/raid1/www/Hosts/bankrupt/CAR

/raid1/www/Hosts/bankrupt/CAR_Public/041008.mbx C L A S S A C T I O N R E P O R T E R Friday, October 8, 2004, Vol. 6, No. 200 Headlines AG INTERCRAFT: Sued Due To Work-At-Home Scam Targeting Hispanics AMERICAN DREAM: Inks Settlement for FTC Suit Over "Fat Seltzer" ARTHRITIS DRUGS: European Regulators To Review Rofecoxib Safety CALL CENTER: FTC Launches Lawsuit Over Bogus Credit Card Offers CINTAS CORPORATION: Drivers Have Oct. 21 To Join Overtime Suit DREAMWORKS SKG: Group Protests Race Stereotyping in "Shark Tale" ELAN PHARMACEUTICALS: To Pay $10M to Settle Stock Fraud Charges FGH INTERNATIONAL: Faces FTC Suit For Deceptive Trade Practices GENERAL MOTORS: NHTSA Reopens 1998-1999 Sierra, Silverado Probe HONEYWELL INTERNATIONAL: Pays $2.25M To Settle Age-Bias Lawsuit MASSACHUSETTS MUTUAL: Settlement Hearing Set November 22, 2004 MAINE: Maine Urologist on Probation Due to Healthcare Fraud MINNESOTA: Residents Of Manufactured Home Community Sue Owners MISSOURI: Kennett City To Join Franchise Fee Suit V. Phone Firms NEW YORK: Recalls 2.5T Electric Fans Due To Fire, Shock Hazards NISSAN MOTOR: To Recall Cars Over Defective Brake Lights, Bolts NORTH CAROLINA: AG Cooper To Award $40,000 To Jaycee Burn Center PARMALAT FINANZIARIA: Preliminary Hearing Held in Italian Court PARTY CITY: Reaches $5.5M Settlement in CA Overtime Wage Lawsuit PEREGRINE SYSTEMS: SEC Files Fraud Charges V. Former Officers PHILIP MORRIS: FL Appeals Court Will Not Review Decertification PRESTON GATES: Settles Employee's Overtime Wage Lawsuit in WA ROBERTSON STEVENS: Reaches Pact To Settle Market Timing Charges ROSARIO PARTNERSHIP: Settles FTC Complaint For Business Fraud RHEE BROS.: Recalls Dried Sweet Potato For Undeclared Sulfites RS INVESTMENT: SEC Issues, Settles Securities Fraud Complaint SAFESCRIPT PAHRMACIES: SEC Lodges Fraud Complaint V. Ex-Officers USS ELDER: Court Orders Assets Frozen, Blocks Work-At-Home Scam Asbestos Alert ASBESTOS LITIGATION: UK Firemen Move to Minimize Exposure Risk ASBESTOS LITIGATION: AU Lawyers Cast Doubt on Common Law Claims ASBESTOS LITIGATION: Rise in Asbestos Death Toll in UK Alarming ASBESTOS LITIGATION: Ex-Navy Overseas Workers Get Compensation ASBESTOS LITIGATION: PTA Alarmed Over Repair Work at PA School ASBESTOS LITIGATION: ATC Releases Revised Statement on Diseases ASBESTOS LITIGATION: Asbestos Disposal in Bermuda Now Available ASBESTOS LITIGATION: UK Council Investigates Asbestos Dumping ASBESTOS LITIGATION: UK Officers Intensify War V. Fly-tippers ASBESTOS LITIGATION: Waste Disposal Costs to Increase in Ireland ASBESTOS LITIGATION: Asbestos EPA Tests Done at CA High School ASBESTOS LITIGATION: JPN Firms Accept Chemical Disclosure Regime ASBESTOS LITIGATION: Controversy Hits Dar Malta Sale in Belgium ASBESTOS LITIGATION: TX Lawyer's Career Built on Asbestos Cases ASBESTOS LITIGATION: Judge Delays Hearing of MO Asbestos Suits ASBESTOS LITIGATION: UK Councilor Upset by Delay in Demolition ASBESTOS LITIGATION: Ex-Union Carbide Mill Workers Fear Asbestos ASBESTOS LITIGATION: Protesters Rally Against Canada's Actions ASBESTOS LITIGATION: Coalition Pledges AUD137M to Fight Cancer ASBESTOS LITIGATION: Federal-Mogul Seeks US$1.9B Citigroup Loan ASBESTOS LITIGATION: FL Hurricane Clean-up Generates US$3.5 Mil ASBESTOS LITIGATION: AU Council Imposes Harsh Fine for Dumping ASBESTOS LITIGATION: UN Alarmed Over Risks from Ships off Iraq ASBESTOS LITIGATION: Asbestos Threat Halts Demolition of NY Site ASBESTOS LITIGATION: MLA Gets Acclaim as Asbestos Bill Thrives ASBESTOS LITIGATION: Research Foundation Hosts Int'l Symposium ASBESTOS LITIGATION: Sen. Reid Introduces Asbestos Awareness Day ASBESTOS LITIGATION: NSW Premier Urges the US to Probe Hardie ASBESTOS LITIGATION: Union Moves for More Awareness in Schools ASBESTOS ALERT: DEP Investigates Craffey and Co. for Violations ASBESTOS ALERT: Fear Strikes Hospital at Former Hardie Dumpsite ASBESTOS ALERT: Marks & Spencer Admits Closure Due to Asbestos ASBESTOS ALERT: Aussie Kids Paid to Remove Asbestos from School ASBESTOS ALERT: Dux Factory Workers Alarmed On Asbestos Removal ASBESTOS ALERT: Crown Group Fined US$100T for Contempt of Court ASBESTOS ALERT: 90 Sydney Hospital Staffers Await Medical Tests New Securities Fraud Cases CONVERIUM HOLDING: Murray Frank Lodges Securities Lawsuit in NY INFINEON TECHNOLOGIES: Lasky & Rifkind Lodges CA Securities Suit INTEGRATED ELECTRICAL: Bernstein Liebhard Files Stock Suit in TX ST. PAUL TRAVELERS: Bernstein Liebhard Lodges MN Securities Suit STONEPATH GROUP: Mager White Lodges Securities Fraud Suit in PA STONEPATH GROUP: Wolf Haldenstein Files Securities Lawsuit in PA ZIX CORPORATION: Goodkind Labaton Lodges Securities Suit in TX ********* AG INTERCRAFT: Sued Due To Work-At-Home Scam Targeting Hispanics ---------------------------------------------------------------- The Federal Trade Commission (FTC) filed The FTC filed a complaint against Amada Guerra in the United States District Court for the Middle District of Florida, Orlando Division. The suit alleges that Ms. Guerra perpetrated a classic work-at- home scam targeting Hispanic consumers looking for work opportunities that do not require English-language skills. According to the complaint, Ms. Guerra or her telemarketers tell consumers that, for a fee, they will receive easy assembly work, such as making greeting cards or Christmas decorations. The defendant's ads promise that consumers can earn from $600 to $800 a week. Consumers are told that the money required up front (from $96 to $106) will be refunded in full once the consumer assembles and mails in a specified number of craft items. In fact, the FTC alleges, virtually no one can assemble the required number of craft items or earn the income promised by the defendant. On September 22, the court entered a temporary restraining order prohibiting the defendant from engaging in the deceptive conduct and freezing her assets to preserve the possibility of consumer redress. Since then, the defendant has agreed to a stipulated preliminary injunction continuing the terms of the TRO pending a final resolution. AMERICAN DREAM: Inks Settlement for FTC Suit Over "Fat Seltzer" --------------------------------------------------------------- The U.S. District Court for the Southern District of Florida entered a stipulated final order on September 23, 2004, against American Dream Enterprises, LLC, and its owner, Andres Fernandez Salvador. The Miami-based defendants marketed a weight-loss dietary supplement - "Fat Seltzer" - which, when added to water, produces bubbles. According to the Federal Trade Commission's (FTC) complaint, filed in April 2004, the defendants claimed that the effervescent action, when combined with Fat Seltzer's ingredients, causes substantial and permanent weight loss without the need to exercise or diet. The settlement prohibits the defendants from, among other things, making claims that Fat Seltzer, or any dietary supplement, over-the-counter drug or cosmetic causes substantial weight loss without the need to diet or exercise, or causes permanent weight loss. The order requires the defendants to pay $185,000 in monetary relief, and contains an approximately $1.5 million avalanche clause that will become due if the court finds that the defendants misrepresented their financial condition. ARTHRITIS DRUGS: European Regulators To Review Rofecoxib Safety --------------------------------------------------------------- The European Medicines Agency intends to review the safety of all brands of a popular type of arthritis pain reliever, in the wake of Merck & Co.'s recall of its popular Vioxx brand after discovering that it doubled the risk of heart attacks and stroke when taken long term, the Associated Press reports. Vioxx is a brand of the drug called rofecoxib, which also falls under a class known as Cox-2 inhibitors, named after the enzymes produced during inflammatory responses that cause arthritis joint pain. Rofecoxib, which is mainly prescribed for arthritis pain but also for acute pain and disorders such as carpal tunnel syndrome, was seen as a potential cancer-prevention medicine as well. The recall was prompted by a three-year study aimed at showing that the drug could prevent the recurrence of potentially cancerous polyps in the colon and rectum. The study asserted that participants who took the drug for more than 18 months were found to be twice as likely as those given dummy pills to suffer a heart attack, stroke or other heart complications, AP reports. During the study, 10 patients died - five who had been taking the treatment and five who took dummy pills. The European Medicines Agency said in the next two weeks it will review all available long-term studies of Cox-2 inhibitors. Other Cox-2 inhibitors include celecoxib which is marketed in the United States as Celebrex and valdecoxib which is called Bextra. Both are made by Pfizer Inc. The medicines already contain warnings regarding heart problems. CALL CENTER: FTC Launches Lawsuit Over Bogus Credit Card Offers --------------------------------------------------------------- The Federal Trade Commission charged three companies and six individuals with promoting bogus offers of unsecured major credit cards for an advance fee. The complaint, filed in the U.S. District Court for the Southern District of Florida, in Miami, names as defendants: (1) Call Center Express Corporation; (2) Abreu Advertising, Inc., doing business as La Familia Group; (3) Pro Line Card LLC; (4) Edgar Alirio Gonzalez; (5) Pablo Jose Martinez; (6) Liens Abreu; (7) Rafael L. Abreu; (8) Julio Cesar Sandoval; and (9) Carlos Felipe Mendez The defendants deceptively led consumers to believe that they would receive unsecured major credit cards, like MasterCard or Visa credit cards, with a guaranteed $2,000 minimum credit limit. When consumers call to order the cards, they are told that they must pay a fee ranging from $149 to $299 before they receive the cards. After the consumers receive the card, they realize that the defendants' cards are not major unsecured credit cards, but, in fact, are cards that can only be used to purchase items from the defendants' own catalogs and Web sites. According to the FTC, the defendants market their cards under the names La Familia Gold Card, Destiny MasterCard, Advantage Platinum Card and Pro Line Card, names that misrepresent that the defendants' cards are unsecured major credit cards issued by MasterCard or Visa. The complaint also alleges that the defendants refuse to provide refunds to consumers, which is contrary to their own written card agreements. The court granted the FTC a temporary restraining order with an asset freeze and appointment of a temporary receiver on September 16, 2004. The FTC obtained preliminary relief as to all the defendants, except Julio Sandoval, requiring them to stop the marketing and sale of credit-related products, programs, or services. This relief continues the freeze on the assets of the defendants to preserve the possibility for consumer redress and continues the appointment of a receiver over the corporate defendant. The stipulated preliminary injunction will be in effect until the litigation is complete. As to defendants Pro Line Card and Carlos Mendez, the court continued the TRO until an October 13 hearing to determine whether this order stays in place. The FTC will proceed with its lawsuit against Julio Sandoval. CINTAS CORPORATION: Drivers Have Oct. 21 To Join Overtime Suit -------------------------------------------------------------- Former and current Cintas Corporation drivers have until October 21 to join a class action filed against the Company for violations of overtime wage laws, eTrucker.com reports. The suit is pending in the U.S. District Court for the Northern District of California. More than 1,400 people in 42 states who have worked as Cintas delivery truck drivers have joined the suit, according to law firm Lerach, Coughlin, Stoia & Robbins, one of the three law firms representing the case. The lawsuit is assisted by UNITE HERE, a recently merged union of hospitality, gaming, apparel, textile and laundry workers. The Ohio-based company stated on its website that the suit is meant only to discredit and harass Cintas and that the company's payment system is legal and fair. "Recently, the Teamsters have been exaggerating the facts surrounding the lawsuit and approaching our service sales representatives while on their routes," Cintas said in a statement, according to eTrucker.com. "Their aggressive efforts are nothing more than an extension of their campaign to pressure the company into a `Card Check/Neutrality' agreement." The suit could cost Cintas $100 million, the Teamsters stated. Drivers who have worked for Cintas since March 19, 2000, can join the suit. Drivers who drove trucks weighing more than 10,000 pounds or who regularly drove interstate routes for Cintas will not receive a consent to sue notice by mail, according to information posted on a website Lerach, Coughlin, Stoia & Robbins created to provide information about the case. Those drivers may still be eligible for overtime pay and may file a consent to sue form to join this lawsuit. For more details, visit the Website: http://www.cintasovertime.com. DREAMWORKS SKG: Group Protests Race Stereotyping in "Shark Tale" ---------------------------------------------------------------- The Coalition Against Racial, Religious and Ethnic Stereotyping (CARRES) warned parents about the violence and stereotyping in DreamWorks' new children's gangster movie, Shark Tale and called for a national boycott of all products that promote the film and its characters. The movie is about a fish named Oscar, who gets involved with a gang of sharks and killer whales. Oscar, voiced by Will Smith, is an African American fish who is a slick, lazy liar with a severe gambling problem. The gangster-fish have Italian names and prey on the weaker fish. They are voiced by Robert DeNiro, Martin Scorsese and actors from The Sopranos. The movie premiered October 1, the first day of Italian American heritage Month, the organization said in a press release. Shark Tale is a production of DreamWorks SKG, owned by Steven Spielberg, Jeffrey Katzenberg and David Geffen. To promote it, DreamWorks formed partnerships with some of the nation's largest corporations, including Coca-Cola and Burger King, the press release stated. Since January, CARRES has petitioned DreamWorks to change the names of the gangster characters and remove Italian expressions from the dialogue. It also has written to the movie's corporate sponsors asking them not to promote the film. "Since our requests fell on deaf ears, we are calling for a boycott of Coca-Cola, Burger King, Krispy Kreme, General Mills and Hasbro Toys, the movie's principal marketing partners," says CARRES spokesperson Dona De Sanctis. It is the first time that the major Italian American organizations have called for a national boycott to protest the defamation of people of Italian heritage. Italian Americans represent the fifth largest ethnic group in the United States, numbering 16 million according to the U.S. Census Bureau. CARRES is composed of more than 25 ethnic organizations, including the four major Italian American organizations -- the Sons of Italy, the National Italian American Foundation, UNICO National and the Columbus Citizens Foundation. ELAN PHARMACEUTICALS: To Pay $10M to Settle Stock Fraud Charges --------------------------------------------------------------- Irish drug maker Elan Pharmaceuticals agreed to pay about $100 million to settle allegations of securities fraud, independent.co.uk reports. The Company, once Ireland's biggest company went to the brink of bankruptcy and back last year. Investors raised concerns after the company repeatedly restated its results. The Company faced charges that it hid important details of its complex and controversial financial structure. Under Garo Armen, its chairman, it unpicked a web of investments in small biotechs, which had in effect been mortgaged to fund expansion but which had since collapsed in value. The company has since reinvented itself as a niche biotech with a portfolio of potential new drugs including treatments for Alzheimer's disease, multiple sclerosis and the bowel disorder Crohn's disease. The settlement includes a fine from the United States and Exchange Commission. The Company expressed relief that the figure was not higher, since a group of private investors had launched a class action against the company claiming damages in sexcess of $1 billion, independent.co.uk reports. The Company said yesterday that it will take a $55m charge in its next results, "a reserve for the company's estimate of the liabilities related to the previously disclosed shareholder class action lawsuit and the ongoing SEC investigation," independent.co.uk. The company has previously disclosed it also has about $50m in insurance cover, indicating the final payouts will total little more than $100m. The Company had previously said it hoped to have the SEC investigation, which was launched in 2002, completed by the end of last month. Yesterday it said it was still in discussions to resolve both that and the class action lawsuit as soon as practicable. FGH INTERNATIONAL: Faces FTC Suit For Deceptive Trade Practices --------------------------------------------------------------- The Federal Trade Commission (FTC) filed a complaint against FGH International Corporation, Inti California, Inc., and their principals, Jaime Jhonny Rojas Villaneueva, also known as Jhonny Rojas, Wilson Rojas, and Franco Morales, over deceptive marketing practices. The complaint, filed in the United States District Court for the Central District of California, alleges that the defendants engaged in deceptive practices in marketing and selling at-home instructional programs, which purportedly teach consumers how to speak English or become an auto mechanic. The complaint alleges that the Van Nuys, California-based defendants represent themselves as affiliated with a government program. The defendants allegedly tell consumers that the government has selected them to receive subsidized training to learn English or to become an auto mechanic. In many instances, the FTC alleges, regardless of whether the consumer agrees to pay the purported discount cost for the training materials, the defendants send the instructional programs to consumers. Those who refuse to pay are threatened with legal action or with being reported to the immigration authorities. Many consumers fear the threatened actions and wire transfer the money. On September 28, 2004, the FTC obtained an ex parte temporary restraining order prohibiting the defendant from engaging in the conduct challenged in the complaint and an order freezing assets to preserve the possibility of consumer redress. GENERAL MOTORS: NHTSA Reopens 1998-1999 Sierra, Silverado Probe --------------------------------------------------------------- The National Highway Traffic Safety Administration (NHTSA) reopened and expanded a probe into General Motor Corporation's Sierra and Chevrolet Silverado pickup trucks, from the 1998 and 1999 model years, after receiving 73 reports of breaking tailgates, the Associated Press reports. The NHTSA already probed tailgates on the 1999 Sierras and Silverados. In March 2004, the Company recalled 4 million 2000- 2004 Silverado, Sierra, Avalanche and Escalade EXT pickups because their tailgate support cables could break when the tailgate was open. However, the NHTSA did not include the 1999 Sierra and Silverados on the recall, as the tailgates on these pickups appear to be breaking at a lower rate than the models that were recalled. The NHTSA has received reports of 19 injuries due to tailgate breakage, but no deaths have been reported. The Company has also received 11,560 warranty claims related to the problem. NHTSA decided to reopen the investigation and expand it to 1998 vehicles last week after getting more data. There are more than 1.4 million 1998-99 Silverado and Sierra pickups on the road, AP reports. A GM spokesman said Tuesday that the company was cooperating with the investigation. HONEYWELL INTERNATIONAL: Pays $2.25M To Settle Age-Bias Lawsuit --------------------------------------------------------------- At a company it acquired during a 1999 merger, Honeywell International has agreed to pay $2.15 million to settle a class- action lawsuit alleging violations of the Age Discrimination in Employment Act of 1967 (ADEA), the HR.BLR.com reports. According to the Equal Employment Opportunity Commission's lawsuit, during a company wide reorganization in 1997, AlliedSignal Automotive Aftermarket terminated or demoted a class of sales managers and representatives because of their age. Furthermore, the EEOC alleges that younger workers with less experience were retained and/or offered those positions. Upon reaching the settlement both the Honeywell and the EEOC stated that they entered into the agreement in order to avoid the time, expense, and uncertainty of further litigation. In addition to providing a total of $2,150,000 to resolve the lawsuit, Honeywell also agreed to post a notice concerning the lawsuit at appropriate facilities and to provide training in the provisions of the ADEA to all the managers and supervisors in the Consumer Products Group (CPG) and Frictions Materials (FM) businesses. Jacqueline McNair, regional attorney of EEOC's Philadelphia office hailed the willingness of all the parties to work together to craft a thorough and effective resolution to this lawsuit. MASSACHUSETTS MUTUAL: Settlement Hearing Set November 22, 2004 -------------------------------------------------------------- The United States District Court for the District of New Jersey will hold a fairness hearing for the proposed settlement in matter Varacallo, et al. v. Massachusetts Mutual Life Insurance Company, et al., on behalf of all Massachusetts Mutual Life Insurance Company, MML Bay State Life Insurance Company, Connecticut Mutual Life Insurance Company or C.M. Life Insurance Company (collectively "MassMutual") policyholder who have or had an ownership interest in permanent policies and/or term life policies and/or disability income policies issued by MassMutual from January 1, 1983 until December 31, 2003. The hearing will be heard before the Honorable Jose L. Linares on November 22, 2004 at 10:00 am, at the Martin Luther King Building & United States Courthouse, 50 Walnut Street, Newark, New Jersey. For more details, contact MassMutual Class Action Information Center by Mail: P.O. Box 919, Minneapolis, MN 55440-0919 or by Phone: 1-800-242-7026 or 1-877-506-4034 MAINE: Maine Urologist on Probation Due to Healthcare Fraud ----------------------------------------------------------- The United States District Court in Maine sentenced a practicing urologist to a term of probation for healthcare fraud. Federal Judge Nancy Gertner sentenced Joseph Olstein, M.D., 58, of Maine, to 1 year of unsupervised probation and a fine of $20,000. Dr. Olstein pleaded guilty in April 2001 to a one count criminal Information charging him with conspiring to bill insurance companies for free samples of the drug Lupron, which he had received from sales representatives employed by TAP Pharmaceutical Products Inc. At the sentencing hearing, Health Care Fraud Chief Michael Loucks urged the Court not to impose a sentence of imprisonment, and to impose only the sentence of probation, given the substantial assistance that Dr. Olstein had provided to the government. Dr. Olstein assisted the government in connection with the investigation in Massachusetts of TAP Pharmaceutical Products Inc., as well as an investigation of AstraZeneca, conducted by the U.S. Attorney's Office in Delaware. Dr. Olstein began cooperating with the investigation in the Fall 1999 and his information allowed the government to focus and streamline its investigative efforts. Assistant U.S. Attorney Loucks pointed out to the Court that at the time, only four federal prosecutors and fewer than ten government agents were working on both investigations. By providing truthful cooperation and assistance from the outset, Dr. Olstein's cooperation helped both investigations substantially. The two investigations of the corporations were resolved with corporate pleas and global settlement agreements with aggregate recoveries to the United States Treasury of more than $1.2 billion. Dr. Olstein had previously made a restitution payment of approximately $50,000. Dr. Olstein is the fourth doctor to be convicted in connection with this investigation. Previously, Dr. Rodney Mannion, a urologist practicing in LaPorte and Michigan City, Indiana, was charged in February, 2000 with Healthcare fraud and pleaded guilty to the charge in April 2000. Dr. Jacob Zamstein, a urologist practicing in Bloomfield, Connecticut, was charged in November 2000 with Healthcare fraud and pleaded guilty in December 2000. Dr. Joseph Spinella, a urologist practicing in Bristol, Connecticut was charged in December 2000 with Healthcare fraud and pleaded guilty in March 2001. All three doctors also cooperated in the government's investigation and all were sentenced to terms of probation. In a trial concluded this summer, a number of TAP employees were acquitted of charges regarding the provision of samples and other things of value to urologists, in exchange for the purchase of the drug Lupron. The case was investigated by the Federal Bureau of Investigation, the Office of Inspector General for the U.S. Department of Health and Human Services, the Food and Drug Administration Office of Criminal Investigations, and the Defense Criminal Investigation Service. The case involving Dr. Olstein was prosecuted by Assistant U.S. Attorney Michael K. Loucks, Chief of Sullivan's Health Care Fraud Unit. MINNESOTA: Residents Of Manufactured Home Community Sue Owners -------------------------------------------------------------- Residents of The Gardens private manufactured home community in Rochester, Minnesota have filed a class-action lawsuit in Olmsted District Court against the owners of the park, according to a recently issued press release, the Post-Bulletin reports. The suit, which was filed by 21 residents, alleges consumer fraud, breach of contract and violations of state and local laws. The suit alleges that the owners made misrepresentations in order to make sales to the plaintiffs starting in 2000. The residents specifically stated in their suit that the owners, orally and in writing, promised a private, "beautiful setting," with walking and biking paths, neighborhood playgrounds, a private lake, gates and 24-hour security. However, the residents also stated that the promises were never kept and that their complaints in the past several year have fallen on deaf ears. The residents alleged that the owners failed to follow proper building and construction practices that have caused damage to several of the homes. The residents further alleged that due to these problems their attempts at selling their homes have been unsuccessful. The park owners include a handful of local businessmen, including former state Rep. Dave Bishop, Dick Hexum Sr., Tom Hexum, Lloyd Johnson and David Kane. Various limited-liability corporations were formed to handle ownership, lease spaces in the park and sell manufactured homes, and those corporations -- not the businessmen themselves -- were the parties named as defendants in the lawsuit. MISSOURI: Kennett City To Join Franchise Fee Suit V. Phone Firms ---------------------------------------------------------------- The City of Kennett, Missouri may join 50 other cities in the state in a class action filed against several wireless telephone providers, the Dunkin Democrat reports. "The class action litigation is to collect franchise fees from wireless telephone providers," City attorney Terry McVey told city council members at their meeting Tuesday evening. Mr. McVey said that while the cities collect franchise fees from conventional telephone service providers, they don't collect anything from wireless providers. He said that if the suit is successful, Kennett would collect an estimated $100,000 to $110,000 a year in additional revenue. The board sentiment is to join in the lawsuit, and an ordinance authorizing the city to join in the lawsuit will be presented the council at its meeting October 19. NEW YORK: Recalls 2.5T Electric Fans Due To Fire, Shock Hazards --------------------------------------------------------------- New York Zion Trading Corporation, of Flushing, New York is cooperating with the United States Consumer Product Safety Commission by voluntarily recalling about 2,500 Portable oscillating electric fans. The wiring is undersized and the power plug is not polarized, creating fire and shock hazards. No injuries have been reported. This recall is being conducted to prevent the possibility of injuries. The recall involves 16-inch diameter 3-speed oscillating fans, which mount on adjustable stands. "NYZT" appears in the center of the front fan guard. The model numbers, FS-1601A and FS- 1607C, are found on a silver label on the back of the controls. The fans come in two color combinations: either blue and white, or all gray. Manufactured in China, the electric fans were sold at discount and variety stores in the New York City metropolitan area during May 2004 for about $10. Consumers should stop using these fans immediately and return them to the place of purchase for a full refund. For more details, contact the Company by Phone: (718) 909-7899, between 8:30 a.m. and 5:30 p.m. ET Monday through Friday. NISSAN MOTOR: To Recall Cars Over Defective Brake Lights, Bolts --------------------------------------------------------------- Nissan Motor Company plans to recall a total of 26,077 cars, including about 100 in the United States to fix defective brake lights and faulty bolts used in the vehicles propeller shaft, the Associated Press report. The recall includes the Cima, President, Skyline sedans and Stagea wagons made in Japan between December 2000 and June 2004, according to Japanese Transport Ministry spokesman Toshihiko Kude. 25,977 of these cars were sold in Japan. Mr. Kude said a loosened bolt could cause the propeller shaft linked to the front wheel to come off. That defect affects most of Nissan's cars in the recall, AP reports. No injuries have been reported to the Company. The remaining 259 cars, including 100 Cima models exported to the United States and sold under the model names M45 and 945, had a brake light that malfunctioned because a different lubricant oil was used in production, AP reports. NORTH CAROLINA: AG Cooper To Award $40,000 To Jaycee Burn Center ---------------------------------------------------------------- More than $40,000 collected by telemarketers using a phony charitable pitch will go to the North Carolina Jaycee Burn Center, North Carolina Attorney General Roy Cooper announced in a statement. "These telemarketers said they were collecting donations to help the Jaycee Burn Center treat children but not one cent of the money they raised actually did that," said AG Cooper. "We've turned the tables on this scam so that these donations will be used as people intended." AG Cooper alleges that a telemarketer misrepresented its connection with the Jaycee Burn Center to solicit donations and then failed to use the money it collected to pay for treatments for burn victims in violation of North Carolina law. A total of $42,359.65 will go to the North Carolina Jaycee Burn Center at UNC Hospitals in Chapel Hill. AG Cooper recovered the funds through a consent judgment entered against Manning Enterprises of Florida, Inc., a for-profit telemarketer that makes calls on behalf of non-profits. Manning Enterprises is also permanently barred from the fund raising business in North Carolina. The Jaycee Burn Center, the only one of its kind in the state, has treated thousands of patients with severe burns since it opened in 1981. About a quarter of all burn victims treated at the Center are children. "The Burn Center is dedicated to burn prevention and research into improved treatment for patients," said Michael D. Peck, M.D., Sc.D., Medical Director of the Center. "These funds will directly help our research, as well our efforts to provide support to children and adults who are striving to return to normal lives following serious burns." According to a complaint filed by AG Cooper, the North Carolina/South Carolina Police and Firefighters Olympics Association hired Manning Enterprises to raise funds through telemarketing calls. Telemarketers working for the company made calls to North Carolinians from spring of 1999 through March 2003. As part of their pitch, the telemarketers claimed they were collecting funds to provide treatments such as skin grafts for children at the Jaycee Burn Center. AG Cooper's office discovered that the money went instead to the telemarketers and the Association. "I'm proud of the generous people in North Carolina who are willing to give to those in need, but we need to be vigilant against people who try to take advantage of our compassion," AG Cooper warned. "Scammers may even try to use the very real victims of this season's hurricanes and floods to make their phony pleas sound more plausible." While there are many legitimate charities that solicit donations, there are also fraud artists that claim to be affiliated with a particular charity or cause in order to take consumers' money. If a caller refuses to answer questions about the charity, offers to come to pick up a donation in person, or asks for a credit card, bank account or Social Security number, the call may be part of a scam, the press statement continued. To report telemarketing fraud, contact the Attorney General's Consumer Protection Division by Phone: (877) 5-NO-SCAM. To check up on a charity that solicits money from you, contact the North Carolina Secretary of State's Office by Phone: (888) 830-4989. For more details, contact Noelle Talley, Public Information Officer, N.C. Department of Justice by Phone: (919) 716-6484 or (919) 716-6413 by Fax: (919) 716-0803 or by E-mail: ntalley@ncdoj.com PARMALAT FINANZIARIA: Preliminary Hearing Held in Italian Court --------------------------------------------------------------- A closed-door preliminary hearing over charges of market manipulation filed against Parmalat Finanziaria SpA founder Calisto Tanzi and 28 others began in a court in Milan, Italy, Bloomberg.net reports. Almost ten months ago, the food company collapsed in what is considered Italy's biggest bankruptcy. More than 100,000 Italian investors incurred losses afterwards, as prosecutors uncovered evidence that the Company used much of the proceeds from more than EUR7 billion ($8.6 billion) in bond sales to hide losses and debt. Italian banks often sold Parmalat bonds to customers without their knowledge, consumer groups alleged. Prosecutor Francesco Greco and his team requested Judge Cesare Tacconi to issue an indictment against the defendants. Judge Tacconi also accepted a request by lawyers for Maurizio Bianchi and Lorenzo Penca, who were auditors at the former Italian unit of Grant Thornton International, for an immediate trial. Today's hearing was adjourned to October 29. Lead Milan prosecutor Greco will try to prove that the Company's former managers, abetted by bank officials and auditors, deceived investors and manipulated the market by hiding debts and losses and fabricating assets for more than a decade, according to court documents filed in May. The charges are based on "false communication of information that provided reassurances about the financial solidity of the Parmalat group, which was instead in crisis from at least 1999," according to the court documents filed by prosecutors. More than 200 lawyers, court officials, investors and consumer groups came to the hearing. Investors flocked to the courthouse, seeking to recover damages as part of the criminal investigation of Italy' biggest bankruptcy. "I came purposely today to see if I can have some hope of getting something back," Lionello Dechecchi, a 74-year-old retiree from Milan, told Bloomberg. "These guys didn't steal from the rich, they stole from the poor, because 90 percent of the people who lost their money were poor people like me." Mr. Dechecchi said his entire savings of EUR25,000 were wiped out in the bankruptcy. The Italian bank that was managing his money invested the savings in Parmalat bonds without his knowledge, he told Bloomberg. Parmalat Administrator Enrico Bondi will present claims as a plaintiff to recoup money in the case, Marco De Luca, a lawyer for the company told Bloomberg. Securities market regulator Consob also is seeking to be a plaintiff, news agency Ansa reported. "Today the process starts after just 10 months, which should establish who was responsible for over 14 billion euros in losses that wiped out the savings of 135,000 investors," Elio Lannutti, president of Adusbef, the Italian association of bank customers told Bloomberg. Riccardo Olivo, a lawyer for Bank of America, told Bloomberg the accusations are "completely without any basis." He said the bank may seek damages "because it believes it has been harmed along with the rest of the market by the false image that Parmalat gave of its financial situation." "We would never have lent Parmalat $700 million over a span of years had we known the true state of its finances," he said. Italian law does not provide for class action lawsuits, though consumer groups are presenting collective demands to recover funds for their members. Adusbef and another consumer group, Adiconsum, say they both have more than 4,000 Parmalat investors joining their effort to recoup money. Altroconsumo says it has support from more than 2,500 investors, Bloomberg reports. "The investors suffered a loss and it's right that they are reimbursed by all of those who are found to be responsible," Giampiero Biancolella, one of Tanzi's lawyers, told Bloomberg. He said Tanzi wasn't planning to plead guilty. PARTY CITY: Reaches $5.5M Settlement in CA Overtime Wage Lawsuit ---------------------------------------------------------------- Party City Corporation (NASDAQ: PCTY) will pay up to $5.5 million to tentatively settle California class action litigation regarding overtime wage and hour laws, the Associated Press reports. The Los Angeles Superior Court has granted approval to the settlement. A recent regulatory filing also reveals that the Rockaway, New Jersey-based Company stated that payments to an assistant manager and other eligible employees would not exceed $5.5 million and at the same time admits no wrongdoing in the settlement. PEREGRINE SYSTEMS: SEC Files Fraud Charges V. Former Officers ------------------------------------------------------------- The Securities and Exchange Commission filed civil fraud and related charges against six former senior officers of San Diego- based Peregrine Systems, Inc. who orchestrated and attempted to cover up a massive accounting fraud at the company. According to the Commission's complaint filed in the United States District Court in San Diego, the Peregrine defendants fraudulently inflated the product revenue Peregrine reported in its filings with the Commission and elsewhere. The defendants employed deception and lies to portray Peregrine as a company with constantly growing sales while covering up Peregrine's persistent failure to fulfill revenue forecasts. At the same time, some of the Peregrine defendants unloaded Peregrine stock into an unsuspecting market, enriching themselves, in some instances by millions of dollars, at the expense of the investing public. In February 2003, Peregrine restated its financial results for eleven quarters during fiscal years 2000, 2001 and 2002, reducing previously reported revenue of $1.34 billion by more than $507 million. The Commission's complaint names: Stephen P. Gardner, Peregrine's former Chairman and Chief Executive Officer; Gary L. Lenz, the former President and Chief Operating Officer; Douglas S. Powanda, the former Executive Vice President of Sales; Berdj J. Rassam, the former Controller; Joseph G. Reichner, the former Senior Vice President for Alliances and Business Development; and Peter J. O'Brien, the former Director of Strategic Alliances. The Commission also charged Daniel F. Stulac, a certified public accountant and former Arthur Andersen LLP engagement partner on the Peregrine audit, with fraud, and Larry A. Rodda and Michael D. Whitt, former principals of two Peregrine channel partners (customers), with aiding and abetting Peregrine's fraud. According to the Commission's complaint, the heart of Peregrine's fraud was the recording of millions of dollars in revenue on the improper basis of non-binding arrangements with resellers ("channel partners") - companies that purchased software from Peregrine for resale to end-users. Peregrine's senior management would determine near the ends of quarters how much additional revenue the company needed to meet or exceed analyst expectations. They would then enter into sham deals with channel partners (including backdated contracts and contracts made contingent by oral or written side agreements). Peregrine executives arranged a number of these fraudulent deals with defendants Rodda and Whitt. Peregrine improperly recorded the resulting "revenue" in order to mislead investors into believing that Peregrine's financial condition was significantly better than it was and to inflate artificially Peregrine's stock price. Gardner, the former CEO who was actively involved in the fraud, and Powanda, the former Executive VP of Sales who devised many of the sham deals, sold over $11 million and $24 million worth of Peregrine stock, respectively, during the fraud, resulting in millions of dollars in profits. The complaint further alleges that, as the uncollected receivables from the fake channel sales swelled on Peregrine's balance sheet, senior officers at the company devised a temporary solution to make it appear that Peregrine was collecting cash on a timely basis. Uncollectible receivables were purportedly sold to banks and removed from Peregrine's balance sheet. These receivable financing transactions, however, were in reality loans and not sales because, under the terms of the deals, the banks had recourse against Peregrine if the customers did not pay. Peregrine's removal of the receivables from its balance sheet was therefore fraudulent. According to the complaint, to prevent the banks from discovering that some of the channel "sales" underlying the receivables were bogus, Peregrine often repurchased the receivables from the banks. To remove the uncollectible receivables from Peregrine's books, Peregrine executives, including former Controller Rassam, with the knowledge of outside engagement partner Stulac, then improperly wrote off millions of dollars of the repurchased receivables (and other unpaid receivables) as acquisition costs, even though the receivables were wholly unrelated to acquisitions. The complaint also alleges that outside auditor Stulac permitted Peregrine to record revenue improperly. Stulac knew, or was reckless in not knowing, that Peregrine's fiscal 2001 financial statements were materially false and misleading. Despite Stulac's knowledge or reckless disregard of this improper accounting, he caused Arthur Andersen to issue an unqualified opinion attesting to the accuracy and completeness of Peregrine's fiscal 2001 financial statements. Based on this conduct, the Commission's complaint alleges the following: (1) Defendants Gardner, Powanda, Lenz, Rassam and O'Brien violated Section 17(a) of the Securities Act of 1933 (Securities Act). (2) Defendants Gardner, Powanda, Lenz, Rassam, Reichner and O'Brien violated Sections 13(b)(5) and 10(b) of the Securities Exchange Act of 1934 (Exchange Act) and Exchange Act Rules 13b2-1 and 10b-5 and aided and abetted violations of Exchange Act Sections 13(a), 13(b)(2)(A) and 13(b)(2)(B) and Exchange Act Rules 12b- 20, 13a-1 and 13a-13. (3) Defendants Gardner and Lenz violated Exchange Act Rule 13b2-2. (4) Defendant Stulac violated Exchange Act Section 10(b) and Exchange Act Rule 10b-5 and aided and abetted violations of Exchange Act Section 13(a) and Exchange Act Rules 13a-1 and 13a-13. (5) Defendants Rodda and Whitt aided and abetted violations of Exchange Act Section 10(b) and Exchange Act Rule 10b-5. This is the fifth civil fraud action the Commission has filed in this investigation. In November 2002, the Commission filed a civil injunctive action against Ilse Cappel, the former Senior Treasury Manager at Peregrine (Litigation Release No. 17859A). In April 2003, the Commission filed a civil injunctive action against Matthew C. Gless, Peregrine's former Chief Financial Officer (Litigation Release No. 18093). In June 2003, the Commission filed a civil injunctive action against Steven S. Spitzer, a former Vice President of sales at Peregrine (Litigation Release No. 18191), and a partially-settled civil injunctive action against the company (Litigation Release No. 18205A). In August of 2003, the Commission announced that it had fully settled its case against Peregrine and that the United States District Court in San Diego had entered final judgment (Litigation Release No. 18290). The United States Attorney's Office for the Southern District of California also announced criminal charges against the nine individuals named in the Commission's complaint, and others who participated in Peregrine's financial fraud. The Commission's investigation of the financial fraud is continuing. Former Peregrine officers and others are cooperating with the investigations. The Commission thanks the United States Attorney's Office for the Southern District of California and the Federal Bureau of Investigation for their cooperation in this matter. The action is titled, SEC v. Stephen P. Gardner, et al., Civil Action No. 04 CV 2002 JAH (RBB) (S.D. Cal.) PHILIP MORRIS: FL Appeals Court Will Not Review Decertification --------------------------------------------------------------- Florida's Fourth District Court of Appeal denied a request to reconsider its decision to decertify a class of Marlboro Lights and Ultra Lights smokers who are seeking the return of their purchase price of cigarettes sold in Florida since 1971. The appeals court decertified the Hines class on Dec. 31, 2003. In December, the Florida appeals court said that Hines could not be fairly tried as a class action because individual issues concerning facts unique to each smoker would need to be resolved. The court said, "The record supports Philip Morris' contention that the manner in which cigarettes were smoked and the smokers' reasons for choosing to smoke 'light' cigarettes could preclude an individual smoker's entitlement to damages and, thus, would be legitimate issues raised in defense." PRESTON GATES: Settles Employee's Overtime Wage Lawsuit in WA ------------------------------------------------------------- The law firm of Preston Gates & Ellis agreed to pay $700,000 to settle a class action lawsuit that accuses the firm of acting improperly by not paying the employees for overtime wages, or compensating them for rest breaks, the Seattle Post Intelligencer reports. Filed on behalf of more than 300 of its current and former employees, the suit focuses on a special group of lawyers known as the Document Analysis Technology Group, or the DATG, as the firm calls it, which processes massive amounts of electronic documents for complex cases. The group's main function is to review electronic documents from the firm's clients ranging from images to e-mail messages in an effort to determine which are appropriate to turn over to the opposing side in response to requests made during the legal process known as discovery. The case hinged on a dispute over whether the actual work the special groups of lawyers were doing qualified them as professionals, since state law defines that lawyers and other professionals are exempt from ordinary requirements for overtime and break pay. The employees who filed the suit argued that the assignments they had at the firm such as the routine nature of the document- processing jobs didn't qualify them as professionals under the law, since they were not working as lawyers in their positions. In a declaration filed with the court, Scott McKenzie, the lead plaintiff in the case described their tasks as being "repetitive and monotonous," to the point that many them listened to music while they worked. Furthermore, the Martin Garfinkel, one of the lawyers representing the employees in the suit stated that his clients generally didn't go to court, represent clients, or do anything else typically associated with the practice of law. However, Preston Gates, which admitted no wrongdoing in settling the suit, argued that the document reviewers were indeed working as lawyers. In one of its court filings the firm even states that the jobs required them to draw on "special skills" developed in years of legal training. Even Gerry Johnson, the Preston Gates managing partner stated that their employees in the special group are all lawyers and are all professionals and that the firm managed them consistently with the statutory requirements. The settlement, which was reached in July through mediation, is set to go to King County Superior Court Judge Paris Kallas for final approval on October 27, 2004. ROBERTSON STEVENS: Reaches Pact To Settle Market Timing Charges --------------------------------------------------------------- Robertson Stevens Investments agreed to settle allegations of "excessive" market timing in its mutual funds for $30 million, New York Attorney General Eliot Spitzer said Wednesday, according to the Associated Press. Under the settlement, which was reached jointly with the United States Securities and Exchange Commission, the Company agreed to pay $11.5 million in restitution and disgorgement to investors. The firm also agreed to pay 13.5 million in civil penalties and $5 million in fee reductions to investors over five years. The company also agreed to several reforms, like creating greater accountability and enhancing compliance and ethical controls. A full-time senior officer would also make sure the fees charged are negotiated "at arm's length and reasonable." "RS managers and executives knew that arrangements with market timers were contrary to claims made in the company's prospectus and harmful to long-term investors," AG Spitzer said, according to AP. "Despite this knowledge, company officials allowed and facilitated market timing of funds because it proved to be a lucrative source of fee revenues." ROSARIO PARTNERSHIP: Settles FTC Complaint For Business Fraud ------------------------------------------------------------- Rosario Partnership and its partners, Leonardo Spelzini and Maite DeNegris and Funes, Inc., and its president, Hector De Nigris have agreed to settle the Federal Trade Commission's (FTC) charges that they made false and unsubstantiated weight loss claims for "Celu-Fat Reductor." The FTC's complaint, filed in the United States District Court for the Central District of California, alleges that the Montclair, California-based defendants made several "red flag" false weight loss claims, including promises that consumers would "shrink two sizes in only 10 days," and would be able to lose weight without dieting or exercising. The proposed stipulated final order prohibits the defendants from making claims that any weight loss product causes users to lose a substantial amount of weight without reducing caloric intake or increasing exercise. In addition, the order prohibits the defendants from making false and unsubstantiated efficacy or safety claims for any health-related service, product, or program, weight loss product, dietary supplement, food, drug or device. The settlement contains a judgment of $157,000 that has been suspended because of the defendants' financial condition. The stipulated order is subject to court approval. RHEE BROS.: Recalls Dried Sweet Potato For Undeclared Sulfites -------------------------------------------------------------- Rhee Bros., Inc. is recalling its 1 lb. packages of 'Dried Sweet Potato' 'Assi' brand because they may contain undeclared sulfites. People who have allergies to sulfites run the risk of serious life-threatening allergic reaction if they consume these products. The recalled 'Dried Sweet Potato' 'Assi' brand was distributed in retail stores on the East Coast. The product comes in a 1 Ib. package marked with 'Dried Sweet Potato' and 'Assi'. Its item number is 09870C on the label. No illnesses have been reported to date in connection with this problem. The recall was initiated after sampling by 'New York State Department of Agriculture & Markets' food inspectors discovered that the sulfites-containing product was distributed in packaging that did not reveal the presence of sulfites. Subsequent investigation indicates the problem was caused by a temporary breakdown in the labeling processes. Wholesale distribution of the product has been suspended until the company is certain that the label has been replaced with a corrected label. Consumers who have purchased 1 Ib. packages of 'Dried Sweet Potato' 'Assi' brand are urged to return them to the place of purchase for a full refund. Consumers with questions may contact the company at 1-410-381-9000. RS INVESTMENT: SEC Issues, Settles Securities Fraud Complaint ------------------------------------------------------------- The Securities and Exchange Commission filed settled administrative and cease-and-desist proceedings against RS Investment Management, Inc., RS Investment Management, L.P. (collectively RS), the investment advisers to the RS complex of mutual funds and RS's CEO G. Randall Hecht (Hecht) and former CFO Steven M. Cohen (Cohen). The Commission's order finds that RS, Hecht and Cohen violated the federal securities laws when they allowed favored clients to conduct market timing trading in a mutual fund RS managed in violation of the exchange limitations set forth in the Funds' prospectus. Under the settlement, RS will pay a civil penalty of $13.5 million, pay disgorgement of $11.5 million, and undertake compliance measures designed to protect against future violations. The penalty and disgorgement amounts will be distributed to shareholders of the RS funds affected by the market timing. The Commission's Order finds that: (1) During at least 2000 through mid-2003, RS entered into undisclosed agreements allowing certain investors in its Emerging Growth Fund (EGF) to engage in frequent trading which exceeded the limitations set forth in the EGF's prospectus. The trading was in substantial dollar amounts, from $15 million to $65 million per trade. (2) The Funds' prospectus limited investors to four exchanges in a twelve-month period. However, the special trading arrangements entered into by RS allowed at least five investors to conduct "unlimited trading." (4) As part of these arrangements, the investors agreed to invest long-term assets, also known as "sticky" assets, into the Funds. RS earned approximately $1.7 million in additional fees as a result of the special trading arrangements. (5) The Commission's order also finds that RS, Hecht and Cohen failed to disclose these arrangements or the potential conflict of interest caused by these arrangements with the RS Funds' Board of Trustees. The Order finds that RS violated Sections 206(1) and 206(2) of the Investment Advisers Act of 1940 and Sections 17(d) and 34(b) of the Investment Company Act of 1940. RS consented without admitting or denying the Commission's findings. Additionally, as part of the settlement, Hecht has agreed, without admitting or denying the Commission's findings, to cease and desist from committing or causing RS's violations of Section 206(2) of the Advisers Act and Sections 17(d) and 34(b) of the Company Act. Hecht will resign as trustee of the RS fund trust and will not reapply for that position for a period of five years. Hecht will curtail certain of his functions as CEO at RS and will pay a $150,000 civil penalty. Also under the settlement, Cohen has agreed, without admitting or denying the Commission's allegations, to cease and desist from committing or causing RS's violations of Sections 206(1) and 206(2) of the Advisers Act and Sections 17(d) and 34(b) of the Company Act, to be suspended from association with an investment adviser and investment company for a nine month period, and to not hold the position of officer or director of an investment adviser or investment company for a two-year period. SAFESCRIPT PAHRMACIES: SEC Lodges Fraud Complaint V. Ex-Officers ---------------------------------------------------------------- The Securities and Exchange Commission filed a civil action in the U.S. District Court for the Eastern District of Texas against the following entity and individuals: Safescript Pharmacies, Inc., f/k/a RTIN Holdings, Inc. (RTIN or the company), a Longview, Texas based, electronic prescription technology company; Stanley L. Swanson, RTIN's former CEO; his son, Curtis A. Swanson, also former RTIN CEO; R. Stephen Cavender, the company's former CFO; and Curtis A. Borman, a former RTIN director. The SEC simultaneously settled its action against RTIN in consideration for RTIN's consenting to a permanent injunction against violations of the antifraud, registration, reporting, books and records and internal controls provisions of the federal securities laws, and RTIN's consenting to the entry of an order by the SEC revoking the SEC registration of RTIN's securities. The SEC also simultaneously settled its action against Borman in consideration for Borman's agreeing to disgorge 106,000 options on RTIN common stock, a $25,000 civil penalty, and a permanent injunction against violations of the "deception of auditors" provisions, and against aiding and abetting violations of the antifraud and reporting provisions of the federal securities laws. In the civil action filed against Stanley Swanson, Curtis Swanson and Cavender, the SEC is seeking, against each of them, a permanent injunction, an officer and director bar, disgorgement plus prejudgment interest, an accounting, and a civil money penalty, based on violations by each of them of the registration, antifraud, falsification of records, deception of auditors, circumvention of controls and certification provisions, and on their each aiding and abetting RTIN's violations of the antifraud, reporting, books and records and internal controls provisions. According to the SEC's complaint, in 2002 and 2003, RTIN materially inflated its reported revenue by selling franchise agreements to start-up franchisees in exchange for worthless stock and promissory notes, and then immediately recognizing revenue from the transactions, despite the franchisees' known inability to pay. The SEC further alleges that the Swansons, together with Cavender, fraudulently supported the company's inflated revenue figures by recording fictitious payments by franchisees and by using funds from undisclosed, unregistered distributions of RTIN stock to pay RTIN's debts and management bonuses. The SEC further alleges that Borman, while he was a director of RTIN, assisted the company in misleading the company's auditors about the authenticity of a sham certificate of deposit, allegedly issued to pay for the purchase of an RTIN franchise license. The revenue-inflation scheme caused RTIN to overstate by material amounts its net income in periodic reports the company filed with the Commission throughout 2002 and 2003. In its complaint, the SEC alleges that RTIN, Stanley Swanson, Curtis Swanson, and Cavender violated Sections 5(a) and 5(c) of the Securities Act of 1933 (Securities Act), and Section 10(b) of the Securities Exchange Act of 1934 (Exchange Act) and Rule 10b-5 thereunder, and that Stanley Swanson, Curtis Swanson and Cavender violated Section 13(b)(5) of the Exchange Act and Rules 13b2-1, 13b2-2 and 13a-14 thereunder. The SEC further alleges that RTIN violated 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, and that Stanley Swanson, Curtis Swanson and Cavender aided and abetted those violations. Finally, the Commission alleges that Borman violated Exchange Act Rule 13b2- 2, and aided and abetted RTIN's violations of Sections 10(b) and 13(a) of the Exchange Act and Rules 10b-5, 12b-20 and 13a-1 thereunder. The action is titled, SEC v. Safescript Pharmacies, Inc., f/k/a RTIN Holdings, Inc., Curtis A. Swanson, Stanley L. Swanson, R. Stephen Cavender, and Curtis A. Borman, defendants, Civil Action No. 6:04-CV-455 (USDC, EDTX, Tyler Division) USS ELDER: Court Orders Assets Frozen, Blocks Work-At-Home Scam --------------------------------------------------------------- The United States District Court for the Central District of California issued a preliminary injunction against a Los Angeles-based operation cited by the Federal Trade Commission (FTC) with perpetrating a classic work-at-home scam. The order froze the operation's assets and prohibits the practices alleged in the FTC complaint. The complaint was filed against USS Elder Enterprises, Inc., America Vespucia Corporation, Ricardo Elder Partners, Inc., and Ricardo E. Gonzalez, doing business under a series of fictitious names and operating as a common enterprise. The defendants targeted Spanish-speaking consumers looking for well-paying jobs that do not require English-language skills. The FTC alleged that the defendants, through ads in various Spanish-language newspapers and magazines, offered easy product assembly work, such as key chains or jewelry, if consumers paid a fee ranging from $50 to $180. Interested consumers were led to believe that they could earn between $112 and $700 a week for such work. In fact, consumers who paid the fee did not receive the promised assembly project work or substantial assistance getting such work. Few, if any, realized the promised earnings. Instead, consumers received a booklet in Spanish that contained lists of companies to contact that allegedly offered work-at-home opportunities. These companies no longer exist; or they required payment of additional fees; or they had no relationship with the defendants. Many consumers were unable to obtain the refunds promised by the defendants. The preliminary injunction, which will be in effect until the court issues a final ruling on the FTC's allegations, prohibits the practices alleged in the FTC's complaint and freezes the defendants' assets. The injunction prevents the defendants from misrepresenting that consumers will obtain assembly project work for pay or substantial assistance in obtaining such work; that consumers are likely to earn a substantial amount of money; and that the defendants will provide refunds to consumers. It also prohibits the defendants from failing to comply with the Telemarketing Sales Rule. Asbestos Alert ASBESTOS LITIGATION: UK Firemen Move to Minimize Exposure Risk -------------------------------------------------------------- Noxious fumes drifted over Warndon in the United Kingdom last week after a garage with a roof containing asbestos was torched. Firefighters wearing breathing apparatus and special protective suits tackled the incident at the block of lock-up garages in Ennerdale Close, at around 10:30 p.m. Officers also went door- to-door to warn nearby residents to shut windows to avoid harmful fumes entering their homes. Two crews from Worcester's Green Watch swiftly dealt with the fire, before washing down their suits thoroughly to ensure the asbestos was removed. The fire gutted the little-used garage, which contained scrap cars, but no one was injured in the incident. An investigation team is trying to discover how the fire started. It is being treated as "suspicious." ASBESTOS LITIGATION: AU Lawyers Cast Doubt on Common Law Claims --------------------------------------------------------------- A Tasmanian lawyers' group has warned that the State Government's bid to help asbestos victims through common law claims could backfire against workers. Australian Plaintiff Lawyers Association Tasmania spokesman John Green said allowing common law claims for asbestos would discriminate against employees who had contracted asbestos- related diseases from exposure in the workplace. "These people have to make claims under the Workers Compensation Act where their common law rights have been gutted. Under the Government's proposed changes, people exposed to asbestos outside of the workplace would have those common law rights," said Mr. Green. He said in situations where people could not sue under common law, compensation was limited to loss of income and medical costs but common law compensation allowed for pain, suffering and loss of enjoyment of life. Mr. Green added, "The APLA is calling on the government for an amendment to this discriminatory provision." ASBESTOS LITIGATION: Rise in Asbestos Death Toll in UK Alarming --------------------------------------------------------------- The number of asbestos related deaths has risen to 3,500 a year and is forecast to increase to 10,000 by the year 2020. Hundreds of thousands of tons of asbestos currently in buildings still needs to be removed. Tragic deaths from killer building material asbestos continue to plague families across the country. Everyday, increasingly more people die from a cancer brought on by exposure to asbestos decades ago and their families are left devastated. Greater Suffolk Coroner Dr. Peter Dean has the unenviable task of investigating the deaths resulting from mesothelioma, the cancer caused by exposure to asbestos. He has to record verdicts that these people died from industrial disease after working unknowingly surrounded by asbestos, often for years on end. He discusses a few of the most recent cases that he had to investigate. Alfred Bartlett, who was 73 when he died in June, had been exposed to asbestos throughout his working life. The victim spent time building and repairing steam locomotives for British Rail. He said he and his colleagues had been given no formal warnings about the dangers of asbestos, but they had been told to tie a string around the sleeves of their overalls. He had also spent time working for the RAF, London Transport, Ford Motor Company and ended his career as a warehouseman at Felixstowe docks. Mesothelioma was diagnosed after a biopsy and doctors concluded Mr. Bartlett's death was a result of exposure to asbestos. Former Royal Navy electrician Arthur Harris, who was 83 when he died, had also been exposed to the material. Mr. Harris had spent 24 years in the Navy. The inquest into the death of Irene Smethurst-King revealed no identifiable source of asbestos exposure. Mrs. King had worked in both a cotton mill and at a silk manufacturer. Dr. Dean states that although there was no direct evidence that she had been exposed to asbestos, it was extremely rare for anyone to develop mesothelioma unless they had been exposed. He said, "On the balance of probability the fact is we have a mesothelioma and we have a disease that is caused more likely than not by asbestos exposure." Sadly, the number of inquests that will hear similar stories is set to rise as thousands of people were exposed to deadly asbestos between the 1940s and 1970s. Helen Bucky from the occupational and environmental diseases association in East Anglia said, "The statistics are coming up and it is going to get worse. The figures are very alarming. It is as big a problem in East Anglia as it is anywhere.these cases won't stop for about 20 years." ASBESTOS LITIGATION: Ex-Navy Overseas Workers Get Compensation -------------------------------------------------------------- Three U.S.-based military contractors have agreed to compensate Spanish workers suffering from asbestos-related illnesses due to their work on U.S. warships in Rota during the Cold War. American lawyer Mitchell Cohen gave out checks ranging from US$2,000 to more than US$6,000 to about a dozen workers. Those with more serious health injuries received more money. More compensation could be coming to the workers. Mr. Cohen has targeted about two-dozen companies that he believes owe the workers compensation for their illnesses because they knew asbestos was harmful. Mr. Cohen, who is representing about 60 Spanish workers exposed to asbestos in the 1950s, '60s and '70s, could not give a total amount given to the workers or reveal the names of the companies because of the settlement terms. The companies, which have filed for bankruptcy, agreed to settle with the former employees. Mr. Cohen said, "These companies did not warn people of the dangers. And the U.S. Navy didn't prevent the companies from warning people about those dangers." Many of the Spanish workers have been diagnosed with asbestosis, a hardening and scarring of the lung tissue that can be fatal. Some spouses of the workers also suffer from health problems because they washed their husbands asbestos-covered work clothes. Mr. Cohen is a lawyer with the Philadelphia-based Locks Law Firm, which represents thousands of American and overseas shipyard workers exposed to asbestos while working on U.S. Navy ships. The firm has represented more than 13,000 personal injury victims across the United States since 1974. The firm typically does not target the U.S. military for asbestos-related claims, but instead seeks compensation from private companies. "The Navy did not know for a long period of time the harmful effects of asbestos, but the companies did," he said. Although the Naval Station Rota is a Spanish base, U.S. courts ruled that the claims could be filed in the United States because the employees worked on American ships, which is considered sovereign U.S. territory by law. ASBESTOS LITIGATION: PTA Alarmed Over Repair Work at PA School -------------------------------------------------------------- Parents want more reassurances that roof replacement work at Pivik Elementary School isn't harming their children, a Parent- Teacher Association member told the Plum school board. As roof-repair work was ongoing, workers discovered that asbestos adhesive was present under the old material. Consequently, the budget ballooned from US$250,000 to US$624,000, nearly tripling in cost. The district decided to go ahead with it since water damage would have worsened; assuring the parents that state guidelines would be strictly followed. But the association insisted that some children have been experiencing headaches and nausea to increased asthma attacks since the work began. The parents claim that even though children are not allowed to enter areas where work is being done, they may still be affected. Viola Valletta, chairwoman of the PTA Health and Safety Committee, said that more complaints are coming in daily. "I feel there is some panic occurring," she said. Ms. Valletta said one pressing concern is the smell of tar in the front hall, which seems to be evident of the air- conditioning units drawing in outside air. In some classrooms, some teachers refused to shut their windows. She believes those issues could be addressed easily. Officials stated that all precautions are taken to ensure safety. They emphasized that removal work is done only on non- school hours. Also, the area is regularly tested while removal is going on to ensure the air quality is not compromised and the results of these tests are published on the district's newsletter. But Ms. Valletta said the PTA is willing to go further to help the district assure parents it is safe. Superintendent George Cooke agreed, adding that for immediate concerns, parents should call the district to get accurate answers. ASBESTOS LITIGATION: ATC Releases Revised Statement on Diseases ---------------------------------------------------------------- In its first official statement since 1986 on the topic, the American Thoracic Society has published a document entitled "Diagnosis and Initial Management of Nonmalignant Diseases Related to Asbestos." The revised statement, updated and reviewed by an 11-person committee of experts, appeared in the American Journal of Respiratory and Critical Care Medicine. According to the authors, the new statement is designed to provide guidance to clinicians in the diagnosis of nonmalignant asbestos-related disease. The nonmalignant medical conditions covered, which are associated with breathing the mineral dust, include: asbestosis, a chronic, progressive lung disease often marked by scarring or fibrosis of the lung tissue; pleural plaques and more diffuse forms of pleural thickening; benign or nonmalignant pleural effusions; and airway obstruction. In the late 19th century, industry recognized that commercial asbestos had high tensile strength, flexibility, resistance to chemical and thermal degradation and high electrical resistance. Asbestos was widely used in the past for insulation, brake linings, flooring, cement, paint, textiles and various other products. However, after documentation of its hazards in the 1970s and 1980s, use of asbestos fell rapidly, and the industrial mineral was ultimately banned in many Western countries. When a physician suspects asbestos-related illness, the document advises the doctor to take a comprehensive occupational and environmental history, with emphasis on exposure 15 years or more prior to the current office visit. The report estimates that asbestos is still a hazard for 1.3 million workers in the construction industry in the United States and for workers involved in the maintenance of buildings and equipment. According to the experts, a chest X-ray is an extremely useful tool to aid in the diagnosis of asbestos-related pleural disease. In addition, the report notes, "The specificity of the diagnosis of asbestosis increases with the number of consistent findings on chest film, the number of clinical features present, and the significance and strength of the history of exposure." However, according to the document, once exposure to asbestos has occurred, no prophylactic medication or treatment is currently available to prevent the development or the progression of asbestosis or other asbestos-related diseases. Treatment is often designed to ease symptoms. ASBESTOS LITIGATION: Asbestos Disposal in Bermuda Now Available --------------------------------------------------------------- An acceptable solution to disposing hundreds of containers of asbestos is within reach, Bermuda's Premier Alex Scott said. Mr. Scott confirmed that Cabinet has received a British Government funded report on asbestos disposal, and said the issue of who foots the bill was now irrelevant as the solution may not be that expensive. He would not say what the study recommended, but it seems more than likely that the asbestos would be disposed of on an island. Government has been hesitant to ship it overseas because of potential liability should the hazardous substance cause problems elsewhere. The Bermuda Government has for the past few years been grappling with how to dispose of the asbestos, an estimated 150 20-foot sea containers left here by the U.S. Navy when it vacated the former Baselands. A deal to terminate the lease for the properties was agreed between the United Kingdom and the United States but neither of the two powers made any provision, or commitment, to clean up tons of waste left behind by the Americans. The study, which was done by consultants W.S. Atkins, looked into costs, international regulations, insurance and liability issues, local environmental concerns, health risks and disposal of hazardous waste in the future. "They have given us viable options and it's for the Environment Ministry and Works & Engineering to put in place a practical way forward based on those recommendations," the Premier said. In October 2003, the UK's Overseas Territories Minister Bill Rammell and the Premier reported that the UK was to look into alternative sources of funding for disposing of the island's asbestos waste. The joint statement came after months of wrangling over the matter with the UK stating definitively that it would not be paying for the disposal. But the UK did agree to pay for a study, and a report was handed to Cabinet this summer. Bermuda has been concerned with the cost of cleaning up the toxic stockpile, and the potential liabilities should the asbestos be shipped off the Island. Asbestos can be found in about 70% of the abandoned buildings on the former U.S. bases, and more than 25% of that is crumbling. There are about 411 asbestos containers currently being stored in Bermuda at two locations. Currently the Island has no specific legislation targeting the removal of asbestos, or the training of workers dealing with asbestos. Instead, Bermuda relies on guidelines provided by the United States Environmental Protection Agency. ASBESTOS LITIGATION: UK Council Investigates Asbestos Dumping ------------------------------------------------------------- Council officers are investigating whether this pile of corrugated iron, which was dumped on a footpath about a month ago, contains asbestos. Ron Aston, director of Sawford Engineering in Priors Haw Road, Corby, has twice reported the dumped waste to the environmental health department of Corby Council. The mess lies on a path next to his factory that has become a dumping ground for fly-tippers. Council spokesman Madelyn McAlpine said, "Corby Council does not ignore the dumping of dangerous waste, such as asbestos, and takes the matter very seriously. On this occasion there appears to have been a mistake, which we are investigating. Asbestos is a dangerous substance and it is irresponsible of people to dump it." The council has sent out an officer to assess whether the material was asbestos or not. If it is asbestos, the authority will call in a specialist contractor to remove it safely. ASBESTOS LITIGATION: UK Officers Intensify War V. Fly-tippers ------------------------------------------------------------- Hidden cameras and secret tracking devices are just some of the surveillance techniques in the planning stage as enforcement officers wage war against professional fly-tippers dumping dangerous waste at some of the city's worst hot spots. Amjad Ishaq, of Bradford Council's ten-strong enforcement team, said, "Clearly people are making a business out of this and there is a lot of it going on in Bradford. We are told that people are moving out of drugs and into waste because it's profitable and people do not tend to end up in prison." The crackdown comes as the Environment Agency confirmed large- scale tipping by gangs was on the rise across the UK. Mr. Ishaq warned a sting operation was on its way in Bradford after talks between the Council and the Environment Agency to discuss surveillance techniques. He said the Council was planning to install CCTV at trouble spots and run sting operations to catch illegal operators in the act. He admitted the problem in Bradford was getting worse because of the rising cost of waste disposal. Councillor Mukhtar Ali, who campaigned with residents to try to get the Sandford Road rubbish cleared, welcomed the move. "Enforcement of this nature will help alleviate and help reduce the amount of rubbish being fly-tipped in Bradford," he said. ASBESTOS LITIGATION: Waste Disposal Costs to Increase in Ireland ---------------------------------------------------------------- Small businesses in Northern Ireland could expect a sharp rise in waste management costs due to the EU Landfill directive which came into force last month, said Democratic Unionist Party spokesman Robin Newton. Mr. Newton said business groups and MPs have all issued warnings that the Government's poor handling of the landfill regulations would lead to problems such as fly-tipping of asbestos and other toxic waste, extra business costs and a slowdown of building on brown field land. He adds that on the British mainland, substances such as asbestos, acids and pesticides will no longer be accepted at most landfill sites and the number of landfill sites that can accept hazardous materials is expected to drop from over 200 to around 10. "However, more alarmingly, there are no landfill sites within Northern Ireland that are able to accept hazardous materials," said Mr. Newton. ASBESTOS LITIGATION: Asbestos EPA Tests Done at CA High School -------------------------------------------------------------- The Environmental Protection Agency are testing for the presence of potentially dangerous amounts of asbestos in the area surrounding Oak Ridge High School in El Dorado Hills, where high levels have already been found in the soil. Asbestos occurs naturally in parts of El Dorado County. The mineral is inert as long as the soil is undisturbed, but if inhaled can cause several life-threatening diseases. "Exposure to asbestos causes lung cancer. It's one of the handful of known human carcinogens," said EPA spokesperson Jerelean Johnson. Testers could be seen wearing protective masks while they played baseball on the diamond, stirring up dust. The point was to see how much exposure they would be subjected to while playing the game. Several area sports grounds, playgrounds and trails will remain closed during the EPA testing. The EPA expects it will be several months before test results are completed. If there are high levels of asbestos found, officials say they will properly coordinate with the public to figure out the next step. ASBESTOS LITIGATION: JPN Firms Accept Chemical Disclosure Regime ---------------------------------------------------------------- More than 10,000 manufacturers of electric machinery and electronics products in Japan, the U.S. and Europe will likely standardize information disclosure for harmful chemicals used in their products. The system is expected to cover 24 substances that are harmful to humans, as well as their compounds. Under the system, parts and materials suppliers will be required to report their use of these substances, which include lead, mercury, asbestos and polychlorinated biphenyl or PCB. All such reports are expected to cover eight points, including the type of part that contains these substances, its weight, and its use. Twelve additional points, such as contact information for personnel in charge of the report at the supplier, may also be required. Many manufacturers have been voluntarily gathering information on harmful substances used in parts and materials from their suppliers. But the lack of a clear standard means that suppliers have to produce several different reports for the same product to satisfy the requirements of different customers. A standardized reporting mechanism will likely save time and effort for both manufacturers and suppliers. The standardized information disclosure requirements will not likely be made into a binding rule, but are expected to become a de facto standard. As such, companies in China and other emerging Asian countries will also likely be compelled to embrace it in order to continue doing business with their customers in industrialized countries. The firms, which include Canon Inc, Sony Corp, NEC Corp, Siemens AG, IBM Corp, Intel Corp and Motorola Inc, plan to draw up a draft for the system, with the goal of implementing it early next year. They hope to sign up as many as 13,000 companies. ASBESTOS LITIGATION: Controversy Hits Dar Malta Sale in Belgium --------------------------------------------------------------- Malta House has been at the center of a raging controversy ever since the story first broke about the high price its government is paying for the building to accommodate the permanent representation to the EU. Apparently, the building purchased by the Maltese government in the heart of Brussels has to be cleared of asbestos. The operation to rid Malta House of asbestos forms part of the refurbishment process, expected to cost MTL2.5 million. Asked whether government was aware of the presence of asbestos before purchasing the building, the Office of the Prime Minister said the "removal of asbestos is the responsibility of the seller and was included in the costs for the refurbishment." The office also did not say what share of the cost was attributable to asbestos removal, which is known to be very expensive, requiring specialized personnel and equipment to carry out the job. The purchase of the building at such a lucrative price was "conceived, controlled and pushed" by Richard Cachia Caruana, in the words of former minister John Dalli. The choice of experts was also Cachia Caruana's, giving rise to accusations of nepotism after it transpired that he chose close friend Peter Caruana Galizia as lawyer and his personal architect Martin Xuereb to be involved. The block was purchased for MTL6.5 million and an additional MTL2.5 million would be required for refurbishment, according to the government estimate. Prime Minister Lawrence Gonzi has repeated more than once that government intends leasing out three or four floors for commercial purposes even though it is still unclear whether renting out would cause government to lose its tax exemptions. When pressed for more information, the reply from the Prime Minister's communications officer remains, "We will give them to you when we have them." ASBESTOS LITIGATION: TX Lawyer's Career Built on Asbestos Cases --------------------------------------------------------------- Few legal careers track more closely with the 30-year history of asbestos litigation than Fred Baron's. Praised as a brilliant tactician, criticized as an opportunist whose firm boldly pushed the ethical envelope, he built one of Texas' largest plaintiffs firms, Dallas-based Baron & Budd, from hundreds of millions of dollars in asbestos settlements and verdicts. Today, the firm has 78 lawyers, 400 support staffers, three corporate jets, a double-digit percentage of the roughly 295,000 asbestos claims pending across the nation and annual revenues estimated by Forbes at US$150 million a year. Baron's share, US$21 million a year, the magazine estimates. Mr. Baron scoffs at that number and says he sold his partnership share at the end of 2002 so as to not present a conflict of interest with his present job, raising money for the Democratic presidential ticket. He admits however, that he is still an employee of the firm. His wife, Lisa Blue, remains a partner. In the early 1970s, the famed lawyer was among those who disclosed documents showing how asbestos manufacturers hid evidence of the dangers of asbestos and, from the 1920s on, exposed hundreds of thousands of workers to the potentially lethal product. As a young lawyer fresh out of the University of Texas, Baron took the case of workers at a Pittsburgh Corning insulation plant in Tyler and eventually won a US$2 million settlement for a group of workers there. "I'm convinced lawsuits had more of an impact [on worker safety] than anything else," Mr. Baron said. Mr. Baron fought and won against the rival firms' attempts to enter into massive class-action settlements. He says the settlements would have harmed so-called future claimants, those who had been exposed in the past but had not yet developed asbestos-related cancers or lung ailments. The settlements also would not have been as beneficial to Baron's firm as the status quo, under which it collects 40% contingency fees as long as there are cases to bring. As it grew, Baron's firm adopted several practices that increased its caseload, revenue and reach, but came under fierce criticism as the number of asbestos cases proliferated and companies began filing for bankruptcy under tons of claims too numerous to fight in the courts. To generate cases, Baron & Budd used mass screenings of former shipyard and factory workers to enlist clients, then coached and prepared them with practices that struck some as beyond ethical boundaries. "I don't think we are the devil," he said. "We do a very good job for our clients. I think the system by in large has worked very well." ASBESTOS LITIGATION: Judge Delays Hearing of MO Asbestos Suits -------------------------------------------------------------- A circuit judge has given lawyers more time to prepare for a hearing on the status of asbestos cases in three southwest Mississippi counties. During this week's hearing in Fayette, attorneys for several of the plaintiffs said they didn't receive proper notice and didn't have enough time to respond to motions by the defendants. Judge Pickard rescheduled the hearing for October 15 in Jefferson County Circuit Court. He also gave plaintiffs an October 12 deadline to file written responses to defense motions. The case involves thousands of plaintiffs in and outside Mississippi and hundreds of defendants. The defendants are mostly companies where the plaintiffs claimed to have been exposed to asbestos. They were asking Circuit Judge Lamar Pickard to either dismiss the cases in Jefferson, Copiah and Claiborne counties or order plaintiffs to provide more information about their claims. The defendants said they received no basic information about each of the plaintiffs. Attorneys for the plaintiffs, according to the court record, said such details would come out when the cases were tried one at a time. Chief Justice Jim Smith said the information should have been included in the lawsuits. "This complaint comes to us from plaintiffs who, more than three years ago, filed suit against 137 defendants, who have amended the complaint six times and who are apparently unable to explain to the trial court, this court or to the defendants, exactly who each plaintiff has sued and why," he wrote. On August 26, the Mississippi Supreme Court ruled in a case from Bolivar County that such lawsuits must include the names of each defendant being sued, when the plaintiff was exposed and the work site where the exposure occurred. If not, separate trials should be set for each plaintiff and cases involving residents outside the county or state should be transferred to other courts. In those cases, the court said it was improper to group plaintiffs together when their claims did not arise from the same incident. The defendants in Pickard's court are seeking the same remedy. "We were pushing these issues before but we didn't have Supreme Court precedent. It is what we had always said the Supreme Court would do if they addressed these issues. So, it's nice to be validated," said Marcy Bryan Croft, a Jackson attorney representing defendants. ASBESTOS LITIGATION: UK Councilor Upset by Delay in Demolition -------------------------------------------------------------- A Ballymena, United Kingdom councilor is "losing sleep" over the risk to children posed by 30 derelict "deathtraps" in the Shanowen area of Ballee. Councilor Beth Adger said that young lives will be lost if there is any further delay in the demolition of the vacant properties by the Housing Executive. So far, only four houses have been torn down. "I have seen kids going in through the roofs myself. All it takes is for somebody to set a match alight and the whole thing will go up in smoke," she said. The councilor added that she was fed up with excuses from the Housing Executive, which had continued to delay the work. A spokesperson for the Housing Executive said that "appropriate approvals" had been obtained to demolish around 30 properties and that, following the completion of necessary asbestos surveys, six had already been leveled. "The Housing Executive is conscious of local concerns, and is working to have the remaining properties removed as quickly as possible," she added. ASBESTOS LITIGATION: Ex-Union Carbide Mill Workers Fear Asbestos ---------------------------------------------------------------- As several trials against Union Carbide are emerging across the country, the company has asserted that its asbestos couldn't be the culprit because none of the King City mill hands has ever been determined to have an asbestos-related disease. However, a small but growing number of mill hands have come to feel haunted, fearing that the work they did could end up killing them. Over the decades, 450 men and women worked at the mill near King City, a town of 11,000 in southern Monterey County. Art Valdez, who worked for the Company for 26 years, says that even after learning of the fatal hazards of asbestos, he didn't think that it would damage his lungs or mark him for cancer. The mill bosses told him that the kind of asbestos Union Carbide Corp. manufactures wouldn't hurt him, he said, and he believed them. He has changed his mind since then. He has now become something of an activist, a role he never expected to play. What angers the former mill hands is that Union Carbide may have kept them in the dark about what it knew of Calidria's potential dangers, including the lung damage suffered by laboratory rats in Union Carbide's own tests in the 1960s. The Company defends itself against people's claims that Calidria in their homes or workplaces gave them cancer by claiming that none of its own mill workers have been inflicted with any asbestos-related disease. Union Carbide further contends that recent research shows that, unlike those of other forms of asbestos, Calidria's fibers are short enough to be easily expelled from the respiratory tract and lungs before causing damage. However, Company documents disclosed in lawsuits in Georgia, Texas and Florida indicate that Union Carbide doctors saw symptoms possibly associated with asbestos-related disease in King City workers on about three dozen occasions. At least three workers have died of cancers that may be associated with asbestos, though in each case other factors, such as smoking, could be to blame. Today, Union Carbide, a unit of Dow Chemical Co. since 2001, faces a mountain of lawsuits over injuries and deaths blamed on the asbestos shipped around the world from King City. None of the King City workers is a plaintiff in any of these cases, but Union Carbide has made them key to its defense: If the people who milled Calidria aren't ill, then the plaintiffs are blaming the wrong asbestos -- and the wrong company. The mill was considered a model in asbestos hygiene. It was state of the art for its time, the first to use a wet process to control the dust. But it was dusty nonetheless, workers said, especially when churning out its biggest moneymaker, Resin Grade 244. Taking the most conservative approach possible, Union Carbide says that they advised plant workers that breathing in any asbestos could put them at risk. But no matter what the experts determine, unless one of the former workers is diagnosed with an asbestos-related disease, there may be no cause for an injury claim. ASBESTOS LITIGATION: Protesters Rally Against Canada's Actions -------------------------------------------------------------- About 100 people have gathered outside the Canadian High Commission in Canberra to protest the country's support for the production and export of asbestos. Unions say there is intense public anger over the conduct of some asbestos manufacturers. The Construction Forestry Mining and Energy Union said Canada was one of the few countries in the world still mining asbestos, and was one of the world's largest exporters of the white asbestos or chrysotile. Construction, Forestry, Mining and Energy Union spokesman John Sutton said that while most European countries and Australia had banned the use of asbestos, the Canadian government had actively blocked the listing of white asbestos in the major international toxic substances convention. He says it is reprehensible, given tens of thousands of people around the world have died as a result of mesothelioma and when you consider that most of Canada's white asbestos is being exported to developing countries. "With 100,000 people dying every year worldwide from asbestos- related diseases, the Canadian government needs to seriously reconsider its policies on asbestos production and export and move quickly to ratify the Rotterdam Convention," Mr. Sutton said. ASBESTOS LITIGATION: Coalition Pledges AUD137M to Fight Cancer -------------------------------------------------------------- A research center into asbestos-related diseases will be created as part of the Coalition's AUD137 million investment in cancer care, treatment and research. Health Minister Tony Abbott announced that a reelected Coalition government would spend AUD60.6 million to support Australians living with cancer, AUD42 million on cancer research and AUD34.5 million to prevent and detect cancer. "The Coalition will establish a national bowel-cancer screening program, fund a new campaign to reduce smoking by pregnant women and promote community awareness about skin cancer," Mr. Abbott said. Labor has already outlined a AUD112 million plan to improve access to cancer treatment and improve cancer prevention programs targeting lung, skin, bowel, prostate, ovarian and testicular cancer. About AUD48 million would be invested in more clinical cancer studies and developing a new Medicare item to cover multidisciplinary medical care for cancer patients. Mr. Abbott said the Coalition would create a new national agency, Cancer Australia, to coordinate services by bringing together scientists, doctors, consumers, industry and government. The party also promised to establish a research center for asbestos-related diseases which were likely to cost the community AUD5 billion during the next 35 years. The Coalition would create 100 new undergraduate university places for radiation therapists, develop training courses for oncology nurses and provide professional development for cancer specialists. "Through targeted investment and highly skilled professionals and researchers, Australia is well placed to move forward towards an age of cancer prevention and cure," Mr. Abbott said. ASBESTOS LITIGATION: Federal-Mogul Seeks US$1.9B Citigroup Loan ---------------------------------------------------------------- Federal-Mogul Corp is asking a U.S. bankruptcy judge for permission to borrow as much as US$1.93 billion from Citigroup Inc. to help fund its reorganization. Federal-Mogul, the world's largest maker of engine bearings and seals, asked U.S. Bankruptcy Judge Raymond T. Lyons in Trenton, NJ, to approve a US$500 million loan to help pay for operations during reorganization and US$1.43 billion of financing for use after the company exits bankruptcy. Billionaire financier Carl Icahn, who is Federal Mogul's largest creditor, and other bondholders support the company's request, according to a lawyer involved in the negotiations. "We are very much in support of it," said Peter D. Wolfson, lawyer for the Federal-Mogul creditors committee. "We invited several financial institutions to make offers. Citigroup gave us the best proposal and we negotiated a deal that was very satisfactory." The new funding would give Federal-Mogul "a very substantial cash cushion" and more favorable terms than existing borrowings, Mr. Wolfson said. The US$500-million loan would replace bankruptcy financing from JPMorgan Chase & Co., which was approved by a judge days after Federal-Mogul's October 2001 Chapter 11 filing. The Southfield-based company filed for bankruptcy after a surge in lawsuits filed by people who claimed they were exposed to asbestos by companies that were later acquired by Federal-Mogul. Federal-Mogul's plan to exit bankruptcy would give 50.1% of the reorganized company's stock to current and future asbestos- injury claimants and 49.9% of the new shares to bondholders and other creditors. The new loans "will help facilitate an efficient and cost-effective transition" out of bankruptcy, Federal-Mogul said. A hearing to approve the recovery plan is set for December 9. A hearing on the company's request for the loan is scheduled for October 22, court papers show. Asbestos, widely used as a fireproofing material until the 1970s, has been linked to lung ailments and a rare form of cancer that can surface years after exposure to the material. More than 70 former makers or sellers of asbestos-containing products have filed for Chapter 11 protection since 1982. ASBESTOS LITIGATION: FL Hurricane Clean-up Generates US$3.5 Mil --------------------------------------------------------------- PDG Environmental Inc. completed US$3.5 million worth of cleanup work in Florida and expects additional revenues of as much as US$10 million. The environmental contractor sent more than 600 managers and laborers to Tampa and Fort Lauderdale after the region was hit by four hurricanes. Crews are doing mold remediation, drying, asbestos removal, demolition and general cleanup of the affected areas. Since the arrival of Hurricane Charley in Florida in early August, the Churchill-based company, which specializes in asbestos removal, has quadrupled its work force. It expects business related to the cleanup after the spate of hurricanes could generate US$5 million to US$10 million of revenue over the next three to six months. The Florida offices have dealt with hurricane damage before, but the devastation wreaked by four storms in six weeks was more than they could handle on their own. Company spokesman Shawn P. Regan said, "We've been working on critical buildings, such as schools and hospitals, just to get them back online. That will taper off, but then you get into the stuff that's not as critical . There are a tremendous number of residences that we haven't even touched yet. The work's going to go on for many months." ASBESTOS LITIGATION: AU Council Imposes Harsh Fine for Dumping -------------------------------------------------------------- Asbestos dumped on a Killara roadside has prompted Wodonga council to warn that anyone caught dumping rubbish will receive a harsh fine. Council health and community services manager Mr. Mark Verbaken said the council engaged qualified contractors to remove the substance early this week after being advised of the dumping. Mr. Verbaken said, "Littering is not acceptable and in a case such as this, the result could have caused an environmental problem if the rubbish had made its way into the Kiewa River. At the end of the day it is the whole community who ends up paying for rubbish that is dumped." Mr. Verbaken said dumping rubbish carried a AUD200 fine and the council would pursue anyone caught. He said the council had report forms and people who saw others dumping rubbish should write down car number plates or other descriptive details and lodge a complaint. "We try and determine where the rubbish is from and if we find the person who did the littering we will issue a litter infringement notice," Mr. Verbaken said. The man who reported the asbestos dump to council, Mr. Terry Dare, praised the council for its swift clean-up but called for a "no dumping rubbish" sign to be erected. Mr. Verbaken said council was more than happy to investigate the need for signage on the road. ASBESTOS LITIGATION: UN Alarmed Over Risks from Ships off Iraq --------------------------------------------------------------- As many as 500 sunken ships lie in Persian Gulf waters around Iraq, posing a serious environmental risk and hampering access to its ports, the United Nations said. Experts are sounding the alarm this week at a Kuwait meeting at which the UN and donors are discussing with the Iraqi and Kuwaiti governments how to tackle the problem. A spokesman for the UN Development Program explained that the scope of the problem was not known, as Iraq had not granted access to the waters before the second Gulf war. Most of the wrecks date from the 1980-88 Iran-Iraq war and the first Gulf war in 1991, although the UN says there are some from the most recent conflict. Their removal is seen as crucial to any refurbishment of Umm Qasr and Al Zubayr ports. According to the report, the ships contain a poisonous assortment of metals including lead, pesticides, hydrocarbons and munitions. Many ships were carrying heavy crude oil, fuel oil or military ordinance as cargo. Even those with more benign freight contain fuel oil, battery acid, hydraulic fluid and asbestos. "Virtually all these vessels are slowly leaking substances that are damaging to marine life and people," the UN says. Paul Clifford, an adviser to the UNDP survey team, said, "It is essential for the countries that rely on the purity of the waters of the Arabian Gulf for desalination and the health of fish stocks that all necessary steps are taken to ensure it continues to be a life source for future generations." The UN says wrecks should be removed in manageable batches of 20 at a time. The cost of removing the larger wrecks runs from US$1 million to US$8 million a vessel. Removing the sunken ships currently impeding access to the ports and restoring the channels to their designed depth of 12.5 meters would cost about US$34 million. But the United Nations Joint Logistic Center estimates that Iraq now spends an additional US$190 million a year importing goods overland that could be brought in much more cheaply by sea. The UN believes the investment in clearing wrecks would pay for itself within a year. It has also proposed an oil spill contingency plan. ASBESTOS LITIGATION: Asbestos Threat Halts Demolition of NY Site ---------------------------------------------------------------- A project to demolish and remove a number of small homes and debris from a 16-acre site here has been halted over the possibility that asbestos might be present. The site off Canal Road near the Mohawk River is the location of Krause's Restaurant and Grove. It is owned by Gary and Gail Krause, who are planning to develop the property once the debris is removed. Officials with the state Department of Labor asked for and received a temporary halt to the demolition of the structures on the Krause site. Francina Kitchen of the Department of Labor said the department had received information that there may be asbestos in some of the buildings on the site or in the construction debris that litters it. Ms. Kitchen said the project was stopped voluntarily while samples are tested The restaurant site became a scene of anger and despair earlier in the summer when many long-time lease holders vacated their homes. When a 30-day-clause in their leases was invoked, many vacated the homes rather than move them. Some destroyed parts of the homes before vacating. Since that time, the site has been the scene of at least two unexplained fires that partially destroyed what was left of the homes. The town has been after the Krauses to move forward more quickly with the demolition and removal process. Town Planning Board Chairman and Public Safety officer Steve Watts said he has given the Krauses four citations for safety and health violations over the structural debris. The Krauses were fined US$50 in Town Court on September 22 for having an unsafe structure. They paid the fine that same night. A second construction company, BBL Services, now has the contract for the demolition and removal of the buildings. Director of Operations Todd Woods said the company has hired an independent company to do a round of tests and will refrain from doing any work until the results of the tests come in. "We're a big company, and we understand our obligations. We'd like the public to know that we do the right things whenever requested. As soon as the complaint came in, we stopped things. We don't want to proceed if it's dangerous to our workers," said Mr. Woods. ASBESTOS LITIGATION: MLA Gets Acclaim as Asbestos Bill Thrives -------------------------------------------------------------- Independent Member of the Legislative Assembly Helen Cross could be the most successful cross-bench politician in the 15-year life of the ACT Legislative Assembly after having no less than four of her bills adopted, more than the combined six-member Liberal Opposition had achieved in three years. Two of the outstanding MLA's bills, on asbestos awareness and on keeping pharmacies out of supermarkets, are in the early stages of being adopted by other state governments across the country. Her four landmark bills include the Smoking (Prohibition in enclosed public spaces) Bill 2003, the Residential (Awareness of Asbestos) Bill 2004, the Pharmacy Amendment Bill 2004 and the Discrimination Amendment Bill 2002 that outlawed discrimination against women on the grounds of pregnancy. Ms. Cross believes she has experienced the worst and the best of Assembly politics, having to contend with threats and pressure, which led to amendments to the Electoral Act that could have signaled the end of her political career. Ms. Cross is fighting her first election as an Independent after resigning from the Liberal Party in 2002. Ms. Cross has long been a strong advocate for the community on business, health, women's issues and planning. She was the first in Australia to spearhead a ban on smoking in enclosed public places. She said her asbestos legislation is being promoted in other state governments and she expects to see it taken up nationwide. ASBESTOS LITIGATION: Research Foundation Hosts Int'l Symposium -------------------------------------------------------------- A lethal, but long-overlooked cancer will take a major step out of the shadows next week, as The Mesothelioma Applied Research Foundation convenes the First International Symposium on Malignant Mesothelioma. Mesothelioma is a rare, asbestos-related cancer. Research efforts were overlooked for decades, and effective treatment lags far behind other cancers. At the same time, incidence in the U.S. and globally is increasing to what some experts term epidemic proportions. The widely reported asbestos exposures resulting from 9/11 have increased the urgency of developing treatments for mesothelioma, in the view of many experts. The Symposium, to be held at Las Vegas' MGM Grand Hotel October 14- 16, 2004, is the first ever meeting designed to unite the entire mesothelioma-concerned community to focus on the research needed to cure the disease. The importance of this effort is gaining national attention. Today, the Honorable Harry Reid, Nevada Senator and Democratic Whip, confirmed that he will attend to deliver the Symposium's keynote speech. Jordan Zevon -- son of critically-acclaimed singer-songwriter Warren Zevon, who died from mesothelioma one year ago -- will also appear. Washington Senator Patty Murray will receive an award in the name of Congressman Bruce Vento, who died from mesothelioma in 2000. The Symposium combines a scientific and medical conference with workshops designed specifically for patients, family members, industry representatives and others interested in the disease. Scientific Co-Chairs Nicholas Vogelzang, MD, Director of the Nevada Cancer Institute, and Harvey Pass, MD, Chief of Thoracic Oncology at Wayne State University's Karmanos Cancer Center, have assembled presentations by the world's leading mesothelioma surgeons, oncologists, and geneticists. Collectively, they will advance scientific understanding of the disease, while educating front-line physicians, as well as patients, families and all who help them, on recent advances, current treatment options, and emerging potential therapies for mesothelioma. Additional presentations will address how both America's public and private sectors can allocate resources toward medical research to improve mesothelioma treatment. Representatives from government agencies, pharmaceutical companies, and law firms and corporations who might typically be found on opposite sides in asbestos litigation are all expected to participate. "Bringing together these diverse members of the mesothelioma- concerned community is the key step needed right now in the effort to solve the problem," said MARF executive director Chris Hahn. "This is also an important opportunity for us to build community among patients, family members, volunteers and patient advocates and provide them with knowledge, encouragement and hope as they observe first-hand the dedication and brilliance of those who are working so passionately to unlock the secrets of this disease." Hahn continued by thanking the co-chairs, Dr. Vogelzang and Dr. Pass, for their efforts and expertise in assembling the Symposium, and the financial sponsors who are helping to make it possible: SimmonsCooper, Brayton Purcell, Waters & Kraus, Stanley, Mandel & Iola, Wise & Julian, Bergman & Frockt, The David Law Firm, and Alfacell Corporation. The Mesothelioma Applied Research Foundation (MARF) is the national nonprofit organization whose mission is to eradicate mesothelioma as a life-ending disease. For more information, contact The Mesothelioma Applied Research Foundation (http://www.marf.org/)Executive Director, Christopher E. Hahn, 805-560-8942, c-hahn@marf.org. ASBESTOS LITIGATION: Sen. Reid Introduces Asbestos Awareness Day ---------------------------------------------------------------- The Asbestos Disease Awareness Organization (ADAO), an organization dedicated to serving as the voice of asbestos victims, applauds Senator Harry Reid (NV) for introducing a resolution designating April 1st 2005 as "Asbestos Awareness Day." This resolution, proposed by the Asbestos Disease Awareness Organization, will raise public awareness about the dangers of asbestos exposure and asbestos related diseases. "By introducing this Senate Asbestos Awareness Day Resolution, Senator Reid has taken an important step towards increasing asbestos awareness in this country," said Jordan Zevon, ADAO National Spokesperson, "We applaud Senate Reid's leadership and encourage his Senate colleagues to support this landmark resolution." "Unknowingly, many innocent people have been occupationally or environmentally exposed to asbestos, and know little about the early warning symptoms of asbestos related diseases." said Linda Reinstein, Executive Director, Asbestos Disease Awareness Organization. "I'm optimistic that Congress will support asbestos awareness as the country works towards prevention, early diagnosis, new treatments and a cure." Asbestos Disease Awareness Organization was founded by asbestos victims and their families. ADAO seeks to give asbestos victims a united voice to help ensure that their rights are fairly represented and protected, and raise public awareness about the dangers of asbestos exposure and the incurable and often deadly asbestos related diseases. ADAO is uniting veterans, firefighters, shipbuilders, teachers and thousands of other concerned people around the world. As an independent organization, Asbestos Disease Awareness Organization will not be influenced by outside sources such as drug companies, law firms or companies that manufacture or use asbestos. ADAO is funded through voluntary contributions and staffed by volunteers. For more information, visit www.asbestosdiseaseawareness.org or contact Doug Larkin, 703-250-3590, Cell: 202-391-1546, doug@asbestosdiseaseawareness.org. ASBESTOS LITIGATION: NSW Premier Urges the US to Probe Hardie ------------------------------------------------------------- The New South Wales Premier has written to the United States Securities and Exchange Commission, urging it to investigate James Hardie Industries over the asbestos controversy. Bob Carr said he had sent a state-commissioned inquiry's 1000- page report on Hardie to the SEC. The report found that Hardie underfunded a pool of compensation money for sufferers of asbestos-related disease by up to AUD2 billion or US$2.1 billion. Mr. Carr says there should be enough information for the SEC to pursue any necessary action. "I just see James Hardie coming under more pressure to settle the legitimate claims of victims," said the Premier. Mr. Carr's comments came as Hardie, which initially said it was not liable to provide more funds for disease sufferers but then agreed to plug the shortfall, holds talks with unions and victims on how it will do this. However, Sydney-based U.S. lawyers say it's unlikely the U.S. Securities & Exchange Commission will take action against the company for underfunding an asbestos compensation trust. The trust was formed before James Hardie shares were listed on the New York Stock Exchange and that may hinder an investor class action, say the lawyers. The U.S. corporate regulator has limited resources and typically only investigates "massive frauds." Meanwhile, both the government and James Hardie have refused to say whether the issue of asbestos liability was raised during a briefing supposedly given by Hardie right before the move offshore. The recent Jackson inquiry in NSW says James Hardie was told of the looming blowout in its asbestos liabilities as early as September or October 2001, prompting calls for the government to reveal whether it was told there could be a shortfall in funds for victims of asbestos disease. A spokesman for James Hardie confirmed "a range of briefings were offered to government stakeholders." It is understood that the main subject discussed was the tax ramifications. James Hardie's move to Netherlands was authorized by the NSW Supreme Court on October 11, 2001. However, the Jackson inquiry earlier this year found the company had not told the court about a letter sent by its asbestos compensation foundation on September 24, 2001, warning of a massive shortfall in funds. Any such blowout was supposed to be covered by partly paid shares but James Hardie later quietly cancelled this, financially cutting off the foundation. Recently, asbestos groups supported union claims the federal coalition had failed to seek a legally enforceable treaty with the Netherlands. A report said the government never approached Dutch authorities to form a treaty so that Australian court decisions would be legally enforceable there. "The [Dutch] representatives there told us that the Australian government had not contacted the Dutch government at any time, but they would be happy to speak with them on a government level if they contacted them regarding a treaty with Australia," it said. This appears to contradict statements by Attorney-General Philip Ruddock, who said the government had been in talks with the Dutch government in July and August about the matter. Last Monday, labor reopened the James Hardie Industries asbestos compensation scandal as an election issue, promising a Latham government would refer the matter to US and Dutch authorities for investigation. The political moves came as Hardie informed the powerful US Securities & Exchange Commission that it could not file its annual financial return on time. The prospects of an investigation by the SEC in the U.S., where Hardie has a stock exchange listing and does about 75% of its business, and in The Netherlands, where it has its corporate headquarters based for tax purposes, present serious additional risks for the company. At this time, the SEC would not confirm nor deny whether it was investigating Hardie, nor would the Dutch corporate regulator. ASBESTOS LITIGATION: Union Moves for More Awareness in Schools -------------------------------------------------------------- The Australian Education Union says parents and teachers need to be aware of the extent of asbestos in school buildings. This urgent advice comes as Darwin's Nakara Primary School library was closed unnecessarily last week after an asbestos scare. Testing revealed no airborne contamination. Northern Territory Schools general manager John Dove says any material suspected to be asbestos have been labeled in all schools built up to the mid-1980s. He says this labeling is also in the process of being checked again by the Education Department's facilities unit. But Education Union spokeswoman Nadine Williams says the Government needs to raise public awareness of the potential dangers of disturbing asbestos. ASBESTOS ALERT: DEP Investigates Craffey and Co. for Violations --------------------------------------------------------------- The Massachusetts Department of Environmental Protection is investigating Craffey and Co. for possible asbestos removal violations during renovation work at its 6 Court St. building in Plymouth. Department representative, Theresa Baroa, confirmed that an investigation is underway, but said she could not discuss details. Kevin Craffey, CEO of Craffey and Co., said his company followed state regulations after workers uncovered asbestos this year on the building's lower level. He said an engineering survey of the building had not noted the presence of asbestos where workers had found it. The company temporarily shut down the job and notified the Department of Environmental Protection. The department inspected the site and worked with the company to have the asbestos removed. He said he did not know if the department was considering imposing a penalty on his company for exposing the asbestos. "We never heard back from them. We did a good job working with them for a solution," he added. Mr. Craffey was sentenced to two months in jail earlier this year by the state of New Hampshire because of asbestos violations during the reconstruction of the Mountain View Grand resort and spa, a tourist attraction in northern New Hampshire. Mr. Craffey said he had accepted responsibility as the head of the company for mistakes made by his workers in disposing of asbestos found in the 19th-century building. It was "the best decision I could have made for the 550 employees that work with me," he said. Company Profile: Craffey & CO Inc 427 Columbia Road, Hanover, MA 02339 Phone: (781) 829-0200 http://www.kevincraffey.com ASBESTOS ALERT: Fear Strikes Hospital at Former Hardie Dumpsite --------------------------------------------------------------- Some sections of Sydney's Westmead Hospital, built on a dumpsite formerly owned by James Hardie Industries, have been cordoned off in an asbestos scare after months of dry weather caused pieces of asbestos to rise up from under the site. Staff working at the hospital found pieces of asbestos on a pathway close to one of the buildings. As a result, the hospital has commissioned an environmental impact study of its entire 10- hectare site to determine the extent of the asbestos. A hospital spokesperson said the EIS conducted in 1993 had found asbestos throughout the hospital grounds, which used to be an old demolition site, but declared it posed no risk because it was about four meters underground. Kevin Gillies, Westmead's deputy director human resources risk management, said, "The previous EIS couldn't tell us whether the asbestos came from the James Hardie site that was here, or if it came from everything that was ploughed into the ground when Westmead was built, or whether it came from the showground buildings that were also here and were demolished . It's three or four meters underground and because we've had a drought, some of it has worked its way to the surface." Mr. Gillies said the type of asbestos found posed no immediate health risk. He points out that what the employees found was fibro, a form of bonded asbestos, which isn't friable. If it's not airborne then it's considered low risk. He said this was the first time asbestos has been found on the ground surface and stressed there was no asbestos inside the hospital. A Health Services Union spokesperson said they've raised the issue with management and are currently holding discussions with the hospital about how to remove the asbestos. Mr. Gillies said he had contacted several licensed contractors to remove the asbestos and believes the matter will be dealt with within the week. ASBESTOS ALERT: Marks & Spencer Admits Closure Due to Asbestos -------------------------------------------------------------- High street giant Marks & Spencer admitted that a discovery of asbestos had led to the closure of an entire floor in its Birmingham store. The revelation sheds light on why the store was closed and shoppers evacuated two weeks ago. It has emerged that thousands of pounds worth of clothes and carpet had to be destroyed after contractors disturbed ceiling tiles, which were found to contain asbestos. The floor has only just been cleared and had already reopened. Shoppers who were evacuated said they had been informed by sales assistants the length of time the floor would be closed would "depend on what they discovered." The chain had previously not only claimed there was nothing to worry about, but also stated it was just connected to the revamp of the floor to house new collections. A Marks & Spencer spokeswoman stated, "Recently installation tiles were disturbed by contractors working on the first floor of our Birmingham High Street store. These tiles contained a small amount of asbestos. Our health and safety asbestos management process was immediately implemented resulting initially in the closure of the store and then the first floor alone to allow for an investigation. "Investigations were completed and the floor has now reopened. It was only really closed as a precautionary measure," the spokeswoman said. She apologized for any earlier confusion and said its concern was not to cause alarm. ASBESTOS ALERT: Aussie Kids Paid to Remove Asbestos from School --------------------------------------------------------------- During a refurbishment of the science laboratory, an Australian State Government contractor paid children to remove deadly asbestos materials from a school worksite. The Employment, Training and Industrial Relations Minister Tom Barton confirmed that employed by a Q-Build contractor, students from Monto High School, west of Bundaberg, removed vinyl tiles containing the potentially fatal carcinogenic material outside school hours in September 2002. Opposition education spokesman Rob Messenger looked into the illegal activity after a Monto resident, concerned the children faced serious health problems because of potential asbestos exposure, contacted him. He stated, "I find this incredible that these children were paid to remove asbestos from their school. It's completely unacceptable. I don't want to cause the kids or their families unnecessary worry or angst but they face serious risk." It is unknown how many students were involved or whether they wore protective gear. It is also not known if they or their parents were aware they were handling asbestos. Staff and former students could not recall protective equipment being worn during the renovations. Sue Muller, who works at the school as a part-time scientific assistant, helped clear the laboratory and watched the work take place. She claims never to have seen anyone wearing protective gear. She also raises the possibility of compensation for any student exposed to asbestos. Nathan Dederer, a 2002 graduate, could remember classmates being paid to gut the laboratory, but also could not remember them wearing any protection. The Opposition believes some of the tiles may have been ripped in the process, exposing the children to asbestos fibers. They also believe the subcontractor may not have had the proper accreditation required to remove asbestos. The Government has been unable to confirm or deny those claims but a spokesman for Public Works Minister Robert Schwarten said the department would investigate. In a letter to Mr. Messenger, Mr. Barton admitted Workplace Health and Safety Queensland was unaware students were being used at the time the work was done. He said he had since been advised Q-Build visited the site after the removal of the tiles and saw personal protective equipment in a trailer used to take the tiles away. However he was unable to confirm whether the students used the protective gear. "Evidence available to Workplace Health and Safety Queensland indicates that compliance to the removal method was most likely followed and it would be difficult now to gather evidence to the contrary," Mr. Barton wrote. Company Profile: Q-Build Industries 10 Oregon Street HEMMANT Q 4174 Phone: (07) 3890 4426 Fax: (07) 3890 4510 http://www.qbuild.qld.gov.au Employees 2,600 Description: Q-Build is a commercialized business unit of the Queensland Department of Public Works. Its core business involves the provision of a range of building services to government agencies and government funded organizations. The company holds a unique position within the building and construction industry being both a major employer and an industry partner. Q-Build has 42 staffed offices and depots that are strategically placed to service every community in Queensland. ASBESTOS ALERT: Dux Factory Workers Alarmed On Asbestos Removal --------------------------------------------------------------- Workers from the Dux Hot Water factory at Moss Vale last week became concerned when they saw contractors working on buildings on the site wearing protective clothing and breathing apparatus. A Dux employee said staff had not been warned about the work being undertaken and they were not aware that work was in progress until noon. They also complained of not being issued protective clothing. Subsequently, the workers were sent home while asbestos sheeting on the site was replaced. Dux general manager Les Patterson said seven buildings on the site formerly owned by James Hardie Industries were constructed of Super Six sheeting. Mr. Patterson said they have appropriately gotten the services of a licensed asbestos removal contractor for this job, which requires penetrating the Super Six sheeting and replacing it with fiberglass. Company Profile: Dux Heaters Pty Limited Collins Rd Moss Vale Phone: (02) 4868 3177 Fax: (02) 4868 2014 Description: Dux have been making water heaters in Australia since 1915. Design, development and manufacturing are carried out at a modern facility in the Southern Highlands of New South Wales. The company boasts of a comprehensive range of gas and electric heaters for domestic and commercial applications alike. Today as part of the GWA International Limited group of household brand names including Caroma, Sebel, Dorf Clark and Rover, Dux is marketed throughout Australia and overseas. ASBESTOS ALERT: Crown Group Fined US$100T for Contempt of Court --------------------------------------------------------------- A Deschutes County judge in Oregon found Crown Investment Group in "willful contempt of court" for tearing down the 67-year-old Brooks-Scanlon Crane Shed after asking the court to take jurisdiction in the matter. The company must pay a US$100,000 penalty for having short-circuited the legal process when it leveled the building without the permission of the city or the court. As a way to offset the direct harm of the illegal demolition, he added that the US$100,000 award would be used by the city to construct a memorial to the crane shed with the funds controlled by the city council and Deschutes County Landmarks Commission. Jim Reckling, the sole representative for Crown to attend the hearing, declined to comment on the decision but stated that he and his partners have not decided whether they will appeal the ruling. Landmarks Commission Chair Derek Stevens said he had expected the court to issue a fine based on Crown's actions and said he was pleased that Judge Adler saw fit to do that. He said he was disappointed that the fine is restricted to a crane shed memorial when the money would be better spent researching ways to shore up the historic code to prevent a repeat of the crane shed episode. In explaining his decision, Judge Adler reminded Crown that the company handed jurisdiction over the crane shed to the state courts when the company filed a lawsuit against the city in August. At the time, Crown was seeking to force the city to issue a demolition permit that had been held up for months during a series of hearings before the Deschutes County Landmarks Commission. He noted that the city put forth testimony that Crown had acted specifically to avoid further delays in its project, which contemplates a mixed-use redevelopment on the crane shed site. In addition to the contempt fines, Crown also faces the possibility of other civil penalties from the state. Officials with Oregon Department Environmental Quality's enforcement division said they are reviewing the case and currently investigating a report that Crown failed to remove asbestos from the building's roof before tearing it down. Crown has since hired a licensed contractor to remove the material from the piles of debris scattered around the crane shed site. However, the company is still prohibited from removing the bulk of the crane shed debris, under a stop work order issued by the city of Bend after the demolition. City Building Division Robert Mathias said he has no plans to lift that order until he is instructed to do so by the court or the city legal staff. Mr. Abernethy said the case was about more than money. It was important to show that the city wasn't going to stand by idly while a developer operated outside the law. Company Profile: Crown Investment Group 95 Scale House Loop Bend Oregon 97701 Phone: 541-317-3977 http://www.cigbend.com/index.html ASBESTOS ALERT: 90 Sydney Hospital Staffers Await Medical Tests --------------------------------------------------------------- Around 90 workers from a maintenance workshop at the Royal Prince Alfred Hospital are set to undergo medical tests, after dust containing asbestos fibers was found on the site. Building union CFMEU says the workshop at the hospital in Camperdown has been shut down and the workers relocated, while the asbestos is removed. Union safety officer Dick Whitehead says documents show that the health authorities became aware of the potential problem several years ago but failed to act. He says the workers are furious and extremely concerned for their health. "Some of these workers have worked there for many, many, many years and we don't know how long this exposure's been going on. Central Sydney Area Health Service has clearly failed in its duty of care to these workers and there's no excuse for it," he said. The union is also calling for an audit of all hospital maintenance workshops across New South Wales. New Securities Fraud Cases CONVERIUM HOLDING: Murray Frank Lodges Securities Lawsuit in NY --------------------------------------------------------------- The law firm of Murray, Frank & Sailer LLP initiated a class action lawsuit in the United States District Court for the Southern District of New York on behalf of all purchasers of Converium Holding AG securities ("Converium") (NYSE:CHR) during the period between December 11, 2001 through July 20, 2004 (the "Class Period"). The complaint charges Converium, Dirk Lohmann, and Martin Kauer with violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. More specifically, the complaint alleges that the Company failed to disclose and misrepresented the following material adverse facts which were known to defendants or recklessly disregarded by them: (1) that Converium maintained inadequate loss reserves in its Converium North America subsidiary; (2) that the Company, contrary to representations, did not establish adequate loss reserves to cover claims by Converium North America policy holders; (3) that reserve increases announced by the Company during the Class Period were materially insufficient; and (4) as a consequence of the understatement of loss reserves, Converium's earnings and assets were materially overstated at all relevant times. On July 20, 2004, Converium announced that second quarter results would be impacted by a reserve strengthening for US casualty business and subsequent asset impairments on the balance sheet of Converium Reinsurance. News of this shocked the market. Shares of Converium fell $11.12 per share, or 44.44 percent, on July 20, 2004, to close at $13.90 per share. On August 31, 2004, Converium announced that the Company had completed external actuarial review of Converium's reserves. On September 2, 2004, Converium announced that following the announcement of the external reserve review's outcome and resulting capital measures, Standard & Poor's and A.M. Best have lowered their ratings on Converium and its subsidiaries. On this news, shares of Converium fell an additional $1.04 per share, or 10.51 percent, to close at $8.86 per share. For more details, contact Eric J. Belfi or Aaron D. Patton of MURRAY, FRANK & SAILER LLP by Phone: (800) 497-8076 or (212) 682-1818 by Fax: (212) 682-1892 by E-mail: info@murrayfrank.com INFINEON TECHNOLOGIES: Lasky & Rifkind Lodges CA Securities Suit ---------------------------------------------------------------- The law firm of Lasky & Rifkind, Ltd. initiated a lawsuit in the United States District Court for the Northern District of California, on behalf of persons who purchased or otherwise acquired publicly traded securities of Infineon Technologies AG ("Infineon" or the "Company") (NYSE: IFX) between March 13, 2000 and July 19, 2004, inclusive, (the "Class Period"). The lawsuit was filed against Infineon 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 concealed a variety of adverse facts including that the Company engaged in anti-competitive behavior to fix prices of Dynamic Random Access Memory ("DRAM"). As a result, the Company's shares traded at inflated prices, allowing the Company to complete a $5.5 billion initial public offering as well as a significant bond offering and numerous acquisitions. On July 19, 2004, Defendants admitted the seriousness of the Justice Department investigation when they announced a $190 million charge for anti-trust litigation. For more details, contact Lasky & Rifkind, Ltd. by Phone: (800) 495-1868 or by E-mail: investorrelations@laskyrifkind.com INTEGRATED ELECTRICAL: Bernstein Liebhard Files Stock Suit in TX ---------------------------------------------------------------- The law firm of Bernstein Liebhard & Lifshitz, LLP initiated a securities class action lawsuit on behalf of all persons who acquired securities of Integrated Electrical Services Inc. ("Integrated Electrical" or the "Company")(NYSE: IES) between November 10, 2003 and August 13, 2004, inclusive (the "Class Period"). The case is pending in the United States District Court for the Southern District of Texas, Houston Division against Defendants Integrated Electrical, Herbert Allen, William W. Reynolds, and Jeffrey Pugh. The Complaint charges that Integrated Electrical and certain officers and directors violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder, by issuing a series of material misrepresentations to the market during the Class Period, thereby artificially inflating the price of Integrated Electrical's securities. Specifically, defendants failed to disclose and/or misrepresented the following adverse facts, among others that: (1) the Company allegedly failed to make timely and appropriate adjustments for a series of large contracts that were accounted for on a percentage of completion basis where the actual costs expected to be incurred exceeded original projected costs; (2) the Company had allegedly improperly accounted for general and administrative costs in a particular contract for costs that did not relate to that contract; (3) the Company allegedly improperly recognized revenue on a particular contract; (4) the Company lacked adequate internal controls and was thus unable to ascertain the Company's true financial condition; and (5) due to these facts, the Company's net income and financial results were allegedly materially overstated during the Class Period. The truth was revealed on August 13, 2004 when Integrated Electrical revealed a number of previously undisclosed accounting problems, including that its independent auditors had discovered material weaknesses in Integrated Electrical's internal controls, and disclosed that the Company may need to restate its prior financial results. In response to this announcement the price of Integrated Electrical common stock fell approximately 40% in one day, from $6.58 per share on August 13, 2004 to $3.93 per share on August 14, 2004. For more details, contact Bernstein Liebhard & Lifshitz, LLP by Phone: (800) 217-1522 by E-mail: IES@bernlieb.com or visit their Web site: http://www.bernlieb.com ST. PAUL TRAVELERS: Bernstein Liebhard Lodges MN Securities Suit ---------------------------------------------------------------- The law firm of Bernstein Liebhard & Lifshitz, LLP initiated a securities class action lawsuit on behalf of former shareholders of Travelers Property Casualty Corp. ("Travelers") Class A and Class B common stock who exchanged their shares in Travelers for shares of the St. Paul Travelers Companies, Inc. ("St. Paul") (NYSE: STA) common stock pursuant to the April 1, 2004 merger of St. Paul and Travelers. The case is pending in the United States District Court for the District of Minnesota, against Defendants: St. Paul Travelers Companies, Inc. f/n/a the St. Paul Companies, Inc., Jay S. Fishman, Thomas A. Bradley, John C. Treacy, Carolyn H. Byrd, John H. Dasburg, Janet Dolan, Kenneth M. Duberstein, Lawrence G. Graev, Thomas R. Hodgson, William H. Kling, James A. Lawrence, John A. Maccoll, Glen D. Nelson, and Gordon M. Sprenger. The Complaint charges that St. Paul and certain officers and directors violated the Securities Act of 1933, by issuing material misrepresentations to the market in connection with the April 1, 2004 merger. Specifically, defendants failed to disclose and/or misrepresented the following adverse facts, among others: St. Paul utilized a markedly different method for calculating insurance reserves than that utilized by Travelers and that applying Travelers' methodology, as was required, would result in the necessity of having to increase reserves on St. Paul's insurance policies by over $1 billion -- approximately 12 percent of the value of St. Paul as determined by the merger consideration. On June 17, 2004, news regarding this issue began to trickle out to shareholders, and St. Paul stock began to decline, falling from $41.10 on that date to $35.66 on July 23, 2004, the date that the exact size of the needed reserve adjustment -- $1.6 billion -- was first announced. Then on August 5, 2004, following the announcement that St. Paul reported a net loss for the second quarter ended June 30, 2004 of $275 million, or $0.42 per basic and diluted share, compared to net income of $441 million or $1.02 per basic share and $1.01 per diluted share in the prior year quarter, the price of St. Paul common stock closed at $34.75, representing a 14.77% decline from its price on August 1, 2004. For more details, contact Bernstein Liebhard & Lifshitz, LLP by Phone: (800) 217-1522 by E-mail: STA@bernlieb.com or visit their Web site: http://www.bernlieb.com STONEPATH GROUP: Mager White Lodges Securities Fraud Suit in PA --------------------------------------------------------------- The law firm of Mager White & Goldstein, LLP initiated a securities class action against Stonepath Group, Inc. (AMEX: STG), Dennis L. Pelino, Bohn H. Crain and Thomas L. Scully. The lawsuit, pending in the United States District Court for the Eastern District of Pennsylvania, was filed on behalf of purchasers of Stonepath securities during the period between May 7, 2003 and September 20, 2004 (the "Class Period"). The complaint charges that Stonepath and certain of its officers and directors violated the Securities Exchange Act of 1934. Specifically, the Complaint alleges that Stonepath failed to disclose and misrepresented that it understated the Company's expenses and liabilities, and overstated the Company's net income and earnings before income, taxes, depreciation, and amortization ("EBITDA"), resulting in materially false and misleading Class Period financial statements by the Company. Due to the above, Stonepath's reported financial results violated GAAP. On September 20, 2004, the Company reported that it planned to restate its fiscal year 2003, and first and second quarter of 2004 financial statements. As a result of this announcement, the price of Stonepath stock dropped 46% from the previous day, closing at $0.86 per share on heavy trading volume of 4,830,200 shares. For more details, contact Jayne A. Goldstein by Mail: One Pitcairn Place, Suite 2400, 165 Township Line Road, Jenkintown, PA 19046 by Phone: 866-274-8258 or by E-mail: jgoldstein@mwg-law.com STONEPATH GROUP: Wolf Haldenstein Files Securities Lawsuit in PA ---------------------------------------------------------------- The law firm of Wolf Haldenstein Adler Freeman & Herz LLP initiated a class action lawsuit in the United States District Court for the Eastern District of Pennsylvania, on behalf of all persons who purchased the securities of Stonepath, Inc. ("Stonepath" or the "Company") (Amex: STG) between May 7, 2003 and September 20, 2004, inclusive, (the "Class Period") against defendants Stonepath and certain officers and directors of the Company. The complaint alleges that defendants violated the federal securities laws by issuing materially false and misleading statements throughout the Class Period that had the effect of artificially inflating the market price of the Company's securities. The complaint further alleges that the Company failed to disclose and misrepresented that it had understated its accrued purchased transportation liability and related costs of purchased transportation rendering the Company's financial statements materially false and misleading because they understated the Company's liabilities and expenses, and overstated the Company's net income and earning before income, taxes, depreciation, and amortization ("EBITDA"). As a result of the above, the Company's reported financial results were in violation of GAAP. On September 20, 2004, the Company announced its intention to restate its fiscal year 2003 and first and second quarter 2004 financial statements. As a result of this news, the price of Stonepath stock dropped 46% from September 19, 2004, and closed at $0.86 per share on heavy trading volume. For more details, contact Fred Taylor Isquith, 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 ZIX CORPORATION: Goodkind Labaton Lodges Securities Suit in TX -------------------------------------------------------------- The law firm of Goodkind Labaton Rudoff & Sucharow LLP initiated a class action lawsuit in the United States District Court for the Northern District of Texas, on behalf of persons who purchased or otherwise acquired publicly traded securities of Zix Corporation ("Zix" or the "Company") (NASDAQ:ZIXI) between October 30, 2003 and May 4, 2004, inclusive, (the "Class Period"). The lawsuit was filed against Zix and Ronald A. Woessner, John A. Ryan, Daniel S. Nutkis, Steve M. York, Russell J. Morgan, Wael Mohamed and Dennis F. Heathcote ("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 disseminated materially false and misleading statements about its business and future prospects. More specifically, Defendants concealed during the Class Period that it was experiencing sluggish physician adoption rates to its e-prescribing service, that it was not even close to achieving its guidance of 1,000 deployed active doctors by the end of Q4 2003, that its claim that it had 4,000 physician deployments already in place was false as it had not surveyed physician sites to determine their wireless needs. On May 2, 2004, Zix announced that its results for Q1 2004 would generate a larger than expected loss. In reaction to the news, shares of Zix fell nearly 50% in the following trading sessions to eventually trade below $7 per share. For more details, contact Christopher Keller, Esq. by Phone: 800-321-0476 or visit their Web site: http://www.glrs.com/get/?case=Zix ********* A list of Meetings, Conferences and Seminars appears in each Wednesday's edition of the Class Action Reporter. Submissions via e-mail to carconf@beard.com are encouraged. Each Friday's edition of the CAR includes a section featuring news on asbestos-related litigation and profiles of target asbestos defendants that, according to independent researches, collectively face billions of dollars in asbestos-related liabilities. ********* S U B S C R I P T I O N I N F O R M A T I O N Class Action Reporter is a daily newsletter, co-published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland USA. Glenn Ruel Se�orin, Aurora Fatima Antonio and Lyndsey Resnick, Editors. Copyright 2004. All rights reserved. ISSN 1525-2272. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The CAR subscription rate is $575 for six months delivered via e-mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are $25 each. For subscription information, contact Christopher Beard at 240/629-3300. * * * End of Transmission * * *