/raid1/www/Hosts/bankrupt/CAR_Public/050128.mbx
C L A S S A C T I O N R E P O R T E R
Friday, January 28, 2005, Vol. 7, No. 20
Headlines
ALABAMA: Lawyers For School Land Case Receives $3.5Mil in Fees
ATHEROGENICS INC.: Shareholders Launch Stock Lawsuits in NY, GA
CALIFORNIA: 10 Killed, 200 Injured in Glendale Train Derailment
CARLTON CARDS: Recalls 5,000 Candle Holders Due To Fire Hazard
CHINA OIL: Shareholders Launch Securities Fraud Suits in S.D. NY
CIB MARINE: Shareholders Launch Securities Fraud Suit in C.D. IL
CITADEL SECURITY: Shareholders Lodge Securities Suits in N.D. TX
ERPENBECK CO.: Homeowner, Attorney Says Erpenbeck Sentence Fair
FOX ENTERTAINMENT: Shareholders Launch DE Securities Fraud Suit
INPUT/OUTPUT INC.: Shareholders File Stock Fraud Suit in S.D. TX
iPASS INC.: Shareholders Lodge Securities Fraud Suits in N.D. CA
JK HARRIS: Motley Rice, Strom Law Lodges Fiduciary Lawsuit in SC
JUBILEE FINANCIAL: Officers Banned From Marketing Debt Services
KAISER FOUNDATION: Members Launch Lawsuit Over Revoked Coverage
MCDONALD'S CORPORATION: Group Scores Obesity Suit Reinstatement
MCDONALD'S CORPORATION: Group Criticizes Food Suit Reinstatement
MEAT PROCESSING PLANTS: Rights' Violations Alleged at Plants
NEW YORK: CA, NY Charities Receive Money From $20 Mil Settlement
OFFICEMAX INC.: Shareholders Launch Securities Suits in N.D. IL
ORGANON USA: NJ Court Approves Remeron Drug Antitrust Settlement
RESEARCH PRODUCTS: Recalls 67T Candle Holders Due To Fire Hazard
ROWAN REGIONAL: To Fight Former Patient's Overcharging Lawsuit
SEARS CANADA: Lawyer Commences Suit Over Deceptive Advertising
TASER INTERNATIONAL: Shareholders Launch Stock Suits in NY, AZ
UNITED STATES: AIA Vows All Out Support For Passage Of S.5 Bill
UNITED STATES: Class Actions Gain Momentum, Claims Research
UNITED STATES: Senate Ready To Tackle Class Action Reform Bill
VICORP RESTAURANTS: Reaches $6.55M Settlement For Overtime Suits
Asbestos Alerts
ASBESTOS LITIGATION: US Court Rejects $1.2B ABB Settlement Again
ASBESTOS LITIGATION: AU Lawyers Call for Cheaper Asbestos Trials
ASBESTOS LITIGATION: MS Supreme Court Tosses Out US$150Mil Award
ASBESTOS LITIGATION: MS High Court Reverses US$25M Verdict V. 3M
ASBESTOS LITIGATION: CFMEU Cites Lack of Trained Bldg Inspectors
ASBESTOS LITIGATION: Hearing on Owens Corning Liabilities Ends
ASBESTOS LITIGATION: Two NSW Sites Pose No Health Risk, Report
ASBESTOS LITIGATION: Foster Wheeler to Take $76M Asbestos Charge
ASBESTOS LITIGATION: Moscow Cablecom Discloses JM Ney's Lawsuits
ASBESTOS LITIGATION: Equitas Fears Bankruptcy Over Asbestos Law
ASBESTOS LITIGATION: GA Supreme Court Deals Blow To Suits V. CSX
ASBESTOS LITIGATION: Crane Ends Settlement, Boosts 4Q Earnings
ASBESTOS LITIGATION: Union Pacific's 4Q Earnings Drop Sharply
ASBESTOS LITIGATION: CA Court Affirms Ruling in Favor of Viacom
ASBESTOS LITIGATION: Huttig Settles Lawsuit Filed by Rugby in NY
ASBESTOS LITIGATION: Halliburton Co. to Begin Settlement Payouts
ASBESTOS LITIGATION: Bill Introduction Delayed by Silica Issue
ASBESTOS LITIGATION: Jefferson County Judge Junks 3,700 Cases
ASBESTOS LITIGATION: W.R. Grace Bears 4Q Loss With Claims Charge
ASBESTOS LITIGATION: Hardie Faces Demands to Extend Deal to Asia
ASBESTOS LITIGATION: NZ Hardie Victims Seek Similar Deal to AU
ASBESTOS LITIGATION: Appeal Court Overturns Ruling of Test Case
ASBESTOS LITIGATION: Canada's DND Puts Up $2.1Mil for Home Tests
ASBESTOS ALERT: Patients Move Out of Center Due to Asbestos Find
ASBESTOS ALERT: UK Fisherman Warns Others to Beware of Asbestos
ASBESTOS ALERT: MD School Shuts Down After Detection of Asbestos
ASBESTOS ALERT: NZ Firefighters Warn of Harmful Fumes
ASBESTOS ALERT: WI DNR Cites Hotel Owners for Removal Violations
ASBESTOS ALERT: CT DEP Pushes US$10T Fine for Removal Violation
ASBESTOS ALERT: UK Council Denies Health Risk at Elstree Studios
ASBESTOS ALERT: Widow Sues UK Dept of Transport for Negligence
ASBESTOS ALERT: NY Broker Pleads Guilty to Falsifying Documents
ASBESTOS ALERT: Bodycote to Pay Settlement for Improper Handling
ASBESTOS ALERT: NY Supreme Court Dismisses Lawsuit V. Hahn Inc.
New Securities Fraud Cases
CITADEL SECURITY: Lerach Coughlin Lodges Securities Suit in TX
MERRILL LYNCH: Finkelstein Lodges Securities Fraud Suit in CA
MORGAN STANLEY: Finkelstein & Krinsk Lodges CA Securities Suit
SILICON STORAGE: Schiffrin & Barroway Lodges CA Securities Suit
SILICON STORAGE: Wolf Popper Lodges Securities Fraud Suit in CA
SIPEX CORPORATION: Schatz & Nobel Lodges Securities Suit in CA
TASER INTERNATIONAL: Zwerling Schachter Lodges Stock Suit in AZ
*********
ALABAMA: Lawyers For School Land Case Receives $3.5Mil in Fees
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The attorneys who won $41 million for 98 Alabama school systems
will be receiving $3.5 million for their work on the class-
action lawsuit, the Associated Press reports.
The agreement resolved a 2002 lawsuit that was filed by the
Covington County school board to prevent the state from using
the money, which accumulated over the years through sales,
leases, timber-cutting and mineral income on land designated for
local schools.
According to documents filed in Covington County Circuit Court,
the first half of the legal fees have already been paid to the
attorneys with the largest amount going to attorney Jerry E.
Stokes and the law firm of Woodard, Patel and Sledge, who
represented Covington County schools and other county systems,
who both received $557,812.50 each. Meanwhile, the law firm of
Laird, Baker and Blackstock received $380,625 and the law firm
of Albritton Clifton, Alverson, Moody and Bowden received
$253,750.
The attorneys told AP they had to weed through hundreds of
historic documents on land sales before they could demand the
payout. Covington County schools claimed the largest known
portion of the payout at $4.01 million.
Covington County schools, the original plaintiff, had filed the
class-action lawsuit against then-Gov. Don Siegelman and other
state officials, claiming the money didn't belong to the state
and couldn't be used to ease state school budget cuts.
Attorneys in class-action suits in Alabama typically ask for 9
percent to 25 percent in fees, thus the attorneys in the school
lands case are receiving about 8.5 percent of the $41 million
settlement.
Attorney William Alverson told AP the fact the education money
was at stake made a difference. He said, "When you represent
schools and kids, you really want the funds to go to them. It's
satisfaction that's not monetarily based."
The award money is going to 98 Alabama systems who are owed
money from land leases or interest earned on land sales, based
on a 1785 federal land ordinance that forced states to set aside
money for education spending.
ATHEROGENICS INC.: Shareholders Launch Stock Lawsuits in NY, GA
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Several purported shareholder class action lawsuits have been
filed against Atherogenics, Inc. and certain of its executive
officers.
The first complaint filed in Southern District of New York
charges that defendants violated federal securities laws by
issuing a series of materially false and misleading statements
to the market throughout the Class Period, which statements had
the effect of artificially inflating the market price of the
Company's securities.
More specifically, the complaint alleges that defendants
violated Section 10(b) of the Securities Exchange Act of 1934,
and Rule 10b-5 promulgated thereunder. The class period begins
after the Company announced on September 27, 2004, positive
interim results for the CART 2 study of its AGI-1067 drug, an
anti- inflammatory agent designed to target atherosclerosis, a
condition in which fatty plaque deposits clog the arteries
leading to the heart, thereby increasing the risk of heart
disease and heart attack. The Company reported that the interim
results of the CART 2 Phase IIb study demonstrated that AGI-
1067 had effectively reduced plaque deposits by a statistically
significant average of 6.4 cubic millimeters, or 3.8%, per
patient.
The complaint further alleges that the Company's statements
regarding the CART 2 Phase IIb study of AGI-1067 were false and
misleading because, among other things: the "interim" results
consisted of an arbitrary post-hoc subgroup analysis, which
served to eliminate patients from the study who were not likely
to have responded well to the drug; and defendants improperly
represented that the reported "interim" results of the AGI-1067
clinical program were a reliable indicator of AGI-1067's
ultimate effectiveness. In response to defendants' false and
misleading statements about the Phase IIb study, AtheroGenics's
stock, which had closed at $23.16 on September 27, 2004, almost
doubled in overnight trading and hit $43.99 on the morning of
September 28, 2004, ultimately gaining 64.1 percent, or $14.84,
to close at $38.00 on September 28 on a trading volume of over
28 million shares.
Further, on or about November 22, 2004, however, defendants
revealed that final results of the Phase IIb trial indicated
that the percentage of regression of plaque in patients using
AGI-1067 was only slightly more than half as much as had been
reported in the interim results defendants had announced two
months earlier, despite the fact that twice as many patients
were included in the determination of the final results. The
market was stunned, and the stock price began to plummet. Then,
on January 3, 2005, the Company announced that it had decided to
increase the number of patients in the Phase III study for the
drug from 4000 to 6000 patients, that the study would be longer
in duration, and that the Company needed to raise more cash to
fund the study. On this news, the Company's stock fell again,
this time 20% to close at $18.72 on unusually heaving trading.
On January 5, 2005, the Company disclosed in a SEC filing that
the SEC and NASD had commenced informal inquiries into the
Company's September 27, 2004 announcement of interim results of
the study.
After January 06, 2005 others action, with similar allegations,
were filed in the United States District Court for the Northern
District of Georgia.
The plaintiff firms in this litigation are:
(1) Berman, DeValerio, Pease, Tabacco Burt & Pucillo (MA),
One Liberty Square, Boston, MA, 2109, Phone:
617.542.8300, Fax: 617.230.0903, E-mail:
info@bermanesq.com
(2) Brodsky & Smith, LLC, 11 Bala Avenue, Suite 39, Bala
Cynwyd, PA, 19004, Phone: 610.668.7987, Fax:
610.660.0450, E-mail: esmith@Brodsky-Smith.com
(3) Charles J. Piven, World Trade Center-Baltimore,401 East
Pratt Suite 2525, Baltimore, MD, 21202, Phone:
410.332.0030, E-mail: pivenlaw@erols.com
(4) Chitwood & Harley, 1230 Peachtree Street, N.E., 2900
Promenade II, Atlanta, GA, 30309, Phone: 888.873.3999,
(5) Milberg Weiss Bershad & Schulman LLP (New York), One
Pennsylvania Plaza, 49th Floor, New York, NY, 10119,
Phone: 212.594.5300, Fax: 212.868.1229, E-mail:
info@milbergweiss.com
(6) Murray, Frank & Sailer LLP, 275 Madison Ave 34th Flr,
New York, NY, 10016, Phone: 212.682.1818, Fax:
212.682.1892, E-mail: email@rabinlaw.com
(7) Schatz & Nobel, P.C., 330 Main Street, Hartford, CT,
06106, Phone: 800.797.5499, (fax) 860.493.6290, E-mail:
sn06106@AOL.com
(8) Wolf Popper, LLP, 845 Third Avenue, New York, NY,
10022-6689Ave, Phone: 877.370.7703, Fax: 212.486.2093,
E-mail: IRRep@wolfpopper.com
CALIFORNIA: 10 Killed, 200 Injured in Glendale Train Derailment
---------------------------------------------------------------
10 people were killed and about 200 were injured as a Metrolink
commuter train smashed into a sports utility vehicle (SUV) left
on the tracks by a suicidal man on Wednesday in Glendale,
California, the Associated Press reports.
A 26-year-old man, described as deranged by officials, left the
SUV on the tracks after changing his mind about suicide. The
man, identified as Juan Manuel Alvarez of Compton, stood by as
the train hit the SUV, derailed and crashed with another train
going in the opposite direction. Both trains landed on their
sides, sending passengers down the aisles.
One commuter train was headed from Los Angeles' Union Station to
downtown Burbank, and the other was bound to Union Station from
Moorpark, Metrolink officials told AP. The accident happened a
little after 6 a.m.
"I heard a noise. It got louder and louder," passenger Diane
Brady, 56, of Simi Valley, told AP. "And next thing I knew the
train tilted, everyone was screaming and I held onto a pole for
dear life. I held on for what seemed like a week and a half, it
seemed. It was a complete nightmare."
Mr. Alvarez will be charged with homicide, Police Chief Randy
Adams told AP. "This whole incident was started by a deranged
individual that was suicidal," Mr. Adams told a news conference
at the scene of mangled railcars in the suburb north of downtown
Los Angeles. "I think his intent at that time was to take his
own life but changed his mind prior to the train actually
striking this vehicle."
Chief Adams added the man tried to slash his wrists and stabbed
himself. "There is no terrorism or terrorist act involved,"
Chief Adams clarified.
It was the worst rail accident in the United States since March
15, 1999, when an Amtrak train hit a truck and derailed near
Bourbonnais, Illinois, killing 11 people and injuring more than
100, AP reports.
Nearly 300 firefighters were at the scene and 35 ambulances were
taking the injured to hospitals. Firefighters picked through
twisted wreckage and carried injured passengers from the trains
to a triage center set up in a nearby parking lot, AP reports.
Dazed passengers, some limping, gathered at tables in a nearby
store, while the injured sprawled on color-coded mats in the
parking lot: red for those with severe injuries, green for those
less seriously harmed.
As the cars tumbled off the tracks, one of the Metrolink trains
struck a parked Union Pacific locomotive, tipping it onto its
side, said Kathryn Blackwell, a railroad spokeswoman in Omaha,
Nebraska, AP reports.
George Touma, 19, of Burbank, told AP he was called by his
mother, who was on one of the Metrolink trains. "She told me
she was bleeding in the head and her arm was really hurting,"
said Mr. Touma, who was searching for her. "I'm really worried
because she has vertigo and when I tried to call back she
wouldn't answer."
Metrolink began service in 1992 and operates seven lines, part
of a multibillion-dollar transportation network aimed at
reducing pollution and congestion in Southern California.
CARLTON CARDS: Recalls 5,000 Candle Holders Due To Fire Hazard
--------------------------------------------------------------
Carlton Cards Retail, Inc., of Cleveland, Ohio is cooperating
with the United States Consumer Product Safety Commission by
voluntarily recalling about 5,000 Roasting Marshmallow Tealight
Candle Holder.
During normal use, the decorative marshmallows or decorative
campfire flames may catch fire. The candle holder is a
Christmas decoration designed to hold a tealight candle. The
candle holder includes three figures (penguin, moose, snowman)
dressed in red and green sweaters, scarves and hats, roasting
marshmallows on a stick over a small fire. Model numbers 4-01-
427, 231279-4 and UPC code 90000 08741 are printed on the bottom
of the candle holder.
Manufactured in China, the candle holders were sold at all card
stores nationwide from October 2004 through December 2004 for
about $13. Consumers should immediately stop using the product
and return it to the store where purchased or other stores where
Carlton Cards are sold for a full refund.
Consumer Contact: Call Carlton Cards at (800) 955-1244 between 8
a.m. and 5 p.m. ET Monday through Friday or visit
http://www.carltoncards.com.
CHINA OIL: Shareholders Launch Securities Fraud Suits in S.D. NY
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China Aviation Oil (Singapore) Corporation Ltd. faces several
securities class actions filed in the United States District
Court for the Southern District of New York, alleging that the
Company and certain of its officers and directors with
violations of the Securities Exchange Act of 1934. China
Aviation trades in petroleum products, including jet fuel, gas
oil, fuel oil, crude oil, plastics and oil derivatives.
More specifically, the complaints allege that during the Class
Period, defendants issued false and misleading statements
regarding the Company's business and prospects. As a result of
the defendants' false statements, China Aviation shares traded
at inflated levels during the Class Period, whereby the
Company's top officers and directors assisted the Company's
parent company/controlling shareholder in the sale of $120
million worth of its own shares. The true facts, which were
known by each of the defendants but concealed from the investing
public during the Class Period, were as follows:
(1) that contrary to the Company's prospectus, the Company
did not have the necessary risk management controls in
place for hedging and trading;
(2) that contrary to the private placement offering
documents, the funds raised were not to fund an
acquisition of the controlling shareholders but rather
to meet margin calls for massive derivative losses; and
(3) that the Company's financial statements were grossly
overstated or the Company was hiding liabilities
totaling in excess of $550 million in derivative
trading losses.
On November 30, 2004, Bloomberg reported that China Aviation was
seeking court protection after losing $550 million from bad bets
on oil prices. On this news, trading in the Company's shares was
suspended after the shares dropped to below $.60 per share.
The first identified complaint is styled "Mary Wilson Burke, et
al. v. China Aviation Oil (Singapore) Corporation, Ltd., et al.,
case no. 05-CV-00060." The suits are pending before Judge Robert
P. Patterson. The plaintiff firms in this litigation are:
(1) Law Office of Christopher J. Gray, P.C., 60 Park
Avenue, 21st Floor, New York, NY, 10022, Phone:
212.838.3221, E-mail: gray@cjgraylaw.com
(2) Lerach Coughlin Stoia Geller Rudman & Robbins LLP (NY),
200 Broadhollow Road, Suite 406, Melville, NY, 11747,
Phone: 631-367-7100, Fax: 631-367-1173,
(3) Murray, Frank & Sailer LLP, 275 Madison Ave 34th Flr,
New York, NY, 10016, Phone: 212.682.1818, Fax:
212.682.1892, E-mail: email@rabinlaw.com
CIB MARINE: Shareholders Launch Securities Fraud Suit in C.D. IL
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CIB Marine Bancshares faces a securities class action filed in
the United States District Court for the Central District of
Illinois, on behalf of all persons who purchased or held shares
of CIB Marine Bancshares common stock from August 27,1999 to
August 1,2004.
The complaint alleges that CIB and other defendants violated the
federal securities laws by issuing materially false and
misleading statements during the Class Period, in violation 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 Defendants failed to disclose and/or
misrepresented the loan loss allocation account and artificially
inflated net income during the Class Period and, as a result, it
expects to allocate a net loss for the years prior and restate
its financial statements. The Complaint also alleges counts of
fraud and breaches of fiduciary duties.
The suit is styled " [Unknown Plaintiff], et al. v. CIB Marine
Bancshares, et al." The Law firm for the plaintiffs is The
Leiter Group, 309-A Main Street, Peoria, IL, Phone:
309.673.2922, Website: http://www.leitergroup.com/
CITADEL SECURITY: Shareholders Lodge Securities Suits in N.D. TX
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Citadel Security Software, Inc. faces several securities class
actions filed in the United States District Court for the
Northern District of Texas on behalf of all securities
purchasers of Citadel Security Software, Inc. The complaint
charges Citadel Security, with violations of the Securities
Exchange Act of 1934.
Citadel Security Software Inc. develops and markets computer
security and privacy software. Its information technology ("IT")
security computer software products include security and
management solutions for networks and personal workstations
designed to secure and manage personal computers and local area
networks.
According to the complaints, the Company failed to disclose and
misrepresented the following material adverse facts known to
defendants or recklessly disregarded by them:
(1) that customer demand in the commercial portion of the
Company's business was slowing;
(2) that the much touted, sizable pipeline of potential
contracts failed to materialize due to poor management
execution;
(3) that as a consequence of the above the Company's growth
was lagging; and
(4) therefore, the defendants' statements about the Company
were lacking in any reasonable basis when made.
Additionally, the complaint alleges that during the Class
Period, defendants sold a total of 754,500 shares for proceeds
totaling more than $3 million.
In addition, on or about December 17, 2004, Citadel Security
provided a financial update for its year-ended December 31,
2004. More specifically, the Company stated that based upon
preliminary estimates, Citadel now expects its revenue for the
full year 2004 to be between $15.2 million and $16.0 million,
compared to previous guidance of full-year revenue of $18.5
million to $21 million. As a result, the Company will not meet
its previously released net income guidance for the second half
of 2004 which was for net income of $1.0 million to $2.0
million. The Company expects to end 2004 with approximately $4.9
million of deferred revenues, most of which will be earned in
2005.
News of this shocked the market. Shares of Citadel Security fell
$1.80 per share, or 41.96 percent, to close at $2.49 per share
on unusually high trading volume.
The first identified complaint is styled "Ruth R. Lentz, et al.
v. Citadel Security Software, Inc., et al., case no. 3-05-CV-
0100D." The plaintiff firms in this litigation are:
(1) Brodsky & Smith, LLC, 11 Bala Avenue, Suite 39, Bala
Cynwyd, PA, 19004, Phone: 610.668.7987, Fax:
610.660.0450, E-mail: esmith@Brodsky-Smith.com
(2) Charles J. Piven, World Trade Center-Baltimore,401 East
Pratt Suite 2525, Baltimore, MD, 21202, Phone:
410.332.0030, E-mail: pivenlaw@erols.com
(3) Federman & Sherwood, 120 North Robinson, Suite 2720,
Oklahoma City, OK, 73102, Phone: 405-235-1560, E-mail:
wfederman@aol.com
(4) Schatz & Nobel, P.C., 330 Main Street, Hartford, CT,
06106, Phone: 800.797.5499, Fax: 860.493.6290, E-mail:
sn06106@AOL.com
(5) Schiffrin & Barroway, LLP, 3 Bala Plaza E, Bala Cynwyd,
PA, 19004, Phone: 610.667.7706, Fax: 610.667.7056, E-
mail: info@sbclasslaw.com
ERPENBECK CO.: Homeowner, Attorney Says Erpenbeck Sentence Fair
---------------------------------------------------------------
One homeowner bilked by Bill Erpenbeck and an attorney, who
represented 211 homeowners in a civil class-action lawsuit
against the homebuilder stated recently that they believe the
criminal sentences meted out against John Finnan and Marc Menne
were fair, the Kentucky Post reports.
Although they were not tied to Mr. Erpenbeck's stealing of money
from homeowners, Mr. Finnan and Mr. Menne, who were the top two
executives at Peoples Bank of Northern Kentucky during the so
called Erpenbeck scandal, admitted to committing bank fraud in
order to help him keep his sinking Erpenbeck Co. afloat. Mr.
Finnan was sentenced to five years and three months, while Mr.
Menne got four years and six months.
Attorney Brandon Voelker, who represented 211 homeowners, told
the Kentucky Post "A lot of people might think they deserve to
get more time, but I think it's in line with other rulings." He
also said, "The punishment is not entirely limited to the jail
sentence, their professional lives have been brought to an end."
Mr. Voelker noted that Mr. Finnan was considered a pillar of the
Northern Kentucky businesses community and now has lost that
status, according to him, "That's as severe as the jail
sentence." He also stated that the claims in the class action
all have been settled, as have those in a minority shareholder
lawsuit in which he is involved with a final hearing on the
shareholder suit being set for March 3.
Linda Harlow, who lost $55,000 in the Erpenbeck scheme, also
said she believes justice was done. Ms. Harlow said that
although she believes Mr. Finnan and Mr. Menne were guilty and
had a duty to protect the bank's customers, they were led astray
by a pro. She also expressed her sincerest hopes that the
scandal convinces business people who might not be on the up-
and-up to act with integrity.
FOX ENTERTAINMENT: Shareholders Launch DE Securities Fraud Suit
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Fox Entertainment Group, Inc. faces a shareholder class action
filed in the United States District Court in Delaware, on behalf
of the Company's shareholders, challenging the fairness of the
recent merger proposal made by the News Corporation.
Investors allege that on January 10, 2005, Fox announced that
News Corp., which owns more than 80% of Fox's outstanding stock,
had made a proposal to acquire all of the Company's common stock
that it does not already own. The consideration offered in the
Buyout is wholly inadequate and fails to offer fair value to the
Company's shareholders for their equity interests in Fox. In
fact, the Buyout offers a mere 7% premium over Fox's closing
stock price on January 7, 2005, the last trading date prior to
the announcement. Further, the Defendants have breached their
duty of loyalty to the Company's stockholders by abusing their
control of Fox to force Plaintiff and the Class to exchange
their equity interest in Fox at an unfair price.
The suit is styled "Royi Shemesh, David Jasinover, and James
Anderson, et al. v. Fox Entertainment Group, Inc., et al." The
plaintiff firms in this litigation are:
(1) Brodsky & Smith, LLC, 11 Bala Avenue, Suite 39, Bala
Cynwyd, PA, 19004, Phone: 610.668.7987, Fax:
610.660.0450, E-mail: esmith@Brodsky-Smith.com
(2) Charles J. Piven, World Trade Center-Baltimore,401 East
Pratt Suite 2525, Baltimore, MD, 21202, Phone:
410.332.0030, E-mail: pivenlaw@erols.com
(3) Federman & Sherwood, 120 North Robinson, Suite 2720,
Oklahoma City, OK, 73102, Phone: 405-235-1560, E-mail:
wfederman@aol.com
(4) Schatz & Nobel, P.C., 330 Main Street, Hartford, CT,
06106, Phone: 800.797.5499, Fax: 860.493.6290, E-mail:
sn06106@AOL.com
(5) Schiffrin & Barroway, LLP, 3 Bala Plaza E, Bala Cynwyd,
PA, 19004, Phone: 610.667.7706, Fax: 610.667.7056, E-
mail: info@sbclasslaw.com
INPUT/OUTPUT INC.: Shareholders File Stock Fraud Suit in S.D. TX
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Input/Output, Inc. faces a shareholder class action filed on
behalf of all its securities purchasers in the United States
District Court for the Southern District of Texas.
The complaint charges I/O and one or more of its officers with
violations of the Securities Exchange Act of 1934. Specifically,
the complaint alleges that the company failed to disclose and
misrepresented the following material adverse facts known to
defendants or recklessly disregarded by them:
(1) that the integration of GXT and I/O was a significant
failure;
(2) that in contrast to I/O representations, GXT project
pipeline lacked in volume;
(3) that, in addition to the company as a whole, I/O's
business development group, within the ISG group, was
suffering from poor management execution;
(4) that company's internal growth, due to poor management
execution, remained stagnant irregardless of
management's assertions otherwise; and
(5) that as a result of the above, the defendants'
statements about the company were lacking in any
reasonable basis when made.
Furthermore, on or around January 4, 2005, I/O issued a press
release wherein it announced that fourth quarter results would
be significantly below the low end of the company's guidance of
$0.08 per share primarily because two high margin GXT data
library sales were not completed as expected. News of this
shocked the market. As a result, shares of I/O fell $1.41 per
share, or about 17 percent, to close at $6.90 per share on
usually high trading volume.
The suit is styled "Harold Read, et al. v. Input/Output, Inc.,
et al." The plaintiff firms in this litigation are:
(1) Charles J. Piven, World Trade Center-Baltimore,401 East
Pratt Suite 2525, Baltimore, MD, 21202, Phone:
410.332.0030, E-mail: pivenlaw@erols.com
(2) Schiffrin & Barroway, LLP, 3 Bala Plaza E, Bala Cynwyd,
PA, 19004, Phone: 610.667.7706, Fax: 610.667.7056, E-
mail: info@sbclasslaw.com
iPASS INC.: Shareholders Lodge Securities Fraud Suits in N.D. CA
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iPass, Inc. faces several securities class actions filed on
behalf of purchasers of the securities of iPass, Inc., to pursue
remedies under the Securities Exchange Act of 1934 (the
"Exchange Act). The suits are pending in the United States
District Court for the Northern District of California.
The complaint alleges that at all relevant times, iPass
purported to provide "simple, secure and manageable connectivity
services" by connecting mobile workers' computers to the Web
through partnerships with local Internet service providers using
"narrowband" telephone dial-up access. With high-speed broadband
access to the Internet getting cheaper and more common among
consumers, it was vitally important to iPass that it make the
transition from "narrow band" dial-up service to broadband
service, and that the transition be executed properly.
More specifically, this complaint alleges that defendants failed
to disclose a major operational snafu that occurred in
connection with defendants' attempt to expand the Company's
broadband service offerings and that this snafu, which hindered
access to the iPass service, resulted in the loss of a material
number of customers, and a concomitant decline in the Company's
revenue, earnings, and growth prospects. Before investors found
out about the snafu, and its effect on iPass's business, Company
insiders, who knew of the snafu and its materially adverse
effects on the Company's business but did not let on, sold more
than 170,000 shares of their personally held iPass securities at
prices within a one-week period between $10.94 to $12.16 for
proceeds well in excess of $2 million. Upon disclosure of the
snafu, on June 30, 2004, iPass shares fell to $6.91.
The first identified complaint is styled "John C. Palumbo, et
al. v. iPass, Inc., et al. case no. 05-CV-0228." The suits are
filed on behalf of purchasers of the Company's securities from
April 22,2004 to June 30,2004. The plaintiff firms in this
litigation are:
(1) Charles J. Piven, World Trade Center-Baltimore,401 East
Pratt Suite 2525, Baltimore, MD, 21202, Phone:
410.332.0030, E-mail: pivenlaw@erols.com
(2) Milberg Weiss Bershad & Schulman LLP (New York), One
Pennsylvania Plaza, 49th Floor, New York, NY, 10119,
Phone: 212.594.5300, Fax: 212.868.1229, E-mail:
info@milbergweiss.com
(3) Schatz & Nobel, P.C., 330 Main Street, Hartford, CT,
06106, Phone: 800.797.5499, Fax: 860.493.6290, E-mail:
sn06106@AOL.com
JK HARRIS: Motley Rice, Strom Firms Lodge Fiduciary Suit in SC
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The Law Firm of Motley Rice LLC and Strom Law Firm LLC filed a
nationwide putative class action lawsuit in South Carolina
against the nation's largest tax resolution company, JK Harris &
Company LLC, for breach of fiduciary duty and breach of contract
including the covenant of good faith and fair dealing.
The lawsuit seeks to stop JK Harris & Company from continuing
unacceptable business practices. This action is brought on
behalf of all persons or entities that entered into contracts
with JK Harris & Company LLC to supply tax resolution services
where fees were charged for JK Harris & Company's Offer In
Compromise (OIC) services.
"JK Harris & Company told our client they could help them out of
an already difficult financial situation," stated Motley Rice
attorney, Suzanne L. Klok. "Instead they had them pay for
services they didn't need, nor qualify for, ignored their case
for almost a year and offered advice which made them incur
penalties and interest from the IRS. Consumers deserve better
than this."
On February 3, 2004, the Internal Revenue Service issued a
consumer alert warning taxpayers about businesses claiming that
tax debts can be settled for "pennies on the dollar" through the
Offer In Compromise program. According to the Better Business
Bureau (BBB) serving South Carolina, JK Harris & Company LLC has
an "unsatisfactory record with the Bureau due to a pattern of
complaints." The BBB processed more than three hundred
complaints against JKHC in the past year. JK Harris & Company
was founded in 1997 by John Klintworth Harris and claims to
"solve IRS problems." Currently JK Harris reports having 475
offices in 46 states and is headquartered in Charleston, South
Carolina.
"Our clients do not want to see another South Carolinian or
American be misled by this company. They want to put a stop to
these bad business practices," explained attorney Pete Strom of
the Strom Law Firm.
For more details, contact Suzanne Klok by Phone: 800-768-4026 or
Pete Strom by Phone: 888-490-2847.
JUBILEE FINANCIAL: Officers Banned From Marketing Debt Services
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Jemuel Apelar and John Mitchell, the remaining defendants in the
case against Jubilee Financial Services and its related debt
negotiation companies, are banned from advertising, marketing,
or providing debt negotiation services, as part of a Federal
Trade Commission settlement entered by the U.S. District Court
for the Central District of California. Mr. Apelar also turned
over his personal residence in partial satisfaction of a
suspended judgment of $2,628,535. The court-appointed receiver
for Jubilee has sold the residence, and the proceeds will be
used for consumer restitution. The FTC filed the original
complaint on August 19, 2002, as part of "Operation No Credit,"
a law enforcement sweep targeting a wide range of credit-related
frauds.
The FTC's original complaint alleged that Jubilee Financial
Services, Inc., related company Jabez Financial Group, Inc., and
others lured consumers with false promises that consumers who
enrolled in their debt negotiation program would be able to pay
their debts at a substantially reduced rate and that consumers
would stop receiving collection calls from creditors. The
complaint also alleged that these defendants misled consumers
about the effects of the Jubilee program on their credit report
and failed to tell consumers that, as a result of using the
defendants' services, negative information would appear on
consumers' credit reports and stay there for seven years. The
FTC later amended the complaint to add an allegation that the
defendants falsely told consumers that money sent to the Jubilee
companies would be held in a trust account to be used by
defendants to pay off consumers' debts at a reduced rate.
According to the FTC, consumers who enrolled in the defendants'
program and paid substantial fees continued to receive phone
calls and collection letters from creditors because the
defendants did not negotiate substantial debt reductions for
consumers. In addition, the FTC alleged that when consumers
followed the defendants' directions to cease making payments on
their debts, many consumers were sued by the creditors.
Consumers allegedly lost money deposited into Jubilee's so-
called trust account because the corporate defendants were
regularly withdrawing money from the trust account to pay their
operating expenses. Instead of finding themselves out of debt,
the FTC alleged, many consumers found that their credit was
ruined and they were left with little alternative but to file
for bankruptcy.
The FTC amended its complaint to add the allegation regarding
Jubilee's trust account after determining that more than $2
million supposedly held in trust for consumers was missing from
Jubilee. The amended complaint also added two more related
corporations as defendants, Gustavsen Learning Centers, Inc.
(GLC), and Debt Relief Counselors of America, P.C. (DRCOA), as
well as the two individual defendants who are parties to the
settlements announced today. Jemuel Apelar was Jubilee's vice
president and the office manager of DRCOA. John Mitchell was
DRCOA's titular president.
Under the terms of both final orders, Apelar and Mitchell are
permanently banned from participating in debt negotiation
services and are prohibited from misrepresenting any material
fact in connection with the sale of any good or service. Both
settlements contain a $2,628,535 suspended judgment, the
approximate amount of consumer injury stemming from Jubilee's
activities. The proceeds from the sale of Apelar's house
partially satisfies the monetary judgment against him. The
remainder of Apelar's judgment and all of Mitchell's judgment
were suspended based on the defendants' financial inability to
redress consumer losses. If either Apelar or Mitchell is found
to have materially misrepresented his financial condition, the
full suspended judgment will be entered against him.
Jubilee's president, defendant John Gustavsen, entered into a
stipulated final judgment and order with the FTC in August 2003.
Gustavsen's settlement also required him to turn over his
personal residence to the court-appointed receiver to be sold
for use as consumer redress. The Commission obtained default
judgments against corporate defendants Jubilee, Jabez, GLC, and
DRCOA on October 4, 2004. The proceeds from the judgments
against Apelar and Gustavsen will be combined with the
companies' remaining funds by the receiver and returned to
consumers.
The Commission vote to authorize staff to file the proposed
stipulated final judgments and orders was 5-0. The judgments and
orders were entered by the U.S. District Court, Central District
of California, Western Division, on December 22, 2004.
For more details, contact FTC's Consumer Response Center, Room
130, 600 Pennsylvania Avenue, N.W., Washington, D.C. 20580, by
Phone: 1-877-FTC-HELP (1 877-382-4357), or use the complaint
form at http://www.ftc.gov. Also contact Brenda Mack, Office of
Public Affairs by Phone: 202-326-2182 or contact Jennifer
Larabee and Kenneth H. Abbe, FTC's Western Region - Los Angeles
by Phone: 310-824-4343.
KAISER FOUNDATION: Members Launch Lawsuit Over Revoked Coverage
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The law firm of Seeger Salvas LLP initiated a class action
lawsuit against Kaiser Foundation Health Plan, Inc. to stop
Kaiser from revoking its members' health insurance based on the
members' responses to a hopelessly ambiguous application
question.
Question No. 9 on Kaiser's standard application asks, "Do you
have any unexplained and/or undiagnosed symptoms such as:" and
then lists 14 specific "symptoms" such as chest pain, shortness
of breath, and loss of consciousness, followed by boxes for
"Other," and "None of the above." Kaiser members who do not
suffer from any of the specifically listed "symptoms" and check
"None of the above" may not realize that Kaiser has used
Question No. 9 to retroactively revoke health care coverage.
After a member is diagnosed with a significant medical
condition, Kaiser's insurance people have poured through
members' medical histories - using 20/20 hindsight - trying to
find something that might have been a "symptom" of that
disorder. Once such a "preexisting symptom" is found, Kaiser
revokes members' health care insurance, claiming that members
intentionally misrepresented his or her health status by not
checking "Other" on Question No. 9.
An example of Kaiser's conduct is found in the case of Steven
Baba, a Kaiser member from Napa, California. When Mr. Baba
suffered a seizure for the first time on September 11, 2004, he
didn't know what had happened. After undergoing several tests
and after suffering from four more similar episodes, Mr. Baba's
neurologist diagnosed him with seizures in November 2004. The
neurologist prescribed anti-seizure medication and warned Mr.
Baba of the importance of frequent medical monitoring.
While Mr. Baba was facing the reality of having seizures,
Kaiser's insurance people were looking for a way out of paying
for his medical treatment. They obtained a copy of his medical
records and found that while Mr. Baba and his neurologist were
desperately trying to find the origin of the seizures, Mr. Baba
recalled intermittent "hot flashes" that he had experienced for
over 12 years. Over a decade earlier, Mr. Baba's doctor advised
him that these heat spells were of no concern. But Kaiser's
insurance people, without even consulting with Mr. Baba's
neurologist, decided that Mr. Baba should have known that these
hot flashes were a "symptom" of seizures. Despite the fact that
Kaiser's own neurologist told Mr. Baba that he could not have
known the implications of these hot flashes, Kaiser's insurance
people decided that by not answering "Other" to Question No. 9,
Mr. Baba made an intentional misrepresentation. Kaiser revoked
Mr. Baba's health insurance and informed him that he would have
to pay for all services Kaiser had provided. Adding insult to
injury, Kaiser also threatened to have Mr. Baba prosecuted for
criminal fraud.
"Kaiser's question is a trap and is hopelessly vague," said Ken
Seeger, a partner with Seeger Salvas LLP. "It cannot be used as
a basis to revoke someone's health insurance."
The suit was filed in Alameda County Superior Court and is
captioned Steven Baba v. Kaiser Foundation Health Plan, No.
RG05195576.
For more details, contact Kenneth Seeger of Seeger Salvas LLP by
Mail: 601 Montgomery St., Suite 325, San Francisco, CA 94111 by
Phone: 415-981-9260 by Fax: 415-981-9266 by E-mail:
kseeger@seegersalvas.com or visit their Web site:
http://www.seegersalvas.com/kaiser.
MCDONALD'S CORPORATION: Group Scores Obesity Suit Reinstatement
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Advocacy group Competitive Enterprise Institute criticized the
reinstatement of the obesity liability lawsuit filed against
McDonald's Corporation, the ruling resurrects another trial
lawyer campaign that undermines personal responsibility and
jeopardizes consumer choice.
In a statement submitted to the Class Action Reporter, CEI
General Counsel Sam Kazman said "If obesity lawsuits succeed,
they will turn all Americans into `victims,' incapable of
bearing responsibility for personal choices."
"Such lawsuits may benefit trial lawyers, but they'll hurt
consumers on limited budgets who will be forced to pay higher
food prices," he added. "Health control activists hope that
obesity lawsuits will be a replay of the tobacco wars .
Unfortunately, the tobacco campaign failed to produce big health
gains, but it did enrich trial lawyers and harm our democratic
system."
The United States 2nd Circuit Court of Appeals reinstated
several claims in the controversial class action filed against
McDonald's Corporation, saying that a lower court judge erred
when he dismissed the suit.
The suit, filed on behalf of overweight children who ate at two
McDonald's branches in the Bronx borough of New York City, seeks
unspecified damages from the firm over health problems that
included diabetes, coronary heart disease, high blood pressure
and elevated cholesterol, an earlier Class Action Reporter story
(January 27,2005) states.
In January 2003, U.S. District Judge Robert Sweet dismissed the
case, saying that the plaintiffs failed to show that customers
of the world's largest fast-food chain were unaware that eating
too much McDonald's fare could be unhealthy.
The McDonald's lawsuit, reinstated Tuesday by the Second Circuit
Court of Appeals, is part of a larger campaign to make food and
restaurant companies responsible for the eating habits of the
public, CEI said in its statement. The Second Circuit ruling
that reverses a trial judge dismissal of the case is couched in
technical legal terms, but its ultimate effect may be to open up
McDonald's and other companies to a form of legalized extortion,
pressuring food companies to settle lawsuits and pass higher
costs on to consumers, the statement continued.
CEI is a non-profit, non-partisan public policy group dedicated
to the principles of free enterprise and limited government.
For more information, contact Richard Morrison, Director of
Media Relations, Competitive Enterprise Institute, 1001
Connecticut Avenue NW - Suite 1250, Washington, DC 20036, Phone:
202-331-1010 - x273, Fax: 202-331-0640, Website:
http://www.cei.org/
MCDONALD'S CORPORATION: Group Criticizes Food Suit Reinstatement
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In response to a recent decision by the U.S. Court of Appeals
for the Second Circuit reinstating a class action obesity
lawsuit against McDonald's, Reid Cox, General Counsel for the
Center for Individual Freedom, made the following statement:
"The absurdity of reviving a lawsuit against McDonald's for
causing childhood obesity is obvious to everyone but the three
federal judges who heard the case. After all, the plaintiffs'
complaint dwells on their lack of dietary knowledge in an effort
to prove they didn't understand that eating a Big Mac a day
wouldn't keep the doctor away. But not knowing exactly how many
calories or how much cholesterol comes with that Value Meal does
not make McDonald's liable for the unfortunate -- but far from
unforeseen -- consequences of eating diets such as those of
these two young women.
"It is wholly irrelevant that the plaintiffs may not have known
every last ingredient that they chose to make part of their
daily unbalanced diet. The only legally important question is
whether they understood that their diet could make them fat.
And, to that question, there is but one answer: everyone,
including the plaintiffs, knows -- or, at least, should have
known -- that a daily diet of burgers, fries and milkshakes
could cause significant health and weight problems if not
countered by moderation and physical exercise.
"Despite the tremendous legal stamina exhibited by the
plaintiffs and their lawyers, their overhyped allegations
constitute nothing more than blaming someone else for their own
bad decisions."
The Center for Individual Freedom (www.cfif.org) is a non-
partisan, non-profit constitutional advocacy organization
dedicated to protecting individual rights and defending the free
market.
MEAT PROCESSING PLANTS: Rights' Violations Alleged at Plants
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Working conditions at three U.S. meat-processing plants in North
Carolina, Nebraska and Arkansas violate basic human rights,
according to a Human Rights Watch report, AP reports.
The report is based on interviews with employees and managers at
a Nebraska Beef factory, a Tyson Foods chicken plant in Arkansas
and the Smithfield Packing Co. pork plant in Tar Heel, North
Carolina. The report, released Tuesday after a year of
research, found that workers at all three plants are frequently
injured, then refused medical care or fired. The report further
found that:
(1) repetitive motion injuries are universal in the
industry;
(2) unsanitary conditions sometimes leave workers covered
in animal urine and feces; and
(3) attempts to unionize are sometimes violently quashed
The report was researched in 2003 and 2004, Human Rights Watch
told AP. The group interviewed workers and mangers as well as
community organizations, union representatives, workers'
compensation attorneys, ergonomics experts and government
officials. The group also looked through records, injury
reports, OSHA records, company memorandums, government and
academic studies, books on the industry and newspaper and
magazine articles.
Tom Clarke, who is leading an 11-year effort to unionize
Smithfield Foods' pork plant told AP that the Company has
violated workers' rights for years. "It's been an attitude of,
`Look, this is rural North Carolina. Who's going to know, and
who's going to care?'" Mr. Clarke, part of the Washington-based
United Food and Commercial Workers International Union, said.
"This is going to shine a brighter light on the activity of the
company."
A spokesman for Smithfield Foods, based in Smithfield, Va., told
The New York Times that the report focused on decade-old labor
disputes and did not reflect current conditions. Officials with
the other two companies cited in the report also denied its
claims.
The American Meat Institute, based in Washington, issued a news
release Tuesday calling the report "way off the mark." The group
told AP that employees in meat plants are paid on average almost
twice the minimum wage and that their rates of unionization are
higher than in other industries.
The institute said the industry is closely monitored by the
federal Occupational Safety and Health Administration and that
injury rates are falling. Human Rights Watch says that injuries
are underreported, AP reports.
NEW YORK: CA, NY Charities Receive Money From $20 Mil Settlement
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As part of a settlement between an insurance company and
descendants of Armenians killed 90 years ago in the Ottoman
Empire, four Armenian charities in Los Angeles will get nearly
$3 million in compensation while five New York-area Armenian
charities have received already checks for $333,333 each, the
Associated Press reports.
The checks are part of a $20 million settlement between New York
Life Insurance Co. and descendants of a community that suffered
what Armenians characterize as the first genocide of the 20th
century.
New York Life spokesman William Werfelman told AP, "It's a happy
day. This is the day that's the culmination of a lot of hard
work by a lot of the parties to bring an amicable solution and
resolution to this matter."
Armenians contended that 1.5 million people were executed
between 1915 and 1919 by Turkish authorities that accused them
of helping the invading Russian army during World War I. A claim
that Turkey rejects saying that Armenians were killed in civil
unrest during the collapse of the Ottoman Empire. France and
Russia are among the countries that have declared the killings
as an act of genocide, but the United States has not made such a
declaration.
Approved last year by U.S. District Court Judge Christina A.
Snyder in Los Angeles, the settlement is believed to be the
first ever in connection with the events of the era. Under the
settlement, $3 million was earmarked for charities and at least
$11 million was set-aside for the heirs of New York Life
policyholders, with $2 million used for administrative costs and
anything not spent on expenses going to additional charities.
The remainder of the $3 million will be handed out to four
additional Armenian charities in a ceremony in Los Angeles.
Brian Kabateck, one of the lawyers for the plaintiffs in the
class-action lawsuit, told AP there were 2,300 policies issued
to Armenians in Turkey before 1915 that were never paid and that
people who believe they may be descended from the policyholders
have until March 16 to file claims. He also stated that under a
formula taking inflation and interest into account, the amount
of the original policies would be multiplied by 15.5.
At a news conference at the midtown offices of the Armenian
General Benevolent Union, one of the groups that received a
check, Mr. Kabateck, who was joined by members of Armenian
religious and social organizations said, "We are here today
urging people to make claims and urging people not to forget the
genocide."
OFFICEMAX INC.: Shareholders Launch Securities Suits in N.D. IL
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OfficeMax, Inc. faces several securities class actions filed in
the United States District Court for the Northern District of
Illinois on behalf of all securities purchasers of OfficeMax
Incorporated.
The actions charge that OfficeMax and certain of its present and
former executive officers violated federal securities laws by
issuing a series of materially false and misleading statements
to the market which had the effect of artificially inflating the
market price of the Company's securities.
More specifically, the complaints allege that the Company failed
to disclose and misrepresented the following material adverse
facts known to defendants or recklessly disregarded by them:
(1) that certain employees of the Company fabricated
supporting documentation for approximately $3.3 million
in claims billed to a vendor of OfficeMax during 2003
and 2004;
(2) that the Company improperly timed the recognition of
recorded rebates and other such payments from vendors;
(3) that the Company's financial results were in violation
of Generally Accepted Accounting Principles ("GAAP");
(4) that the Company lacked adequate internal controls; and
(5) that as a result of the above, the Company's financial
results were materially inflated at all relevant times.
The first identified complaint is styled "Bruce L. Wing, et al.
v. OfficeMax, Inc., et al., case no. 05-C-0238." The suits are
pending under Judge Manning. The plaintiff firms in this
litigation are:
(i) Brodsky & Smith, LLC, 11 Bala Avenue, Suite 39, Bala
Cynwyd, PA, 19004, Phone: 610.668.7987, Fax:
610.660.0450, E-mail: esmith@Brodsky-Smith.com
(ii) Charles J. Piven, World Trade Center-Baltimore,401 East
Pratt Suite 2525, Baltimore, MD, 21202, Phone:
410.332.0030, E-mail: pivenlaw@erols.com
(iii) Lerach Coughlin Stoia Geller Rudman & Robbins LLP (NY),
200 Broadhollow Road, Suite 406, Melville, NY, 11747,
Phone: 631-367-7100, (fax) 631-367-1173,
(iv) Much Shelist Freed Denenberg Ament & Rubenstein, PC,
Chicago, IL, Phone: 800-470-6824, Fax: 312-621-1750,
(v) Schatz & Nobel, P.C., 330 Main Street, Hartford, CT,
06106, Phone: 800.797.5499, Fax: 860.493.6290, E-mail:
sn06106@AOL.com
(vi) Schiffrin & Barroway, LLP, 3 Bala Plaza E, Bala Cynwyd,
PA, 19004, Phone: 610.667.7706, Fax: 610.667.7056, E-
mail: info@sbclasslaw.com
ORGANON USA: NJ Court Approves Remeron Drug Antitrust Settlement
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A New Jersey federal judge gave preliminary approval of the
settlement of an antitrust lawsuit filed against Organon USA,
Inc. over its antidepressant drug Remeron, Texas Attorney
General Greg Abbott announced in a statement.
AG Abbott's leading role in a national antitrust case will
ensure that thousands of eligible Texas consumers get their
money back. Consumers will receive the money as damages after
paying high prescription prices for Remeron.
The manufacturer of the drug, Organon USA Inc. of New Jersey,
and its Dutch parent company, Akzo Nobel N.V., agreed to settle
the matter with the states for $36 million after engaging in a
scheme to mislead the U.S. Food and Drug Administration and
manipulate the patent process. This orchestrated practice
unlawfully kept cheaper generic equivalents of Remeron off the
market, extended the Company's monopoly over the drug and
wrongly generated millions of dollars in profits.
"The company abused the system by preventing Texas consumers
from having access to more affordable, generic versions of this
drug," said Attorney General Abbott. "My antitrust team led the
way in getting justified relief for the end-users of the
medication here in Texas and nationwide, and the overall result
is lower drug prices."
Texas consumers, as well as state purchasers such as the
Medicaid program, will be among those nationwide who may submit
claims for reimbursement. The court approval allows attorneys
general to implement a claims administration process for
consumers who purchased Remeron or a generic equivalent between
June 15, 2001, and the present. Consumers will be notified via
advertising in major newspapers and magazines, as well as by
direct mail and radio public service announcements from
pharmacies and psychiatrists. Beginning in March, the claims
administrator will introduce a Web site,
http://www.remeronsettlement.com,and toll-free number for
information about filing claims.
Generic equivalents are included for consideration in refunds
because Organon's actions delayed their entry into the
marketplace, which adversely influenced how quickly the prices
might have fallen for Remeron and its generic substitutes.
Organon USA also agreed to an injunction that will require it to
make timely listings of patents and prohibits it from submitting
false or misleading information to the FDA. The settlement must
receive final court approval before the money will be
distributed.
For more information, contact Angela Hale, Paco Felici, Jerry
Strickland, or Tom Kelley of the Office of Attorney General
Abbott by Phone: (512) 463-2050 or visit the website:
http://oag.state.tx.us.
RESEARCH PRODUCTS: Recalls 67T Candle Holders Due To Fire Hazard
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Research Products Corp., of Madison, Wisconsin is cooperating
with the United States Consumer Product Safety Commission by
voluntarily recalling about 67,000 Aprilaire Electronic Air
Cleaners.
The air cleaner's plastic inner housing and filter are not
flame-resistant. If electrical arcing occurs in the cleaner, a
fire can develop. This poses a risk of burn injuries and
property damage. Research Products has received six reports of
fires involving these air cleaners. No injuries were reported.
The recall involves all Aprilaire Model 5000 Electronic Air
Cleaners. The air cleaners are almond colored, and located near
the heating and cooling equipment. An identification label on
the access door reads "Aprilaire Model 5000."
Manufactured in the U.S.A., the cleaners were sold at all
independent HVAC dealers nationwide from June 2000 through
December 2004 for an installed price of about $800.
Consumers should immediately turn off the unit or unplug it.
Consumers also should contact Research Products Corp. to receive
a free repair kit containing the flame-retardant inner housing
and filter.
Consumer Contact: For more information, call Research Products
Corp. toll-free at (888) 742-2401 between 6 a.m. and 8 p.m. CT
Monday through Friday, and between 8 a.m. and 12 p.m. CT on
Saturday. Consumers also can visit the firm's Web site at
http://www.aprilaire.com.
ROWAN REGIONAL: To Fight Former Patient's Overcharging Lawsuit
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Rowan Regional Medical Center, in response to a former patient's
allegation that the hospital overcharged her for treatment in
its Emergency Department, said it would vigorously defend itself
and its collection policy in court.
Rowan Regional sued the patient in November, 2004 -- more than a
year after the patient's car accident, during which no payment
was made on her bill.
The counter suit against Rowan Regional was filed in Rowan
County by a Salisbury woman who claims she was overcharged and
not given an estimate of charges prior to being treated in the
Emergency Department. Notice of the counter suit was served on
Rowan Regional last Friday.
The patient was brought to Rowan Regional following an
automobile accident in June 2003. She was treated in the
Emergency Department before being kept overnight for observation
and released the next day.
"The patient has made no effort to pay anything on her bill,
despite repeated phone calls and letters from us," said Paula
Tucker, Director of the Business Office at Rowan Regional
Medical Center. "In fact, she never returned a phone call or
responded to a letter from us in the 17 months between her
treatment and when a lawsuit was finally filed against her."
"Rowan Regional provided more than $8,542,000 in charity care to
uninsured and self-pay patients in the last fiscal year (which
ended September 30, 2004)," said Marlin Markham, Chief Financial
Officer at Rowan Regional. "We would have been happy to help her
work out a payment schedule if she had only responded to our
requests for information."
The patient's counter suit against Rowan Regional asks the court
for class action status, and is similar to suits filed against
other hospitals across the state and the nation in recent weeks.
One of her claims is that Rowan Regional and other hospitals use
two tiers of pricing, which keeps uninsured patients from
reaping the benefits of volume discounts such as those
negotiated by insurance companies for the people they insure.
Rowan Regional's policy uses federal poverty guidelines to
establish levels of payment, and the total amount to be paid by
uninsured and self- paying patients for hospital services.
Patients who don't have health insurance, or who aren't covered
by Medicare, Medicaid or other government programs can request
financial counseling to make payment arrangements.
"For years, we've made financial counselors available to
patients who needed consideration with bills, whether they had
insurance or not," said Charles W. Elliott, Jr., Chief Executive
Officer at Rowan Regional Medical Center.
"Even with the new policy, we know some patients will be unable
to pay a significant amount, and in some cases anything, on
their hospital bills. We work with patients on a daily basis to
make a careful review of their financial situation. We recognize
the fact that some people are out of work or for other reasons
are unable to pay medical expenses.
"We and other hospitals always treat patients in the Emergency
Department regardless of their ability to pay," Elliott said.
"And we constantly urge our patients to let us know if their
financial situation changes. But patients need to communicate
with our Business Office if they have difficulties paying so
that we can help them."
Rowan Regional Medical Center is a private, not-for-profit,
acute care hospital. It offers women's health services,
cardiology, oncology, and inpatient rehabilitation services,
extensive outpatient services, a 24-hour Emergency Department,
hospice and home health services, and psychiatric services.
SEARS CANADA: Lawyer Commences Suit Over Deceptive Advertising
--------------------------------------------------------------
Tony Merchant, a Saskatchewan lawyer has launched a proposed
class-action suit against Sears Canada over tires that were
supposed to be on sale in 1999, the CBC Saskatchewan reports.
A federal Competition Bureau tribunal ruled Sears Canada
violated the Competition Act by exaggerating the possible
savings to consumers across Canada when it advertised that the
tires were on sale. According to the tribunal, the company only
sold two per cent of the tires at "regular" prices before
putting them on sale at lower prices. The bureau also said that
the ruling showed that "bogus" bargain price claims mislead
customers and harm retailers who comply with the law.
After the tribunal's ruling, Sears Canada stated that it was
disappointed with the ruling and noted the tribunal did not find
that consumers were harmed as a result of the 1999 tire sales.
Mr. Merchant stated he has filed lawsuits in Saskatchewan,
Quebec and Ontario on behalf of consumers who bought the tires
in question. His firm has also been involved in a number of
other mass and class action lawsuits, including those on behalf
of silicon breast implant users, former residential school
students and cryptosporidium victims.
TASER INTERNATIONAL: Shareholders Launch Stock Suits in NY, AZ
--------------------------------------------------------------
Several purported shareholder class action lawsuits have been
filed against TASER International, Inc. and certain of its
present and former executive officers.
The first suit was filed in the United States District Court for
the Southern District of New York. The first suit charges TASER
and one or more of its officers and/or directors 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 the Company actively and continually obscured the
truth about the safety of its TASERs;
(2) that even after it was revealed that more than 70
people had died in North America in TASER-related
incidents, the Company vehemently asserted that its
weapons were safe, in order to maintain profitability;
(3) that the Defendants accelerated the Davidson's deal in
the fourth quarter of 2004, in order to book the
revenue, so TASER did not have to report its first
quarter-to-quarter revenue decline in nearly two years;
and
(4) as a result, the Company lacked any reasonable basis
for any statements it made regarding profitability and
safety.
Further, on January 6, 2005, TASER announced that it was
cooperating with an informal inquiry letter from the SEC
regarding the safety of TASER(r) products and a recent order
received from Davidson's, Inc. This news shocked the market. As
a result, shares of TASER fell $4.90 per share, or 17.74
percent, on January 7, 2005, to close at 22.72 per share. Then
on Monday, January 10, 2005, TASER shares tumbled another $2.67
per share or 11.75 percent, to close at $20.05 per share. On
January 11, 2005, TASER released a letter to its shareholders
and customers regarding the SEC investigation and the general
state of the Company. Following the announcement, shares of
TASER were down another $5.95 per share or 29.68 percent on
January 11, 2005, and last traded at $14.10 per share.
On or after January 11, 2005 others actions, with similar
allegations, were filed against TASER in the United States
District Court for the District of Arizona.
The plaintiff firms in this litigation are:
(1) Berger & Montague, P.C., 1622 Locust Street,
Philadelphia, PA, 19103, Phone: 800.424.6690, Fax:
215.875.4604, E-mail: investorprotect@bm.net
(2) Berman, DeValerio, Pease, Tabacco Burt & Pucillo (MA),
One Liberty Square, Boston, MA, 2109, Phone:
617.542.8300, Fax: 617.230.0903, E-mail:
info@bermanesq.com
(3) Charles J. Piven, World Trade Center-Baltimore, 401
East Pratt Suite 2525, Baltimore, MD, 21202, Phone:
410.332.0030, E-mail: pivenlaw@erols.com
(4) Chitwood & Harley, 1230 Peachtree Street, N.E., 2900
Promenade II, Atlanta, GA, 30309, Phone: 888.873.3999,
(5) Federman & Sherwood, 120 North Robinson, Suite 2720,
Oklahoma City, OK, 73102, Phone: 405-235-1560, E-mail:
wfederman@aol.com
(6) Girard Gibbs & De Bartolomeo LLP, 601 California
Street, Suite 1400, San Francisco, CA, 94108, Phone:
415.981.4800, Fax: 415.981.4846, E-mail:
girardgibbs@girardgibbs.com
(7) Girard Gibbs & De Bartolomeo, LLP, 601 California
Street - Suite 1400, San Francisco, CA, 94104, Phone:
415.981.4800,
(8) Lovell Stewart Halebian LLP, 500 Fifth Avenue, New
York, NY, 10110, Phone: 212.608.1900, Fax:
212.719.4677, E-mail: info@lshllp.com
(9) Murray, Frank & Sailer LLP, 275 Madison Ave 34th Flr,
New York, NY, 10016, Phone: 212.682.1818, Fax:
212.682.1892, E-mail: email@rabinlaw.com
(10) Pomerantz,Haudek, Block, Grossman & Gross, 100 Park
Avenue, 26th Floor, New York, NY, 10017-5516, Phone:
212.661.1100,
(11) Schatz & Nobel, P.C., 330 Main Street, Hartford, CT,
06106, Phone: 800.797.5499, Fax: 860.493.6290, E-mail:
sn06106@AOL.com
(12) Schiffrin & Barroway, LLP, 3 Bala Plaza E, Bala Cynwyd,
PA, 19004, Phone: 610.667.7706, Fax: 610.667.7056, E-
mail: info@sbclasslaw.com
(13) Spector, Roseman & Kodroff (Philadelphia), 1818 Market
Street; Suite 2500, Philadelphia, PA, 19103, Phone:
215.496.0300, Fax: 215.496.6610, E-mail:
classaction@srk-law.com
(14) Spector, Roseman, & Kodroff (San Diego), 600 West
Broadway, Suite 1800, San Diego, CA, 92101, Phone:
619.338.4514,
UNITED STATES: AIA Vows All Out Support For Passage Of S.5 Bill
---------------------------------------------------------------
Senate Republican leaders have introduced vital class action
litigation reform legislation, and the American Insurance
Association (AIA) immediately praised the move, the Insurance
Journal reports.
Melissa Shelk, AIA vice president of federal affairs told the
Insurance Journal, "We are very encouraged that Senate
Republican leaders are making the Class Action Fairness Act (S.
5) one of their top ten legislative priorities." She, however,
acknowledged that getting the bill passed into law would not be
easy. "We are going to have to fight off amendments that have
the potential to weaken the bill. Our immediate goal is to get
this through the Senate Judiciary Committee quickly and
cleanly."
Senate observers explained that S.5 would curb many current
class action abuses by re-establishing federal authority over
interstate cases in which plaintiffs' claims are over $5 million
in the aggregate, while maintaining exclusive state authority
over truly intrastate cases, so that the rights of consumers in
all states are protected the experts also explained that S.5
will also set limits on so called "venue shopping" to prevent
litigants from seeking out favorable court jurisdictions,
requiring that claims be brought in a venue with a substantial
connection to the injury.
The House of Representatives has passed class action reform on
three separate, previous occasions, but the legislation fell one
vote short the last time the full Senate considered it.
However, according to the AIA, this year as in the past it is
committed to working alongside class action reform supporters in
the business community, who have been harassed by frivolous
class action suits to end this abuse of the civil justice
system.
Ms. Shelk noted, "The current system has been a losing
proposition for everyone involved, except the trial attorneys
who bring these lawsuits. We feel the climate this year is
particularly favorable for passage of this long-overdue fix for
the badly broken class action system."
UNITED STATES: Class Actions Gain Momentum, Claims Research
-----------------------------------------------------------
U.S. class action litigation appears to be growing, according to
an annual report by the prestigious Stanford Law School, which
had found that the number of companies sued in 2004 rose by 17%,
the Legal Week Global reports.
According to the annual class action report, 212 companies were
sued for securities violations, up from 181 in 2003. Researchers
estimated that the disclosure dollar loss (DDL), the decline in
defendants' market capitalization in the wake of litigation,
nearly tripled from 2003's $58bn to $169bn.
Furthermore, the report pointed out that consumer, technology
and communications are the three sectors facing the most
litigation, highlighting the impact of the allegations relating
to sales practices in the insurance industry and claims facing
pharmaceuticals companies.
Robert Roseman, name partner at plaintiff firm Spector Roseman &
Kodroff, told Legal Week: "I am not surprised with the numbers.
It is clear that securities fraud, particularly accounting fraud
is still prevalent."
The Stanford report follows a bitter battle between big business
and the plaintiff bar, which in 2004 saw a prolonged debate over
the impact of class action litigation on corporate America. The
issue was pushed to the top of the political agenda by the
nomination of Senator John Edwards, a medical malpractice
lawyer, as the Democratic vice presidential candidate in the US
elections, and by the Democrats' blocking of the Class Action
Fairness Act, intended to push more cases to federal court. It
also come as the U.S. nears the 10-year anniversary of the
passage of the Private Securities Litigation Reform Act (PSLRA),
the last major attempt to reform the class action system.
O'Melveny & Myers litigation partner Matthew Close told Legal
Week, "When the PSLRA was passed, many thought it would usher in
a new era for public companies. The data in the report really
does not support this conclusion. The Reform Act has not reined
in the number of securities fraud filings as anticipated. Even
though few securities fraud cases are successfully proven, the
amounts involved are so great that the plaintiff bar only needs
to be right about their assertions on very few occasions to make
these cases worthwhile economically."
Mr. Roseman, who is currently suing advisers to Parmalat, also
cited the trend for European companies being sued in the U.S. He
comments, "These numbers have been on the rise during the past
few years. Look at Parmalat, Ahold, Shell, etc. Institutional
shareholder activism is still alive and well."
UNITED STATES: Senate Ready To Tackle Class Action Reform Bill
--------------------------------------------------------------
Consistently derailing class action reform legislation in the
past, the Senate has apparently cleared such a measure for
passage within the next 10 days, NU Online News Service reports.
This was the implication of the announcement by Sen. Arlen
Specter, R-Pa. that he would no longer link movement of class
action to some difficult asbestos injury legislation and would
report out the class action measure on February 3. He added that
the introduction of the asbestos bill would be delayed until
next week.
The controversial asbestos bill would establish an alternative
claims processing system for those injured by exposure to
asbestos in the workplace. Sen. Specter's comments followed by
one-day remarks by Senate Majority Leader William Frist, R-
Tenn., that he wants a vote on class action reform legislation
on the Senate floor the week of February 7.
According to David Winston, senior vice president, federal
affairs of the National Association of Mutual Insurance
Companies, Sen. Specter's comments after a closed session of the
committee "interesting." He explains that it means in effect
that Sen. Specter's efforts to have his asbestos legislation
move through his committee side-by-side with the class action
bill had failed, clearly under pressure from the Senate
Republican leadership. He also added, "The leadership really
wants this [class action] bill to move. We are pleased that the
Senate has decided to establish passage of class action
legislation as a priority. This bill will go a long way toward
discouraging forum shopping by the plaintiff's bar and reduce
efforts by them to `game the system,' so to speak."
Joel Wood, senior vice president for governmental affairs at the
Council of Insurance Agents and Brokers, commented on the recent
developments by saying, "the industry, at long last, is going to
see this bill enacted." Hopefully, Mr. Wood said, "the vote will
be sufficient to be a bellwether for legal reforms"-i.e., be
strong enough to win support from Democrats for other
legislation, like tort reform and curbs on medical malpractice
litigation. Furthermore, Mr. Wood pointed out, "Even the
comments of Sen. Harry Reid, D-Nev., the minority leader, who
was himself a trial lawyer, have been encouraging. He is
resigned that several moderate members of the Democratic caucus
will vote for this." Despite the encouraging developments,
however, Mr. Wood was quick to point out that he remained
cautious, noting that compromise between the House and Senate
"has always been elusive, and there are those on the House side
who wish that this bill be much stronger. But we would rather
have 80 percent of something than 100 percent of nothing."
Introduced recently as S.5, the legislation would curb many
current class action abuses by re-establishing federal authority
over interstate cases in which plaintiffs' claims are over $5
million in the aggregate, while maintaining exclusive state
authority over truly intrastate cases, so that the rights of
consumers in all states are protected. S.5 also limits "venue
shopping" to prevent litigants from seeking out favorable court
jurisdictions, requiring that claims be brought in a venue with
a substantial connection to the injury.
The House of Representatives has previously passed class action
reform on three separate occasions, but the legislation fell one
vote short the last time the full Senate considered it.
VICORP RESTAURANTS: Reaches $6.55M Settlement For Overtime Suits
----------------------------------------------------------------
Vicorp Restaurants, Inc. reached a settlement for two class
actions filed against it in California State Court by its former
employees.
The first class action claim was brought in October 2003 by two
of the Company's former employees and one current employee and
the second class action claim was brought in May 2004 by two
former employees. The complaints allege that the Company
violated California law with regard to rest and meal periods,
bonus payment calculations (in the October 2003 complaint),
overtime payments (in the May 2004 complaint) and California law
regarding unfair business practices. The classes and subclasses
alleged in the actions have not been certified by the respective
courts at the current stages of the litigation, but generally
are claimed in the 2003 complaint to include persons who have
been employed by the Company in California since October 17,
1999 in the positions of food server, restaurant general manager
and assistant restaurant manager, and generally are claimed in
the 2004 complaint to include persons who have been employed by
the Company in California since May 21, 2000 in the positions of
restaurant general manager and restaurant associate manager. No
dollar amount in damages is requested in either complaint, and
the complaints seek statutory damages, compensatory damages,
interest and attorneys' fees in unspecified amounts.
During the fourth quarter of fiscal 2004, the Company
established a reserve of $3.2 million in connection with its
agreement in principle to settle these class action lawsuits.
The parties in both lawsuits are in the process of finalizing
the settlement, which is subject to approval of the court.
Under the terms of the proposed settlements, the Company agreed
to pay up to an aggregate of $6.55 million for the alleged
claims and associated legal fees.
Asbestos Alerts
ASBESTOS LITIGATION: US Court Rejects $1.2B ABB Settlement Again
----------------------------------------------------------------
ABB Ltd., the Swiss-Swedish electrical engineering giant,
suffered another setback in its attempts to finalize a billion-
dollar asbestos settlement in the United States.
After having rejected the whole plan late last year, ABB lost
its bid to have a U.S. appeals court partially review its US$1.2
billion asbestos-claims settlement, which focuses on its
Connecticut-based subsidiary.
The 3rd U.S. Circuit Court of Appeals in Philadelphia would at
least reconsider some of its ruling rejecting ABB's petition to
include its Lummus and Basic Industries units in the company's
overall settlement plan, which centers on Winsdor, Conn.-based
Combustion Engineering.
Keeping Lummus and Basic Industries out of the settlement could
hamper ABB's efforts to sell the two units because of potential
litigation headaches for any buyer.
"We regret but expected this decision," ABB spokesman Thomas
Schmidt said. "The claims against these companies are
insignificant and we are working on a solution for these
companies."
Combustion Engineering filed for bankruptcy protection in 2003
after 93 percent of 111,000 plaintiffs accepted the plan to
settle asbestos lawsuits. Lummus and Basic Industries together
faced about 13,000 of the claims.
The plan involved putting the unit into Chapter 11 bankruptcy to
allow ABB to protect itself against future asbestos claims.
ABB had asked the U.S. court in mid-December to decide on a
possible partial rehearing of its case after the same court
rejected ABB's asbestos settlement proposal earlier that month.
The court ruled that ABB's attempt to include Lummus and Basic
Industries in the settlement was unfair. The settlement plan
needs now to be renegotiated at the District Court level.
ABB said it expects resolution of its asbestos settlement in a
few months and also has said it expects no substantial extra
costs to reach a final settlement. But analysts said they feared
the extra costs could hover between US$500 million and US$2
billion and that a final settlement could take at least a year.
ABB's stock fell on the news as investors were concerned that
the company's attempt to free itself of pending asbestos claims
could take up to a year and cost ABB more than the budgeted
US$1.2 billion.
Combustion Engineering, which benefits from Chapter 11 creditor
protection, made industrial boilers lined with asbestos, a
lethal substance that can cause cancer and other diseases.
Lummus and Basic have received far fewer claims than Combustion
Engineering. But all three units made products containing
asbestos and also shared production sites.
ASBESTOS LITIGATION: AU Lawyers Call for Cheaper Asbestos Trials
----------------------------------------------------------------
Aiming to increase the efficiency with which Australia's dust
diseases compensation claims are resolved, legal bodies and
other organizations handed over submissions to the NSW
government to help identify cost-saving opportunities within the
common law system.
Among the Australian Lawyers Alliance's list was a suggestion to
ask victims to file sworn statements early in the proceedings to
hasten the establishment of facts. This proposal supposedly will
mean "expensive and lengthy pre-trial procedure can be dispensed
with," said organization president, Tom Goudkamp.
Mr. Goudkamp added, "The onus would then be on the defendants to
settle promptly and not pay expensive corporate lawyers to drag
cases out in an effort to avoid liability." The method would,
however, require the Dust Diseases Tribunal to be given the
discretion to penalize parties that unnecessarily drag out
cases.
The NSW Government's review of legal and administrative costs in
dust diseases compensation claims came about after the Report of
the Special Commission of Inquiry into the Medical Research and
Compensation Foundation, conducted by David Jackson QC.
Mr. Jackson found that while the existing common law system in
NSW did include some procedures to increase the efficiency with
which dust diseases compensation claims are resolved, further
changes could be made to ensure that as much money as possible
is made available to claimants.
There has been considerable debate about the level of legal
costs incurred in dust diseases litigation. Some stakeholders
argue overall legal costs could reach 40 percent of total
payments. They also brought up the issue that claimants' lawyers
overservice and unnecessary legal costs are incurred as a result
of defendants taking too many erroneous points.
John Gordon, also from the lawyers group, said that these
lawyers will not able to overservice. He stated that to prove
that allegation, the best way is to have the court determine the
costs that are payable in a particular claim. In doing so, all
that claimants have to pay for is only what is reasonable.
Regarding the NSW Government's review, Mr. Gordon said it was
highly likely that some amendments would be made. Hardie has
"made a lot of noise" about cost reforms but "has made no
concrete proposals."
The Alliance believes "something along these lines" will
probably come into being, "if for no other reason than it
enhances the prospect that Hardie will then be able to get
shareholders to support the plan," he said.
A number of other law societies and legal bodies have acquired
extensions to the deadline for their submissions.
ASBESTOS LITIGATION: MS Supreme Court Tosses Out US$150Mil Award
----------------------------------------------------------------
The Mississippi Supreme Court threw out a US$150 million award
to six laborers from Attala and Holmes counties who claimed they
were exposed to asbestos as far back as the 1950s.
The Supreme Court, in a 5-2 decision, ruled separate trials
should have been conducted. The justices, as they had in
decisions dating back to February 2004, said it was improper to
group the plaintiffs together when their claims did not arise
from the same incident or involve the same defendants.
"The only similar trait shared by the plaintiffs is the alleged
exposure to asbestos at some point in their work history,"
Justice George C. Carlson Jr. wrote for the court. "Although the
plaintiffs were of varying ages, had different work histories,
different exposures and different diagnoses, the jury returned
identical damage awards."
The initial case filed on April 28, 2000, in Homes County
Circuit Court, had over 150 plaintiffs suing about 62
defendants. Six plaintiffs were selected from the initial group
to be tried jointly against the defendants against whom there
were claims. Circuit Judge Jannie M. Lewis had denied a defense
motion for a separate trial for each plaintiff. On Oct. 1, 2001,
a jury awarded each plaintiff US$25 million in compensatory
damages. No punitive damages were awarded.
Judge Carlson said separate trials should be held for about 100
remaining plaintiffs not involved in the 2001 case. He said
Judge Lewis also should determine if separate trials should be
given each defendant.
Two justices did not participate in the decision.
In recent years, Mississippi has become a haven for asbestos
trial lawyers. The controversial verdicts and enormous
settlements prompted the legislature to rewrite tort laws and
the Supreme Court to issue new rules that have virtually
eliminated class action lawsuits.
ASBESTOS LITIGATION: MS High Court Reverses US$25M Verdict V. 3M
----------------------------------------------------------------
As part of a recent Mississippi Supreme Court decision, a US$25
million verdict against 3M Co. with Case No. 2002-CA-01651-SCT
was overturned on Jan. 20, 2005.
The case was brought by laborers who alleged that St. Paul,
Minn.-based 3M's devices failed to protect them from asbestos
exposure. The Supreme Court said the plaintiffs did not prove a
product liability claim that 3M allegedly had defective
facemasks. The company claimed its masks were never designed for
asbestos protection.
This asbestos-related case was filed before Holmes County
Circuit Court Judge Jannie M. Lewis, on April 28, 2000, by over
150 plaintiffs, including James Curry, Bobby Joe Lawrence,
Phillip Pate and Simeon Johnson against about 62 defendants, one
of which was Minnesota Mining and Manufacturing Company or 3M
Co.
Donna Brown Jacobs, John C. Henegan, W. Wayne Drinkwater, Jr.,
and Margaret Oertling Cupples, represented the
appellant/defendant, 3M Co.
Suzanne Griggins Keys, Precious Tyrone Martin, Isaac K. Byrd,
Jr., Patrick C. Malouf, and Timothy W. Porter, represented the
appellees/plaintiffs.
The 3M products at issue in the case are the 8500 dust mask and
the 8710 disposable respirator. Neither product contains
asbestos; however, only the 8710 mask was designed to reduce
exposure to respirable fibers, including asbestos.
In 1978, 3M added warnings to the box containing the 8500 mask,
cautioning the user not to use the mask around asbestos. 3M
later placed this warning on the mask itself.
In 1986, 3M voluntarily withdrew the 8710 respirator for use
with asbestos after the Occupational Safety and Health
Administration reduced the permissible exposure limit for
asbestos from 2 fibers/cc of air to .2 fibers/cc.
The justices said the plaintiffs were allowed to introduce large
amounts of evidence about manufacturers' supposed careless
marketing of asbestos-containing products, which had nothing to
do with 3M. The justices dismissed the claim against 3M with
prejudice, meaning it cannot be refiled.
"From 3M's perspective, it was the only defendant in the suit
which did not manufacture or distribute a product containing
asbestos," Judge George C. Carlson Jr. stated.
Officials with 3M released a statement saying that with this
latest reversal, it has prevailed in all seven trials of
asbestos-related cases brought against it involving respiratory
products.
The statement concluded, "The Mississippi Supreme Court's
reversal of the jury's adverse verdict will not affect 3M's
earnings or reserves."
ASBESTOS LITIGATION: CFMEU Cites Lack of Trained Bldg Inspectors
----------------------------------------------------------------
The Construction Forestry Mining Energy Union said the safety of
regional workers across the state is being jeopardized by a
shortage of trained WorkCover inspectors. As a result, many
safety risks in many regional areas are going undetected.
The CFMEU's latest safety audit revealed many inspectors in
regional New South Wales lack a detailed knowledge of the
building industry. This puts them at more risk for asbestos-
related injury since Sydney is the only area with specialized
asbestos assessors, said union spokesman Tim Vollmer.
"When there's large distances to travel and a whole range of
people with less time to do it and less skills to be precise
about it, the WorkCover assessors in regional New South Wales
just don't have the ability to give the same quality of safety
on sites that you'd expect in Sydney," said Mr. Vollmer. "It's
just not good enough."
However, WorkCover New South Wales responded that CFMEU's safety
audit is inaccurate. Spokeswoman Jenny Thomas hit back at claims
of a shortage of specially trained safety inspectors in the
state's regional areas.
Ms. Thomas said it is impossible to have an inspector on every
work site. She said that having WorkCover NSW has 301
inspectors, which is the most in any state in Australia. She
insisted that all WorkCover assessors are trained in dealing
with asbestos and demolition issues.
"We've got 49 in the construction team in the metro area and
more than 120 in regional areas and in the regional areas those
inspectors are well-versed in construction matters and asbestos
and demolition matters," said Ms. Thomas.
ASBESTOS LITIGATION: Hearing on Owens Corning Liabilities Ends
--------------------------------------------------------------
After six days of testimony starting Jan. 13, a federal court
hearing about the size of Owen Corning's asbestos liability
concluded last week. However, a decision isn't expected for a
few weeks.
Judge John Fullam, who heard the case in the U.S. District Court
in Philadelphia, agreed to accept post-hearing briefs from the
various parties, said Stephen Krull, OC's chief counsel. He set
a deadline of Feb. 7 for the briefs, and gave opposing parties
until Feb. 18 to reply.
OC, Toledo's third largest corporation, faces 181,000 claims now
and 600,000 claims or more in the future, one expert testified.
The hearing was held as part of the firm's four-year-old Chapter
11 bankruptcy case. "This is an important, important step in
getting our case behind us," Mr. Krull said.
Estimates for asbestos liability for OC alone range from US$2.2
billion to US$11 billion.
When the firm's Fibreboard subsidiary is added, the highest
estimate is US$18 billion, although asbestos claimants whose
expert submitted that estimate have said they would accept a
figure of US$16 billion.
Because liability estimates far exceed the value of OC, asbestos
claimants will receive 38.5 cents on the dollar. Whatever amount
the judge decides upon, 38.5 percent will be deposited in a
trust fund in a combination of stocks, bonds, and cash, and will
be used to pay asbestos claims when OC emerges from Chapter 11.
That step will end decades of lawsuits against OC that resulted
from the sale of asbestos-containing insulation by the firm from
the early 1950s to the early 1970s.
ASBESTOS LITIGATION: Two NSW Sites Pose No Health Risk, Report
----------------------------------------------------------------
A consultants report adopted by Orange City Council has found
that naturally occurring asbestos at two sites in the city does
not represent an increased asbestos-related health risk.
The report by risk management consultants, Noel Arnold and
Associates, said asbestos air monitoring at the Narrambla
stockpile site was less than the detectable limit.
The report also outlined remedial works that need to be
undertaken at nine sites and the council's acting general
manager, Michael Ryan, says a bitumen seal needs to be sprayed
over the Narrambla stockpile.
Aside from the bitumen seal, the council will set up an air
monitoring site to get more regular monitoring than what had
been previously advised.
Meanwhile, council has met with the United Services Union to
discuss council staff handling material containing asbestos. The
union says the training that staff received does not apply to
naturally occurring asbestos and has advised its members not to
take part in the removal of the material.
Orange City Council has received advice from WorkCover that the
training is sufficient.
ASBESTOS LITIGATION: Foster Wheeler to Take $76M Asbestos Charge
----------------------------------------------------------------
Foster Wheeler Ltd. (OTCBB: FWHLF) announced last week that it
will take a charge to earnings in the fourth quarter as a result
of an adverse court decision in asbestos coverage allocation
litigation involving certain of its subsidiaries.
On January 10, 2005, a New York state trial court entered an
order finding that New York, rather than New Jersey, law applies
in a lawsuit regarding the allocation of liability for asbestos-
related personal injury claims among the Foster Wheeler entities
and their various insurers.
As a result of this decision, the Company will record a charge
to earnings in the fourth quarter of 2004 of about US$76
million. After recording this charge, the Company continues to
believe that it will not be required to fund any asbestos
liabilities from its cash flow before 2010. However, unless this
decision is reversed on appeal, it expects that it will be
required to fund a portion of its asbestos liabilities from its
own cash beginning in 2010.
The amount and timing of these funding requirements will be
dependent upon, among other things, litigated or negotiated
resolution of the various disputes between Foster Wheeler and
the insurers with whom it has not yet settled. In addition, the
Company continues to evaluate whether the court's decision will
have any additional impact on the calculation of its insurance
asset, its cash flow requirements, or both. Foster Wheeler
intends to pursue settlements with its insurers and to manage
its insurance portfolio in order to minimize its cash
obligations going forward.
The Company intends promptly to file an appeal of the New York
court's decision, and believes that it has solid grounds
supporting reversal.
The litigation seeks to determine the respective obligations of
Foster Wheeler's various insurers to indemnify the Company for
asbestos-related bodily injury losses. The substantive laws of
New Jersey and New York apply different methods of allocating
insurance proceeds available to satisfy claims triggered over
multiple years. The application of New York, rather than New
Jersey, law would result in realizing lower insurance
recoveries.
Since the inception of this litigation, Foster Wheeler has
calculated its estimated insurance recoveries applying New
Jersey law. The Company based its approach on, among other
considerations, the advice of its outside asbestos litigation
counsel and its team of internal and external asbestos advisors.
In light of the court's decision, Foster Wheeler in the fourth
quarter will calculate its estimated insurance recoveries
applying New York law, which will result in the mentioned charge
to earnings.
ASBESTOS LITIGATION: Moscow Cablecom Discloses JM Ney's Lawsuits
----------------------------------------------------------------
Moscow Cablecom Corp. (NASDAQ: MOCC) submitted its latest filing
to the Securities and Exchange Commission stating that in March
and April 2004, JM Ney, now known as Andersen Land Corp., was
served with a summons and a complaint in three cases. Namely,
the first two are:
(1) Norman D. Mass and Lois Ravage Mass v. Amchem Products, Inc.
et. al. (New York State Supreme Court, County of New York, Index
101931-04); and
(2) Loretta Brienza and Brent Brienza v. A.W. Chesterton Company
et al. (New York State Supreme Court, County of New York, Index
104076-04).
These cases name the Company including more than a hundred other
defendants in asbestos-related civil actions for negligence and
product liability filed in the Supreme Court of New York. The
plaintiffs are claiming damages from being exposed to asbestos
and asbestos products alleged to have been manufactured or
supplied by the defendants, including JM Ney's former dental
division.
The third case is Jay K. Fleckner v. Amchem Products, Inc. et al
(New York State Supreme Court, County of New York, Index 113970-
04). In October 2004, Andersen Land Corp. also received a
summons in which it and about 30 additional companies were named
as defendants in an asbestos-related civil action for negligence
and product liability filed in the Supreme Court of New York.
The plaintiff Jay Fleckner claimed for damages from being
exposed to asbestos and asbestos products alleged to have been
manufactured or supplied by the defendants, including JM Ney's
former dental division.
The plaintiffs have not provided any specific allegations of
facts as to which defendants may have manufactured or supplied
asbestos and also which asbestos products are alleged to have
caused the injuries.
The Company believes that it has insurance that potentially
covers these claims and is in the process of notifying its
insurance carriers to provide reimbursement of defense costs and
liability, should any arise. Based upon the answers to the
interrogatories that have been supplied by the plaintiffs'
attorneys, it does not appear to the Company that JM Ney
manufactured any products containing asbestos that are the
subject of these matters. As of this date, the Company has no
basis to conclude that the litigation may be material to the its
financial condition or business. The Company intends to
vigorously defend these lawsuits.
From 1991 until March 22, 2002, Moscow Cablecom Corp. owned and
operated JM Ney as its primary operating subsidiary. JM Ney
(which has been renamed Andersen Land Corp in connection with
the sale of JM Ney's operating assets) owns a 98,000 square foot
facility and 18.4 acres within an industrial park in Bloomfield,
Connecticut.
ASBESTOS LITIGATION: Equitas Fears Bankruptcy Over Asbestos Law
---------------------------------------------------------------
Equitas, the reinsurance vehicle created by Lloyd's of London in
response to mounting asbestos liabilities, blasted a proposed US
law that would fail to protect the organization from going
bankrupt.
The Fairness in Asbestos Injury Resolution Act, a bill laid
before the US Senate this week by Senate Judiciary Chairman
Arlen Specter, would require US businesses and all insurers with
asbestos liabilities to contribute to a US$140 billion or GBP75
billion trust to settle all asbestos claims bypassing the US
courts.
Insurers would be asked for about US$46 billion over 27 years,
with individual companies' amounts decided by a new commission,
based on their liabilities. All insurers and reinsurers except
Equitas would be given the right to either reduce or defer the
payment if they could demonstrate it is unfair or would force
them into bankruptcy.
Though the payments would be spread over those 27 years, they
could wipe out Equitas's reserves. These stood at US$7.4 billion
in March last year, but have been reduced by around US$1 billion
of settlements since then.
This could lead to further bills for thousands of Lloyd's Names,
investors in the Lloyd's of London insurance market, who hoped
the creation of Equitas had closed the book on their investments
at Lloyd's.
Equitas may have to put up US$10 billion, about 20% of the
amount the insurance industry is expected to have to put into
the fund. However, its reserves are currently reckoned to stand
at US$6 billion.
If about 15,000 former Lloyd's Names had to fund a US$4 billion
shortfall, the average claim on them would be GBP135,000, rising
to GBP1 million for those exposed to several syndicates.
Many of the liabilities were insured at Lloyd's and were moved
into Equitas as part of the "Reconstruction and Renewal" reform
in 1996.
In testimony before the Senate Committee on Jan. 11, Equitas's
legal representative, Jeffrey Robinson, opposed the bill as
Equitas would be the only contributor that would be allowed to
go bankrupt if it could not afford the sum demanded.
However, Equitas chief executive Scott Moser said, "We believe
that our reserves for asbestos are adequate and that if there is
a fair, open, transparent proceeding, a commission will not ask
us to pay any more than what we have reserved. It might even ask
us to pay less.
"We are just saying if you are going to ask us to give up all
our rights like everybody else and you are going to realize that
you should protect people in case this goes a bit awry, then you
should protect us like everyone else."
Christopher Stockwell, chairman of the Lloyd's Names
Association, said, "The proposed bill could crystallize demands
on Names far sooner than anyone envisaged. The consequence could
be very serious for thousands of Names who could face new
demands for cash. These proposals need to be strenuously
resisted by Equitas on behalf of all Names."
Equitas assumed all Lloyd's pre-1993 liabilities. It has paid
out GBP15 billion since 1996 and settled five of the top 10
claims it had four years ago.
ASBESTOS LITIGATION: GA Supreme Court Deals Blow To Suits V. CSX
----------------------------------------------------------------
The state Supreme Court last Monday dealt a decision favoring
CSX Transportation Inc. in a case brought up by four plaintiffs
claiming to have contracted illnesses from secondary asbestos
exposure. The decision sends the case back to the U.S. District
Court, where the lawsuits were filed.
Supreme Court spokesman Richard Diguette, said the court ruled
unanimously that Georgia's negligence law does not impose any
duty on an employer to a third-party who is not an employee of
that company who comes into contact with an employee's asbestos-
tainted work clothing away from the workplace.
Three of the four plaintiffs filed a suit based on their claim
that each was exposed at home as a child to airborne asbestos
fibers released from the clothing his father wore while working
at the railroad, and that this exposure contributed to their
asbestos-related disease.
The fourth plaintiff brought a wrongful death action based on
his late wife's exposure at home to asbestos on clothes he wore
to work at the railroad.
CSX Transportation filed a request for summary judgment in each
case, arguing that the "clothing exposure" claims are not
covered under the negligence law. The federal court denied the
motion. A federal appeals court then asked Georgia's Supreme
Court to address the question of whether the state's negligence
law covers the claims in the suits.
"We're obviously very happy about the decision," CSX lawyer Mary
H. Moses said. "What it does is put Georgia in line with most of
the other states that have dealt with this issue."
This decision makes it likely that the wrongful death lawsuit
and the three other injury claims under Georgia's negligence law
will be dismissed. However, a separate claim involving three
other cases was also filed under the Federal Employers Liability
Act, which is not affected by the recent decision, said Ms.
Moses.
Mary H. Moses and Randall A. Jordan, of Jordan & Moses, from St.
Simons Isl., represented the defendant, CSX Transportation Inc.
Roger B. Lane, of Lane & Gossett, from Brunswick, stood for the
plaintiffs.
CSX Transportation, the primary subsidiary of CSX, provides rail
freight transportation over more than 23,000 miles of track in
23 states in the eastern half of the US and two Canadian
provinces.
ASBESTOS LITIGATION: Crane Ends Settlement, Boosts 4Q Earnings
--------------------------------------------------------------
Crane Co. (NYSE: CR), a diversified manufacturer of engineered
industrial products, said it has decided to terminate an
agreement settling its asbestos-related litigation, giving a
boost to its fourth-quarter results. The Company said it will
continue to go through the court system, a move it expects will
help it recover more money from insurers and reduce interest
expenses.
Headquartered in Stamford, Connecticut, Crane said its decision
added US$9.1 million, or 15 cents a share, to its fourth-quarter
earnings. The company reported a net income of US$46.4 million,
or 78 cents a share, up from US$33.7 million, or 56 cents a
share, a year ago.
The Company said it earned 52 cents a share from operations, as
a result of higher material costs, weaker margins at its
aerospace and electronic unit, and lower sales volumes of
electronic products. That exceeded analysts' estimates, which
had averaged 48 cents a share, but was within the company's
estimate of 49 cents to 54 cents a share.
Crane had reached an agreement in principle on Oct. 21 to settle
all current and future asbestos-related personal injury claims.
On that date, MCC Holdings, Inc., an indirect wholly owned
subsidiary of the Company formerly known as Mark Controls
Corporation, entered into a Master Settlement Agreement with
representatives of a majority of current claimants and a
Settlement Trust Agreement, which provides for a US$280 million
trust to be funded and administered to pay asbestos-related
personal injury claims settled under the MSA.
The Company said it has now changed its mind about the
settlement agreement after an appellate court decision in Dec. 2
involving another company.
Crane Co. management, with the assistance of outside experts,
has reviewed the estimated asbestos liability in light of the
termination of the MSA. Because of the many uncertainties
inherent in predicting the course of asbestos litigation,
management believes that it is not possible to make a meaningful
estimate of the Company's asbestos liability beyond the year
2011. Based on its most recent experience, the Company has made
its best estimate of the costs through 2011 of resolving
asbestos claims in the tort system.
It has also adjusted the assumed rate of insurance recoveries
from 30% for the accelerated settlement payments back to 40%
under the tort system. Under the tort system, the Company incurs
not only settlement costs but substantial legal defense costs,
and the Company's best estimate of these costs for both pending
and future claims through 2011 amounted to US$649.7 million at
December 31, 2004.
This compares to the MSA-based liability estimate of US$565.9
million (US$578 million at September 30, 2004), which represents
the cost of the one-time settlement of all asbestos claims
against the Company. The US$83.8 million higher liability
estimate under the tort system includes the added cost to defend
claims against the Company. However, the higher insurance
recovery rate in the tort system (40%), as compared with the MSA
(30%), is expected to provide the Company with greater insurance
recoveries of about US$97.8 million. Thus, the net estimated
cost after anticipated insurance recoveries was reduced by US$14
million, which increased net income by US$9.1 million, or
US$0.15 per share, in the fourth quarter of 2004.
As a result, it reduced net estimated costs for asbestos by
US$14 million and increased net income by US$9.1 million, or 15
cents a share, in the fourth quarter.
Full year 2004 net income, before the net impact of asbestos and
environmental charge, increased to US$123.9 million, or US$2.09
per share, compared with net income of US$104.3 million, or
US$1.75 per share, reported for the full year 2003. Including
the impact from the asbestos and environmental charge of
US$229.3 million, the Company recorded a full year 2004 net loss
of US$105.4 million, or US$1.78 per share.
ASBESTOS LITIGATION: Union Pacific's 4Q Earnings Drop Sharply
-------------------------------------------------------------
Union Pacific Corp. reported sharp drops in quarterly earnings
as it struggled with high fuel prices and service disruptions
amid last year's record freight volume.
Fourth-quarter net earnings plunged to US$79 million, or 30
cents a share, from US$551 million, or US$2.12 a share, a year
earlier. The earnings included a non-cash charge of US$153.6
million related to estimated liabilities for asbestos-related
claims.
U.S. economic expansion and surging global trade boosted freight
volume last year, but Union Pacific was not as well prepared for
the boom as its peers. The company, considered a gauge of
economic activity because of the varied cargo it hauls,
struggled with traffic bottlenecks and faced crew and locomotive
shortages.
A company spokeswoman said operating earnings, excluding the
asbestos-related charge, were 88 cents a share -- a penny above
the top end of Union Pacific's most recent forecast and 4 cents
better than the average forecast among analysts polled by
Reuters Estimates. Year-earlier operating earnings were US$1.28
a share.
Executives said first-quarter earnings would be sharply lower
from a year ago, but added the railroad was focusing on cutting
costs related to congestion and slow trains and getting more
price flexibility as contracts come up for renewal.
Fourth-quarter operating revenue rose 8 percent to US$3.2
billion, driven by an increase in hauling grains, industrial
products and chemicals.
"High fuel prices and increased operating costs continued to
impact earnings," Dick Davidson, chairman and chief executive
officer, said in a statement. But he added that while 2005 got
off to a difficult start with severe storms on the West Coast,
he expects a better year for the company, with the strong
shipping demand of 2004 continuing.
In a statement, Union Pacific said its best estimate was that
storm costs could approach or surpass US$200 million -- about
half for capital expenditures for repairs and the rest
consisting of lost revenue and higher costs. The estimates do
not include any insurance recovery.
ASBESTOS LITIGATION: CA Court Affirms Ruling in Favor of Viacom
---------------------------------------------------------------
California First District Court of Appeals on Jan. 19, 2005
affirmed a judgment in favor of media company Viacom Inc. (NYSE:
VIA) on the personal injury lawsuit filed by William and Sharon
Smith.
Plaintiffs claimed that Mr. Smith contracted asbestosis and
asbestos-related pleural disease as a result of his exposure
from different products at various jobsites across the state.
Katherine Yao Wang, of Paul, Hanley & Harley, from Berkeley, CA,
and Bryce Clay Anderson, of Brentwood, CA, represented the
plaintiff. Renee Joan Laurents, of Pond North LLP, from Los
Angeles, CA, represented the defendant.
On March 30, 1999, Mr. Smith filed a complaint for personal
injury and loss of consortium against over 200 defendants.
The complaint was amended more than two years later to name CBS
Corporation as a Doe defendant. Viacom, the successor by merger
to CBS Corporation, which was formerly known as Westinghouse
Electric Corporation, answered the complaint on October 5, 2001.
Mr. Smith's deposition began less than two weeks later.
On June 28, 2002, Viacom filed a motion for summary judgment,
arguing, based on Smith's deposition and plaintiffs' responses
to discovery served by Viacom, "There [was] no evidence to
support plaintiffs' allegations of exposure to any asbestos-
containing products for which Viacom is liable...."
In response, plaintiffs submitted declarations from former co-
worker Richard Dole and Charley Ay, an expert witness on
asbestos insulation, application and removal techniques.
Mr. Dole declared he and Smith worked together in the early
1970s at the Pacific Gas & Electric power plant in Pittsburg,
California. During this time, Mr. Dole said both of them worked
in close proximity to Westinghouse employees who were installing
pumps and piping on Westinghouse turbines and sweeping up
"asbestos-containing debris" in their work area.
Mr. Ay testified based on Mr. Dole's declaration that Smith was
exposed to airborne asbestos dust created by Westinghouse
employees during his work at the PG & E power plant in
Pittsburg, California.
New York-based Viacom objected that the Dole declaration was
inadmissible because it was unsigned and it directly
contradicted previous testimony given in his own asbestos
personal injury lawsuit. Viacom submitted a transcript of Dole's
deposition testimony on May 9, 2001, in which Dole testified he
did not recall working at the PG & E power plant in Pittsburg,
California in 1970. He later recanted that story about a year
later but gave no explanation for how he came to this
recollection.
Viacom had produced sufficient evidence to "shift its burden to
plaintiffs" and plaintiffs had failed to raise a triable issue
of material fact that Mr. Smith had been exposed to asbestos-
containing products for which Westinghouse was responsible. In
so finding, the court ruled the Dole declaration submitted by
plaintiffs was inadmissible "because it is directly contrary
[to] his deposition testimony." This appeal followed.
Plaintiffs argued that Viacom did not produce sufficient
evidence in its summary judgment motion to shift the burden of
production to plaintiffs. In addition, they believed that the
trial court erred in disregarding the declaration plaintiffs
submitted from a nonparty witness.
Viacom's motion for summary judgment was premised on the
argument that plaintiffs could not prove Smith was exposed to
asbestos-containing products for which Viacom is responsible.
The Court also noted that the plaintiffs failed to file a motion
for reconsideration to submit any additional information, thus
playing a part in the affirmation of the judgment.
Judges Corrigan and Parrilli concurred with the decision set by
Judge McGuines.
ASBESTOS LITIGATION: Huttig Settles Lawsuit Filed by Rugby in NY
----------------------------------------------------------------
On January 19, 2005, Huttig Building Products, Inc. (NYSE: HBP)
entered into a settlement agreement with The Rugby Group Ltd.,
the Company's principal stockholder, and Rugby IPD Corp., a
former subsidiary of The Rugby Group Ltd., settling the pending
lawsuit filed by the Company in the Supreme Court of the State
of New York. The parties agreed to dismiss the pending
litigation without prejudice and without any admission of
liability in any respect by any party.
In accordance with the terms of the settlement, The Rugby Group
Ltd. paid to the Company US$609,581.46 on January 19, 2005. In
addition, the Company and Rugby each released the other from
further liabilities with respect to the underlying asbestos-
related liabilities and claims and any future asbestos-related
liabilities and claims, subject to termination of the joint
defense agreement. The Company and Rugby also have agreed to
certain other terms typical for a settlement agreement of this
kind.
Under the terms of a joint defense agreement entered into by the
Company and Rugby on January 19, 2005, the parties agreed to
jointly defend any future asbestos-related claims relating to
the business acquired by Rugby Building Products, Inc. in 1994.
Any asbestos-related claim against the Company not related to
that business, of which none has been filed to date, is not
covered by the joint defense agreement. The parties have
established a joint defense fund to which the Company and The
Rugby Group Ltd. will contribute specified amounts in equal
shares from time to time and from which they will pay amounts
incurred in connection with covered claims.
The joint defense agreement has a term of 10 years and may be
terminated by the Company or The Rugby Group Ltd. if either of
their respective contributions to the joint defense fund exceeds
a specified cap.
The Company believes that it is unlikely that a termination
right will occur during the term of the joint defense agreement,
but there can be no assurances that will be the case. In the
event of a termination of the joint defense agreement, the
settlement agreement will be deemed to have been rescinded, and
the Company, or, in certain circumstances, The Rugby Group Ltd.,
may reinstitute the litigation between the parties.
While the Company believes that its factual allegations and
legal claims are meritorious, there can be no assurance at this
time that, if this litigation is renewed, the Company will
recover any of its costs related to future asbestos-related
claims from Rugby or from insurance carriers or that such costs
will not have a material adverse effect on the Company's
business or financial condition.
Huttig Building Products, Inc. is one of the US's largest
distributors of millwork and building products. Huttig sells its
millwork and building products through more than 50 distribution
centers throughout the US. UK cement and lime firm RMC Group
owns more than 29% of Huttig.
ASBESTOS LITIGATION: Halliburton Co. to Begin Settlement Payouts
----------------------------------------------------------------
Halliburton Co. (NYSE: HAL) has completed the funding of the
asbestos and silica settlements for its subsidiaries that had
filed Chapter 11 proceedings. It is now gearing up to distribute
US$2.775 billion in cash and 59.5 million shares to thousands of
claimants.
The Houston-based oil services conglomerate said that final
installments of the cash portion of the settlement have been
placed in a trust. On Jan. 20, 2005, the company issued the
shares of common stock that have been contributed for the
benefit of future asbestos claimants. As a result of the
issuance of these new shares, the total number of shares of
common stock outstanding is now about 504 million.
Together, along with notes with a net present value expected to
be less than US$100 million, the payouts will settle all current
and future claims.
The shares will be sold over time as allowed by the settlement,
and proceeds forwarded to claimants will be the value of the
shares as of the day of sale.
Halliburton has collected to date over US$1.0 billion in cash
from various insurance carriers related to the asbestos and
silica settlements. "The funding and completion of this
settlement allows us to open a new chapter for Halliburton. We
are excited about the company's prospects in the coming years,"
said Dave Lesar, chairman, president and chief executive officer
of Halliburton.
The deal, first announced in 2002, involved pre-negotiated
bankruptcy filings in 2003 of engineering and construction
subsidiary KBR, DII Industries and six others affected by
asbestos claims. The subsidiaries emerged from bankruptcy last
month.
Halliburton inherited the claims when the company acquired
Dresser Industries Inc. for US$7.7 billion in 1998. Halliburton
announced in September that KBR, formerly known as Kellogg,
Brown & Root, may be sold or spun off if its stock performance
fails to improve after the conclusion of the asbestos
litigation.
Halliburton, founded in 1919, is one of the world's largest
providers of products and services to the petroleum and energy
industries. The company serves its customers with a broad range
of products and services through its Energy Services and
Engineering and Construction Groups.
ASBESTOS LITIGATION: Bill Introduction Delayed by Silica Issue
--------------------------------------------------------------
Senate Judiciary Chairman Arlen Specter, who is currently
pushing the bill for a US$140 billion trust fund to cover rising
asbestos claims, said its introduction had been delayed for a
week while senators discuss how to handle claims of injury by
silica.
Pennsylvania Republican Sen. Arlen Specter told reporters the
panel would hold a hearing Feb. 2 to try to establish medical
criteria for silica claims. He also said he hoped the committee
could vote on another bill to change the rules on class action
lawsuits the following day, Feb. 3.
Vermont's Sen. Patrick Leahy, a ranking democrat on the
judiciary committee, asked Sen. Specter to delay the
introduction of the bill while the senate works out medical
criteria for injuries caused by each mineral so as not to
compensate people twice.
"We've got a problem on mixed dust. The issue is, if you have a
trust fund to pay all people from asbestos, and then some of the
cases are allegedly being repackaged as silica cases, it's not
solving the problem," remarked Sen. Specter.
In recent years a deluge of asbestos injury claims have clogged
U.S. courts and bankrupted dozens of companies. Asbestos, an
insulator and fire-retardant mineral widely used by the
construction industry, has been proven to cause respiratory
diseases and even cancer.
Manufacturers have urged senators to write the trust fund law so
lawyers could not repackage asbestos claims into claims
involving other airborne fibers like silica.
But Sen. Leahy said in a statement that he was concerned that
some "last-minute" provisions in the bill would impair the legal
rights of victims of other airborne minerals in the workplace.
"Asbestos legislation should focus on compensating asbestos
victims and not denying the legal rights of victims of other
airborne dust, fiber or other minerals," Sen. Leahy added.
ASBESTOS LITIGATION: Jefferson County Judge Junks 3,700 Cases
-------------------------------------------------------------
Jefferson County Circuit Judge Lamar Pickard dismissed nearly
3,700 asbestos claims because the plaintiffs have no ties to
Mississippi, a defense attorney said earlier this week. Judge
Pickard ruled that another 1,500 cases related to the lawsuit
not be pursued for various reasons and the remaining 700 cases
be transferred to other counties in the state.
The Mississippi Supreme Court has recently ruled that plaintiffs
should not sue companies in Mississippi if the plaintiff does
not live in the county or was not exposed to asbestos there.
Marcy Bryan Croft, a Jackson lawyer who represents more than 75
defendants, said the cases involved about 5,900 claims filed in
Jefferson County by a Texas law firm. She added, "It's a victory
for all Mississippians. Our courts should not be burdened with
dealing with cases that have no connection to Mississippi."
It is estimated that there are about 100,000 asbestos cases
filed in Mississippi courts but only half the plaintiffs have
ties to the state.
Plaintiffs' attorneys have said such rulings inhibit the
public's ability to seek justice in areas that might be more
sympathetic to their injuries.
Asbestos is a mineral that was commonly used in insulation,
fireproofing materials, wallboard materials and automotive
brakes until the 1970s. Its use was scaled back after public
disclosure that it had a tendency to be easily friable be easily
inhaled, potentially causing lung scarring, breathing problems,
cancer or heart failure.
Judges in Jones, Holmes, Humphreys, Yazoo and Hinds counties
have recently ordered plaintiffs to provide the courts with
specific information.
The Class Action Reporter edition last Oct. 8 related how Judge
Pickard pressured plaintiffs' lawyers to provide basic
information about the claims brought against hundreds of
defendants. He cited a Mississippi Supreme Court ruling on Aug.
26, 2004 that said 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, Judge Pickard
said separate trials should be set for each plaintiff and cases
involving residents outside the county or state should be
transferred to other courts.
ASBESTOS LITIGATION: W.R. Grace Bears 4Q Loss With Claims Charge
----------------------------------------------------------------
W.R. Grace & Co., the bankrupt chemicals company, reported a
much wider fourth-quarter loss after taking a big charge for
asbestos liabilities and other claims under its Chapter 11
reorganization plan.
Its fourth-quarter net loss jumped to US$487.4 million, or
US$7.36 per diluted share, from US$49.5 million, or 75 cents per
share, a year ago.
The pretax charge amounted to US$570.7 million, the Columbia,
Maryland-based company said.
The charge included an increase in the recorded liability for
asbestos-related litigation, net of insurance recovery, of
US$476.6 million, and additional interest on pre-petition debt
and general unsecured claims of US$94.1 million.
Revenue rose 15.2 percent to US$589.1 million but was offset by
higher performance-related compensation and rising costs of
energy and raw materials, the company said.
Most of Grace's noncore liabilities and contingencies, including
asbestos-related litigation, are subject to compromise under the
ongoing Chapter 11 process, the company said.
Chapter 11 proceedings, including related litigation and the
claims valuation process, could result in claims that differ
from recorded amounts, W.R. Grace said.
As a result, pretax income from core operations fell 34.1
percent to US$33.8 million in the fourth quarter, compared with
a year earlier, hurt by higher performance-related compensation
and rising costs of energy and raw materials, the company said.
"Actions have been taken to improve supply chain productivity
and to recognize the higher costs in our future selling prices,"
said W.R. Grace's Chairman and Chief Executive Officer Paul
Norris.
Quarterly sales for the Davison Chemicals segment, maker of
refinery chemicals and silica-based products, rose 17.5 percent
to US$319.7 million, mainly reflecting sales volume increases,
improved economic conditions, and acquisitions.
Sales for the performance chemicals segment rose 12.7 percent to
US$269.4 million, helped by a favorable currency exchange and
sales of construction chemicals like cement additives and
waterproofing and fireproofing products.
Grace and 61 of its U.S. subsidiaries and affiliates, filed for
bankruptcy on April 2, 2001 under the weight of asbestos
lawsuits.
ASBESTOS LITIGATION: Hardie Faces Demands to Extend Deal to Asia
----------------------------------------------------------------
Embattled building products firm James Hardie Industries NV is
facing a potential flood of new asbestos compensation claims
from thousands of Asian victims after a landmark $1.5 billion
deal with Australian victims.
Union leaders and politicians have called on the company to pay
compensation in countries where it manufactured or sold asbestos
products, on the same terms as those agreed for Australian
victims.
Last month, Hardie signed a landmark compensation deal for
thousands of Australian victims. It relocated to the Netherlands
in 2001, leaving an earlier compensation fund seriously
underfunded and eventually forcing it to file for liquidation
last year. Hardie began phasing out asbestos production in
Australia in 1974 and ceased all asbestos manufacturing in 1987.
An investigation has revealed a potential additional liability
for Hardie of hundreds of millions of dollars, which could be
owed to Asian victims who have no idea as yet about asbestos
disease or that the Company is paying compensation in Australia.
In Indonesia, where the company ran two companies making pipes
and building products from the deadly fiber for 16 years, no
compensation has yet been paid. The Indonesian company that
acquired Hardie's factory outside Jakarta in 1985, PT Bakrie and
Brothers, is still producing asbestos goods under the brand name
Harflex.
However, the country's use of asbestos is surging, with 20,000
tons imported in the four months to April 2004, making Indonesia
a time bomb for asbestos diseases.
Making matters worse, Indonesian authorities lack the medical
technology to properly identify asbestos-related lung diseases,
including the cancer mesothelioma and the scarring disease
asbestosis.
By contrast, Australian asbestos victims get an average of
$250,000 in lump-sum compensation through the common law system.
Some court awards in particularly tragic cases involving younger
victims with children have reached $1 million.
Australian unions will demand Hardie meet its Asian obligations.
Doug Cameron, the national secretary of the Australian
Manufacturing Workers Union, said, "This Company has a duty of
care to all of its employees that it fatally inflicted with
asbestos diseases. I think it is an important issue for the
ACTU, which should take it up with the international union
movement."
A spokeswoman for NSW Premier Bob Carr said, "James Hardie
should be working with governments of those respective countries
on the issue of compensation."
Hardie spokesman James Rickards said the Company had no record
of any claim being made against it in Indonesia. "If we were to
receive such a claim, it would be assessed on a case-by-case
basis," he said.
Mr. Rickards confirmed, however, that the Company no longer has
a corporate presence in Indonesia, making it difficult for
Indonesians to process a claim.
Hardie chairwoman Meredith Hellicar held out some prospect
Hardie might pay Asian victims. She said she had not been
informed previously of the Indonesian question, but "as a matter
of general principle, if there are legitimate victims of
products manufactured by James Hardie, those companies will
certainly compensate."
ASBESTOS LITIGATION: NZ Hardie Victims Seek Similar Deal to AU
---------------------------------------------------------------
New Zealand victims and unions are urging James Hardie
Industries NV to offer payouts to the country's asbestos
sufferers, who presently receive less than $65 a week under a
government-funded compensation scheme, compared with lump sum
payouts of up to $1 million for Australian victims.
The New Zealand Government must either increase the state-funded
payouts or force Hardie to offer a deal similar to that agreed
in Australia, said Andrew Little, national secretary of the New
Zealand Engineering, Printing and Manufacturing Union.
"These are people who have suffered because of James Hardie's
products and their lives have been cut short or debilitated,"
Mr. Little said. "They should be properly compensated for that,
either by James Hardie or by the Government."
However, Hardie has washed its hands of the New Zealand issue,
with spokesman James Rickards saying it is a matter for the
Government in Wellington.
New Zealand's "no-fault" compensation system, unlike
Australia's, bans personal injury lawsuits, so its victims
cannot sue James Hardie.
"This is a gross injustice, and James Hardie is really guilty of
commercial genocide," said John Lehmann, whose father Ross died
of asbestos-related lung disease in 2003.
"Hardie's don't have to pay anything to New Zealanders," Mr.
Lehmann said. "And our Government offers victims an absolute
pittance -- which means Kiwis are much, much worse off than
Australians."
The state-run Accident Compensation Commission is engaged in a
legal battle to avoid paying lump sums, and is appealing against
a District Court decision ordering it to pay NZD98,500 to Mr.
Lehmann's mother Dawn.
The ACC has told Mrs. Lehmann she will have to repay the lump
sum if the High Court decides in the commission's favor, but the
Government is understood to have decided she will be allowed to
keep the money.
Doctors estimate up to 80 New Zealanders a year die of asbestos-
related diseases, such as mesothelioma and asbestosis,
contracted from products like the insulation materials made by
James Hardie at its south Auckland factory from 1939. But there
may be thousands more victims since hundreds of employees at a
time worked at the factory before it ceased asbestos production
in 1984, and Hardie products were used by thousands of workers
in other industries, as well as by home renovators and handymen.
Paying lump sums to all asbestos victims would cost about NZD150
million, according to ACC Minister Ruth Dyson. The Government
believes it would set a precedent for other workers, such as
medical professionals who contracted hepatitis C, to claim
massive payouts.
"Some people will always miss out unless you make a policy
retrospective," Ms. Dyson said, adding that victims could invest
their NZD68.77 a week allowance. "Even if a person is terminally
ill they can still capitalize (the allowance). They could get
around NZD20,000 over time."
But union advocates said most asbestos victims died within two
years of diagnosis. "Life is very short and very hard for these
people and the Government is not helping them," said barrister
Hazel Armstrong, who represents dozens of dying asbestos
victims.
James Hardie did not have to offer compensation to Kiwis because
they were covered by the ACC, said company spokesman James
Rickards. "It's really up to the Government. Our understanding
is that the ACC is there to provide appropriate levels of
compensation."
Some New Zealanders may be able to apply to the Australian fund,
the Medical Research and Compensation Foundation, if they
contracted asbestos diseases while working in Australia, or if
they became ill from non-occupational exposure.
Mr. Little will meet Australian union counterparts next week to
discuss bringing pressure on the Government and Hardie.
ASBESTOS LITIGATION: Appeal Court Overturns Ruling of Test Case
---------------------------------------------------------------
In a decision that could affect similar claims among thousands
of asbestos-related cases, the Appeal Court overturned an
GBP82,000 compensation payout for the death of a former shipyard
worker's wife.
Teresa Maguire, aged 67, contracted the disease through
secondary exposure to asbestos dust on husband James's work
clothes. Mr. Maguire worked as a boilermaker at the yard during
the 1960s. His wife died last May just weeks after being awarded
GBP82,000 damages against the company by the High Court.
The Appeal Court ruled that Harland and Wolff, which owned the
ship repair yard in Liverpool, was not legally liable for Mrs.
Maguire's death. The decision was overturned by a majority of
two to one.
The court said that given the state of knowledge about the risks
of secondary exposure to asbestos, the Company could not have
reasonably foreseen that she would suffer personal injury.
The Class Action Reporter previously disclosed in its Nov. 12,
2004 edition how relevant this case was since its ruling
signaled the overturning of the "date of knowledge" for the
first time. Before 1965, experts were unaware that secondary
exposure presented a risk.
The High Court had then ruled the employers could have foreseen
that wives who washed the clothes of their employees could also
be at risk. Providing changing rooms where employees could hand
in contaminated clothing for laundering could have reduced the
risk.
Until the 1960s, asbestos was widely used for insulation in
shipbuilding and other construction. Its legacy has been a range
of cancers and other lung diseases among workers who were
exposed to it.
ASBESTOS LITIGATION: Canada's DND Puts Up $2.1Mil for Home Tests
----------------------------------------------------------------
The Department of National Defense will be spending $2.1 million
to test military homes and buildings for asbestos in 26 cities
throughout the country.
Canadian Forces will be conducting extensive tests for asbestos
due to concerns about contamination due to asbestos, mostly sold
under the brand name Zonolite Attic Insulation.
The news comes less than a week after federal Housing Minister
Joe Fontana said the federal government has no plans to test
homes in First Nations communities for the asbestos-contaminated
insulation. He said Canadians shouldn't be overly concerned if
they have Zonolite in their attics and walls.
Winnipeg homeowners have been demanding that Ottawa help pay for
the removal of the dangerous material.
In April, Health Canada issued a warning to Canadians that they
shouldn't disturb the insulation linked to a cancer cluster on a
Manitoba reserve. The statement added that the asbestos in
Zonolite, if disturbed, can cause scarring of the lungs and some
forms of cancer when inhaled in significant quantities. It is
estimated that up to 200,000 to 300,000 Canadian homes have this
type of insulation.
Meanwhile, Canada Mortgage and Housing says it has no plans to
implement special rules to ensure home buyers are told if a
house has vermiculite insulation containing asbestos.
CMHC officials say the organization will not treat concerns over
Zonolite insulation the same way it handled concerns about urea-
formaldehyde insulation (UFFI).
After Health Canada released warnings that UFFI could be a
health hazard, the federal government banned the substance. The
CMHC then required people selling their homes to sign a
declaration indicating if their homes had UFFI.
CMHC spokesman Peter DeBarros said, "Health Canada is advising
that there's currently no evidence of risk to one's health if
the insulation is sealed behind the wallboards and floorboards
and if left undisturbed, and so for that reason there is no
requirement for disclosure as part of CMHC's mortgage insurance
policies."
Mr. DeBarros said CMHC has no plans to test for asbestos in the
insulation of the 10,000 homes it owns across the country.
ASBESTOS ALERT: Patients Move Out of Center Due to Asbestos Find
----------------------------------------------------------------
After asbestos was detected during recent renovations, several
patients at Kincardine's South Bruce Grey Health Center in
Scotland were moved to beds at other sites last weekend.
Paul Davies, president and chief executive officer of the health
center, said the discovery of asbestos in the ceiling insulation
during the construction of a new operating room on Jan. 14 meant
the room and surrounding area had to be sealed off.
Several patient rooms had to be taken out of service, requiring
a reduction of beds. Instead of the 33 beds normally available
for the patients, the hospital was down to 25. To reduce the
impact of this situation, the health center will be increasing
some two-bed wards to three-bed wards. If needed, the hospital
could send patients to other South Bruce Grey Health Center
sites.
Mr. Davies said five or six patients were being moved to sites
at the Chesley, Durham and Walkerton hospitals to ensure that
enough beds are kept available at the Kincardine site for
patients with acute care needs.
Mr. Davies said all of the patients were moved with their
consent, although one family member of a chronic care patient,
said he isn't happy about having his relative moved, but he can
live with it because he has written confirmation that his
relative will be taken back into the care at the Kincardine site
in four weeks time.
"The affected area has been sealed off and a special ventilation
system for that area installed," he said, noting that work on
the clean-up was to start Jan. 24. "It isn't dangerous unless
you tamper with it, and the area was sealed off as soon as the
asbestos was found."
Mr. Davies said it will take four weeks and an additional
$60,000 to clean the asbestos out of the ceiling. He gave
assurances that the situation is under control and isolated, and
there is absolutely no danger to either patients or staff.
The asbestos was discovered during construction of a new
$809,000 project, which includes a new operating room with
surrounding support areas.
ASBESTOS ALERT: UK Fisherman Warns Others to Beware of Asbestos
---------------------------------------------------------------
A Former Grimsby fisherman, diagnosed last September with
asbestos-related lung cancer, is now urging other fishermen to
get physically checked, since he believes he contracted the
disease by exposure to asbestos on the boats.
David Smith, aged 45, claims to be the youngest trawlerman in
the United Kingdom to be diagnosed with pleural mesothelioma, a
cancer of the cells that make up the lining around the outside
of the lungs and inside of the ribs.
Given only 18 months to live, the former deckhand who fished out
of Grimsby for 15 years on Ross Group boats including the
Panther, Lynx and Leopard, wants other fisherman to be aware of
the dangers of asbestos. Of Parker Street, Cleethorpes, he
started on the boats when he left Lindsey School in 1975. But
when the industry declined, he moved to fish in Newquay,
Cornwall, and later out of Brixham, Devon, and then Penzance.
Mr. Smith said, "Asbestos was all over the boats. It was on the
laggings, on the pipes and there were no warnings about it then.
And, as fishermen, we were all in confined spaces.
"I have been a fisherman all my life and to have to stop is
hard. When the doctor told me, he said it was all in God's
hands. They can estimate how long it has lain dormant; they said
it had been there for about 25 years," said Mr. Smith.
However, the organization that hired Mr. Smith no longer exists.
A firm of solicitors is investigating on behalf of Mr. Smith and
would like to speak to any trawlermen who were on the Ross
Panther, Lynx or Leopard between 1975 and 1979. The number to
contact is 0800 591999.
ASBESTOS ALERT: MD School Shuts Down After Detection of Asbestos
----------------------------------------------------------------
Steuart Hill Academy was shut down earlier this week after
health inspectors found elevated levels of asbestos in the
school, which had closed one day after a fire last week that had
started in the basement.
City schools officials sent staff and pupils home after
announcing that the school would be closed because of a lack of
heat. But officials had actually decided to shut down the
heating and ventilation system to avoid spreading asbestos found
in the auditorium and another room.
After the fire last week, pupils were asked to stay home while
staff members were told to report to a nearby middle school.
When Steuart Hill, west of downtown, reopened the next day,
teachers and pupils detected a burnt smell throughout the
building. Ed Pietroski, a fifth-grade teacher, said he notified
the city Health Department.
"They put us back in there knowing full well not all the tests
were conducted," Mr. Pietroski said.
Carlton G. Epps, the system's chief operating officer, said
health inspectors have not determined whether asbestos abatement
is needed or when the school will reopen.
ASBESTOS ALERT: NZ Firefighters Warn of Harmful Fumes
-----------------------------------------------------
New Zealand firefighters are warning people in the immediate
vicinity of a fire, which destroyed a derelict building, of
dangerous fumes that could contain asbestos fibers.
A big blaze has destroyed a corner block of old Christchurch
that street kids had used as a drug hangout. Firefighters say it
was a fire waiting to happen after pulling one kid from the
derelict Cashel Chambers.
"I don't think she knew what day it was. This place is sort of
frequented by that type of person -- a lot of glue-sniffers --
people like that," says Deputy Chief Fire Officer Greg Crawford.
And the scene is still too unsafe for firefighters to enter.
"It's just not worthwhile committing manpower into the building
-- it's just far too dangerous," says Mr. Crawford.
The Cashel Chambers are just two blocks from the center of
Christchruch, a collection of listed heritage buildings
including the original farmers co-op dating back 113 years, and
the forerunner to the modern day department store.
"With a building of this nature and this age you can never not
assume there's asbestos involved," says fire incident controller
Steve Barclay.
Heavy machinery has been called in to push walls down before
they tumble with firefighters hoping they won't find bodies in
the rubble.
ASBESTOS ALERT: WI DNR Cites Hotel Owners for Removal Violations
----------------------------------------------------------------
Wisconsin's Department of Natural Resources has notified the
owners of downtown Milwaukee's former Hotel Wisconsin of
asbestos removal violations that were committed while converting
the hotel.
Hotel Wisconsin originally opened in 1913 in Milwaukee.
Wisconsin Hotel Co. bought the hotel in 1997 and made plans to
convert it into a 70-unit apartment building, with offices on
the upper levels and commercial space on the street.
Wisconsin Hotel Co. LLC, a group of Miami Beach, Fla. investors
that own the 12-story building, bought the hotel in 1997. Those
violations occurred in October when materials containing
asbestos were improperly removed from the building, the agency's
notice says.
During an Oct. 12 inspection, asbestos emissions "were observed
several times on site," according to the agency notice. The
notice says proper controls weren't used during the removal of
asbestos.
State regulations require asbestos to be dampened and removed
carefully to prevent exposure.
Representatives of the building's owners were scheduled to
attend a meeting with agency officials to discuss the notice.
One of the owners, Oscar Behncke, said the project would cost
US$12 million. To prepare for the conversion, the hotel's 45
long-term residents, along with three businesses on the street
level, were evicted.
Work on the redevelopment project stopped in September,
according to the state notice. Work later resumed, said Saji
Villoth, an inspector with the Department of Natural Resources.
However, except for asbestos removal, no building permits have
been issued in connection with the project, city Department of
Neighborhood Services records say.
The Hotel Wisconsin opened in 1913 and was among the city's
oldest hotels when it closed.
ASBESTOS ALERT: CT DEP Pushes US$10T Fine for Removal Violation
---------------------------------------------------------------
Five companies in the Connecticut River Valley have been fined a
total of nearly US$28,000 by the state Department of
Environmental Protection for various environmental violations.
Two of these companies were discovered to have committed
violations while doing asbestos removal operations.
The largest fine, US$10,000, was issued to Norman Zalesky, doing
business as Williamsburg Home Improvement of 37 Chesterfield
Road in Williamsburg, for violations during an asbestos removal
project in Northampton last year, according to the state.
"Just because all these violations happened in the valley does
not necessarily mean there is any greater threat in the valley.
It's just that we are making an effort to make our enforcement
actions known to the public in this region," said Eva V. Tor, a
spokeswoman for the state agency's regional office in
Springfield.
Mr. Zalesky, of Williamsburg, was fined after state inspectors
performed an inspection of an asbestos removal operation on
North Bridge Street in Northampton in April 2004. The contractor
failed to properly remove and contain asbestos cement siding.
Zalesky will pay US$4,000 in penalties with the remaining
US$6,000 suspended during a two-year probationary period.
Other violations were issued to companies in Springfield,
Holyoke and Northampton.
Other penalties included US$2,000 for excess emissions of
nitrous oxide due to equipment problems; US$5,750 for air
quality violations at a coal-fired power plant; US$4,600 for air
quality violations at unapproved spraying at an electro-optical
office; and a US$5,750 settlement for violating regulations
governing air pollution and hazardous waste at a finishing firm.
ASBESTOS ALERT: UK Council Denies Health Risk at Elstree Studios
----------------------------------------------------------------
Hertsmere Council denied a local newspaper's report that claimed
an asbestos dump was situated next to Elstree Studios,
potentially-causing cancer to celebrities in the Big Brother
house due to airborne fibers.
The Daily Star Sunday's tabloid article stated that fathers'
rights protestors who stormed the site a couple of weeks ago
disturbed the soil on top of the dump. The council denied that
the protestors had been anywhere near the site.
The council admits however that asbestos is buried next to the
studios but that it is deep underground and not a health risk.
The material was buried on fenced-off land in the 1950s, when
MGM, who owned the studios, filled in parts of the site with
rubble and building material from the surrounding area.
A council spokesman said, "This is just scare mongering by the
tabloid press -- it is irresponsible journalism and their
suggestions of cancer scares have been completely disproved by
scientific testing."
He said that independent tests on the contaminated land are
carried out as "an extra security measure" and show that the
site is suitable for "return to normal use." He added that the
damp British weather meant that the chances of fibers becoming
airborne were extremely low.
The reporter of the story, Jonathan Corke, stands by his
statements. He said, "The facts are plain and simple. It has
been proven that there is an asbestos dump situated next to the
studios and it is in the public interest to know this. There is
a risk, however much they play it down and deny it, and it is my
responsibility as a reporter to let the public know that."
But Neville Reid, director of Elstree film studios, said the
report was a "complete fabrication."
"There are tiny amounts of low grade asbestos, but it's securely
fenced off and there is no access allowed by anybody at any
time, which is strictly monitored by studio staff. No excavation
is allowed on that site at all," Mr. Reid added.
Mr. Reid said the long-term plan includes clearing up the site
while adhering strictly to health and safety requirements.
ASBESTOS ALERT: Widow Sues UK Dept of Transport for Negligence
--------------------------------------------------------------
A Wallington widow is suing her husband's former employer, the
Department of Transport, for negligence leading to his premature
death due to asbestos-related cancer.
Jean Lock, of Bute Gardens West, Wallington, is seeking up to
GBP150,000 damages following the death of her husband Henry at
the age of 59.
According to a writ issued at London's High Court, Mr. Lock was
exposed to substantial amounts of asbestos while working as a
scientific assistant at the Fire Research Station from 1959 to
1963. His tasks included installing and removing asbestos boards
in rooms used for experiments. This job often saw him covered in
asbestos dust at various times during his work.
Mrs. Lock accuses the Department of Transport of exposing her
husband to a major risk of fatal injury without warning him of
the risks he ran or providing breathing apparatus or
ventilation.
ASBESTOS ALERT: NY Broker Pleads Guilty to Falsifying Documents
---------------------------------------------------------------
A Western New York businessman pleaded guilty last week in
Onondaga County Court to falsifying documents allowing asbestos-
contaminated construction debris to be dumped illegally at a
landfill in Steuben County. He was sentenced to a three-year
conditional discharge and fined US$1,000.
Christopher McCune, aged 40, of Niagara Falls, pleaded guilty
before Judge William Walsh to a felony count of falsifying
business records.
The charge stemmed from the demolition of a former monastery in
Sullivan County in September 2001, said Lt. James Masuicca, of
the state Environmental Conservation Police.
The paperwork for the project was filed locally because Sabre
Demolitions, of Baldwinsville, was demolishing the structure
that had asbestos in it, authorities said. Because the building
had asbestos in it, the project's construction debris had to be
considered "regulated waste" that had to be disposed of in an
approved landfill.
Mr. McCune, of Earthwatch Waste Systems of Buffalo, was the
broker who arranged for the debris to be dumped at the Hakes
Landfill in Campbell in Steuben County. That landfill was not
approved to handle regulated waste, but Mr. McCune falsified the
paperwork to conceal the asbestos-laden nature of the debris,
Lt. Masuicca said.
Ricelli Transportation ended up dumping more than 20 truckloads
of debris at the landfill as a result of the falsified
paperwork.
There was no indication anyone from the demolition company, the
trucking company that shipped the debris or the landfill was
aware of the degree of asbestos contamination.
Assistant District Attorney Paul Berry said cost was a motive in
the crime as it cost US$54 a ton to dispose of regular
construction debris and US$85 a ton to dispose of asbestos-
contaminated debris. Asbestos may have been a small part of the
overall debris in this case, but it was mixed in and the higher
disposal cost would have been required as a result, he said.
The U.S. Environmental Protection Agency investigated the case
based on a complaint phoned in from a worker at the demolition
site, officials said.
Company Profile:
Earthwatch Waste Systems, Inc.
Corporate and Sales Office
4950 Genesee St, Suite 170
Buffalo, NY 14225
Phone: (716) 681-6433
Fax: (716) 681-6165
Description:
Earthwatch Waste Systems, Inc. offers environmentally sound
waste management, transportation logistics and recycling
services to customers in both the US and Canada. It provides
proper, safe and cost-effective management of hazardous and non-
hazardous wastes.
ASBESTOS ALERT: Bodycote to Pay Settlement for Improper Handling
----------------------------------------------------------------
Dallas, TX-based Bodycote Thermal Processing, Inc. will pay
US$42,500 to settle a case involving local violations of state
asbestos handling regulations, announced Attorney General Peg
Lautenschlager.
The violations occurred at a facility Bodycote formerly operated
at 4210 Douglas Street, Racine, Wisconsin.
The complaint alleged that in October 2003, Bodycote performed
renovation work at its Douglas Street facility in anticipation
of the sale of the industrial building. As part of the planned
renovation work, the Company determined that it would remove and
recycle for scrap metal a number of large industrial ovens. The
recycling began by the employees using a forklift to transport
two of the ovens outside of the facility. The ovens were
subsequently loaded into a "dumpster truck" for transport to a
yard.
The two ovens removed from Bodycote's Douglas Street facility
contained friable asbestos-containing insulating material.
During removal, one of the ovens fell off the forklift and was
damaged. The damage caused some of the asbestos-containing
material to become dislodged from the oven and fall to the
floor. Some of the asbestos-containing insulation was left on
the floor and was later driven over by vehicular traffic.
"When asbestos is not properly removed, the hazard to human
health and to the environment can be serious, even deadly," Ms.
Lautenschlager said. "The Wisconsin Department of Justice will
continue to enforce our tough laws on asbestos removal
requirements."
The Department of Justice filed the lawsuit at the request of
the Department of Natural Resources. Bodycote cooperated with
the DNR in the investigation and proper clean-up of the
asbestos-containing debris discovered at the site.
Racine County Circuit Court Judge Faye M. Flancher approved the
settlement on January 18, 2005.
Assistant Attorney General Jeff Gabrysiak prosecuted the case
for the Department of Justice.
Company Profile:
Bodycote Thermal Processing, Inc.
5001 L.B.J. Fwy.
Dallas, TX 75244-6120
Phone: 214-904-2420
Fax: 214-904-2424
http://www.bodycote.com/
Description:
Bodycote Thermal Processing (formerly Bodycote Lindberg), a
subsidiary of UK-based Bodycote International plc, heat-treats
metal components to improve their mechanical properties,
durability, and wear resistance. The Bodycote Group offers vital
metallurgical and materials testing services with over 235
facilities in 22 countries.
ASBESTOS ALERT: NY Supreme Court Dismisses Lawsuit V. Hahn Inc.
---------------------------------------------------------------
The New York Supreme Court on Jan. 12, 2005 ruled in favor of
the defendant, Hahn Automotive Warehouse Inc., which stood
against a claim alleging personal injury and death due to
exposure to asbestos products from the 1940s through the 1980s.
Kelley Gerhart, the executor of Thomas Gerhart's estate, named
and identified around 25 other defendants including Borg-Warner
Corporation, Daimlerchrysler Corp., Federal Mogul Products Inc.,
and General Motors Corp. These companies allegedly sold or
distributed asbestos products and therefore contributed to Mr.
Gerhart's premature death.
Douglas von Oiste, Esq., of Weitz & Luxenberg, P.C., represented
the plaintiff and Gregory G. Broikos, Esq., of Woods Oviatt
Gilman LLP, represented the defendant, Hahn Automotive
Warehouse, Inc., before Judge Raymond Cornelius.
In essence, the claim against these defendants is based upon Mr.
Gerhart's purchases of replacement brakes for several trucks he
used in connection with a drilling business. To support this,
invoices from the 1960s containing the name "Finn's Auto Parts
Center" were presented to the court.
Finn's Auto Parts is not a separate legal entity, but rather,
the d/b/a of an auto parts store previously operated by Finn of
Canandaigua, Inc. On May 1, 1997, Hahn entered into an asset
purchase agreement with Finn of Canandaigua, Inc., involving
Finn's Auto Parts, and this forms the basis for the claim
against Hahn on a theory of successor liability.
Hahn made a motion for summary judgment to dismiss the
complaint, which contains causes of action based upon claims of
negligence, failure to warn, breach of warranty, and product
liability. Hahn contended that under existing New York law,
liability should not be imposed against them for the previous
sale, by Finn's Auto Parts, of brake products, which resulted in
the plaintiff's exposure to asbestos.
A review of the asset purchase agreement, dated May 1, 1997,
revealed that Hahn acquired all of the fixed assets, inventory
of automotive parts and supplies, goodwill, list of customers,
and "related files and such records as are reasonably necessary
for the continuation of the business" of Finn's auto Parts.
Hahn also received permission to use the name "Finn's Auto
Parts" while the seller agreed to discontinue use of the name
after that agreement.
The conditions of closing included the negotiation of a
satisfactory lease for the property, and entering into an
employment agreement with a store employee. However, under this
purchase agreement, the purchaser did not assume any liabilities
of the seller.
Court documents also noted that following the purchase, Hahn
began to operate Finn's Auto Parts in the same manner as Hahn's
other stores. In addition, Hahn replaced the prior store
supervisor, used its own invoices, and after several years,
moved to a new location.
On these grounds, the Supreme Court ordered that the motion for
summary judgment be granted, dismissing the complaint against
the automotive company.
Company Profile:
Hahn Automotive Warehouse, Inc.
415 W. Main St.
Rochester, NY 14608
Phone: 585-235-1595
Fax: 585-235-8615
http://www.hahnauto.com/
Description:
Hahn Automotive Warehouse, Inc. distributes aftermarket auto
parts to independent traders, more than 80 company-owned
Advantage Auto Stores, and professional installers. It runs more
than 20 distribution centers in the East and Midwest.
New Securities Fraud Cases
CITADEL SECURITY: Lerach Coughlin Lodges Securities Suit in TX
--------------------------------------------------------------
The law firm Lerach Coughlin Stoia Geller Rudman & Robbins LLP
("Lerach Coughlin") initiated a class action in the United
States District Court for the Northern District of Texas on
behalf of purchasers of Citadel Security Software Inc.
("Citadel") (NASDAQ:CDSS) common stock during the period between
February 12, 2004 and December 16, 2004 (the "Class Period").
The complaint charges Citadel and certain of its officers and
directors with violations of the Securities Exchange Act of
1934. Citadel develops and markets computer security and privacy
software. Its information technology (IT) security computer
software products include security and management solutions for
networks and personal workstations designed to secure and manage
personal computers and local area networks.
The complaint alleges that during the Class Period, defendants
made false and misleading statements about the Company's
business and prospects. The facts, known by each of the
defendants but concealed from the investing public during the
Class Period, were that:
(1) there was not "growing demand" for the Company's
Hercules products in either the public or commercial
(private) sectors;
(2) the Company maintained the appearance of growing
prospects (projections) for the sole purpose of
inducing third parties to finance the Company's cash-
starved operations and allow the Company's executives
to sell their own shares at artificially inflated
prices; and
(3) as a result of (a)-(b) above, the defendants' claims as
to the Company's business prospects and projections of
full year 2004 revenue of $18.5-$21 million and net
income during the second half of 2004 of $1.0-$2.0
million were grossly exaggerated.
On December 17, 2004, after defendants had reaped $2.9 million
in insider trading proceeds, Citadel revealed its revenue for
the full year 2004 would be between $15.2 million and $16.0
million, well below the previous guidance of full-year revenue
of $18.5 to $21 million. As a result, the Company would not meet
its previously released net income guidance for the second half
of 2004 of $1.0 million to $2.0 million. On this news, Citadel
shares plummeted over 40%, to close at $2.49 per share.
For more details, contact William Lerach or Darren Robbins of
Lerach Coughlin by Phone: 800-449-4900 or 619-231-1058 by E-
mail: wsl@lerachlaw.com or visit their Web site:
http://www.lerachlaw.com/cases/citadelsecurity/.
MERRILL LYNCH: Finkelstein Lodges Securities Fraud Suit in CA
-------------------------------------------------------------
The law firm of Finkelstein & Krinsk, LLP, initiated a class in
the United States District Court for the Southern District of
California on behalf of purchasers of Variable Annuity Insurance
Products ("Variable Annuities") from Merrill Lynch & Co., Inc.
("Merrill Lynch") between January 1, 1990 and January 21, 2005
(the "Class Period").
The complaint alleges that during the Class Period, Merrill
Lynch made false and misleading statements and omitted material
facts concerning its undisclosed financial interests with third
party suppliers of annuity contracts. The third parties paid
monies and other incentives to have Variable Annuities steered
to them by Merrill Lynch without properly disclosing the
preexisting arrangement to its customers.
A variable annuity is an insurance contract with characteristics
causing it to be treated as an "investment" under the Securities
Act of 1933. A Variable Annuity contract generally provides that
the purchaser agree to a simple "lump sum" premium or scheduled
fixed premiums for a pre-set number of years. The premiums are
deposited into a separate account after deducting expenses, fees
and charges specified in the contract. The premiums thus
collected in the annuitant's separate account are available for
tax deferred investment in one or more portfolios (called sub-
accounts). Upon maturity of the annuity, the annuitant receives
payment from the accumulated value in such amounts and upon the
terms specified in the underlying investment contract.
Rather than providing independent and unbiased services for
clients wanting to purchase Variable Annuities, Merrill Lynch
maintained secret contingent fee sharing agreements with a
number of insurance company underwriters of annuity contracts.
These activities cause insurance companies to collect higher
premiums than would be paid absent these arrangements and result
in Merrill Lynch customers paying inflated premiums for the
Variable Annuities.
Plaintiff seeks to recover damages on behalf of all purchasers
of Variable Annuities from Merrill Lynch during the Class
Period. Plaintiff is represented by the below firms. These law
firms, working on a contingent fee basis, have extensive
expertise in prosecuting investor class actions and substantial
experience with financial fraud.
For more details, contact Amy Lepine, Esq. of Finkelstein &
Krinsk, LLP by Phone: 877-493-5366 by Fax: 619-238-5425 or by E-
mail: ajl@classactionlaw.com OR Ronald A. Marron, Esq. of the
Law Office of Ronald A. Marron, APLC by Phone: 619-685-6969 by
Fax: 619-690-0983 or by E-mail Ron.Marron@cox.net OR Frederick
Schenk, Esq. of Casey, Gerry, Reed & Schenk by Phone: 619-238-
1811 by Fax: 619-544-9232 or by E-mail: fschenk@cglaw.com and
Stephen Basser, Esq. of Barrack, Rodos & Bacine by Phone: 619-
230-0800 by Fax: 619-230-1874 or E-mail: sbasser@barrack.com.
MORGAN STANLEY: Finkelstein & Krinsk Lodges CA Securities Suit
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The law firm of Finkelstein & Krinsk, LLP, initiated a class
action in the United States District Court for the Southern
District of California on behalf of purchasers of Variable
Annuity Insurance Products ("Variable Annuities") from Morgan
Stanley DW, Inc., or Morgan Stanley, Inc. ("Morgan Stanley")
between January 1, 1990 and January 20, 2005 (the "Class
Period").
The complaint alleges that during the Class Period, Morgan
Stanley made false and misleading statements and omitted
material facts concerning its undisclosed financial interests
with third party suppliers of annuity contracts. The third
parties paid monies and other incentives to have Variable
Annuities steered to them by Morgan Stanley without properly
disclosing the preexisting arrangement to its customers.
A variable annuity is an insurance contract with characteristics
causing it to be treated as an "investment" under the Securities
Act of 1933. A Variable Annuity contract generally provides that
the purchaser agree to a simple "lump sum" premium or scheduled
fixed premiums for a pre-set number of years. The premiums are
deposited into a separate account after deducting expenses, fees
and charges specified in the contract. The premiums thus
collected in the annuitant's separate account are available for
tax deferred investment in one or more portfolios (called sub-
accounts). Upon maturity of the annuity, the annuitant receives
payment from the accumulated value in such amounts and upon the
terms specified in the underlying investment contract.
Rather than providing independent and unbiased services for
clients wanting to purchase Variable Annuities, Morgan Stanley
maintained secret contingent fee sharing agreements with a
number of insurance company underwriters of annuity contracts.
These activities cause insurance companies to collect higher
premiums than would be paid absent these arrangements and result
in Morgan Stanley customers paying inflated premiums for the
Variable Annuities.
Plaintiff seeks to recover damages on behalf of all purchasers
of Variable Annuities from Morgan Stanley during the Class
Period. Plaintiff is represented by the below firms. These law
firms, working on a contingent fee basis, have extensive
expertise in prosecuting investor class actions and substantial
experience with financial fraud.
For more details, contact Amy Lepine, Esq. of Finkelstein &
Krinsk, LLP by Phone: 877-493-5366 by Fax: 619-238-5425 or by E-
mail: ajl@classactionlaw.com OR Ronald A. Marron, Esq. of the
Law Office of Ronald A. Marron, APLC by Phone: 619-685-6969 by
Fax: 619-690-0983 or by E-mail Ron.Marron@cox.net OR Frederick
Schenk, Esq. of Casey, Gerry, Reed & Schenk by Phone:
619-238-1811 by Fax: 619-544-9232 or by E-mail:
fschenk@cglaw.com and Stephen Basser, Esq. of Barrack, Rodos &
Bacine by Phone: 619-230-0800 by Fax: 619-230-1874 or E-mail:
sbasser@barrack.com.
SILICON STORAGE: Schiffrin & Barroway Lodges CA Securities Suit
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The law firm of Schiffrin & Barroway, LLP initiated a class
action lawsuit in the United States District Court for the
Northern District of California on behalf of all securities
purchasers of the Silicon Storage Technology (Nasdaq: SSTI)
("SST" or the "Company") between March 30, 2004 and December 20,
2004, inclusive (the "Class Period").
The complaint charges SST, Bing Yeh, Jack K. Lai, Isao Nojima,
and Yasushi Chikagami 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 known to defendants or
recklessly disregarded by them:
(1) that the demand for the Company's products was
materially declining;
(2) that the Company's margins were being significantly
eroded due to excess inventory that were in the
channels;
(3) that the Company was experiencing greater competition
across all segments of business, which lead to
significant decreases in the prices of SST products and
also caused a significant erosion of the Company's
margins;
(4) that as a result of the above, the Company's revenue
and earnings were materially decreasing; and
(5) that the defendants' positive statements concerning the
Company were lacking in any reasonable basis when made.
On December 20, 2004, after the market closed, SST announced
today that its revenue in the fourth quarter was expected to be
between $102 and $108 million versus previous guidance of $120
to $130 million. News of this shocked the market. Shares of SST,
on December 21, 2004, fell $1.02 per share, or 14.55 percent, to
close at $5.99 per share (down from $7.01 per share on December
20, 2004) on unusually heavy trading volume.
For more details, contact Marc A. Topaz, Esq. or Darren J.
Check, Esq. of Schiffrin & Barroway, LLP by Mail: Three Bala
Plaza East, Suite 400, Bala Cynwyd, PA 19004 by Phone:
1-888-299-7706 or 1-610-667-7706 Or by E-mail:
info@sbclasslaw.com.
SILICON STORAGE: Wolf Popper Lodges Securities Fraud Suit in CA
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The law firm of Wolf Popper LLP initiated a securities fraud
lawsuit against Silicon Storage Technology, Inc. ("Silicon
Storage") (Nasdaq: SSTI) and certain of its officers and
directors, on behalf of all purchasers of Silicon Storage
securities on the open market from March 30, 2004 through
December 20, 2004. The action was filed in the United States
District Court for the Northern District of California.
The complaint alleges that during the Class Period, defendants
caused Silicon Storage to issue numerous press releases and
quarterly reports touting the Company's financial performance
and prospects. However, unbeknownst to the market and contrary
to the Company's public statements, defendants were aware of the
competitive market that was beginning to emerge in the flash
memory sector and the impact this was having on chip prices.
Despite this knowledge, defendants made false and misleading
statements about the Company's financial prospects and growth
and failed to disclose that:
(1) the Company's sales and margins were being materially
impacted by Macronix, Hynix and Intel actively lowering
average selling prices;
(2) the Company was not on track to achieve Q4
profitability, but rather losses;
(3) the Company's gross margin projections were
significantly overstated;
(4) the Company's accounting for inventory during the Class
Period was false and misleading; and
(5) as a result, the Company's Q4 revenue estimates of
$120- $130 million and income estimates of $0.10 to
$0.14 were grossly inflated and the Company's reported
assets were materially overstated.
Defendants' improper actions were revealed after the markets
closed on December 20, 2004, when the Company issued a press
release reducing its previous guidance. The press release
stated, in part, that "revenue in the fourth quarter is expected
to be between $102 and $108 million versus previous guidance of
$120 to $130 million. Due to current market conditions, the
company expects to record an inventory charge of between $20 and
$25 million for excess inventory and to write certain products
down to their current estimated market values."
As a result of the foregoing disclosure, on December 21, 2004,
Silicon Storage shares dropped 14.5% to close at $5.99 per share
on heavy volume of 11.9 million shares, as compared to a closing
price of $7.01 per share on volume of 1.6 million just the
previous day.
On January 18, 2005, the Company announced that on December 21,
2004, it was notified that the SEC was conducting an informal
inquiry regarding trading of shares of Silicon Storage common
stock prior to the Company's December 20, 2004 announcement. The
Company revealed that it believed the inquiry involved trading
in shares of common stock by an executive officer and a
director.
For more details, contact Renee L. Karalian, Esq. of Wolf Popper
LLP by Mail: 845 Third Avenue, New York, NY 10022 by Phone:
212-451-9621 or 877-370-7703 by Fax: 212-486-2093 or 877-370-
7704 by E-mail: irrep@wolfpopper.com or visit their Web site:
http://www.wolfpopper.com.
SIPEX CORPORATION: Schatz & Nobel Lodges Securities Suit in CA
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The law firm of Schatz & Nobel, P.C. initiated a lawsuit seeking
class action status in the United States District Court for the
Northern District of California on behalf of all persons who
purchased the publicly traded securities of Sipex Corporation
(NasdaqNM: SIPX) ("Sipex") between April 10, 2003 and January
20, 2005 (the "Class Period").
The Complaint alleges that Sipex violated federal securities
laws by issuing false or misleading public statements.
Specifically, the Complaint alleges that Sipex was
inappropriately recognizing revenue on sales for which price
protection, stock rotation and/or return rights were granted,
and that its financial results were in violation of Generally
Accepted Accounting Principles ("GAAP"). On January 20, 2005
Sipex announced that it may restate its financial statements for
the fiscal year 2003 and for the first three quarters of 2004
due to the possible improper recognition of revenue during those
periods. On this news, Sipex shares fell from a close of $3.84
per share on January 20, 2005, to close at $2.94 per share on
January 21, 2005.
For more details, contact Wayne T. Boulton by Phone:
(800) 797-5499 by E-mail: sn06106@aol.com or visit their Web
site: http://www.snlaw.net.
TASER INTERNATIONAL: Zwerling Schachter Lodges Stock Suit in AZ
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The law firm of Zwerling, Schachter & Zwerling, LLP ("Zwerling
Schachter") initiated a class action lawsuit in the United
States District Court for the District of Arizona on behalf of
all persons and entities who purchased the common stock of TASER
International Inc. ("TASER" or the "Company") (Nasdaq: TASR)
between October 19, 2004 and January 10, 2005, inclusive. The
deadline to file a motion seeking to be appointed lead plaintiff
is March 11, 2005.
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, it alleges that the
defendants failed to disclose and misrepresented the following
material adverse facts known to defendants or recklessly
disregarded by them that:
(1) the Company misled the public about the safety of its
TASERs;
(2) studies conducted on the Company's TASER devices were
inconclusive as to safety,
(3) even after it was disclosed that more than 70 people
had died in North America in TASER-related incidents,
the Company strongly asserted that its TASER devices
were safe, in order to maintain profitability;
(4) the defendants accelerated a deal in the fourth quarter
of 2004 with one of the Company's distributors, in
order to book the revenue, so TASER could meet its
sales goals for the quarter and did not have to report
its first quarter-to-quarter revenue decline in nearly
two years;
(5) delays in sales were due to the fact that further
testing of competitors products were necessary;
(6) the Company's revenues and earnings would be negatively
impacted once the truth of these studies was disclosed
and
(7) as a result, TASER lacked any reasonable basis for any
statements it made regarding profitability and safety.
On January 6, 2005, after the U.S. markets closed, TASER
announced that it was cooperating with an informal inquiry
letter from the SEC regarding the safety of TASER products and a
recent order received from one of the Company's distributors.
Shares of TASER fell $4.90 per share, or approximately 17%, on
January 7, 2005, to close at $22.72 per share. Then on January
10, 2005, TASER shares fell another $2.67 per share or
approximately 11%, closing at $20.05 per share. On January 11,
2005, TASER released a letter to its shareholders and customers
regarding the SEC investigation and the general state of the
Company. Following the announcement, shares of TASER closed at
$14.10 per share.
For more details, contact Shaye J. Fuchs, Esq. or Jayne Nykolyn
of Zwerling Schachter by Phone: 1-800-721-3900 or by E-mail:
sfuchs@zsz.com or jnykolyn@zsz.com.
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