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            C L A S S   A C T I O N   R E P O R T E R

              Thursday, May 6, 2005, Vol. 7, No. 88


                            Headlines

AES CORPORATION: Remand of Antitrust Suit To State Court Allowed
AES CORPORATION: Seeks Judgment on Dismissal of IN Suit Claims
AES CORPORATION: IN Court Approves Securities Lawsuit Settlement
AMERICAN INTERNATIONAL: Keller Rohrback Investigates ERISA Fraud
FERRARI NORTH: Recalls 201 F40 Vehicles Because of Crash Hazard

FIRST TRUST: D.W. Heath Investors Launch Securities Fraud Suit
FLEETWOOD FOLDING: Recalls 161 Travel Trailers For Injury Hazard
HERMES INVESTMENT: Shareholders To Launch Stock Lawsuit in Korea
HYUNDAI MOTOR: Recalls 349 Tucson SUVS For Crash, Injury Hazard
IMPAC FUNDING: Continues To Face Consumer Fraud Lawsuits in MO

IMPAC FUNDING: Asks MI Court To Dismiss Consumer Fraud Lawsuit
LEASECOMM CORPORATION: CA Suit Settlement Approval Deemed Final
LEASECOMM CORPORATION: TX Fraud Lawsuit Settlement Deemed Final
LEASECOMM CORPORATION: Plaintiffs Junk MA Suit Dismissal Appeal
LEASECOMM CORPORATION: CA Court Approves Fraud Suit Settlement

MICROFINANCIAL INC.: Asks MA Court To Dismiss Securities Lawsuit
MICROFINANCIAL INC.: Plaintiffs To File Amended Consumer Lawsuit
MICROFINANCIAL INC.: Reaches Settlement For AL Consumer Lawsuit
NEWMAR CORPORATION: Recalls 935 Motorhomes Due To Fire Hazard
NOVELLE FINANCIAL: Reaches Settlement For IL Consumer Fraud Suit

QUANTUS HOLDING: SEC Files Civil Injunctive Action V. President
SAMSON RESOURCES: Faces WY Lawsuit Over Energy Royalty Payments
SCHOLARSHIP FRAUD: Fourth Required Aid Fraud Report Issued
SMITH BARNEY: Financial Consultants Launch Sex Bias Suit in CA
ZIX CORPORATION: Plaintiffs To File Consolidated Suit in N.D. TX

                         Asbestos Alert

ASBESTOS LITIGATION: National Waterworks Unfazed by Liabilities
ASBESTOS LITIGATION: Alfa Laval Faces 29 More Lawsuits in 1Q05
ASBESTOS LITIGATION: Ladish Co. Named in 73 Suits in MS, 3 in IL
ASBESTOS LITIGATION: USG Corp. 1Q05 Earnings Rose US$20M or 35%
ASBESTOS LITIGATION: ENSCO Int'l. Faces 3 Multiparty Suits in MS    

ASBESTOS LITIGATION: UK Museum Restoration Group Denies Charges
ASBESTOS LITIGATION: EPA Approves Relocation of OR Residents
ASBESTOS LITIGATION: Canada's WCB Focuses on Asbestos Exposure  
ASBESTOS LITIGATION: Work on Asbestos Bill Delayed Until May 12
ASBESTOS LITIGATION: Asbestos Bill to Include Natural Exposure

ASBESTOS LITIGATION: UK Family to Pursue Claim V. Balfour Betty  
ASBESTOS LITIGATION: DEP Files Charges Against NY Investigator
ASBESTOS LITIGATION: Lone Star, Subsidiaries Named in 45 Suits
ASBESTOS LITIGATION: Badger Meter Takes on Multi-party Lawsuits
ASBESTOS LITIGATION: PolyOne Corp. Posts US$2M Asbestos Reserves

ASBESTOS LITIGATION: US Steel Corp. Battles 450 Active Cases
ASBESTOS LITIGATION: MT Senator Calls for Redraft to FAIR Bill
ASBESTOS LITIGATION: CT Town Gets US$750T Cleanup Help from EPA
ASBESTOS LITIGATION: NSW Town to Hold More Testing for Illnesses
ASBESTOS LITIGATION: High Exposure Levels Detected in CA Region

ASBESTOS LITIGATION: Advocacy Group Urges Congress to Back Bill
ASBESTOS LITIGATION: Fujirebio Seeks Approval of Diagnostic Test
ASBESTOS LITIGATION: SCOR's '04 Asbestos Reserves Down by EUR16M
ASBESTOS LITIGATION: Bticino-SpA Employees Pursuing Litigation
ASBESTOS LITIGATION: NGOs Seek Action Against Indian Officials   

ASBESTOS LITIGATION: Competing Bill to $140B Trust Fund Emerges
ASBESTOS LITIGATION: SC Says Court Erred in Granting Discovery
ASBESTOS LITIGATION: Union Carbide Posts $1.6B Liability in 1Q05
ASBESTOS LITIGATION: Crum & Forster Strengthens Reserves in 2004
ASBESTOS LITIGATION: Hartford to Issue Liabilities Review in 2Q

ASBESTOS LITIGATION: NSW Publicizes Plans to Educate on Asbestos
ASBESTOS LITIGATION: Activist Group Demands Total Ban in India
ASBESTOS LITIGATION: Owens Corning Posts US$4.2B Loss in 1Q05
ASBESTOS ALERT: AU Workers Refuse to Return to Site After Scare
ASBESTOS ALERT: LA Jury Awards US$3.625M in Case V. Hebert Bros.

ASBESTOS ALERT: UK Agency Files Charges Against Demolition Firm
ASBESTOS ALERT: Widow of Palace Worker Given GBP177T in Damages
ASBESTOS ALERT: NZ Island Closed to Public After Asbestos Find
ASBESTOS ALERT: Former Employee Wins Settlement from Zinifex Ltd
ASBESTOS ALERT: Man Sues Cadbury's over Mother's Asbestos Death

                  New Securities Fraud Cases

AVAYA INC.: Charles Piven Launches Securities Fraud Suit in NJ
BLUE COAT: Cohen Milstein Launches Securities Lawsuit in N.D. CA
MARTEK BIOSCIENCES: Schiffrin & Barroway Lodges Stock Suit in MD
R&G FINANCIAL: Wechsler Harwood Files Securities Suit in S.D. NY
R&G FINANCIAL: Lerach Coughlin Launches Securities Lawsuit in NY


                           *********


AES CORPORATION: Remand of Antitrust Suit To State Court Allowed
----------------------------------------------------------------
The United States Ninth Circuit Court of Appeals allowed the
class action filed against AES Corporation and other electric
companies to California State Court.

In November 2000, the Company was named in a purported class
action suit along with six other defendants, alleging unlawful
manipulation of the California wholesale electricity market,
resulting in inflated wholesale electricity prices throughout
California. The alleged causes of action include violation of
the Cartwright Act, the California Unfair Trade Practices Act
and the California Consumers Legal Remedies Act.

In December 2000, the case was removed from the San Diego County
Superior Court to the U.S. District Court for the Southern
District of California.  On July 30, 2001, the Court remanded
the case back to San Diego Superior Court.  The case was
consolidated with five other lawsuits alleging similar claims
against other defendants.  In March 2002, the plaintiffs filed a
new master complaint in the consolidated action, which asserted
the claims asserted in the earlier action and names as
defendants the Company and:

     (1) AES Redondo Beach, L.L.C.,

     (2) AES Alamitos, L.L.C., and

     (3) AES Huntington Beach, L.L.C.

In May 2002, the case was removed by certain cross-defendants
from the San Diego County Superior Court to the United States
District Court for the Southern District of California.  The
plaintiffs filed a motion to remand the case to state court,
which was granted on December 13, 2002.  Certain defendants
appealed aspects of that decision to the United States Court of
Appeals for the Ninth Circuit. On December 8, 2004, a panel of
the Ninth Circuit issued an opinion affirming in part and
reversing in part the decision of the District Court, and
permitting the remand of the case to state court.


AES CORPORATION: Seeks Judgment on Dismissal of IN Suit Claims
--------------------------------------------------------------
AES Corporation filed a motion for judgment on the pleadings
dismissing the remaining claims in the class action filed
against it in the United States District Court for the Southern
District of Indiana.  The suit also names as defendants Dennis
W. Bakke, Roger W. Sant, and Barry J. Sharp.

In September 2002, two virtually identical complaints were filed
against the same defendants in the same court. All three
lawsuits purport to be filed on behalf of a class of all persons
who exchanged their shares of IPALCO Enterprises, Inc. common
stock for shares of the Company's common stock issued pursuant
to a registration statement dated and filed with the SEC on
August 16, 2000.  The complaints purport to allege violations of
Sections 11, 12(a)(2) and 15 of the Securities Act of 1933 based
on statements in or omissions from the registration statement
concerning certain secured equity-linked loans by the Company's
subsidiaries; the supposedly volatile nature of Company stock,
as well as its allegedly unhedged operations in the United
Kingdom at that time, and the alleged effect of the New
Electrical Trading Agreements (NETA) on the Company's United
Kingdom operations.

On April 14, 2003, lead plaintiffs filed an amended and
consolidated complaint, which added former IPALCO directors and
officers John R. Hodowal, Ramon L. Humke and John R. Brehm as
defendants and, in addition to the purported claims in the
original complaint, purports to allege against the newly added
defendants violations of Sections 10(b) and 14(a) of the
Securities Exchange Act of 1934 and Rules 10b-5 and 14a-9
promulgated thereunder. The amended complaint also purports to
add a claim based on alleged misstatements or omissions
concerning an alleged breach by the Company of alleged
obligations it owed to Williams Energy Services Co. under an
agreement between the two companies in connection with the
California energy market.  On September 26, 2003, defendants
filed a motion to dismiss the amended and consolidated
complaint.  By Order dated November 17, 2004, the Court
dismissed all of the claims asserted in the amended and
consolidated complaint against all defendants with one
exception.  The exception consists of claims against Mr. Bakke,
Mr. Sant, Mr. Sharp and the Company (the "AES Defendants"),
under Sections 11, 12 and 15 of the Securities Act of 1933, 15
U.S.C. 77k, 77l and 77o, based on the alleged failure of the
Registration Statement and Prospectus disseminated to the IPALCO
stockholders for purposes of the Share Exchange to disclose the
Company's purported temporary default on its contract with
Williams.  


AES CORPORATION: IN Court Approves Securities Lawsuit Settlement
----------------------------------------------------------------
The United States District Court for the Southern District of
Indiana granted final approval to the settlement of a
consolidated class action filed against the Company, Dennis W.
Bakke, Roger W. Sant and Barry J. Sharp.

Between October 29, 2002 and December 11, 2002, seven virtually
identical lawsuits were filed in the United States District
Court for the Eastern District of Virginia against the same
defendants in the same court.  The lawsuits purport to be filed
on behalf of a class of all persons who purchased the Company's
common stock and certain of its bonds between April 26, 2001 and
February 14, 2002. The complaints purport to allege violations
of Sections 10(b) and 20(a) of the Securities Exchange Act of
1934, and Rule 10b-5 promulgated thereunder based on statements
or omissions concerning the Company's United Kingdom operations
and the alleged effect of the NETA on those operations.

On January 16, 2003, the Court granted defendants' motion to
transfer the actions to the United States District Court for the
Southern District of Indiana.  On September 26, 2003, plaintiffs
filed a single consolidated amended class action complaint on
behalf of a purported class of all persons who purchased the
Company's common stock and certain of its bonds between July 27,
2000 and November 8, 2002 (the "Imler Action").  The
consolidated amended class action complaint, in addition to
asserting the same claims asserted in the original complaints,
also purports to allege that the Company and the individual
defendants failed to disclose information concerning its role in
purported manipulation of the California electricity market, the
effect thereof on the Company's reported revenues, and the
Company's purported contingent legal liabilities as a result
thereof, in violation of Sections 10(b) and 20(a) of the
Securities Exchange Act of 1934 and Rule 10b-5 promulgated
thereunder.  Defendants filed a motion to dismiss on November
17, 2003.  On October 1, 2004, the parties filed a Stipulation
and Agreement of Settlement pursuant to which defendants caused
to be paid a total of $5 million into a settlement fund to
settle, as defined in the stipulation, all claims arising out of
this action and a related action captioned "Moskal v. The AES
Corporation, et al., case no. 1:03-CV-0284."


AMERICAN INTERNATIONAL: Keller Rohrback Investigates ERISA Fraud
----------------------------------------------------------------
Keller Rohrback L.L.P. has commenced an investigation against
American International Group, Inc. (NYSE:AIG) for violations of
the Employee Retirement Income Security Act of 1974 (ERISA). The
investigation focuses on investments in Company stock by the AIG
Incentive Savings Plan, the American General Agents' and
Managers' Thrift Plan, the American General Employees' Thrift
and Incentive Plan (which was merged into the AIG Incentive
Savings Plan), and the CommoLoCo Thrift Plan (the "Plans") from
December 1, 1998 through the present.

Since February 2005, the Company has admitted to numerous
accounting errors in multiple areas of its operations, which
were intended to improve its financial statements by reporting
growth where it did not exist.  The Company has delayed issuance
of its Annual Report for another thirty days while internal
investigations and outside auditors seek to unravel various
complex maneuvers.  The Company has already admitted that it
will likely reduce its net worth by $2.7 billion and restate its
financial results for the years from 2000 through 2004. These
revelations follow the October 2004 allegations of involvement
in Marsh & McLennan Companies' illegal bid-rigging and
contingent commission fee scheme.

Keller Rohrback's investigation focuses on concerns that the
company and other fiduciaries for the Plans may have breached
their ERISA-mandated fiduciary duties of loyalty and prudence
by:

     (1) failing to prudently and loyally manage the Plans'
         assets by investing a significant amount of the Plans'
         assets in AIG stock when it no longer was a prudent
         investment for participants' retirement savings;

     (2) failing to monitor and provide fiduciary appointees
         with information that the appointing fiduciaries knew
         or should have known the monitored fiduciaries needed
         in order to prudently manage the Plans' assets;

     (3) failing to provide complete and accurate information to
         participants and beneficiaries regarding AIG's business
         prospects and financial performance; and

     (4) breaching their duty to avoid conflicts of interest.

For more details, contact Jennifer Tuato'o, Paralegal, of Keller
Rohrback L.L.P. by Phone: 800-776-6044 by E-mail:
investor@kellerrohrback.com, or visit the Websites:
http://www.erisafraud.comor http://www.seattleclassaction.com.


FERRARI NORTH: Recalls 201 F40 Vehicles Because of Crash Hazard
---------------------------------------------------------------
Ferrari North America, Inc. is cooperating with the National
Highway Traffic Safety Administration (NHTSA) by voluntarily
recalling 201 Ferrari F40 vehicles, models 1990-1992.

On certain vehicles, in extreme conditions of use, the forks
fastening the front and rear lower suspension levers to the
chassis can break or crack.  This could lead to increased stress
on the threaded pins' anchorage areas which could also cause the
possible breakage of the forks.  This could lead to a loss of
vehicle control and could result in a crash.

Dealers will install new front and rear lower suspension forks.  
The recall is expected to begin on May 19,2005.  For more
details, contact the Company by Phone: 201-816-2600 or contact
the NHTSA's auto safety hotline: 1-888-327-4236.


FIRST TRUST: D.W. Heath Investors Launch Securities Fraud Suit
--------------------------------------------------------------
Investors in D.W. Heath & Associates filed a class action
against Colorado-based First Trust Corporation, alleging it
helped cover up illegal activities by D.W. Heath's president
that resulted in a multi-million fraud, the Press-Enterprise
reports.

D.W. Heath & Associates president Daniel Heath, along with three
others, has pleaded not guilty to fraud and grand theft charges
filed by the Riverside County district attorney's office.  
Prosecutors allege Mr. Heath ran a Ponzi scheme for years after
the state told him to stop selling investments.  A Ponzi scheme
is one in which early investors are paid with money from later
ones.  The firm was closed last April by a federal court order.

The suit was filed on behalf of more than 1,600 Heath investors,
alleging First Trust neglected its duties and ignoring
information that could have prevented the fraud.  The suit
alleges that the Company administered Heath IRAs worth more than
$60 million, almost one-third of which was ultimately raised by
Heath & Associates.  The Company allegedly covered up illegal
activities by keeping a lid on the investment firm's many
complaints and record-keeping errors.

In March 2003, the Company warned investors in a letter that Mr.
Heath might not be complying with a 5-year-old order from the
state Department of Corporations telling him to halt investment
sales.  At that time, the Company told investors and the state
that it would no longer accept accounts from Heath & Associates.  
However, the suit contends that by then the Company knew that
Mr. Heath's investment firm was floundering and concealed
information from investors.  The lawsuit claims, for example,
that Mr. Heath revealed to the Company that $60 million invested
by its customers was worth as little as $15 million.  

The suit adds that the Company did not review investment
paperwork and it neglected to keep on file a prospectus for most
Heath offerings, even though the company told investors it had
done both.  "Had First Trust required these documents, the Heath
criminals could not have perpetrated their scam," the suit says,
The Press-Enterprise reports.

"They knew problems were coming and started changing policies  .
and they took these actions to protect themselves and not their
investors," Kevin F. Ruf, who said he filed the suit 4Wednesday
in U.S. District Court, told the Press-Enterprise.

James R. Hoy, assistant general counsel at First Trust, declined
to comment saying the company had not been served with the
lawsuit. But at an investor meeting last year, Hoy said the
company is a background player that was "not in a position to do
due diligence to find out what Dan Heath says is true," The
Press-Enterprise reports.

At least one other investor lawsuit has been filed on behalf of
a group of investors looking to recoup $10.8 million they say
they put into Heath & Associates.


FLEETWOOD FOLDING: Recalls 161 Travel Trailers For Injury Hazard
----------------------------------------------------------------
Fleetwood Folding Trailer, Inc. is cooperating with the National
Highway Traffic Safety Administration by voluntarily recalling
161 travel trailers, namely:

     (1) FLEETWOOD / RESORT 18CK, model 2005

     (2) FLEETWOOD / RESORT 20CK, model 2005

     (3) FLEETWOOD / RESORT 21SS, model 2005

Certain towable travel trailers were built without a bedroom
emergency egress window.  In the event of a fire or other
emergency, persons in the front bedroom area must exit through
the access door.  If the access door is blocked, there is no way
out of the trailers, increasing the risk of injuries to the
trailer occupants.

Dealers will replace the current sliding window with an
emergency egress exit window.  For more details, contact the
Company by Phone: 1-814-445-9661 or contact the NHTSA's auto
safety hotline: 1-888-327-4236.


HERMES INVESTMENT: Shareholders To Launch Stock Lawsuit in Korea
----------------------------------------------------------------
Korean firm Hermes Investment Management faces a class action
filed by its minority shareholders, alleging that it manipulated
its stock prices, the Korea Times reports.

In December 2004, the Company hinted at a possible acquisition
of Samsung Corporation by foreign buyout funds, which boosted
its share prices.  The announcement also caused many individual
investors to buy the stock, betting that the Company and other
foreign investors may raise their stakes in the trading and
construction unit of Samsung Group to take over management
control in a hostile manner.  In the following days, the fund
abruptly divested all of its shares in following days, locking
in huge profits and leaving many individual investors burned in
the wake.

The suit is one of the first complaints filed under Korea's
class action suit system, which went into effect this year.  
Under the system, companies with total assets of 2 trillion won
or more will be subject to securities-related class-action suits
from January 1, 2005.  In particular, there is no grace period
for stock manipulation and illegal insider trading, even though
companies have been granted a grace period until the end of 2006
regarding accounting-related class-action suits.

Financial Supervisory Commission (FSC) officials say that
investment funds are also subject to class action suits, the
Korea Times reports.  They said that minority shareholders are
entitled to file suits against investment funds, individual and
corporate investors that engaged in irregular stock
transactions.  An FSC official noted that traders should be
alert over powers of the new class action suit system, saying
that aside from corporate rule-breakers, any investors violating
rules and sued by a group of investors may go bankrupt.

However, he added that the problem is that whether Hermes Fund,
if sued by a group of minority shareholders, would follow
procedures mandated by laws governing class-action suits, like
compliances with court summons.  "There are discussions on the
possible compulsory application of the class action laws to
offshore traders," the official told the Korea Times.

Regulators are close to concluding their investigation into the
Hermes case, consulting with legal advisors and adjusting the
extent of possible sanctions against the fund, according to
sources.


HYUNDAI MOTOR: Recalls 349 Tucson SUVS For Crash, Injury Hazard
---------------------------------------------------------------
Hyundai Motor Company is cooperating with the National Highway
Traffic Safety Administration (NHTSA) by voluntarily recalling
349 Hyundai Tucson sport utility vehicles, model 2005.

On certain sport utility vehicles equipped with electronic
stability program (ESP), the yaw rate sensor may become too
sensitive and may recalibrate inaccurately.  Driving the ESP
program may cause the engine to reduce power and may cause a
brake at one of the wheels to be activated inappropriately.  
Brake application caused by inadvertent ESP activation may
result in loss of control and a crash.

Dealers will reprogram the ESP hydraulic electronic control
unit.  The recall is expected to begin on May 2005.  For more
details contact Hyundai de Puerto Rico by Phone: 1-800-981-0188
or contact the NHTSA auto safety hotline: 1-888-327-4236.


IMPAC FUNDING: Continues To Face Consumer Fraud Lawsuits in MO
--------------------------------------------------------------
Impac Funding Corporation continues to face several class action
filed in Missouri state courts, alleging violations of
Missouri's Second Loans Act and Merchandising Practices Act.

On September 1, 2000, a complaint captioned "Michael P. and
Shellie Gilmor v. Preferred Credit Corporation and Impac Funding
Corporation, et al., case no. CV100-4263-CC," was filed in the
Circuit Court for Clay County, Missouri.  In July 2001, the
Missouri complaint was amended to include Impac Mortgage
Holdings and other Impac-related entities.  A plaintiff class
was certified on January 2, 2003.  On June 22, 2004, the court
issued an order to stay all proceedings pending the outcome of
an appeal in a similar case in the United States Eighth Circuit
Court of Appeals.

On February 3, 2004, a complaint captioned "James and Jill Baker
v. Century Financial Group, Inc, et al, case no. CV100-4294-CC,"
was filed in the Circuit Court of Clay County, Missouri.  The
purported class action alleges that the defendants violated
Missouri's Second Loan Act and Merchandising Practices Act.

All of the above purported class action lawsuits are similar in
nature in that they allege that the mortgage loan originators
violated the state's statutes by charging excessive fees and
costs when making second mortgage loans on residential real
estate.  The complaints allege that the Company was a purchaser,
and is a holder, along with other affiliated entities, of second
mortgage loans originated by other lenders. The plaintiffs in
the lawsuits are seeking damages that include disgorgement of
interest paid, restitution, rescission, actual damages,
statutory damages, exemplary damages, pre-judgement interest and
punitive damages.  No specific dollar amount of damages is
specified in the complaints.


IMPAC FUNDING: Asks MI Court To Dismiss Consumer Fraud Lawsuit
--------------------------------------------------------------
Impac Funding Corporation asked the Wayne County Circuit Court
in Michigan to dismiss the class action filed against it, styled
"Deborah Searcy, Shirley Walker, et al. v. Impac Funding
Corporation, Impac Mortgage Holdings, Inc. et. al."

The suit alleges that the defendants violated Michigan's
Secondary Mortgage Loan Act, Credit Reform Act and Consumer
Protection Act.  Specifically, it alleges that the mortgage loan
originators violated the state's statutes by charging excessive
fees and costs when making second mortgage loans on residential
real estate.  The complaint alleges that the Company was a
purchaser, and is a holder, along with other affiliated
entities, of second mortgage loans originated by other lenders.
The plaintiffs in the lawsuits are seeking damages that include
disgorgement of interest paid, restitution, rescission, actual
damages, statutory damages, exemplary damages, pre-judgement
interest and punitive damages.  No specific dollar amount of
damages is specified in the complaints.


LEASECOMM CORPORATION: CA Suit Settlement Approval Deemed Final
---------------------------------------------------------------
The Orange County Superior Court for the State of California
granted final approval to the settlement of the class action
filed against Leasecomm Corporation, Galaxy Mall, Inc. and
Electronic Commerce International, Inc.

On April 29, 2003, the Company was served with the complaint,
filed by Maria J. Smith and purporting to bring a claim for
unfair business practices and competition under California
Business and Professions Code section 17200 et seq.  The essence
of the claim is that Ms. Smith and others who are similarly
situated were defrauded in connection with their acquisition of
certain licenses that were financed by the Company.

In May 2003, the Company filed a motion to stay the action in
favor of a Massachusetts forum based on a forum selection clause
contained in plaintiff's lease agreement with it.  After filing
the motion, the Company entered into settlement negotiations
with plaintiff's counsel to explore the possibility of resolving
the matter on a class wide basis without the need for further
litigation (meaning the settlement would, if accepted, apply not
only to the named plaintiff but to others similarly situated).  
The parties signed a stipulation setting forth the terms of
their agreement and the Court has preliminarily approved the
settlement, approved the form of notice to class members.  The
Parties then sought and the Court granted final approval to the
settlement class. The sixty-day period for the filing of appeals
has run, therefore the settlement has become final.


LEASECOMM CORPORATION: TX Fraud Lawsuit Settlement Deemed Final
---------------------------------------------------------------
Texas State Court's approval of the settlement of the class
action filed against Leasecomm Corporation is deemed final.  The
suit also names as defendants Cardservice International, Inc.,
Linkpoint International, Inc., and Clear Commerce Corporation.

On April 28, 2003, Plaintiff Wallace Dickey filed a purported
class action against the Company, alleging that he lease-
financed through the Company the right to use certain computer
software manufactured, distributed, and sold by the other
defendants.  The Plaintiff did not allege that the Company
failed to provide the lease financing contemplated by the
Leasecomm lease. Instead, the Plaintiff alleged that the other
defendants' software failed to operate as well as he believed it
would. He sued for a declaration that would allow him to rescind
his contract, to recover money paid in the course of the
transaction, and to recover damages allegedly caused by
unspecified deceptive trade practices.  The Plaintiff asserted
his claims "on behalf of himself and all others similarly
situated."

The Company denied all of the Plaintiff's allegations. The
defendants agreed to a proposed class action settlement with the
Plaintiff and his counsel.  The proposed settlement, if granted
final approval by the Court, would apply to all Texas residents
who lease-financed through the Company the same software rights
that the Plaintiff lease-financed.  The Court preliminarily
approved certification of the Texas class for settlement
purposes only, and the parties distributed notice to all class
members in accordance with the Court's s instructions. Upon
expiration of the notice period, the Parties sought and the
Court granted final approval to the settlement class.


LEASECOMM CORPORATION: Plaintiffs Junk MA Suit Dismissal Appeal
---------------------------------------------------------------
Plaintiffs withdrew their appeal of the dismissal of the class
action filed against Leasecomm Corporation, a dealer and a party
purportedly related to the dealer in the Superior Court in
Massachusetts.

In February 2004, a purported class action was filed on behalf
of a nationwide class who signed lease agreements identical to,
or substantially similar to, the plaintiff's lease agreement
with the Company, and covering the same product.  The Complaint
asserts claims for declaratory judgment, absence of
consideration, unconscionability, and violation of Massachusetts
General Laws Chapter 93A, Section 11.  The claims concern the
validity, enforceability, and alleged unconscionability of this
the Company lease of a product which enabled a merchant to
process credit card payments.  The Complaint seeks rescission of
lease agreements with the Company, restitution, multiple damages
and attorneys fees under Chapter 93A, and injunctive relief.

The Company filed a Motion to Dismiss the Complaint, which the
Court granted, entering judgment dismissing the Complaint. On
December 17, 2004 plaintiffs filed a Notice of Appeal with
respect to the judgment of dismissal, which plaintiffs
subsequently withdrew by filing a Withdrawal of Appeal dated
February 8, 2005.


LEASECOMM CORPORATION: CA Court Approves Fraud Suit Settlement
--------------------------------------------------------------
The Los Angeles Superior Court in California granted final
approval to the settlement of the unfair trade class action
filed against Leasecomm Corporation, styled "Margarita Hinojosa,
et al. v. Leasecomm Corporation, case no. BC317371."

On June 21, 2004, the Company was named as defendant in a
punitive class action complaint, which alleges fraud, unfair
business practices under California Business & Professions Code
section 17200 et seq., false advertising under California
Business & Professions Code section 17500 et seq. and violations
of various California consumer protection statutes.  The essence
of the claim is that plaintiffs and others who are similarly
situated were defrauded in connection with their acquisition of
credit card swipe machines that were financed by the Company and
which plaintiffs claim they intended to use to add value to
telephone calling cards that could be used for their personal
use or resale to others.  During negotiations with plaintiffs'
counsel prior to the filing of the Complaint, the Company
reached a proposed class action settlement of all claims. On
January 11, 2005, the Court granted final approval to the
Stipulation of Settlement.  The sixty-day period for the filing
of appeals has run, therefore the settlement has become final.


MICROFINANCIAL INC.: Asks MA Court To Dismiss Securities Lawsuit
----------------------------------------------------------------
MicroFinancial, Inc. asked the United States District Court for
the District of Massachusetts to dismiss the amended securities
class action filed against it on behalf of all persons who
purchased Company securities between February 5, 1999 and
October 30, 2002.

In October 2003, the Company was served with a purported class
action complaint alleging violations of the federal securities
laws.  The complaint asserts that during this period the Company
made a series of materially false or misleading statements about
the Company's business, prospects and operations, including with
respect to certain lease provisions, the Company's course of
dealings with its vendor/dealers, and the Company's reserves for
credit losses.

In April 2004, an Amended Class Action Complaint was filed which
added additional defendants and expanded upon the prior
allegations with respect to the Company. The Company has filed a
Motion to Dismiss the Amended Complaint, which is awaiting
decision by the Court.


MICROFINANCIAL INC.: Plaintiffs To File Amended Consumer Lawsuit
----------------------------------------------------------------
Plaintiffs asked the Cambridge District Court in Massachusetts
for leave to file an amended nationwide consumer class action
against MicroFinancial, Inc., Leasecomm Corporation and one of
Leasecomm's dealers.

In March 2003, a purported class action was filed in Superior
Court in Massachusetts against Leasecomm and one of its dealers.
The class sought to be certified is a nationwide class
(excluding certain residents of the State of Texas) who signed
identical or substantially similar lease agreements with
Leasecomm covering the same product.  After the Company had
filed a motion to dismiss, but before the motion to dismiss was
heard by the Court, plaintiffs filed an Amended Complaint.  The
Amended Complaint asserted claims against the Company for
declaratory relief, absence of consideration, unconscionability,
and violation of Massachusetts General Laws Chapter 93A, Section
11.

The Company filed a motion to dismiss the Amended Complaint.  
The Court allowed the Company's motion to dismiss the Amended
Complaint in March 2004. In May 2004, a purported class action
on behalf of the same named plaintiffs and asserting the same
claims was filed.  The Company has filed a Motion to Dismiss the
Complaint, which was heard in August 2004, and denied by the
District Court.  On September 16, 2004, the Company filed an
Answer and Counterclaims to the Amended Complaint denying the
plaintiffs' allegations.  On March 2, 2005, the plaintiffs filed
a motion for leave to file an amended complaint.  The Court has
not ruled yet on plaintiffs' motion for leave to file an amended
complaint.  In plaintiffs' proposed amended complaint plaintiffs
seek to add a claim for usury against the Company.


MICROFINANCIAL INC.: Reaches Settlement For AL Consumer Lawsuit
---------------------------------------------------------------
MicroFinancial, Inc. reached an agreement to settle the class
action filed against it in Alabama Superior Court, Bullock
County.  The suit filed on August 22, 2002 by plaintiff Aaron
Cobb, also names as defendants Leasecomm Corporation and Galaxy
Mall, Inc.  The suit alleges:

     (1) breach of contract;

     (2) Fraud, Suppression and Deceit;

     (3) Unjust Enrichment;

     (4) Conspiracy;

     (5) Conversion;

     (6) Theft by Deception; and

     (7) violation of Alabama Usury Laws

The Complaint was filed on behalf of Aaron Cobb individually,
and on behalf of a class of persons and entities similarly
situated in the State of Alabama.  More specifically, the
Plaintiff purports to represent a class of persons and small
business in the State of Alabama who allegedly were induced to
purchase services and/or goods from any of the Defendants named
in the Complaint.

On March 31, 2003 the trial court entered an Order denying the
Company's Motion to Dismiss. An appeal of the Order was filed
with the Alabama Supreme Court on May 12, 2003.  On February 20,
2004, the Alabama Supreme Court overruled the Company's
application for rehearing.  On February 24, 2004, Plaintiff
filed a First Amended Class Action Complaint in which Plaintiff
added Electronic Commerce International (ECI) as an additional
party defendant. No new allegations were asserted against the
Company in the Amended Complaint. On March 31, 2004 the Company
filed an answer to the Amended Complaint denying the Plaintiff's
allegations. The Company also filed an additional motion to
enforce a forum selection clause, which, if successful, would
have caused the case to be dismissed with leave to re-file in
Massachusetts.  Galaxy Mall filed a similar motion. The motions
were scheduled to be heard in September 2004, however, the
parties have reached an agreement on settlement terms and are
currently drafting the settlement documents. The settlement, if
finalized and signed by the parties, will require court approval
to become effective.


NEWMAR CORPORATION: Recalls 935 Motorhomes Due To Fire Hazard
-------------------------------------------------------------
Newmar Corporation is cooperating with the National Highway
Traffic Safety Administration (NHTSA) by voluntarily recalling
935 motorhomes, namely:

     (1) NEWMAR / DUTCH STAR, model 2003-2005

     (2) NEWMAR / ESSEX, model 2003-2005

     (3) NEWMAR / LONDON AIRE, model 2003

     (4) NEWMAR / MOUNTAIN AIRE, model 2003-2005

On certain Class A motorhomes equipped with vehicle systems'
Aqua-hot and Hydro-Hot Water Heaters, which are equipped with
Webasto burner tires, the burner tubes do not meet
specifications and could fail prematurely.  Should the burner
tube fail, the coolant heater could overheat, probably resulting
in a fire.

Vehicle Systems is conducting the owner notification and remedy
for this campaign.  For more details, contact Vehicle Systems by
Phone: 1-800-685-4298, the Company by Phone: 574-773-7719 or
contact the NHTSA's auto safety hotline: 1-888-327-4236.  


NOVELLE FINANCIAL: Reaches Settlement For IL Consumer Fraud Suit
----------------------------------------------------------------
Novelle Financial Services, Inc. reached a settlement for the
class action filed in the Circuit Court of Cook County,
Illinois against it, styled "Fast Forward Solutions, LLC v.
Novelle Financial Services, Inc, case no. 03 CH17085."

The complaint contained an allegation of a class action and
alleged that the defendant sent out unsolicited faxes in
violation of the Telephone Consumer Protection Act, the Illinois
Consumer Fraud Act, and Illinois common law.  The plaintiff was
seeking statutory and treble damages.  The Company settled this
action for an immaterial amount and the matter was dismissed on
January 31, 2005.


QUANTUS HOLDING: SEC Files Civil Injunctive Action V. President
---------------------------------------------------------------
The Securities and Exchange Commission filed a civil injunctive
action in U.S. District Court for the Southern District of New
York, charging Vincent Montagna, president of Quantus Holding
Company, Inc., an unregistered investment adviser, with
securities fraud, and naming his wife, Christine Palmer, as a
relief defendant   On the same day, the United States Attorney's
Office for the Southern District of New York announced the
unsealing of an indictment against Mr. Montagna concerning some
of the same conduct alleged in the Commission's complaint.
     
The complaint alleges that from at least August 2001 until at
least August 5, 2002, Mr. Montagna defrauded investors and
prospective investors in two hedge funds he managed through
Quantus - Tiburon Asset Management LLC and Tiburon Partners,
Ltd. (collectively, Funds).   He allegedly defrauded the
investors and prospective investors by:   

     (1) repeatedly causing extremely positive - and false -  
         performance claims to be disseminated to them;

     (2) failing to disclose to investors the declining value
         and increased risk of Fund holdings;

     (3) failing to disclose conflicts of interest he had with
         respect to certain investments;

     (4) converting Fund income and assets for his own (or his
         wife's) benefit; and

     (5) causing the Funds to make payments to him and his
         associates in excess of the amounts to which they were
         entitled.
     
Specifically, the complaint alleges, among other things, that
Mr. Montagna knew or recklessly disregarded that by at least
November 2001 two of the Funds' major assets were worthless, yet
he continued to cause extremely positive performance claims -
e.g. that Tiburon Asset had increased in value 58.40% over the
year 2001 - to be disseminated to investors and prospective
investors.  He continued to obtain additional investments in the
Funds using his false and inflated valuations until September
2002, when he announced that the Funds were being written down
45% and 60%, respectively.
     
Mr. Montagna also allegedly converted a valuable Fund asset by
transferring it to his wife for nominal consideration.  In
December 2002, Mr. Montagna caused one of the Funds to convey a
property in Bensalem, Pennsylvania worth at least $325,000 to a
partnership controlled by Ms. Palmer, his wife.  In return, Ms.
Palmer's partnership paid $1.
     
The complaint alleges that through this conduct, Mr. Montagna
violated the antifraud provisions of the Securities Exchange and
Investment Advisers Acts, more specifically Section 17(a) of the
Securities Act of 1933, Section 10(b) of the Securities Exchange
Act of 1934 and Rule 10b-5 thereunder, and Sections 206(1) and
206(2) of the Investment Advisers Act of 1940.  In its
complaint, the Commission seeks against Mr. Montagna a permanent
injunction, disgorgement plus prejudgment interest, and civil
penalties.  In addition, the Commission seeks disgorgement plus
prejudgment interest from Ms. Palmer, whom the complaint names
as a relief defendant.
     
The complaint further stated that Mr. Montagna, 32, is the co-
founder, president, and chief executive officer of Quantus, the
entity through which he managed Tiburon Asset Management LLC,
and the founder, president, and chief executive officer of
Tiburon Investment Management Ltd, the entity through which he
managed Tiburon Partners Ltd.   During the relevant period, Mr.
Montagna was the sole owner of Quantus and Tiburon Investment
Management, which operated out of offices in lower Manhattan,
and was solely responsible for managing the Funds' investments.      
Relief Defendant Christine Palmer,35, resides in Pennsylvania.   
She is Mr. Montagna's wife.  Ms. Palmer received and may still
control Fund assets or property traceable to such assets or to
Mr. Montagna's ill-gotten gains, including the Pennsylvania
property, which is worth approximately $325,000.
     
The Funds raised approximately $10 million from approximately
seventy investors over the period beginning in or about February
1998 and ending in July 2002.  Virtually all of the investors'
money is gone - most of it lost through investments in small,
high-risk private companies, in some of which Mr. Montagna had
undisclosed conflicts of interest.  By at least June 2003, the
Funds' only assets were a property in Nevada worth approximately
$1 million, virtually worthless promissory notes issued by the
private companies, a small amount of virtually worthless
publicly trading stock, and rights to small amounts of income
from the private investments.
     
The Commission acknowledges the assistance of the U.S.
Attorney's Office for the Southern District of New York and
United States Postal Service in the investigation of this
matter.  The complaint is styled "SEC v. Vincent Montagna and
Christine Palmer, 05 Civ. 4303, KW, USDC, SDNY."
     

SAMSON RESOURCES: Faces WY Lawsuit Over Energy Royalty Payments
---------------------------------------------------------------
Samson Resources Company continues to face a class action filed
in the District Court of Sweetwater County, Wyoming, styled
"Robert W. Scott, Individually and as Managing Member of R.W.
Scott Investments, LLC v. Samson Resources Company, Case No. C-
01-385."

The lawsuit seeks class action certification and alleges that
the Company deducted from its payments to royalty and overriding
royalty owners certain charges improper under the Wyoming
royalty payment statutes.  A number of these royalty and
overriding royalty payments burdened the interests of the
Geodyne Energy Income Limited Partnership II-C and Geodyne
Energy Income Limited Partnership II-D (II-C and II-D
Partnerships).  

In February 2003, the Company made a supplemental payment to the
royalty and overriding royalty interest owners who were
potential class members of amounts then thought improperly
deducted plus statutory interest thereon. The applicable
portions of these payments, $2,548.31 and $26,768.96,
respectively, were recouped from the II-C and II-D Partnerships
in the first quarter of 2003. The lawsuit also alleges that
Samson's check stubs did not fully comply with the Wyoming
Royalty Payment Act.  


SCHOLARSHIP FRAUD: Fourth Required Aid Fraud Report Issued
----------------------------------------------------------
The Federal Trade Commission and the Departments of Justice
(DOJ) and Education (ED) have issued their fourth required
report to Congress describing their continued efforts to combat
scholarship and financial aid fraud.

Each year, millions of students seek help in financing their
college education, and some fall prey to scholarship and
financial aid scams that "guarantee" money for college in
exchange for a fee. In 2000, Congress passed the College
Scholarship Fraud Prevention Act to help federal agencies crack
down on these scams.

The College Scholarship Fraud Prevention Act of 2000 established
stricter sentencing guidelines for criminal financial aid fraud
and charged ED and the FTC with conducting outreach efforts to
educate consumers about scholarship scams. The Act also requires
the three agencies to submit a yearly report detailing the
nature and quantity of scholarship fraud incidents since the Act
was enacted. The FTC, DOJ, and ED have implemented all the
required provisions and their activities are highlighted below.

In 1996, the FTC implemented "Project Scholarscam," an ongoing
campaign to prevent and prosecute scholarship fraud. To date,
the FTC has brought eleven law enforcement cases against alleged
scammers and published a variety of consumer education and
outreach materials to help consumers avoid these scams.

This year's report discusses ED's and the FTC's continued
efforts to educate consumers about scholarship scams. The
agencies have created Web sites, booklets, brochures,
videoconferences, flyers, posters, and bookmarks and distributed
them to the public in English and Spanish. ED's materials also
provide helpful information about federal student aid programs,
including the fact that there is no fee to submit the Free
Application for Federal Student Aid (FAFSA) - contrary to what
many scholarship scammers claim - and that free information
about college scholarships is available from libraries, high
school guidance counseling offices, and other sources. The
report notes that the FTC and ED continue to work together in
their outreach efforts, including linking to each other's
materials.

Regarding the amount of reported scholarship fraud in 2004, the
report notes that complaints and inquiries to the FTC's Consumer
Sentinel database have increased sizeably to 4,486 from 667 in
2003, but that scholarship fraud complaints and inquiries
represent just 1.15 percent of the total fraud complaints and
inquiries in the database. The report notes that the increase
likely does not indicate an increase in scholarship fraud,
instead attributing it to a greater number of law enforcement
and consumer protection agencies referring complaints to the
Sentinel database and increased consumer awareness of how to
report fraud and inquire about a company's practices. The report
states that the nature of the fraudulent activity reported
continues to shift from scholarship search services to financial
aid consulting services. In addition, the report informs
Congress of the FTC's and DOJ's continued monitoring of the
financial aid industry, citing specific enforcement actions the
agencies brought in 2004.

Copies of the report are available from the FTC's Web site at
http://www.ftc.govand also from the FTC's Consumer Response  
Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington,
D.C. 20580. The FTC works for the consumer to prevent
fraudulent, deceptive, and unfair business practices in the
marketplace and to provide information to help consumers spot,
stop, and avoid them. To file a complaint in English or Spanish
(bilingual counselors are available to take complaints), or to
get free information on any of 150 consumer topics, call toll-
free, 1-877-FTC-HELP (1-877-382-4357), or use the complaint form
at http://www.ftc.gov.The FTC enters Internet, telemarketing,  
identity theft, and other fraud-related complaints into Consumer
Sentinel, a secure, online database available to hundreds of
civil and criminal law enforcement agencies in the U.S. and
abroad.


SMITH BARNEY: Financial Consultants Launch Sex Bias Suit in CA
--------------------------------------------------------------
Citigroup Global Markets, Inc., doing business as Smith Barney
faces a national class action filed in the United States
District Court for the Northern District of California, styled
"Fassbender Amochaev v. Citigroup Global Markets, Inc., d/b/a
Smith Barney Case No. 051-298 (PJH)."

Four financial consultants from California filed the suit,
alleging systemic sexual discrimination in account distribution,
sales support, compensation and other areas.  If approved for
class-action status, the suit could be opened to thousands of
current and former employees of Smith Barney's parent,
Citigroup.

The Company said the allegations are without merit, Primedia
Business Magazines and Media reports.  

In 1998, Smith Barney paid out roughly $100 million to settle a
class action brought against it in 1996. The case featured
disturbing details of male-advisor behavior in a Long Island
branch that was home to the infamous "boom-boom room."  As part
of its settlement, the firm promised to improve working
conditions for female employees through the formation of
diversity groups, through the hiring of more women and by
updating firm policies regarding account distribution and
opportunities for advancement.


ZIX CORPORATION: Plaintiffs To File Consolidated Suit in N.D. TX
----------------------------------------------------------------
Plaintiffs intend to file a consolidated securities class action
against Zix Corporation and certain of its officers and
directors in the United States District Court for the Northern
District of Texas.

Beginning in early September 2004, several purported shareholder
class action lawsuits and one purported shareholder derivative
lawsuit were filed on behalf of purchasers of the Company's
common stock between October 30, 2003 and May 4, 2004.  The
purported shareholder class action lawsuits allege that the
defendants made materially false and misleading statements
and/or omissions in violation of Sections 10(b) and 20(a) of the
Securities Exchange Act of 1934 during this time period.

The various plaintiff groups have filed motions seeking
appointment of lead plaintiff and lead counsel in these class
action lawsuits.  No timeframe has yet been established by the
court for appointing the lead plaintiff and lead counsel. The
lead counsel, once determined by the court, will file a
consolidated complaint.

The first identified complaint in the litigation is styled
"Brody, et al. v. Zix Corporation, et al.," filed in the United
States District Court for the Northern District of Texas.  The
plaintiff firms in this litigation are:

     (1) Brian Felgoise, 230 South Broad Street, Suite 404,
         Philadelphia, PA, 19102 Phone: 215.735.6810, Fax:
         215/735.5185,

     (2) Charles J. Piven, World Trade Center-Baltimore,401 East
         Pratt Suite 2525, Baltimore, MD, 21202 Phone:
         410.332.0030, E-mail: pivenlaw@erols.com

     (3) Federman & Sherwood, 120 North Robinson, Suite 2720,
         Oklahoma City, OK, 73102 Phone: 405-235-1560, E-mail:
         wfederman@aol.com

     (4) Lerach Coughlin Stoia Geller Rudman & Robbins (San
         Diego) 401 B Street, Suite 1700, San Diego, CA, 92101
         Phone: 619.231.1058, Fax: 619.231.7423, E-mail:
         info@lerachlaw.com

     (5) Murray, Frank & Sailer LLP, 275 Madison Ave 34th Flr,
         New York, NY, 10016 Phone: 212.682.1818, Fax:
         212.682.1892, E-mail: email@rabinlaw.com

     (6) Provost & Umphrey Law Firm, LLP, 3232 McKinney Avenue,
         Suite 700, Dallas, TX, 75204 Phone: 214.744.3000, Fax:
         214.744.3015, E-mail: info@provostumphrey.com

     (7) Schatz & Nobel, P.C., 330 Main Street, Hartford, CT,
         06106 Phone: 800.797.5499, Fax: 860.493.6290, E-mail:
         sn06106@AOL.com

     (8) Schiffrin & Barroway, LLP, 3 Bala Plaza E, Bala Cynwyd,
         PA, 19004 Phone: 610.667.7706, Fax: 610.667.7056, E-
         mail: info@sbclasslaw.com

     (9) Shepherd, Finkelman, Miller & Shah, LLC Phone:
         877.891.9880, E-mail: jshah@classactioncounsel.com

    (10) Wolf Popper, LLP 845 Third Avenue, New York, NY, 10022-
         6689 Ave Phone: 877.370.7703, Fax: 212.486.2093, E-
         mail:  IRRep@wolfpopper.com  



                         Asbestos Alert


ASBESTOS LITIGATION: National Waterworks Unfazed by Liabilities
---------------------------------------------------------------
National Waterworks Inc., a distributor of water and wastewater
transmission products, said it did not assume any existing or
future asbestos-related liabilities relating to U.S. Filter or
its predecessors.

The Company acquired the business of U.S. Filter Distribution
Group, Inc. on Nov. 22, 2002. NWW also acquired substantially
all of the assets and certain liabilities of U.S. Filter
Distribution Group, Inc., a wholly owned subsidiary of United
States Filter Corporation, which is an indirect-wholly owned
subsidiary of Veolia Environnement (formerly Vivendi
Environnement S.A.).

The Waco, TX-based Company said however, that it may become
subject to asbestos liabilities because of this relationship.
According to the filing it submitted to the Securities and
Exchange Commission, in the event that U.S. Filter, United
States Filter Corporation and Veolia are unable to fulfill their
contractual obligations, it is possible that the Company's
financial condition and earnings would deteriorate if it would
be required to satisfy those asbestos liabilities.

USFDG and its predecessor companies have been named as
defendants in 1,180 asbestos related lawsuits, of which 976 have
been dismissed, 144 have been settled and 60 remain open at
March 25, 2005. The majority of these suits have either been
dismissed or settled for nominal amounts. USFDG's insurers have
paid the majority of the settlement and defense costs related to
these suits. As of March 25, 2005, USFDG has made aggregate
settlement payments of US$0.1 million and paid aggregate defense
costs of US$0.6 million related to settled claims.

Certain of U.S. Filter's predecessors distributed cement pipe
containing asbestos. Certain of these predecessors have been
defendants in lawsuits seeking to recover personal injury and
other damages for alleged exposure to asbestos in these pipes.
Except for one predecessor, the cement pipe distributed was
primarily used in water and sewage application where the pipe
was typically buried underground. Management believes that the
nature of the asbestos-containing pipe distributed by the
predecessors and the uses of such pipe makes it unlikely that a
large number of plaintiffs would be exposed to friable asbestos
emanating from the pipe.

The acquisition was structured as an asset purchase and National
Waterworks did not assume any existing or future asbestos-
related liabilities relating to U.S. Filter or its predecessors.
U.S. Filter and United States Filter Corporation retained these
liabilities and jointly and severally agreed to indemnify and
defend the Company from and against these liabilities on an
unlimited basis with no termination date.

United States Filter Corporation and U.S. Filter also agreed
that, until November 22, 2012, they would maintain U.S. Filter's
corporate existence and ensure that U.S. Filter has sufficient
funds to pay any and all of its debts and other obligations,
including liabilities and indemnification obligations.

In addition, Veolia Environnement (formerly Vivendi
Environnement S.A.) has guaranteed all obligations of United
States Filter Corporation and U.S. Filter under the asset
purchase agreement up to an aggregate of US$50.0 million through
Nov. 22, 2017. Historically, courts have not held the acquirer
of an entity's assets liable for liabilities that are not
assumed as part of the transaction unless the asset buyer is
found to be a "successor" to the asset seller.

National Waterworks, a wholly owned subsidiary of National
Waterworks Holding, Inc., was incorporated in September 2002 for
the purpose of acquiring substantially all of the assets and
assuming certain obligations of USFDG, a wholly owned subsidiary
of United States Filter Corporation, which is an indirect-wholly
owned subsidiary of Veolia Environnement.

As the asbestos claims were retained by USFDG and USFC and in
view of the indemnity by USFDG and USFC with respect to retained
liabilities and the Veolia guarantee, management of NWW believes
that it has no liability related to asbestos claims at March 25,
2005.


ASBESTOS LITIGATION: Alfa Laval Faces 29 More Lawsuits in 1Q05
--------------------------------------------------------------
Alfa Laval's subsidiary in the United States, Alfa Laval Inc.,
revealed that as of March 31, 2005, the Company has been named
as co-defendant in a total of 175 asbestos-related lawsuits with
a total of about 11,000 plaintiffs.

During the first quarter of 2005, Alfa Laval Inc. was named as
co-defendant in an additional 29 lawsuits with a total of 36
plaintiffs. During the first quarter 2005, 29 lawsuits involving
about 2,800 plaintiffs have been resolved. The Richmond, VA-
based firm, which manufactures specialized equipment, believes
these claims have no merit and intends to vigorously contest
each lawsuit.

Alfa Laval Inc. has insurance coverage for the asbestos-related
claims under a large number of insurance policies issued by
several insurance companies. Primary insurance policies issued
in favor of Alfa Laval Inc. provide for coverage of defense
costs. Most of these insurance carriers have confirmed that they
will, taken together, provide coverage for a substantial
majority of the costs arising from the claims. Alfa Laval is in
the process of negotiating settlement agreements with certain of
its insurance carriers. These negotiations primarily relate to
the extent of coverage and the documentation concerning the
existence of certain insurance policies.

Based on current information and Alfa Laval's understanding of
these lawsuits, Alfa Laval continues to believe that these
lawsuits will not have a material adverse effect on the
company's financial condition or results of operation.


ASBESTOS LITIGATION: Ladish Co. Named in 73 Suits in MS, 3 in IL
----------------------------------------------------------------
Ladish Co., Inc. (NASDAQ: LDSH) has been named as a defendant in
about 73 asbestos cases in Mississippi and three asbestos cases
in Illinois. As of the date of this filing submitted to the
Securities and Exchange Commission, the Cudahy, WI-based Company
has been dismissed from 43 of the cases in Mississippi and two
of the cases in Illinois.

Ladish declared that from time to time, it has been involved in
legal proceedings relating to claims arising out of its
operations in the normal course of business. The Company
believes however, that there are no material legal proceedings
pending against the Company or any of its properties.

In addition, the Company asserted that it has never manufactured
or processed asbestos. Its only exposure to asbestos, it says,
involves products the Company purchased from third parties. The
Company has notified its insurance carriers of these claims and
is vigorously defending these actions.

Ladish Co. Inc. designs and manufactures high-strength forged
and cast metal components for aerospace and industrial markets.
Jet engine parts, missile components, landing gear, helicopter
rotors, and aerospace products account for more than 90% of
sales. The Company also makes large crankshafts and metal
forgings used in power-generation equipment and heavy-duty off-
road vehicles.


ASBESTOS LITIGATION: USG Corp. 1Q05 Earnings Rose US$20M or 35%
---------------------------------------------------------------
USG Corp. said first quarterly earnings rose US$20 million or 35
percent to US$77 million compared to the US$57 million recorded
in the first quarter of 2004, as net sales increased and
operating margins improved, mainly due to improved pricing.

The Chicago, IL-based wallboard maker company, said its outlook
for the rest of 2005 remained positive, though rising interest
rates and tighter lending standards may bring demand down
slightly from last year.

Strong new housing and residential repair and remodeling markets
are expected to keep demand high for USG's gypsum wallboard, and
the commercial construction market, while still soft, is showing
some signs of improvement, said Chairman, President and CEO
William C. Foote.

Net income rose to US$77 million, or US$1.77 a share, in the
first quarter, from US$57 million, or US$1.33 a share, a year
earlier. Sales rose 15 percent to US$1.17 billion in the quarter
from a year earlier.

At the end of the quarter, USG had US$1.2 billion of cash, cash
equivalents, restricted cash and marketable securities, up from
US$925 million a year earlier, but down from the US$1.25 billion
it had at the end of 2004.

USG and 10 of its domestic subsidiaries filed voluntary
petitions for reorganization under Chapter 11 of the US
Bankruptcy Code on June 25, 2001. This action was taken to
resolve asbestos claims in a fair and equitable manner, protect
the long-term value of the businesses and maintain their market
leadership positions.

On April 11, 2005, the Unsecured Creditors Committee filed a
motion with the bankruptcy court requesting that the debtors
make interest payments to all non-asbestos unsecured creditors
for interest accrued from January 1, 2005, on liquidated,
undisputed pre-petition claims. If approved, this motion, which
is still before the court, would require the debtors to make
interest payments of about US$84 million on an annual basis.

On April 21, 2005, an official committee representing
shareholders of the corporation was appointed in the debtors'
Chapter 11 cases. The Official Committee of Equity Security
Holders is composed of seven USG common stockholders that are
among the largest holders of the Corporation's total equity.
This committee, along with the creditors' committees and the
legal representative for future asbestos claimants assigned in
the debtors' cases, will participate in the resolution of the
debtors' reorganization.


ASBESTOS LITIGATION: ENSCO Int'l. Faces 3 Multiparty Suits in MS    
----------------------------------------------------------------
In August 2004, ENSCO International Incorporated (NYSE: ESV), an
offshore oil and gas drilling contractor, and certain
subsidiaries were named as defendants in three multiparty
lawsuits filed in Mississippi State courts involving numerous
other companies as co-defendants. The lawsuits seek an
unspecified amount of monetary damages on behalf of about 120
named individuals alleging personal injury or death, including
claims under the Jones Act, purportedly resulting from exposure
to asbestos on drilling rigs and associated facilities during
the period 1965 through 1986.

The lawsuits are in very preliminary stages and the Dallas, TX-
based Company has not been able to determine the number of
plaintiffs that were employed by the Company or its subsidiaries
or otherwise associated with its drilling operations during the
relevant period. The Company has filed responsive pleadings
preserving all defenses and challenges to jurisdiction or venue,
and intends to vigorously defend against the litigation.

Based on information currently available, the Company cannot
reasonably estimate a range of potential liability exposure, if
any.


ASBESTOS LITIGATION: UK Museum Restoration Group Denies Charges
---------------------------------------------------------------
Four men appeared before Whitehaven magistrates court to face
more than 40 charges of health and safety offenses after
asbestos was found at Haig Pit Museum, one of Cumbria's most
popular tourist attractions, BBC News reports. All four denied
the charges brought against them.

The Haig Pit Museum in Whitehaven closed when asbestos was found
in 2003. It reopened in 2004 after renovations. English Heritage
awarded a grant of GBP35,000 to investigate improvements and
expansion of the museum during the crisis.

These four men, members of the museum committee, attended court
after the Copeland Borough Council brought legal action against
them. Chairman of the Haig restoration group, Barry Prest, and
committee members Anthony Haile and Andrew Ainsworth all face 10
counts of health and safety offenses. Secretary John Greasley
faces 10 similar counts, two counts of burning controlled waste
and one of improperly treating controlled waste. The offenses
are all alleged to have taken place between March 19 and April 5
in 2003.

The cases were adjourned until May 12, 2005.


ASBESTOS LITIGATION: EPA Approves Relocation of OR Residents
------------------------------------------------------------
After a barrage of demands from residents, county commissioners
and most recently from Oregon Rep. Greg Walden, the U.S.
Environmental Protection Agency will temporarily relocate as
many as 27 families with homes in the asbestos-contaminated
Klamath Falls subdivision. The largest ever taken by the EPA in
the Pacific Northwest, the relocation would allow testing to be
done during the period, said to last from June 10 to September
10.

Recent air studies determined that children face health risks
from microscopic asbestos fibers if inhaled. The airborne fibers
can cause various respiratory illnesses, even cancer.

The US$300,000 move could affect 84 people, including 30
children and teenagers. EPA officials say they eventually can
charge the costs to the subdivision's developer, who homeowners
say failed to disclose the existence of the asbestos.

The 52-acre subdivision was built on the site of World War II
Marine barracks. Debris from the barracks, which contains
asbestos, was mixed with dirt in the subdivision, while
asbestos-containing steam pipes run through the ground.
Homeowners discovered in 2001 the buried debris from razed
buildings, raising concerns about their exposure to asbestos
fibers.

Dan Heister, the EPA's on-scene coordinator for the North Ridge
Estates subdivision, said that the relocation could begin before
summer. The Army Corps of Engineers and the U.S. Department of
Transportation would help with the relocation.

Thirteen families have sued Mel Stewart, the owner of MBK
Partnership in federal court, alleging fraud. MBK Partnership in
turn sued the state of Oregon and federal government, both
former owners of the site, claiming they bear responsibility for
cleanup costs. Last month, the Oregon Department of Justice
responded with its own US$3 million lawsuit in state court
alleging fraud.

Mr. Stewart's attorney, Lawrence Burke, said the Partnership
favors a permanent relocation for families who want to move.

The EPA commented that the agency does not have the authority to
relocate people permanently until the site investigation is
done. The EPA plan estimates paying for the rents, utilities and
other expenses for the families will cost about US$104,000. The
plan also estimates moving the families' belongings could cost
US$35,000, providing security for the site another US$35,000 and
boarding homeowners' pets US$20,000.


ASBESTOS LITIGATION: Canada's WCB Focuses on Asbestos Exposure  
--------------------------------------------------------------
When the British Columbia's Workers Compensation Board observed
its annual day of mourning for people injured or killed on the
job, the group highlighted the rising death rate for
occupational exposure and disease, particularly from asbestos
exposure, the Vancouver Province reports.

In 1985, deaths related to asbestos exposure accounted for 11
percent of accepted fatal claims at the board. By last year,
asbestos-triggered deaths in B.C. had risen to 31 percent. Of
the 134 B.C. workers who lost their lives last year, 51 were
caused by asbestos exposure or other occupational diseases.

British Columbia's workplaces kill an average of three workers
every week and injure more than 3,000. Eighteen workers are
permanently disabled every working day.

The board admits to mixed success in reducing workplace death
and injury. Over the past 20 years, employers, workers and the
WCB have managed to reduce death caused by traumatic injuries.

Most of the disease claims accepted by the board today are for
asbestos exposures that took place 25 to 40 years ago. However,
the number of asbestos-related deaths is expected to remain at
current levels for the next 10 to 12 years.

"Work-related death, injury, illness and disease are not, and
should not be, an inevitable and acceptable cost of doing
business," WCB president/CEO David Anderson said.


ASBESTOS LITIGATION: Work on Asbestos Bill Delayed Until May 12
---------------------------------------------------------------
Procedural wrangling by a Democratic senator forced the Senate
Judiciary Committee to postpone action for two weeks on a US$140
billion asbestos compensation fund. Committee Chairman Sen.
Arlen Specter, who had intended to resolve 82 amendments in one
day, rescheduled the debate for May 12 after the Senate returns
from a one-week recess.

The panel only completed work on 12 amendments before an
opponent invoked a Senate rule that committees cannot work more
than two hours after the full Senate has gone into session. The
delay will give Sen. Specter and Vermont Senator Patrick Leahy,
the panel's top Democrat and the bill's cosponsor, more time to
round up 10 votes among the committee's 18 members.

Before adjourning, the committee by 12-5 declined to expand the
fund to lung cancer sufferers who could not show their ailment
was due to asbestos. Republic Sen. Tom Coburn of Oklahoma
predicted that the fund would be dead in three or four years.

The panel also voted to allow Lloyds of London reinsurer,
Equitas, to apply for a hardship adjustment from the fund's
administrator, like any other insurance company, if it finds it
hard to make payments to the fund. Before the halt, the
committee adopted language giving a credit to insurers, after
the fifth year of the fund, if they have to cover shortfalls
from Equitas. Previously, the bill had excluded Equitas from
possible hardship adjustments, with U.S. insurers saying it
should be treated differently because it is backed by Lloyd's.

Despite dozens of amendments proposed by senators in both
parties, Judiciary Chairman Sen. Arlen Specter remained
optimistic about getting final panel approval next month.


ASBESTOS LITIGATION: Asbestos Bill to Include Natural Exposure
--------------------------------------------------------------
In the final bill rewrite of the bill aiming to set up a trust
fund for victims of asbestos exposure, Sen. Dianne Feinstein, a
leading Democrat on the Senate Judiciary Committee, managed to
push an amendment to make compensation available for people
sickened by outside the workplace and set aside US$40 million
for federal agencies to study the problem of naturally occurring
asbestos, The Argus reports.

This marks the first federal legislation to deal with a threat
that geologists suspect exists in at least 44 of 58 counties in
California where asbestos minerals coexist with the state rock,
serpentine, or other minerals and are being disturbed by rapid
development. In over two decades, studies have found evidence
that builders and gravel quarries are digging into natural
asbestos veins, and that Californians are breathing asbestos
fibers in the course of daily living.

The problem is especially acute in the Sierra foothills where
wildfire growth is stirring up types of asbestos that many
scientists believe are 10 to hundreds of times more carcinogenic
than the asbestos commonly used in construction, insulation and
brake pad manufacture.

With the US$40 million amendment, federal agencies would study
standards and regulations for natural asbestos in soil and air,
begin aerial mapping of likely asbestos deposits and offer
grants for removing or sealing up natural asbestos in public
places such as schools, parks and gravel roads.

Up to US$3 million in the amendment would pay for the federal
Agency for Toxic Substances and Disease Registry to check for
abnormal changes in the lungs of Californians living in fast-
developing areas rich in asbestos.

California began regulating quarrying, construction and road
building involving asbestos containing rock in 1990 and
tightened the rules five years ago. But federal, state and local
governments have drawn the line at prohibiting development or
disturbance of asbestos-containing rock and have made meager
progress in mapping asbestos deposits statewide.  


ASBESTOS LITIGATION: UK Family to Pursue Claim V. Balfour Betty  
---------------------------------------------------------------
Barry Welch, a man believed to be one of the youngest persons in
the UK to contract asbestos-related cancer, died at a hospice
last week. A 32-year-old father of three from Leicester, he was
diagnosed with mesothelioma in October 2004.

Mr. Welch's family, who intends to pursue his claim for
compensation, alleges he was exposed to asbestos fibers as a
child in the 1970s. It is believed that Mr. Welch might have
breathed in asbestos dust released from his stepfather Roger
Bugby's overalls when he came home from work at a power station
in Kent on the Isle of Grain.

As previously reported on the October 22, 2004 edition of the
Class Action Reporter, the law firm Irwin Mitchell has been
representing Mr. Welch in his claim for compensation. Spokesman
Adrian Budgen had said, "This is a particularly tragic case and
it is vital that people who remember Roger Bugby or the presence
of asbestos at the Isle of Grain Power Station in Kent come
forward as witnesses."

Mr. Bugby's employer Balfour Beatty said it did not comment on
single cases.

Mesothelioma, whose only known cause in the UK is exposure to
asbestos, is a form of cancer that attacks the lining of the
lungs. The period between that exposure and development of the
condition can be from 10 to 50 years.

Formerly BICC (British Insulated Callender's Cables), Balfour
Beatty is engaged in engineering, construction, and building
management services, primarily in Europe and North America.


ASBESTOS LITIGATION: DEP Files Charges Against NY Investigator
--------------------------------------------------------------
New York Department of Environmental Protection has charged an
asbestos investigator with misrepresenting the quantity and
nature of asbestos on a waterfront site in Red Hook where home
furnishings firm Ikea plans to build a megastore, reports The
Brooklyn Papers.

Thomas Parisi, who was licensed by the agency to perform
asbestos investigations, stands to face up to a US$1,200 fine
for the infraction. He attested that the building had
significantly less asbestos that was discovered. This
certification led to the issuance of a building demolition
permit for Brooklyn, NY-based US Dredging Corp., the owner of
the 22-acre site.

DEP spokesman Ian Michaels said that Mr. Parisi has been issued
11 violations since last September. Five of those were the
result of a random audit by the DEP, during which agents found
he had not kept proper paperwork on his clients or was missing
complete evidence of his investigations.

Following complaints last December, the DEP on Jan. 7, 2005,
issued a stop-work order halting the demolition when large
amounts of asbestos were found in the rubble. The agency served
US Dredging contractors a total of 18 violations after the
investigation. Both the agent and the contractors face fines for
exposure, potentially reaching up to US$86,400 in penalties.

The US Dredging Corporation was contracted by Ikea to carry out
the demolition of an existing Civil War-era pump house and
adjacent warehouses that sit on the property, said US Dredging's
lawyer. The property is part of an assemblage at the former New
York Shipyard upon which Ikea will build a 346,000-square-foot
store site.

A lawyer for US Dredging, Philip Karmel, said his client is not
guilty of violations issued for improperly reporting and
containing the asbestos in the site prior to, and during
demolition since the company did not directly hire the
investigator. Mr. Karmel claims to not know Mr. Parisi since it
was the demolition company that had hired the investigator.

At an April 25, 2005 meeting of the Community Board 6 Public
Safety and Environmental Protection committee, DEP public
affairs officer Lillie Zeigler Farrell told committee members
that although the DEP did find high levels of asbestos on the
Ikea site, their role in future investigations was limited to
issuing fines and responding to phoned-in complaints.

A DEP spokesman later that because the investigator was not
hired by the DEP, the most the city could do was revoke his
certification.

In a hearing before the Environmental Control Board on May 6,
U.S. Dredging will contend that the asbestos found did not merit
following DEP's removal guidelines. The DEP disagrees. Mr.
Michaels, said, "The rules are very clear that you have to file
a report with the DEP, and must follow the exact procedure you
have to use to remove the asbestos, to store it, to transport
and dispose of it."

Lou Sones, a member of the CB6 public safety committee pressed
Farrell to commit to a full inspection of the buildings on the
site prior to allowing any further demolition. His request was
later turned into a committee motion that passed unanimously,
asking the DEP to conduct a full site investigation.

Mr. Michaels said the DEP had contacted the city Department of
Buildings and put a "red flag" on U.S. Dredging and the Ikea
site's address for every time they file an application.


ASBESTOS LITIGATION: Lone Star, Subsidiaries Named in 45 Suits
--------------------------------------------------------------
During the last six years, Lone Star Steel, one of the principal
operating companies of Lone Star Technologies Inc., has been
named as one of a number of defendants in 45 lawsuits alleging
that certain individuals were exposed to asbestos on the
defendants' premises. The plaintiffs are seeking unspecified
damages.

To date several of these lawsuits have been settled for about
US$0.3 million in the aggregate. Of the 45 lawsuits, 18 have
been settled or are pending settlement and 12 have been
dismissed or are pending dismissal. Steel did not manufacture or
distribute any products containing asbestos. Some or all of
these claims may not be covered by the Company's insurance. The
Company has accrued for the estimated exposure to known claims,
but does not know the extent to which future claims may be
filed. Therefore, the Company cannot estimate its exposure, if
any, to unasserted claims.

Beginning in 2003, Lone Star's subsidiary Zinklahoma, Inc.,
inactive since 1989, was named as one of a number of defendants
in seven lawsuits alleging that the plaintiffs had contracted
mesothelioma as the result of exposure to asbestos in products
manufactured by the defendants and John Zink Company. Three of
these lawsuits have been dismissed and one was settled for less
than US$0.1 million. Lone Star acquired the stock of Zink in
1987 and, in 1989, sold the assets of the former Zink to Koch
Industries, Inc. and renamed the now-inactive subsidiary
"Zinklahoma, Inc."  Lone Star retained, and agreed to indemnify
Koch against, certain pre-closing liabilities of Zink. It is
Lone Star's understanding that Zink never manufactured asbestos
and primarily used it only to the limited extent included in
certain purchased component parts used in products made by Zink
prior to 1984, when Zink ceased using asbestos-containing
products entirely. Koch continues to operate the business as
John Zink Company, LLC

In addition, Zink LLC has been named in six lawsuits in which
the plaintiffs, two of whom have mesothelioma, allege exposure
to asbestos in Zink's products (three of these lawsuits have
been dismissed) and three personal injury lawsuits resulting
from a 2001 explosion and flash fire at a flare stack and crude
unit atmospheric heater. Zink allegedly manufactured the flare
and related components for the flare stack in the early 1970s.
Koch is seeking indemnification from Lone Star with respect to
these six pending lawsuits. The costs of defending and settling
the lawsuits alleging exposure to asbestos in Zink's products
have been borne by Zink's insurance carrier. Lone Star believes
that Koch's indemnity claim with respect to the 2001 explosion
and flash fire is covered by Lone Star's insurance, subject to a
deductible, and has notified its insurance carrier of that
claim.

Steel's workers' compensation insurance was with one insurance
carrier from 1992 through 2001. In March 2002, that carrier was
declared insolvent and placed in receivership. Since then, the
Texas Property and Casualty Insurance Guaranty Association has
been paying the insolvent carrier's obligations under those
insurance policies, as required by Texas law. Steel paid TPCIGA
US$1.9 million on October 4, 2004 in full settlement and release
of all past, present, and future claims paid by TPCIGA under
those policies.


ASBESTOS LITIGATION: Badger Meter Takes on Multi-party Lawsuits
---------------------------------------------------------------
Badger Meter Inc. is a defendant in several multi-party asbestos
lawsuits pending in various state courts. These lawsuits assert
claims alleging that certain industrial products were
manufactured by the defendants and were the cause of injury and
harm.

The company, a leading marketer and manufacturer of products
using flow measurement and control technologies, is vigorously
defending itself against these alleged claims. Although it is
not possible to predict the ultimate outcome of these matters,
the company does not believe the ultimate resolution of these
issues will have a material adverse effect on the company's
financial position or results of operations, either from a cash
flow perspective or on the financial statements as a whole.  


ASBESTOS LITIGATION: PolyOne Corp. Posts US$2M Asbestos Reserves
----------------------------------------------------------------
Multiple claimants have named PolyOne Corporation (NYSE: POL)
including numerous other co-defendants for alleged asbestos
exposure in the past by workers and contractors and their
families at plants or ships owned by the Company or its
predecessors. The plastics compounder and resins distributor
Company established reserves of about US$2 million as of March
31, 2005 for asbestos-related claims, which it considers
probable and estimable.

According further to the filing it submitted to the Securities
and Exchange Commission, the Avon Lake, OH-based Company
believes the probability is remote that losses in excess of the
amounts it has accrued could be material to its financial
condition, results of operations, or liquidity. This belief is
based upon its ongoing assessment of the strengths and
weaknesses of the specific claims and the defenses and insurance
coverages available with respect to these claims, as well as the
probability and expected magnitude of reasonably anticipated
future asbestos-related claims.

Its assessment includes: whether the pleadings allege exposure
to asbestos, asbestos-containing products or premises exposure;
the severity of the plaintiffs' alleged injuries from exposure
to asbestos or asbestos-containing products and the length and
certainty of exposure on its premises, to the extent disclosed
in the pleadings or identified through discovery; whether the
named defendant related to Polyone manufactured or sold
asbestos-containing products; the outcomes of cases recently
resolved; and the historical pattern of the number of claims. If
the underlying facts and circumstances change in the future,
PolyOne said that it would modify its reserves, as appropriate.


ASBESTOS LITIGATION: US Steel Corp. Battles 450 Active Cases
------------------------------------------------------------
United States Steel Corporation (NYSE: X) is a defendant in
about 450 active cases involving about 10,000 plaintiffs. At
December 31, 2004, the Pittsburgh, PA-based Company was a
defendant in about 500 active cases involving about 11,000
plaintiffs. These cases allege a variety of respiratory and
other diseases based on exposure to asbestos. Many of these
cases involve multiple defendants, typically involving from
fifty to more than one hundred defendants.

More than 9,500, or 95 percent, of these claims are pending in
jurisdictions which permit filings with massive numbers of
plaintiffs. Based upon U. S. Steel's experience in such cases,
it believes that the actual number of plaintiffs who ultimately
assert claims against U. S. Steel will likely be a small
fraction of the total number of plaintiffs.  

During 2004, U. S. Steel paid about US$14.6 million in
settlements. These settlements and voluntary and involuntary
dismissals resulted in the disposition of about 5,300 claims.
New case filings added 1,464 claims.

These claims against U. S. Steel fall into three major groups:

(1) Claims made under certain federal and general maritime laws
by employees of the Great Lakes Fleet or Intercoastal Fleet,
former operations of U. S. Steel;

(2) Claims made by persons who allegedly were exposed to
asbestos at U. S. Steel facilities; and

(3) Claims made by industrial workers allegedly exposed to
products formerly manufactured by U. S. Steel.

While U. S. Steel has excess casualty insurance, these policies
have multi-million dollar self-insured retentions. To date, the
Company has not received any payments under these policies
relating to asbestos claims. In most cases, this excess casualty
insurance is the only insurance applicable to asbestos claims.
U. S. Steel is currently a defendant in cases in which a total
of about 160 plaintiffs allege that they are suffering from
mesothelioma.

Historically, about 89 percent of the cases against U. S. Steel
stated that the damages sought exceeded the amount required to
establish jurisdiction of the court in which the case was filed.
(Jurisdictional amounts generally range from US$25,000 to
US$75,000.) About 4 percent did not specify any damages sought
at all, about 6 percent alleged damages of US$1.0 million or
less, another 0.6 percent alleged damages between US$2.0 million
and US$10.0 million, and 0.4 percent alleged damages over US$10
million.

U. S. Steel aggressively pursues grounds for the dismissal of
the Company from pending cases and litigates cases to verdict
where it believes litigation is appropriate. It also makes
efforts to settle appropriate cases, especially mesothelioma
cases, for reasonable, and frequently nominal, amounts.


ASBESTOS LITIGATION: MT Senator Calls for Redraft to FAIR Bill
--------------------------------------------------------------
Disappointed over last-minute changes that would reduce coverage
of Libby's claimants in a federal asbestos compensation bill,
Sen. Conrad Burns, R-Mont. is threatening to withdraw his
support of the proposal.

Sen. Burns said that the terms relating to Libby's asbestos
victims in earlier drafts had been adequate but when they were
introduced recently during the last Senate Judiciary Committee
meeting, changes written in have made these provisions
insufficient. Some bill sponsors viewed the Libby fix as
overcompensation and altered the bill to exclude those exposed
to asbestos who are not yet sick. Sen. Diane Feinstein, D-
Calif., has even gone as far as saying that providing special
compensation for victims from a single geographical area such as
Libby, Montana is unconstitutional.

"The good news is that it gives us additional time to lobby for
Libby," said Barrett Kaiser, a spokesman for Sen. Max Baucus, D-
Mont. Sen. Baucus has likewise said he will withdraw his support
of the bill if Libby victims aren't fully compensated.

As previously reported in the April 15, 2005 edition of the
Class Action Reporter, Sen. Baucus persuaded Sen. Arlen Specter,
R-Penn., to add special provisions for Libby victims to the bill
draft. In addition to ensuring at least US$400,000 for asbestos
victims in Libby, the measure exempts them from strict
qualifying criteria. It also extends compensation to family
members and Libby residents, not just former mine workers. The
provision allows the claimants to be compensated from the
asbestos trust fund as well as other sources such as Medicaid
and Medicare.

Sen. Burns said he also worked closely with Sen. Specter
throughout the drafting process, including provisions
recognizing Libby's tremolite asbestos exposure from the now-
defunct W.R. Grace vermiculite mine.

During the committee meeting, Sen. Feinstein offered an
amendment to strike the Libby-specific language and extend
rewards to those who have claims against companies that have
been the subject of either criminal indictments or convictions.
That proposal would significantly expand the class of
individuals able to recover money.

Calling for a redraft, Sen. Burns said that Sen. Specter did
commit to resolving the issue in a way that the Libby provision
passes constitutional muster.

The committee adjourned without passing the bill but will
reconvene next week after the congressional recess.

Asbestos fibers have been used in building materials, auto parts
and other products for decades, but are linked to cancer and
other diseases. Hundreds of thousands of injury claims have
clogged U.S. courts and forced many companies into bankruptcy.


ASBESTOS LITIGATION: CT Town Gets US$750T Cleanup Help from EPA
---------------------------------------------------------------
After a massive fire at the abandoned furniture factory, the
U.S. Environmental Protection Agency committed to provide
another US$500,000 on top of the US$250,000 it promised last
week to fund the onsite cleanup work of the burned-out
InterRoyal Mill at Plainfield, Connecticut. Overseen by an EPA-
hired contractor, two private firms will be clearing the town of
wind-blown debris, possibly containing lead and asbestos.

The State of Connecticut requested the involvement of EPA
emergency responders due to the existence of asbestos on the
site. EPA has assisted by performing air monitoring at the site
and in the adjoining area, to determine whether there are air
contaminants that pose a risk to human health.

Dozens of families nearest the blaze were temporarily evacuated
from their homes.

In First Selectman Donald Gladding's meeting with
representatives of U.S. Sens. Christopher J. Dodd and Joseph
Lieberman, U.S. Rep. Rob Simmons and state officials, he failed
to receive commitment for federal and state assistance. He had
aimed to have the entire complex demolished, including the
section of the mill that didn't burn since it still poses a
potential hazard to the town. He also said the town plans to
apply for a US$25,000 EPA grant that would help pay other
overtime costs for police and Town Hall staff who manned an
around-the-clock hotline or did other work connected with the
fire and its aftermath.

Fire officials believe the blaze was set but are still trying to
determine whether it was arson or an accident. There were no
injuries.

The former office furniture factory shut down in 1985 when it
went bankrupt. Part of the site was used for plastic recycling
in the early 1990s, but the complex has been vacant since 1992.

As reported in the April 29, 2005 edition of the Class Action
Reporter, chemicals from years of manufacturing were detected to
have seeped into the building and surrounding land. The EPA
halted demolition in 2000 after finding asbestos.

The Plainfield site has been the subject of EPA Superfund clean
up work. In order to address immediate needs to protect human
health and the environment, in 1996 EPA removed drums, vats, and
other containers of hazardous materials that had been abandoned
at the site. In late 2002, EPA took additional action at the
site, including repairing fences to prevent unauthorized access
and to quantify remaining concerns regarding asbestos in the
facility.


ASBESTOS LITIGATION: NSW Town to Hold More Testing for Illnesses
----------------------------------------------------------------
The NSW Dust Diseases Board will be conducting more tests of
asbestos-related illnesses for residents of the Baryulgil
community near Grafton in northern New South Wales. A previous
batch had already received their medical results from the tests
last month however, no releases have been made regarding the
legal action any of the 122 residents are going to take.

In March, the board's "Lung Bus" traveled to the indigenous
community, a former mining town that bears the consequences of
the asbestos contamination that occurred from the 1940s to 1979.
Many people came in contact with the nearby asbestos mine, which
was then run by James Hardie Industries.

The Asbestos Diseases Foundation president, Barry Robson, said
all the residents now want to be tested. He confirmed that the
bus would be in Grafton at the Aboriginal Medical Service to
test the rest of the population who missed out the first time.

Mr. Robson stated that the community has decided not to make a
public comment until after everyone is screened and the results
are in. The medical tests will be conducted over three days next
week.

As previously reported in the April 22, 2005 edition of the
Class Action Reporter, Hardie had committed to compensating
former miners and inhabitants of Baryulgil who suffer from
asbestos-related illnesses. In a move praised by NSW Premier Bob
Carr, Hardie vowed to include them in the multimillion-dollar
Australian agreement the Company expects to sign this June.

James Hardie said the total workforce at the mine between the
early 1940s and its closure in 1979 was about 350 people, while
the estimated population of the town during this time was
between 100 and 200 people.

Meanwhile, The NSW Department of Mineral Resources is asking the
town's elders to contact the agency regarding their claims that
asbestos remains to be a risk despite a major cleanup of the
mine site in 1995. Scott Brooks, the department's derelict mines
coordinator, expressed his intention to get the information
first-hand so that he can assess whether the issue is eligible
for funding in the future.


ASBESTOS LITIGATION: High Exposure Levels Detected in CA Region
---------------------------------------------------------------
The U.S. Environmental Protection Agency confirmed that
naturally-occurring asbestos poses a high risk in El Dorado
Hills after releasing the results of the testing it conducted
last October. The EPA stressed that the potential for long-term
development of asbestos-related diseases exists with the
exposure levels found in the region.

Asbestos can be found in at least 44 of California's 58
counties, and is only dangerous when the ground is disturbed and
the fibers become airborne. El Dorado Hills is an area of
particular concern because of the aggressive construction taking
place there.

Unlike most commercial asbestos, most of the fibers found in El
Dorado Hills are tremolite and actinolite, two kinds of
amphibole asbestos that most scientists believe are perhaps tens
to hundreds of times more likely than common commercial asbestos
to trigger lung cancer and mesothelioma.

In October, EPA workers wearing respirators and protective
outfits simulated recreational activities at various schools and
parks to measure the potential for exposure to asbestos. The
test results show personal exposure levels of asbestos were
significantly higher during most sports and play activities as
compared to nearby air samples taken outside the areas of
activity.

The highest asbestos levels occurred along the New York Trail,
where EPA workers simulated children riding bicycles. A child
riding a bike would have been exposed to 43 times the asbestos
level found in air samples away from the trail. Children playing
on the Community Park baseball diamond would have been exposed
to 22 times the asbestos level found in nearby air.

However, no one knows how much exposure is dangerous. No studies
have been conducted on long-term exposure to naturally-occurring
asbestos. The EPA said it was putting together an independent
panel of health experts to help evaluate the data.

The EPA and local health officials will host a public meeting to
discuss the test results Friday, May 6 from 7 to 10 p.m. in the
El Dorado Hills Community Services District Gym at 1021 Harvard
Way.


ASBESTOS LITIGATION: Advocacy Group Urges Congress to Back Bill
---------------------------------------------------------------
The Center for Individual Freedom, a non-profit, non-partisan
constitutional advocacy organization, called on Members of
Congress to support the asbestos victims' compensation fund. The
group sent a letter to Congress urging them to move the bill
forward as it is the best solution to the asbestos litigation
crisis.

According to its press release, Marshall Manson, the Center's
Senior Vice President of Public Affairs, stated, "Victims of
asbestos exposure too often find themselves suffering, not only
from illness, but also at the hands of the court system."

The group pointed out that a study by the RAND Institute found
that the weight of asbestos lawsuits is a US$200 billion drain
on the economy.  Already more than US$70 billion has been spent
on claims, but only 43 percent of that total has gone to
victims.  The bulk of the remaining 57 percent has gone in the
already deep pockets of lawyers.

Too many asbestos victims, Mr. Manson said, will not receive
fair compensation if Congress does not act immediately to adopt
the trust fund. The group seeks to end the trial lawyers' "gravy
train" by ensuring that the money spent on claims goes to the
"real victims."

Mr. Manson concedes that the current bill is not perfect,
however, he believes that it is an outstanding step in reaching
their goals.


ASBESTOS LITIGATION: Fujirebio Seeks Approval of Diagnostic Test
----------------------------------------------------------------
Fujirebio Diagnostics, Inc., a world-leader in oncology testing,
submitted a 510K application to the U.S. Food and Drug
Administration on April 29, 2005 for the clearance of MESOMARK,
the first blood test for the early detection of lung cancer
mesothelioma.

It was earlier reported in the April 22, 2005 edition of the
Class Action Reporter that MESOMARK was launched in Australia,
which holds the highest reported incidence of asbestos-related
illnesses in the world. Professor Bruce Robinson and a team of
researchers, who developed this non-invasive blood test, said
that they considered the diagnostic test a breakthrough that may
lead to better treatment.

Rates of mesothelioma, a highly aggressive form of cancer found
in the lining of the chest, have tripled in the last 20 years
and it is estimated that 10,000 new cases are diagnosed each
year among industrialized countries. Up until now, there have
been no reliable serum tumor markers for mesothelioma, which
means that diagnosis, screening and monitoring responses to
treatment have been difficult. Over 100 million people worldwide
have been occupationally exposed to asbestos in the past five
decades.

MESOMARK, a manual enzyme-linked immunosorbent assay, works by
identifying serum tumor markers called soluble mesothelin-
related peptides. These proteins are released into the
bloodstream by malignant mesothelioma cells. FDI's mesothelioma
assay is a two-step immunoassay that quantitates SMRP in human
blood using a standard ELISA microplate sandwich assay format.

"We are pleased to bring this new and exciting diagnostic tool
for monitoring mesothelioma before the FDA for review," said
Paul Touhey, president and COO for FDI. "MESOMARK further
demonstrates FDI's commitment to deliver novel, innovative and
noninvasive technologies that help patients and physicians
better manage cancer."


ASBESTOS LITIGATION: SCOR's '04 Asbestos Reserves Down by EUR16M
----------------------------------------------------------------
In the filing submitted by reinsurance firm SCOR to the US
Securities and Exchange Commission, the La Defense Cedex,
France-based Company stated that it is exposed to environmental
and asbestos-related risks. Due to the imprecise nature of these
claims, the Company can only give a very approximate estimate of
its potential exposure of these claims. In 2004, it decreased
its level of reserves by EUR16 million.

The 2004 reserves were EUR18 million and EUR16 million for
asbestos and environmental, respectively. The 2004 paid claims
and loss adjustment expenses were EUR0.3 million and EUR0.3
million for asbestos and environmental, respectively.

The Company believes that its reserves as of December 31, 2004
are sufficient to cover its estimated liabilities. The Group's
reserves for losses and loss adjustment expenses include an
estimate of its ultimate liability for asbestos and
environmental claims for which an ultimate value cannot be
estimated using traditional reserving techniques and for which
there are significant uncertainties in estimating the amount of
the potential losses.

SCOR and its subsidiaries have received and continue to receive
notices of potential reinsurance claims from ceding insurance
companies which have in turn received claims asserting
environmental and asbestos losses under primary insurance
policies, in part reinsured by Group companies. Such claims
notices are frequently merely precautionary in nature and
generally are unspecific, and the primary insurers often do not
attempt to quantify the amount, timing or nature of the
exposure.

These uncertainties inherent to environmental and asbestos
claims are unlikely to be resolved in the near future, despite
several aborted regulatory attempts in the U.S. for containing
the overall costs related to asbestos. Evaluation of these risks
is all the more difficult given that claims related to asbestos
and environmental pollution are often subject to payments over
long periods of time. In these circumstances, it is difficult
for the Company to estimate the reserves that should be recorded
for these risks and to guarantee that the amount reserved will
be sufficient.

More generally, SCOR has developed a policy of buying back its
longstanding liabilities on asbestos and environmental exposures
whenever the possibility exists to do so on a commercially
reasonable basis, whenever SCOR determines, based on its
assessment of the potential exposure of the Group based on
actuarial techniques and market practices, that the terms of the
final negotiated settlement are attractive in light of the
possible development of future liabilities. Preference is given
to selected treaties with regard to specific circumstances such
as the maturity of claims, the level of claims information
available, the status of cedents and market settlements.

SCOR's exposure to asbestos was reduced in 2004 by EUR9.3
million compared to 2003, due to commutations. Environmental
exposure also decreased by EUR2.5 million over the same period
for the same reason. It is the intention of management that this
commutation policy be further pursued and developed in 2005 and
in subsequent years. It is anticipated that the policy will
affect settlement patterns to a limited degree in future years.
Although the changes in settlement patterns may improve
predictability and reduce potential volatility in the reserves,
they may also have an adverse effect on the Group's cash flows
linked to these reserves.

With 30 offices around the world, serving clients in over 150
countries, SCOR is France's largest reinsurer and one of the
industry world leaders.


ASBESTOS LITIGATION: Bticino-SpA Employees Pursuing Litigation
--------------------------------------------------------------
Legrand Holding SA, France-based manufacturer and distributor of
electrical supplies, revealed in its latest filing to the
Securities and Exchange Commission that it might incur liability
and costs in connection with potential claims relating to
asbestos.

In the second half of 2001, about 180 current and former
employees of BTicino SpA, Legrand Holding's primary Italian
subsidiary, commenced two class actions and three individual
suits against the Italian social security agency for early
retirement payments citing alleged exposure to asbestos during
the manufacture of products at its Torre del Greco facility.
BTicino, as the employer, is a party to the suit, as is
customary under Italian law.

Pursuant to Italian law, if the employees prove long-term, which
is at least 10 years, exposure to asbestos, they may be entitled
to retire early and, as a result, could receive higher
retirement payments over the course of their retirement.

Although the early retirement payments would be payable by the
Italian social security agency, Legrand cannot ensure that the
agency will not seek a contribution from the Company for all or
a portion of the payments. Regardless of whether the employees
are successful in their claim for early retirement payments,
they may also commence personal injury claims against the
Company relating to damages they could allege to have suffered.
Should any employee proceed with such claims, it could incur
significant costs defending against such claims and could be
required to pay potentially significant damage awards.

The Company's potential exposure in Italy would depend, among
other things, on the type and scope of asbestos damage claims
asserted against it. As a result, it cannot estimate its
potential exposure with respect to asbestos claims, and there
can be no assurance that such claims will not, individually or
in the aggregate, have a material adverse effect on its
business, financial condition and cash flows.

BTicino is a major producer of low-voltage electrical products
for domestic and commercial use. Part of the Legrand Group of
companies, BTicino has subsidiaries and affiliates across Europe
and throughout the world.


ASBESTOS LITIGATION: NGOs Seek Action Against Indian Officials   
--------------------------------------------------------------
After Indian authorities ignored the Danish government's request
to disallow the entry of an asbestos-laden ship-for-scrap ship
for dismantling at Alang yard in Gujarat, environmental groups
are now urging Prime Minister Manmohan Singh to return the
fugitive toxic ship "Kong Frederik IX", now renamed "Riky." The
environmental coalition has also asked that separate proceedings
be initiated against the Indian agencies that allowed the ship
to dock at its waters and the firm that intends to take it
apart.    

Basel Action Network, Greenpeace, Ban Asbestos Network, Center
of Indian Trade Unions and Corporate Accountability Desk said
that stringent action should be taken against the officials
concerned in the Ministry of Environment and Forests, the
Central Pollution Control Board, the Gujarat Maritime Board, the
Gujarat Pollution Control Board and the Indian Customs for
allowing the ship to enter the Indian waters.

As reported in the April 22, 2005 edition of the Class Action
Reporter, Danish Environment Minister Connie Hedegaard asked
India to consider the ship illegal traffic under the Basel
Convention. She reminded A. Raja, India's environment minister,
of the Supreme Court order prohibiting the import of hazardous
wastes and requiring India to participate in international
negotiations with a clear mandate for the decontamination of
ships of all hazardous substances prior to export.

Jacob Hartmann of Greenpeace in Denmark said in a statement,
"Unless contempt of court proceedings are initiated against
those responsible, nothing will change and India will become the
toxic dumping ground of the world irrespective of the Supreme
Court's intent."

CITU leader P.K. Ganguly echoed the demands of the environment
and labor groups.

Contravening Danish, European Union and Indian laws, the ship
managed to escape Danish authorities by quickly changing its
flag and name, right after its owners received orders to hold
the ship until it is decontaminated. Denmark had assured India
that it would take action against the ship owner and ensure that
the ship was stripped of toxic substances if the Indian
Government seized the ship and returned it.

The ship was, however, allowed to beach despite notification of
the illegality to all concerned authorities, indicating the
involvement of these agencies in violating the Supreme Court
directives.

"Despite advance notification of a fugitive ship's illegal entry
into India by another Government, the Indian authorities chose
to allow "Fredrik". Nothing more needs to be said about the
Indian Environment Ministry's seriousness about protecting India
from becoming the West's dumping ground," said Shailendra
Yashwant of Greenpeace.


ASBESTOS LITIGATION: Competing Bill to $140B Trust Fund Emerges
---------------------------------------------------------------
As the proposed trust fund for asbestos victims gets a beating
at the Senate, a congressman introduces a competing plan that
establishes medical criteria and would eliminate fraud cases and
compensate victims more quickly.

Rep. Chris Cannon, R-Utah, a member of the House Judiciary
Committee, said, "If we just get rid of the exaggerated claims
of defendants, we can handle the problem."

In Rep. Cannon's bill, people would have to prove that they are
truly sick to receive compensation but they do not lose their
right to sue in the future if they do become ill with an
asbestos-related disease.

The proposal won support from a former House Majority Leader
Dick Armey, R-Texas, who currently heads the movement, Freedom
Works, a conservative lobby advocating lower taxes. It has
launched a campaign on conservative talk-radio stations in seven
states that likens the proposed US$140 billion trust fund to a
tax increase.

Rep. Cannon asserted that Republicans and Democrats alike agree
that asbestos litigation has gotten out of hand with literally
tens of thousands of lawsuits, many by people who aren't even
sick. The lawsuits have resulted in more than 70 bankruptcies,
60,000 lost jobs and billions of dollars in lost revenue to the
economy. Between 1940 and 1980, some 27.5 million workers were
exposed to asbestos on the job and almost 19 million were
exposed to high levels over long periods.

Mr. Armey predicted the Senate bill will fail "under its own
weight" and that will leave Rep. Cannon's bill as the most
viable option. In the Senate, the trust fund proposal has
bipartisan support, but many members of the Judiciary Committee
expressed reservations about the bill during the last hearing.
However, he says it may come down to the Senate passing a trust
fund bill and the House passing a medical criteria provisions
bill, and then the two sides working out a compromise.

Fueling criticism for the bill setting up a trust fund, Mr.
Armey said the proposal amounts to a huge tax on businesses that
would offer US$7 billion more to trial lawyers. "It's basically
a government-sponsored slush fund," he said.


ASBESTOS LITIGATION: SC Says Court Erred in Granting Discovery
--------------------------------------------------------------
The Missouri Supreme Court last week rejected a ruling from a
trial court that had ordered Ford Motor Co. to comply with
discovery requests, which the company considered unduly
burdensome since they did not contain geographical, time or
subject matter restrictions.

The family of former Ford employee Roy Dietiker pursued the
suits against Ford and other defendants after his death. Mr.
Dietiker claimed that his lung cancer resulted from exposure to
asbestos products while working at Ford. Mr. Dietiker died while
the suits were pending, but after discovery had been obtained
from Ford.

His relatives filed a wrongful death action against the
automaker and sought additional discovery. Ford didn't comply
with the requests, and Jackson County Circuit Judge W. Stephen
Nixon issued an order compelling production. Ford refused to
comply with the requests, saying that these were overbroad.

The Supreme Court agreed. It wrote, "Plaintiffs are seeking
information and documents regarding every product containing
asbestos that was ever manufactured, sold or distributed in its
102-year history without limitation as to locality or as to the
specific products to which Dietiker was allegedly exposed."

The court directed Judge Nixon to limit discovery in the case to
"relevant" matter not already discovered.


ASBESTOS LITIGATION: Union Carbide Posts $1.6B Liability in 1Q05
----------------------------------------------------------------
Union Carbide Corporation, a subsidiary of Dow Chemical Company,
disclosed in the regulatory filing it submitted to the
Securities and Exchange Commission that the Houston, TX-based
Company has been involved in a large number of asbestos-related
suits filed primarily in state courts during the past three
decades. These suits principally allege personal injury
resulting from exposure to asbestos-containing products and
frequently seek both actual and punitive damages.

The alleged claims primarily relate to products that the global
chemical producer sold in the past, alleged exposure to
asbestos-containing products located on its premises, and its
responsibility for asbestos suits filed against a former
subsidiary, Amchem Products, Inc. In many cases, plaintiffs are
unable to demonstrate that they have suffered any compensable
loss as a result of such exposure, or that injuries incurred in
fact resulted from exposure to the Corporation's products.

Influenced by the bankruptcy filings of numerous defendants in
asbestos-related litigation and the prospects of various forms
of state and national legislative reform, the rate at which
plaintiffs filed asbestos-related suits against various
companies, including the Corporation and Amchem, increased in
2001, 2002 and the first half of 2003. Since then, the rate of
filing has significantly abated. The Corporation expects more
asbestos-related suits to be filed against it and Amchem in the
future, and will aggressively defend or reasonably resolve, as
appropriate, both pending and future claims.  

The resulting study completed by Analysis, Research & Planning
Corporation in January 2005 stated that the undiscounted cost of
resolving pending and future asbestos-related claims against
Union Carbide and Amchem, excluding future defense and
processing costs, through 2017 was estimated to be between about
US$1.5 billion and US$2.0 billion. Based on the low end of the
range in the January 2005 study, the recorded asbestos-related
liability for pending and future claims at December 31, 2004
would be sufficient to resolve asbestos-related claims against
UCC and Amchem into 2019.

Based on the Corporation's review of 2005 activity, the
Corporation determined that no change to the accrual was
required at March 31, 2005.

The asbestos-related liability for pending and future claims was
US$1.6 billion at March 31, 2005 and December 31, 2004. At March
31, 2005, about 38 percent of the recorded liability related to
pending claims and about 62 percent related to future claims. At
December 31, 2004, about 37 percent of the recorded liability
related to pending claims and about 63 percent related to future
claims. The Corporation's receivable for insurance recoveries
related to its asbestos liability was US$636 million at March
31, 2005 and US$712 million at December 31, 2004.


ASBESTOS LITIGATION: Crum & Forster Strengthens Reserves in 2004
----------------------------------------------------------------
A subsidiary of Fairfax Financial Holdings, Crum & Forster
Holdings Corp. strengthened its asbestos, environmental and
other latent reserves by US$100,542 in 2004. The Morristown, NJ-
based Company based this figure on its internal actuarial review
and an independent actuarial firm's ground-up study of the
Company's asbestos reserves.

The Company has exposure to asbestos and environmental claims
arising from the sale of general liability, commercial multi-
peril and umbrella insurance policies, the majority of which
were written for accident years 1985 and prior. Estimation of
ultimate liabilities for these exposures is unusually difficult
due to such issues as whether or not coverage exists, definition
of an occurrence, determination of ultimate damages and
allocation of such damages to financially responsible parties.

Crum & Forster's subsidiaries receive claims asserting alleged
injuries and damages from asbestos and other hazardous waste and
toxic substances and are subject to related coverage litigation.
Currently, it is not possible to predict judicial and
legislative changes and their impact on the future development
of asbestos and environmental claims and litigation. As a result
of these uncertainties, additional liabilities may arise for
amounts in excess of current reserves for asbestos,
environmental and other latent exposures. In each of these areas
of exposure, the Company litigates individual cases when
appropriate and endeavors to settle claims on favorable terms.

Crum & Forster's current ratings are the lowest necessary to
compete in its targeted markets. The Company may not maintain
its financial strength ratings from the rating agencies. A
downgrade or withdrawal of any rating could severely limit or
prevent the Company from writing quality new or renewal
business, securing adequate reinsurance on acceptable terms and
retaining its key management and employees.

A.M. Best has advised the Company that, although it is
encouraged by the improved underlying trends exhibited in its
recent underwriting performance, the ratings outlook is negative
and contingent upon management's ability to ultimately achieve
overall earnings stability, specifically with regard to adequacy
of asbestos reserves, and improved financial flexibility of the
Company's ultimate parent, Fairfax. According to A.M. Best, a
negative outlook indicates that A.M. Best believes that the
rated insurer is experiencing unfavorable financial and/or
market trends relative to its rating level and, if such trends
continue, it has a good possibility of having its rating
lowered.

The Company's ratings are based on a variety of factors, many of
which are outside of its control, including the financial
condition of Fairfax and its affiliates, the financial condition
or actions of parties from which the Company has obtained
reinsurance and factors relating to the sectors in which the
Company or its reinsurers conduct business and the statutory
surplus of its insurance subsidiaries, which is adversely
affected by underwriting losses and dividends paid by them to
Crum & Forster.


ASBESTOS LITIGATION: Hartford to Issue Liabilities Review in 2Q
---------------------------------------------------------------
Like many other insurers, the Hartford Financial Services Group,
Inc. (NYSE: HIG) is facing actions by asbestos plaintiffs
asserting that insurers had a duty to protect the public from
the dangers of asbestos. Asbestos claims relate primarily to
bodily injuries asserted by people who came in contact with
asbestos or products containing asbestos.

The Hartford, CT-based Company wrote several different
categories of insurance contracts that may cover asbestos and
environmental claims. First, the Company wrote primary policies
providing the first layer of coverage in an insured's liability
program. Second, it wrote excess policies providing higher
layers of coverage for losses that exhaust the limits of
underlying coverage. Third, it acted as a reinsurer assuming a
portion of risks previously assumed by other insurers writing
primary, excess and reinsurance coverages. Fourth, it
participated in the London Market, writing both direct insurance
and assumed reinsurance business.

Currently, the Company is performing its regular comprehensive
review of its asbestos liabilities and assumed reinsurance to be
completed in the second quarter of 2005 and expects to perform
its regular comprehensive review of its environmental
liabilities in the third quarter of 2005. If there are
significant developments that affect particular exposures,
reinsurance arrangements or the financial condition of
particular reinsurers, the Company will make adjustments in the
portion of liabilities it expects to cede or in its allowance
for uncollectible reinsurance.

The Company believes that its current asbestos and environmental
reserves are reasonable and appropriate. However, analyses of
future developments could cause the Company to change its
estimates and ranges of its asbestos and environmental reserves,
and the effect of these changes could be material to the
Company's consolidated operating results, financial condition
and liquidity.


ASBESTOS LITIGATION: NSW Publicizes Plans to Educate on Asbestos
----------------------------------------------------------------
Instead of making asbestos safety certificates mandatory, the
New South Wales government opted to instill new measures to
improve community awareness about asbestos in people's homes,
the AAP reports.

Local Government Minister Tony Kelly said that the decision not
to introduce a proposal requiring homeowners to obtain the
certificate when selling their home was because such a scheme
would result in extra costs and delay. He said the certification
does not necessarily reduce the risks associated with asbestos.
He explained that the government's preferred strategy is to make
sure that homeowners get information on the identification and
safe handling of asbestos when they intend to undertake work in
their homes.

Mr. Kelly provided a list of measures that he says, are aimed to
ensure home renovations were undertaken in the safest way
possible. These include training programs on asbestos safety for
owner-builders, warnings on all home building contracts, and
distribution of a brochure on asbestos safety to homeowners when
they applied for an owner-builder permit.

Barry Robson, president of the Asbestos Diseases Foundation of
Australia, said he was disappointed with the government's
decision on not imposing the asbestos certificates. He said, "We
can't understand why Premier [Bob] Carr and his government would
take such decision which is in effect giving away the struggle
to protect our community and prevent more asbestos related
disease and death."


ASBESTOS LITIGATION: Activist Group Demands Total Ban in India
--------------------------------------------------------------
Reacting to news of plans to lift the existing ban on asbestos
in India, Ban Asbestos Network of India is now urging all
ministers, legislators and the public to prevent this from
occurring and instead work towards a complete ban on the trading
of the carcinogenic material.

While blue and brown asbestos are banned, white asbestos
continues to be in use in India. BANI, an alliance of civil
society groups, has been endorsing the total ban of all types of
asbestos and has collaborated with trade union groups to demand
protection of workers and the public. The group pointed out that
those exposed to asbestos could suffer from various respiratory
problems including asbestosis, a disease that leads to scarring
of the lungs, breathing problems and even heart failure.

People working in the manufacture of asbestos products are
exposed to very high fiber concentration at work places. They do
not use gloves, masks and protective clothing, said BANI
activist Gopal Krishna.

Workers and the public who may be exposed to products containing
asbestos must be protected by means of adequate risk management
procedures developed with the active participation of these
people. The rehabilitation of environmentally damaged areas
should be a priority. Asbestos victims and their families must
have prompt medical treatment and equitable compensation.
Empowerment of the victims and their families in participating
in local campaigns and taking direct action should be given a
high priority. These are just some of the demands of the civil
group.

Although this ban on mining of asbestos has not been lifted,
there are plans to do so according to information given by
Minister of State for Coal and Mines Dasari Narayana Rao in the
Lok Sabha, Mr. Krishna said.

"We urge parliament not to revoke the existing ban on asbestos
mining in India," said J. John of Center for Education and
Communication, a leading labor research organization.


ASBESTOS LITIGATION: Owens Corning Posts US$4.2B Loss in 1Q05
-------------------------------------------------------------
Building materials company Owens Corning suffered a huge first-
quarter loss after increasing its recorded reserves for
asbestos-related liability, but said sales rose in the quarter,
Reuters reports.

It posted a loss of US$4.2 billion compared to net income of
US$5 million a year earlier after increasing its recorded
reserves for asbestos-related liability by about US$4.3 billion.

Owens Corning filed for Chapter 11 protection in October 5,
2000, in response to hundreds of thousands of asbestos liability
lawsuits. From 1952 to 1972 Owens Corning produced an asbestos-
containing high-temperature pipe coating called Kaylo.  

The Toledo, Ohio-based Company said its income from continuing
operations, excluding the asbestos charge and US$36 million of
reorganization items, would have been US$97 million compared to
US$39 million a year earlier. Sales in the quarter rose 16% to
US$1.4 billion, with the company reporting strong demand from
all its major markets and higher prices.

"Through a combination of record sales and productivity, we
offset significant increases in energy and raw material costs,"
said Chief Executive Dave Brown.

The increase in recorded reserves for asbestos liability
followed a March 31, 2005 court ruling that Owens Corning owes a
potential US$7 billion to thousands of people sickened or killed
by asbestos used to insulate pipes in homes and offices.

As previously reported in the April 22, 2005 edition of the
Class Action Reporter, Judge John P. Fullam of the U.S. District
Court in Philadelphia, the federal judge overseeing the
bankruptcy proceedings, rejected a request from financial
creditors to reconsider his US$7 billion estimate of the
company's liabilities for asbestos damages.

The estimate, which represents a midpoint between estimates of
opposing creditor groups, is a crucial step in the company's
emergence from Chapter 11 bankruptcy.


ASBESTOS ALERT: AU Workers Refuse to Return to Site After Scare
---------------------------------------------------------------
After the evacuation of more than 100 workers from a
redevelopment site in Brisbane due to an asbestos find, they are
now refusing to return until the site is thoroughly cleaned.
Unions said specialists should have removed the hazardous
material before work started on the former Wool Store building
at Teneriffe.

The contractor, Hutchinson Builders, is converting the site into
a block of luxury apartments.

Men working on an upper level disturbed sheets of asbestos
before realizing the danger they were in. An immediate
evacuation resulted, said Bob Carnegie, from the Builders and
Laborers Federation.

Potentially, all the workers on the site were at risk, said Mr.
Carnegie. Their names will now be placed on an asbestos
register, which would serve as the workers' protection against
the responsible companies if any of the workers contract
asbestos-related disease in the future. The register is expected
to help in any legal cases brought up as a result of this
incident.

Workplace Health and Safety officers have placed a prohibition
order on parts of the project until further notice.

"Hopefully we can start some discussions with Hutchinson's
management and work through a proposal where the asbestos is
removed completely and then our workers will then be given
tests," Mr. Carnegie said.


ASBESTOS ALERT: LA Jury Awards US$3.625M in Case V. Hebert Bros.
---------------------------------------------------------------
Following a two-week trial before Judge James Best of the 18th
Judicial District Court for the Parish of Iberville, the jury
awarded a total of US$3.625 million in actual damages to the
family left by a former Hebert Brothers Engineers Inc. laborer,
according to the press release by Dallas law firm Baron & Budd,
P.C.

The jury found that the Plaquemine, LA-based Company failed to
warn Alfred Watts about the dangers of asbestos exposure while
he worked for the Company from 1963 to 1994. He worked as a
laborer for Hebert Brothers, which did work for The Dow Company
in Plaquemine.

Nearly 40 years after first being exposed to asbestos, Mr. Watts
was diagnosed with asbestos-related lung cancer in June 2001. He
died four months later on October 31, 2001.

Lawrence G. Gettys of Baron & Budd, stood as counsel for Mr.
Watts' surviving family members. Cameron Waddell of Baton Rouge,
La.'s LeBlanc & Waddell, LLP, also represented Mr. Watts' widow,
Rosa Lee Watts, and the couple's adult children.

Hebert Brothers was represented at trial by Edward E. Rundell of
Alexandria, La.'s Gold, Weems, Bruser, Sues & Rundell, APLC.


Company Profile:
Hebert Brothers Engineers Inc
25250 Highway 1 70764
Phone: (225) 343-1600


ASBESTOS ALERT: UK Agency Files Charges Against Demolition Firm
---------------------------------------------------------------
After a lengthy investigation by Environment Agency officers in
Leeds, the agency is pursuing legal action against a Bradford-
based demolition firm, accused of charging inflated prices to
supposedly cover the increased costs of disposing of asbestos
waste at a specially licensed dump site, The Evening Post
reports.

Asbestos was found dumped on a Halifax street, however hundreds
of tons of potentially deadly asbestos are still unaccounted for
and have apparently gone missing in West Yorkshire. A large
proportion of the material the demolition firm gathered from
sites in Leeds and Bradford was never taken to the dump. The
waste was composed largely of bonded, corrugated asbestos, which
if broken up into small pieces, can release harmful fibers.

Paul Glasby, a special enforcement officer at the Environment
Agency, said, "Rubbish is expensive to deal with legally, which
means there is potentially a big profit to be made by
unscrupulous individuals prepared to break the law. Rubbish has
become part of the new currency of crime."

Mr. Glasby's team spent weeks sifting through some of the fly-
tipped waste for clues about the origin of the asbestos. That
led them to trace the alleged culprits before carrying out a
series of raids and making a number of arrests against the still
unnamed company.

It costs more than GBP100 to legally dump each ton of asbestos.
The law requires that waste operators provide the agency with
details so it can track the waste from the demolition site to
the dump. But Mr. Glasby admitted that the agency had yet to
find documentation for hundreds of tons of the substance during
their investigation.

He added that firms allegedly use a number of ploys to dump
unwanted asbestos. He said these included:

(1) Exercising a Government loophole by claiming they are
constructing a golf course or carrying out other so-called
landscaping projects that allow them to bury materials without a
waste management license;

(2) Running supposedly legitimate skip hire and other waste
disposal businesses;

(3) Taking payment for legitimate disposal but then dumping the
contents or unlawfully disposing of the waste by burning it in a
secluded spot releasing toxic fumes into the atmosphere; and

(3) Tricking landowners by passing off construction and
demolition waste as topsoil, and leaving them with the cost and
worry of cleaning up an illegal dump on their own property.

Dumping of waste or fly tipping costs more than a GBP100 million
to clear every year. Recent figures show that there is an
incidence of fly tipping every 35 seconds in England.


ASBESTOS ALERT: Widow of Palace Worker Given GBP177T in Damages
---------------------------------------------------------------
An official at the High Court in London awarded GBP177,900 or
US$318,000 in damages to the widow of a maintenance worker who
died after contracting an asbestos-related lung disease due to
exposure at Buckingham Palace.  

Mary Costello, aged 59, had to wait almost four years for the
judgment after his husband, John, died at the age of 58 in
September 2001 from mesothelioma, a rare and lethal cancer of
the lung linings. She had to stop working to care for her
husband and she sought compensation to cover the cost of his
care and loss of earnings.

Mr. Costello had been employed as a fitter and maintenance
engineer by the Property Services Agency, the state agency that
maintains royal buildings, to work at the palace from 1970 to
1992. He had to strip down the large boilers that heated
Buckingham Palace to repair them. He had to remove the old
asbestos packing and replace it with new asbestos. He also
worked on pipes, which were covered with flaky asbestos. In the
early 1980s, he helped with a task to remove the asbestos at the
palace that started with the boilers and took five years.

Frances McCarthy, the Costellos' lawyer, said that the failure
of company officials to provide protective devices and warnings
that the working conditions could cause injury were "contrary to
legal guidelines." Property Services had previously admitted
liability in the case but failed to provide compensation,
forcing Mr. Costello to go to court, added Ms. McCarthy.

The settlement, before senior High Court official, Master
Whitaker, was made against the Attorney General following an
earlier admission of a breach of duty of care. Master Whitaker
told Mrs. Costello that he was "very happy" that the two sides
had been able to agree the outstanding issues over the amount of
damages, although he was sorry it occurred at the last minute.  

In 1972, the Property Services Agency was set up within the
Department of the Environment to provide other government
departments with property management services, building
construction and maintenance and appropriate supplies.


ASBESTOS ALERT: NZ Island Closed to Public After Asbestos Find
--------------------------------------------------------------
Pending an investigation into the presence of asbestos, Somes
Island, one of the most accessible of New Zealand's predator-
free islands, has been closed since April 29, 2005. The island
is off limits to the public following the discovery of asbestos
flakes from the cement roofs of five buildings associated with
the former animal quarantine facility.

The Department of Conservation closed the island while further
investigations are carried out to determine the extent of
asbestos contamination and the remedial action to be taken.

The Dominion Post East-by-West ferry, which visits the island on
its journeys between Wellington and Day's Bay, will bypass Somes
till it reopens.

The island, also known as Matiu, is a scientific reserve
administered by the Conservation Department. The buildings,
which are part of the former Ministry of Agriculture quarantine
station that closed in 1995, date back to the 1970s when
asbestos was a commonly used building product. DOC is working
with Occupational Safety and Health to develop a hazard control
plan for the island.

Spokesman Peter Simpson said staff had noticed flakes appearing
on the island's roadway over a period of months. A survey by
asbestos testing specialists has revealed the presence of
asbestos in or around the quarantine building, the former
recreation hall, the ova transplant building, and the workshop
and generator sheds.

Consultants had found asbestos in the courtyard, guttering,
window ledges and soil. They had recommended decontaminating the
building and replacing the roofs. Moss and lichen had taken hold
on roof surfaces, exposing a soft fibrous mat and making the
roof unstable, allowing the asbestos inside to escape.

Though the buildings were unused, demolition was unlikely to be
an option because their solid construction would make it
expensive. Demolition could also allow further spread of the
asbestos.

Two departmental staff members live on the island. Mr. Simpson
said one was on leave but the other would remain to maintain the
generator that powered the island's navigation lights.

Meanwhile, a list of people who have spent 10 days or more on
the island over the past 10 years is being compiled. They are
being sent a copy of the OSH-operated Asbestos Exposure
Registration form to fill out and a copy of the OSH fact sheet -
A Guide to the Health and Safety in Employment asbestos
regulations 1998.

For more information please contact Colin Miskelly, phone +64 4
472 5821 (work) or +64 4 479 1662 (home) or Peter Simpson, Phone
+64 4 472 5821 or 025 748 220.


ASBESTOS ALERT: Former Employee Wins Settlement from Zinifex Ltd
----------------------------------------------------------------
A South Australian won compensation in an out-of-court
settlement for an asbestos-related disease contracted as an
employee for Zinifex, one of the world's largest zinc mining and
smelting companies. A pre-trial conference found that the Port
Pirie Zinifex smelter, then known as BHAS, was responsible for
the man now suffering from mesothelioma, ABC NewsOnline reports.

The claimant's legal representative, Jane McDermott, of Slater
and Gordon, said the settlement spared the man the stress and
expense of going to trial. The positive result, she said, should
encourage other asbestos-affected workers to consider taking
legal action.

The former employee, who was not named, has been suffering since
November 2004 from mesothelioma, a rare cancer of the lung
linings. He has been told he faces a life expectancy of nine
months.

A spokesman from Zinifex says the company will not comment on
the final outcome, as the case has not yet been finalized.

Company Profile:
Zinifex Limited
380 St Kilda Road
Melbourne, Victoria 3004
Australia
Phone: +61 3 9288 033
Fax: +61 3 928 8919

Description:
Zinifex Limited is an Australian company that owns and operates
two mines and two smelters in Australia, as well as the Budel
Zinc Smelter in the Netherlands and a zinc smelter in
Clarksville, Tennessee, in the United States. The Company
markets a range of zinc metal, lead metal and associated alloys
in 20 countries, exporting more than 80% of its products
primarily to Asia. In addition, Zinifex owns 50% of Australian
Refined Alloys, an acid battery and lead-recycling business with
battery-recycling facilities in Sydney and Melbourne.


ASBESTOS ALERT: Man Sues Cadbury's over Mother's Asbestos Death
---------------------------------------------------------------
A man whose mother died of an asbestos-related lung disease is
suing confectionery giant Cadbury's for failing to take steps to
warn or protect the health of their workforce, even when in the
1940s, companies knew of the health risks involved in inhaling
asbestos, The Scotsman reports.

David Small's mother, Bronwen Owen Small, from Northfield,
Birmingham, died from mesothelioma in April 2002, at the age of
79. She experienced breathing problems and was diagnosed with
the disease in 2001.

Mr. Small, a 60-year-old former lorry driver, from Lichfield,
Staffordshire, claimed that his mother was exposed to asbestos
fibers when assembling gas masks for a Cadbury's offshoot firm,
Bournville Utilities, during the Second World War. She worked at
the plant from 1940 to 1946.

When Britain stood before Nazi Germany, Bournville Utilities
Ltd., was set up to aid the war effort by channeling some of the
company's engineering and manufacturing expertise into the
production of sub-assemblies for military aircraft, machine
tools for the army, munitions and other wartime equipment. Two
thousand Cadbury employees were redirected, for the duration, to
work in this venture.

Alida Coates, of law firm Irwin Mitchell, which is representing
Mr. Small in his claim, said an inquest found Mrs. Small died
from an industrial disease. She claimed that Mrs. Small was not
provided with any proper respiratory protection nor was she
warned of the dangers of working with asbestos.

Ms. Coates is now appealing for other people who worked at the
firm from 1940 to 1945 to come forward to assist in the claim.
Anyone who worked with her are urged to contact Irwin Mitchell
on 0870 1500 100.

Company Profile:
Cadbury Schweppes plc
25 Berkeley Square
London, W1J 6HB
United Kingdom
Phone: +44 20 7409 1313
Fax: +44 20 7830 5200

Fiscal Year-End     :  December
2004 Sales (mil.)    :  GBP6,704.4
1-Year Sales Growth    :  12.5%
2004 Net Income (mil.)    :  GBP428.7
1-Year Net Income Growth   :  26.5%
2004 Employees     :  58,442
1-Year Employee Growth    :  4.7%

Description:
The Group's principal activities are the manufacture and
distribution for sale of branded beverages and confectionery in
almost 200 countries. In confectionery, the Group has
manufacturing facilities in 25 countries and markets a broad
range of chocolates, gum and sugar confectionery brands in over
170 countries. In beverages, the Group operates both as a
manufacturer and as a licensor selling concentrate and syrup to
independently owned manufacturers to which it also supplies
technical and marketing support.


                  New Securities Fraud Cases


AVAYA INC.: Charles Piven Launches Securities Fraud Suit in NJ
--------------------------------------------------------------
The Law Offices Of Charles J. Piven, P.A. initiated a securities
class action was commenced on behalf of shareholders who
purchased, converted, exchanged or otherwise acquired the common
stock of Avaya, Inc. (NYSE: AV) between October 5, 2004 and
April 19, 2005, inclusive.

The case is pending in the United States District Court for the
District of New Jersey against defendant Avaya 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.

For more details, contact Law Offices Of Charles J. Piven, P.A.
by Mail: The World Trade Center-Baltimore, 401 East Pratt
Street, Suite 2525, Baltimore, Maryland 21202, by Phone:
410-986-0036 or by E-mail: hoffman@pivenlaw.com.


BLUE COAT: Cohen Milstein Launches Securities Lawsuit in N.D. CA
----------------------------------------------------------------
The law firm of Cohen, Milstein, Hausfeld & Toll, P.L.L.C. filed
a securities class action on behalf of its client and on behalf
of other similarly situated purchasers of the securities of Blue
Coat Systems, Inc. (Nasdaq:BCSI) from February 20, 2004 to May
27, 2004, inclusive in the United States District Court for the
Northern District of California.

The Complaint charges the Company and certain of the Company's
executive officers (collectively "defendants") with violations
of federal securities laws. Plaintiff claims defendants'
omissions and material misrepresentations artificially inflated
the Company's stock price, inflicting damages on investors. Blue
Coat is a developer and distributor of "proxy"' software, which
helps corporations control employee access to Internet websites
and to potentially dangerous downloadable files.

The Complaint alleges that, from its founding in 1996 through
the beginning of the Class period, Blue Coat had never turned a
profit. The Complaint further alleges that when, on February 19,
2004, Blue Coat announced an unprecedented increase in sales and
its first profitable quarter, defendants stated in a conference
call a belief that gross margins in the following quarter would
fall in the range of 68-69%. The stock price subsequently rose
to $38.27 on February 20, 2004, on unusually high volume of 1.3
million shares. The Complaint charges that unbeknownst to
investors, these gross margin calculations did not reflect any
realistic expectations as to what could be achieved, given
material business issues of which the defendants would have been
aware. Soon after the February 19 conference call, certain
defendants began selling large blocks of shares, at prices
ranging from $40-52 per share.

On May 27, 2004, Blue Coat made an announcement that its
purported gross margin calculations had fallen short for the
fourth quarter of fiscal 2004 and profitability was lower than
that achieved in the third quarter. The next trading day, May
28, 2004, Blue Coat shares fell $11.45 per share to close at
$27.80 per share. By August 2004, Blue Coat shares fell as low
as $10 per share before recovering to approximately the $20
level.

In the summer of 2004, the SEC began an informal inquiry into
trading of Blue Coat stock, which the Company initially
characterized as involving only "individuals or organizations
outside the company." By early 2005, however, the SEC had
upgraded its inquiry to a formal investigation. Instead of only
individuals or organizations outside the Company, the SEC was
now focusing on "whether certain present or former officers,
directors, employees, affiliates or others made intentional or
non-intentional selective disclosure of material nonpublic
information, traded in the Company's stock while in possession
of such information, or communicated such information to others
who thereafter traded in the Company's stock."

For more details, contact Steven J. Toll, Esq. or Robert Smits
of Cohen, Milstein, Hausfeld & Toll, P.L.L.C. by Mail: 1100 New
York Avenue, N.W. West Tower B Suite 500 Washington, D.C. 20005
by Phone: 888-240-0775 or 202-408-4600 or by E-mail:
stoll@cmht.com or rsmits@cmht.com.


MARTEK BIOSCIENCES: Schiffrin & Barroway Lodges Stock Suit in MD
----------------------------------------------------------------
The law firm of Schiffrin & Barroway, LLP initiated a securities
class action in the United States District Court for the
District of Maryland on behalf of all securities purchasers of
Martek Biosciences Corporation (Nasdaq: MATK) between December
9, 2004 and April 27, 2005 inclusive.

The complaint charges the Company, Henry Linsert, Jr., and Peter
L. Buzy 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 due to the Company's productions issues in the
         past, the defendants put in place a system by which
         they allowed their customers to build a moderate level
         of safety stock inventory;

     (2) that throughout the fourth quarter of fiscal year 2004
         and the first quarter of fiscal year 2005, defendants
         manipulated its channels of distribution by flooding
         its major customers with inventory in excess of their
         allotted levels, so that Martek could meet its
         financial numbers and complete an $81.4 million stock
         offering;

     (3) as a result of defendants' channel manipulation,
         Martek's financial results were materially inflated;
         and

     (4) that as a result of the above, the Company's statements
         about its fiscal year 2005 financial performance were
         lacking in any reasonable basis when made.

On April 27, 2005, after the market closed, Martek provided an
update of its earnings estimates and production plan for fiscal
year 2005. Martek revealed it anticipated a decrease in third
quarter sales. News of this shocked the market. Shares of
Martek, on April 28, 2005, fell $32.49 per share, or 45.9
percent, on unusually heavy trading volume.

For more details, contact Marc A. Topaz, Esq. or Darren J.
Check, Esq. by Mail: 280 King of Prussia Road Radnor, PA 19087
by Phone: 1-888-299-7706 (toll-free) or 1-610-667-7706 or by E-
mail: info@sbclasslaw.com.


R&G FINANCIAL: Wechsler Harwood Files Securities Suit in S.D. NY
----------------------------------------------------------------
Wechsler Harwood LLP initiated a securities class action on
behalf of all purchasers of the common stock of R&G Financial
Corporation (NYSE:RGF) between April 21, 2003 and April 26,
2005, both dates inclusive.  The action, entitled Reikes v. R&G
Financial Corp., Case No. 05 CV 4265, is pending in the United
States District Court for the Southern District of New York, and
names as defendants, the Company, Chairman, Chief Executive
Officer, and director, Victor J. Galan, its Vice Chairman and
President, Ramon Prats, and its Executive Vice President, and
Chief Financial Officer, Joseph Sandoval.

The Complaint charges defendants with violations of Sections
10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule
10b-5 promulgated thereunder. Specifically, the Complaint
alleges that defendants issued a series of materially false and
misleading statements contained in press releases and filings
with the Securities and Exchange Commission during the Class
Period, including:

     (1) that R&G Financial's earnings quality had been
         significantly weakened by the Company's use of overly
         aggressive assumptions to generate gain on sale income,
         as well as to boost the value it retained in its
         interest only ("IO") residuals in securitization
         transactions;

     (2) that R&G Financial's methodology used to calculate the
         fair value of its IO residual interests retained in
         securitization transactions was incorrect and caused
         the Company to overstate its financial results by at
         least $50 million;

     (3) that the Company's financial statements were not
         prepared in accordance with Generally Accepted
         Accounting Principles ("GAAP");

     (4) that the Company lacked adequate internal controls and
         was therefore unable to ascertain the true financial
         condition of the Company; and

     (5) that as a result, the value of the Company's net income
         and financial results were materially overstated during
         the Class Period.

On March 25, 2005, after the market closed, R&G Financial
announced that it would restate its financial results for fiscal
years 2003 and 2004. News of this shocked the market. Shares of
R&G Financial, on April 26, 2005, fell $8.14 per share, or 35.12
percent, to close at $15.04 on unusually heaving trading volume.
After the market closed on April 26, 2005, R&G Financial issued
a press release announcing that it was also now subject to an
informal SEC probe relating to its restatement announcement.

For more details, contact Craig Lowther, Wechsler Harwood LLP by
Mail: 488 Madison Avenue, 8th Floor New York, New York 10022
Phone: (877) 935-7400 or by E-mail: clowther@whesq.com.


R&G FINANCIAL: Lerach Coughlin Launches Securities Lawsuit in NY
----------------------------------------------------------------
Lerach Coughlin Stoia Geller Rudman & Robbins LLP initiated a
securities class action in the United States District Court for
the Southern District of New York on behalf of purchasers of R&G
Financial Corp. (NYSE:RGF) publicly traded securities during the
period between April 21, 2003 and April 25, 2005.

The complaint charges the Company and certain of its officers
and directors with violations of the Securities Exchange Act of
1934. R&G is a diversified financial holding company with
operations in Puerto Rico and the United States, providing
banking, mortgage banking, investments, consumer finance and
insurance through its wholly-owned subsidiaries.

The complaint alleges that during the Class Period, defendants
made materially false and misleading statements regarding the
Company's business and prospects. Then, on April 25, 2005, the
Company announced that after consultation with its independent
accountants and firms with experience in valuation issues, it
had "determined to review the independent market valuations used
in valuing residual interests retained in securitization
transactions of the Company. The Company stated that it is
revising its valuation methodology used in valuing these
interests that are presented in the Company's audited
consolidated financial statements.... The Company is considering
alternative valuation methodologies. Depending on the valuation
methodology used, the Company has preliminarily estimated that
the fair value of its residual interests would be reduced as of
December 31, 2004 by an amount equal to between approximately
$90 million to $150 million ($55 million and $90 million after
taxes, respectively)."

According to the complaint, the true facts, which were known by
each of the defendants but concealed from the investing public
during the Class Period, were as follows:

     (1) the Company was using manipulative accounting practices
         that materially overstated its net income, net gain on
         mortgage loan sales and net capital; and

     (2) the Company was using ineffective risk management and
         hedging strategies against the increasing risk of
         rising interest rates.

As a result of these false statements, R&G's stock price traded
at inflated levels during the Class Period, increasing to as
high as $40 per share. However, after the truth began to be
revealed in R&G's press release on April 25, 2005, the Company's
shares fell to below $15 per share.

For more details, contact William Lerach or Darren Robbins of
Lerach Coughlin by Phone: 800-449-4900 or 619-231-1058, or by E-
mail: wsl@lerachlaw.com or visit the Website:
http://www.lerachlaw.com.

                            *********


A list of Meetings, Conferences and Seminars appears in each
Wednesday's edition of the Class Action Reporter. Submissions
via e-mail to carconf@beard.com are encouraged.

Each Friday's edition of the CAR includes a section featuring
news on asbestos-related litigation and profiles of target
asbestos defendants that, according to independent researches,
collectively face billions of dollars in asbestos-related
liabilities.

                            *********


S U B S C R I P T I O N   I N F O R M A T I O N

Class Action Reporter is a daily newsletter, co-published by
Bankruptcy Creditors' Service, Inc., Fairless Hills,
Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland
USA.   Glenn Ruel Senorin, Aurora Fatima Antonio and Lyndsey
Resnick, Editors.

Copyright 2005.  All rights reserved.  ISSN 1525-2272.

This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding, electronic
re-mailing and photocopying) is strictly prohibited without
prior written permission of the publishers.

Information contained herein is obtained from sources believed
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The CAR subscription rate is $575 for six months delivered via
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