/raid1/www/Hosts/bankrupt/CAR_Public/050225.mbx
C L A S S A C T I O N R E P O R T E R
Friday, February 25, 2005, Vol. 7, No. 40
Headlines
ALABAMA: Parties Propose $5.5M Settlement For DOT Pollution Suit
AMERICAN CAREER: PA A.G. Corbett Initiates Consumer Fraud Suit
AUSTRALIA: Federal Court Dismisses Dungowan Pipeline Legal Row
CANADA: Ear Bank Faces Lawsuit Questioning Donor Screening
CHOICEPOINT INC.: Asked To Disclose Info on Unauthorized Access
CHOICEPOINT INC.: CA Resident Launches Identity Theft Complaint
CRESSI-SUB USA: Recalls 1T Buoyancy Compensators Due To Defect
EBAY INC.: Lerach Coughlin Launches "Shill Bidding" Suit in CA
ECKERD CORPORATION: Law Firms Launch Overtime Wage Suit in FL
ERNST & YOUNG: Bankruptcy Court Judge Keeps Documents Private
IOWA: High Court Dismisses Illegal Aliens' Driving Licenses Suit
JD BYRIDER: OH A.G. Petro Reaches Vehicle Sale Probe Settlement
KMART CORPORATION: Recalls 4.6T Candle Sets Due To Fire Hazard
KONECRANES INC.: Motley Rice Launches Wrongful Death Suit in SC
MCDONALD'S USA: Ex-Employee Files Race Discrimination Suit in KS
MERCK & CO.: Two Canadian Lawyers To Commence New Vioxx Lawsuit
OHIO: Retirement Systems Appointed As Lead Plaintiff in AIG Suit
PARADIGM MEDICAL: Federal, State Settlement Agreements Executed
PAYMAXX: Shuts Down Payroll Site Because of Security Concerns
PORTNOFF LAW: PA Property Owners File Unfair Tax Collection Suit
RED BRICK: OH A.G. Petro Delivers Wedding Refunds To Consumers
RUSH MEDICAL: Chicago Resident Commences Price-Gouging Lawsuit
ULTIMATE FITNESS: Returns $8,000 Membership Fees To Consumers
VERTEX PHARMACEUTICALS: MA Court Dismisses Securities Lawsuit
Asbestos Alert
ASBESTOS LITIGATION: Aircraft Braking Systems Clears Case Issues
ASBESTOS LITIGATION: Hardie Supports Passage of US Asbestos Law
ASBESTOS LITIGATION: ABB Profits Up in '04 Despite Asbestos Woes
ASBESTOS LITIGATION: High Court Orders Victims to Justify Claims
ASBESTOS LITIGATION: Zenith Corp. Faces 500 Compensation Claims
ASBESTOS LITIGATION: Garlock Cites 61% Drop in New Claims
ASBESTOS LITIGATION: PPG Industries Faces 116,000 Injury Claims
ASBESTOS LITIGATION: Royal & Sun Allocates GBP160M for US Claims
ASBESTOS LITIGATION: AU's Property Council Calls for Clear Laws
ASBESTOS LITIGATION: Pres. Bush Targeting Asbestos Litigation
ASBESTOS LITIGATION: James Hardie Confronts Lawsuits in US Court
ASBESTOS LITIGATION: "Lung Bus" to Examine NSW Ex-mine Workers
ASBESTOS LITIGATION: Rival Insurers Protest ACE's Plan to Sell
ASBESTOS LITIGATION: Promina Shares Decline on Asbestos Claims
ASBESTOS LITIGATION: AFL-CIO Cites Arguments for Opposing Bill
ASBESTOS LITIGATION: Silica Injury Claims Could Decline, Study
ASBESTOS LITIGATION: MS Supreme Court Orders Separate Trials
ASBESTOS LITIGATION: Liability Reform Bill Introduced in Texas
ASBESTOS LITIGATION: Minister Approves Asbestos Storage Facility
ASBESTOS LITIGATION: PA Court Denies Confirmation of AWI Plan
ASBESTOS LITIGATION: Six WR Grace Employees Plead Not Guilty
ASBESTOS LITIGATION: NSW Government to Implement Asbestos Law
ASBESTOS ALERT: CT Contractor Charged with Illegal Demolition
ASBESTOS ALERT: UK Council Bolsters Efforts to Stop Flytippers
ASBESTOS ALERT: Parents Consider Pulling Out Kids from CO School
ASBESTOS ALERT: AU Government Faces Suits Due To Nondisclosure
ASBESTOS ALERT: NZ City Council Acts on Health Risks at Flats
ASBESTOS ALERT: UK Councilor Encourages Ex-Workers To Register
ASBESTOS ALERT: Inquest Shows Factory Worker Died from Exposure
ASBESTOS ALERT: Finding at AU School Prompts Calls for Action
ASBESTOS ALERT: IN Officials Call for Cleanup After Plant Fire
ASBESTOS ALERT: AU City Council Employs More Checks at Work Site
ASBESTOS ALERT: Inquest Shows Railway Worker Died of Exposure
ASBESTOS ALERT: Routine Check Reveals Asbestos at UK Hospital
ASBESTOS ALERT: Dispute Arises at Scotland's Fort Houses Site
ASBESTOS ALERT: Victim's Family Files Suit V. Swindon Pressings
ASBESTOS ALERT: CT Superior Court Drops Case V. 3M, Weil-McLain
ASBESTOS ALERT: Pensioner Dies from Industrial Disease
New Security Fraud Cases
AXONYX INC.: Brodsky & Smith Lodges Securities Fraud Suit in NY
AXONYX INC.: Charles J. Piven Lodges Securities Fraud Suit in NY
AXONYX INC.: Schatz & Nobel Lodges Securities Fraud Suit in NY
AUDIBLE INC.: Milberg Weiss Lodges Securities Fraud Suit in NJ
MAMMA.COM INC.: Charles J. Piven Lodges Securities Lawsuit in NY
MAMMA.COM INC.: Murray Frank Lodges Securities Fraud Suit in NY
MOLEX INC.: Marc Henzel Investigates Possible Securities Fraud
PHARMOS CORPORATION: Cohen Milstein Lodges Securities Suit in NJ
SINA CORPORATION: Schatz & Nobel Lodges Securities Suit in NY
SINA CORPORATION: Schiffrin & Barroway Lodges NY Securities Suit
TRAVELZOO INC.: Marc Henzel Lodges Securities Lawsuit in S.D. NY
VEECO INTRUMENTS: Baron & Budd Files Securities Fraud Suit in NY
VEECO INSTRUMENTS: Milberg Weiss Files Securities Lawsuit in NY
VEECO INSTRUMENTS: Marc Henzel Lodges Securities Suit in E.D. NY
*********
ALABAMA: Parties Propose $5.5M Settlement For DOT Pollution Suit
----------------------------------------------------------------
A nearly $5.5 million settlement could compensate more than
fifteen hundred north Montgomery residents whose properties were
contaminated by the Alabama Department of Transportation, the
Associated Press reports.
Lawyers for both parties told the Montgomery Advertiser in that
they would present their agreement to the circuit judge at an
April 20th hearing. In addition to the $5.5 million settlement,
residents in the Coliseum Boulevard area could receive a one-
time amount to help regain depreciation of their homes.
DOT is accused of disposing chemicals and solvents in ditches
that got into groundwater and nearby neighborhoods. The
contamination caused a plume to develop that extended into
Chisholm, Eastern Meadows and Vista View.
An attorney representing the DOT told AP it was time to try to
resolve the four-year-old class-action lawsuit instead of
spending more of the state's resources on a trial.
AMERICAN CAREER: PA A.G. Corbett Initiates Consumer Fraud Suit
--------------------------------------------------------------
Philadelphia Attorney General Tom Corbett filed a civil lawsuit
in Commonwealth Court accusing a Florida-based employment agency
of charging Pennsylvania job seekers fees for job applications,
Civil Service exam materials and other services to secure state
government positions that were not available.
Attorney General Corbett identified the defendant as American
Career Services Inc., 6711 North West Third St., Margate, Fla.
or 1303 North State Road 7, Suite A-5, Margate, Fla. The
lawsuit accuses the business of violating Pennsylvania's
Employment Agency Law and Unfair Trade Practices and Consumer
Protection Law.
According to investigators, the defendant during 2004 purchased
and placed "help wanted" ads in various Pennsylvania newspapers.
The ads offered specific jobs and in some cases listed an hourly
pay rate. Some of the advertisements claimed that the positions
were "entry level" with "benefits" and "paid training." Each ad
listed a toll-free telephone number to call to respond to the
offer.
"Job seekers who called the toll-free number were told that they
must take the state civil service exam and pay $69.95 to receive
the application and study materials to prepare for the test,"
the Attorney General said. "The company also claimed that it
would take care of all costs associated with administering the
exam. The applicants later learned that the jobs they were
seeking did not exist and that the Commonwealth provides the
test and all related study materials for free."
Attorney General Corbett said one ad falsely advertised Park
Ranger positions that paid $13 per hour and included benefits.
In reality, the positions were not available and the actual
compensation for a Park Ranger is $11.62 per hour without
benefits.
Consumers said the company led them to believe that it served as
a "middleman" for government agencies that sought assistance in
locating candidates to fill job vacancies. Applicants said the
name "American Career Services" reinforced the defendant's false
representation that it was affiliated with the government to
provide employment services.
Last September, a Perry County woman answered the defendant's ad
and paid the required $69.95 to receive the application and
study materials for the Civil Service exam. After contacting
state officials, the consumer was told that all of the
information she purchased and the exam is available to the
general public at no charge. The consumer cancelled her credit
card in an attempt to prohibit the defendant from billing her
account. To date, she has not received her refund.
The defendant is also accused of operating as an employment
agency in Pennsylvania without a license.
Attorney General Corbett said the complaint asks the court to
require the defendant to:
(1) Pay full restitution to eligible consumers who file
complaints with the Bureau of Consumer Protection.
(2) Cease engaging in activities in violation of
Pennsylvania's Employment Agency Law and Consumer
Protection Law.
(3) Permanently forfeit its right to conduct business in
Pennsylvania.
(4) Pay civil penalties of $1,000 per violation and $3,000
for each violation involving a consumer age 60 or
older.
(5) Pay the Commonwealth's costs of investigation.
The Attorney General also said consumers who wish to file a
complaint in this case can obtain a form by contacting his
Bureau of Consumer Protection at 1-800-441-2555 or visiting the
Website: http://www.attorneygeneral.govto file electronically.
The lawsuit was filed in Commonwealth Court. The case is being
handled by Deputy Attorney General Kathryn H. Silcox of
Corbett's Bureau of Consumer Protection in Harrisburg.
AUSTRALIA: Federal Court Dismisses Dungowan Pipeline Legal Row
--------------------------------------------------------------
To resolve a protracted legal dispute that has cost the Tamworth
council of NSW, Australia more than $1 million, the Federal
Court has dismissed a class action by landholders who access
water from the Dungowan pipeline, the ABC Regional Online
reports. The landholders had taken the council to court,
claiming it was not providing drinking water according to
contracts signed when the pipeline was built.
Tamworth Mayor James Treloar told the ABC Regional Online while
the Federal Court has dismissed the seven-year legal battle, the
council still wants to address some of the landholders'
concerns.
CANADA: Ear Bank Faces Lawsuit Questioning Donor Screening
----------------------------------------------------------
The B.C. Ear Bank in Canada faces a class action, which arose
out of a Health Canada report that alleged the Bank did not keep
proper records to confirm that appropriate screening of tissue
donors had been done, the Victoria Times Colonist reports. The
suit names as defendants the University of B.C., which helped
oversee the ear bank, Providence Health Care Society, which
operates St. Paul's, and the Vancouver Coastal Health Authority.
The suit arose over fears that some tissues supplied by the bank
could have been contaminated with diseases like HIV or
hepatitis. As a result of the report, the Bank recalled unused
tissue and patients who had been given tissue were urged to
undergo HIV and hepatitis testing.
Lead plaintiff Margaret Birrell had an ear operation at St.
Paul's Hospital in Vancouver in 1994 and received tissues
supplied by the ear bank. She is represented by Vancouver
lawyer David Klein.
CHOICEPOINT INC.: Asked To Disclose Info on Unauthorized Access
---------------------------------------------------------------
Ohio Attorney General Jim Petro joined several other state
Attorneys General in requesting a Georgia company immediately
take steps to inform anyone whose personal information may have
been compromised and released to parties engaged in identity
theft.
The letter from Mr. Petro and his colleagues in Alaska, Arizona,
Connecticut, Florida, Idaho, Illinois, Indiana, Iowa, Maryland,
Massachusetts, Michigan, Oregon, New York, North Carolina, North
Dakota, South Dakota, Vermont and Washington urges ChoicePoint,
Inc., to provide as much detailed information as possible to
potential victims as soon as possible. ChoicePoint provides data
to credit providers, government agencies, landlords and others
seeking to make business decisions based on a person's credit
history and other factors. It has been reported that identity
thieves were able to successfully subscribe to ChoicePoint's
service using falsified information.
"We are very concerned about this security breach and its
potential impact on Ohio residents," Mr. Petro said. "If you
receive a letter from ChoicePoint, it is very important that you
do not dismiss it without reading it first. If the personal
information of any Ohioans has been compromised, we fully expect
ChoicePoint to notify them immediately."
The press release advised "If you receive notification from
ChoicePoint, immediately check your accounts and request a copy
of your credit report to check for any suspicious activity,
including new accounts opened without your knowledge. According
to reports, the thieves used information obtained from
ChoicePoint to open accounts in the names of the unsuspecting
victims."
"If you discover that you have been victimized by an identity
thief who gained your personal information from ChoicePoint or
by any other means, immediately contact your local law-
enforcement agency to file a report," the statement continued
For more details or to apply for an identity theft verification
passport, contact the Attorney General's Office by Phone:
1-888-MY-ID-4ME (1-888-694-3463) or visit the website:
http://www.ag.state.oh.us. For Additional Information, contact
Bob Beasley, Attorney General's Office, by Phone: (614) 466-3840
CHOICEPOINT INC.: CA Resident Launches Identity Theft Complaint
---------------------------------------------------------------
A California woman initiated a lawsuit seeking class action
status against ChoicePoint, Inc. alleging fraud and negligence
after criminals gained access to a database of personal records
compiled by the company, the Reuters News Agency reports.
The suit, filed in Los Angeles Superior Court, claims that for
at least five months, the company failed to adequately protect
people's financial records and confidential information.
Though a ChoicePoint representative was not immediately
available to comment, the firm has acknowledged that tens of
thousands of consumer records were improperly accessed, and the
Los Angeles County Sheriff's Department has made at least one
arrest, Reuters reports.
ChoicePoint maintains a database of information, including bank
and criminal data, on virtually every U.S. consumer that is sold
to government agencies, prospective lenders and others, the
identity thieves were able to access Social Security numbers,
credit histories, criminal records and other sensitive data.
Court documents state that the suit seeks to represent anyone
whose personal records were maintained by ChoicePoint from
October 2004 through the completion of the suit, regardless of
whether or not that data was actually released to anyone. In
addition, the suit claims that prospective class members,
possibly numbering at least 145,000 in total, have suffered
damages of less than $75,000 each.
CRESSI-SUB USA: Recalls 1T Buoyancy Compensators Due To Defect
--------------------------------------------------------------
In cooperation with the U.S. Consumer Product Safety Commission
(CPSC), Cressi-sub USA, of Westwood, N.J. and Cressi-sub S.p.A.,
of Genoa, Italy is recalling about 1,000 Cressi-sub Buoyancy
Compensators.
A slow leak from the shoulder exhaust caused by expansion of an
internal cable housing could result in slow deflation. This
could impact the diver's ability to control buoyancy.
Buoyancy Compensator devices provide buoyancy control for scuba
divers by allowing them to inflate or deflate the devices. The
recalled buoyancy compensators have model numbers J107, J113,
J115, and J119. The numbers appear on the top right-hand corner
of the unit (on the shoulder). "CRESSI" is written on the
buoyancy control devices.
Manufactured in Genoa, Italy, the compensators were sold at all
authorized dive shops nationwide and at various Web sites from
January 2003 through September 2004 for between $400 and $700.
Customers can return the product to a Cressi-sub-authorized dive
shop to have the product retro-fitted with a free replacement
internal cable housing. Buoyancy Compensator devices with a
black retaining ring around the yellow inflate button on the
inflation mechanism, and an adjoining gray cover assembly
(bypass case), which screws onto the inflator, are subject to
this recall and must be retro-fitted. Devices which have yellow
retaining rings and black cover assemblies have been retro-
fitted.
Consumer Contact: For more information or for a list of
authorized dive shops, consumers can call Cressi-sub at
(800) 338-9143 between 9 a.m. and 4:30 p.m. ET Monday through
Friday.
EBAY INC.: Lerach Coughlin Launches "Shill Bidding" Suit in CA
--------------------------------------------------------------
Reed Kathrein of Lerach Coughlin Stoia Geller Rudman & Robbins
initiated a class action lawsuit against EBay Inc. on behalf of
a Pennsylvania man, who alleges that the online auctioneer
illegally forces up prices when certain high bidders raise their
maximum bid to guard against last-minute offers, the Reuters
News Agency reports. The suit was filed in Santa Clara County
Superior Court.
Lead Plaintiff Glenn Block claims that eBay raised his bid from
$111 to $112.50 after he responded to an e-mail from the auction
site that said he was the highest bidder for an item. The email
had warned that he could be outbid if he did not increase his
maximum. Mr. Block alleges that he could have won the auction at
$111, and accused eBay of forcing him to overpay by $1.50.
Responding to the allegations, eBay spokesman Hani Durzy told
Reuters, "Based on what we know about what's being alleged, it
appears the plaintiff completely misunderstands the
functionality of the eBay bidding system." He also said the
company had not yet seen the lawsuit.
In addition, Mr. Durzy also told Reuters that eBay only notifies
winning bidders that they could be outbid when they have hit
their preset maximum bid and that increasing a maximum bid is
voluntary.
Experts explain EBay automatically increases bids only when the
maximum has been hit and when the prior top bid was between
bidding increments. For example, bidding increments on items
priced between $100 and $249.99 is $2.50. Mr. Block, however,
raised his bid increment by $1.50.
Mr. Kathrein, equated eBay's actions to "shill bidding," and
told Reuters it forces bidders to bid against themselves. He
explains that shill bidders are often in cahoots with sellers
and work to artificially raise the price of auction items they
have no intention of buying.
Mr. Kathrein also said that eBay and its PayPal online payments
unit receive larger transaction fees as a result of the
company's alleged shill bidding. Furthermore, he pointed out
that eBay's actions have created substantial unlawful profits
for eBay and its online payment unit PayPal and thus required
restitution would run in "excess of tens of millions, if not
hundreds of millions, of dollars during the past four years."
ECKERD CORPORATION: Law Firms Launch Overtime Wage Suit in FL
-------------------------------------------------------------
Adriene Posely and Karl Bloomfield, two former Eckerd store
managers, have sued Eckerd Corporation in Federal Court, on
behalf of themselves and all other persons similarly situated.
This paves the way for some 1,000 former Eckerd employees in
Florida to participate in the lawsuit, according to the Miami-
Dade County law firms Fuller & Suarez, Freidin & Brown, and
Campbell & Malafy.
The lawsuit alleges that Eckerd willfully misclassified workers
as salary-exempt to avoid paying overtime and other wages. The
claim alleges that over recent years, Eckerd store managers were
managers in title only, routinely performing all the duties of
hourly employees. This resulted in requiring store managers to
routinely work in excess of 40 hours a week without receiving
the legally required overtime pay for performing tasks such as
stocking shelves, unloading trucks and scrubbing floors and
toilets. Meanwhile, assistant store managers, who routinely
performed the same tasks as store managers, were paid overtime.
Plaintiff Adriene Posely worked for the Ives Dairy Road Eckerd
in Miami until 2001. Karl Bloomfield, a twenty-year veteran of
Eckerd, most recently worked for the Miramar Parkway Eckerd
store in Broward County, Florida. Posely and Bloomfield estimate
they worked well in excess of 40 hours every week, doing work
for which they were never compensated with overtime pay, and
that did not fall under their managerial area of responsibility.
For over twenty years, Eckerd has required its store managers to
participate in a practice known as "work parties." At these
"parties", store managers, assistant store managers, and hourly
workers performed the same menial tasks. Persons assigned to
work at work parties were required to go to stores other than
their own, and did not supervise or manage other employees. When
assistant store managers and hourly employees were assigned to
"work parties," they were paid overtime. However, store managers
were not paid overtime for their service at these "parties,"
despite performing exactly the same work as the other employees.
"While working at Eckerd," says plaintiff Karl Bloomfield, "I
was predominantly involved in performing non-management tasks,
which included unloading trucks, stockroom maintenance, cleaning
floors, stocking shelves and cleaning toilets. Further, store
managers were required to attend involuntary work parties to
perform these and other non-management duties."
"Work parties were usually ordered by the district manager,"
says plaintiff Adriene Posely. According to Ms. Posely,
attendance of store managers at work parties was not an option.
It was a demand. If a store manager did not show up, their job
was in jeopardy. Activities Ms. Posely claims occurred in work
parties include:
(1) Cleaning restrooms and toilets
(2) Organizing the inventory in the stock room
(3) Restocking store shelves
(4) Straightening the store shelves
(5) Replacing missing labels on shelves
(6) Cleaning employees' break room
(7) Emptying the trash
(8) Sweeping and mopping the floors
The plaintiffs' story has been echoed by many other former
Eckerd employees, including Glendon Waite, who opted-in to the
claim. "At work parties we never performed managerial duties,"
states Mr. Waite. "We were always doing menial work such as
stocking, cleaning shelves, setting up displays, etc."
Eckerd policy dictated that the vast majority of "work party"
participants be store managers, whom it claims are exempt from
overtime pay. A store manager assigned to a work party generally
could not send an hourly worker in his or her place, absent
special authorization from a district manager. Generally, store
managers would be informed that their presence at a work party
was mandatory, even if it was their day off, and that the party
would last "until the work was done."
For more details, contact Fuller & Suarez, P.A. by Mail: 201
Alhambra Circle, Suite #602, Coral Gables, Florida 33134 by
Phone: 305-445-7150 or by Fax: 305-447-4674 OR Freidin & Brown,
P.A. by Mail: 2 S. Biscayne Blvd., Suite 3100, Miami, Florida
33131 by Phone: 305-371-3666 or by Fax: 305-371-6725 OR Campbell
& Malafy by Mail: 2655 Le Jeune Road, #201, Coral Gables,
Florida 33134 by Phone: 305-447-8580 or by Fax: 305-476-8383.
ERNST & YOUNG: Bankruptcy Court Judge Keeps Documents Private
-------------------------------------------------------------
U.S. Bankruptcy Court Judge Patricia Williams has ruled to keep
documents that could be potentially damaging to Ernst & Young
from becoming part of the public record in a securities class-
action lawsuit, the Associated Press reports.
The decision stems from a case charging that E&Y was negligent
in its audit of the now bankrupt Metropolitan Mortgage &
Securities. Also known as Met Mortgage, it had filed for
bankruptcy in March 2004 and was at one time a $2 billion
financial conglomerate, but currently it owes 16,000 creditors
$580 million.
P.J. Grabicki, an attorney representing Met Mortgage creditors,
told AP that the decision means that the bankruptcy trustee must
spend more time and money to obtain the documents, which could
increase the creditors' claims against E&Y. In addition, Jim
Clanton, who heads the creditors' committee in the case,
stressed that the documents would bolster charges that E&Y knew
about questionable business dealings at Met Mortgage and "had an
obligation to stop them."
Before the judge made a decision to keep the E&Y papers private,
court-appointed examiners had reviewed the documents. Those
examiners noted that E&Y and other companies might have played a
role in Met Mortgage's "dubious accounting methods."
However, since the E&Y documents were initially turned over to
the Securities and Exchange Commission as part of a broader
investigation, they were deemed private by E&Y. Lori Lynn
Phillips, an attorney representing the audit firm, urged
creditors to use traditional discovery instead of relying on
documents given to the examiner by the SEC to support their
charge, AP reports.
In her decision, Judge Williams noted that turning over the
documents would have had a "chilling effect" on future
bankruptcy examinations and SEC investigations.
IOWA: High Court Dismisses Illegal Aliens' Driving Licenses Suit
----------------------------------------------------------------
The Iowa Supreme Court dismissed this a class action filed
against the state's officials who refused to issue them driver's
licenses, The Washington Times reports.
The suit was filed on behalf of a Des Moines couple and all
illegal and undocumented aliens in Iowa who wanted or had sought
driver's licenses. The suit names as defendants Attorney
General Tom Miller, Department of Public Safety Commissioner
Kevin W. Techau and Department of Transportation Director Mark
Wandro.
The couple was named under pseudonyms "Juan and Maria Sanchez."
They have three school-age children and have lived in the
country for five years. The suit was filed after the couple
received more than $1,000 in traffic tickets over a single
weekend. The couple's attorney, Curt Daniels, told the Times
his clients had been targeted by police because they were
illegal aliens, and the state should allow them to apply for
licenses to drive.
The suit alleged that the State Department of Transportation had
refused to issue licenses to illegal aliens, saying state law
required license recipients to have a Social Security card or
other proper immigration documents in order to obtain an
operator's permit. The suit asserted that the state's refusal
to issue the licenses violated rights guaranteed to illegal
aliens under both the U.S. and Iowa constitutions. The suit
further argued that the state could waive the requirements and
that its refusal to do so "does not further a legitimate state
interest and violates the due process and equal protection
guarantees of the United States and Iowa constitutions."
Mr. Daniels and others in Iowa argued that illegal aliens should
have licenses as a matter of public safety, issued after they
pass the same tests given to all motorists; that licenses would
allow the aliens to buy car insurance and to find jobs, many of
whom are employed in Iowa as laborers or agricultural workers,
the Times reports.
However, Polk County District Judge Joel Novak in Des Moines
ruled that the couple had no fundamental right to obtain
driver's licenses. In his ruling, Judge Novak said operating a
motor vehicle was a privilege that was "not unrestrained,"
according to the Times.
The Iowa Supreme Court upheld the ruling, saying the "practice
of denying driver's licenses to illegal aliens violates none of
the statutory and constitutional provisions raised" in the
lawsuit. The high court added that the state's licensing scheme
was "rationally related to the legitimate state interest of 'not
allowing its governmental machinery to be a facilitator for the
concealment of illegal aliens.'"
Fourteen states - Alaska, Connecticut, Idaho, Louisiana,
Montana, Nevada, New Mexico, North Carolina, Ohio, Rhode Island,
Tennessee, Utah, Washington and West Virginia - permit the
issuance of licenses to illegal aliens, the Times reports. A
bill by Rep. F. James Sensenbrenner, Wisconsin Republican and
chairman of the House Judiciary Committee, would prevent the
federal government from accepting state-issued identifications,
including driver's licenses, if the state makes them available
to illegal aliens.
Passed last week by the House, the bill - known as the Clear ID
Act - is aimed at establishing security standards for driver's
licenses and identification documents to prevent terrorists from
abusing asylum laws and to unify terrorism-related grounds for
inadmissibility and removal, the Washington Times states.
JD BYRIDER: OH A.G. Petro Reaches Vehicle Sale Probe Settlement
---------------------------------------------------------------
Ohio Attorney General Jim Petro agreed to a settlement with JD
Byrider and more than 20 of its locations throughout Ohio. The
settlement is the result of an investigation addressing the
Company's sales of used motor vehicles to low-income customers
or consumers who ordinarily might not qualify for prime-market
financing. The investigation was prompted by more than 300
complaints received by the Attorney General's Consumer
Protection Section.
"In order to make informed decisions, consumers must be given
the details of their transaction," said Mr. Petro. "Any company
failing to provide information or misleading consumers about
automobile deals must reevaluate their business practices to
ensure that they are complying with Ohio law."
As part of this settlement, JD Byrider agreed to make more than
20 remedial changes to its business practices in order to
operate within compliance of Ohio laws. Some of the changes
include: establishing a price for a vehicle before offering it
to the public, informing the consumer the price up front,
clearly and conspicuously disclosing terms of warranties, and
adhering to advertised specials. In addition, the business also
agreed to change much of its collection practices.
JD Byrider founder and chairman James DeVoe Sr. stated, "We've
appreciated the manner in which the Attorney General's Office
has conducted the investigation. They were willing to listen to
our position and learn about our business, while conducting
their investigation in a professional manner."
Throughout the investigation and the settlement process, JD
Byrider, in cooperation with the Attorney General's Office,
worked to settle and resolve all outstanding complaints
resulting in the payment of more than $100,000 to consumers.
Additionally, JD Byrider agreed to review any future consumer
complaints received by the Consumer Protection Section. Terms of
the settlement require JD Byrider to pay both a civil penalty in
the amount of $300,000 and costs in pursuing the investigation,
resulting in the payment of an additional $250,000.
For more details, contact the Attorney General Petro's Consumer
Protection Section by Phone: 1-800-282-0515 or visit the
Website: http://www.ag.state.oh.us.
KMART CORPORATION: Recalls 4.6T Candle Sets Due To Fire Hazard
--------------------------------------------------------------
In cooperation with the U.S. Consumer Product Safety Commission
(CPSC), Kmart Corp., of Troy, Mich. is recalling about 4,600
Martha Stewart Everyday Brand Birch Candle Sets.
The birch surrounding the candles, may ignite, posing a fire and
burn hazard. Kmart has received one report of a man who was
burned on the hand while picking up one of the candles.
The recalled candle sets contain three birch bark candles and
pine cones that sit on a round tray. The candles measure 3-, 4-,
and 6-inches in height and have a white birch exterior. "Martha
Stewart Everyday" brand name is printed on the box.
Manufactured in China, the candle sets were sold at all Kmart
stores nationwide from September 2004 through January 2005 for
about $13.
Consumers should return these candle sets to the Kmart store
where purchased to receive a refund. For additional
information, contact Kmart at (866) KMART4U anytime or visit the
Company's Web site at http://www.kmart.com.
KONECRANES INC.: Motley Rice Launches Wrongful Death Suit in SC
---------------------------------------------------------------
Nationally known law firm, Motley Rice LLC, initiated a wrongful
death and survival action against Konecranes, Inc. and the South
Carolina State Port Authority (SCSPA) on behalf of Jean Holst,
wife of William Edward Holst, Jr., who was killed at the Wando
Welch Terminal in Mt. Pleasant, S.C., on July 5, 2004. The
action against Konecranes is for negligence, breach of warranty,
strict liability, wrongful death and punitive and exemplary
damages. The action against SCSPA is for negligence and wrongful
death.
The claim alleges that Konecranes, which designed and
manufactured the overhead crane that landed on and ultimately
caused the death of Holst while he was performing his job at the
Wando Welch Terminal, breached a duty of care owed to Mr. Holst.
It also alleges that SCSPA failed to adopt and implement
adequate safety procedures and policies; failed to ensure
personnel on site received adequate training and supervision;
failed to fulfill its duty of care as a premise owner; and is
responsible for the negligence of its employee/agent.
Mr. Holst's death is one of many recent deaths at ports across
America. Motley Rice attorneys and their client hope that suits
such as this one will help evoke the safety changes necessary at
our nation's ports.
"Ports play a crucial role in our country's and our state's
economy. However, safety needs to be made a priority," said Anne
Kearse, Motley Rice member. "We hope that by bringing this suit
to court we will help bring forth the necessary safety changes
and regulations."
Dennis E. O'Neill, Esquire, of Mt. Pleasant, S.C., is working
closely with Motley Rice on this case. Mr. O'Neill handles the
Longshore and Harbor Workers' Compensation Act Claim, and is
also a close friend of the Holst Family.
For more details, contact Motley Rice LLC by Phone:
1-800-768-4026 or visit their Web site:
http://www.motleyrice.com.
MCDONALD'S USA: Ex-Employee Files Race Discrimination Suit in KS
----------------------------------------------------------------
A former African-American employee at McDonald's USA, who was
told by managers that he could get a promotion if he worked at a
Prospect Avenue restaurant instead of one in Johnson County has
filed a federal lawsuit alleging race discrimination, the Kansas
City Business Journal reports.
According to his lawsuit, Jerry Stubbs, now 56, worked for seven
years as a second assistant manager without a promotion,
resigning in 2003. The suit also stated that McDonald's
allegedly passed him over for promotions repeatedly and let him
know "we don't need any more black managers in Johnson County."
In a reply filed that was filed on February 16, McDonald's
denied the allegations and said that it "had legitimate and non-
discriminatory reasons for all employment actions taken with
respect to" Mr. Stubbs and that its stated reasons "were not a
pretext for discrimination," the Kansas City Business Journal
reports
In an e-mail to the Kansas City Business Journal, Company
spokesman Bill Whitman said that McDonald's expects the case to
be dismissed. He also adds, "We have a strict policy prohibiting
any form of discrimination in the workplace, including our
restaurants."
According to the complaint, which was filed by Daniel Young of
the Edgar Law Firm LLC, Mr. Stubbs had seen several employees
hired as his subordinates and promoted to be his bosses. It also
states, "At one point, plaintiff was offered a better chance of
promotion if he would agree to be transferred to a McDonald's
restaurant on Prospect Avenue, in the heart of the inner-city."
Court records indicated that Mr. Stubbs began his stint with
McDonald's at a Wyandotte County restaurant in 1996 but worked
at three Johnson County restaurants before resigning.
U.S. District Judge Thomas VanBebber dismissed part of Mr.
Stubbs' claim last November 12 ruling that Mr. Stubbs couldn't
bring a class-action discrimination case alleging a hostile work
environment, failure to hire, pay disparity, or discriminatory
terms and conditions because he hadn't first made those
allegations to the Equal Employment Opportunity Commission.
However, the court upheld Mr. Stubbs' right to sue for
McDonald's alleged failure to promote. "We continue to pursue
the claim," Mr. Young told Kansas City Business Journal.
MERCK & CO.: Two Canadian Lawyers To Commence New Vioxx Lawsuit
---------------------------------------------------------------
Two Canadian lawyers intend to file a class action against
pharmaceutical giant Merck & Co., Inc. over its arthritis drug
Vioxx, which the Company recalled from the market September last
year, Canada.com reports.
Lawyers William Gandy of Saint John and Peter Mockler of
Fredericton intend to file the suit, which is at least the fifth
of its kind in Canada, saying that 400 people have come forward,
claiming health problems related to the drug.
"A very large majority of them have had adverse affects," Mr.
Mockler told Canada.com. "Others, it's not as clear. So that's
what we're tryin to do - catalogue adverse impacts and then
ascertain whether they follow the pattern."
The Company pulled the drug from the market after studies linked
it to increased risk of heart attack and stroke. The three-year
Vioxx study, released in late September, asserted that five
people out of almost 1,300 participants died. The same number
of people died in the placebo part of the study. However, 45
participants on Vioxx had cardiovascular problems compared with
25 on the placebo.
Other class actions have already been filed in Ontario, Quebec,
British Columbia and Saskatchewan. The first statement of claim
filed in Canada came from British Columbia last October. That
suit alleges the company:
(1) Failed to adequately test and follow up on studies of
the safety of the drug;
(2) Noticed problems with Vioxx as early as 2000, but
failed to issue adequate warnings;
(3) Failed to give pharmacists and physicians in Canada
adequate warnings about side-effects.
OHIO: Retirement Systems Appointed As Lead Plaintiff in AIG Suit
---------------------------------------------------------------
Three of Ohio's public retirement systems have been appointed
lead plaintiff in a securities class action lawsuit against
American International Group, Inc. (AIG), one of the world's
largest international insurance and financial services
corporations, that alleges AIG engaged in "bid-rigging" and
other fraudulent behavior, Attorney General Jim Petro announced
in a statement.
Preliminary loss estimates to the Ohio Public Employees
Retirement System (OPERS), State Teachers Retirement System of
Ohio (STRS Ohio) and Ohio Police & Fire Pension Fund could be as
much as $70 to $75 million, while losses to the entire class
could be billions of dollars.
"As I have continued to state, the blatant disregard for
generally accepted accounting principles seems to be pervasive
in business today, and my office will seek to protect all
investors from such actions. Obtaining lead plaintiff status
will allow Ohio to champion investor rights and corporate reform
as we fight this deep corporate malaise," Attorney General Petro
said.
The allegations against AIG include misleading investors by
being part of a "bid-rigging" scheme and by the true nature of
its contingent-commission arrangements with Marsh & McLennan and
other insurance brokers. Two AIG executives have pleaded guilty,
the documents produced to regulators and the investigations
concerning "bid-rigging" and its sale of "income-smoothing"
products and creation of off balance sheet partnerships lead to
the appearance that AIG was aware of its wrongful conduct.
"It is time that corporate wrongdoers realize that we will not
sit by the wayside. My office will continue to serve the State
of Ohio and all citizens against fraudulent behavior," he added.
The class action is currently pending in the United States
District Court for the Southern District of New York. Attorney
General Jim Petro is representing Ohio public pension systems
named as lead plaintiff in six cases fighting corporate fraud:
Global Crossing, Marsh & McLennan, Freddie Mac, Fannie Mae,
Exxon-Mobil, and now AIG. The Attorney General is also pursuing
other litigation on behalf of the state against AOL-Time Warner,
Enron, Pilgrim Baxter, Putnam, and WorldCom.
For more information, contact Michelle Gatchell, Attorney
General's Office, by Phone: (614) 466-3840
PARADIGM MEDICAL: Federal, State Settlement Agreements Executed
---------------------------------------------------------------
Paradigm Medical Industries, Inc. (OTCBB: PMED.OB/PMEDW.OB)
announced that written settlement agreements have been executed
to settle the federal and state court class action lawsuits that
were filed against the Company and its former executive
officers, Thomas F. Motter, Mark R. Miehle, and John W. Hemmer.
"Having these agreements signed represents a tremendous
milestone in the recovery process for the Company," said
Paradigm Medical's Chief Executive Officer, John Y. Yoon.
"Settling these lawsuits has been a major objective of the
management team, and we are now able to more fully focus our
time on revitalizing the Company."
Under the terms of settlement of the federal court class action
lawsuit, U.S. Fire Insurance Company, which issued a Directors
and Officers Liability and Company Reimbursement Policy to
Paradigm Medical for the period from July 10, 2002 to July 10,
2003, has agreed to pay the sum of $1,507,500 in cash to the
class members that purchased securities of Paradigm Medical
during the period between April 17, 2002 and November 4, 2002.
Under the terms of settlement of the state court class action
lawsuit, U.S. Fire has agreed to pay the sum of $625,000 in cash
to the class members that purchased shares of Series E
Convertible Preferred Stock on or about July 11, 2001.
As a condition to the settlement agreements, the courts in the
federal and state court class action lawsuits must have entered
orders granting final approval of the settlements reached in
those respective actions, and such orders must have become final
and non-appealable.
As a further condition, both settlement agreements provide that
U.S. Fire Insurance Company must not have exercised its option
to terminate the settlement agreements. U.S. Fire has the option
to terminate the settlement agreements if the cumulative dollar
value of the claims held by individuals or entities that "opt
out" of the federal and state class action lawsuits exceeds
$250,000. If such "opt outs" exceed $250,000, however,
plaintiffs in the federal and state court class action lawsuits
will have five days to cure by reducing the amount of "opt outs"
to less than $250,000.
If U.S. Fire exercises its option to terminate the settlement
agreements, then all parties to the settlement agreements will
be restored to their respective positions in the various actions
as of the date of the settlement agreement. In addition, the
terms and provisions of the settlement agreements will have no
further force and effect on the various parties and will be
deemed null and void in their entirety.
On January 26, 2005, the Company completed a written agreement
to settle the lawsuit that Innovative Optics, Inc. and Barton
Dietrich Investments, L.P. brought against Paradigm Medical and
its former executive officers. Under the terms of that
settlement, U.S. Fire agreed to pay Innovative Optics, Inc. and
Barton Dietrich Investments, L.P. the sum of $367,500 in cash.
Payment of this amount is contingent, however, upon the courts
in the federal and state class action lawsuits granting final
approval of the settlements reached in those respective actions,
and such orders becoming final and non-appealable.
Under the terms of the settlement agreements regarding the
federal and state court class action lawsuits and the lawsuit
that Innovative Optics, Inc. and Barton Dietrich Investors, L.P.
brought against Paradigm Medical and its former executive
officers, U.S. Fire has agreed to pay a total of $2,500,000 in
cash to the classes in the class action lawsuits and to
Innovative Optics, Inc. and Barton Dietrich Investments, L.P. in
settlement of these lawsuits. Under the terms of settlement,
Paradigm Medical is to pay U.S. Fire the sum of $220,000
representing the remaining amount owing under a $250,000
retention obligation in the insurance policy, and to execute a
policy release in favor of U.S. Fire as to coverage under the
insurance policy.
PAYMAXX: Shuts Down Payroll Site Because of Security Concerns
-------------------------------------------------------------
Online payroll service provider PayMaxx shut down its automated
W-2 site Wednesday after a researcher claimed that two security
holes had exposed data on more than 25,000 people, CNET News.com
reports.
Aaron Greenspan, president of Think Computer, posted a
description of the problem on the Company website, saying that
security issues could allow anyone to view the W-2 forms
generated for employees of PayMaxx's clients for the last five
years.
Mr. Greenspan, a former PayMaxx customer, told CNET News he
discovered the alleged problems with the system more than two
weeks ago, after he received notification from the company that
his W-2 tax form was available online for download and printing.
The link to access the W-2 form included an ID number, so Mr.
Greenspan decided to test the Company's security by adding on to
the ID number to get the next form. Instead of being denied
access, he found that another person's W-2 was downloaded and
readable. Sequential, rather than randomized, ID numbers made
it easy to call up numerous customers' data.
The hole could have allowed employees at PayMaxx's clients to
access more than 25,000 W-2 forms for last year and the W-2
forms for years back to 2000, he said. He told CNET News his
investigation revealed that PayMaxx's database contained a
record for testing purposes that contained a Social Security
number of 000-00-0000 and a password of all zeros. That could
allow anyone to log into the site and then use the lack of
authentication to sequentially download all the W-2 forms.
"Anyone could have been exploiting these security issues for
years, and no one would have known about it," he said.
The Company refused to acknowledge or deny the problems, saying
that "No system in the world is 100 percent secure from a
sophisticated and determined hacker," the Tennessee-based
payroll company said in a statement sent to CNET News.com.
"PayMaxx has made and continues to make every effort to secure
its system against any breach."
The Company acknowledged that test account that Mr. Greenspan
accessed existed, but countered Mr. Greenspan's other
allegations. The Company had already reviewed Mr. Greenspan's
paper and said it found several of his claims to be inaccurate.
However, the Company did not specify what these claims were.
The Company also qualified the extent of the damage. "Our
initial analysis indicates that if Mr. Greenspan was able to
improperly access any W-2 forms, a limited number of forms were
accessed," the company said in the statement.
The Company also charged that Mr. Greenspan had "attempted to
hack" into its Web site. It said he had held back details of
the alleged flaws and had requested that PayMaxx hire his
company. Mr. Greenspan said he had only accessed enough of the
site to confirm the issue and gauge the extent of the problem.
"Due to the lack of specificity provided by Mr. Greenspan in his
obvious sales pitch, PayMaxx did not view his communications as
credible," the company told CNET News. "Consequently, we
declined his offer to hire his services."
PayMaxx declined to comment on whether it had notified any of
its customers about the report of a problem. Under California's
Security Breach Information Act (S.B. 1386), companies that may
have leaked personal or financial data must advise their
customers as soon as possible, CNET News.com reports.
The incident comes a week after background-check provider
ChoicePoint acknowledged that data thieves had created dozens of
fake companies to acquire more than 145,000 records touching on
the personal lives of U.S. citizens. Federal legislators are
considering strong protections on identity data following the
ChoicePoint leak, and a class action lawsuit has been filed in
California.
PORTNOFF LAW: PA Property Owners File Unfair Tax Collection Suit
----------------------------------------------------------------
Fourteen Aliquippa property owners in Pennsylvania have filed a
lawsuit seeking class action status against the city, Aliquippa
School District and Portnoff Law Associates, contending that
Portnoff's system for collecting real estate taxes is unfair,
the Pittsburgh Post-Gazette reports.
Of the fourteen property owners ten had originally filed suit
together in 1999, a year after the city and school district
hired the Montgomery County firm, and renewed that suit in late
January. In their newest filing is seeking certification for a
class action, which would allow them to represent all Aliquippa
property owners who have tangled with Portnoff.
According to the property owners, Portnoff, which is in the
business of tax collection, and openly pursues a philosophy that
delinquent taxpayers should be the ones to pay the costs of the
process, charges them fees for letters and court filings, is
strict about deadlines and has no hesitation in filing liens.
In a January interview with the Pittsburgh Post-Gazette,
Portnoff lead attorney Dawn Schmidt said, "I totally believe
this is the only fair way to collect taxes. I really believe
putting the costs of collection on the payers is the right
thing."
In addition, Mr. Schmidt points out that it also gets the
taxpayers' attention and that in fact, the firm all but
advertises the motivational effect of the fees, since an
overview on its Web site says, "Tax delinquents are notified of
the fees to be imposed." "This gives owners the opportunity to
avoid legal fees by paying the debt," since "When they start
paying those costs, they start re-prioritizing their finances,"
Mr. Schmidt adds.
Still, the 14 property owners contend that the fees are
exorbitant and unfair. Their suit also includes a five-page list
of complaints about fees and practices, claiming among other
things that Portnoff charges $150 to send out form letters and
has unannounced charges for telephone calls. Also, the suit
claims that the city and the school district are liable since
they hired Portnoff in 1999 and approved its fee schedule, and
both later renewed their contracts with the firm.
Gladys Bernice Mason spearheaded the fight against Portnoff in
1999 and is one of the 14 plaintiffs in the suit. According to
her, the people being pursued by Portnoff are often those
struggling the most economically, and the firm's tactics are "an
affront to people who have struggled to hang on."
RED BRICK: OH A.G. Petro Delivers Wedding Refunds To Consumers
--------------------------------------------------------------
Ohio Attorney General Jim Petro delivered checks to consumers
who lost money after planning a wedding reception at Red Brick
House, which closed before the paid events happened and without
providing refunds to consumers. Twelve consumers were included
in the settlement agreement negotiated by the Consumer
Protection Section and Red Brick House owner Tim Hirst to refund
approximately 55% of consumers' money.
"Consumers should always remember that they can come to the
Attorney General's Office for help," said Attorney General
Petro. "The Consumer Protection Section has experienced
mediators and attorneys dedicated to fighting for Ohioans
consumer rights."
The settlement also included a $100,000 civil penalty, which was
suspended because of Hirsts' financial situation and the need to
maximize the amount of money returned to consumers. The victims
that are receiving money suffered one or more of the following
violations, which led to the filing of a suit against Red Brick,
and Mr. Hirst, in 2004, resulting in the settlement:
(1) Failure to refund - Mr. Hirst accepted money from
consumers for wedding reception services which he used
inappropriately for expenses of the Red Brick House
before the receptions or events happened.
(2) Failure to gain permits/licenses - Mr. Hirst did not
have the proper permits, licenses and/or regulatory
clearances necessary to fulfill wedding reception
services prior to accepting consumers' deposits.
(3) Precarious financial condition - Mr. Hirst knowingly
accepted money from consumers without telling them
about his financial situation and the likelihood that
the scheduled wedding reception would not be performed.
Red Brick House was located in Alliance and has since been
closed.
For more information, contact Michelle Gatchell, Attorney
General's Office, by Phone: (614) 466-3840
RUSH MEDICAL: Chicago Resident Commences Price-Gouging Lawsuit
--------------------------------------------------------------
Rush Medical, one of Chicago's most respected hospitals, was
recently hit with a class-action lawsuit claiming that the 170-
year-old institution is using fraudulent price-gouging tactics
to make millions of dollars from treatments provided to the
region's poorest patients.
Danielle Lebherz, a 28-year-old Chicago resident, brought the
case. In September of 2003, Ms. Lebherz came to Rush Medical's
Oak Park facility for emergency care. She was discharged less
than 24 hours later and billed more than $22,000.
According to the complaint, had Ms. Lebherz been covered by an
HMO, her insurance company would have been charged only $6,534,
a difference of more than $15,000.
Steve Berman, managing partner of Hagens Berman Sobol Shapiro,
the law firm representing Lebherz, says that Rush bases its
charges on a price list, from which insurance companies
negotiate a discount rate. But according to the suit, those who
are uninsured are stuck with the highly inflated listed rates.
"Rush charges individuals for the proverbial $10 aspirin so that
they can give the big insurance companies a 90 percent discount.
The problem is that those who are least fortunate are being
saddled with the full bill. I find that personally abhorrent,
and we believe it is patently illegal," Mr. Berman stated.
According to the complaint, Rush's negotiation strategy has paid
off handsomely for the organization. In 2001, Rush Oak Park and
Rush North Shore were reported to be making a potential profit
of more than $9,000 for every uninsured patient treated,
compared to a state average of just $3,641, the suit states.
According to the suit, Lebherz originally sought care at Rush
Oak Park, but the facility was not equipped to do the emergency
surgery Danielle needed. She was told that she would be
transported to Rush Medical Center but when the facility learned
she was uninsured, physicians there refused to treat her, and
instead arranged for physicians affiliated with the Rush System
to do the surgery at Rush Oak Park. She underwent a surgical
procedure and was discharged the next day.
When Ms. Lebherz learned of her extreme debt, she attempted to
make payments, but the hospital has since turned her account
over to a collection agency, according to her attorney.
Ms. Lebherz was forced to forego follow-up appointments with her
Rush-affiliated physician in fear of racking up additional debt.
"I went to Rush in horrible pain and in urgent need of care,"
Ms. Lebherz said. "I didn't have the opportunity to price-shop
local hospitals. But I made the mistake of assuming I would be
treated fairly when it came to pricing. I was wrong."
An integrated healthcare system, Rush links a number of
community healthcare facilities and regional hospitals to
services available at Rush Medical Center, and professes to
provide the community with charity care services.
But according to the complaint, Rush is anything but charitable.
Serving a population of three million in the Chicago area, Rush
provided charity care for just 115 patients in 2003, or .002
percent of its actual patient load. In fact, Rush North Shore,
one of the facilities in the network, provided no charity
patient care in 2003, the suit states.
According to reports included in the complaint, Rush is one of
the region's most expensive healthcare facilities, and one of
the most profitable. According to one study, Rush Medical
Center's prices were 57.1 percent higher than the state median.
Another recent study cited in the complaint shows that the
average price for a semi-private hospital room in Illinois
stands at $589. The same room costs $783 in the Rush system.
"There is nothing wrong with a non-profit setting prices to meet
market demands," Mr. Berman added. "But to force the working
poor to finance discounts given to insurance companies is
horribly misguided."
The suit claims that Rush violated the Illinois Consumer Fraud
Act and benefited from unjust enrichment and seeks full
restitution for potential class members. It also asks the court
to immediately stop Rush from charging self-pay patients a
higher rate than its insurance payors.
For more details, contact Steve Berman of Hagens Berman Sobol
Shapiro, LLP by Phone: 206-623-7292 or by E-mail:
steve@hbsslaw.com.
ULTIMATE FITNESS: Returns $8,000 Membership Fees To Consumers
-------------------------------------------------------------
Nearly $8,000 will be returned to members of an Allegheny
County, Pennsylvania health club that shut down without
refunding consumers' prepaid membership fees, state Attorney
General Tom Corbett announced in a statement.
The action follows an investigation into claims that more than
85 consumers failed to receive refunds for the unused portion of
their prepaid memberships after the gym closed in September
2004. Along with consumer restitution, the legal action filed
in Allegheny County Court requires the health club operators to
pay $5,500 in fines and costs while permanently forfeiting their
right to own or operate a health club within the Commonwealth.
Corbett's Bureau of Consumer Protection today filed an
"Assurance of Voluntary Compliance" agreement with Dr. William
Webb, Mark DeFelice and Julie Mathias, all individually, and
doing business as Ultimate Fitness Complex, formerly of 1712
Lincoln Highway, North Versailles, Allegheny County.
Today's agreement resolves claims that the facility from
January-May 2004 continued to violate Pennsylvania's Health Club
Act, despite a 2002 agreement with the Attorney General's Office
that required full compliance with the Pennsylvania Health Club
Act.
Ultimate Fitness operators in 2002 were accused of failing to
register as a health club with the Attorney General's Bureau of
Consumer Protection prior to selling membership contracts. Other
allegations include claims that they accepted advance payments
from consumers for long term memberships without first obtaining
a bond or letter of credit.
Corbett said a bond or letter of credit is required under the
Pennsylvania Health Club Act to secure restitution for consumers
in the event that the gym closes before members have used-up the
time remaining on their pre-paid contracts.
"Here you have a gym that ignored our prior legal action, failed
to obtain the required bond or letter of credit and then closed
its doors without immediately returning thousands of dollars to
members who were legally entitled to restitution," Mr. Corbett
said. "This business practice defied the very safeguards that
are put in place to protect consumers."
Under the terms of the legal action, Ultimate Fitness operators
are required to:
(1) Pay nearly $8,000 to 86 consumers who failed to be
reimbursed for the unused portion of their pre-paid
memberships;
(2) Refund fees that were automatically debited from
consumers' bank accounts after the health club closed;
(3) Pay $5,000 in civil penalties;
(4) Forfeit their right to own or operate a health club in
Pennsylvania;
(5) Pay $548 for the Commonwealth's investigation costs and
fees
Mr. Corbett said refund checks will be mailed to eligible
consumers. Ultimate Fitness members who believe they are
entitled to restitution and have not received a check by March
30 should contact Corbett's Office at 1-800-441-2555.
The assurance was filed in Allegheny County Court. The case is
being handled by Senior Deputy Attorney General Marcia L. Telek
DePaula of Corbett's Bureau of Consumer Protection in
Pittsburgh.
VERTEX PHARMACEUTICALS: MA Court Dismisses Securities Lawsuit
-------------------------------------------------------------
Global biotechnology firm, Vertex Pharmaceuticals Incorporated
(Nasdaq: VRTX) reports that the United States District Court for
the District of Massachusetts has granted its motion to dismiss
a purported class action lawsuit pending before the court
against certain of the Company's officers and a former employee.
In the lawsuit, the plaintiffs claimed that the defendants made
material misrepresentations and/or omissions of material fact
regarding an investigational drug candidate. In her order
dismissing the complaint, United States District Court Judge
Patti B. Saris also denied the plaintiffs' motion to supplement
the complaint as "futile." No consideration has been exchanged,
and neither the plaintiffs nor their counsel will receive any
compensation or expense reimbursement from Vertex in connection
with the dismissal.
Vertex believes the District Court's decision is consistent with
the Company's assertions that its disclosures and practices were
both proper and timely, and that the plaintiffs' claims were
without merit. If they choose to do so, the plaintiffs may
appeal the court's decision.
The case was designated as "In re Vertex Pharmaceuticals, Inc.,
Securities Litigation, Consolidated Civil Action No. 03-11852-
PBS."
Asbestos Alert
ASBESTOS LITIGATION: Aircraft Braking Systems Clears Case Issues
----------------------------------------------------------------
Aircraft Braking Systems Corporation reported in its filing to
the Securities and Exchange Commission that it has been named,
along with other defendants, in a small number of products
liability cases and employee exposure lawsuits alleging that the
company is responsible, as a corporate successor, for the
asbestos exposure liabilities of the previous owners.
Previous owners of the aircraft braking system production assets
that the Company now operate in its headquarters at Akron, Ohio
installed brake pads containing asbestos in certain of their
products.
However, to date, there has been no finding adverse to the
Company in any such litigation, and it believes that it has
defenses to the allegations of successor liability and other
theories of liability, as well as rights to contribution and
indemnity from others.
Since 1993, about 170 non-employee plaintiffs alleging personal
injury from exposure to asbestos have named the Company in
products liability lawsuits. In connection with these lawsuits,
it has sought and received defense and indemnity from Goodyear,
which produced aircraft braking systems equipped with asbestos-
containing brake linings between about 1940 and 1985 at the
Akron, Ohio facility now operated by Aircraft Braking Systems.
Goodyear has been named as a defendant in all of these claims.
In addition, these claims name Loral Corporation (now part of
Lockheed Martin Corporation), from whom the Company bought the
aircraft braking system production assets in 1989. To date, the
Company has incurred only administrative costs in connection
with these claims.
In 2003, the Company participated with Lockheed Martin
Corporation in the resolution of numerous worker-related claims,
including 157 claims, for an aggregate cost of US$120,000. There
are currently no further employee asbestos exposure claims
pending against the Company.
Goodyear has so far defended and resolved the products claims
for this Company, but Goodyear has recently reserved its rights
to dispute whether such defense and indemnification are
required.
The Company has obtained limited indemnification regarding these
and other issues, upon the terms and conditions of the purchase
agreement. But the Company states there can be no assurance that
these defense and indemnity arrangements will be available or
sufficient to satisfy any claims or losses as a result of
asbestos issues.
Aircraft Braking Systems Corporation is a manufacturer of
wheels, brakes, brake control and related systems for the
commercial, military and general aviation markets. Located in
Akron, Ohio, with a product support facility in Slough, England,
ABSC supplies braking systems and components to a wide variety
of customers ranging from small aircraft operators to some of
the world's major airlines and aircraft manufacturers.
ASBESTOS LITIGATION: Hardie Supports Passage of US Asbestos Law
---------------------------------------------------------------
In an attempt to protect itself from a flood of US asbestos
claims, building products company James Hardie Industries is
lobbying politicians in the US and Australia to pass legislation
to set up a US$140 billion trust fund to answer to all asbestos
claims.
This comes at the wake of a AUD250,000 payout to an American
asbestos victim from a former subsidiary. The claims are now
more of a threat to the company since it was revealed that it
exported Australian-manufactured asbestos building products and
brake linings to the US from the 1960s to the 1980s.
The Company is supporting the proposal that is aiming to put a
stop to litigation that has destroyed more than 70 former
asbestos companies in the US and is threatening to pull down
even more.
Meanwhile, US plaintiff lawyers are preparing to bring up more
lawsuits against Hardie and the Medical Research and
Compensation Foundation, the trust it set up in 2001 to
compensate victims of the asbestos products it manufactured in
Australia until 1987.
Steven Kazan, the head of one of the largest and most effective
of these firms, which deals exclusively in asbestos litigation,
said his office already had two claims against Hardie. He
intends to pursue more claims against Hardie and the trust,
seeking payouts of several million dollars in each case.
This would be in line with the norm in the US, where
compensation awards for asbestos cancer cases are almost always
over USUS$1 million and occasionally top US$10 million, compared
with an average payout of AUD250,000 in Australia.
While Hardie Chief Financial Officer Russell Chenu said the
amount of Hardie Australian asbestos product shipped to the US
was "modest," Mr. Kazan said, "If I were Chenu, I'd be a bit
nervous."
The US moves mean potential disaster for the historic and hard-
fought provisional agreement in which Hardie agreed to pay an
estimated US$1.5 billion into a special purpose fund for future
Australian victims of asbestos disease caused by its products.
While Hardie is now a separate entity from the compensation
trust, the company has said it is counting on the MRCF's US$130
million or so in remaining assets to go into the pool of funds
for Australian victims.
Any diminution of the trust's funds would ultimately come at
Hardie's expense. Hardie has retained the politically plugged-in
Washington law firm of Shea and Gardner, now part of a larger
firm called Goodwin Procter, to handle its litigation in the US.
In addition, Hardie is also lobbying the NSW Government to
protect it from overseas claims, and some legal observers say
the Government could conceivably enact legislation allowing only
Australians to sue the compensation fund.
A spokesman for NSW Attorney-General Bob Debus said details of
the compensation deal, including any legislation, had not been
finalized.
But Mr. Kazan said that if the NSW Government protected the
compensation trust from US claims, he would then sue Hardie in
the US -- the company's biggest and richest market, where it has
registered subsidiaries.
"Nothing this Government of NSW can do is going to stop us suing
Hardie," Mr. Kazan said firmly.
In response to the issue, Hardie released a statement saying it
was confident that the claims against it in the United States
would be thrown out of court.
"The few asbestos-related cases pending in California naming
James Hardie entities are suits only against its US
subsidiaries, which have never used asbestos," James Hardie
said.
"We are therefore confident that any such cases will be
dismissed as either time-barred or wholly lacking in any
evidence of exposure to any asbestos-related product
manufactured or sold by any James Hardie entity."
ASBESTOS LITIGATION: ABB Profits Up in '04 Despite Asbestos Woes
----------------------------------------------------------------
After three years of losses, engineering firm ABB (NYSE: ABB)
swung to a net profit in 2004, but the Swiss-based company said
it could not predict the costs of its asbestos woes and lowered
its 2005 margin target.
The maker of industrial robots and electric motors said
resolving its US$1.2 billion asbestos settlement, which was
rejected by a US court late last year, was a key challenge in
2005. The company said it could not predict what the financial
impact of US asbestos claims would be or when a settlement
proposal would be accepted, knocking its shares lower in early
trading.
ABB had previously said it expected to resolve its asbestos
liabilities without significant extra costs.
"This is a step backwards," said Zuercher Kantonalbank market
analyst Claude Zehnder.
JP Morgan, which upgraded its recommendation to "overweight"
from "neutral" after the results citing strong underlying
profitability, expected the additional costs for asbestos to
amount to US$500 million.
The group, which came to the brink of financial collapse in 2002
after an acquisition spree left it unwieldy and laden with debt,
brought down its 2005 operating margin target to 7.7 percent
from a previous 8 percent. But ABB Chief Executive Fred Kindle
said this was solely due to accounting changes related to the
reclassification of its oil, gas and petrochemicals business.
"[This] does not reflect a change in outlook ... or ambition
level," Mr. Kindle said. Achieving a 10 percent operating margin
in its core power technology unit was "achievable" but
"challenging," he said.
ABB posted a US$201 million net profit for 2004, at the lower
end of analyst expectations and compared with a loss of US$779
million in 2003. The group operating margin stood at 5.2 percent
for the full year 2004, compared with 1.7 percent in 2003.
Clariden Bank fund manager Javier Ruiz was disappointed by the
results and did not expect the group to reach its margin target.
"I don't think they will be able to achieve 7.7 percent," citing
margin pressures at ABB's power unit. ABB said it was
considering whether to change its US$1.2 billion Combustion
Engineering U.S. asbestos settlement plan, but said it was
committed to keep extra costs at a minimum.
"We are still very much committed ... to keep the costs at
reasonable levels, at immaterial levels ... and also to resolve
it in a timely manner," said Mr. Kindle. Settling those claims
was also key to achieving the firm's US$4 billion debt target in
2005, he said.
At the end of December 2004, total debt was US$5.5 billion,
compared with US$5.2 billion at September 30, 2004, and US$7.9
billion at the end of December 2003. Operating income came in at
US$1.084 billion in 2004 compared with the previous year's
US$357 million, on group revenues of US$20.721 billion, which
rose 1 percent. Orders were US$21.689 billion, up 10 percent.
The group's 2004 results were clouded by costs of the
reclassification of its remaining OGP business as a continuing
operation following rejection of the asbestos settlement. ABB
also deconsolidated its power lines unit. The net loss in
discontinued operations amounted to US$247 million in 2004.
Mr. Kindle was optimistic about the company's prospects for this
year. "The market environment is promising, favorable in 2005,"
he said.
ASBESTOS LITIGATION: High Court Orders Victims to Justify Claims
----------------------------------------------------------------
The Mississippi Supreme Court junked a district court's ruling
to group plaintiffs and instead has ordered 115 plaintiffs in an
asbestos injury lawsuit to reveal the details of their
individual claims.
Court documents show that in 2002, these plaintiffs sued 77
defendants in Jones County.
Circuit Judge Billy Joe Landrum assigned a trial group of up to
12 plaintiffs, whose claims would then be tried together and
would represent all plaintiffs. Judge Landrum did not hold a
hearing before issuing the order.
The 3M Co., one of the defendants, appealed on grounds the
defendants should be forced to justify their individual claims
and why their cases should be heard in Jones County.
Justice George C. Carlson Jr., writing for the court, said a
hearing in Jones County would follow procedure laid out last
August by the court. He said the plaintiffs must provide the
defendants with information on who each plaintiff sued and why.
That information should also include when the plaintiff was
exposed and the work site where the exposure occurred.
The plaintiffs were given 45 days to comply or their claims
would be thrown out. The justices also said separate trials
should be scheduled for each plaintiff and those cases involving
residents in other Mississippi counties should be transferred to
other courts.
The Supreme Court has ruled similarly in lawsuits against the
maker of a diet drug. In those cases, the court said it was
improper to group plaintiffs together when their claims did not
arise from the same incident.
ASBESTOS LITIGATION: Zenith Corp. Faces 500 Compensation Claims
---------------------------------------------------------------
Zenith National Insurance Corporation (NYSE: ZNT) declared that
as of Dec. 31, 2004, it faced about 500 asbestos-related
workers' compensation claims open with loss reserves of about
US$3.6 million compared to its total workers' compensation loss
reserves of US$1,074 million.
Zenith National Insurance is the holding company for Zenith
Insurance, ZNAT Insurance, and Zenith Star Insurance, which
underwrite workers' compensation policies in more than 40
states, as well as reinsurance treaties.
According to the filing it submitted to the Securities and
Exchange Commission, the Woodland Hills, CA-based Company has
paid and closed about 3,700 such claims for a total of US$9.7
million or about US$2,600 per claim. It added that it has
exposure to asbestos losses in its workers' compensation segment
that have not been material to results of operations or
financial condition in any year or in the aggregate.
Zenith also has potential exposure to environmental and asbestos
losses and loss adjustment expenses beginning in 1985 through
its reinsurance segment, but the business reinsured by Zenith in
this segment contains exclusion clauses for such losses. The
Company believes that its reserves for environmental and
asbestos losses are currently appropriately established.
ASBESTOS LITIGATION: Garlock Cites 61% Drop in New Claims
---------------------------------------------------------
EnPro Industries, Inc. (NYSE: NPO) related in its filing to the
Securities and Exchange Commission that the rate of new asbestos
claims filed against one of its subsidiaries, Garlock Sealing
Technologies, continued to decline, with a 61% reduction in 2004
as compared to 2003.
Garlock faced about 2,000 new claims filed in the fourth
quarter. For the full year of 2004, 17,400 new claims were
filed, a considerable reduction compared to 2003, when there
were 44,700 new filings. The total of new claims filed in 2004
was the lowest yearly total since the early 1990s.
Headquartered in Palmyra, NY, Garlock posted a cash balance of
US$108 million on Dec. 31, 2004, an improvement from about US$95
million at the beginning of the year, even though capital
expenditures increased by over 60% in 2004 to US$37 million as
the company invested in programs to improve the performance of
its operations. After spending about US$40 million in net cash
outflows for asbestos-related claims and expenses, net cash
provided by operating activities still totaled about US$41
million for the year.
Payments to settle asbestos claims and for associated fees and
expenses declined by about US$12 million to US$122.8 million in
2004. However, net cash outflows for claims and expenses
increased by about US$5 million to US$40.3 million, reflecting
delays in the collection of insurance caused by a dispute with a
group of London-based carriers.
The dispute was settled during the fourth quarter of 2004, and
in January 2005, Garlock received past due reimbursements
totaling about US$22 million. Had this amount been collected in
2004, net cash outflows for asbestos-related claims and expenses
would have been significantly less than the US$35.5 million net
cash outflow in 2003.
President and CEO of EnPro Industries, Ernie Schaub, said, "We
committed fewer total dollars to settlements for the third
consecutive year as a result of our strategy to reduce cash
outflows for asbestos claims. We expect net cash outflows will
decline sharply in 2005 as we approach our goal of more closely
matching Garlock's settlement costs with anticipated insurance
payments.
"We are also encouraged to report that the trend of
significantly lower new filings has continued now for six
consecutive quarters," Mr. Schaub continued.
"However, asbestos claims remain a significant issue for EnPro
and many other companies. We continue to believe the time is
right for a national legislative solution that provides fair and
timely compensation for those truly afflicted with an asbestos-
related disease and certainty for the thousands of companies
burdened by asbestos claims, a high percentage of which are
filed by people with no physical impairment."
Cash flows in 2005 are expected to benefit from lower net
asbestos payments and improved operating income. Capital
spending is likely to be comparable to the levels of 2004 as a
result of continued investments in operational efficiencies,
cost reductions and new product development.
As a result of two significant adverse asbestos verdicts in
2004, Garlock Sealing Technologies will be required to provide
security in the form of bonds in connection with its appeals.
The bonds could exceed the total amount of the verdicts and
total as much as US$41 million for the two cases.
Use of the cash collateral required for the bonds would be
restricted for the period of the appeals, which could be for up
to three years. Garlock remains confident that it will prevail
on the appeals, particularly on the issue of punitive damages.
Garlock's parent company, EnPro Industries, Inc., is a leader in
sealing products, metal polymer and filament wound bearings,
compressor systems, diesel and dual-fuel engines and other
engineered products for use in critical applications by
industries worldwide.
ASBESTOS LITIGATION: PPG Industries Faces 116,000 Injury Claims
---------------------------------------------------------------
As of Dec. 31, 2004, diversified manufacturer of decorative and
protective products PPG Industries, Inc. (NYSE: PPG) was one of
many defendants in numerous asbestos-related lawsuits involving
about 116,000 claims.
Most of these claims relate to allegations that PPG should be
liable for injuries involving asbestos-containing thermal
insulation products manufactured and distributed by Pittsburgh
Corning Corporation.
PPG and Corning Incorporated are each 50% shareholders of PC.
Pittsburgh, PA-based PPG has denied responsibility for, and has
defended, all claims for any injuries caused by PC products. On
April 16, 2000, PC filed for Chapter 11 Bankruptcy in the U.S.
Bankruptcy Court for the Western District of Pennsylvania.
As a consequence of the bankruptcy filing and various motions
and orders in that proceeding, the asbestos litigation against
PPG, as well as against PC, has been stayed and the filing of
additional asbestos suits against them has been enjoined, until
thirty days after the effective date of a confirmed plan of
reorganization for PC in accordance with the settlement
arrangement among PPG and several other parties. The stay may be
terminated if the Bankruptcy Court determines that such a plan
will not be confirmed, or the settlement arrangement is not
likely to be consummated.
On May 14, 2002, PPG announced that it had agreed with several
other parties, including certain of its insurance carriers, the
official committee representing asbestos claimants in the PC
bankruptcy, and the legal representatives of future asbestos
claimants appointed in the PC bankruptcy, on the terms of a
settlement arrangement relating to asbestos claims against PPG
and PC.
On March 28, 2003, Corning Incorporated announced that it had
separately reached its own arrangement with the representatives
of asbestos claimants for the settlement of certain asbestos
claims that might arise from PC products or operations.
The terms of the PPG Settlement Arrangement and the Corning
Settlement Arrangement have been incorporated into a bankruptcy
reorganization plan for PC along with a disclosure statement
describing the plan, which PC filed with the Bankruptcy Court on
April 30, 2003. Amendments to the plan and disclosure statement
were filed on Aug. 18 and Nov. 20, 2003.
Creditors and other parties with an interest in the bankruptcy
proceeding were entitled to file objections to the disclosure
statement and the plan of reorganization, and a few parties
filed objections. On Nov. 26, 2003, after considering objections
to the second amended disclosure statement and plan of
reorganization, the Bankruptcy Court entered an order approving
such disclosure statement and directing that it be sent to
creditors, including asbestos claimants, for voting.
The Bankruptcy Court established March 2, 2004 as the deadline
for receipt of votes. On March 16, 2004, notice was received
that the plan of reorganization received the required votes to
approve the plan with a channeling injunction. From May 3 to 7,
2004, the Bankruptcy Court judge conducted a hearing regarding
the fairness of the settlement, including whether the plan would
be fair with respect to present and future claimants, whether
such claimants would be treated in the same manner, and whether
the protection provided to PPG and its participating insurers
would be fair in view of the assets they would convey to the
asbestos settlement trust to be established as part of the plan.
At that hearing, certain creditors and other parties in interest
raised objections to the PC plan of reorganization. Following
that hearing, the Bankruptcy Court set deadlines for the parties
to develop agreed-upon and contested Findings of Fact and
Conclusions of Law and scheduled oral argument for contested
items on Nov. 9, 2004.
The Bankruptcy Court heard oral arguments on the contested items
on Nov. 17 to 18, 2004. At the conclusion of the hearing, the
Bankruptcy Court agreed to consider certain post-hearing written
submissions.
In a further development, on Feb. 2, 2005, the Bankruptcy Court
established a briefing schedule to address whether certain
aspects of a decision of the U.S. Third Circuit Court of Appeals
in an unrelated case have any applicability to the PC plan of
reorganization. The Bankruptcy Court set oral arguments on the
briefs for March 16, 2005.
PPG currently believes the Third Circuit Court of Appeals'
decision should not adversely affect the confirmability of the
PC plan of reorganization incorporating the terms of the PPG
Settlement Arrangement.
About 9,000 of the 116,000 claims pending against PPG and its
subsidiaries are premises claims. Many of PPG's premises claims
have been resolved without payment from PPG. To date, PPG has
paid about US$7 million to settle about 1,100 premises claims,
virtually all of which has been covered by PPG's insurers.
There are no property damage claims pending against PPG or its
subsidiaries. PPG believes that it has adequate insurance for
the asbestos claims that would not be covered by any channeling
injunction and that any financial exposure resulting from such
claims will not have a material effect on PPG's consolidated
financial position, liquidity or results of operations.
PPG has no obligation to pay any amounts under the PPG
Settlement Arrangement until the effective date. PPG and certain
of its insurers, along with PC, would then make payments to the
trust, which would provide the sole source of payment for all
present and future asbestos bodily injury claims against PPG,
its subsidiaries or PC alleged to be caused by the manufacture,
distribution or sale of asbestos products by these companies.
For over thirty years, PPG admitted that it has been a defendant
in lawsuits involving claims alleging personal injury from
exposure to asbestos. However, the Company believes that it is
not responsible for any injuries caused by PC products, which
represent the majority of the pending bodily injury claims
against it. Prior to 2000, PPG had never been found liable for
any such claims, in numerous cases PPG had been dismissed on
motions prior to trial, and aggregate settlements by PPG to date
have been immaterial.
ASBESTOS LITIGATION: Royal & Sun Allocates GBP160M for US Claims
----------------------------------------------------------------
In a move to extricate itself from the compensation culture in
the US, Royal & Sun Alliance has boosted its provision against
claims from US workers for asbestos-related illnesses by another
GBP160 million.
The Liverpool insurance giant said the GBP160 million would come
out of the GBP204 million remaining from a "contingent
liability" set up at the time of its GBP960 million rights issue
in September 2003.
The move was in tandem with other insurers, including Zurich
Financial Services, which also raised their provisions to cover
further possible US claims.
Chief executive Andy Haste said that GBP95 million of the new
provision was to cover worker compensation claims and that the
total is in line with its guidance at the time of its third
quarter results last September. He said that this amount proved
greater than expected because of increased life expectancy and
rising costs of medical care.
Royal drew down GBP96 million from the GBP300 million contingent
liability last March, saying the money was needed for workers'
compensation and asbestos claims. It had earlier put GBP500
million of the rights issue cash into strengthening US reserves
against those issues.
However, Mr. Haste said last August that there was "no quick
fix" for the rump of closed US businesses, which lost GBP58
million in the first half of 2004. In November, he said the
company was looking again at reserves.
Royal said the remaining GBP44 million in the contingent
liability would now be transferred back into general funds. A
spokesman said, "It is fair to say that, if you looked at our
legacy issues 18 months ago, there was a weak capital position,
the problem of getting out of our life businesses, board and
management issues and ridding our portfolio of non-performing."
The company added that outside the US, its performance since
then has been "strong."
RSA raised GBP960 million though a controversial rights issue in
2003 to meet any possible claims for asbestos. The company has
now closed its entire US arm to new business, except for a small
motor insurer.
The company is facing legal action from General Motors, which
says the insurer should indemnify it against claims from former
employees who have suffered illnesses arising from the use of
asbestos. GM is making claims against policies it says were
underwritten between 1954 and 1971.
ASBESTOS LITIGATION: AU's Property Council Calls for Clear Laws
---------------------------------------------------------------
The Property Council of Australia has called for more clarity in
the Australian Capital Territory Government's changes to laws
about asbestos.
Amendments passed in the Assembly last week were aimed at
removing any doubt that an owner or occupier is now obliged to
obtain a professional asbestos report for a building.
PCA's new Executive Director, Catherine Carter, said she has had
legal advice that the legislation is still unclear about the
extent of duty of care.
"We believe that means that any owner of property that's of a
certain age - typically built before the 1960s...may have a duty
of care to people they sell that property to or people who are
tenants of that property.
"The potential, while the legislation is unclear in that regard,
is for some very expensive litigation to come people's way," she
said.
Ms. Carter says the laws need to be changed now before building
owners become embroiled in expensive court action. She believes
the better result is to have the legislation amended.
Principally, the Property Council champions the interests of the
industry in the political arena to ensure a better business
environment for the property industry. The Property Council
currently has about 2000 member companies, ranging from
Australia's largest institutions, to private property investors
and crucial service providers to the industry.
ASBESTOS LITIGATION: Pres. Bush Targeting Asbestos Litigation
-------------------------------------------------------------
After President George W. Bush last week signed legislation
aimed at discouraging class action lawsuits, he has now set his
sights on placing curbs on asbestos litigation and medical
malpractice awards.
"We're making important progress toward a better legal system,"
he said during the signing ceremony for the class-action bill.
The president hailed the legislation that had been bitterly
opposed by consumer groups and trial lawyers but nonetheless
attracted some Democratic supporters. He said having federal
judges take most large class-action lawsuits away from state
courts would "prevent trial lawyers from shopping around for
friendly local venues."
Under the bill, class action suits seeking US$5 million or more
would be heard in state court only if the primary defendant and
more than one-third of the plaintiffs are from the same state.
The president has described class action suits, in which a
single person or a small group can represent the interests of
thousands in court, as often frivolous.
"The House of Representatives joined the Senate in sending a
clear message to the nation: the rights of large corporations
that take advantage of seniors, low-wage workers and local
communities are more important than the rights of average
American citizens," said Helen Gonzales of USAction, a liberal,
pro-consumer activist group.
During the brief ceremony, Pres. Bush repeatedly described the
bill as just a beginning in his drive to place much broader
restraints on the American legal system. The president, the GOP
and businesses have criticized what they see as a litigation
crisis that enables lawyers to reap huge profits while
businesses and consumers alike are stuck with the bill.
Federal courts are expected to allow fewer large class action
suits to go forward, which Democrats say means more businesses
will get away with wrongdoing and fewer ordinary people will be
protected.
"It's the final payback to the tobacco industry, to the asbestos
industry, to the oil industry, to the chemical industry at the
expense of ordinary families who need to be able go to court to
protect their loved ones when their health has been
compromised," said Rep. Ed Markey, D-Mass.
ASBESTOS LITIGATION: James Hardie Confronts Lawsuits in US Court
----------------------------------------------------------------
James Hardie is facing a compensation claim worth millions of
dollars filed in a Californian court in behalf of two Americans
who allegedly died due to asbestos the company exported to the
US.
Mounting the actions for wrongful death is well-known plaintiff
lawyer Steven Kazan, whose firm has won a number of similar
cases in the past.
These American victims were former workers of the Californian
distributor Industrial Building Materials Inc., which they claim
imported and installed Hardie asbestos products.
The fact that Hardie's US subsidiaries are listed as defendants
in one case would appear to contradict a statement by Hardie
chief financial officer Russell Chenu last week that the company
faced no asbestos compensation actions in the US, and that only
its compensation trust, the Medical Research and Compensation
Foundation, was a defendant.
The suits are particularly dangerous for Hardie because, in a
company memo, Hardie's then litigation counsel, Wayne Attrill,
said Hardie's Australian asbestos subsidiary had exported
asbestos products to IBMI, and could be liable.
At Hardie's quarterly results meeting last week, Mr. Chenu had
said that only a "modest" amount of asbestos product had been
sent to the US from the 1960s to the 1980s.
Hardie spokesman James Rickards said the few lawsuits filed in
the US were against the legally separate compensation trust.
However, Hardie still refuses to provide figures of its asbestos
exports to the US, and the claim that only the MRCF is a
defendant appears to be wrong.
The California Superior Court lists James Hardie Building
Products Inc, and other Hardie subsidiaries in the US, as
defendants in the wrongful death case filed in July 1997 for
Ronald Brown. Mr. Brown worked at IBMI from 1964 to 1976, and
died of the asbestos cancer mesothelioma.
Hardie has filed documents denying the claims that its products
were responsible for Mr. Brown's death, while the MRCF has
similarly filed a denial in the Henderson case.
A leading consultant on international asbestos litigation, Ian
Mutton, said Hardie's US subsidiaries risked being found liable
if the Brown family wins the case.
"The risk is that the judge will say there's a defendant here,
there's a plaintiff here whose husband died from asbestos
disease, so the defendant has to pay," Mr. Mutton said.
Hardie shareholders, alarmed by revelations about the company's
US asbestos exposure, wiped almost US$200 million off its value
in trading.
"I suspect people are more focused on asbestos issues and
potential liability," said analyst Mark Ebbinghaus of UBS.
ASBESTOS LITIGATION: "Lung Bus" to Examine NSW Ex-mine Workers
--------------------------------------------------------------
The Dust Diseases Board will visit former miners next month at
the Baryulgil asbestos mine near Grafton in northern NSW to
assess the health of these aborigines.
Bundjalung elder Charles Moran, a former miner at Baryulgil,
said he has been waiting a long time for a visit by the famed
"Lung Bus."
However, Mr. Moran said what is really needed is compensation
from mine owner James Hardie. He said, "I'd like to see it
happen because it's been a long time and ... we've lost most of
our miners now."
"There's still family around that are still suffering and I
think if they can get compensation, well and good, because once
you've got something to do with asbestos, it's terminal," he
added.
Chrysotile or white asbestos deposits were discovered at
Baryulgil during World War I.
From the early 1940s to 1979, aboriginal miners and their
community were poisoned by asbestos, which contaminated the air,
food, water, ground and buildings, as they produced profits for
the industry's owners.
As they represented cheap, expendable labor, the Bundjalung
people were put to work in the mines when operations began in
the 1940s. They were the traditional custodians of the Clarence
valley, in northern NSW, until pastoralists dispossessed them in
the last century.
James Hardie now says it's not liable. However, two legal
victories for asbestos victims in 1988 place the company on
shaky ground. Also in 1988, former employees founded the NSW Ex-
Miners' Asbestos Aboriginal Corporation to fight a compensation
case. A victory for the Baryulgil community would mean a
colossal payout.
ASBESTOS LITIGATION: Rival Insurers Protest ACE's Plan to Sell
--------------------------------------------------------------
Four of ACE Ltd's competitors are disputing a sale leading to a
discharge of some of the company's asbestos obligations. They
are seeking the cooperation of Pennsylvanian and British
regulators to prevent any transactions.
An attorney representing AIG, Allstate Corp., Chubb Corp. and
St. Paul Travelers Cos. sent a letter asking Pennsylvania
Insurance Commissioner Diane Koken to prevent the property-
casualty insurer's planned sale of three subsidiaries to UK
private-equity investors.
Mark A. Aronchick, of Hangley Aronchick Segal & Pudlin in
Philadelphia, wrote that the four insurers are accusing ACE of
shedding its legal obligations to policyholders.
The legal battle between Maurice "Hank" Greenberg, chairman of
American International Group Inc. and Evan Greenberg, chief
executive of ACE, has been long drawn out.
ACE is set to sell three of its insurance units dealing with
substantial liabilities for policies covering asbestos and
environmental claims. ACE acquired a number of such liabilities
when it bought Cigna Corp.'s property-casualty insurance
business in 1999. Cigna had created a separate operating company
covering those polices so that its remaining operations could do
business with a clean bill of health from regulators and rating
agencies.
ACE followed suit, saying it could walk away from any further
claims on the old policies once it would not possess the
necessary resources to cover them. Those recourses comprise US$4
billion in assets and additional US$850 million set aside by
Cigna, plus a US$2.5 billion reinsurance policy ACE bought at
the time of its purchase. At the moment ACE has spent most of
those funds.
Several insurers contested Cigna's original move, arguing it
didn't protect Cigna, and later, ACE, from the obligation to pay
claims if those resources proved too little.
As ACE culminated the review of its asbestos liabilities last
year, several analysts predicted that the Company's entire
assets and reinsurance were used to cover the old policies.
Insurance insiders were eager to see whether it would still
continue giving payouts.
However in a stunning move, ACE announced on January 6 that it
gave consented to selling the units holding old policies to
Randall & Quilter Investment Holdings Ltd., a U.K. investment
firm.
The Class Action Reporter edition on Jan. 14, 2005 disclosed the
Company's plans to sell three reinsurance units in the first
half of the year. ACE American Reinsurance Company, Brandywine
Reinsurance Co (UK) Ltd and Brandywine Reinsurance Company are
so-called run-off companies to manage asbestos and other
reserves.
Evan Greenberg, president and CEO of ACE Limited had said, "This
sale is an important step in our strategy to resolve our
asbestos exposures responsibly and to achieve the certainty
intended by the 1996 reorganization."
The insurers contended that the Company was trying to avoid
paying claims by transferring ownership to the UK.
In the past, AIG has contested with ACE in a California court.
AIG won the lawsuit accusing Cigna of violating state law while
transferring its policies to a new legal entity without its
clients' permission.
A spokeswoman for the Pennsylvania Insurance Department said the
public comment period for the ACE transaction is scheduled to
run through April 5.
ASBESTOS LITIGATION: Promina Shares Decline on Asbestos Claims
--------------------------------------------------------------
Shares in Promina Group Ltd., Australia's second-biggest general
insurer, fell to a record slump after it revealed a higher
exposure to asbestos claims than previously thought.
Sydney-based Promina, which owns AAMI, Vero and Australian
Pensioners Insurance Agency brands, posted that its insurance
margin, a measure of profitability, dropped to 10.1 percent last
year from 10.4 percent in 2003.
Net income in the second half of the year rose 56 percent to
AUD254 million or US$200 million after stock gains boosted
investment earnings.
Promina increased provisions against asbestos claims 59 percent
to AUD204 million in the second half and doubled its forecast
for future cases of mesothelioma, an asbestos-related disease.
The company is liable to claims that cover worker compensation.
The insurance group revealed it had reviewed its asbestos
provisioning in light of new information from a NSW inquiry into
the asbestos compensation problems of building products company
James Hardie.
Promina also received double the expected number of claims for
asbestos-related mesothelioma in the second half of the year.
The slump was a dampener for the insurer, which posted an annual
net profit of US$458 million in 2004 that chief executive
Michael Wilkins described as "spectacularly good." The amount
represented a jump of 54 percent compared with 2003 on a
proforma basis.
"It was a combination of both excellent operational performance
and above average investment returns. All came together for us
in 2004," Mr. Wilkins said. Promina pledged to hand an extra
US$200 to US$250 million cash to shareholders by the end of
June.
After its review, Promina bolstered asbestos provisioning by
US$77 million, pre-tax, to US$204 million, for claims up until
2029. Promina also strengthened its other reserves during the
year to 90 percent of probability of sufficiency, up from 85
percent previously, representing a US$52 million increase to the
risk margin, pre-tax.
Promina's insurance brands had a growth in volume, with gross
written premium up 3.5 percent to US$3.08 billion.
Mr. Wilkins indicated that conditions wouldn't be quite so good
during 2005, with both the good investment climate and good
claims experience of 2004 unlikely to last. He also said
competition in commercial insurance was starting to hit.
"We are now concerned about what we regard as more than isolated
cases of seemingly unsustainable pricing behavior in the general
insurance market in Australia," Mr. Wilkins said.
ASBESTOS LITIGATION: AFL-CIO Cites Arguments for Opposing Bill
--------------------------------------------------------------
In a letter drafted to US senators, organized labor warned that
it could not support an asbestos litigation bill that puts the
AFL-CIO and its Democratic backers at odds with defendants and
insurers. The group believes that this scenario might kill
reform in this Congress.
The American Federation of Labor-Congress of Industrial
Organizations is the voluntary federation of America's unions,
representing more than 13 million working women and men
nationwide.
Arlen Specter, chairman of the Senate Judiciary Committee, had
hoped to introduce a bipartisan bill early this year for a fund
supported by companies and insurers facing asbestos litigation.
However, Senate Majority Leader William Frist delayed the
passing of the bill when Sen. Specter added provisions
acceptable to committee democrats.
Specifically, these provisions included calls for a US$140
billion trust to be spread out over 27.5 years by industry and
insurers, as well as language that said all claims accepted by
the alternative claims-processing system established by the bill
would revert to the tort system at any point the fund couldn't
pay claims for six months.
The AFL-CIO said it would strongly oppose any attempt to push
through, on a partisan basis, legislation whose main purpose is
to bail out companies at the expense of victims.
The labor group said that it is deeply disturbed by the
statements of some senators and some business and insurance
groups calling for reopening agreements reached in the last
Congress or returning to the terms of [a prior bill] as the
legislative vehicle for consideration.
At the same time, Sen. John Cornyn, R-Texas the Judiciary
Committee member who has been most receptive to arguments from
defendants and said he is reaching out to Democrats and
Republicans to fashion a bill.
"We're trying to get everything side by side and let people
understand what the options are," he said. "We're trying to
narrow the issues."
ASBESTOS LITIGATION: Silica Injury Claims Could Decline, Study
--------------------------------------------------------------
Court rulings concerning silica injury claims may keep such
lawsuits from matching the explosive growth of asbestos
litigation, according to a report released by reinsurance
intermediary, Guy Carpenter & Company Inc.
Silica is used in the stone masonry business, for glass
production and pool-filter sand. Ground silica is ideal for
plastics and rubber, polishes and cleansers, glass fiber and
precision castings. It is often turned into a gel and put into
handbags and electronic goods to soak up moisture.
A compound of the elements silicon and oxygen, silica occurs
naturally in crystalline and non-crystalline forms. The
crystalline form has given rise to lawsuits brought by workers
who worked with silica sand. They allege that small particles
they inhaled during abrasive sandblasting and other operations
have caused a variety of lung ailments, including silicosis.
This report also had the authors review two recent developments
in silica litigation. They point to a September 2004 Texas
Supreme Court ruling on the "bulk supplier doctrine" in the case
Humble Sand & Gravel Inc. vs. Gomez. The defense arises from the
idea that sand suppliers can't label sand with a warning because
they're supplying it in bulk.
The court considered the issue of whether a supplier of a
potentially dangerous product must warn a customer's employees
of the hazard. A lower appeals court had found that suppliers
have such a duty, but the Texas Supreme Court ordered a new
trial, holding that a duty to warn hinged on the ability of
suppliers to reach their customer's employees.
Also noted was the consolidation of 71 cases filed in 55 Texas
district courts as a positive sign for the future of silica
litigation. Consolidation allows for a more informed decision on
the part of an experienced jurist.
The report also looks at health data and reviews the silica
liability issue in Europe.
"A review of health data.suggests that silica-related deaths are
declining while a similar review of health data suggests that
asbestos deaths remain on the rise," said Sean Mooney, Guy
Carpenter's chief economist, in a statement announcing the
report.
A related report on the Class Action Reporter edition on Sept.
24, 2004 stated that the insurers and reinsurers alike were
investigating whether exposure to silica sand could lead to
numerous insurance claims. Aon, the second-largest insurance
broker, had said the potential for class action was "possible."
According to the National Institute for Occupational Safety and
Health, "At least 1.7 million U.S. workers are exposed to
respirable crystalline silica in a variety of industries and
occupations, including construction, sandblasting, and mining."
The updated report, "Update #1: Silica-A Litigation Sandstorm,"
is available on the Guy Carpenter website, www.guycarp.com.
ASBESTOS LITIGATION: MS Supreme Court Orders Separate Trials
------------------------------------------------------------
Chief Justice James W. Smith for the Supreme Court of
Mississippi on Feb. 3, 2005 reversed a District Court's decision
and ordered separate trials for these companies alleged to have
mined or manufactured products containing asbestos. It also
ordered the transfer of these cases to the jurisdiction of the
district courts where the plaintiffs should have brought their
claims.
Tagged as Case No. 2003-IA-02378-SCT, the defendants were
identified as Crossfield Products Corp., Pneumo Abex
Corporation, Roth Pump Company and Monsanto Company.
Simine Bazyari Reed, Walter Watkins, Jr., Thomas Tardy, III,
Samuel D. Habeeb, Robert M. Arentson, Jr., James Lawrence Jones,
represented the appellants.
The nine plaintiffs led by Charles W. Irby filed the case
originally brought before Jones County Circuit Court Judge
Richard W. McKenzie.
Sara Morris Farris, Anthony Sakalarios, Stacey Lea Sims, served
as attorneys for the appellees.
Mr. Irby joined eight other plaintiffs in filing suit against
200 named defendants as well as 258 "John Doe" defendants in the
Circuit Court of Jones County, Mississippi, for alleged exposure
to asbestos and products containing asbestos.
Plaintiffs stated that at the time of this appeal they were in
the process of narrowing the remaining defendants to less than
20. All nine plaintiffs claim exposure to asbestos and products
containing asbestos while employed with Ingalls Shipyard located
in Pascagoula, Mississippi.
They allege that during all or part of the period from 1930
until the present, the defendants used asbestos in their
respective businesses.
The plaintiffs seek recovery on the following theories: strict
liability, negligence, and fraudulent
concealment/misrepresentation/alteration of medical
studies/conspiracy. They sought to hold all defendants jointly
and severally liable to each plaintiff for compensatory and
punitive damages.
All plaintiffs allege that they suffer from asbestosis, with
only one admitting to having cancer. During the span of 24 years
where the plaintiffs claim a common work site, they all were
employed at different times and dates. In fact, only four out of
the nine plaintiffs recall working on many of the same ships,
but still with varying dates of employment.
The defendants argued that the plaintiffs were improperly
grouped because the health and work histories are so varied.
Defendants also argue that they will be denied due process since
a joinder would result in an unfair trial.
Since there was no single transaction or occurrence connecting
all of these plaintiffs, the Supreme Court reversed the circuit
court's order and ordered separate trials for these cases.
ASBESTOS LITIGATION: Liability Reform Bill Introduced in Texas
--------------------------------------------------------------
Texas lawmakers are considering a bill that would require
plaintiffs in asbestos and silica injury cases to meet certain
medical criteria before their claims can go forward.
State Rep. Joe Nixon, a Republican from Harris County, on Feb.
22 introduced H.B. 8, whose purpose is to "protect the right of
people with impairing asbestos-related and silica-related
injuries to pursue their claims for compensation under our tort
principles in a fair and efficient manner," while "preventing
scarce judicial and litigant resources from being misdirected by
the claims of individuals exposed to asbestos or silica but
having no functional or physical impairment from asbestos-
related or silica-related disease."
The measure also aims to head off "factually and medically
baseless claims of individuals who have been mistakenly
identified as claimants by marketing firms and screening
companies in the business of creating 'inventories' of toxic
tort claimants."
This proposed change in the Texas legal system was prompted by
lawmakers and business leaders aiming to stop the flood of
"frivolous lawsuits" in the state's asbestos litigation system.
They believe that nearly bankrupt companies pay huge awards to
people who aren't sick from asbestos exposure while those who
are suffering the most are left out in the cold.
Texans for Lawsuit Reform wants lawmakers to limit the number of
asbestos claims to only the seriously ill and allow people who
are not yet sick but were exposed to asbestos to file lawsuits
later, when they do become ill.
However, critics of the bill said they would limit access to the
courts for asbestos victims and give immunity to lucrative
companies.
"It is an attempt on the part of groups like Texans for Lawsuit
Reform and the asbestos companies to avoid accountability," said
Alex Winslow, spokesman for Texas Watch, a consumer advocacy
group.
Mr. Winslow said the proposal would lengthen the average three
to six years a case lingers before trial since it would require
people who have already been tested for asbestos-related disease
to be tested again under new standards.
Before Texas, Ohio set the requirement of specified medical
conditions before pursuing claims. The law, which took effect on
the last week of August, is the first state law that requires
plaintiffs in asbestos liability cases to meet specific criteria
before their claims can proceed to trial, although several
individual courts throughout the country have instituted
medical-criteria requirements in recent years.
ASBESTOS LITIGATION: Minister Approves Asbestos Storage Facility
----------------------------------------------------------------
Northern Ireland Environmental Minister Angela Smith approved a
controversial plan for an asbestos storage facility in County
Antrim, citing there were no environmental reasons to withhold
permission for the facility at Crosshill Quarry, Crumlin.
Ms. Smith said, "Disproportionate and unnecessary fears have
been aroused." She said scientific investigations concluded
there were no significant residual risks associated with the
historical deposit of redundant railway carriages on the site.
However, she believes monitoring would ensure there was no
danger to nearby residents who had opposed the plan.
The submission of a planning application in November 2003 by
Eastwoods Ltd. to develop a storage facility for asbestos
encountered considerable local opposition and media attention.
Alliance Party leader David Ford said that campaigners had not
"had full disclosure of documents requested under the Freedom of
Information Act." He said the Department of Environment should
have more time to examine the issue more thoroughly and to take
local opinion into consideration.
The proposal will see double bagged asbestos being transported
from its removal site to Crosshill, where it will be stored in
steel containers awaiting movement for final disposal. This is
the normal transfer process throughout the United Kingdom and
accepted practice for the safe disposal of asbestos.
The applicants are licensed asbestos removal contractors with
Northern Ireland's Health and Safety Executive and the quarry
has a waste license and discharge consent.
SDLP MLA for South Antrim, Thomas Burns, said he is disappointed
at the decision. He said, "We are well aware that a repackaging
site is needed, but it should not be located in a highly
populated area close to housing, schools, and amenities. Any
transfer depot for packaging asbestos waste for export should be
sensibly located close to the appropriate shipping port."
ASBESTOS LITIGATION: PA Court Denies Confirmation of AWI Plan
-------------------------------------------------------------
On February 23, 2005, the Honorable Eduardo C. Robreno of the
U.S. District Court for the Eastern District of Pennsylvania
denied confirmation of the Fourth Amended Plan of Reorganization
filed by Armstrong world industries, Inc. and two of its
subsidiaries.
The District Court finds that the distribution of New Warrants
to the class of Equity Interest Holders over the objection of
the class of Unsecured Creditors violates the "fair and
equitable" requirement of 11 U.S.C. Section 1129(b)(2)(B)(ii), a
codification of the absolute priority rule.
AWI has estimated that the Unsecured Creditors in Class 6 have
claims amounting to approximately US$1.651 billion. Under the
Plan, AWI proposed that the Unsecured Creditors would recover
about 59.5% of their claims.
The Asbestos PI Claimants in Class 7 have claims estimated at
US$3.146 billion and would recover approximately 20% of their
claims under the Plan. The Equity Interest Holders in Class 12
would be issued New Warrants valued at approximately US$35
million to US$40 million.
The Plan provides that, if the Unsecured Creditors reject the
Plan, the Asbestos PI Claimants will receive the New Warrants,
but then will automatically waive the distribution, causing the
Equity Interest Holders to secure the New Warrants.
Judge Robreno points out that the net result of the Asbestos PI
Claimants' waiver is that the Equity Interest Holders -- the old
AWI shareholders -- receive the Debtor's property -- the New
Warrants -- on account of their equity interests, although a
senior class -- the Unsecured Creditors -- would not have full
satisfaction of its allowed claims.
A full-text copy of the District Court's opinion is available at
no charge at http://bankrupt.com/misc/00-4471-7899.pdf
(Armstrong Bankruptcy News, Issue No. 72; Bankruptcy Creditors'
Service, Inc., 215/945-7000)
ASBESTOS LITIGATION: Six WR Grace Employees Plead Not Guilty
------------------------------------------------------------
In federal court, six senior employees of W.R. Grace & Co.
pleaded not guilty before U.S. Magistrate Judge Leif Erickson to
charges that they conspired for decades to hide the health
dangers posed by asbestos-laced vermiculite mined by the company
near Libby.
The Company and seven top executives are named in a 10-count
indictment that accuses them of intentionally withholding
numerous studies stating the risk cancer-causing tremolite
asbestos posted to its customers, employees and Libby residents.
Charges include conspiracy, wire fraud, obstruction of justice
and violations of the federal Clean Air Act.
Arraigned were former mine manager Alan Stringer, along with
corporate executives Henry Eschenbach, Jack Wolter, Robert
Bettacchi, Mario Favorito and Robert Walsh.
William McCraig, a former general manager of operations at
Libby, will be arraigned March 8. His lawyer had a prior
commitment in another court and could not be present.
Watching were some residents of Libby who have suffered the ill
effects of asbestos pollution in the community's air and soil.
These were persons whose health the W.R. Grace executives are
accused of knowingly endangering.
Sisters Helen McMillan Zak and Judy McMillan Shelmerdine, who
both have asbestos disease after growing up in Libby, attended
the arraignment.
"I just wanted to see their faces. They were pretty blank, no
remorse or anything," said Mrs. Zak, of Stevensville, breathing
with the aid of an oxygen tank.
The McMillan family lived alongside the railroad tracks halfway
between W.R. Grace's mine and processing plant in Libby. Of the
nine-member family, only the eldest sister and mother have not
been diagnosed with asbestosis.
Mr. Stringer's attorney, Angelo Calfo of Seattle, issued a
statement following the arraignment saying the indictment,
"falsely portrays the facts. Alan is innocent and will prove so
at trial." Mr. Stringer could be sentenced to 70 years in
prison, if found guilty.
In addition, W.R. Grace and Co. could face penalties of two
times the gross gain from the operation in Libby.
Judge Erickson agreed with a prosecution request that the men
surrender their passports as a condition of their release.
A pretrial conference with U.S. District Court Judge Donald
Molly was set for March 9. A trial date is to be set at that
conference.
Asbestos contamination in Libby came to light in 1999 after
national news reports first linked the pollution from a nearby
vermiculite mine to the deaths and illnesses of area residents.
The vermiculite ore was used in a number of household products,
most notably a common home insulation. The ore, however,
contained naturally occurring tremolite asbestos, a carcinogen.
The Libby area has been declared a Superfund site and the
Environmental Protection Agency has spent more than US$55
million on cleanup so far.
ASBESTOS LITIGATION: NSW Government to Implement Asbestos Law
-------------------------------------------------------------
Premier Bob Carr said the NSW Government would implement
legislation before the end of June to allow asbestos victims to
legally pursue James Hardie Industries for compensation.
After a six-month NSW Special Commission of Inquiry and then
nearly three months of negotiations with unions, the building
products company signed Australia's largest ever personal injury
settlement just before Christmas. James Hardie agreed, in
principle, to dedicate part of its cash flow to asbestos
compensation over the next four decades.
But the Company has yet to sign a legally binding agreement as
it is waiting for the outcome of a NSW Government review of the
States asbestos compensation system, aimed at reducing
unnecessary legal costs.
Mr. Carr said the Government expected to adopt the
recommendations of the asbestos review by March 8, after which
Parliament would introduce legislation allowing victims to sue
the Company. The Government is also waiting for James Hardie to
produce a draft of its principal agreement.
"They are making progress but there is more work to do," Mr.
Carr told Parliament.
ASBESTOS ALERT: CT Contractor Charged with Illegal Demolition
-------------------------------------------------------------
Police arrested and charged a local contractor with the illegal
demolition and burning of a house and nearby structures on the
Shunpike last October 18. In addition, he is also charged with
violating the state regulations regarding the handling and
disposal of asbestos.
The demolition was said to be part of the effort to clear a
portion of a 13-acre site so it could be developed as the Coles
Brook Industrial Park.
Salvatore Branciforte, aged 39, a resident of Cromwell, was
arrested last Tuesday when he surrendered to police at
headquarters.
Investigation revealed that Mr. Branciforte failed to acquire
the necessary permit to demolish the house. He tore down the
104-year-old wooden frame house, a garage that was built in
1958, and a barn that dated from 1948. He also did not have a
license to either handle or dispose of asbestos that was found
in the house.
Police Chief Anthony J. Salvatore said after Mr. Branciforte
allegedly removed the asbestos from the house, he then turned it
over to a firm that is licensed to dispose of the material.
There is no suggestion, however, that he burned any asbestos,
the chief stressed.
Following his arrest, Mr. Branciforte was released on US$100
bond for a March 8 appearance in Middlesex Superior Court.
Chief Salvatore said with the arrest, "This investigation is now
closed. We don't expect any additional arrests in connection
with the incident."
ASBESTOS ALERT: UK Council Bolsters Efforts to Stop Flytippers
--------------------------------------------------------------
Flytippers struck again as asbestos-riddled roof parts were
discovered dumped in a Suffolk road on the path leading to
Tattingstone. This area has long been a favorite dumping site of
flytippers who wanted to avoid the expense of properly disposing
of asbestos.
Specialist workers wearing protective clothing will now be
needed to remove the roof parts as the hazardous material poses
a high health risk. Babergh District Council will be responsible
for ensuring the asbestos is safely cleared away.
Tiny fibers from the banned building material can be inhaled and
stay dormant in the body for several years before developing
into mesothelioma, a particularly severe form of respiratory
cancer. Thousands of former construction workers have died
because of exposure to asbestos during their working lives and
the number of deaths from mesothelioma has been predicted to
continue to rise.
Jonas Grist, a Babergh council technical officer said, "Babergh
is aware of the dumping of asbestos roofing in a number of
locations near Tattingstone, one of which makes the collection
of the material very difficult indeed."
Aiming to complete the work as soon as possible, he said that
the council is working with a contractor to remove the waste. He
asserted that the council regards the issue of asbestos dumping
very seriously. He said that efforts to find the liable parties
would persist steadfastly, utilizing more of the Council's
resources.
A campaign is ongoing, primarily engaging the public to help
with the dilemma.
"The illegal dumping of any material is an anti-social act, the
dumping of potentially dangerous substances doubly so," added
Mr. Grist.
ASBESTOS ALERT: Parents Consider Pulling Out Kids from CO School
----------------------------------------------------------------
Parents of students at Ben Franklin Elementary School in Pueblo
are alarmed to learn some of their children are in classrooms
adjacent to the conduct of asbestos removal in line with its
renovation project.
The kindergarten students' classrooms are situated right above
where the asbestos removal is taking place. However, the
spokesperson for District 60, assured that there's nothing to
worry about. The reason being that asbestos is only exposed
after school hours.
Once school lets out for the day, construction crews are free to
resume the removal of the potentially deadly material from 4
p.m. to 2 a.m.
Despite the officials claiming that its contractors are taking
every precaution to extract the material safely, parents remain
anxious of the health risk it poses. Asbestos fibers may still
be in the air when their children return to school in the
morning.
Aggravating matters is the fact that there was no letter sent
home alerting parents to details of the construction project.
Many are now said to be considering transferring their
kindergartners out of the school.
ASBESTOS ALERT: AU Government Faces Suits Due To Nondisclosure
--------------------------------------------------------------
The State Government faces massive legal action over its failure
to alert buyers of the presence of asbestos in public housing.
Hundreds of Tasmanians have bought Housing Tasmania properties
without realizing they contain asbestos.
Franklin MHR Harry Quick is currently brewing plans for a class
action with a top Sydney lawyer.
The Government, in hopes to avoid possible legal action, pledged
to alert buyers to houses that contain asbestos. But a day
earlier, it had stated that it had no obligation to do so.
The Government also disclosed that it had initiated a review of
all Housing Tasmania properties several months ago to determine
the extent of the contamination. The review will be completed in
mid-March. Immediate reforms to inform buyers of any defects in
its houses were also cited.
Earlier this week, it was revealed that Housing Tasmania had
been selling up to 150 homes from its ageing public housing
stock every year without telling buyers whether they contained
asbestos. Housing Tasmania responded by saying it had no
obligation to tell buyers, who are often from disadvantaged
backgrounds.
However, after incurring strong criticism across the political
spectrum, the Government went into damage control.
Both Attorney-General Judy Jackson and Health and Human Services
Minister David Llewellyn expressed sympathy for the Pettman
family, who had discovered asbestos during recent renovations to
their Ashburton Rd home.
Housing Tasmania director Mercia Bresnehan had said the burden
was on the potential purchaser to get a building report done.
She said no survey has ever been undertaken in Tasmania to
determine the number of homes, both public and private, built of
materials that may contain asbestos.
But Mr. Quick said that response was unacceptable and it was an
issue that would affect hundreds of families in his electorate,
which covers the major Housing Tasmania suburbs in the South.
Ms. Jackson revealed that new legislation would require
disclosure by vendors of potential problems with houses. "Many
Tasmanians have suffered as a result of undisclosed defects,
faults or hazards in real estate dealings," she said.
"It will be an offense not to make the statement available and
purchasers may be able to withdraw from the contract at any time
prior to settlement."
Under a revamped Auctioneers and Estate Agents Bill, vendors
will have to detail such issues as presence of asbestos,
potential for flooding, site contamination and other defects or
faults. The reforms were proposed in September last year by the
Tasmanian Law Reform Institute and were welcomed by the Real
Estate Institute of Tasmania.
Ms. Jackson said the focus of the new legislation was "vendor
show care" rather than "buyer beware" and would be introduced
later this year.
Mr. Llewellyn said Housing Tasmania would immediately adopt the
"vendor show care" proposals in the new legislation. It would
provide an independent building report to clients and advise
whether there was asbestos in the building. He said buyers of
former public housing properties could contact Housing Tasmania
to find out if their homes were built in an era when asbestos
was commonly used.
Greens housing spokesman Tim Morris said there should be a
register of Housing Tasmania properties containing asbestos. As
well as protecting prospective buyers, the register would inform
current residents and work contractors of buildings with
asbestos.
"The government must move to address two significant issues
regarding asbestos. One is ensuring state compliance with worker
safety laws and the other is to remove the bias towards buyer
beware when selling Housing Tasmania stock," Mr. Morris said.
The Tasmanian government is seeking legal advice on whether it
could face lawsuits from people who bought their homes and
discovered the presence of the deadly building product.
Law firm Slater and Gordon, which handles major asbestos claims
across Australia, says it is unlikely a successful case could be
launched against the Government.
ASBESTOS ALERT: NZ City Council Acts on Health Risks at Flats
-------------------------------------------------------------
The discovery of asbestos dust in one of 10 council flats has
prompted a health scare among several elderly women.
Fay Dooley, a mild asthmatic, will have herself checked for
asbestosis, a respiratory disease caused by the inhalation of
the asbestos fibers. It is the second time the Pooles Rd
resident has been exposed to the dust. A similar build-up of
dust on the inside of her front walls and windows about 18
months ago went unrecognized, even though her flat has an
asbestos roof.
The builder who undertook the recent repairs immediately
reported his suspicions to the council early this month. Tests
revealed the dust contained the same white variety of asbestos
as found in the roof sheeting.
The council immediately acted, announcing it would replace the
asbestos roofs on all 10 flats on the road. It has also offered
to evacuate the 10 residents to a motel for the month it would
take to organize a contract and re-roof the flats.
At a meeting with pensioners, only Mrs. Dooley took the offer.
"I feel I have been placed at risk - the dust should have been
checked for asbestos first time around."
The results of four hours of airborne testing in Mrs. Dooley's
flat reassured the residents. Health protection officer Helen
Vanderwerf said not a single fiber of asbestos was sucked into a
filter during the test. She said day-to-day air movement could
not have been enough to stir up the dust.
Council property manager Anthony Averill said the dust could
have come from under the perimeter of the roof, stirred up by
repairs two years ago. He denied that the council had shown
neglect by not testing the dust when it was first noticed.
"It was routine maintenance and the asbestos flag was not
raised. The builder that went out to do the work hadn't raised
any concerns with us - we are now using a different builder,"
said Mr. Averill.
Mrs. Dooley's neighbor Pat McQueen was also hit by an earlier
leakage of dust when it seeped through gaps in her roof panels.
She said she has had no health problems that suggested inhaling
asbestos.
Mrs. McQueen said the council had reacted quickly and
supportively. However the incident has prompted other village
residents to question the alertness of the council and whether
any asbestos had slipped through the gaps in their ceilings.
Another resident, Margaret Scott, says her 74-year-old brother
Joe has asbestosis. She said Joe headed James Hardies' carpentry
division in Auckland, where he spent years working with asbestos
every day. "I could have it now - I don't know. People might
have it and they don't know - it is a long time killing you,"
she said.
The rest of the Pooles Rd flats will be examined for asbestos
over the next couple of days. None of the council's other 237
retirement flats have asbestos roofing.
ASBESTOS ALERT: UK Councilor Encourages Ex-Workers To Register
--------------------------------------------------------------
A former worker at a Norwich chocolate factory and a city
councilor are encouraging the firm's former engineers and
electricians to come forward after a landmark High Court ruling
on asbestos compensation was handed down.
Councilor Mick Banham said there would have been many workers at
the Rowntree factory, a Chapelfield-based chocolate firm, who
might have been exposed to the potentially deadly dust. The
factory was taken over by Nestle before closing for good in
1996.
About 900 men and women worked at the factory, then owned by
Nestle, when it shut in 1996.
The High Court ruling against city-based firm Norwich Union and
British Shipbuilders will cost the insurers hundreds of millions
of pounds as pleural plaques sufferers to receive compensation
in the coming decades.
Mr. Banham, who said he has seen at least a dozen former
Rowntree workers die from asbestos-related illnesses, welcomed
the ruling. He said that it is the employers' responsibility to
protect their workforce and to take the necessary care to
provide employees with the necessary equipment for their job
safety.
"It's a horrible illness and one which manifests many years
after exposure. People's contact with it needs to be recorded.
They need to be registered so if the time comes Trade Unions can
fight their cases for them," said Mr. Banham.
Major fears were sparked three years ago after a coroner ruled
that a woman who worked at the chocolate factory died from
asbestos-related mesothelioma. Hilda Hurrell, aged 88, fought a
painful 15-month battle with cancer before she died. A city
inquest heard how her only known connection with the material
was when she worked at the chocolate factory at Chapelfield as a
chocolate packer.
Herbert Field, who worked at Rowntree for 36 years, was
diagnosed with the non-fatal form of asbestosis three years ago.
He suffers shortness of breath due to scarring on his lungs but
the effects of his exposure to asbestos are not life
threatening.
The former production worker Mr. Field, aged 76, who was a
physical training instructor in the Army before being employed
by the confectioner, said he would like to see a list of workers
other than electricians and engineers, who were believed to have
suffered more exposure, drawn up too.
Mr. Field, of Spixworth, added, "I don't think the firm realized
the seriousness until the building was taken down.
"I'm sure it's be too late for me if a list is ever drawn up of
other employees who may have risked exposure while with the firm
but I would like to see it happen for those who will have
problems in the future," he said.
ASBESTOS ALERT: Inquest Shows Factory Worker Died from Exposure
---------------------------------------------------------------
A Swindon inquest revealed that a man who worked for 41 years in
an electrical components factory in the town died from
industrial disease.
Iyor Brown, aged 76, died at his Upper Stratton home last
September. Only weeks earlier he had been diagnosed as having
lung and liver disease.
Mr. Brown started to work at Plessey Resistors on Cheney Manor
industrial estate in 1952.
In 1969 he was appointed facilities works manager. His work
involved maintaining facilities such as plumbing and air
conditioning.
Coroner David Masters said that a significant contributory
factor was asbestos exposure. He said, "He had been exposed to
asbestos over a long period and on the balance of probabilities,
this happened in the workplace."
His widow, Iris, said he had never mentioned anything about
exposure to asbestos.
A post mortem examination clearly exhibited the effects of
asbestos on his lungs.
ASBESTOS ALERT: Finding at AU School Prompts Calls for Action
-------------------------------------------------------------
After asbestos was detected in the building's roofing, parents
of more than a dozen students at the Moggill State School in
Queensland have taken their children out of classes due to fears
for their health.
A July 24, 1996 report had advised Education Queensland to put
on high priority the replacement of the roofing since tests
revealed that it was in poor condition. However, the department
says the parents' fears are unfounded because the asbestos is
sealed and therefore poses no risk.
One of the more vocal parents, Samantha Retamal, said, "It's
ludicrous. This isn't just about the classrooms being hot and
needing air conditioning. This is about a poorly conditioned
asbestos roof."
Ms. Retamal said she learned of the asbestos when she complained
students were suffering in high temperatures without roof
insulation. Education Queensland had told parents that asbestos
prevented them from insulating the roof.
Robert Vojakovic, Asbestos Diseases Advisory Service president,
backed her concerns. He said the students were at significant
risk of developing asbestos-related diseases later in life. He
added, "Their parents should put up barricades and not allow
their kids to go to such a school."
While principal Helen King declined to comment, she admitted the
school retained a copy of the 1995 Q Build report.
Moggill State Liberal MP Bruce Flegg said Education Queensland
should have replaced the asbestos roofing long ago. He said the
education department's response is unacceptable.
An Education Queensland spokeswoman said if the roof were
disturbed, it would be immediately replaced according to
Education Queensland policy.
Education Queensland is responsible for the education of
students in all government schools across Queensland: over 1000
state primary schools and more than 200 state high schools.
ASBESTOS ALERT: IN Officials Call for Cleanup After Plant Fire
--------------------------------------------------------------
After thousands of people were evacuated from their homes last
month due to suspected asbestos in the fire debris, Anderson
City officials are now asking the Indiana Department of
Environmental Management to authorize a quick cleanup of the
area.
The debris emanated from a fire in a recycling plant.
Officials said debris in yards near the Advanced Magnesium
Alloys Corp. plant tested positive for asbestos, a potentially
deadly substance that can cause various respiratory illnesses
including cancer.
Magnesium in the plant caught fire last Jan. 14, sending up
plumes of smoke that could be seen miles away. Authorities that
night evacuated about 8,000 people from their homes, fearing
that the fire could have been sending toxic chemicals into the
air. Days later, the company said in a letter to residents that
the smoke wasn't toxic.
Authorities have said they believe the fire was intentionally
set, but no arrests have been made.
ASBESTOS ALERT: AU City Council Employs More Checks at Work Site
----------------------------------------------------------------
After Cessnock City Council detected asbestos at a demolition
site, it has engaged HLA Enviroscience Pty Ltd to undertake an
extensive assessment of the site to determine rehabilitation
options. The Council intends to allow the site to be safely used
as a passive recreation area.
The assessment involved the excavation of 13 test pits across
the former Cessnock Workers Club demolition site with soil
sampling and laboratory testing for a variety of contaminants.
A detailed report from HLA on the site investigation is expected
later this month together with remedial options and
recommendations. The Council will then seek to coordinate with
the Major Projects Committee on the remedial action plan to be
pursued.
The presence of friable asbestos on the site, which was
highlighted in a report late last year, alerted the council to
the impending substantial cost increase associated with
requested day work under the contract. Council then resolved
that a revised allocation of $350,000 for the demolition of the
former Cessnock Workers Club be included as part of the Cessnock
Civic Precinct budget.
However, with the discovery of large amounts of asbestos under
the originally constructed floor slabs, the project budget of
$350,000 has been exceeded with further costs outstanding.
Presently, some areas with visible asbestos contaminated soil
remain as well as areas of exposed coal chitter and ash fill.
Some of the exposed concrete footings contain broken fragments
of asbestos sheeting embedded into the concrete matrix.
The original estimate to do the work before the asbestos problem
was encountered was $148,500.
ASBESTOS ALERT: Inquest Shows Railway Worker Died of Exposure
-------------------------------------------------------------
An inquest revealed that asbestos contributed to the death of a
Swindon man who spent 28 years working in the Great Western
Railway Works.
After hearing evidence at the inquest of Victor Clemm, Coroner
David Masters recorded a verdict of death by industrial disease.
Mr. Clemm, from Haydon, began work in number seven shop in 1945.
He was installing fittings to the interiors of coaches, which
were sprayed with wet asbestos. He was working in close
proximity to the asbestos on a daily basis. He had to scrape off
asbestos with a chisel or screwdriver, and was not provided with
a mask.
He was laid off in 1963, but returned to work in the number 19
shop in 1987. His work there involved refurbishing the fittings
of carriages. He was again exposed to the lining of the
carriages, and was also not provided with a mask or any type of
protective equipment.
Mr. Clemm died at the Great Western Hospital last August at the
age of 75.
The inquest heard that a post-mortem showed heart disease but
also pulmonary fibrosis caused by asbestos exposure.
Mr. Masters said, "We don't know when the exposure to asbestos
occurred, but I am satisfied it was at some time during his
employment with British Rail."
Before 1948, the railway system in the UK consisted of four big
companies, each controlling its own geographical area, and a
main line from there into London. The Great Western Railway
covered the area west of London, into South Wales and down into
Cornwall at the southwestern tip of England. It closed in 1986.
ASBESTOS ALERT: Routine Check Reveals Asbestos at UK Hospital
-------------------------------------------------------------
Together with specialist contractors, Leeds hospital's asbestos
team is now leading a three-week investigation into around 30
plant rooms after the discovery of deadly asbestos in these
areas.
Asbestos is an extremely hazardous material, the dust of which
has been linked with the lung disease mesothelioma.
A major safety alert has been sounded at Leeds General Infirmary
when a routine re-inspection unveiled significant amounts of
asbestos in the plant rooms, which house boilers, air
conditioning systems and other maintenance services.
A classification as a "red risk" was announced following this
re-inspection. Previous tests had declared the hospital section
as completely free from asbestos. As a result, employees then
were allowed to return to work.
Hospital officials gave fresh reassurances that the rooms
involved are not in public areas and neither patients nor
visitors should be affected.
Meanwhile, the staff will have to undergo a risk assessment to
determine any harmful health effects at this point. However, the
most pressing concern of staff members would be the long-term
health implications due to the incident.
Staff now having to use the areas will also have to follow
further strict guidelines.
A spokesman for the Leeds Teaching Hospitals NHS Trust, which
runs the LGI, said, "Our main concern is to assess the potential
risk to staff who may have worked in this plant room and provide
them with the appropriate advice and support. As all of the
areas concerned are restricted, we are confident that patients
and the public are unaffected."
Both LGI and St James's Hospital, which date back to the
Victorian era, are thought to contain large quantities of the
material, which was used characteristically in buildings of that
age.
ASBESTOS ALERT: Dispute Arises at Scotland's Fort Houses Site
-------------------------------------------------------------
Claims that asbestos-contaminated soil weighing 600 tons was
dumped in the area have prompted an investigation into the
controversial housing site.
Following conflicting reports from the Scottish Environmental
Protection Agency and an independent company, Highland Council
experts are now carrying out tests to determine the severity of
the situation.
The allegations surfaced following the submission of an
application by Fort William restaurateur Alan Kirk and his wife
to build two houses on a site at the town's Seafield Gardens.
The application faced opposition from neighbors and residents on
nearby Achintore Road, who claimed, along with other concerns,
development of the sloping site would worsen an existing
flooding problem.
Measures undertaken by the Kirks to solve the problem included
covering existing bare rock with soil imported from Corpach to
absorb and reduce the amount of water running into a nearby burn
and other drainage work.
However, two neighbors, James Kennedy of Tigh Na Faigh, and Ewan
MacDonald, have said that the soil is contaminated with asbestos
and fuel oil.
Mr. Kennedy, who took up the issue with the environment agency,
has been told that there is no reason to suspect contamination
from the site where the soil was excavated last November.
Analysis from both the Corpach and Seafield Gardens sites had
shown there was no contamination "sufficient to render it
harmful or dangerous," said SEPA's protection and improvement
director, Colin Baynes.
But tests carried out on Mr. Kennedy's behalf by an independent
company, Omnitech of Prestwick, contradicted the agency's
findings. The Company reports, "Chrysotile white asbestos fibers
were found throughout the soil sample."
Dr. MacDonald, a consultant occupational physician, claimed
there was evidence throughout the soil of broken asbestos
corrugated roofing. He demanded the removal and safe disposal of
the soil. He told the agency's chief executive, Campbell
Gemmell, "I am very concerned by the inadequacy of the original
risk assessment of the site and the failure to identify
asbestos."
Asbestos is recorded to have already contributed significantly
to Scotland's mortality rates.
Despite the site having been granted outline approval for
housing 12 years ago, Highland councilors overturned their
officials' recommendations and voted 5-3 to refuse permission
for development.
Among the reasons for refusal, councilors mentioned, "The site
has recently been filled with imported soils of unconfirmed
provenance and the applications have failed to demonstrate that
the site is free from contamination and suitable for use."
Stephen Fair, an area planning official, said that the agency's
actions would depend on the outcome of the investigation.
Councilor Neil Clark, who represents the area, said, "If there
is contamination it will be a matter of concern to people in the
area. The onus is now on Mr. Kirk to prove otherwise."
Mr. Kirk responded, "SEPA has taken samples and given a clean
bill of health so we have no concerns about the situation. As
far as the planning issue is concerned, we are considering our
position."
ASBESTOS ALERT: Victim's Family Files Suit V. Swindon Pressings
---------------------------------------------------------------
The family of a man who died from an asbestos-related lung
disease is now seeking compensation from his former employer,
Swindon Pressings Ltd.
Graham Horne of Medina Way, Swindon, retired from Swindon
Pressings in 1987 and was ill for three years with a heart and
lung condition before he died at age 77 last June. A day after
his death, a biopsy revealed he had been suffering from
mesothelioma.
18 years earlier, Mr. Home had worked for the Swindon Pressings
factory, working alongside a set of heating pipes lagged with
asbestos. He worked at the factory from 1956 to 1987 and came
into contact with asbestos on a regular basis.
Coroner David Masters said, "It was not until after his death
that anyone realized his death was due to exposure to asbestos."
A verdict of industrial disease was recorded.
Mr. Horne was married to Martina Horne, aged 75, and had two
children, Kate Duncan, aged 53, and Clive Horne, aged 50, and
four grandchildren.
Speaking after the inquest, Mrs. Horne said she had been shocked
to discover her husband was suffering from mesothelioma. She
said, "He had all sorts of tests and scans for lots of things
but it was never mentioned."
A Swindon lawyer, Brigitte Chandler of Old Town solicitor
Charles Lucas, is representing the family.
The Company is currently owned by BMW, but has changed hands a
number of times over the years so different insurance companies
may be liable.
Company Profile:
Swindon Pressings Ltd.
Stratton St. Margaret
Swindon
SN3 4PE, United Kingdom
Phone: +44-1793-536-281
Fax: +44-1793-551-760
http://www.swindon-pressings.co.uk/
2003 Sales (mil.) : GBP211.9
1-Year Sales Growth : 12.7%
2003 Net Income (mil.) : (GBP17.5)
2003 Employees : 2,110
1-Year Employee Growth : 7.2%
Description:
Swindon Pressings Ltd. is the largest single-location pressings
and full systems engineering firm in Europe. The Company has its
main production operations in Swindon, UK, and a dedicated
prototype and low volume production facility at Saltley,
Birmingham. As a world-class 1st tier supplier to the automotive
industry, SPL's customers include BMW, Land Rover, MG Rover,
Honda and Nissan.
ASBESTOS ALERT: CT Superior Court Drops Case V. 3M, Weil-McLain
---------------------------------------------------------------
The Superior Court of Connecticut on Jan. 11, 2005 dismissed the
case alleging asbestos exposure filed by Robert Cromier against
3M Corporation and boiler manufacturer Weil-McLain.
Lisa Cormier, the executrix of the estate of her late husband,
claimed that Mr. Cormier was exposed to asbestos in household
products from 1952 to 1968 and during his employment as a
construction worker from 1966 to 1996.
Before passing away, Mr. Cormier had prepared a videotaped
statement where he stated that while he was engaged in
construction, other employees worked around him installing
asbestos-laden boilers. However, he did not state that he used
any of the defendants' products.
Mrs. Cormier insisted in her testimony that her husband had
mentioned to her that he had used some of the defendants
products that led to his illness.
The Court wrote that the plaintiff had to meet high standards,
same as the defendant, to prove a claim. It said, "Plaintiff
must show that a particular defendant's product was used at the
job site and that the plaintiff was in proximity to that product
at the time it was being used."
The Court noted that Mr. Cormier's statements were elicited
prior to the start of this litigation. The defendants also did
not receive notice of this procedure in recording his statement.
The Court ruled the statement inadequate to proceed with the
case. It further stated that the plaintiff had no reason to
complain since her own counsel controlled the nature, scope, and
duration of the statement and it was within his ability to
elicit relevant information.
There was no admissible evidence linking the company's products
to Mr. Cormier's fatal illness. It was not also proven whether
the products were used in the vicinity of his workplace. With
these reasons, the Court granted the defendant's motion for
summary judgment.
Company Profile:
Weil-McLain
500 Blaine Street
Michigan City, IN 46360-2388
Phone: 219-879-6561
http://www.weil-mclain.com/
Description:
Weil-McLain makes residential and commercial boilers, water
heaters, and radiant and baseboard heaters. Weil-McLain is owned
by SPX Corporation (NYSE:SPW) and has manufacturing plants in
Michigan City, IN and Benton Harbor, MI.
ASBESTOS ALERT: Pensioner Dies from Industrial Disease
------------------------------------------------------
A Little Clifton pensioner died from an industrial disease after
20 years of regular exposure to asbestos, according to a
Workington inquest.
James Graham Weir, aged 72, of Fairview, worked at Distington's
High Duty Alloys, now Pechiney Aviatube, between 1960 and 1996
and until 1980. Staff would tear off the dangerous mineral from
long rolls to make gloves or pads from it to handle red-hot
alloy.
The gloves would disintegrate through use and send particles
into the air.
Asbestos was taken out of the workplace in 1980 when its dangers
were realized. However, prior to 1980, workers did not wear any
safety equipment.
Mr. Weir died in October from malignant mesothelioma, a type of
cancer that develops when the tissues of the lung react to
asbestos dust after it is inhaled.
West Cumbria coroner John Taylor heard that Mr. Weir developed
symptoms of a dry cough and breathlessness three years before
his death. He recorded a verdict that Mr. Weir died of
industrial disease malignant mesothelioma.
Mr. Weir's widow Isobel, told the hearing he accepted his death
with a fighting spirit and at first, declined medical treatment
but he finally began to slow down in February 2004. He died at
home surrounded by his family.
Company Profile:
Pechiney Aviatube
Lillyhall Workington
CA14 4JY
Cumbria
Phone: 01900 322500
Fax: 01900 322501
Description:
Pechiney Aviatube is an aluminium alloy extrusion company with
an extensive UK site in Workington, Cumbria. It is primarily a
manufacturer of parts for the aerospace market. The site at
Workington employs 157 people, turns over GBP15 million and is
the only UK aluminum extruder in the Pechiney Group.
New Security Fraud Cases
AXONYX INC.: Brodsky & Smith Lodges Securities Fraud Suit in NY
---------------------------------------------------------------
The Law offices of Brodsky & Smith, LLC initiated a securities
class action lawsuit on behalf of shareholders who purchased the
common stock and other securities of Axonyx, Inc. ("Axonyx" or
the "Company") (Nasdaq:AXYX), between June 26, 2003 and February
4, 2005 inclusive (the "Class Period"). The class action lawsuit
was filed in the United States District Court for the Southern
District of New York.
The Complaint alleges that defendants violated federal
securities laws by issuing a series of material
misrepresentations to the market during the Class Period,
thereby artificially inflating the price of Axonyx securities.
No class has yet been certified in the above action.
For more details, contact Marc L. Ackerman, Esq. or Evan J.
Smith, Esq. of Brodsky & Smith, LLC by Phone: 877-LEGAL-90 or by
E-mail: clients@brodsky-smith.com.
AXONYX INC.: Charles J. Piven Lodges Securities Fraud Suit in NY
----------------------------------------------------------------
The Law Offices Of Charles J. Piven, P.A. initiated a securities
class action on behalf of shareholders who purchased, converted,
exchanged or otherwise acquired the common stock of Axonyx, Inc.
(Nasdaq:AXYX) between June 26, 2003 and February 4, 2005,
inclusive (the "Class Period").
The case is pending in the United States District Court for the
Southern District of New York against defendants Axonyx, Marvin
Hausman and Gosse Bruinsma. The action charges that defendants
violated federal securities laws by issuing a series of
materially false and misleading statements to the market
throughout the Class Period, which statements had the effect of
artificially inflating the market price of the Company's
securities. No class has yet been certified in the above action.
For more details, contact Charles J. Piven by Phone:
(410) 986-0036 or by E-mail: hoffman@pivenlaw.com.
AXONYX INC.: Schatz & Nobel Lodges Securities Fraud Suit in NY
--------------------------------------------------------------
The law firm of Schatz & Nobel, P.C. initiated a lawsuit seeking
class action status has been filed in the United States District
Court for the Southern District of New York on behalf of all
persons who purchased the publicly traded securities of Axonyx
Inc. (Nasdaq: AXYX) ("Axonyx") between June 26, 2003 and
February 4, 2005 (the "Class Period").
The Complaint alleges that Axonyx violated federal securities
laws by issuing false or misleading public statements.
Specifically, the Complaint alleges that Axonyx misrepresented
or failed to disclose shortcomings with its experimental drug
Phenserine, a acetylcholinesterase ("AChE") inhibitor intended
to curb symptoms of Alzheimer's disease. On February 7, 2005,
Axonyx announced that Phenserine did not achieve significant
efficacy in Phase III Alzheimer's Disease trial. On this news,
Axonyx stock fell from a previous close of $4.85 per share, to
close at $1.81 per share.
For more details, contact Wayne T. Boulton or Nancy Kulesa by
Phone: (800) 797-5499 by E-mail: sn06106@aol.com or visit their
Web site: http://www.snlaw.net.
AUDIBLE INC.: Milberg Weiss Lodges Securities Fraud Suit in NJ
--------------------------------------------------------------
The law firm of Milberg Weiss Bershad & Schulman LLP initiated a
class action lawsuit, on behalf of purchasers of the securities
of Audible, Inc. ("Audible" or the "Company") (Nasdaq: ADBL)
between November 2, 2004 to February 15, 2005, inclusive (the
"Class Period") seeking to pursue remedies under the Securities
Exchange Act of 1934 (the "Exchange Act").
The action, captioned Carter v. Audible Inc. et al., is pending
in the United States District Court for the District of New
Jersey against defendants Audible, Donald R. Katz (CEO,
Chairman) and Andrew P. Kaplan (CFO).
The Complaint alleges that, throughout the Class Period, Audible
reported increased revenues and earnings, growth that defendants
represented would continue as the Company capitalized on
increasing demand for its products and a growing customer base.
Unbeknownst to investors, however, throughout the Class Period,
defendants' representations about the Company's operations, made
in Audible press releases and elsewhere, were materially false
and misleading because they failed to disclose that the
Company's heady growth could not continue without material
investments in expensive strategic initiatives that would
severely erode the Company's earnings in the foreseeable future;
and the Company was about to embark on expensive strategic
initiatives that would constitute a material risk to the
Company's growth and its stock price.
On February 15, 2005, after the close of trading, Audible
announced that in 2005 it would be undertaking several
initiatives requiring substantial investments in infrastructure,
new business units and marketing, among other areas, and that
these initiatives would depress earnings and cash flow at least
until 2006. In reaction to this announcement, the price of
Audible common stock plummeted, falling from $26.70 per share on
February 15, 2005 to $17.32 on February 16, 2005, a one-day
decline of 35%, on unusually heavy trading volume of 20.9
million shares. Prior to this disclosure, defendants Katz sold
150,000 Audible shares for gross proceeds of $3,675,000, while
defendant Kaplan sold 125,000 shares for gross proceeds of
$3,062,500 in the Company's secondary offering on November 18,
2004.
For more details, contact Steven G. Schulman, Peter E. Seidman
or Andrei V. Rado of Milberg Weiss Bershad & Schulman LLP by
Mail: One Pennsylvania Plaza, 49th fl., New York, NY 10119-0165
by Phone: (800) 320-5081 by E-mail: sfeerick@milbergweiss.com or
visit their Web site: http://www.milbergweiss.com.
MAMMA.COM INC.: Charles J. Piven Lodges Securities Lawsuit in NY
----------------------------------------------------------------
The Law Offices Of Charles J. Piven, P.A. initiated a securities
class action on behalf of shareholders who purchased, converted,
exchanged or otherwise acquired the common stock of Mamma.com,
Inc. (Nasdaq:MAMA) between March 2, 2004 and February 15, 2005,
inclusive (the "Class Period").
The case is pending in the United States District Court for the
Southern District of New York against defendant Mamma.com and
one or more of its officers and/or directors. The action charges
that defendants violated federal securities laws by issuing a
series of materially false and misleading statements to the
market throughout the Class Period, which statements had the
effect of artificially inflating the market price of the
Company's securities. No class has yet been certified in the
above action.
For more details, contact Law Offices Of Charles J. Piven, P.A.
by Phone: (410) 986-0036 or by E-mail: hoffman@pivenlaw.com.
MAMMA.COM INC.: Murray Frank Lodges Securities Fraud Suit in NY
---------------------------------------------------------------
The law firm of Murray, Frank & Sailer LLP initiated a class
action lawsuit in the United States District Court for the
Southern District of New York on behalf of shareholders who
purchased or otherwise acquired the securities of Mamma.com Inc.
("Mamma.com" or the "Company") (Nasdaq:MAMA) between March 2,
2004 and February 15, 2005, inclusive (the "Class Period").
The complaint charges Mamma.com and certain of its officers and
directors with violations of the Securities Exchange Act of
1934. Mamma.com provides information retrieval on the Internet
through its metasearch engine www.mamma.com. The Company is
focused on being a provider of online marketing solutions to
advertisers.
The complaint alleges that during the Class Period, defendants
caused Mamma.com's shares to trade at artificially inflated
levels through the issuance of false and misleading financial
statements. As a result of this inflation, Mamma.com was able to
complete a private offering, raising proceeds of $16.6 million
on the sale of stock and warrants in June 2004.
On February 16, 2005, the Company issued a press release
announcing that "it has been unable to reach an agreement on the
terms of the audit engagement with PricewaterhouseCoopers LLP
('PWC') for the year ended December 31, 2004. Accordingly, PWC
will not act as the Company's independent auditor for the audit
of the Company's financial statements for the year ended
December 31, 2004 . . . . As a result of these developments, it
is unlikely that the Company will file its audited financial
statements for the year ended December 31, 2004 and related
disclosures within the timeframe prescribed by Canadian
securities rules." The stock dropped below $4 per share on this
news.
For more details, contact Eric J. Belfi or Aaron D. Patton of
Murray, Frank & Sailer LLP by Phone: (800) 497-8076 or (212)
682-1818 by Fax: (212) 682-1892 or by E-mail:
info@murrayfrank.com.
MOLEX INC.: Marc Henzel Investigates Possible Securities Fraud
--------------------------------------------------------------
The Law Offices of Marc S. Henzel is researching Molex, Inc. for
possible action on behalf of shareholders who purchased the
Company's (Nasdaq: MOLXE) stock during the period of April
15,2004 through February 14,2005.
Molex slipped 5% on Feb 14, 2005 after the maker of electronic
components encountered another bookkeeping issue and projected
weak results for coming quarters. The company cited rising raw
materials costs and a weak dollar for the shortfalls. The
company also said it remains delinquent on its regulatory
filings and that it will need to adjust its first-quarter
filings. Molex said it may also need to make additional
adjustments, depending a discussion with the Securities and
Exchange Commission Division of Corporation Finance.
Molex said a review of the already completed first quarter
showed errors in accounts receivable, accruals for vacation pay,
the recording of a contingent gain, and the recording of a
first-quarter profit-in-inventory charge. The company said
correcting the errors will trim first-quarter earnings by a
penny, to 28 cents a share.
The shortfalls and the accounting errors are only the latest
hiccup at Molex. Last November, Nasdaq told Molex it wasn't in
compliance with certain rules because some filed financial
statements hadn't been reviewed by an independent public
accountant. The company received an extension that has now been
pushed into next month. Molex said it intends to file
appropriatre documentation by then.
For more details, contact Marc S. Henzel, Esq. of The Law
Offices of Marc S. Henzel, by Mail: 273 Montgomery Ave, Suite
202 Bala Cynwyd, PA 19004-2808, by Phone: (888) 643-6735 or
(610) 660-8000, by Fax: (610) 660-8080, by E-mail:
Mhenzel182@aol.com or visit the firm's Website:
http://members.aol.com/mhenzel182.
PHARMOS CORPORATION: Cohen Milstein Lodges Securities Suit in NJ
----------------------------------------------------------------
The law firm of Cohen, Milstein, Hausfeld & Toll, P.L.L.C. filed
a lawsuit on behalf of its client and on behalf of other
similarly situated purchasers of the securities of Pharmos Corp.
("Pharmos" or the "Company") (NASDAQSC: PARS) between August 23,
2004 and December 17, 2004, inclusive (the "Class Period"), in
the United States District Court for the District of New Jersey.
The action is against defendants Pharmos, Haim Aviv (CEO and
Chairman) and Gad Riesenfeld (President and COO). According to
the complaint, defendants violated sections 10(b) and 20(a) of
the Exchange Act, and Rule 10b-5, by issuing a series of
material misrepresentations to the market during the Class
Period.
Pharmos is a bio-pharmaceutical company that develops and
commercializes novel therapeutics to treat neurological
disorders, including traumatic brain injury ("TBI") and post-
surgical cognitive impairment. The complaint alleges that during
the Class Period, Pharmos claimed that the early stage results
from its Phase II clinical study of one of the Company's leading
products, dexanabinol, a non-psychotropic cannabinoid, for the
treatment of severe TBI, were "encouraging." The Company claimed
that the Food and Drug Administration ("FDA") had granted
dexanabinol fast-track status and that the drug was destined to
become the first of its kind to be approved by the FDA and that
the drug would have "billion dollar potential." The complaint
further alleges that unbeknownst to investors however, these
statements were materially false and misleading because
defendants knew or recklessly disregarded that the results from
the clinical studies of dexanabinol demonstrated that the drug
was not effective in treating severe TBI. As detailed below,
according to the complaint defendants' materially false and
misleading statements artificially inflated the price of Pharmos
securities causing harm to Class Period purchasers of Pharmos
securities in violation of the Exchange Act. The complaint
further alleges that defendants were motivated to engage in this
fraudulent and illegal conduct to enable Company insiders,
including the Individual Defendants, to sell 420,129 shares of
their personally-held Pharmos shares for proceeds of more than
$1.68 million.
On December 20, 2004, before the market opened, Pharmos issued a
press release revealing disappointing results from the Phase III
trial of dexanabinol for the treatment of TBI. In the release,
the Company stated that, "Dexanabinol did not demonstrate
efficacy as measured by the primary clinical outcome endpoint"
and, as a result, "it is unlikely that (Pharmos) will continue
to develop dexanabinol for TBI." Following this announcement,
the price of Pharmos common shares plummeted, falling $2.32 per
share, or 66%, from their closing price of $3.50 on the previous
trading day, December 17, 2004, to close at $1.18 per share on
December 20, 2004 on unusually high trading volume.
For more details, contact Steven J. Toll, Esq. or Kari Fiore-
Walker of Cohen, Milstein, Hausfeld & Toll, P.L.L.C. by Mail:
1100 New York Avenue, N.W. West Tower - Suite 500, Washington,
D.C. 20005 by Phone: (888) 240-0775 or (202) 408-4600 or by E-
mail: stoll@cmht.com or kfiore@cmht.com.
SINA CORPORATION: Schatz & Nobel Lodges Securities Suit in NY
-------------------------------------------------------------
The law firm of Schatz & Nobel, P.C. initiated a lawsuit seeking
class action status in the United States District Court for the
Southern District of New York on behalf of all persons who
purchased the publicly traded securities of SINA Corporation
(NasdaqNM: SINA) ("SINA") between October 26, 2004 and February
7, 2005 (the "Class Period").
The Complaint alleges that SINA violated federal securities laws
by issuing false or misleading public statements. Specifically,
the Complaint alleges that SINA misrepresented or failed to
disclose the effect changes to China Mobile's multimedia
messaging billing processes would have on SINA's business. Also,
the Complaint alleges that SINA misrepresented or failed to
disclose the effect a government clamp-down on "fortune-telling"
advertising would have on SINA's revenue stream. On February 7,
2005, after SINA announced its financial results for the fourth
quarter and year 2004, SINA stock fell from a previous close of
$27.35 per share to close at $24.39 per share, on unusually high
trading volume.
For more details, contact Wayne T. Boulton or Nancy Kulesa by
Phone: (800) 797-5499 by E-mail: sn06106@aol.com or visit their
Web site: http://www.snlaw.net.
SINA CORPORATION: Schiffrin & Barroway Lodges NY Securities Suit
----------------------------------------------------------------
The law firm of Schiffrin & Barroway, LLP initiated a class
action lawsuit in the United States District Court for the
Southern District of New York on behalf of all securities
purchasers of SINA Corporation (Nasdaq: SINA) ("SINA" or the
"Company") between October 26, 2004 and February 7, 2005,
inclusive (the "Class Period").
The complaint charges SINA, Wang Yan, and Charles Chao, 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
known to defendants or recklessly disregarded by them:
(1) that the Company was increasingly relying on services
related to "fortune telling" advertising, like
horoscopes and astrology, in order to meet its earnings
forecasts and generate a positive revenue stream;
(2) that the Chinese government had clamped down on
"fortune telling" advertising and the resulting
clampdown on "fortune telling" advertising would have a
material effect on the Company's revenue stream;
(3) that China Mobile Communication Corp.'s recent change
in its billing process for multimedia messaging
services SINA provides to China Mobile subscribers had
a material effect on the Company's business; and
(4) that as a result of the above, the defendants' positive
statements about the growth and prospectus of SINA were
lacking in any reasonable basis when made.
On February 7, 2005, after the markets closed, SINA announced
its financial results for the fourth quarter and full year ended
December 31, 2004. The results and the Company's business
outlook shocked the market. Shares of SINA fell $2.96 per share,
or 10.82 percent, to close at $24.39 per share on unusually high
trading volume.
For more details, contact Marc A. Topaz, Esq. or Darren J.
Check, Esq. of Schiffrin & Barroway, LLP by Mail: 280 King of
Prussia Road, Radnor, PA 19087 by Phone: 1-888-299-7706 or
1-610-667-7706 or by E-mail: info@sbclasslaw.com.
TRAVELZOO INC.: Marc Henzel Lodges Securities Lawsuit 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 all persons who purchased the publicly traded securities of
Travelzoo (NasdaqNM:TZOO) between October 12, 2004 and January
21, 2005 (the "Class Period").
A profit warning and report of an SEC inquiry whacked highflying
Travelzoo (NasdaqNM:TZOO) Monday, marking the latest casualty in
an ugly fourth-quarter earnings season. The provider of online
travel deals earned 9 cents a share in the fourth quarter, up
350% vs. a year earlier, but 4 cents below Thomson First Call's
mean estimate. Travelzoo also said the SEC is probing stock-
trading activity last year. Travelzoo plunged 25% to 55.33 --
49% off its Dec. 28 peak
For more details, contact 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 or by E-Mail:
mhenzel182@aol.com.
VEECO INTRUMENTS: Baron & Budd Files Securities Fraud Suit in NY
----------------------------------------------------------------
The law firm of Baron & Budd, P.C. initiated a class action
lawsuit in the U.S. District Court for the Eastern District of
New York on behalf of purchasers of Veeco Instruments, Inc.
(Nasdaq: VECO) ("Veeco" or the "Company") securities during the
period between April 26, 2004 and February 10, 2005, inclusive
(the "class period").
The complaint alleges that defendants violated federal
securities laws through the Company's financial statements and
defendants' disclosures throughout the class period. Throughout
the Class Period, defendants issued numerous positive statements
and filed quarterly reports with the SEC that described how the
acquisition of Emcore Corporation's TurboDiscr Metal Organic
Chemical Vapor Deposition business was increasing the financial
performance of the Company.
These statements were materially false and misleading, the suit
alleges, because the Company failed to disclose the following
adverse facts:
(1) that improper accounting procedures were in place in
Veeco's TurboDisc division;
(2) that these improper accounting procedures caused the
Company to materially overstate its net revenue for the
first three quarters of 2004 by at least $7.5 million;
(3) that the Company lacked adequate controls and was
therefore unable to ascertain its true financial
condition; and
(4) that as a result, the value of the Company's inventory,
accounts payable, revenue, and net income were
materially overstated at all relevant times.
Before the market opened on February 11, 2005, Veeco announced
that it would delay the release of its fourth-quarter and its
full year 2004 results while the Company conducted an internal
investigation of the TurboDisc division's accounting practices.
This news shocked the market, and Veeco's shares fell to $16.96,
down 10 percent from a previous closing price at $18.86.
For more details, contact Randall K. Pulliam, Esq. or Max Jodry
of Baron & Budd, P.C. by Phone: 1-800-222-2766 or visit their
Web site: http://www.baronandbudd.com.
VEECO INSTRUMENTS: Milberg Weiss Files Securities Lawsuit in NY
---------------------------------------------------------------
The law firm of Milberg Weiss Bershad & Schulman LLP announces
that a class action lawsuit was filed on February 23, 2004, on
behalf of purchasers of the securities of Veeco Instruments,
Inc. ("Veeco" or the "Company") (Nasdaq: VECO), between April
26, 2004 and February 10, 2005, inclusive (the "Class Period"),
seeking to pursue remedies under the Securities Exchange Act of
1934 (the "Exchange Act").
The action is pending in the United States District Court for
the Eastern District of New York against defendants Veeco,
Edward Braun (CEO and Chair) and John Rein (CFO).
The complaint alleges that Veeco, together with its consolidated
subsidiaries, designs, manufactures, markets and services a
broad line of equipment primarily used by manufacturers in the
data storage, semiconductor, compound semiconductor/wireless and
HB-LED (high brightness light emitting diode) industries.
Defendants' Class Period representations were materially false
and misleading when made, and defendants knew or recklessly
disregarded that they were materially false and misleading when
made, because they failed to disclose and misrepresented the
following material adverse facts, among others:
(1) Veeco at all relevant times lacked adequate internal
controls and, therefore, defendants' class-period
statements with respect to Veeco's financial condition
and performance were inherently unreliable;
(2) Veeco overstated its net revenue for the first three
quarters of 2004 by at least $7.5 million; and
(3) Veeco's financial statements were not prepared in
accordance with GAAP (Generally Accepted Accounting
Principles).
The truth began to emerge on February 11, 2005 when the Company
issued a press release in which it announced that an internal
investigation into accounting allegations at its TurboDisc unit
could lead to a downward restatement of up to $7.5 million for
the first nine months of 2004, causing it to delay releasing
fourth-quarter results. On this news, the Company's share price
fell $2.14, or 11.6%, from their closing price of $18.37 on
February 10, 2005, to a low of $16.23 on February 11, 2005.
For more details, contact Steven G. Schulman, Peter E. Seidman
or Andrei V. Rado of Milberg Weiss Bershad & Schulman LLP by
Mail: One Pennsylvania Plaza, 49th fl., New York, NY 10119-0165
by Phone: (800) 320-5081 by E-mail: sfeerick@milbergweiss.com or
visit their Web site: http://www.milbergweiss.com.
VEECO INSTRUMENTS: Marc Henzel Lodges Securities Suit in E.D. NY
----------------------------------------------------------------
The Law Offices of Marc S. Henzel initiated a securities class
action in the United States District Court for the Eastern
District of New York on behalf of purchasers of Veeco
Instruments, Inc. (NASDAQ: VECO) common stock during the period
between April 26, 2004 and February 10, 2005.
The complaint charges Veeco and certain of its officers and
directors with violations of the Securities Exchange Act of
1934. Veeco designs, manufactures, markets and services a broad
line of equipment primarily used by manufacturers in the data
storage and semiconductors industry.
Prior to the start of the Class Period, on November 3, 2003, the
Company announced the acquisition of Emcore Corporation's
TurboDiscr Metal Organic Chemical Vapor Deposition (MOCVD)
business. Throughout the Class Period, defendants issued
numerous positive statements and filed quarterly reports with
the SEC which described the Company's increasing financial
performance due in part to the success of its TurboDisc
division. In fact, defendants reported that the Company exceeded
its quarterly guidance for the first and second quarters of
2004.
These statements were materially false and misleading because
they failed to disclose and misrepresented the following adverse
facts, among others:
(1) that Veeco was materially overstating its financial
results by engaging in improper accounting practices.
As detailed herein, Veeco has admitted that its prior
financial reports are materially false and misleading
as it announced that it is going to restate its results
for the first three quarters of 2004;
(2) that the Company lacked adequate internal controls and
was therefore unable to ascertain its true financial
condition; and
(3) that as a result of the foregoing, the values of the
Company's inventory, accounts payable, revenue and net
income were materially overstated at all relevant
times.
Then, on February 11, 2005, Veeco announced that it would delay
releasing its fourth-quarter and yearly results while it
examines improper accounting at its TurboDisc division.
According to the press release, the Company's investigation is
focusing mainly on the value of inventory, accounts payable and
certain revenue items.
Upon this shocking news, shares of the Company's stock fell
$1.90 per share, or almost 10%, to close at $16.96 per share, on
unusually heavy trading volume.
For more details, contact 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 or by E-Mail:
mhenzel182@aol.com.
*********
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news on asbestos-related litigation and profiles of target
asbestos defendants that, according to independent researches,
collectively face billions of dollars in asbestos-related
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*********
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Class Action Reporter is a daily newsletter, co-published by
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Resnick, Editors.
Copyright 2004. All rights reserved. ISSN 1525-2272.
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