/raid1/www/Hosts/bankrupt/CAR_Public/050214.mbx
C L A S S A C T I O N R E P O R T E R
Monday, February 14, 2005, Vol. 7, No. 31
Headlines
ABERCROMBIE & FITCH: MALDEF Publicizes $40M CA Settlement Fund
ABERCROMBIE & FITCH: WA Employees' Suit Set To Be Heard By Judge
ADDERALL XR: Linked To 20 Deaths, Health Canada Orders Recall
AMERICA WEST: Settles Teamsters Pension Fund Lawsuit For $15 Mil
AMERICAN HONDA: Recalls 486,659 Passenger Cars For Crash Hazard
ARIZONA: Judge Accepts Efforts To Improve Teachers' Training
ARKANSAS: Food Banks Share in $350T Vitamin Additives Settlement
ARETT SALES: Recalls 2 Mil Barbecue Lighters Due To Fire Hazard
BANK OF AMERICA: VA Judge Allows Workers To Join Overtime Suit
DEB SHOPS: Recalls 48,000 Candleholders Because of Fire Hazard
FIRST COMMAND: CA Attorneys Sue Over Systematic Investment Plan
FORD MOTOR: OH Court Approves To Race Bias Lawsuit Settlement
FORTNER FOODS: Recalls Ham Products For Listeria Contamination
FOUNDRY NETWORKS: Plaintiffs Voluntarily Dismiss Judgment Appeal
GENERAL MOTORS: Recalls Trucks, SUV, Vans For Injury, Crash Risk
GENERAL MOTORS: Recalls 17,815 SUVs For Failing Safety Standard
GENERAL MOTORS: Recalls 19,924 Passenger Cars For Brake Defect
HARTFORD FINANCIAL: Applauds Passage Of Class Action Reform Bill
HAWAII: Agrees To Pay $1.2 Mil in Acquitted Detainees' Lawsuit
IC CORPORATION: Recalls 920 IC CE Buses For Defective Locknuts
MASSACHUSETTS: AT&T Reaches Fraudulent Billing Settlement
NEW STAR TOYS: Recalls 1,200 Toy Cars Because of Choking Hazard
NEW YORK: Individuals Charged With Fraud For Filing False Claims
PNC FINANCIAL: Employees Lodges PA Suit Over Pension Alteration
RENT-A-CENTER: Appeals Court Rules That Judge Must Review Ruling
SHIMANO AMERICAN: Recalls 13.63T Cables Due To Injury Hazard
TEXAS: Homeowners Lodge Suit Over General Contractor's Expenses
TEXAS: A.G. Abbot Files Immigration Fraud Suit V. Houston Woman
TEXAS: A.G. Nets Favorable Judgment in Gym Membership Fraud Suit
TODO DOLLAR: Recalls 102T Flashing Pacifiers For Choking Hazard
UNION PACIFIC: TX Royalty Owners To Share in $30M Gas Settlement
UNION PACIFIC: TX Royalty Owners To Share in $30M Gas Settlement
UNITED STATES: ACEC Applauds Senate Passage of Reform Bill (S.5)
UNITED STATES: AHIP Head Applauds Passage Of Lawsuit Reform Bill
VALLEY PROTEINS: Deadline Set For Opting Out Of $2.3 Settlement
WOOD MANUFACTURING: Recalls 7,577 Trailers Due To Crash Hazard
New Securities Fraud Cases
EPIX PHARMACEUTICALS: Marc S. Henzel Files Securities Suit in MA
HUFFY CORPORATION: Stull Stull Files Securities Fraud Suit in OH
HYPERCOM CORPORATION: Federman & Sherwood Files Stock Suit in AZ
HYPERCOM CORPORATION: Lerach Coughlin Lodges AZ Securities Suit
HYPERCOM CORPORATION: Marc S. Henzel Files Securities Suit in AZ
HYPERCOM CORPORATION: Marc Henzel Lodges Securities Suit in AZ
INPUT/OUTPUT: Marc Henzel Files Securities Fraud Suit in S.D. TX
OFFICEMAX INC.: Spector Roseman Lodges Securities Suit in IL
PHARMOS PHARMACEUTICAL: Marc S. Henzel Lodges NJ Securities Suit
SIERRA WIRELESS: Stull Stull Lodges Securities Fraud Suit in CA
SIPEX CORPORATION: Marc S. Henzel Lodges Securities Suit in CA
SIRVA INC.: Marc Henzel Lodges Securities Fraud Suit in N.D. IL
STAR GAS: Marc Henzel Commences Securities Fraud Lawsuit in CT
STONEPATH GROUP: Marc Henzel Lodges Securities Suit in E.D. PA
SUPPORTSOFT INC.: Marc Henzel Lodges Securities Suit in N.D. CA
SWIFT TRANSPORTATION: Marc Henzel Lodges Securities Suit in AZ
TOWER AUTOMOTIVE: Marc Henzel Lodges Securities Suit in S.D. NY
*********
ABERCROMBIE & FITCH: MALDEF Publicizes $40M CA Settlement Fund
--------------------------------------------------------------
Individuals who applied for a job at Abercrombie & Fitch and
were turned down because of their race or sex, or those who
worked at Abercrombie and were let go or relegated to the back
room, that they may be eligible for payment from the settlement
of a class action lawsuit against the retail giant, The Mexican
American Legal Defense and Educational Fund (MALDEF) announced,
according to the Filipino Express.
The settlement applies to all women and all African Americans,
Asian Americans and Latinos who either applied for a job at an
Abercrombie store (or attempted to do so and were discouraged)
or were employed there between February 24, 1999 and November
16, 2004. The stores include Abercrombie & Fitch, Abercrombie
kids and Hollister stores.
Tom Saenz, an attorney with MALDEF explains, "The settlement
provides $40 million in compensation to Latino, African
American, Asian American, and female applicants and employees
discriminated against by Abercrombie."
The settlement comes in the case of Gonzalez v. Abercrombie, a
federal civil rights lawsuit filed in 2003 by MALDEF, the NAACP
Legal Defense and Educational Fund (LDF), the Asian Pacific
American Legal Center (APALC), and private plaintiffs' law firms
on behalf of nine young adults of color, including students and
graduates of the University of California and Stanford, who were
refused sales jobs or terminated because of their race or
ethnicity.
Others across the country eventually joined the original
plaintiffs, including women who were discriminated against based
on their gender. The federal Equal Employment Opportunity
Commission (EEOC) further strengthened the plaintiffs' position
when it validated their claims.
According to plaintiff Jennifer Lu, a recent graduate of UC
Irvine who was terminated from a southern California Abercrombie
& Fitch store, in addition to the money for class members, the
settlement requires Abercrombie to substantially reform its
recruitment, hiring, job assignment, promotion, and training
practices. "It is a comprehensive package of reforms that will
make minority and female employees feel more welcome."
For more details, contact MALDEF, c/o Shaheena Ahmad Simons by
Phone: (213) 629-2512 ext. 127 OR PALC, c/o Minah Park by Phone:
(213) 241-0220 OR NAACP LDF, c/o Marcy DeVaux or John Tucker by
Phone: (310) 342-5130 OR The Gonzalez v. Abercrombie Claims
Administrator by Mail: P.O. Box 10564, Tallahassee, FL 32302-
2564 by Phone: 1-866-854-4175 or visit their Web site:
http://www.abercrombieclaims.com.
ABERCROMBIE & FITCH: WA Employees' Suit Set To Be Heard By Judge
----------------------------------------------------------------
Judge Julie Specter of the King County Superior Court in
Washington is set to hear a lawsuit filed two years ago by
Shelby Port, Lindsey King and other current and former
Abercrombie & Fitch employees, claiming that the Company forces
them to wear and buy their own clothes for seasonal promotions
or risk losing their jobs, the Seattle Times reports.
The suit, which was recently certified as a class-action
lawsuit, specifically alleges that the Midwest retailer has an
unwritten, but strictly enforced dress code that violates
Washington law. Under that state law, employers cannot require
employees to buy elaborate or expensive uniforms without
compensation.
Ms. King, a former manager at the retailer's Bellingham store,
told the Seattle Times, "Well, I didn't want to have to show up
every day in a miniskirt. But the real reason I'm participating
in this is because I know that what they were doing was unfair
and I know they were taking advantage of the associates by
making them spend more money to purchase clothes for work than
they would even take home."
The suit contends that Abercrombie made a policy of requiring
employees to buy and wear whatever outfits were being promoted
by the Company as "The Look" at the time, which actually changes
every three months. In addition, court documents say, employees
were not allowed to wear items that had been marked for sale.
Though unavailable for comment, attorneys for Abercrombie stated
in court documents that were filed in the case that the Company
does not require employees to either purchase or wear the
Company's clothes as a condition of employment, the Times
reports.
Within the last few years, the Company has been boycotted for
marketing thongs to elementary school-age girls and for selling
a T-shirt that was deemed racist by members of the Asian
community. Just recently, the Company settled a $40 million
race- and gender-bias suit in California, agreeing to create an
office of diversity and to recruit more black, Latino and Asian
employees.
Stephen P. Connor, representing the plaintiffs in the Washington
State case, told the Times he hopes the lawsuit will compel the
Company to reimburse employees for required clothing purchases.
ADDERALL XR: Linked To 20 Deaths, Health Canada Orders Recall
-------------------------------------------------------------
Health Canada has ordered a recall of the attention deficit
hyperactivity disorder (ADHD) drug Adderall XR late Wednesday,
after it was linked to 20 sudden deaths and a dozen strokes,
including some among children, the Associated Press reports.
The drug is manufactured by Shire Pharmaceuticals Group PLC,
based in Basingstoke, England, and is sold in Canada and the
United States. A related immediate-release form of the drug,
sold simply as Adderall, is sold in the United States but has
not been approved for sale in Canada, where 11,000 patients are
prescribed Adderall XR. Canadian officials approved that drug
in January 2004.
Of the 20 cases of sudden deaths linked to the drug, 14 were in
children. Two of the 12 strokes were suffered by children taking
the drug. The adverse reactions were not associated with
overdose, misuse or abuse of the drug, Health Canada spokesman
Ryan Baker told AP.
None of these deaths or strokes associated with Adderall XR were
reported in Canada, Mr. Baker added. "However, Health Canada
has received eight reports of adverse reactions ranging in
severity from convulsions to minor skin rash," he told AP.
"It's not been determined yet whether these reactions were a
result of Adderall XR use."
The U.S. Food and Drug Administration, however, said it had
evaluated the same reports and doesn't believe the data
warranted such action in the United States. In a statement late
Wednesday, Health Canada said it is asking makers of related
stimulants used to treat the commonly diagnosed condition to
provide a thorough review of their worldwide safety data, AP
reports.
Shire's chief executive, Matthew Emmens, said in a statement
late Wednesday that the Company "remains confident in the safety
and efficacy" of the drug. Mr. Emmens told AP the FDA had
reviewed the same data as Health Canada last year and sought an
additional warning in September that the drug should not be
prescribed for people with "structural cardiovascular
abnormalities."
About 700,000 people take Adderall XR in the United States, with
about 300,000 more using Adderall, Shire spokesman Matthew
Cabrey said Wednesday, according to AP. Shire reported $140
million in U.S. sales of the drugs in the third quarter of 2004.
In a statement posted on its Web site late Wednesday, the FDA
said it "does not feel that any immediate changes are warranted
in the FDA labeling or approved use of this drug based upon its
preliminary understanding of Health Canada's analyses of adverse
event reports and FDA's own knowledge and assessment of the
reports received by the agency."
Health Canada is asking people taking the drug or parents of
children on it to consult their physicians immediately to select
alternatives. It is also asking them not to discard unused pills
but rather to take them to a pharmacy for safe disposal. People
taking related drugs for the management of ADHD should not stop
their treatment but could consult their doctors if they have
concerns, the department said, according to AP.
In light of the international reports of adverse reactions, the
department reviewed the drug's safety data and conducted a
preliminary review of safety data for the other related
stimulants authorized for treatment of ADHD in Canada. The
incidence of serious adverse reactions leading to death was
higher in Adderall and Adderall XR combined than in any other
drugs of the class, the release said.
AMERICA WEST: Settles Teamsters Pension Fund Lawsuit For $15 Mil
----------------------------------------------------------------
America West Airlines, several of its officers and directors and
two major shareholders, Continental Airlines and TPG Partners,
have agreed to settle a protracted class action shareholder
lawsuit by the Teamsters pension fund for $15 million, the
American City Business Journals Inc. reports.
The five-year-old Teamsters lawsuit had alleged that some
members of management of the Tempe-based airline artificially
inflated the value of Company stock, before they sold it
themselves, by failing to disclose the magnitude of an FAA
investigation into maintenance records back in 1997 and 1998.
America West spokeswoman Elise Eberwein told the Phoenix
Business Journal Thursday that the settlement with the
Teamsters, which still requires court approval, will not impact
future earnings, since it will be paid through insurance and
that the other defendants in the case will share in the payment.
America West (NYSE: AWA) serves 96 destinations daily in the
United States, Canada, Mexico and Costa Rica.
AMERICAN HONDA: Recalls 486,659 Passenger Cars For Crash Hazard
---------------------------------------------------------------
American Honda Motor Co. is cooperating with the National
Highway Traffic Safety Administration (NHTSA) by voluntarily
recalling 486,659 passenger vehicles, namely:
(1) ACURA / TL, model 1999-2000
(2) HONDA / ACCORD, model 1999-2002
(3) HONDA / PRELUDE, model 1997-2001
On certain passenger vehicles, the interlock operation of the
ignition switch may not function properly, making it possible to
turn the ignition key to the "off" position and remove the key
without shifting the transmission to park. If the driver does
not shift to park before removing the key and fails to engage
the parking brake, the vehicle could roll and a crash could
occur.
Dealers will perform an inspection procedure that confirms
interlock function. Vehicles will be updated with a redesigned
interlock lever. The recall is expected to begin during
February 2005. For more details, contact Honda by Phone:
1-800-999-1009 or Acura by Phone: 1-800-382-2238, or contact the
NHTSA's auto safety hotline: 1-888-327-4236.
ARIZONA: Judge Accepts Efforts To Improve Teachers' Training
------------------------------------------------------------
U.S. District Judge Raner Collins has accepted Arizona's efforts
to improve training of teachers who instruct students learning
English, the Associated Press reports.
Despite accepting the state's efforts, the federal judge did
reject a challenge that the state didn't deliver on promised
improvements. Parents of English-learning students, who are
plaintiffs in a class-action lawsuit, had asked the judge to
rule that Arizona was in contempt of court for allegedly failing
to abide by its 2000 promises. However, Judge Collins says the
state Department of Education has put forth "a good faith
effort."
A lawyer for the plaintiffs, Tim Hogan, told AP the ruling
disappoints him, but he adds that it doesn't end debate on the
teacher training issue.
ARKANSAS: Food Banks Share in $350T Vitamin Additives Settlement
----------------------------------------------------------------
Ozark Foodbank, a local food bank in Bethel Heights along with
six other state food banks will receive a portion of a $350,000
class action settlement on a price-fixing conspiracy of vitamin
additives in food products, the Springdale Morning News reports.
The suit, filed by the McMath Law Firm, had brought a $750,000
settlement. The Arkansas Attorney General's Office provided
assistance in determining statewide programs to use the money.
Eventually, the settlement was split three ways, with $350,000
going to the Arkansas Hunger Relief Alliance, an organization of
which Ozark Foodbank is a member. Other members of the
organization are the Arkansas Foodbank Network, the Northeast
Arkansas Foodbank, the North Central Arkansas Foodbank, the
Northwest Arkansas Foodbank and Harvest Texarkana.
In 2004, the alliance provided 13.6 million pounds of food to
nearly 1,000 emergency food pantries, homeless shelters, soup
kitchens and other organizations. Another $350,000 will go to
the Meals On Wheels Association of America, which feeds elderly,
homebound people who cannot shop or prepare their own meals.
The University of Arkansas Medical System Champions Club of
Arkansas, a program helps overweight children and their families
make healthy lifestyle changes will receive the final $50,000.
ARETT SALES: Recalls 2 Mil Barbecue Lighters Due To Fire Hazard
---------------------------------------------------------------
In cooperation with the U.S. Consumer Product Safety Commission
(CPSC), Arett Sales Corporation (ASC), of Cherry Hill, N.J., is
recalling about 2 million multi-purpose barbecue lighters.
Sold under the brand name "Kitchen Works," the lighters lack
child-resistant mechanisms that meet federal safety standards.
Young children could operate these lighters, which poses a fire
hazard. Federal standards require multi-purpose lighters to have
the same level of child-resistance as required in the safety
standard for cigarette lighters. The child-resistant mechanism
must operate safely, function for the expected life of the
lighter, and not be easy to deactivate. The child-resistant
mechanism also must automatically reset after each use.
ASC has not received any reports of incidents or injuries
involving these barbecue lighters. The recalled gas-fueled
lighters have an orange or red plastic body, and a silver-
colored metal nozzle. Each lighter measures 10 _- inches long.
The lighters were made in China. Dollar stores nationwide sold
the barbecue lighters from January 2001 through July 2004 for
about $1.
Consumers should stop using the lighters immediately and return
them to the place of purchase for a full refund or dispose of
the lighters in a manner that is in compliance with all state
and local requirements. Lighters should not be incinerated or
punctured.
For more information, consumers should contact ASC toll-free at
(800) 431-1212 between 9 a.m. and 4:30 p.m. ET Monday through
Friday.
BANK OF AMERICA: VA Judge Allows Workers To Join Overtime Suit
--------------------------------------------------------------
A federal judge in the Western District of Virginia ruled that
about 250 current and former Bank of America Corporation
employees can now join a class-action lawsuit seeking
compensation for unpaid overtime labor, the Associated Press
reports.
The suit charges that Bank of America improperly classified the
workers as ineligible for overtime between September 2002 and
April 2003. Furthermore, the suit also charges the bank of
changing their classification, but improperly discouraged
overtime claims.
The affected employees had worked for the Banking Center Control
Review department, performing on-site reviews at Bank of America
branches. According to the suit, filed by former employee
Cynthia Deel, the employees worked long hours and were expected
to travel between branches on their own time. Ms. Deel left the
Company in July 2003.
A magistrate judge ruled in December that other employees could
join the suit. The bank objected, but still Judge James Turk
sided with the magistrate judge. Though the case will not come
to trial for at least several more months, the court will soon
start authorizing the wording of a letter to eligible workers
inviting their participation.
A spokeswoman for the Charlotte-based Company told AP the
charges were "without merit" and that Bank of America would
defend itself against the suit.
DEB SHOPS: Recalls 48,000 Candleholders Because of Fire Hazard
--------------------------------------------------------------
Deb Shops Inc., of Philadelphia, Pennsylvania and Horn Sing Ind.
Company Ltd., of Taipei, Taiwan is cooperating with the United
States Consumer Product Safety Commission by voluntarily
recalling about 48,000 Decorative Candleholders.
The hook or handle of the candleholder can overheat and break,
causing the lit candle to fall out and pose a fire hazard. Deb
Shops has received two reports of the metal candleholder burning
through, causing the candle to fall and burn a small rug area.
No injuries have been reported.
This recall involves moon, dolphin and fish themed
candleholders. The decorative candleholders are about 9-inches
tall with a metal bucket that sits suspended from a hook. A
votive candle sits inside the bucket. Manufactured in Taiwan,
the candleholders were sold at all Deb Shops retail stores
nationwide from November 2001 through November 2004 for about
$13.
Consumers should stop using the candleholder immediately and
return it to the nearest Deb Shops retail store for a full
refund. Consumer Contact: Contact Deb Shops Inc. at
(800) 332-7467 between 9 a.m. and 5 p.m. ET or visit the firm's
Web site at http://www.debshops.com/recall/candleholder.
FIRST COMMAND: CA Attorneys Sue Over Systematic Investment Plan
---------------------------------------------------------------
California attorneys filed a class-action lawsuit against First
Command Financial Planning, which could result in payouts to
military investors not included in last year's federal
settlement, the Stars and Stripes reports.
The suit, filed in the U.S. District Court of Southern
California, asks for compensation for members of First Command's
systematic investment plan, saying the Company used "false and
misleading marketing" in its dealings with troops.
However, First Command officials through Paul Cozby, a Company
spokesman dismissed those accusations saying, "First Command
Financial Planning is proud of its years of service to hundreds
of thousands of military families. We believe the complaint
filed in San Diego contains numerous factual inaccuracies and
erroneous conclusions," the Stars and Stripes reports.
In December, federal regulators had publicly revealed that First
Command would refund about $4 million to customers who bought
and sold the systematic investment plans between 1999 and 2004,
a settlement that came after an investigation found the
Company's salespeople had misled military personnel about costs
and returns associated with the plan. Though Company officials
did not admit to or deny the charges they have since stopped
offering those funds.
Norman Blumenthal, one of eight attorneys already signed on to
the suit, told the Stars and Stripes anyone who bought a
systematic investment plan before December 15 and did not sell
the plan before that date could be eligible to join the class-
action suit. He also explains that the ultimate goal of the
legal action is to help customers not included in the federal
settlement, but also "punished" by First Command's sales
practices. He even adds, "You shouldn't put military personnel
in a position where you're taking that much money away in fees.
We think it's a bad plan."
As stated in the lawsuit, the systematic investment plans took
as much as 50 percent of investors' first-year savings in broker
fees and higher-than-needed fees after that. It also alleges
that salespeople for the firm lied about the likelihood of
recouping that money and of misleading customers about better
investment plans.
Furthermore, Mr. Blumenthal said First Command customers do not
need to sign up to become part of the class, if a settlement or
verdict award is reached, all those eligible will be able to
recover money, he however is encouraging military personnel he
speaks with to talk with a financial adviser about their
investments.
A lead plaintiff for the case is to be named by May 1, at which
point the courtroom process will begin.
FORD MOTOR: OH Court Approves To Race Bias Lawsuit Settlement
-------------------------------------------------------------
The United States District Court for the District of Ohio
granted preliminary approval to a settlement proposed by Ford
Motor Co., that would guarantee black employees access to an
apprenticeship training program they say they were illegally
barred from in the automaker's factories, The Associated Press
reports.
The Company's apprenticeship program allows unskilled laborers
in Ford plants to learn skills for higher paying jobs including
electricians and millwrights. Participation in the program can
lead to better job security and improved opportunities for
promotion, lawyers for the plaintiffs told The AP.
The lawsuit represents black employees who took an application
test for the program on or after January 1, 1997, and were not
chosen. They said the selection process discriminated against
black applicants in violation of state and federal civil rights
laws.
Ford says it did nothing wrong in administering the program at
its plants nationwide, but it agreed to settle the lawsuit.
Under the settlement, the Company will allocate 279 positions in
the program for blacks and will pay $2,400 apiece to as many as
3,400 current and former Ford workers who could be eligible for
the settlement.
The Company also agreed to create a new selection program that
would be monitored by an industrial psychologist with expertise
in workplace and personnel issues. The proposed settlement
could cost Ford more than $11 million, including $30,000 in
payments to the 11 current and former Ford workers who filed the
lawsuit in December, payment of their attorneys' fees and a
later payment of $567,000 to the workers' lawyers for
administering the settlement, The AP reports.
U.S. District Judge S. Arthur Spiegel gave preliminary approval
to the settlement Wednesday. He authorized the workers' lawyers
to mail out letters to inform eligible participants, and set a
June 1 hearing to determine whether to give the deal final
approval.
Telephone messages requesting comment were left Thursday with
Ford spokesman Glenn Ray and United Auto Workers spokesman Roger
Kerson, in Detroit, according to The AP. The UAW represents Ford
workers and was sued because the union has an interest in the
selection process for the program.
FORTNER FOODS: Recalls Ham Products For Listeria Contamination
--------------------------------------------------------------
Fortner Foods Commissary, a Murfreesboro, Tennessee,
establishment, is voluntarily recalling ready-to-eat ham that
may be contaminated with Listeria monocytogenes, the U.S.
Department of Agriculture's Food Safety and Inspection Service
announced.
The ready-to-eat ham was distributed to four Sir Pizza
restaurants; two in Murfreesboro and one each in La Vergne and
Smyrna. It may have been an ingredient in several menu items
served at the four restaurants February 5 and 6.
The problem was discovered through routine FSIS sampling. FSIS
has received no reports of illnesses associated with consumption
of these products.
Consumption of food contaminated with Listeria monocytogenes can
cause listeriosis, an uncommon but potentially fatal disease.
Healthy people rarely contract listeriosis. Listeriosis can
cause high fever, severe headache, neck stiffness, and nausea.
Listeriosis can also cause miscarriages and stillbirths, as well
as serious and sometimes fatal infections in those with weak
immune systems - infants, the frail or elderly, and persons with
chronic disease, with HIV infection, or taking chemotherapy.
Media and consumers with questions about the recall may contact
Company President Nona Poole by Phone: (615) 896-9660.
Consumers with food safety questions can phone the toll-free
USDA Meat and Poultry Hotline at 1-888-MPHotline
(1-888-674-6854). The hotline is available in English and
Spanish and can be reached from l0 a.m. to 4 p.m. (Eastern Time)
Monday through Friday. Recorded food safety messages are
available 24 hours a day.
FOUNDRY NETWORKS: Plaintiffs Voluntarily Dismiss Judgment Appeal
----------------------------------------------------------------
Plaintiffs have voluntarily dismissed their appeal of the
judgment rendered in favor of Foundry Networks, Inc. and certain
of its officers in the shareholder class action entitled "In re
Foundry Networks Securities Litigation," pending in the Ninth
Circuit Court of Appeals.
As previously reported in the Company's SEC filings, in December
2000, several similar stockholder class action lawsuits were
filed against the Company and certain of its officers in the
United States District Court for the Northern District of
California, following the Company's announcement of its
anticipated financial results for the fourth quarter ended
December 31, 2000. The lawsuits were subsequently consolidated
by the District Court under the caption In re Foundry Networks,
Inc. Securities Litigation, Master File No. C-00-4323-MMC. Lead
Plaintiffs then filed a consolidated amended complaint, which
alleged violations of federal securities laws and purported to
seek damages on behalf of a class of stockholders who purchased
the Company's common stock during the period from September 7,
2000 to December 19, 2000.
On August 29, 2003, the United States District Court dismissed
the action with prejudice and subsequently entered judgment in
favor of Foundry Networks and the director and officer
defendants. Plaintiffs appealed to the Ninth Circuit of Appeals.
Argument on the appeal was set for February 17, 2005. Plaintiffs
filed their unopposed motion for dismissal of the appeal on
February 9, 2005. No settlement was paid in the action. The
Company believes that the dismissal validates its position that
the lawsuit was without merit.
Shirli Wiess of the law firm of Gray Cary Ware & Freidenrich,
LLP, represented foundry Networks and its directors and officers
in the matter. The firm is now known as DLA Piper Rudnick Gray
Cary US LLP.
GENERAL MOTORS: Recalls Trucks, SUV, Vans For Injury, Crash Risk
----------------------------------------------------------------
General Motors Corporation is cooperating with the National
Highway Traffic Safety Administration (NHTSA) by voluntarily
recalling 155,465 trucks, sport utility vehicles and vans,
namely:
(1) CHEVROLET / AVALANCHE, model 2004-2005
(2) CHEVROLET / EXPRESS, model 2004-2005
(3) CHEVROLET / KODIAK, model 2004-2005
(4) CHEVROLET / SILVERADO, model 2004-2005
(5) CHEVROLET / SUBURBAN, model 2004-2005
(6) GMC / SAVANA, model 2004-2005
(7) GMC / SIERRA, model 2004-2005
(8) GMC / TOPKICK, model 2004-2005
(9) GMC / YUKON XL, model 2004-2005
(10) HUMMER / H2, model 2004-2005
Certain trucks, sport utility vehicles and vans equipped with
Bosch hydro-boost brake assemblies, the hydraulic brake booster
pressure accumulator may crack and separate from the hydro-boost
assembly during normal operating conditions. If a separation
occurred and the hood of the vehicle were open, fragments from
the accumulator could cause injury to people in the immediate
area. The presence of this crack or fractured surface could
allow the hydraulic fluid to leak from the accumulator circuit
of the booster assembly. The loss of fluid would cause increased
steering and braking effort and a crash may occur without prior
warning.
Dealers will test the hydro-boost assembly for functional
operation of the two-function valve. If the hydro-boost
assembly fails the test, dealers are to replace the assembly.
The recall is expected to begin during March 2005. For more
details, contact Chevrolet by Phone: 1-800-630-2438, GMC by
Phone: 1-866-996-9463 and Hummer by Phone: 1-800-732-5493, or
contact the NHTSA's auto safety hotline: 1-888-327-4236.
GENERAL MOTORS: Recalls 17,815 SUVs For Failing Safety Standard
---------------------------------------------------------------
General Motors Corporation is cooperating with the National
Highway Traffic Safety Administration (NHTSA) by voluntarily
recalling 17,815 sport utility vehicles, namely:
(1) BUICK / RAINIER, model 2005
(2) CHEVROLET / TRAILBLAZER, model 2005
(3) GMC / ENVOY, model 2005
(4) ISUZU / ASCENDER, model 2005
Certain sport utility vehicles fail to comply with the
requirements of federal motor vehicle safety standard no. 212
"windshield mounting." The windshield urethane bead may not
have adhered to the body in certain areas during the cure
process. If a crash occurs, the windshield may not be retained,
increasing the risk of injury to a vehicle occupant.
Dealers will replace the windshield. The recall is expected to
begin on March 10,2005. For more details, contact Buick by
Phone: 1-866-608-8080, Chevrolet by Phone: 1-800-630-2438, or
GMC by Phone: 1-866-996-9463, or contact the NHTSA auto safety
hotline: 1-888-327-4236.
GENERAL MOTORS: Recalls 19,924 Passenger Cars For Brake Defect
--------------------------------------------------------------
General Motors Corporation is cooperating with the National
Highway Traffic Safety Administration (NHTSA) by voluntarily
recalling 19,924 passenger cars, namely:
(1) CADILLAC / SRX, model 2004
(2) CADILLAC / XLR, model 2004
(3) PONTIAC / GRAND PRIX, model 2004
Certain passenger vehicles fail to comply with the requirements
of the federal motor vehicle safety standard No. 124
"accelerator control systems." If one of the two accelerator
pedal return springs fails and the temperature is 22 degrees
Fahrenheit to -40 degrees Fahrenheit, the engine may not return
to idle within three seconds, as required. If this were to
occur, greater brake pedal force and a longer distance may be
required to stop the vehicle.
Dealers will replace the accelerator pedal assembly. This
recall is expected to begin during March 2005. For more
details, contact Cadillac by Phone: 1-866-982-2339 or Pontiac by
Phone: 1-800-620-7668, or contact the NHTSA's auto safety
hotline: 1-888-327-4236.
HARTFORD FINANCIAL: Applauds Passage Of Class Action Reform Bill
----------------------------------------------------------------
The Hartford Financial Services Group, Inc. (NYSE: HIG), one of
the nation's largest financial services and insurance companies,
with 2004 revenues of $22.7 billion, applauded 72-26 vote in the
United States Senate for passage of the Class Action Fairness
Act, a bill debated by federal lawmakers for more than six
years. Connecticut's two Senators, Christopher Dodd and Joseph
Lieberman, helped steer the most recent version of this bill
through the Senate.
Supporters of the new legislation, including The Hartford, say
that consumers and business win with this reform. The Class
Action Fairness Act will significantly limit the certification
of dubious class action lawsuits. Most importantly, the federal
law will curb "venue shopping," a practice in which plaintiffs'
lawyers bring large, national class actions in state courts that
have little or no connection to the controversy. Class actions
in these courts, typically located in remote counties, often
lead to large settlements in which lawyers collect millions of
dollars, while consumers receive little or nothing of value.
"Today is an important day for all Americans, for the companies
who make products for them and for the insurers whose policies
protect those companies," said Ramani Ayer, Chairman and Chief
Executive Officer of The Hartford. "Connecticut's senators,
Christopher Dodd and Joseph Lieberman, deserve thanks from all
of their constituents for helping to find a bi-partisan solution
to this major problem."
HAWAII: Agrees To Pay $1.2 Mil in Acquitted Detainees' Lawsuit
--------------------------------------------------------------
The state of Hawaii agreed to pay $1.2 million to settle a
federal class-action lawsuit that sought to stop a practice of
detaining people who were returned to jail despite being found
not guilty or ordered released by the courts, according to the
American Civil Liberties Union (ACLU), The Honolulu Advertiser
reports.
The lawsuit was filed in December 2001 by the ACLU on behalf of
nine people who alleged they were shackled, placed in court
holding cells, taken back to the O'ahu Community Correctional
Center and bodily searched after being acquitted. According to
the ACLU, the state continued to hold some people for days and
sometimes weeks.
According to the Department of Public Safety, which was one of
the defendants, at the time that the acquitted inmates were
returned to OCCC to clear routine background checks and collect
belongings before final court approval to be released. However,
in January 2002, Circuit Judge Gail Nakatani ruled that people
found not guilty should be allowed to leave the courtroom on
their own and pick up their belongings at their convenience.
Judge Nakatani said the release should be immediate, unless the
defendant is being held on another matter.
IC CORPORATION: Recalls 920 IC CE Buses For Defective Locknuts
--------------------------------------------------------------
IC Corporation is cooperating with the National Highway Traffic
Safety Administration (NHTSA) by voluntarily recalling 920 IC CE
school buses, model 2005.
Certain IC CE 2005 school buses manufactured between April 27
and October 13,2004 have locknuts that secures the hydraulic
brake pivot bolt. These locknuts may not be torqued properly.
The brake pedal may separate from the pivot bracket. This could
prevent brake application.
The Company will notify its customers and will inspect the
locknut, replace if necessary and torque properly. The recall
is expected to begin by March 26,2005. For more details,
contact the NHTSA's auto safety hotline: 1-888-DASH-2-DOT
(1-888-327-4236).
MASSACHUSETTS: AT&T Reaches Fraudulent Billing Settlement
---------------------------------------------------------
A T &T has agreed to a comprehensive settlement package,
including more than $400,000 in restitution and calling cards
for National Guard members based overseas, to resolve
allegations that the Company improperly billed at least 40,000
Massachusetts consumers for long distance service, Attorney
General Tom Reilly and Department of Telecommunications and
Energy (DTE) Chairman Paul G. Afonso announced in a statement.
The settlement, filed February 9, 2005 in Suffolk Superior
Court, stems from allegations that the Company erroneously
billed Massachusetts consumers close to $4 a month for an
estimated two and a half months. As part of this settlement,
AT &T has already refunded or credited more than $400,000 -- or
an estimated $10 each - to affected Massachusetts consumers.
"I am pleased that this Company is taking the steps necessary to
correct the harm done to Massachusetts consumers," A.G. Reilly
said. "This agreement not only provides refunds to affected
individuals here in the Commonwealth, but provides the men and
women of the National Guard, who are serving overseas in Iraq
and Afghanistan, with an opportunity to call home."
As part of the settlement, AT & T will deliver 1,100 calling
cards -- with an estimated 20 minutes of calling time from Iraq
or Afghanistan -- to members of the Massachusetts National
Guard. The retail value of these cards is approximately $25,000.
"Today's settlement ensures that customers will be billed
correctly and only for the services they use, while serving
notice that improper billing practices will not be tolerated in
any form," DTE Chairman Afonso said. "I am grateful for the good
work done by the consumer investigators at the DTE and the work
by the Attorney General's Office in reaching this fair and
important settlement."
"Staying in touch with loved ones is vitally important to our
Guard members overseas," Major General George W. Keefe said.
"These phone cards will mean a lot to them and their families."
The settlement also addresses customer service issues and
consumers' ability to cancel their long-distance service with
AT&T. Under the terms of the agreement, AT&T must address
consumers "courteously" and provide a manager when requested.
The Company must also clearly and conspicuously provide its long
distance service cancellation policy in writing on its website
and on the phone.
To avoid billing problems in the future, AT&T must maintain an
accurate list of Massachusetts customers and certify that it has
ceased collection and correct negative credit reports regarding
erroneous billing. AT&T must also stop any marketing relating to
inquiries about erroneous billing and provide A.G. Reilly's
Office with a 90-day status report on affected consumers and
refund activity.
In addition, AT&T will also pay $140,000 to the Commonwealth,
the majority of which will go to the Massachusetts Local
Consumer Aid Fund.
A.G. Reilly's Office was referred this case by the DTE, which
received close to 900 complaints. Several state Attorneys
General have brought cases against AT & T alleging similar
consumer violations. Nationwide an estimated one million
consumers were improperly billed.
Assistant Attorneys General Geoffrey G. Why and Scott D. Schafer
of A.G. Reilly's Consumer Protection and Antitrust Division,
Assistant Attorney General Karlen J. Reed of A.G. Reilly's
Utilities Division, and Assistant Attorney General Glen M. Shor,
handled this case with assistance from Karen Robinson, who
directs the DTE's Consumer Division.
NEW STAR TOYS: Recalls 1,200 Toy Cars Because of Choking Hazard
---------------------------------------------------------------
New Star Toys & Gifts Inc., of Vernon, California is cooperating
with the United States Consumer Product Safety Commission by
voluntarily recalling about 1,200 Toy Cars. Small parts can
break off during use, posing a choking hazard to young children.
The recall includes two styles of toy cars. The Funny Puzzle Car
or "Funny Game Car" is about 9-inches long. The car has an
orange body, green interior and blue wheels. A frog button is on
one side and lettered buttons are on the other. Stickers on the
car read "FUNNY GAME CAR," "Funny Intelligence Game" and "NO.
1340." They are sold with four shape blocks that can be inserted
in the windows of the car. The Funny Cartoon Car or "Beautiful
Music Car" is a six-wheel truck about 16-inches long. The cab of
the truck is yellow and the trailer is green. It has 15 spinning
blocks on one side showing Spanish words and a plastic abacus on
the other side and a play clock on the back. Stickers on the
product read "Beautiful Music Car," "LOVELY CARTOON CAR" and
"NO.1345." Both products have a yellow pull-string in the front.
Manufactured in China, the toys were sold at all toy, department
and discount stores nationwide from September 2004 through
December 2004 for between $4 and $6.
Consumers should take these toys away from young children, and
return the recalled toys to the store where purchased for a
refund. Consumer Contact: Contact New Star toll-free at
(888) 647-0051 between 9 a.m. and 6 p.m. PT Monday through
Friday.
NEW YORK: Individuals Charged With Fraud For Filing False Claims
----------------------------------------------------------------
Two individuals have been charged for orchestrating separate
scams that investigators say lead to the loss of more than $9
million by filing false claims on class actions across the
country from a homeless shelter and a prison cell, the Newsday
reports.
According to investigators the two confidence men operated
independently, scouring newspapers and legal notices for
information on class-action settlements, and then sending in
phony brokerage account statements, tax returns and other
documents to support their claims.
U.S. Attorney Roslynn Mauskopf told Newsday the two worked the
schemes between 2001 and 2004 with most of the money being
mailed to a homeless shelter in downtown San Diego, where
Richard Lagerveld, 45, who lived in a shabby apartment nearby
and hung out there allegedly picked it up. Officials told
Newsday that the money sent to San Diego $9.2 million in total
was mailed in checks by two court-appointed firms on Long Island
that specialize in distributing the proceeds resulting from
class-action suits across the nation.
The other scheme was orchestrated by Alan Scott, 52, from his
cell at the Federal Correctional Institution in Minersville,
Pa., officials said. They also add that he had at least $200,000
mailed to outside addresses where accomplices picked it up.
Pasquale D'Amuro, head of the FBI in New York, called the two
"the legal and ethical equivalent of Gold Rush claim-jumpers,"
which mined the suits "like the mother lode," Newsday reports.
Mr. Lagerveld allegedly received a check from one of the Long
Island distribution firms, David Berdon & Co. of Jericho, for
$2.2 million, his supposed share of a settlement of an anti-
trust case involving glass manufacturing. Michael Rosebaum, the
head of that firm, said that while the cases were unfortunate,
his firm and similar ones handle "thousands and tens of
thousands of claims every day involving hundreds of millions of
dollars" without incident.
Court records indicate that Mr. Lagerveld also received a check
at the shelter for $6.5 million from another Long Island firm,
the Garden City Group, in Garden City, which was money that came
from a settlement of a class-action suit involving the stock of
Oxford Health Plan.
At arraignment on fraud charges before U.S. District Arthur
Spatt in Central Islip, Mr. Lagerveld pleaded not guilty and
thus was held without bail. His attorney, federal public
defender Tracey Gaffey, declined to comment as did Assistant
U.S. Attorney Bonnie Klapper.
Mr. Scott, 52, of the Boston area, is serving a 96-month term in
the Pennsylvania prison on unrelated fraud charges. He was
charged with fraud for receiving a total of $200,000 from the
two Long Island firms and several others around the country. He
was also arraigned in Central Islip before federal magistrate
James Orenstein, who ordered him temporarily moved to a New York
prison for future hearings. Like the Lagerveld case, Mr. Scott's
attorney, William Wexler of Babylon, also declined to comment,
as did the prosecutor in his case, Assistant U.S. Attorney Mark
Lesko.
PNC FINANCIAL: Employees Lodges PA Suit Over Pension Alteration
---------------------------------------------------------------
A federal lawsuit has been filed by three Cincinnati-area
residents in U.S. District Court in Philadelphia against PNC
Financial Service alleging that its 1999 decision to alter its
method for calculating employees' pension benefits violates
federal law and has significantly reduced their retirement
incomes, the Pittsburgh Tribune-Review reports.
Attorney Bryan Clobes, who represents the plaintiffs, told the
Tribune-Review the lawsuit could apply to roughly 50,000 current
and former PNC employees however it would have to be certified
by the presiding judge as a valid class-action case. Mr.
Clobes, who is with the Philadelphia law firm Miller Faucher and
Cafferty LLP also said, "Companies are simply trying to increase
profits, at the expense of their employees, by breaking the
retirement promises they made to plan participants."
The seven-count complaint alleges that in 1999, Pittsburgh-based
PNC illegally converted its traditional pension plan to a cash
balance plan, which according to the lawsuit is worth much less
money, and will result in a reduction in benefits as employees
grow older. Furthermore, the lawsuit alleges that PNC violated
laws on private pension fund administration by, among other
things, failing to notify employees that the change in the
retirement program would result in a significant reduction in
benefits.
Experts explain that in a traditional defined-benefit pension
plan, a worker receives a guaranteed monthly benefit at
retirement with the amount being based on formulas that include
variables such as age at retirement, years worked and rate of
pay. Workers accrue more in their plans toward the end of their
careers because, in most cases, their rates of pay increase.
However, in a cash balance pension plan, contributions are more
level over the years and critics contend that for this reason,
some older workers can be shortchanged by thousands of dollars
in benefits.
PNC is one of a number of companies that have converted their
traditional pension plans to cash balance plans. IBM, AT&T,
Xerox and Cigna are among the highest-profile firms that made
the pension switch.
RENT-A-CENTER: Appeals Court Rules That Judge Must Review Ruling
----------------------------------------------------------------
A Los Angeles Superior Court judge must reconsider his ruling
denying class action status to a lawsuit filed against Rent-A-
Center Inc. over alleged labor and wage violations, according to
the district's Court of Appeal, the Metropolitan News-Enterprise
reports.
In an unpublished decision, the court's Div. Seven pointed out
that Judge Ralph W. Dau's ruling that individual issues would
predominate in any litigation was undercut by the state Supreme
Court's ruling last year in Sav-On Drug Stores, Inc. v. Superior
Court, 34 Cal.4th 319, and by the First District's opinion a few
months earlier in Bell v. Farmers Insurance Exchange (2004) 115
Cal.App.4th 715. Neither ruling though was available to Judge
Dau when he made his ruling in March of 2003.
Plaintiff Jeremy Burdusis had sued RAC in October 2001 claiming
that the Texas-based rent-to-own operator had a policy of
failing to pay overtime, failing to give employees proper meal
and rest breaks and mailing final paychecks late.
Justice Laurie Zelon noted in her opinion for the appellate
panel that the attorneys for the Company had argued that RAC's
employee handbook forbids working off the clock and provides
employees a hotline to call to report any violations.
When an attorney in a separate but similar case against RAC
indicated he would request class certification in that suit,
brought by Isreal French, Judge Dau ruled that Mr. French was
bound by his ruling in the Burdusis case.
In the end however, the appellate panel instructed Judge Dau to
review the Sav-On and Bell decisions, both of which dealt with
employee claims for unpaid overtime. Justice Zelon noted that in
making his ruling, Judge Dau had relied on two out-of-state
court decisions one from Ohio and the other from Texas.
According to Justice Zelon, the general rule that trial judges
are "afforded great latitude" in making class certification
determinations was trumped in this situation by another general
rule-that appellate court decisions should be applied
retroactively "where to do so is not unfair and no public policy
is implicated." Furthermore, she explains that applying the two
rulings to the RAC litigation "is not unfair to the litigants in
this action, as neither case represents an entirely `new' rule
of law. Sav-On and Bell did not change the rules concerning
whether a plaintiff group is amenable for class treatment
because they applied the same standard to a different factual
scenario and used proof through statistical evidence."
She conceded though that the Texas and Ohio cases Judge Dau
considered applied "virtually identical tests for certifying a
class action." "However," she reasoned, "the determination here
must be made in light of governing California law."
Justice Zelon also pointed out that in Sav-On, the high court
rejected arguments that individual damages calculations would be
too cumbersome in a case in which workers claimed they had been
misclassified as managers and denied overtime pay, suggesting
that statistical sampling could be used. In Bell, also an
overtime case, the First District rejected claims that a
statistical methodology "would improperly relieve the employees
of their burden under California law to establish they actually
worked overtime," she observed.
However, she said it was up to the trial court, not the
appellate jurists, to decide how the case law should be applied
to the RAC litigation, which is entitled Burdusis v. Rent-A-
Center, Inc., B166923.
James A. Krutcik and Angelo Nicholas Georggin of Bailey Pinney
Georggin & Krutcik in Mission Viejo and James G. Bohm of Bohm,
Francis, Kegel & Aguilera in Costa Mesa represented Mr. Burdusis
on appeal, while Latham & Watkins attorneys Joel E. Krischer of
the Los Angeles office and Laura Emily Hayward of the Costa Mesa
office represented RAC.
SHIMANO AMERICAN: Recalls 13.63T Cables Due To Injury Hazard
------------------------------------------------------------
Shimano American Corporation, of Irvine, California is
cooperating with the United States Consumer Product Safety
Commission by voluntarily recalling about 13,630 Shimano Road
Racing Bicycle Brake Inner Cables.
The bicycle brake cable can detach during braking, causing the
rider to lose control and fall. Shimano has received one report
of the brake inner cable detaching. No injuries have been
reported.
This recall involves aftermarket Shimano 1.6 mm X 1,700 mm brake
inner cables for ATB and road racing bicycles. Dual ended brake
cables packaged in quantities of ten have a part number of
Y80098400/Z80098400. Individual packages have a part number of
Y80098110/Z80098110. All single ended brake cables were packaged
individually with part number Y80098300/Z80098300. Brake cables
installed on mountain, BMX and flat handlebar bicycles are not
affected by this recall.
Manufactured in Japan, the bicycle parts were sold at all
sporting goods and bicycle specialty stores nationwide from
April 2003 through October 2004 for between $2 and $17.
Consumers should contact their local bicycle dealer immediately
to arrange for a free inspection. Consumers with the recalled
brake cables will have a replacement cable installed free of
charge. Consumer Contact: Contact Shimano American Corp. at
(800) 353-4719 between 8 a.m. and 5 p.m. PT Monday through
Friday or visit the firm's Web site at http://www.shimano.com.
TEXAS: Homeowners Lodge Suit Over General Contractor's Expenses
---------------------------------------------------------------
A national class action lawsuit has been filed in Miller County
Circuit Court against Reliable Life Insurance Co., Capital
County Mutual Fire Insurance Co., Prudential General Insurance &
Casualty Insurance Co., Old Reliable Insurance Co. and Hartford
Insurance Co. of the Midwest alleging that various home
insurance companies are leaving homeowners paying the expense of
general contractors, the Texarkana Gazette reports.
Three Miller County residents are leading the lawsuit, namely:
Joyce Beasley, Mary Smith and Warren Vammen, who are represented
by the law firm of Patton, Roberts, McWilliams & Capshaw, of
Texarkana, Texas.
The lawsuit, which has been assigned to Circuit Judge Joe
Griffin, claims that the insurance Company improperly profited
at the expense of policyholders when paying claims for loss or
damage to real estate. According to the lawsuit, "These
underpayments, in the form of failing to pay general
contractors' profit and overhead, have generated extensive
profits and ill-gotten gains to (the insurance companies)." The
lawsuit specifically accuses the companies of fraud.
It is customary for general contractors, who will oversee work
done on a construction project, to add a percentage to the total
estimate for a job. Lawyers for the policyholders stated that in
the industry, 20 percent is usually assessed for profit and
overhead to cover the general contractors' fees.
However, policyholders contend that they were never told that
they were entitled to an allowance for the general contractors'
fees. The lawyers say this means that policyholders paid the
general contractors out of their own pockets, went without the
services of a general contractor or served as their own general
contractors for free.
TEXAS: A.G. Abbot Files Immigration Fraud Suit V. Houston Woman
---------------------------------------------------------------
Texas Attorney General Greg Abbott is suing a Houston woman for
charging hundreds of Hispanic consumers hundreds of dollars per
person for unauthorized legal advice, document preparation and
other immigration-related consulting services.
Elvia Diaz, who advertised in church bulletins and flyers and
told clients she could get them work permits and other documents
in as little as three months. Instead, she frequently filed
applications incorrectly, causing her clients to miss critical
deadlines and putting them in danger of deportation.
"I am determined to stop scam artists like this woman who
imperil the lives and futures of people who want to call Texas
home," said Attorney General Abbott, who obtained a temporary
restraining order against Ms. Diaz. "Texas law is quite clear
about who is authorized to provide immigration consulting
services, and those who disregard the law will be brought to
justice."
According to the lawsuit, which alleges violations of the Texas
Deceptive Trade Practices Act, Ms. Diaz charged clients between
$400 and $1,500 per person for immigration services she was not
authorized to provide. In Texas, only licensed attorneys and
nonprofit organizations specifically accredited by the U.S.
Department of Justice's Board of Immigration Appeals (BIA) can
charge fees to advise and represent clients in immigration
matters.
Whether consumers were trying to obtain residency, a work permit
or citizenship status, she assured them they qualified and
offered to fill out the appropriate applications to submit to
U.S. Citizenship and Immigration Services. Several former
clients reported their applications were returned multiple times
because of incorrect addresses or incorrect fee amounts.
Ms. Diaz charged one Jefferson County woman $2,000 to fill out
immigration paperwork for her and her five children. She
continually addressed the woman's petition to the wrong
location, causing it to be returned at least 13 times. When the
woman received a letter denying her application for permanent
residency, she tried to seek advice from Ms. Diaz, but found her
office closed and was unable to contact her by phone.
"I wish Ms. Diaz could feel the heartache, suffering and stress
I have had to feel as a result of doing business with her and
the fear of having myself and my family deported - not to
mention all the money she charged me to do things that were not
necessary or correct," the woman said in her affidavit filed
with the lawsuit.
A Houston man paid Ms. Diaz $800 to file immigration papers for
himself, his wife and his daughter. The paperwork was returned
by federal officials about 20 times over a two-year period
before the man was informed he and his family members permanent
residency applications had been denied.
"I wish I had never trusted Ms. Diaz with my family's future,
but because I did, I do not know whether we will be able to stay
in the United States or have to return to Mexico," the man said
in his affidavit.
The lawsuit also alleges Ms. Diaz, a notary public, violated the
Texas notary public statute by advertising that she was a
"notaria p'a." In Texas a notary public is an official witness
during the signing of certain documents, but in Mexico the term
"notaria p'a" is used to address certain highly experienced
attorneys. Scam artists in Texas have long exploited this
mistranslation to give Spanish-speaking clients the mistaken
impression they are dealing with an attorney.
Former or current clients of Diaz who are interested in
obtaining their files can contact the Office of the Attorney
General at 1-800-252-8011. Consumers can also call that number
to file a complaint against any other suspected unauthorized
operation. Assistance is available in Spanish and English.
To see the Attorney General's complaint, visit the Website:
http://www.oag.state.tx.us/newspubs/releases/2005/021005ediaz1.p
df
TEXAS: A.G. Nets Favorable Judgment in Gym Membership Fraud Suit
----------------------------------------------------------------
Texas Attorney General Greg Abbott has obtained a default
judgment against a California man who fled Dallas last year
after abruptly closing several Gold's Gym franchises without
notifying members. The Attorney General also filed agreements
with several unrelated Dallas-area fitness clubs to ensure
compliance with state licensing laws and filed two new lawsuits
against Austin- and Dallas-area clubs.
"Since we embarked on this effort many months ago, our first
objective was to take care of the many club members who were
treated unfairly and lost lots of money in prepaid memberships,"
said Attorney General Abbott. "I am pleased our efforts have
resulted in court orders for the return of these consumers'
money, and we continue to pursue other fitness clubs that
operate outside the law."
The Attorney General filed the default judgment against former
Gold's franchise owner Scott R. Theeringer, who allegedly fled
Texas when these locations were closed:
(1) Club Systems Inc., (Garland, Dallas and Carrollton);
(2) Fitness Forever, Inc., (Arlington); and
(3) Fitness Forever IV, Inc., (Fort Worth)
The settlements announced today with Fitness Evolution
(locations in Dallas and Carrollton), and Ultra Fitness, the new
Gold's Gym franchise in Carrollton, ensure the businesses obtain
the required registration with the Secretary of State's Office
and a $20,000 security bond to protect members.
The two new lawsuits were filed against Westlake Fitness of
Austin and owner Charles Burnett, and SportsRidge Athletic Club
of Richardson. The Attorney General sued Westlake Fitness for
abruptly closing last year without notifying its Austin-area
members. Burnett encountered financial difficulties in late 2003
and attempted in vain to sell the facility. In January 2004, he
allegedly posted a notice at the site claiming a gas leak had
prompted an immediate closure. He then removed all equipment
from the facility and completely abandoned it by the following
February.
In the other suit, SportsRidge Athletic Club faces allegations
that it failed to register and post a security with the
Secretary of State.
The Attorney General is authorized to seek civil penalties and
injunctive relief from fitness clubs under the Texas Health Spa
Act and the Texas Deceptive Trade Practices Act, including such
violations as failing to post security and causing confusion
among members as to the licensing of the businesses.
TODO DOLLAR: Recalls 102T Flashing Pacifiers For Choking Hazard
---------------------------------------------------------------
Todo Dollar Wholesale, of Los Angeles, California is cooperating
with the United States Consumer Product Safety Commission by
voluntarily recalling about 102,000 Flashing Pacifier with
Whistle Necklace and Flashing Pacifier Shock Baby Necklaces.
The nipple can detach from the pacifier, posing a choking hazard
to young children.
The recalled pacifier necklace consists of a 28-inch multi-
colored cord with a 3-inch plastic pacifier that comes in
assorted colors. On the Whistle Necklace pacifier, the nipple is
the whistle, which contains a hole at the tip to be used as a
blow hole. The pacifier handle operates as the on-off button for
the flashing light on both pacifiers. "Flashing Pacifier Shock
Baby Necklace" or "2-in-1 Flashing Pacifier with Whistle
Necklace" is printed on the packaging of the pacifiers.
Manufactured in China, the pacifiers were sold through Internet
sales, distributors and small retail stores from January 2004
through November 2004 for about $1.
Consumer Contact: For additional information, call Todo Dollar
Wholesale toll-free at (866) 325-4732 between 9 a.m. and 5 p.m
PT Monday through Friday.
UNION PACIFIC: TX Royalty Owners To Share in $30M Gas Settlement
----------------------------------------------------------------
More than 35,000 royalty owners across Texas will share in a
natural gas settlement that involves a class action lawsuit that
was filed in 1998 against Union Pacific Resources Co., which
could exceed $30 million, the Brenham Banner Press reports.
The lawsuit had alleged that UPRC did not properly market
natural gas produced from wells and or pay proper royalties from
the mid-1990s to April 2004.
Under the terms of the settlement, an immediate cash payment of
$22 million and what attorneys called "prospective relief" of at
least $8 million will be shelled out by UPRC. According to local
attorney Hal Moorman, one of the local counsels working on the
case, the "prospective relief" (the defendants agreed to change
how royalty payments on future production will be calculated)
could be worth as much as $16 million.
UPRC, which was purchased by Andarko Petroleum Corp. after the
suit was filed, was a major oil and gas developer around Texas,
drilling hundred of wells.
The lawsuit was initially a legal battle on whether it would be
considered a "class action" filing to represent tens of
thousands of royalty owners. A special trial judge appointed to
preside over the case ruled it could be a class action lawsuit,
however that was later reversed on appeal.
In the mean time, settlement talks were opened that eventually
went into mediation last summer with Brenham attorney Tom
Bartley acting as chief mediator with a settlement being
approved by District Judge Terry Flenniken last January.
Mr. Moorman and Larry P. Urquhart of Moorman, Tate, Moorman,
Urquhart and Haley served as local counsel. They were joined by
two Houston law firms, who had served as co-lead counsel for the
royalty owners, namely: James L. Reed Jr. and James J. Ormiston
of Looper Reed & McGraw and Scott A. Love and George M. Fleming
of Fleming & Associates.
Asked for comment by the Brenham Banner Press, Mr. Reed called
the settlement "a significant victory for the royalty owners."
He also adds, "Not only did they recover money for past royalty
underpayments, but the defendants have agreed to pay royalties
properly in the future."
Mr. Urquhart also commented about the settlement by saying that
the amounts of payments will vary greatly. He explains, "There
are some royalty owners who are going to get thousands of
dollars and there are some who are going to get $7.28. There's a
wide variation."
UNION PACIFIC: TX Royalty Owners To Share in $30M Gas Settlement
----------------------------------------------------------------
More than 35,000 royalty owners across Texas will share in a
natural gas settlement that involves a class action lawsuit that
was filed in 1998 against Union Pacific Resources Co., which
could exceed $30 million, the Brenham Banner Press reports. The
lawsuit alleged that UPRC did not properly market natural gas
produced from wells and or pay proper royalties from the mid-
1990s to April 2004.
Under the terms of the settlement, an immediate cash payment of
$22 million and what attorneys called "prospective relief" of at
least $8 million will be shelled out by UPRC. Local attorney
Hal Moorman, one of the local counsels working on the case, told
the Banner Press the "prospective relief" (the defendants agreed
to change how royalty payments on future production will be
calculated) could be worth as much as $16 million.
UPRC, which was purchased by Anadarko Petroleum Corp. after the
suit was filed, was a major oil and gas developer around Texas,
drilling hundred of wells. The lawsuit was initially a legal
battle on whether it would be considered a "class action" filing
to represent tens of thousands of royalty owners. A special
trial judge appointed to preside over the case ruled it could be
a class action lawsuit, however that was later reversed on
appeal.
In the mean time, settlement talks were opened that eventually
went into mediation last summer with Brenham attorney Tom
Bartley acting as chief mediator with a settlement being
approved by District Judge Terry Flenniken last January.
Mr. Moorman and Larry P. Urquhart of Moorman, Tate, Moorman,
Urquhart and Haley served as local counsel. They were joined by
two Houston law firms, who had served as co-lead counsel for the
royalty owners, namely: James L. Reed Jr. and James J. Ormiston
of Looper Reed & McGraw and Scott A. Love and George M. Fleming
of Fleming & Associates.
Asked for comment by the Brenham Banner Press, Mr. Reed called
the settlement "a significant victory for the royalty owners."
He also adds, "Not only did they recover money for past royalty
underpayments, but the defendants have agreed to pay royalties
properly in the future."
Mr. Urquhart also commented about the settlement by saying that
the amounts of payments will vary greatly. He explains, "There
are some royalty owners who are going to get thousands of
dollars and there are some who are going to get $7.28. There's a
wide variation."
UNITED STATES: ACEC Applauds Senate Passage of Reform Bill (S.5)
----------------------------------------------------------------
The American Council of Engineering Companies (ACEC) strongly
endorsed the Senate passage of the Class Action Fairness Act
(S.5), as a first step in bringing common sense and meaningful
reform to a troubled U.S. legal system.
The Class Action Fairness Act seeks to curb abuses of the class
action lawsuit system. Backed by President Bush and Senate
Majority Leader Bill First (R-TN), the legislation does not make
any changes to substantive law, but instead would allow multi-
state class action litigants to move their cases from state to
federal court, thus avoiding "judicial hellholes" or certain
state courts known for strong consumer bias, anti-business
jurors and outrageous jury awards.
"Jackpot justice and lawsuit abuse is out of control in the U.S.
legal system and is one of the worst problems facing the
business community," said ACEC President Dave Raymond. "U.S.
tort costs have steadily increased reaching a record $246
billion in 2003 -- It is important and gratifying to see that
this issue is being addressed in Congress and that the President
has made this issue a priority for his second term."
Raymond noted that engineering firms are increasingly becoming
victims of lawsuit abuse. "There are always litigants out there
looking for what they consider a deep pocket regardless of the
facts or the merits of the case," Raymond said. "As a result,
more and more engineers are becoming the answer to the question
-- 'who else can we sue?' -- in a legal system out of balance."
Abuse of the class action lawsuit system includes frivolous
claims, gaming of the system to keep cases in lenient state
courts, and collusive statements. Too often, lawsuits are only
an attempt to force settlements from a corporation even though
the corporation is not guilty of any wrongdoing.
S.5 is the first component of a larger tort reform effort backed
by the Council, which includes legislation to curb runaway
medical malpractice awards that drive up the cost of health
insurance for engineering firms. ACEC is also supportive of The
Lawsuit Abuse Reduction Act, introduced last week by Rep. Lamar
Smith, (R-Texas), which tightens the Federal Rules of Civil
Procedure to establish mandatory sanctions against lawyers who
file repeated frivolous lawsuits.
The American Council of Engineering Companies (ACEC) is the
business association of America's engineering industry,
representing approximately 5,500 independent engineering
companies throughout the United States engaged in the
development of America's transportation, environmental,
industrial, and other infrastructure. Founded in 1910 and
headquartered in Washington, D.C., ACEC is a national federation
of 51 state and regional organizations.
UNITED STATES: AHIP Head Applauds Passage Of Lawsuit Reform Bill
----------------------------------------------------------------
Karen Ignagni, President and CEO of America's Health Insurance
Plans (AHIP), released the following statement in response to
the U.S. Senate passage of class action lawsuit reform.
"Today, the Senate took an important first step on the road to
fixing our broken civil litigation system by passing
comprehensive class action lawsuit reform. By confronting this
issue, we are one step closer to achieving a rational legal
system.
"We hope today's action is just the beginning, because lawsuit
abuse is not limited to class action litigation. Indeed, it is
our hope that Congress takes the next logical step and enacts
medical liability reform legislation to rein in frivolous
lawsuits and improve the quality and accessibility of health
care."
VALLEY PROTEINS: Deadline Set For Opting Out Of $2.3 Settlement
---------------------------------------------------------------
Saluda County residents must choose by Friday how to address
pollution complaints against the Valley Proteins plant, The
State reports.
Nearly all people living within four miles of the plant
automatically become part of a class-action lawsuit against the
plant, unless they choose to file individual suits. Valley
Proteins reached a nearly $2.3 million settlement proposal in
the case in January, and a judge is scheduled to rule on
February 18 on whether such a settlement would be fair.
According to plaintiff lawyer Ronald B. Cox, six of the roughly
1,400 people who could join the class action have opted out.
For more information, call Mr. Cox at (803) 788-5220.
WOOD MANUFACTURING: Recalls 7,577 Trailers Due To Crash Hazard
--------------------------------------------------------------
Wood Manufacturing Co., Inc. is cooperating with the National
Highway Traffic Safety Administration (NHTSA) by recalling 7,577
trailers, namely:
(1) RANGER TRAIL / AF4500, model 2005
(2) RANGER TRAIL / AF5000, model 2004-2005
(3) RANGER TRAIL / CF3725, model 2004-2005
(4) RANGER TRAIL / CF4500, model 2004-2005
(5) RANGER TRAIL / CF5000, model 2004-2005
(6) RANGER TRAIL / FF3725, model 2004-2005
(7) RANGER TRAIL / FF4500, model 2004-2005
(8) RANGER TRAIL / FF5000, model 2004-2005
(9) RANGER TRAIL / SF3725, model 2004-2005
(10) RANGER TRAIL / SF4500, model 2004-2005
(11) RANGER TRAIL / SF5000, model 2004-2005
Certain trailers, equipped with truck-lite brand model 44,40 or
30 stop/tail light and front/rear side marker lights with no
reflex lens or reflective material, fail to comply with the
requirements of federal motor vehicle safety standard no. 108,
"lamps, reflective devices and associated equipment."
A reflex lens or reflective material is not incorporated in the
lights. This reduced lighting level will affect drivers'
visibility and a crash may occur without prior notice.
Dealers will mail to owners a written notification along with
instructions, diagrams and parts to apply a 4-red and 2 Amber
SAE A 90 Adhesive Backed reflectors. Owners may also have
dealers perform the work. The manufacturer has not yet provided
an owner notification schedule. For more details, contact the
Company by Phone: 612-337-1859 or the NHTSA's auto safety
hotline: 1-888-327-4236.
New Securities Fraud Cases
EPIX PHARMACEUTICALS: Marc S. Henzel Files Securities Suit in MA
----------------------------------------------------------------
The Law Offices of Marc S. Henzel initiated a class action
lawsuit in the United States District Court for the United
States District Court for the District of Massachusetts on
behalf of purchasers of EPIX Pharmaceuticals, Inc. (NASDAQ:
EPIX) securities during the period between July 10, 2003 and
January 14, 2005 (the "Class Period").
The complaint charges EPIX and certain of its officers and
directors with violations of the Securities Exchange Act of
1934. EPIX (formerly known as EPIX Medical Inc.) is a developer
of targeted contrast agents that are designed to improve the
diagnostic quality of images produced by magnetic resonance
imaging ("MRI"). MRI is an imaging technology for a range of
applications, including the identification and diagnosis of a
variety of medical disorders.
The complaint alleges that, by the start of the Class Period,
defendants became aware of clinical quality issues with the
underlying data for their MS-325 Phase III program. MS-325 is
designed to provide visual imaging of the vascular system
through a type of MRI known as magnetic resonance angiography.
These issues, including the generation of unintelligible imaging
scans, made difficult, if not impossible, the proper control of
their clinical test results and statistical analysis of the data
and results. On December 16, 2003, defendants announced the
submission of their New Drug Application ("NDA") for MS-325.
Defendants continued to conceal the serious problems with their
clinical program, specifically the poor quality of the
underlying clinical data and problems with the statistical
analysis. Defendants instead made positive and encouraging
remarks about their "extensive scientific and clinical
development" activities and prospects for product approval.
Then, on January 14, 2005, as alleged in the Complaint, the
Company reported shocking news about the MS-325 submission.
Although defendants sought to place a positive spin on their
receipt of an "approvable" action letter from the U.S. Food &
Drug Administration ("FDA") for MS-325, the news was far from
positive. The FDA had determined that problems with the Phase
III clinical trials were so serious that it was impossible for
them to come to a conclusion about the efficacy of MS-325.
Worse, the FDA noted problems with the underlying data itself,
problems that could not be resolved simply on the basis of re-
analysis of the data. Thus, defendants delivered a serious
setback to investors and, based on their news, the price of EPIX
stock plunged 27%, to $10.67, for a loss of $3.98 per share, on
volume of 11 million shares.
For more details, contact the Law Offices of Marc S. Henzel by
Mail: 273 Montgomery Ave., Suite 202, Bala Cynwyd, PA 19004 by
Phone: 610-660-8000 or 888-643-6735 by Fax: 610-660-8080 by E-
Mail: mhenzel182@aol.com.
HUFFY CORPORATION: Stull Stull Files Securities Fraud Suit in OH
----------------------------------------------------------------
The law firm of Stull, Stull & Brody initiated a class action
lawsuit in the United States District Court for the Southern
District of Ohio, on behalf of all persons who purchased the
publicly traded securities of Huffy Corp. ("Huffy") (Pink
Sheets: HUFCQ.PK) between April 16, 2002 and August 13, 2004,
inclusive (the "Class Period").
The Complaint alleges that Huffy violated federal securities
laws by issuing false or misleading public statements.
Specifically, the Complaint alleges that Huffy's positive
statements concerning its growth and long-term prospects were
false and misleading because Huffy was experiencing problems
integrating the McCalla and Gen-X acquisition; Huffy's Canadian
operations were engaged in improper accounting practices; legacy
costs associated with discontinued operations were continuing to
mount; and, as a result of the foregoing, Huffy's financial
condition was dramatically eroding such that it was approaching
insolvency.
On August 13, 2004, Huffy issued a press release announcing
that, in the course of its review of its financial statements
for the first quarter of 2004, it had determined that certain
accounting entries, estimated in the range of $3.5 to $5.0
million and related primarily to customer deductions, credits
and reserves for inventory valuation and doubtful account
receivables for Huffy Sports Canada (formerly known as Gen-X
Sports), were more properly reflected in the period ended
December 31, 2003 rather than in the first quarter of 2004. In
response to this announcement, the price of Huffy common stock
declined from a close of $0.58 per share on August 13, 2004, to
close at $0.35 per share on August 14, 2004. Then, on August 16,
2004, Huffy announced that it was being delisted from the New
York Stock Exchange ("NYSE"). Finally, on October 20, 2004,
Huffy announced that it was filing for bankruptcy.
For more details, contact Tzivia Brody, Esq. of Stull, Stull &
Brody by Mail: 6 East 45th Street, New York, NY 10017 by Phone:
1-800-337-4983 by Fax: 212/490-2022 or by E-mail: SSBNY@aol.com.
HYPERCOM CORPORATION: Federman & Sherwood Files Stock Suit in AZ
----------------------------------------------------------------
The law firm of Federman & Sherwood initiated a class action
lawsuit in the United States District Court of Arizona against
Hypercom Corporation (NYSE: HYC).
The complaint alleges violations of federal securities laws,
Sections 10(b) and 20(a) of the Securities Exchange Act of 1934
and Rule 10b-5, including allegations of issuing a series of
material misrepresentations to the market which had the effect
of artificially inflating the market price. The class period is
from April 30, 2004 through February 3, 2005.
For more details, contact William B. Federman of FEDERMAN &
SHERWOOD by Mail: 120 N. Robinson, Suite 2720, Oklahoma City, OK
73102 by Phone: (405) 235-1560 by Fax: (405) 239-2112 by E-mail:
wfederman@aol.com or visit their Web site:
http://www.federmanlaw.com.
HYPERCOM CORPORATION: Lerach Coughlin Lodges AZ Securities Suit
---------------------------------------------------------------
The law firm of Lerach Coughlin Stoia Geller Rudman & Robbins
LLP ("Lerach Coughlin") initiated a class action in the United
States District Court for the District of Arizona on behalf of
purchasers of Hypercom Corporation ("Hypercom") (NYSE:HYC)
common stock during the period between April 30, 2004 and
February 3, 2005 (the "Class Period").
The complaint charges Hypercom and certain of its officers and
directors with violations of the Securities Exchange Act of
1934. Hypercom manufactures, designs and sells end-to-end
electronic payment solutions that include point-of-sale/point-
of-transaction terminals, peripheral devices, transaction
networking devices, transaction management systems and
application software and provides related support and services.
The complaint alleges that during the Class Period, defendants
caused Hypercom's shares to trade at artificially inflated
levels through the issuance of false and misleading financial
statements. On February 4, 2005, before the market opened, the
Company issued a press release announcing that its financial
results for the first three quarters of 2004 would be restated
following "determination that certain leases originated during
that period by the Company's UK subsidiary, Hypercom EMEA, Inc.,
were incorrectly accounted for as sales-type leases, rather than
operating leases. This accounting error, which relates to
approximately 3,200 leases, resulted in an overstatement of net
revenue for the first three quarters of 2004. The Company
currently estimates that the adjustment to its financial
statements will decrease net revenue for the nine months ended
September 30, 2004 by up to $4.0 million as compared to
previously announced results, and that operating profit for the
same period will decrease by approximately 65 to 75% of the
amount of the net revenue reduction."
On this news, Hypercom shares closed down 18.3% at $4.46 per
share on volume of 2.9 million shares, more than six times the
stock's average full-day turnover.
For more details, contact William Lerach or Darren Robbins of
Lerach Coughlin by Phone: 800/449-4900 or 619/231-1058 or by E-
mail: wsl@lerachlaw.com or visit their Web site:
http://www.lerachlaw.com/cases/hypercom/.
HYPERCOM CORPORATION: Marc S. Henzel Files Securities Suit in AZ
----------------------------------------------------------------
The Law Offices of Marc S. Henzel initiated a class action
lawsuit in the United States District Court for the United
States District Court for the District of Arizona on behalf of
all securities purchasers of Hypercom Corporation (NYSE: HYC)
from April 30, 2004 through February 3, 2005, inclusive (the
"Class Period").
The complaint charges Hypercom and certain of its officers and
directors with violations of the Securities Exchange Act of
1934. Hypercom Corporation manufactures, designs and sells end-
to-end electronic payment solutions that include point-of-sale
(POS)/point-of-transaction terminals, peripheral devices,
transaction networking devices, transaction management systems
and application software and provides related support and
services. 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 Company's leases originated during the Class
Period, by the Company's UK subsidiary, Hypercom EMEA,
Inc., were improperly accounted for as "sales-type
leases," rather than "operating leases;"
(2) that as a result of this, the Company materially
overstated its net revenue for the first three quarters
of 2004 by at least $4.0 million;
(3) that the Company had materially overstated its
operating profit by at least 65-75% during the Class
Period;
(4) that the Company's financial statements were not
prepared in accordance with Generally Accepted
Accounting Principles ("GAAP");
(5) that the Company lacked adequate internal controls and
was therefore unable to ascertain the true financial
condition of the Company; and
(6) that as a result, the value of the Company's net income
and financial results were materially overstated at all
relevant times.
On February 4, 2005, prior to the opening of the market,
Hypercom announced a restatement of prior 2004 quarterly
financials. More specifically, the Company stated that certain
leases originated during that period by the Company's UK
subsidiary, Hypercom EMEA, Inc., were incorrectly accounted for
as sales-type leases, rather than operating leases. This
accounting error, which related to approximately 3,200 leases,
resulted in an overstatement of net revenue for the first three
quarters of 2004. The Company currently estimated that the
adjustment to its financial statements would decrease net
revenue for the nine months ended September 30, 2004 by up to
$4.0 million as compared to previously announced results, and
that operating profit for the same period would decrease by
approximately 65 to 75% of the amount of the net revenue
reduction. The Company had also determined that the internal
control deficiency that gave rise to this restatement
represented a material weakness, as defined by the PCAOB's
Auditing Standard No. 2. Consequently, management would be
unable to conclude that the Company's internal controls over
financial reporting were effective as of December 31, 2004, and
the Company's independent auditors, Ernst & Young LLP, were
expected to issue an adverse opinion with respect to the
Company's internal controls over financial reporting.
News of this shocked the market. Shares of Hypercom fell $1.00
per share, or 18.32 percent, to close at $4.46 per share on
unusually high trading volume.
For more details, contact the Law Offices of Marc S. Henzel by
Mail: 273 Montgomery Ave., Suite 202, Bala Cynwyd, PA 19004 by
Phone: 610-660-8000 or 888-643-6735 by Fax: 610-660-8080 by E-
Mail: mhenzel182@aol.com.
HYPERCOM CORPORATION: Marc Henzel Lodges Securities Suit in AZ
--------------------------------------------------------------
The Law Offices of Marc S. Henzel initiated a securities class
action in the United States District Court for the United States
District Court for the District of Arizona on behalf of all
securities purchasers of Hypercom Corporation (NYSE: HYC) from
April 30, 2004 through February 3, 2005, inclusive.
The complaint charges Hypercom and certain of its officers and
directors with violations of the Securities Exchange Act of
1934. Hypercom Corporation manufactures, designs and sells end-
to-end electronic payment solutions that include point-of-sale
(POS)/point-of-transaction terminals, peripheral devices,
transaction networking devices, transaction management systems
and application software and provides related support and
services.
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 Company's leases originated during the Class
Period, by the Company's UK subsidiary, Hypercom EMEA,
Inc., were improperly accounted for as "sales-type
leases," rather than "operating leases;"
(2) that as a result of this, the Company materially
overstated its net revenue for the first three quarters
of 2004 by at least $4.0 million;
(3) that the Company had materially overstated its
operating profit by at least 65-75% during the Class
Period;
(4) that the Company's financial statements were not
prepared in accordance with Generally Accepted
Accounting Principles ("GAAP");
(5) that the Company lacked adequate internal controls and
was therefore unable to ascertain the true financial
condition of the Company; and
(6) that as a result, the value of the Company's net income
and financial results were materially overstated at all
relevant times.
On February 4, 2005, prior to the opening of the market,
Hypercom announced a restatement of prior 2004 quarterly
financials. More specifically, the Company stated that certain
leases originated during that period by the Company's UK
subsidiary, Hypercom EMEA, Inc., were incorrectly accounted for
as sales-type leases, rather than operating leases. This
accounting error, which related to approximately 3,200 leases,
resulted in an overstatement of net revenue for the first three
quarters of 2004. The Company currently estimated that the
adjustment to its financial statements would decrease net
revenue for the nine months ended September 30, 2004 by up to
$4.0 million as compared to previously announced results, and
that operating profit for the same period would decrease by
approximately 65 to 75% of the amount of the net revenue
reduction. The Company had also determined that the internal
control deficiency that gave rise to this restatement
represented a material weakness, as defined by the PCAOB's
Auditing Standard No. 2. Consequently, management would be
unable to conclude that the Company's internal controls over
financial reporting were effective as of December 31, 2004, and
the Company's independent auditors, Ernst & Young LLP, were
expected to issue an adverse opinion with respect to the
Company's internal controls over financial reporting.
News of this shocked the market. Shares of Hypercom fell $1.00
per share, or 18.32 percent, to close at $4.46 per share on
unusually high trading volume.
For more details, contact the Law Offices of Marc S. Henzel by
Mail: 273 Montgomery Ave., Suite 202, Bala Cynwyd, PA 19004,
Phone: 610.660.8000 or 888.643.6735 by Fax: 610.660.8080 or by
E-mail: mhenzel182@aol.com.
INPUT/OUTPUT: Marc Henzel Files Securities Fraud Suit in S.D. TX
----------------------------------------------------------------
The Law Offices of Marc S. Henzel initiated a securities class
action in the United States District Court for the United States
District Court for the Southern District of Texas on behalf of
purchasers of Input/Output, Inc. (NYSE: IO) publicly traded
securities during the period between May 10, 2004 and January 4,
2005 (the "Class Period"), including those who acquired their
shares pursuant to the Company's June 2004 Secondary Stock
Offering.
The complaint charges Input/Output and certain of its officers
and directors with violations of the Securities Exchange Act of
1934. Input/Output is a provider of seismic acquisition imaging
technology for exploration, production and reservoir monitoring
in land and marine, as well as shallow water and marsh
environments.
The complaint alleges that during the Class Period, defendants
issued materially false and misleading statements regarding the
Company's financial results and its business and prospects.
According to the complaint, during the Class Period defendants
failed to disclose and misrepresented the following material
adverse facts known to defendants or recklessly disregarded by
them:
(1) that the Company's products were defective;
(2) that customers were wrongfully induced into buying the
Company's products;
(3) that the integration of GX Technology ("GXT"), acquired
by the Company in May 2004, and Input/Output was
suffering from massive problems, preventing the
acquisition from being as accretive as claimed;
(4) that the GXT project pipeline was not on track, as
defendants had claimed; and
(5) that as a result of the above, the defendants'
statements about the Company were lacking in any
reasonable basis when made.
On January 4, 2005, Input/Output 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. On this news, shares of Input/Output
fell $1.41 per share, or about 17%, to close at $6.90 per share,
on unusually high trading volume.
For more details, contact the Law Offices of Marc S. Henzel by
Mail: 273 Montgomery Ave., Suite 202, Bala Cynwyd, PA 19004,
Phone: 610.660.8000 or 888.643.6735 by Fax: 610.660.8080 or by
E-mail: mhenzel182@aol.com.
OFFICEMAX INC.: Spector Roseman Lodges Securities Suit in IL
------------------------------------------------------------
The law firm of Spector, Roseman & Kodroff, P.C. initiated a
securities class action lawsuit in the United States District
Court for the Northern District of Illinois, on behalf of
purchasers of the common stock of OfficeMax, Inc. ("OfficeMax"
or the "Company") (NYSE: OMX) between January 22, 2004 through
January 11, 2005, inclusive (the "Class Period").
The Complaint alleges that defendants violated the federal
securities laws by issuing materially false and misleading
statements contained in press releases and filings with the
Securities and Exchange Commission during the Class Period.
Specifically, the Complaint alleges that during the Class
Period, defendants made materially false and misleading
statements with respect to OfficeMax's financial performance and
internal controls. On December 20, 2004, the Company announced
that it had launched an internal investigation into vendor
claims, "that certain employees acted inappropriately in
requesting promotional payments and in falsifying supporting
documentation for approximately $3.3 million in claims billed to
the vendor by OfficeMax during 2003 and 2004."
On January 11, 2005, the Company announced that:
(1) its recently appointed Chief Financial Officer, Brian
Anderson, had resigned;
(2) it was postponing the release of its earnings for the
fourth quarter and full year 2004 pending the
conclusion of an investigation into issues relating to
its accounting for vendor income;
(3) its investigation had confirmed the claims by a vendor
to its retail business that certain employees
fabricated supporting documentation for approximately
$3.3 million in claims billed to the vendor by
OfficeMax during 2003 and 2004;
(4) it was expanding its investigation into vendor rebates
and revenue recognition; and
(5) it had terminated four employees as a result of
information discovered through its investigation.
On this news, the Company's stock fell $1.42, or 4.7%, to
$28.88.
For more details, contact Robert M. Roseman by Phone:
888-844-5862 or by E-mail: classaction@srk-law.com or visit
their Web site: http://www.srk-law.com.
PHARMOS PHARMACEUTICAL: Marc S. Henzel Lodges NJ Securities Suit
----------------------------------------------------------------
The Law Offices of Marc S. Henzel initiated a class action
lawsuit in the United States District Court for the United
States District Court for the District of New Jersey on behalf
of all persons who purchased the publicly traded securities of
Pharmos Corp. (Nasdaq: PARS) between August 23, 2004 and
December 17, 2004 (the "Class Period").
The Complaint alleges that Pharmos violated federal securities
laws by issuing false or misleading public statements.
Specifically, the Complaint alleges that Dexanabinol, the
Company's flagship drug product, in Phase III trials for
Traumatic Brain Injury ("TBI") trial, was not exhibiting a
materially favorable reaction. However, prior to disclosing this
information to the public, Pharmos sold $16.75 million worth of
stock in a private placement. Furthermore, the Company's CEO
sold 20% of his holdings and its President sold almost 50% of
his holdings. Such sales occurred after the close of Phase III
enrollment and after the six month post-enrollment period had
concluded. On December 20, 2004, just weeks after insiders sold
400,000 shares of stock, Pharmos announced that Dexanabinol was
not found to be materially effective in Phase III testing.
Furthermore, after years of touting the effectiveness of
Dexanabinol, Pharmos abruptly ceased its effort to gain approval
for Dexanabinol for TBI.
For more details, contact the Law Offices of Marc S. Henzel by
Mail: 273 Montgomery Ave., Suite 202, Bala Cynwyd, PA 19004 by
Phone: 610-660-8000 or 888-643-6735 by Fax: 610-660-8080 by E-
Mail: mhenzel182@aol.com.
SIERRA WIRELESS: Stull Stull Lodges Securities Fraud Suit in CA
---------------------------------------------------------------
The law firm of Stull, Stull & Brody initiated a class action
lawsuit in the United States District Court for the Southern
District of California, on behalf of all persons who purchased
the securities and/or sold the put options of Sierra Wireless,
Inc. ("Sierra") (Nasdaq:SWIR) between January 28, 2004 and
January 26, 2005, inclusive (the "Class Period").
The Complaint alleges that Sierra and certain of its officers
and directors violated federal securities laws by issuing
materially false and misleading statements concerning the
Company's financial results and business condition while failing
to disclose material adverse facts, including:
(1) that Sierra's revenues from its PC card products would
decrease because channel partners and customers held
excess inventory;
(2) that excess inventory of PC cards held by the Company's
channel partners and customers would lead to reduced
orders and sales in future quarters;
(3) that Sierra's dependence on revenue from sales of its
embedded module products to palmOne for its Treo PDA
product was greater than had been disclosed;
(4) that Sierra faced increased competition in the PC card
market;
(5) and that Sierra' s recent introduction of its new Voq
professional phone product added little revenue while
it damaged the Company's relationship with a prime
customer, palmOne, because the Voq product would
compete with palmOne's Treo.
On January 27, 2005, Sierra's stock plummeted 38% to $8.97, one
day after the Company issued a press release announcing that its
revenue and earnings per share for the fourth quarter of 2004
were below previous guidance, and that the Company expected a
steep decline in revenue, and a net loss, in the first quarter
of 2005.
For more details, contact Tzivia Brody, Esq. of Stull, Stull &
Brody by Mail: 6 East 45th Street, New York, NY 10017 by Phone:
1-800-337-4983 by Fax: 212/490-2022 or by E-mail: SSBNY@aol.com.
SIPEX CORPORATION: Marc S. Henzel Lodges Securities Suit in CA
--------------------------------------------------------------
The Law Offices of Marc S. Henzel initiated a class action
lawsuit in the United States District Court for the Northern
District of California on behalf of all securities purchasers of
Sipex Corporation (Nasdaq: SIPX) between April 10, 2003 and
January 20, 2005, inclusive (the "Class Period").
The complaint charges Sipex, Douglas M. McBurnie, Walid
Maghribi, Phillip A. Kagel, and Clyde R. Wallin 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 inappropriately recognized revenue on
sales for which price protection, stock rotation and/or
return rights were granted;
(2) that the Company's financial results were in violation
of Generally Accepted Accounting Principles ("GAAP");
(3) that the Company lacked adequate internal controls; and
(4) that as a result of the above, the Company's financial
results were materially inflated at all relevant times.
On January 20, 2005 Sipex announced that the Company may restate
its financial statements for the fiscal year ended December 31,
2003 and the fiscal quarters ended April 3, 2004, July 3, 2004
and October 2, 2004 due to the possible improper recognition of
revenue during these periods on sales for which price
protection, stock rotation and/or return rights may have been
granted. The news shocked the market. Shares of Sipex fell $0.90
per share, or 23.44 percent, on January 21, 2005 to close at
$2.94 per share, on unusually high volume.
For more details, contact the Law Offices of Marc S. Henzel by
Mail: 273 Montgomery Ave., Suite 202, Bala Cynwyd, PA 19004 by
Phone: 610-660-8000 or 888-643-6735 by Fax: 610-660-8080 by E-
Mail: mhenzel182@aol.com.
SIRVA INC.: Marc Henzel Lodges Securities Fraud Suit in N.D. IL
---------------------------------------------------------------
The Law Offices of Marc S. Henzel initiated a securities class
action in the United States District Court for the United States
District Court for the Northern District of Illinois on behalf
of all of the common stock of SIRVA, Inc. (NYSE: SIR) between
November 24, 2003 and November 9, 2004, inclusive (the "Class
Period") and on behalf of purchasers who bought SIRVA common
stock pursuant to and/or traceable to the Company's June 8, 2004
Registration Statement.
The complaint charges SIRVA and certain of its officers and
directors with violations of Sections 10(b) and 20(a) of the
Securities Exchange Act of 1934 and Rule 10b-5 promulgated
thereunder. SIRVA is in the global relocation industry,
providing its solutions to a diverse customer base, including
transferring corporate and government employees and moving
individual consumers.
According to the Complaint, the Company failed to disclose and
misrepresented the following material adverse facts known to
defendants or recklessly disregarded by them:
(1) that the Company maintained inadequate reserves in the
Network Services division;
(2) that the growth and profitability of the Network
Services division was being adversely affected;
(3) that SIRVA failed to rationalize capacity, reduce fixed
costs, and generate a more meaningful relocation volume
growth in its European division; and
(4) that the profitability of the European operations was
suffering.
Additionally, during the Class Period and with the Company's
stock trading at artificially inflated prices, Company insiders
embarked on an insider trading scheme. As a result of the
insider trading scheme, Company insiders reaped more than $336
million in gross proceeds.
On November 9, 2004, SIRVA reported third-quarter profit fell
from the year-ago period as the Company booked a $15.2 million
charge to increase insurance loss reserves. The Company said due
to higher reserves for U.S. insurance claims and continued poor
market conditions in Europe, 2004 earnings from continuing
operations are now projected to be between 86 cents and 87
cents. For 2005, it expects to post earnings in the range of
$1.25 to $1.30 per share.
News of this shocked the market. Shares of SIRVA fell $5.83 per
share, or 24.52 percent, to close at $17.95 per share.
For more details, contact the Law Offices of Marc S. Henzel by
Mail: 273 Montgomery Ave., Suite 202, Bala Cynwyd, PA 19004,
Phone: 610.660.8000 or 888.643.6735 by Fax: 610.660.8080 or by
E-mail: mhenzel182@aol.com.
STAR GAS: Marc Henzel Commences Securities Fraud Lawsuit in CT
--------------------------------------------------------------
The Law Offices of Marc S. Henzel initiated a securities class
action in the United States District Court for the District of
Connecticut on behalf of purchasers of Star Gas Partners, L.P.
(NYSE:SGU) (NYSE:SGH) publicly traded securities during the
period between December 4, 2003 and October 18, 2004 (the "Class
Period").
The complaint charges Star Gas and certain of its officers and
directors with violations of the Securities Exchange Act of
1934. Star Gas is a diversified home energy distributor and
service provider, specializing in heating oil, propane, natural
gas and electricity.
The complaint alleges that during the Class Period, defendants
caused Star Gas's shares to trade at artificially inflated
levels through the issuance of false and misleading statements.
As a result of this inflation, Star Gas was able to complete a
secondary public offering of 1.3 million common units and two
note offerings totaling $65 million, raising net proceeds of $95
million during the Class Period. The truth, known by each of the
defendants but concealed from the investing public during the
Class Period, were as follows:
(1) that the Company was experiencing massive delays in the
centralization of its dispatch system and causing its
customers to flee to competitors;
(2) that the Company's Petro heating oil division's
business process improvement program was faltering and
not generating the benefits claimed by defendants;
(3) that contrary to defendants' earlier indications, the
Company was not able to increase or even maintain
profit margins in its heating oil segment;
(4) that the Company's second quarter 2004 claimed profit
margins were an aberration and not indicative of the
Company's success or ability to pass on the heating oil
price increase because the Company had earlier acquired
heating oil (sold in the second quarter) at a much
lower basis; and
(5) that as a result, defendants were facing imminent
bankruptcy and would no longer be able to service the
Company's debt, all of which would halt the Company's
ability to maintain the Company's credit rating and/or
obtain future financing.
On October 18, 2004, TheStreet.com issued an article, entitled
"Stocks In Motion: Star Gas," which stated: "Earnings at Star
Gas' heating oil unit are expected to decline substantially, the
Company said, which will not permit it to meet the borrowing
conditions under its working capital line. Star is currently in
talks with lenders to modify conditions and other terms that
would allow its business unit to operate through the winter. If
lenders do not agree, however, to offer modified terms, Star
said it could be forced to seek alternative financing on
'extremely disadvantageous' terms or even be forced to seek
bankruptcy protection." On this news, Star Gas's stock dropped
to $4.32 per share from a closing price of $21.60 on the
previous trading day.
For more details, contact the Law Offices of Marc S. Henzel by
Mail: 273 Montgomery Ave., Suite 202, Bala Cynwyd, PA 19004,
Phone: 610.660.8000 or 888.643.6735 by Fax: 610.660.8080 or by
E-mail: mhenzel182@aol.com.
STONEPATH GROUP: Marc Henzel Lodges Securities Suit in E.D. PA
--------------------------------------------------------------
The Law Offices of Marc S. Henzel initiated a securities class
action in the United States District Court for the Eastern
District of Pennsylvania on behalf of all persons who purchased
or acquired securities of Stonepath Group, Inc. (AMEX: STG)
between May 7, 2003 and September 20, 2004, inclusive, seeking
to pursue remedies under the Securities Exchange Act of 1934
(the "Exchange Act").
The Complaint charges Stonepath Group, Inc., Dennis L. Pelino,
Bohn H. Crain, and Thomas L. Scully with violations of the
Securities Exchange Act of 1934. More specifically, the
Complaint alleges that the Company failed to disclose and
misrepresented that the Company understated its accrued
purchased transportation liability and related costs of
purchased transportation rendering the Company's Class Period
financial statements materially false and misleading because
they understated the Company's liabilities and expenses, and
overstated the Company's net income and earnings before income,
taxes, depreciation, and amortization ("EBITDA"). As a result of
the above, the Company's reported financial results were in
violation of GAAP.
On September 20, 2004, the Company reported that it intended to
restate its fiscal year 2003 and first and second quarter of
2004 financial statements. As a result of this news, the price
of StonePath stock closed at $0.86 per share (on heavy trading
volume of 4,830,200 shares), a 46% decrease from its close on
September 19, 2004.
For more details, contact the Law Offices of Marc S. Henzel by
Mail: 273 Montgomery Ave., Suite 202, Bala Cynwyd, PA 19004,
Phone: 610.660.8000 or 888.643.6735 by Fax: 610.660.8080 or by
E-mail: mhenzel182@aol.com.
SUPPORTSOFT INC.: Marc Henzel Lodges Securities Suit in N.D. CA
---------------------------------------------------------------
The Law Offices of Marc S. Henzel initiated a securities class
action filed in the United States District Court for the
Northern District of California on behalf of all securities
purchasers of SupportSoft, Inc. (Nasdaq: SPRT) between January
20, 2004 and October 1, 2004, inclusive.
The complaint charges SupportSoft, Radha R. Basu, and Brian M.
Beattie with violations of the Securities Exchange Act of 1934.
More specifically, the Complaint alleges that the Company failed
to disclose and misrepresented the following material adverse
facts which were known to defendants or recklessly disregarded
by them:
(1) that the Company failed to close two $4.5 million
transactions, due to major flaws in SupportSoft's
internal controls;
(2) that the Company was experiencing sales execution
issues;
(3) that SupportSoft's product pipeline was heavily
weighted toward perpetual deals;
(4) that due to the saturation of the domestic broadband
market, the Company was facing a more challenging
software spending environment of authorization
signatures and longer sales cycles; and
(5) that as a result of the above, the defendants' fiscal
2004 projections were lacking in any reasonable basis
when made.
On October 4, 2004, SupportSoft announced preliminary financial
results for the quarter ended September 30, 2004. The Company
expected total revenues for the third quarter 2004 to be in the
range of $11.9 million to $12.3 million versus $13.5 million for
the same period last year. GAAP loss per share was expected to
be in the range of $0.01 to $0.04, this was well below
expectations. News of this shocked the market. Shares of
SupportSoft fell $3.41 per share, or 35.45 percent, to close at
$6.21 per share.
For more details, contact the Law Offices of Marc S. Henzel by
Mail: 273 Montgomery Ave., Suite 202, Bala Cynwyd, PA 19004,
Phone: 610.660.8000 or 888.643.6735 by Fax: 610.660.8080 or by
E-mail: mhenzel182@aol.com.
SWIFT TRANSPORTATION: Marc Henzel Lodges Securities Suit in AZ
--------------------------------------------------------------
The Law Offices of Marc S. Henzel initiated a securities class
action in the United States District Court for the United States
District Court for the Southern District of Arizona on behalf of
all securities purchasers of Swift Transportation Co., Inc.
(Nasdaq: SWFT) from October 16, 2003 through October 1, 2004,
inclusive.
The complaint charges Swift, Gary R. Enzor, Patrick J. Farley,
Jerry C. Moyes, and William F. Riley III 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 conditional safety rating given to the Company
by the FMSCA was not an error, but rather a true
representation of Swift's performance;
(2) that making the internal changes necessary to improve
the rating was fiscally prohibitive;
(3) that the Company had to absorb the cost of the new
Department of Transportation regulations requiring that
drivers be paid for loading time and time waiting to
load;
(4) that as a consequence of the foregoing, the Company was
losing its competitive position and revenue, however,
in order to maintain the appearance of financial well-
being, for the benefit of defendant Moyes' personal
finances, the Company systematically under-depreciating
its capital assets thereby artificially inflating its
revenues;
(5) that as a result of this, the Company's financial
results were in violation of Generally Accepted
Accounting Principles ("GAAP");
(6) the Company lacked adequate internal controls; and
(7) the Company's financial results were materially
inflated at all relevant times.
On September 15, 2004, Swift announced that it had adopted a new
repurchase program, under which it may acquire up to $150
million of its common stock over the next several months.
Additionally, Swift also announced that it expects Q3 earnings
to range between 26 cents and 31 cents per share. This news
shocked the market. Shares of Swift fell $2.18 per share, or
14.9 percent, on September 15, 2004, to close at $16.09 per
share. On October 1, 2004, Swift announced that the previously
disclosed informal inquiry by the SEC into certain stock trades
by the Company and insiders, including defendant Moyes, had
become a formal investigation. The investigation centers around
certain stock trades made by defendant Moyes as well as selected
the Company repurchases. On this news, shares of Swift tumbled
an additional $.95 per share, or 5.4 percent, on October 4,
2004, to close at $16.54 per share.
For more details, contact the Law Offices of Marc S. Henzel by
Mail: 273 Montgomery Ave., Suite 202, Bala Cynwyd, PA 19004,
Phone: 610.660.8000 or 888.643.6735 by Fax: 610.660.8080 or by
E-mail: mhenzel182@aol.com.
TOWER AUTOMOTIVE: Marc Henzel Lodges Securities Suit in S.D. NY
---------------------------------------------------------------
The Law Offices of Marc S. Henzel initiated a securities class
action in the United States District Court for the United States
District Court for the Southern District of New York on behalf
of purchasers of Tower Automotive, Inc. (NYSE: TWR) common stock
during the period between February 14, 2003, and January 21,
2005.
The complaint charges certain of Tower Automotive's officers and
directors with violations of the Securities Exchange Act of
1934. Tower Automotive is a global designer and producer of
vehicle structural components and assemblies used by every major
automotive original equipment manufacturer. On February 2, 2005,
the Company filed for bankruptcy protection under Chapter 11 of
the United States Bankruptcy Code in the Southern District of
New York and, therefore, the Company is not named as a
defendant.
The complaint alleges that, during the Class Period, defendants
failed to disclose and/or misrepresented the following adverse
facts, which were known to defendants, or recklessly disregarded
by them, at all relevant times:
(1) that the Company was facing increasing pressure from
automakers to dramatically lower its prices in order to
offset incentives that automakers were having to
provide in order to remain competitive;
(2) that the costs of steel and other raw materials were
continuing to rise and would do so in the future,
thereby increasing expenses and, when combined with the
squeeze being placed on the Company by automakers,
dramatically decreasing the Company's earnings ability.
To the extent that Tower purported to warn of the
impact of rising materials' prices, those warnings were
generic in nature and did not advise investors of the
full extent of the risks and uncertainties faced by the
Company as a result of rising materials' prices;
(3) that early pay programs that had been instituted by
automakers in 2001 which enabled automakers to pay
suppliers early for products and therefore get a
discount were going to be terminated, thereby depriving
the Company of a primary source of its liquidity;
(4) based on the foregoing, contrary to Defendants'
representations, the Company's financial condition was
declining precipitously such that the Company was
nearing insolvency and would have to file for
bankruptcy; and
(5) based on the foregoing, defendants had no reasonable
basis for their positive statements regarding the
Company's ability to control its liquidity issues.
Then, on January 20, 2005, the Company issued a press release
announcing that longer-than-anticipated holiday shutdowns at
certain key customers will reduce liquidity by $40 million
during the first quarter of 2005. On the following trading day,
Standard & Poor's ("S&P") slashed its rating on Tower Automotive
saying that the Company may have to restructure its finances
unless business improves over the next two quarters. S&P cut
Tower Automotive's corporate credit rating by three notches to
the deeply speculative "CCC" level from "B."
Market reaction to these announcements was swift and severe. On
January 21, 2005, shares of Tower Automotive common stock closed
at $0.75 per share, a decline of $1.61 per share, or almost 70%,
from its close on January 19, 2005.
For more details, contact the Law Offices of Marc S. Henzel by
Mail: 273 Montgomery Ave., Suite 202, Bala Cynwyd, PA 19004,
Phone: 610.660.8000 or 888.643.6735 by Fax: 610.660.8080 or by
E-mail: mhenzel182@aol.com.
*********
A list of Meetings, Conferences and Seminars appears in each
Wednesday's edition of the Class Action Reporter. Submissions
via e-mail to carconf@beard.com are encouraged.
Each Friday's edition of the CAR includes a section featuring
news on asbestos-related litigation and profiles of target
asbestos defendants that, according to independent researches,
collectively face billions of dollars in asbestos-related
liabilities.
*********
S U B S C R I P T I O N I N F O R M A T I O N
Class Action Reporter is a daily newsletter, co-published by
Bankruptcy Creditors' Service, Inc., Fairless Hills,
Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland
USA. Glenn Ruel Se¤orin, Aurora Fatima Antonio and Lyndsey
Resnick, Editors.
Copyright 2005. All rights reserved. ISSN 1525-2272.
This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding, electronic
re-mailing and photocopying) is strictly prohibited without
prior written permission of the publishers.
Information contained herein is obtained from sources believed
to be reliable, but is not guaranteed.
The CAR subscription rate is $575 for six months delivered via
e-mail. Additional e-mail subscriptions for members of the same
firm for the term of the initial subscription or balance thereof
are $25 each. For subscription information, contact Christopher
Beard at 240/629-3300.
* * * End of Transmission * * *