its receivables and inventory to the tune of
nearly $10 million which defendants concealed until
February 2004;
(5) that the Company's long-lived assets were overstated by
in excess of $10 million;
(6) that the Company did have material internal control
deficiencies;
(7) that customers were pulling business back from REMEC
due to poor performance, quality and concerns about the
stability of the Company;
(8) that defendants were manipulating the success of
REMEC's business model by selling "written down"
inventory which inflated the Company's gross margins;
(9) that demand for REMEC's products was weakening due to
the fact that several major REMEC customers were having
serious problems with their businesses, and thus were
rescheduling, stretching out, or delaying the release
date of and canceling existing orders with REMEC;
(10) that due to the foregoing negative factors, REMEC was
very concerned about and displeased with the state of
its commercial business; and
(11) that as a result of (a)-(j) above, defendants' revised
estimates for fiscal 2005 of $500 million were
materially false and misleading.
For more details, contact William S. Lerach or Darren J. Robbins
of Lerach Coughlin by Phone: 800-449-4900 by E-mail:
wsl@lerachlaw.com or visit their Web site:
http://www.lerachlaw.com/cases/remec/
*********
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asbestos defendants that, according to independent researches,
collectively face billions of dollars in asbestos-related
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*********
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Copyright 2004. All rights reserved. ISSN 1525-2272.
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