/raid1/www/Hosts/bankrupt/CAR

/raid1/www/Hosts/bankrupt/CAR_Public/050617.mbx C L A S S A C T I O N R E P O R T E R Friday, June 17, 2005, Vol. 7, No. 119 Headlines ABERCROMBIE & FITCH: CA Court Grants Final Settlement Approval ABERCROMBIE & FITCH: Seeks Approval For WA Wardrobing Suit Pact ACTIVISION INC.: CA Court Dismisses Consolidated Securities Suit AUGUST TECHNOLOGY: MN Suits Dismissed Due to Amendment Failure BOEING CO.: Workers Plans Age Discrimination Suit V. Firm, Onex BROOKSTONE INC.: Plaintiffs Appeal CA Suit Settlement Approval CABLE & WIRELESS: Lawsuit Settlement Hearing Set July 22, 2005 CANADA: 500 Crocus Shareholders Discuss Suit Over Troubled Fund CANADA REVENUE: Firms File Suit Over Costs of Auctioned Vehicles COMPUWARE CORPORATION: Discovery Proceeds in MI Securities Suit ESTEE LAUDER: FL Resident Launches Deceptive Advertising Lawsuit FEDERATED DEPARTMENT: NY Court Dismisses Securities Fraud Suit FORD MOTOR: Recalls Pickup Trucks Due to Fuel Systems Defect FORD MOTOR: Recalls Vehicles Due to Electrical Systems Defect GANDER MOUNTAIN: Plaintiffs Seek Consolidation of MN Stock Suits GENESCO INC.: Working For Settlement of CA Overtime Wage Suits LANTRINIX INC.: CA Court Approves Settlement of Derivative Suit LIGHTSPAN INC.: Plaintiffs Seek Suit Dismissal Reconsideration LION PAVILION: Recalls Dried Cabbages Due to Undeclared Sulfites MARSH & MCLENNAN: Faces Consolidated ERISA Fraud Lawsuit in NY MARTEK BIOSCIENCES: Shareholders Launch Stock Fraud Suits in MD MARVELL TECHNOLOGY: Suit Fairness Hearing Set January 2006 in NY MEN'S WEARHOUSE: Reaches Settlement For CA Overtime Wage Lawsuit MEN'S WEARHOUSE: Reaches Settlement For CA Consumer Fraud Suit MICHAELS STORES: TX Court Dismisses Consolidated Securities Suit MICHAELS STORES: Plaintiffs Seek Certification For Overtime Suit NEIMAN MARCUS: Shareholders Sue V. Newton Acquisition Merger PAT & OSCAR'S: Suit Over E.coli in CA Restaurants Still Pending PFIZER INC.: Schatz & Nobel Commences ERISA Violations Lawsuit POSSIS MEDICAL: Shareholders Launch Securities Fraud Suits in MN QUALITEST PHARMACEUTICALS: Recalls Syringes Due to Mislabeling SHARPER IMAGE: Shareholders Launch Securities Fraud Suits in CA STEWART ENTERPRISES: CA Consumers Launch "Funeral Rule" Lawsuit STEWART ENTERPRISES: Consumers Launch Fraud Lawsuits in TN, CA TEXAS: Attorneys in Medicaid Case Sum Up Arguments Before Judge TOYS "R" US: Asks DE Court To Dismiss Suit V. Global Toys Merger WAL-MART STORES: Recalls 26T Frog Soft Gyms Due to Injury Hazard WHITEHALL JEWELLERS: IL Court Mulls Dismissal of Securities Suit YAMAHA MOTOR: Recalls 46T Motorcycles For Passenger Seat Defect Asbestos Alert ASBESTOS LITIGATION: Columbus McKinnon Shows Liability Estimates ASBESTOS LITIGATION: Longview Fibre Co Faces Claims in IL and MO ASBESTOS LITIGATION: General Cable Has 16,400 Non-maritime Cases ASBESTOS LITIGATION: Victim's Family Campaigns for Medical Study ASBESTOS LITIGATION: Contractor Insists Rubble Is Asbestos-free ASBESTOS LITIGATION: UK Council Urges Firms to Comply with Rules ASBESTOS LITIGATION: HSE to File Charges Against Derby Council ASBESTOS LITIGATION: UK Locals Alarmed Over Dumped Bags on Road ASBESTOS LITIGATION: UK Navy Stoker Dies from Asbestos Exposure ASBESTOS LITIGATION: NSW Queen Honors Asbestos Victims' Advocate ASBESTOS LITIGATION: Toxins at Power Station Alarm Australians ASBESTOS LITIGATION: UK Asbestos Claims Seen to Rise Until 2015 ASBESTOS LITIGATION: UK Inquest Proves Death was Work-related ASBESTOS LITIGATION: MT School Sounds Alarm After Asbestos Find ASBESTOS LITIGATION: PCI Lays Grounds for Opposing Asbestos Bill ASBESTOS LITIGATION: FL Law's Medical Criteria Meet Challenges ASBESTOS LITIGATION: DEP to Monitor Remediation of PA Property ASBESTOS LITIGATION: Trade Unions Seek Global Ban on Asbestos ASBESTOS LITIGATION: EPA Warns of Soil Contamination on MT Road ASBESTOS LITIGATION: MP Fears Rise in Claims Filed by Ex-miners ASBESTOS LITIGATION: MN Appeals Court Reverses Ruling V. API Inc ASBESTOS LITIGATION: Residents Fear Health Risk from Abatement ASBESTOS LITIGATION: Asbestos Roofs of Garages Pose Health Risks ASBESTOS LITIGATION: Aussie Urges Study on Asbestos-Lined Pipes ASBESTOS LITIGATION: KY County Residents Plan to Reject Landfill ASBESTOS LITIGATION: A.P.I. Files Amended Plan of Reorganization ASBESTOS LITIGATION: UK Prime Minister Backs Global Asbestos Ban ASBESTOS LITIGATION: Toxic Exposure Caused Navy Officer's Death ASBESTOS LITIGATION: ABB to Submit Settlement Plan on June 23 ASBESTOS LITIGATION: Traders Watch Cape PLC for Settlement Plans ASBESTOS LITIGATION: OK Rep. Asks for Scoring of Asbestos Deal ASBESTOS LITIGATION: Business Group Aims to Expose Flaws in Bill ASBESTOS LITIGATION: Esso Makes GBP90T Settlement with Ex-worker ASBESTOS LITIGATION: Widow Urges More Medical Research in the UK ASBESTOS ALERT: UT Restaurant Files Suit V. Far West Roofing Inc ASBESTOS ALERT: GA Court Reverses in Landers v. Medical Center ASBESTOS ALERT: EPA Imposes $3T Fine on CA Demolition Contractor New Securities Fraud Cases BOMBARDIER INC.: Schoengold Sporn Lodges Amended Complaint in NY BROCADE COMMUNICATIONS: Wechsler Harwood Lodges Stock Suit in CA CRAY INC.: Milberg Weiss Lodges Securities Fraud Suit in W.D. WA DITECH COMMUNICATIONS: Milberg Weiss Files Securities Suit in CA DITECH COMMUNICATIONS: Schatz & Nobel Lodges Stock Lawsuit in CA DREAMWORKS ANIMATION: Wechsler Harwood Lodges Stock Suit in CA MAGMA DESIGN: Charles J. Piven Files Securities Fraud Suit in CA OCA INC.: Pomerantz Haudek Lodges Securities Fraud Lawsuit in LA POSSIS MEDICAL: Reinhardt Wendorf Files Securities Lawsuit in MN STOCKERYALE INC.: Leo W. Desmond Lodges Securities Lawsuit in NH TIBCO SOFTWARE: Wechsler Harwood Lodges Securities Lawsuit in CA WILLBROS GROUP: Baron & Budd Lodges Securities Fraud Suit in TX ********* ABERCROMBIE & FITCH: CA Court Grants Final Settlement Approval -------------------------------------------------------------- The United States District Court for the Northern District of California granted final approval to the settlement of the to the settlement of three employee class actions filed against Abercrombie & Fitch Co., alleging discrimination in hiring or employment decisions due to race, national origin and/or gender. The first suit, styled "Eduardo Gonzalez, et al. v. Abercrombie & Fitch Co.," was filed on June 16, 2003 in the United States District Court for the Northern District of California. The plaintiffs subsequently amended their complaint to add A&F California, LLC, Abercrombie & Fitch Stores, Inc. and A&F Ohio, Inc. as defendants. The plaintiffs allege, on behalf of their purported class, that they were discriminated against in hiring and employment decisions due to their race and/or national origin. The plaintiffs seek, on behalf of their purported class, injunctive relief and unspecified amounts of economic, compensatory and punitive damages. A second amended complaint, which added two additional plaintiffs, was filed on January 9, 2004. The defendants filed an answer to the second amended complaint on January 26, 2004. A third amended complaint was filed on June 10, 2004, restating the original claims and adding two individual, but not class, claims of gender discrimination. The defendants filed an answer on June 21, 2004. On November 8, 2004, the plaintiffs filed a fourth amended complaint, adding an additional plaintiff and claims on behalf of those who asserted they were discriminated against in hiring and employment decisions as managers due to their race and/or national origin. On November 11, 2004, the defendants answered the fourth amended complaint. Two other class action employment discrimination lawsuits have been filed in the United States District Court for the Northern District of California, both on November 8, 2004. In "Elizabeth West, et al. v. Abercrombie & Fitch Stores, Inc., et al.," the plaintiffs allege gender (female) discrimination in hiring or employment decisions and seek, on behalf of their purported class, injunctive relief and unspecified amounts of economic, compensatory and punitive damages. The other was brought by the Equal Employment Opportunity Commission (the "EEOC") and alleges race, ethnicity and gender (female) discrimination in hiring or employment decisions. The EEOC complaint seeks injunctive relief and, on behalf of the purported class, unspecified amounts of economic, compensatory and punitive damages. On November 8, 2004, the Company signed a consent decree settling these three related class action discrimination lawsuits, subject to judicial review and approval. The monetary terms of the consent decree provide that the Company will set aside $40.0 million to pay to the class, approximately $7.5 million for attorneys' fees, and approximately $2.5 million for monitoring and administrative costs to carry out the settlement. As part of the consent decree, the Company also agreed to implement a series of programs and initiatives that are designed to achieve greater diversity throughout its stores. The Consent Decree (settlement agreement) contains provisions related to the recruitment, hiring, job assignment, training, and promotion of Abercrombie & Fitch, Hollister, and abercrombie kids employees. The Decree is effective immediately, pursuant to the Court's order. An appointed Monitor will regularly evaluate and report on Abercrombie's compliance with the provisions in the Consent Decree. These provisions include: (1) "Benchmarks" for hiring and promotion of women, Latinos, African Americans, and Asian Americans. These benchmarks are goals, rather than quotas, and the Company will be required to report on its progress toward these goals at regular intervals; (2) A prohibition on targeting fraternities, sororities, or specific colleges for recruitment purposes; (3) Advertising of available positions in publications targeting minorities of both genders; (4) A new Office and Vice President of Diversity, responsible for reporting to the CEO on the Company's progress toward fair employment practices (the Office has already been created, and the VP has been hired and begun work); (5) The hiring of 25 recruiters who will focus on and seek women and minority employees. (At least 24 of the 25 have already been hired, and are working.); (6) Equal Employment Opportunity (EEO) and Diversity Training for all employees with hiring authority; (7) Revision of Performance Evaluations for managers, making progress toward diversity goals a factor in their bonuses and compensation; (8) A new internal complaint procedure; and (9) Company marketing materials will reflect diversity by including members of minority racial and ethnic groups The preliminary approval order was signed by Judge Susan Illston of the United States District Court for the Northern District of California on November 16, 2004 and, after a fairness hearing, Judge Illston signed a final approval order on April 14, 2005. The suit is styled "Gonzalez et al v. Abercrombie & Fitch Co. et al., case no. 3:03-cv-02817," filed in the United States District Court for the Northern District of California, under Judge Susan Illston. Representing the Company is Thomas Brennan Ridgley of Vorys Sater Seymour & Pease LLP, 52 East Gay Street, P.O. Box 1008 Columbus, OH 43216-1008 Phone: (614) 464-6229 Fax: 614-464-6350 E-mail: tbridgley@vssp.com. Lead counsel for the plaintiffs is Thomas A. Saenz of the Mexican American Legal Defense and Educational Fund, 634 South Spring Street, 11th floor Los Angeles, CA 90014 Phone: 213/629-2512 Fax: 213/629-0266 E-mail: tsaenz@maldef.org. ABERCROMBIE & FITCH: Seeks Approval For WA Wardrobing Suit Pact --------------------------------------------------------------- Parties filed a joint motion for preliminary approval of the settlement of the class action filed against Abercrombie & Fitch Co. in the Washington Superior Court of King County, over the Company's alleged "wardrobing" policy. In 2003, an action was filed on behalf of a purported class of employees and former employees of the Company alleging that the Company required its employees to purchase and wear specified clothes during specified times in violation of Washington law and seeking, on behalf of the purported class, injunctive relief and unspecified amounts of economic and liquidated damages. The Company has filed an answer in this legal proceeding. The plaintiffs filed, and the Company opposed, a motion to certify a class of employees in the State of Washington. The trial court granted the plaintiffs' motion and the Company has commenced a discretionary appeal thereof. The parties have agreed to a settlement of this matter, which must be approved by the trial court. The parties filed a joint motion for preliminary approval of the settlement on or about June 6, 2005. ACTIVISION INC.: CA Court Dismisses Consolidated Securities Suit ---------------------------------------------------------------- The United States District Court for the Central District of California dismissed the consolidated securities class action filed against Activision, Inc. and certain of its current and former officers and directors. On March 5, 2004, a class action lawsuit was filed, asserting claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 based on allegations that the Company's revenues and assets were overstated during the period between February 1, 2001 and December 17, 2002. The Construction Industry and Carpenters Joint Pension Trust for Southern Nevada filed the suit, purporting to represent a class of purchasers of Company stock. Five additional purported class actions have subsequently been filed by Gianni Angeloni, Christopher Hinton, Stephen Anish, the Alaska Electrical Pension Fund and Joseph A. Romans asserting the same claims. Consistent with the Private Securities Litigation Reform Act (PSLRA), the court appointed lead plaintiffs, consolidating the six putative securities class actions into a single case. In an Order dated May 16, 2005, the court dismissed the consolidated complaint because the plaintiffs failed to satisfy the heightened pleading standards of the PSLRA. The court did, however, give the lead plaintiffs leave to file an amended consolidated complaint within 30 days of the order. The suits are being coordinated in the "In Re Activision, Inc Securities Litigation, lead docket 2:04-cv-01501-PA-E," filed in the United States District Court for the Central District of California, Western Division, under Judge Percy Anderson, referred to Magistrate Judge Charles F. Eick. Plaintiffs are Construction Industry and Carpenters Joint Pension Trust for Southern Nevada, on Behalf of Itself and All Others Similarly Situated, Plumbers and Pipefitters National Pension Fund, Logan Capital Management, Inc. and Trust Mark Group. Law firms for the plaintiffs are: (1) Darren J. Robbins of Lerach Coughlin Stein and Robbins, Mail: 401 B Street, Suite 1700 San Diego, CA 92101-4297 Phone: 619-231-1058 E-mail: Denisey@lcsr.com (2) Jason Robert Llorens, Jonathan Behar and William S. Lerach of Lerach Coughlin Stoia and Robbins, Mail: 355 South Grand Avenue, Suite 4170 Los Angeles, CA 90071 Phone: 213-617-9007 (3) Daniel E. Bacine, David E. Robinson, Leonard Barrack of Barrack Rodos and Bacine, Mail: 3300 Two Commerce Square, 2001 Market Street, Philadelphia, PA 19103 Phone: 215-963-0600 (3) John L. Haeussler, Marisa Livesay, Samuel L. Ward, Stephen R. Basser of Barrack Rodos and Racine, Mail: 402 West Broadway, Suite 850 San Diego, CA 92101, Phone: 619-230-0800 (4) Christopher Kim and Lisa Yang of Lim Ruger & Kim, Mail: 1055 W 7TH St, Ste 2800, Los Angeles, CA 90017, Phone: 213-955-9500, Email: Ckim@lrklawyers.com (5) Marc A. Topaz and Richard A. Maniskas of Schiffrin and Barroway, Mail: Three Bala Plaza East, Suite 400 Bala Cynwyd, PA 19004, Phone: 610-667-7706, Fax: 610-667- 7056 (6) Aaron L Brody and Jules Brody of Stull Stull and Brody Mail: 6 East 45TH Street New York, NY 10017, Phone: 212-687-7230 (7) Joseph H Weiss of Weiss and Yourman, Mail: 551 Fifth Avenue, New York, NY 10176, Phone: 212-682-3025, Fax: 212-682-3010 (8) Michael D Braun of Stull Stull and Brody, Mail: 10940 Wilshire Blvd, Suite 2300, Los Angeles, CA 90024, Phone: 310-209-2468 Email: Service@secfraud.com Lawyers for the defendants are: (i) Harriet S Posner and Robert F. Lemoine, Mail: Skadden Arps Slate Meagher and Flom, 300 South Grand Avenue Los Angeles, CA 90071-3144, Phone: 213-687-5000 Fax: 213- 687-5600 E-mail: lacefax@skadden.com (ii) James E Lyons of Skadden Arps Slate Meagher and Flom 4 Embarcadero Center, Suite 3800 San Francisco, CA 94111, Phone: 415-984-6400 Fax: 415-984-2698 AUGUST TECHNOLOGY: MN Suits Dismissed Due to Amendment Failure -------------------------------------------------------------- Bloomington-based August Technology Inc. said that two shareholder class action lawsuits against the company, which claimed the board breached its duties by agreeing to a stock- trade merger valued at $150 million with Nanometrics Inc. of Milpitas, California, in the face of two unsolicited, higher- valued offers, was dismissed, The Minneapolis Star Tribune reports. The Company, considered a leader in semiconductor testing equipment, is talking with one of those companies under terms of the merger agreement. About half of August's 300 employees work at its headquarters in Bloomington. Court documents revealed that the Nanometrics merger agreement was announced January 21. Six days later, another competitor, Rudolph Technologies of Flanders, New Jersey, offered $185 million cash and stock for August. In February, KLA-Tencor Corporation of San Jose, California, offered $205 million in cash. Company CFO Stan Piekos told the Star Tribune, the suit was dismissed after the plaintiffs failed to amend their complaint by June 9 to say that the company, not the shareholders, should be suing the board. A court-approved committee found that the board had not neglected its fiduciary duty, he added. As previously reported in the February 4, 2005 edition of the Class Action Reporter, the suit, which was filed in Hennepin County District Court in Minneapolis, came eight days after Rudolph Technologies Inc., which makes equipment to inspect semiconductors for defects, issued a counteroffer for August Technology, which makes semiconductor equipment. The lawsuit noted the share price of August fell 13 percent from $9.15 to $7.99 when the proposed merger with Milpitas, California-based Nanometrics was announced January 21. The suit claims that when Rudolph made its competing bid on January 27, the share price jumped 18 percent. The lawsuit also claims that the merger agreement requires any company that makes a counteroffer to August to sign a confidentiality agreement that would prevent that company from making a subsequent offer directly to August shareholders. That same agreement, the suit contends, also requires August to notify Nanometrics of the specific terms of any counteroffers, including showing Nanometrics any relevant documents or letters. The suit further contends that if August pulls out of the merger, it must pay Nanometrics an $8.3 million "termination fee" that represents about 5 percent of the value of the merger. The suit was filed by an August stockholder identified as David Richard, who is represented by Schiffrin & Barroway, a Philadelphia-area law firm that specializes in class-action suits. Company officials said that August Technology agreed to merge with Nanometrics to create a new company with better long-term prospects selling a wider product line for the semiconductor and flat-panel display industries. The deal would create a $140 million company with each Nanometrics share of stock swapped for one of the new company. August shareholders would receive 0.6401 share of the new firm for each August share, The Tribune reports. However, despite the dismissal, Mr. Piekos told the Tribune that a Department of Justice competitiveness investigation launched when Rudolph and KLA-Tencor made their offers continues. BOEING CO.: Workers Plans Age Discrimination Suit V. Firm, Onex --------------------------------------------------------------- Some workers laid off from The Boeing Company (NYSE: BA) are planning to file a class action lawsuit claiming age discrimination, The KAKE News reports. The former employees claim mostly older workers who lost their jobs when Boeing was sold to Canada-based Onex Corporation. A letter that was sent out by a local lawyer this week, which was later obtained by KAKE News, was served as official notice to Boeing and Onex that a class action lawsuit will be filed. The letter claims that the sale "targeted and led to the illegal displacement of individuals above the age of 40." It also calls for the companies to preserve all documents related to the sale, purchase or any other financial transactions since 1999. Additionally, it states, "the companies should immediately suspend any computer system purging activities that might cause the destruction of such evidence." More than 1,200 workers received layoff notices from Onex. The lawyer filing the claim told KAKE News that more than 100 of them have joined the class action suit so far. The workers though are not the only ones to complain about how Boeing and Onex handled the whole deal. The National Labor Relations Board is now investigating the companies after receiving complaints from SPEEA and 11 laid-off workers. BROOKSTONE INC.: Plaintiffs Appeal CA Suit Settlement Approval -------------------------------------------------------------- Plaintiffs appeal the California Superior Court for the County of Los Angeles' approval of the settlement for a class action filed against Brookstone, Inc. on behalf of current and former managers and assistant managers of its California stores. The suit alleges that the plaintiffs were improperly classified as exempt employees. The lawsuit sought damages including overtime pay, restitution and attorneys' fees. On August 15, 2003, a settlement agreement was finalized that included a maximum Company payment of $1.5 million. On May 5, 2004, the California Superior Court, County of Los Angeles granted final approval to the parties' settlement agreement and ordered that distributions be made pursuant to the agreement. However, on July 6, 2004, a class member who objected to the final approval of the settlement filed an appeal of the Superior Court's May 5, 2004 order. The objecting class member filed her opening appellate brief on or about May 2, 2005. The Company has requested an extension of time to file its opening appellate brief, and anticipates that its opening brief will be due on or about July 15, 2005. At this time, a hearing on the appeal has not yet been scheduled. Unless the parties agree to alternative arrangements, settlement funds will not be distributed until the appeal is resolved. CABLE & WIRELESS: Lawsuit Settlement Hearing Set July 22, 2005 -------------------------------------------------------------- The United States District Court for the Eastern District of Virginia will hold a fairness nearing for the proposed $7 million settlement in the matter: In re Cable & Wireless PLC Securities Litigation, No. 02-1860-A, on behalf of all persons or entities who acquired the publicly traded securities of the firm from August 6, 1999 through December 6, 2002. The hearing will be held before the Honorable Gerald Bruce Lee in the United States District Court for the Eastern District of Virginia, Albert V. Bryan U.S. Courthouse, 401 Courthouse Square, Alexandria, VA, 22314 at 10:00 a.m. on July 22, 2005. For more details, contact Cable & Wireless plc Securities Litigation, c/o The Garden City Group, Inc., Claims Administrator, P.O. Box 9000 #6317, Merrick, NY, 11566-9000, Phone: 800-293-9236 OR Jeffrey N. Leibell, Esq. of Bernstein Litowitz Berger & Grossmann LLP, Phone: +1-800-380-8496, Web site: http://www.blbglaw.comOR Jeffrey S. Nobel, Esq. of Schatz & Nobel, P.C., Phone: +1-800-797-5499, Web site: http://www.snlaw.net. CANADA: 500 Crocus Shareholders Discuss Suit Over Troubled Fund --------------------------------------------------------------- Approximately 500 angry shareholders in the troubled Crocus Investment Fund met recently to lay the groundwork for a class action lawsuit, which may target everyone from the fund's former directors to the Manitoba government, The Canadian Press reports. Bernie Bellan, one of the shareholders who are wondering how much of their investment is left following the labor-sponsored venture fund's sudden decline, spearheaded the meeting, the Canadian Press reports. He told the crowd, "We're all banding together now because we've all come under the same sad fate. We trusted those figures that were shown to us." The Crocus fund was set up by the Manitoba government in the early 1990s but was run independently. It suddenly halted trading last December as questions arose about the true value of the fund's assets. The fund had issued a $15-million write down in its value weeks earlier, and soon announced a further write down of $46 million. Shares that were sold as high as $15 suddenly dropped to an estimated $7 worth. As previously reported in the May 23, 2005 edition of the Class Action Reporter, Mr. Bellan, secretary for the Crocus Investors Association and other members will be seeking damages in the range of $75 million or more. Mr. Bellan told the Canadian Press the statement of claim, which is the first step in the planned lawsuit, would be filed after the release of the Manitoba auditor general's probe into the operations of the Crocus Investment Fund. Mr. Bellan added that the shareholders are seeking reimbursements for the write down in the share's value since trading was suspended in December. So far, he has estimated that amount at $75 million, and the suit, according to him, will have to prove that amount is due to wrongful valuations. He added, "We don't have to name an amount (of damages) in the suit. It could be much higher." Last month, the much-anticipated report by Jon Singleton was released. That report found that the fund's directors misled shareholders by overstating the fund's value. The report also found that the Manitoba government failed to respond to warning signs that the fund was headed for trouble as far back as 2002. The Manitoba Securities Commission and police are now investigating the fund. Some of the people who attended the recent meeting though expressed concern that there might not be much money left to recoup, because fund money is being used to defend former Crocus directors in the securities commission probe. Mr. Bellan told CP that it is too early to name who will be targeted in the lawsuit, but pointed to the auditor's report as providing a list of people who should be held responsible. In the meantime, while the lawsuit is being prepared, Mr. Bellan started a website to allow shareholders to register to be part of the class action suit. CANADA REVENUE: Firms File Suit Over Costs of Auctioned Vehicles ---------------------------------------------------------------- Law firms initiated a class action lawsuit against the Canada Revenue Agency (CRA), under its former name the Canada Customs and Revenue Agency (CCRA), accusing it of "brazenly ignoring the principles of law," amounting to a clear effort by public officials to knowingly engage in deliberate and unlawful conduct. The action was brought in the Federal Court of Canada by Thorsteinssons LLP of Vancouver and Toronto, which is Canada's largest law firm practicing exclusively in tax law, and Poyner Baxter LLP of North Vancouver, B.C., who practice predominantly in the field of class action litigation. Class action suits are typically initiated in the names of one or more individuals or legal entities as representative of a class. The current case focuses on a firm engaged in auto sales that transported more than 4,000 vehicles to public auction. CRA auditors challenged the costs claimed for this transport and related expenses and treated the difference as a personal income benefit of $181,000 to the owner. The owner claimed that the company owed him a substantial shareholder's loan, and that any amount seen to be a taxable benefit ought to be considered a loan repayment and not defined as personal income. The Appeals Division of the Vancouver Island Tax Services Office (TSO) disallowed this claim and proceeded to seek collection of the revised tax liability for the three years in question. This week's lawsuit will affect every shareholder of every company in Canada where shareholders' loans exist. The point of the action is that shareholders who lend funds to their companies, but who obtain gifts or other benefits from these firms, have the right to reduce or eliminate the value of the taxable benefit by the amount outstanding on the loan. Cited in this action is the case of Franklin v. The Queen during 2000, when the Tax Court of Canada ruled that there could be no taxable benefit to an individual because of an offsetting credit balance in the shareholder's loan account with the company. The Federal Court of Appeal subsequently upheld this. This judgment also supported the taxpayers' right to revise shareholders' loan accounts to accurately reflect the true status of loans payable by a company to a shareholder, and net benefits received. Tax lawyer Craig C. Sturrock of Thorsteinssons said, "The law is absolutely clear. What should have been a matter of simple arithmetic in this case and other similar cases, following an established precedent, has became some kind of bureaucratic obsession to defy the law and is now an expensive process of litigation." The statement of claim that was filed states, in part: "The Plaintiff says that the actions of the CCRA through its officers at Head Office Appeals Division and Head Office Audit Division and through its officers and employees throughout the various TSOs amounts to a deliberate misapplication of the law as established in Franklin and in doing so the CCRA has engaged in deliberate and unlawful conduct in its capacity as a Public Officer. Further, it is the Plaintiff's position that the CRA was aware that its conduct was unlawful and that it was likely to harm the Plaintiff." Co-counsel Jim Poyner said that this class action proceeding would potentially benefit many thousands of corporate shareholders, particularly those involved with tightly held corporations, where loans from the owners are often central to the business plan. "What makes this current case an ideal class action is the contempt shown by CRA to the Tax Court, the Federal Court of Appeal and the taxpayers. Their arrogance is simply breathtaking and we will look forward to demonstrating this in court." For more details, contact Thorsteinssons LLP, Phone: (604) 689-1261, E-mail: classaction@thor.ca, Web site: http://www.thor.caOR Poyner Baxter LLP, Phone: (604) 988-6321, E-mail: classaction@poynerbaxter.com, Web site: http://www.poynerbaxter.com. COMPUWARE CORPORATION: Discovery Proceeds in MI Securities Suit --------------------------------------------------------------- Discovery is proceeding in the consolidated securities class action filed against Compuware Corporation and Peter Karmanos, Jr. in the United States District Court for the Eastern District of Michigan. The original lawsuits were filed on September 20, 2002 and October 10, 2002 respectively. On May 1, 2003, the cases were consolidated. The matter is now titled "In re Compuware Securities Litigation." The suit was brought on behalf of purchasers of the Company's common stock from January 1, 1999 to April 3, 2002. The plaintiff alleges that the Company failed to disclose under the securities laws its problems with the misappropriation of its software source code by IBM. The plaintiff further alleges that the Company omitted and/or disseminated materially false and misleading statements concerning its deteriorating relationship with IBM. The plaintiff requests that the court award them monetary damages and expenses of litigation, including reasonable attorneys fees. On August 27, 2004, plaintiffs moved to certify a class. In January 2005, the Court ruled in the Company's favor by denying plaintiff's motion for class certification. The lawsuit is currently in the discovery phase. ESTEE LAUDER: FL Resident Launches Deceptive Advertising Lawsuit ---------------------------------------------------------------- Florida resident Diane Hutto initiated a lawsuit seeking class action status in U.S. District Court in Miami against Estee Lauder, claiming it falsely advertised that its products provide "anti-aging" or "youth-inducing" benefits, The Miami Herald reports. Howard M. Rubinstein, one of the lawyers for plaintiff Diane Hutto, paraphrased Revlon founder Charles Revlon to support his client's claims against the cosmetics company. Mr. Rubinstein, based in Texas, who filed the suit last week, told the Herald, "It's nothing more than hope in a jar, and they are making it sound like it's some medical breakthrough that makes it more than hope in a jar." Estee Lauder spokeswoman Janet Bartucci told the Herald that it's company policy not to comment on ongoing litigation and added that the Company "stands behind the products 100 percent." FEDERATED DEPARTMENT: NY Court Dismisses Securities Fraud Suit -------------------------------------------------------------- The United States District Court for the Southern District of New York dismissed with prejudice the consolidated securities class action filed against Federated Department Stores, Inc. and certain members of its senior management. Five substantially identical purported class action complaints were initially filed on behalf of persons who purchased shares of the Company's Common Stock between February 23, 2000 and July 20, 2000. Originally filed in August, September and October 2000, in the United States District Court for the Southern District of New York, the actions were consolidated into a single case, styled "In Re Federated Department Stores, Inc. Securities Litigation, Case No. 00-CV-6362 (RCC)" and a consolidated amended complaint was filed. The Complaint alleged violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 thereunder, on the basis of claims that the Company, among other things, made false and misleading statements regarding its financial condition and results of operations and failed to disclose material information relating to the credit delinquency problem at the Company's former subsidiary, Fingerhut Companies, Inc. The plaintiffs sought unspecified amounts of compensatory damages and costs, including legal fees. The Company filed a Motion to Dismiss the Complaint on January 22, 2002, and on March 11, 2004, the court dismissed the Complaint without prejudice. On May 18, 2004, the plaintiffs filed a second amended complaint, asserting the same claims as in the earlier versions of the Complaint. The Company filed a Motion to Dismiss the Second Amended Complaint on July 7, 2004, and it was dismissed with prejudice by the Court on March 23, 2005. The suit is styled "In Re Federated Department Stores, Inc. Securities Litigation, Case No. 00-CV-6362 (RCC)," filed in the United States District Court for the Southern District of New York, under Judge Richard C. Casey. Representing the plaintiffs are: Brad Nelson Friedman, Samuel Howard Rudman, Steven G. Schulman, Milberg Weiss Bershad & Schulman LLP (NYC), One Pennsylvania Plaza, New York, NY 10119, Phone: 212-594-5300, Fax: 212-868-1229, E-mail: bfriedman@milberg.com, srudman@lerachlaw.com, sschulman@milbergweiss.com; and Frederick Taylor Isquith, Sr., Wolf, Haldenstein, Adler, Freeman & Herz, L.L.P., 270 Madison Avenue, New York, NY 10016, Phone: (212) 545-4600, E-mail: isquith@whafh.com. Representing the Company are: (1) Bonnie L. Hemenway, Jones Day, 222 East 41st Street, New York, NY 10017, Phone: 212-326-3939, Fax: 212-755- 7306, E-mail: blhemenway@jonesday.com; (2) Barbra Spalten Levy, McCarter and English (NJ), Four Gateway Center, 100 Mulberry Street, Newark, NJ 07102, Phone: (973)622-4444, Fax: (973) 624-7070; (3) John M. Newman, Jr., JONES, DAY, REAVIS & POGUE, 599 Lexington Avenue, New York, NY 10022, Phone: (212) 326- 3939 (4) Gregory J. Ritts, Nixon, Hargrave et al., Clinton Sq., P.O.B. 1051, Rochester, NY 14603, Phone: 716/ 263-1000 FORD MOTOR: Recalls Pickup Trucks Due to Fuel Systems Defect ------------------------------------------------------------ Ford Motor Company in cooperation with the National Highway Traffic Safety Administration's Office of Defects Investigation (ODI) is voluntarily recalling about 78675 2005 Ford of F-250 Superduty/F-350 Superduty/F-450 Superduty/F-550 Superduty pickup trucks due to fuel systems defect. According to the ODI, on certain pickup trucks and chassis cab vehicles equipped with 5.4L or 6.8L gasoline engines, the fuel jumper line may have an incorrect end form. The fuel line may separate at the connection to the main fuel bundle, which can cause an operator to notice a gasoline odor and/or fuel on the ground, loss of power and the engine will eventually stall. Fuel leakage in the presence of an ignition source could result in a fire. As a remedy, dealers will install an external retention clip at the fuel jumper line to the main fuel bundle connection. The recall is expected to begin on June 20, 2005. For more details, contact Ford by Phone: 1-800-392-3673 or the NHTSA Auto Safety Hotline: 1-888-327-4236. FORD MOTOR: Recalls Vehicles Due to Electrical Systems Defect ------------------------------------------------------------- Ford Motor Company in cooperation with the National Highway Traffic Safety Administration's Office of Defects Investigation (ODI) is voluntarily recalling about 180104 2004-2005 Ford of F- 250 Superduty/F-350 Superduty/F-450 Superduty/F-550 Superduty/ E350/E450/Excursion vehicles due to electrical systems defect. According to ODI, Certain vehicles equipped with 6.0L diesel engines may experience stalling without warning while driving and may or may not restart. Should the vehicle stall, a vehicular crash could occur. As a remedy, dealers will upgrade the fuel injection control module (FICM) wire harness or replace, and/or have a new injection control pressure (ICP) sensor connector installed. The recall is expected to begin on July 5, 2005. For more details, contact Ford by Phone: 1-800-392-3673 or the NHTSA Auto Safety Hotline: 1-888-327-4236. GANDER MOUNTAIN: Plaintiffs Seek Consolidation of MN Stock Suits ---------------------------------------------------------------- Plaintiffs asked the United States District Court for the District of Minnesota to consolidated the securities class actions filed against Gander Mountain Company and eight of its present and former directors and executive officers between January 28, 2005 and March 4, 2005. These actions are titled as: (1) Joseph Merrelli v. Gander Mountain Company, et al., (2) George Patchan v. Gander Mountain Company, et al. (3) John Stainbrook v. Gander Mountain Company, et al. (4) Robert Schuck v. Gander Mountain Company, et al., (5) William C. Fernalld, Jr. v. Gander Mountain Company, et al., and (6) Sean Peter Sloan v. Gander Mountain Company, et al. Each action is a purported class action brought on behalf of all persons (except defendants) who purchased stock in the Company's initial public offering on April 20, 2004, or in the open market between April 20, 2004 and January 13, 2005. The complaints allege that the defendants made false and misleading public statements about the company, and its business and prospects, in the registration statement and prospectus for the Company's initial public offering, and in filings with the SEC and press releases issued thereafter, and that the market price of the Company's stock was artificially inflated as a result. The complaints allege claims under Sections 11 and 15 of the Securities Act of 1933, and under Sections 10(b) and 20(a) of the Securities and Exchange Act of 1934. The plaintiffs in all six cases seek compensatory damages on behalf of the alleged class, an award of attorneys' fees and costs of litigation, and unspecified equitable/injunctive relief. GENESCO INC.: Working For Settlement of CA Overtime Wage Suits -------------------------------------------------------------- Genesco, Inc. is working to settle two overtime class actions filed in the Superior Court of the State of California, Los Angeles County. On October 22, 2004, the Company was named a defendant in a putative class action filed in the Superior Court of the State of California, Los Angeles, styled "Schreiner vs. Genesco Inc., et al.," alleging violations of California wages and hours laws, and seeking damages of $40 million plus punitive damages. On May 4, 2005, the Company and the plaintiffs reached an agreement in principle to settle the action, subject to court approval and other conditions. In connection with the proposed settlement, to provide for the settlement payment to the plaintiff class and related expenses, the Company recognized a charge of $2.6 million before taxes included in restructuring and other, net in the accompanying Consolidated Statements of Earnings for the first quarter of Fiscal 2006. On May 25, 2005, a second putative class action, styled "Drake vs. Genesco Inc., et al.," making allegations similar to those in the Schreiner complaint on behalf of employees of the Company's Johnston & Murphy division, was filed by a different plaintiff in the California Superior Court, Los Angeles. LANTRINIX INC.: CA Court Approves Settlement of Derivative Suit --------------------------------------------------------------- Lantronix, Inc. (Nasdaq:LTRX) today announced that the Superior Court of the State of California, County of Orange, approved the settlement of a shareholder derivative action (entitled Drake v. Bruscha, et al) pending against certain of the Company's current and former directors and former officers. As described in the company's most recent Form 10-Q filed with the SEC, the settlement involves the adoption of certain corporate governance measures and payment of attorneys' fees and expenses to the derivative plaintiff's counsel in the amount of $1.2 million. The action was dismissed with prejudice as to all parties, including Mr. Steven Cotton, who was not a party to the settlement agreement and who had objected to the settlement. The company's insurance carrier has agreed to pay the $1.2 million, and the settlement will have no impact on the company's financial statements or results of operations. "The resolution of this lawsuit represents another step in the right direction as the Company continues building upon the new foundation put in place over the past several years," said Lantronix CEO Marc Nussbaum. This settlement does not impact the securities class action or Synergetic Micro Systems securities case described in the Company's most recent Form 10-Q filed with the SEC. For more details, contact Jim Kerrigan, CFO of Lantronix, Inc., Phone: (949) 453-3990. LIGHTSPAN INC.: Plaintiffs Seek Suit Dismissal Reconsideration -------------------------------------------------------------- Plaintiffs asked the United States District Court for the Southern District of New York to reconsider the dismissal of a securities class action filed against Credit Suisse First Boston and several of its clients, including Lightspan, Inc., captioned "Liu, et al. v. Credit Suisse First Boston Corp., et al." The complaint alleges that Credit Suisse First Boston, its affiliates, and the securities issuer defendants (including the Company) manipulated the price of the issuer defendants' shares in the post-initial public offering market. The securities issuer defendants (including the Company) filed a motion to dismiss the complaint in September 2004 on the grounds of multiple pleading deficiencies. On April 1, 2005, the complaint was dismissed with prejudice. On April 15, 2005, the plaintiff filed a motion for reconsideration. The court has not yet ruled on that motion. LION PAVILION: Recalls Dried Cabbages Due to Undeclared Sulfites ---------------------------------------------------------------- Lion Pavilion Ltd., 518 Gardner Avenue, Brooklyn, New York 11222 is recalling Dried Cabbage Vegetable (product of China) because it may contain undeclared sulfites. People who have severe sensitivity to sulfites run the risk of serious or life- threatening allergic reactions if they consume this product. The recalled Dried Cabbage Vegetable in plastic bags, 8.8 oz. (250 g), were sold in New York State. The recall was initiated after routine sampling by New York State Department of Agriculture and Markets Food Inspectors and subsequent analysis of the product by Food Laboratory personnel revealed the presence of sulfites in packages of Dried Cabbage Vegetable that did not declare sulfites on the label. The consumption of 10 milligrams of sulfites per serving has been reported to elicit severe reactions in some asthmatics. Anaphylactic shock could occur in certain sulfite sensitive individuals upon ingesting 10 milligrams or more of sulfites. No illnesses have been reported to date in connection with this problem. Consumers who have purchased Dried Cabbage Vegetable should return it to the place of purchase. Consumers with questions may contact the company at 1-718-384-6951. MARSH & MCLENNAN: Faces Consolidated ERISA Fraud Lawsuit in NY -------------------------------------------------------------- The law firm of Keller Rohrback L.L.P. initiated a Consolidated Complaint in the United States District Court for the Southern District of New York, in the In re Marsh ERISA Litigation, Civil Action No. 04-8157. This litigation is pending against Marsh & McClennan Companies Inc., ("MMC" or the "Company") and other fiduciaries of the Marsh & McLennan Stock Investment Plan (the "Plan"), on behalf of Plan participants and beneficiaries who were invested in MMC common stock at any time between July 1, 2000 and January 31, 2005 (the "Class Period"). The Court has appointed the law firm of Keller Rohrback L.L.P. to serve as lead counsel for plaintiffs and the proposed class. Schatz & Nobel, PC and Cohen, Milstein, Hausfeld & Toll, P.L.L.C serve on the Executive Committee along with Goodkind Labaton Rudoff & Sucharow LLP which serves on the Executive Committee and as Liaison Counsel for plaintiffs and the proposed class. The Complaint alleges that during the Class Period, the defendants violated the fiduciary duties they owed to the Plan participants and beneficiaries by: (1) failing to prudently and loyally manage the Plan's assets; (2) failing to provide participants with complete and accurate information regarding Marsh stock sufficient to advise participants of the true risks of investing their retirement savings; and (3) failing to properly monitor the performance of their fiduciary appointees, and remove and replace those whose performance was inadequate. For more details, contact paralegal Jen Veitengruber or attorneys Erin Riley, Margie Wetherald, or Lynn Sarko, Phone: 800/776-6044, E-mail: investor@kellerrohrback.com. MARTEK BIOSCIENCES: Shareholders Launch Stock Fraud Suits in MD --------------------------------------------------------------- Martek Biosciences Corporation and certain of its officers face several securities class actions filed in the United States District Court for the District of Maryland. On May 4, 2005, a putative class action lawsuit was filed, captioned "Reed Black v. Martek Biosciences Corporation, et al., Case No. MJG 05 CV1224." Since then, several other putative class action lawsuits were filed against the Company and certain of its officers in the same court making similar allegations. These other putative class actions lawsuits are captioned as follows: (1) Brocco v. Martek Biosciences Corp., et. al., Case No. MJG 05 CV 1257; (2) Sowattanangkul v. Martek Biosciences Corp., et. al., Case No. MJG 05 CV 1309; (3) Wright v. Martek Biosciences Corp., et. al., Case No. 05-1354; (4) Epstein v. Martek Biosciences Corp., et. al., Case No. MJG 05 CV 1508; and (5) Fujitake v. Martek Biosciences Corp., et. al., Case No. MJG 05 CV 1514 The Court has not yet entered any Orders regarding the consolidation of the pending cases or the appointment of lead plaintiffs or the approval of such plaintiffs' selection of lead counsel nor has the Court made a determination of whether a putative class can be certified. At this time, plaintiffs have not specified the amount of damages they are seeking in the actions. These actions claim to be filed on behalf of the purchasers of the Company's common stock during a purported class period beginning December 9, 2004 and ending April 27, 2005. The complaints allege, among other things, violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, as amended, and Rule 10b-5, promulgated thereunder. In addition, one of the complaints purports to be brought on behalf of those persons who purchased or otherwise acquired the Company's common stock in its public offering in January 2005 and alleges violations of Sections 11, 12(a)(2) and 15 of the Securities Act of 1933, as amended. The complaints allege generally that the Company and the individual defendants made false or misleading public statements and failed to disclose material facts regarding its business and prospects in public statements the Company made or failed to make during the period and, in the case of the Securities Act of 1933 claims, in its January 2005 prospectus. MARVELL TECHNOLOGY: Suit Fairness Hearing Set January 2006 in NY ---------------------------------------------------------------- A public hearing for the fairness of the settlement of the consolidated securities class action filed against Marvell Technology Group, Inc., certain of its officers and the underwriters of its initial public offering (IPO) is tentatively set for January 9,2006 in the United States District Court for the Southern District of New York. On July 31, 2001, a putative class action suit was filed against two investment banks that participated in the underwriting of the Company's IPO on June 29, 2000. That lawsuit, which did not name the Company or any of its officers or directors as defendants, was filed in the United States District Court for the Southern District of New York. Plaintiffs allege that the underwriters received "excessive" and undisclosed commissions and entered into unlawful "tie-in" agreements with certain of their clients in violation of Section 10(b) of the Securities Exchange Act of 1934. Thereafter, on September 5, 2001, a second putative class action was filed in the Southern District of New York relating to the Company's IPO. In this second action, plaintiffs named three underwriters as defendants and also named as defendants Marvell and two of the Company's officers, one of whom is also a director. Relying on many of the same allegations contained in the initial complaint in which Marvell was not named as a defendant, plaintiffs allege that the defendants violated various provisions of the Securities Act of 1933 and the Securities Exchange Act of 1934. In both actions, plaintiffs seek, among other items, unspecified damages, pre-judgment interest and reimbursement of attorneys' and experts' fees. These two actions relating to the Company's IPO have been consolidated with hundreds of other lawsuits filed by plaintiffs against approximately 40 underwriters and approximately 300 issuers across the United States. Defendants in the consolidated proceedings moved to dismiss the actions. In February 2003, the trial court issued its ruling on the motions, granting the motions in part, and denying them in part. Thus, the cases may proceed against the underwriters and the Company as to alleged violations of section 11 of the Securities Act of 1933 and section 10(b) of the Securities Exchange Act of 1934. Claims against the individual officers have been voluntarily dismissed with prejudice by agreement with plaintiffs. On June 26, 2003, the plaintiffs announced that a settlement among plaintiffs, the issuer defendants and their directors and officers, and their insurers has been structured, a part of which provides that the insurers for all issuer defendants would guarantee up to $1 billion to investors who are class members, depending upon plaintiffs' success against non-settling parties. The Company's board of directors has approved the proposed settlement, which will result in the plaintiffs' dismissing the case against the Company and granting releases that extend to all of its officers and directors. Definitive settlement documentation was completed in early June 2004 and first presented to the court on June 14, 2004. On February 15, 2005, the court issued an opinion preliminarily approving the proposed settlement, contingent upon certain modifications being made to one aspect of the proposed settlement - the proposed "bar order". The court ruled that it had no authority to deviate from the wording of the Plaintiff's Securities Law Reform Act of 1995 and that any bar order that may issue should the proposed settlement be finally approved must be limited to the express wording of 15 U.S.C. section 78u-4(f)(7)(A). The court scheduled a further conference for April 13, 2005, for the purposes of making a final determination as to the form, substance and program of class notice, and scheduling a Rule 23 public hearing on the fairness of the proposed settlement. The suit is styled "IN RE MARVELL TECHNOLOGY GROUP, INC. INITIAL PUBLIC OFFERING SECURITIES LITIGATION," filed in relation to "IN RE INITIAL PUBLIC OFFERING SECURITIES LITIGATION, Master File No. 21 MC 92 (SAS)," both pending in the United States District Court for the Southern District of New York, under Judge Shira N. Scheindlin. The plaintiff firms in this litigation are: (1) Bernstein Liebhard & Lifshitz LLP (New York, NY), 10 E. 40th Street, 22nd Floor, New York, NY, 10016, Phone: 800.217.1522, E-mail: info@bernlieb.com (2) Milberg Weiss Bershad Hynes & Lerach, LLP (New York, NY), One Pennsylvania Plaza, New York, NY, 10119-1065, Phone: 212.594.5300 (3) Schiffrin & Barroway, LLP, Mail: 3 Bala Plaza E, Bala Cynwyd, PA, 19004, Phone: 610.667.7706, Fax: 610.667.7056, E-mail: info@sbclasslaw.com (4) Sirota & Sirota, LLP, 110 Wall Street 21st Floor, New York, NY, 10005, Phone: 888.759.2990, Fax: 212.425.9093, E-mail: Info@SirotaLaw.com (5) Stull, Stull & Brody (New York), 6 East 45th Street, New York, NY, 10017, Phone: 310.209.2468, Fax: 310.209.2087, E-mail: SSBNY@aol.com (6) Wolf, Haldenstein, Adler, Freeman & Herz LLP, 270 Madison Avenue, New York, NY, 10016, Phone: 212.545.4600, Fax: 212.686.0114, E-mail: newyork@whafh.com MEN'S WEARHOUSE: Reaches Settlement For CA Overtime Wage Lawsuit ---------------------------------------------------------------- The Men's Wearhouse, Inc. reached a settlement for the class action filed against it in the Superior Court of California for the County of Orange. The suit was brought as a purported class action and alleged several causes of action, each based on the factual allegation that in the State of California, the Company misclassified its managers and assistant managers as exempt from the application of certain California labor statutes. Because of this alleged misclassification, the suit alleged that the Company failed to pay overtime compensation and provide the required rest periods to such employees. The suit sought, among other things, declaratory and injunctive relief along with an accounting as to alleged wages, premium pay, penalties, interest and restitution allegedly due the class defendants. MEN'S WEARHOUSE: Reaches Settlement For CA Consumer Fraud Suit -------------------------------------------------------------- The Men's Wearhouse, Inc. reached a tentative settlement for the purported class action filed against it in the Superior Court of California for the County of Los Angeles. On April 1, 2004, a lawsuit was filed against the Company, seeking class action status and alleging two causes of action, each based on the factual allegation that the Company requests or requires, in conjunction with a customer's s use of his or her credit card, the customer to provide personal identification information which is recorded upon the credit card transaction form. The Suit seeks: (1) civil penalties pursuant to the California Civil Code; (2) an order enjoining the Company from requesting or requiring that a customer provide personal identification information which is then recorded on the transaction form; (3) permanent and preliminary injunctions against the Company requesting or requiring that a customer provide personal identification information which is then recorded on the transaction form; (4) restitution of all funds allegedly acquired by means of any act or practice declared by the Court to be unlawful or fraudulent or to constitute a violation of the California Business and Professions Code; (5) attorney's fees; and (6) costs of suit The Court has not yet decided whether the action may proceed as a class action. The Court has determined that the claim for restitution may not proceed. The Company has reached a tentative settlement; however, no assurance can be given that the Court will approve the settlement or that the anticipated resolution will be realized. MICHAELS STORES: TX Court Dismisses Consolidated Securities Suit ---------------------------------------------------------------- The United States District Court for the Northern District of Texas, Dallas Division dismissed the consolidated securities class action filed against Michaels Stores, Inc. and certain of its current and former directors and officers. On various dates between February 4, 2003 and March 25, 2003, 10 purported class action lawsuits were filed. All of these lawsuits have been consolidated. The suits assert various claims under Sections 10(b), 20(a), and 20A of the Securities Exchange Act of 1934 related to actions prior to the Company's announcement on November 7, 2002, that, among other things, it had revised its outlook for the fourth fiscal quarter of 2002, adjusting downward its guidance for annual earnings per diluted share. The consolidated complaint charges that, prior to that announcement, the Company and certain of the other defendants made misrepresentations and failed to disclose negative information about the financial condition of the Company while the individual defendants were selling shares of the Company's common stock. On December 10, 2004, the Court granted the defendants' motion to dismiss the consolidated complaint, dismissing certain allegations supporting the claims with prejudice. For those allegations that were not dismissed with prejudice, the Court allowed the plaintiffs to amend, which they did on January 14, 2005. In that amended consolidated complaint, the plaintiffs added a claim under Section 20A of the Securities Exchange Act of 1934 and re-pled their Sections 10(b) and 20(a) claims based on allegations similar to those in the original consolidated complaint. After the defendants moved to dismiss the amended consolidated complaint, the plaintiffs filed a notice of voluntary dismissal May 13, 2005. The Court issued an order on May 18, 2005 dismissing the case in its entirety without prejudice. The suit is styled "In re Michaels Stores, Inc. Securities Litigation, case no. 3:03-cv-00246," filed in the United States District Court for the Northern District of Texas, Dallas Division, under Judge Barbara M. G. Lynn. Representing the Company is George Allen Whittenburg, II, Whittenburg Whittenburg Schachter & Harris, 1010 S Harrison St, PO Box 31718, Amarillo, TX 79120-1718, Phone: 806/372-5700, Fax: 806/372-5757, E-mail: gwhittenburg@whittenburglaw.com. Representing the plaintiffs are: (1) Joe Kendall, Provost Umphrey Law Firm - Dallas, 3232 McKinney Ave, Suite 700, Dallas, TX 75204, Phone: 214/744-3000, Fax: 214/744-3015, E-mail: Provost_Dallas@yahoo.com; (2) Roger F. Claxton, Claxton & Hill, 3131 McKinney Ave, Suite 700 LB 103, Dallas, TX 75204-2471, Phone: 214/969-9029, Fax: 214/953-0583, E-mail: claxtonhill@airmail.net; (3) Patricia J. Villareal, Jones Day - Dallas, PO Box 660623, 2727 N Harwood St, Dallas, TX 75266-0623, Phone: 214/220-3939, Fax: 214/969-5100, E-mail: pjvillareal@jonesday.com MICHAELS STORES: Plaintiffs Seek Certification For Overtime Suit ---------------------------------------------------------------- Plaintiffs are working to have the lawsuit filed against Michaels Stores, Inc. and Michaels of Canada in the Ontario Superior Court of Justice certified as a class action. On December 20, 2002, James Cotton, a former store manager of Michaels of Canada, ULC, the Company's wholly-owned subsidiary, and Suzette Kennedy, a former assistant manager of Michaels of Canada, commenced a proposed class proceeding against Michaels of Canada and Michaels Stores, Inc. on behalf of themselves and current and former employees employed in Canada. The Cotton claim was filed in the Ontario Superior Court of Justice and alleges that the defendants violated employment standards legislation in Ontario and other provinces and territories of Canada by failing to pay overtime compensation as required by that legislation. The Cotton claim also alleges that this conduct was in breach of the contracts of employment of those individuals. The Cotton claim seeks a declaration that the defendants have acted in breach of applicable legislation, payment to current and former employees for overtime, damages for breach of contract, punitive, aggravated and exemplary damages, interest, and costs. In May 2005, the plaintiffs delivered material in support of their request that this action be certified as a class proceeding. A date has not yet been set for the hearing with respect to certification. NEIMAN MARCUS: Shareholders Sue V. Newton Acquisition Merger ------------------------------------------------------------ The Neiman Marcus Group, Inc. faces a class action filed in the United States District Court in the Northern District of Texas, styled ""NECA-IBEW Pension Fund (The Decatur Plan) v. The Neiman Marcus Group, Inc. et al., CA No. 3-05-CV-0898B." The suit also names the Company's directors as defendants. The complaint opposes the planned merger of the Company with Newton Acquisition, Inc., and Newton Merger Sub, Inc. The suit alleges a cause of action for breach of fiduciary duty against the directors, claiming, among other things, that the merger consideration to be paid to the Company's stockholders in the merger is grossly inadequate and unfair and that the defendants failed to maximize shareholder value through a proper sale of the Company and its assets. In addition, the complaint alleges that the Company's directors breached their fiduciary duties in connection with the approval of the merger by, among other things, tailoring the transaction to serve the interests of the defendants and the family of Richard A. Smith, Chairman of the Company's board of directors and its largest stockholder, rather than structuring the merger to obtain the highest price for the Company stockholders, depriving public stockholders of the value of certain assets of the Company (primarily the Company's credit card division), failing to realize the financial benefits from a separate sale of the Company's credit card division, not engaging in a fair process of negotiating at arm's length and structuring a preferential deal for Company insiders. The complaint seeks, among other things, injunctive relief to enjoin the consummation of the merger, rescind any actions taken to effect the merger, direct the defendants to sell or auction the Company for the highest possible price, and impose a constructive trust in favor of plaintiffs upon any benefits improperly received by defendants. PAT & OSCAR'S: Suit Over E.coli in CA Restaurants Still Pending --------------------------------------------------------------- Restaurant chain Pat & Oscar's continues to face several lawsuits, one of which was filed as a class action, by patrons who allegedly became ill with E. coli from consuming salad at the Company's restaurants in San Diego and Orange Counties. On October 7, 2003, the Company was the focal point of an investigation into a potential outbreak of E. coli at certain of its restaurants. Approximately 45 cases of E. coli were confirmed by the health departments. The lawsuits also name Pat & Oscar's produce distributor, F.T. Produce, Inc. ("Family Tree") and Gold Coast Produce ("Gold Coast"), the processor of lettuce supplied to Pat & Oscar's restaurants. Family Tree's insurance company has accepted tender of the Company's defense pursuant to an insurance certificate issued by Family Tree's insurance company naming the Company and Pat & Oscar's as additional insureds. PFIZER INC.: Schatz & Nobel Commences ERISA Violations Lawsuit -------------------------------------------------------------- The law firm of Schatz & Nobel, P.C., initiated a lawsuit seeking class action status against Pfizer, Inc. (NYSE: PFE) ("Pfizer") alleging violations of ERISA (Employee Retirement Income Security Act) in connection with the Pfizer retirement plans that invested in Pfizer stock between August 29, 2000 and the present. The suit was brought on behalf of individuals who bought Pfizer stock through their Pfizer retirement plan. For more details, contact Wayne T. Boulton of Schatz & Nobel, Phone: +1-800-797-5499, E-mail: sn06106@aol.com, Web site: http://www.snlaw.net. POSSIS MEDICAL: Shareholders Launch Securities Fraud Suits in MN ---------------------------------------------------------------- Possis Medical, Inc. and certain of its officers face a securities class action filed on June 3, 2005 in the United States District Court for the State of Minnesota. The suit alleges the defendants violated federal securities laws during a period beginning in 2002. The Complaint seeks class action status and unspecified damages. The complaint alleges violations of federal securities laws, Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5, including allegations of issuing a series of material misrepresentations to the market which had the effect of artificially inflating the market price. The class period is from September 24, 2002 through August 24, 2004. At this time the Company has not been served with a copy of the complaint. The Company believes that the allegations of the lawsuit are without merit and intends to contest the lawsuit vigorously, it stated in a disclosure to the Securities and Exchange Commission. The first identified complaint in the litigation is styled "The Cornelia I. Crowell GST Trust, et al. v. Possis Medical, Inc., et al., case no. 05-CV-1084," filed in the United States District Court in Minnesota, under Judge James M. Rosenbaum. The plaintiff firms in this litigation are: (1) Brodsky & Smith, LLC, 11 Bala Avenue, Suite 39, Bala Cynwyd, PA, 19004, Phone: 610.668.7987, Fax: 610.660.0450, E-mail: esmith@Brodsky-Smith.com; (2) Charles J. Piven, World Trade Center-Baltimore,401 East Pratt Suite 2525, Baltimore, MD, 21202, Phone: 410.332.0030, E-mail: pivenlaw@erols.com; (3) Glancy Binkow & Goldberg LLP (NY), 1501 Broadway, Suite 1416, New York, NY, 10036, Phone: (917) 510-000, Fax: (646) 366-089, E-mail: info@glancylaw.com; (4) Milberg Weiss Bershad & Schulman LLP (New York), One Pennsylvania Plaza, 49th Floor, New York, NY, 10119, Phone: 212.594.5300, Fax: 212.868.1229, E-mail: info@milbergweiss.com; (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) Schatz & Nobel, P.C., 330 Main Street, Hartford, CT, 06106, Phone: 800.797.5499, Fax: 860.493.6290, E-mail: sn06106@AOL.com; QUALITEST PHARMACEUTICALS: Recalls Syringes Due to Mislabeling -------------------------------------------------------------- Qualitest Pharmaceuticals, Inc., issued a voluntary nationwide recall of Accusure Insulin Syringes 1cc, 28 Gauge l/2 Inch, distributed between October 2004 and June 2005. There may be 1cc syringes which are mislabeled as 1/2 cc syringes on the plastic inner wrap holding 10 individual syringes, which could potentially result in confusion by the patient or caregiver, resulting in an incorrect dose or amount being administered. Though no injuries have been reported to date consumers who have any of the product on hand should immediately stop using, and contact Qualitest, or return unused syringes to the pharmacy from which purchased. Product was distributed to drug wholesalers/distributors, and pharmacies within the United States. The product affected is as follows: NDC 0603-6996-21 Accusure Insulin Syringes 1cc 28 Gauge 1/2 Inch Boxes of 100 (all lots) Qualitest is notifying all customers who received the product and arranging for return of any affected product. This recall is being conducted with the full knowledge of the Food and Drug Administration. Consumers with questions may contact the company at 1-800-444-4011 for more information. SHARPER IMAGE: Shareholders Launch Securities Fraud Suits in CA --------------------------------------------------------------- Sharper Image Corporation faces several purported stockholder class action lawsuits filed in the United States District Court for the Northern District of California on behalf of purchasers of the Company's common stock during the period of February 5, 2004 and August 4, 2004. The complaints allege that during the Class Period, the Company and certain of its officers and employee-directors made false and misleading statements regarding the Company's business and business prospects. The first identified suit is styled "Rosenbaum Capital, LLC, et al. v. Sharper Image Corporation, et al.," filed in the United States District Court for the Northern District of California. The plaintiff firms in this litigation are: (1) Baron & Budd, P.C., 3102 Oak Lawn Avenue, Suite 1100, Dallas, TX, 75219, Phone: 800-946-9646, E-mail: info@baronbudd.com; (2) Brodsky & Smith, LLC, 11 Bala Avenue, Suite 39, Bala Cynwyd, PA, 19004, Phone: 610.668.7987, Fax: 610.660.0450, E-mail: esmith@Brodsky-Smith.com; (3) Charles J. Piven, World Trade Center-Baltimore,401 East Pratt Suite 2525, Baltimore, MD, 21202, Phone: 410.332.0030, E-mail: pivenlaw@erols.com (4) Lerach Coughlin Stoia Geller Rudman & Robbin (San Francisco), 100 Pine Street, Suite 2600, San Francisco, CA, 94111, Phone: 415.288.4545, Fax: 415.288.4534, E- mail: info@lerachlaw.com; (5) Schatz & Nobel, P.C., 330 Main Street, Hartford, CT, 06106, Phone: 800.797.5499, Fax: 860.493.6290, E-mail: sn06106@AOL.com; (6) Schiffrin & Barroway, LLP, 3 Bala Plaza E, Bala Cynwyd, PA, 19004, Phone: 610.667.7706, Fax: 610.667.7056, E- mail: info@sbclasslaw.com STEWART ENTERPRISES: CA Consumers Launch "Funeral Rule" Lawsuit --------------------------------------------------------------- Stewart Enterprises, Inc. faces a class action filed in the Superior Court for the State of California for the County of Los Angeles, Central District, styled "Henrietta Torres and Teresa Fiore, on behalf of themselves and all others similarly situated and the General Public v. Stewart Enterprises, Inc., et al., case no. BC328961." The suit also names as defendants several of the Company's Southern California affiliates. This purported class action was filed on February 17, 2005, on behalf of a nationwide class defined to include all persons, entities and organizations who purchased funeral goods and/or services in the United States from defendants at any time on or after February 17, 2001. The suit also seeks to assert claims against a class of all entities located anywhere in the United States whose ultimate parent corporation has been the Company at any time on or after February 17, 2001. The plaintiffs allege that defendants failed to disclose that the prices charged by defendants for certain goods and services exceeded what defendants paid to third parties for those same goods and services and that such failure violated provisions of the Federal Trade Commission's "Funeral Rule" that require a funeral home to disclose, if true, that it marks up the price of certain items purchased from third parties on behalf of customers on a "cash advance" or "accommodation" basis. The plaintiffs allege that by failing to comply with the Funeral Rule, defendants (1) breached contracts with the plaintiffs, (2) were unjustly enriched, (3) engaged in unfair, unlawful and fraudulent business practices in violation of a provision of California's Business and Professions Code, and (4) engaged in a civil conspiracy among the defendants to breach plaintiffs' contracts and commit acts of unfair competition. The plaintiffs seek restitution damages, disgorgement, interest, costs, and attorneys' fees. The Company was served with the complaint on April 7, 2005. By order dated May 5, 2005, the court ruled that this case was related to similar actions against Service Corporation International and Alderwoods Group, Inc. STEWART ENTERPRISES: Consumers Launch Fraud Lawsuits in TN, CA -------------------------------------------------------------- Stewart Enterprises, Inc. faces two class actions filed in Tennessee and California federal courts on behalf of a nationwide class of consumers who purchased caskets from the Company and other funeral homes. The first suit, styled "Funeral Consumers Alliance, Inc, et al. v. Service Corporation International, Alderwoods Group, Inc., Stewart Enterprises, Inc., Hillenbrand Industries, Inc., and Batesville Casket Co., case no. C 05 1804," was filed in the United States District Court, Northern District of California on May 2, 2005. The suit was filed on behalf of a nationwide class defined to include all consumers who purchased a Batesville casket from the funeral home defendants. The suit alleges that the defendants acted jointly to fix and maintain prices on caskets and reduce competition from independent casket discounters in violation of the federal antitrust laws and California's Business and Professions Code. The plaintiffs seek treble damages, restitution, injunctive relief, interest, costs and attorneys' fees. The Company was served with the complaint on May 10, 2005. The second suit, styled "Ralph Lee Fancher, on behalf of himself and all others similarly situated v. Service Corporation International, Alderwoods Group, Inc., Stewart Enterprises, Inc., Hillenbrand Industries, Inc., Aurora Casket Co., York Group, Inc., and Batesville Casket Co., case no. 2:05cv145," was filed in the United States District Court, Eastern District of Tennessee on May 18, 2005." The suit was filed on behalf of consumers in twenty-three states and the District of Columbia who purchased caskets. The allegations of fact are essentially the same as those made in the first suit. Rather than allege violations of federal law, however, the plaintiff in this suit alleges that the defendants violated state antitrust, consumer protection and/or unjust enrichment laws. The plaintiff seeks damages, treble damages where appropriate, restitution, interest and costs. The Company was served with the complaint on May 26, 2005. TEXAS: Attorneys in Medicaid Case Sum Up Arguments Before Judge --------------------------------------------------------------- Lawyers' arguing a historic class action lawsuit over how far Texas must go to ensure Medicaid reaches the state's poor children summed up their cases before U.S. District Judge William Wayne Justice, The San Antonio Express reports. The judge, who is expected to make a ruling in the few weeks, ordered both sides to submit written arguments by July 6. Court documents revealed that the suit, which was first filed 12 years ago by San Antonio attorney Susan Zinn, alleges that Texas violates federal law by failing to provide adequate health care access to its 2.7 million children on Medicaid. It is seeking to force the state to abide by a nearly decade-old agreement, called a consent decree, in which it promised to carry out specific measures to improve access. In her summation, Ms. Zinn states, "We're here on behalf of one third of Texas children. They're our most vulnerable." She further pointed out that the state's own data indicated that their situation has grown worse, not better in the five years since the court ruled that Texas was violating the consent decree. The number of children on Medicaid who received no medical checkups has jumped to 1.45 million in 2004 from about 1 million in 2000, she adds. Ms. Zinn further argued, the number of children who don't receive preventive dental care has grown even more, from under 1 million in 2000 to 1.45 million in 2004. Meanwhile, lawyers for the state disputed some of the numbers and argued Texas had in recent years vastly improved its Medicaid outreach and education programs. They also pointed out that they now spend $16 million a year on outreach alone and shouldn't have to abide by an out of date consent decree. "Frankly, I can't think of what else the state could have to do to prove it is complying" with federal law, Linda Halpern told the San Antonio Express. She even argues that Texas ranks 16th among states in the number of Medicaid children who get yearly medical checkups and is second in the nation in the number of Medicaid children receiving preventive dental care. In 1989, Congress changed Medicaid laws to require states to ensure that families with Medicaid-eligible children know what health care services are available to them and is able to access those services. TOYS "R" US: Asks DE Court To Dismiss Suit V. Global Toys Merger ---------------------------------------------------------------- Toys "R" Us, Inc. asked the Court of Chancery in the State of Delaware in and for New Castle County to dismiss a consolidated class action filed against it and certain of its officers and directors, challenging the Agreement and Plan of Merger, dated as of March 17, 2005 by and among the Company, Global Toys Acquisition, LLC ("Parent") and Global Toys Acquisition Merger Sub, Inc. ("Acquisition Sub"). On March 25 and 31, 2005 respectively, Iron Workers of Western Pennsylvania Pension & Profit Plans and Jolly Roger Fund LP filed two purported class action complaints. On April 20, 2005, these two lawsuits were consolidated. On May 18, 2005, Plaintiffs filed a consolidated First Amended Complaint, in which plaintiffs named Parent and Acquisition Sub as additional defendants. The Complaint asserts, on behalf of a purported class of stockholders of the Company, a claim against the Individual Defendants for alleged breaches of fiduciary duties in connection with the Merger Agreement. The Complaint additionally asserts a claim against Parent and Acquisition Sub for aiding and abetting the alleged breaches of fiduciary duties by the Individual Defendants in connection with the Merger Agreement. The Complaint seeks to enjoin the consummation of the merger or, alternatively, to rescind it. Plaintiffs also seek an award of damages for the alleged wrongs asserted in the Complaint. On May 20, 2005, plaintiffs filed motions for expedited proceedings and a preliminary injunction. The court granted plaintiffs' motion to expedite discovery and scheduled a hearing on their motion for a preliminary injunction on June 17, 2005. On June 2nd and 3rd, 2005, the Company and the Individual Defendants moved to dismiss the lawsuit brought by plaintiffs. WAL-MART STORES: Recalls 26T Frog Soft Gyms Due to Injury Hazard ---------------------------------------------------------------- In cooperation with the U.S. Consumer Product Safety Commission (CPSC), Wal-Mart Stores Inc., of Bentonville, Arkansas and Infantino LLC, of San Diego, California are voluntarily recalling about 26,000 Baby Connection Fun Frog Soft Gyms. A cap on the wire supports inside the soft gym's upright arms can detach, allowing the wire to poke through the fabric. This poses a laceration and puncture hazard to babies. Infantino has received four reports of incidents involving the support wire poking through the soft gym's fabric arms. Of the four incidents reported, two involved babies being scratched by the exposed wire. The recalled Baby Connection Fun Frog Soft Gym is comprised of a multi-colored, frog-shaped padded fabric mat, from which blue and orange support arms extend. The support arms consist of thin steel wire covered by foam and fabric. They can be arched, allowing for three stuffed infant toys to hang above the product's mat. A label with the word "Infantino" is attached to each of the stuffed toys as well as the underside of the mat. Products sold under item 150-761, Infantino Activity Soft Gym, which have a stamp on the back of the product showing 150-761 Production Date June 2005, are not affected by this recall. Manufactured in China, the soft gyms were sold at all Wal-Mart stores nationwide from October 2004 through May 2005 for about $20. Consumers should return the recalled soft gyms to their nearest Wal-Mart store to receive a refund. Consumer Contact: Contact Infantino at (888) 808-3111 between 8 a.m. and 4 p.m. PT Monday through Friday, or go to the firm's Web site: http://www.infantino.comand click on "Product Recalls." WHITEHALL JEWELLERS: IL Court Mulls Dismissal of Securities Suit ---------------------------------------------------------------- The United States District Court for the Northern District of Illinois has fully briefed Whitehall Jewellers, Inc.'s motion to dismiss the second amended consolidated securities class action filed against the Company and certain of its current and former officers. On February 12, 2004, a putative class action complaint captioned "Greater Pennsylvania Carpenters Pension Fund, et al. v. Whitehall Jewellers, Inc. et al., Case No. 04 C 1107," was filed in the U.S. District Court for the Northern District of Illinois against the Company and certain of the Company's current and former officers. The complaint makes reference to the litigation filed by Capital Factors, Inc. ("Capital Factors") and settled as disclosed in the Company's Quarterly Report in Form 10-Q for the fiscal quarter ended October 31, 2004 and to the Company's November 21, 2003 announcement that it had discovered violations of Company policy by the Company's Executive Vice President, Merchandising, with respect to Company documentation regarding the age of certain store inventory. The complaint further makes reference to the Company's December 22, 2003 announcement that it would restate results for certain prior periods. The complaint purports to allege the Company and its officers made false and misleading statements and falsely accounted for revenue and inventory during the putative class period of November 19, 2001 to December 10, 2003. The Complaint purports to allege violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. On February 18, 2004, a putative class action complaint captioned "Michael Radigan, et al., v. Whitehall Jewellers, Inc. et al., Case No. 04 C 1196," was filed in the same court against the Company and certain of the Company's current and former officers, charging violations of Sections 10(b) and 20(a) of the 1934 Act and Rule 10b-5 promulgated thereunder, and alleging that the Company and its officers made false and misleading statements and falsely accounted for revenue and inventory during the putative class period of November 19, 2001 to December 10, 2003. The factual allegations of this complaint are similar to those made in the Greater Pennsylvania Carpenters Pension Fund complaint discussed above. On February 20, 2004, a putative class action complaint captioned "Milton Pfeiffer, et al., v. Whitehall Jewellers, Inc. et al., Case No. 04 C 1285," was filed in the U.S. District Court for the Northern District of Illinois against the Company and certain of the Company's current and former officers, charging violations of Sections 10(b) and 20(a) of the 1934 Act and Rule 10b-5 promulgated thereunder, and alleging that the Company and its officers made false and misleading statements and falsely accounted for revenue, accounts payable, inventory, and vendor allowances during the putative class period of November 19, 2001 to December 10, 2003. The factual allegations of this complaint are similar to those made in the Greater Pennsylvania Carpenters Pension Fund complaint discussed above. On April 6, 2004, the District Court in the Greater Pennsylvania Carpenters case, No. 04 C 1107 consolidated the Pfeiffer and Radigan complaints with the Greater Pennsylvania Carpenters action, and dismissed the Radigan and Pfeiffer actions as separate actions. On April 14, 2004, the court granted the plaintiffs up to 60 days to file an amended consolidated complaint. The Court also designated the Greater Pennsylvania Carpenters Pension Fund as the lead plaintiff in the action and designated Greater Pennsylvania's counsel as lead counsel. On June 10, 2004, a putative class action complaint captioned "Joshua Kaplan, et al., v. Whitehall Jewellers, Inc. et al., Case No. 04 C 3971," was filed in the U.S. District Court for the Northern District of Illinois against the Company and certain of the Company's current and former officers, charging violations of Sections 10(b) and 20(a) of the 1934 Act and Rule 10b-5 promulgated thereunder, and alleging that the Company and its officers made false and misleading statements and falsely accounted for revenue, accounts payable, inventory, and vendor allowances during the putative class period of November 19, 2001 to December 10, 2003. The factual allegations of this complaint are similar to those made in the Greater Pennsylvania Carpenters Pension Fund complaint discussed above. On June 14, 2004, lead plaintiff Greater Pennsylvania Carpenters Pension Fund in Case No. 04C 1107 filed a consolidated amended complaint. On July 14, 2004, the District Court in the Greater Pennsylvania Carpenters action consolidated the Kaplan complaint with the Greater Pennsylvania Carpenters action, and dismissed the Kaplan action as a separate action. On August 2, 2004, the Company filed a motion to dismiss the consolidated amended complaint. The motion to dismiss was granted in part and denied in part, with plaintiffs granted leave to file an amended complaint by February 10, 2005. On February 10, 2005, the lead plaintiff filed a first amended consolidated complaint. On March 2, 2005, the Company filed a motion to dismiss the amended complaint. Briefing on this motion is complete and the parties are awaiting the Court's ruling. If the Company is successful on its motion, the class in this action may be limited to the period November 19, 2001 through June 6, 2002. On April 19, 2005, the Court issued an order, sua sponte, directing the parties to submit simultaneous briefs addressing what impact, if any, the Supreme Court's ruling in Dura Pharmaceuticals, Inc. v. Broudo, 125 S.Ct. 1627 (2005), has on Plaintiff's loss causation allegations. In response to this order, the Company filed a brief on May 4, 2005 in which it requested that the Court dismiss the amended complaint in its entirety for failure to adequately plead loss causation. The Court has not yet ruled on this issue. YAMAHA MOTOR: Recalls 46T Motorcycles For Passenger Seat Defect --------------------------------------------------------------- Yamaha Motor Corporation, USA in cooperation with the National Highway Traffic Safety Administration's Office of Defects Investigation (ODI) is voluntarily recalling about 46000 1998- 2005 Yamaha XVS111/XVS65 due to motorcycle seat defect. According to the ODI, on certain motorcycles, the original replacement mountain hardware holding the passenger seat to the fender could break if the mounting hardware is over tightened. If the hardware breaks, the passenger seat can fall of the rear fender. The passenger could lose balance and fall, causing injury or death. As a remedy, dealers will replace the hardware holding the passenger seat to the fender with components of a different type that will not allow the seat to fall off. The recall is expected to begin on June 30, 2005. For more details, contact Yamaha by Phone: 1-800-88-YAMAHA or the NHTSA Auto Safety Hotline: 1-888-327-4236. Asbestos Alert ASBESTOS LITIGATION: Columbus McKinnon Shows Liability Estimates ---------------------------------------------------------------- Columbus McKinnon Corporation (NASDAQ: CMCO), a manufacturer of handling, lifting, and positioning equipment, disclosed in its latest filing to the Securities and Exchange Commission that based on actuarial information, the Company has estimated its asbestos-related aggregate liability through March 31, 2030 and March 31, 2081 to range between US$4,200,000 and US$16,700,000. As of March 31, 2005, the Amherst, NY-based Company's estimation of its asbestos-related aggregate liability that is probable and estimable is through March 31, 2030 and ranges from US$4,200,000 to US$5,500,000 as of March 31, 2005. Like many industrial manufacturers, the Company is involved in asbestos-related litigation. In continually evaluating its estimated asbestos-related liability, the Company reviews, among other things, the incidence of past and recent claims, the historical case dismissal rate, the mix of the claimed illnesses and occupations of the plaintiffs, its recent and historical resolution of the cases, the number of cases pending against it, the status and results of broad-based settlement discussions, and the number of years such activity might continue. The range of probable and estimable liability reflects uncertainty in the number of future claims that will be filed and the cost to resolve those claims, which may be influenced by a number of factors, including the outcome of the ongoing broad- based settlement negotiations, defensive strategies, and the cost to resolve claims outside the broad-based settlement program. Based on the underlying actuarial information, the Company has reflected US$4,800,000 as a liability in the consolidated financial statements in accordance with U.S. generally accepted accounting principles. The increase in the recorded liability from the amount of US$3,000,000 at March 31, 2004 is due to a change in actuarial parameters used to calculate required asbestos liability reserve levels. The recorded liability does not consider the impact of any potential favorable federal legislation such as the "FAIR Act." Of this amount, management expects to incur asbestos liability payments of about US$220,000 over the next 12 months. Because payment of the liability is likely to extend over many years, management believes that the potential additional costs for claims will not have a material after-tax effect on the financial condition of the Company or its liquidity, although the net after-tax effect of any future liabilities recorded could be material to earnings in a future period. Based on this review, the Company has estimated its share of liability to defend and resolve probable asbestos-related personal injury claims. This estimate is highly uncertain due to the limitations of the available data and the difficulty of forecasting with any certainty the numerous variables that can affect the range of the liability. The Company will continue to study the variables in light of additional information in order to identify trends that may become evident and to assess their impact on the range of liability that is probable and estimable. ASBESTOS LITIGATION: Longview Fibre Co Faces Claims in IL and MO ---------------------------------------------------------------- Longview Fibre Company (NYSE: LFB) divulged that since 2002, it has been named a defendant in a number of asbestos-related lawsuits in Madison County, Illinois and St. Louis, Missouri, along with numerous other defendants. In each of the lawsuits, the plaintiff alleges asbestos-related injuries from exposure to the defendants' asbestos products, as well as exposure to asbestos while working on certain of the defendants' premises. At least one lawsuit alleges the plaintiff worked at its premises for unidentified contractors. In all other respects the claims are not specific as to what contacts the plaintiffs had with the Company or its manufacturing plants or products. None of the claims specifies damages sought from the Company individually, but each plaintiff alleges a general jurisdictional amount against all defendants. Headquartered in Longview, WA, the Company owns and operates tree farms, a pulp and paper mill, and 15 converting plants in a dozen states. Its paper mill and converting plants produce a broad range of paper products, including kraft paper, containerboard, and converted products such as shipping containers. In 2004 Longview Fibre sold its bag business to Ampac Packaging. ASBESTOS LITIGATION: General Cable Has 16,400 Non-maritime Cases ---------------------------------------------------------------- General Cable Corporation (NYSE: BGC) revealed that there are about 16,400 pending non-maritime asbestos cases involving its subsidiaries, according to a filing it submitted to the Securities and Exchange Commission. The majority of these cases involve plaintiffs alleging exposure to asbestos-containing cable manufactured by its predecessors. In addition to its subsidiaries, numerous other wire and cable manufacturers have been named as defendants in these cases. Headquartered in Highland Heights, KY, General Cable Corp. is a manufacturer of aluminum, copper, and fiber-optic wire and cable products. It operates through three segments: energy, industrial and specialty, and communications. The Company's subsidiaries have also been named, along with numerous other product manufacturers, as defendants in about 33,200 suits in which plaintiffs alleged that they suffered an asbestos-related injury while working in the maritime industry. These cases are referred to as MARDOC cases and are currently managed under the supervision of the U.S. District Court for the Eastern District of Pennsylvania. On May 1, 1996, the District Court ordered that all pending MARDOC cases be administratively dismissed without prejudice and the cases cannot be reinstated, except in certain circumstances involving specific proof of injury. The Company said that it cannot give assurance that any judgments or settlements of the pending non-maritime and MARDOC asbestos cases or any cases which may be filed in the future will not have a material adverse effect on its financial results, cash flows or financial position. Moreover, certain of its insurers may be financially unstable and in the event one or more of these insurers enter into insurance liquidation proceedings, the Company will be required to pay a larger portion of the costs incurred in connection with these cases. ASBESTOS LITIGATION: Victim's Family Campaigns for Medical Study ---------------------------------------------------------------- The family of a Royal Navy veteran who died from an asbestos- related illness is campaigning for medical research into the dangers of the substance. Coroner Paul Forrest recorded a verdict of death from an industrial disease in the demise of Kenneth Batty, aged 69, of Manor Close. He died on January 2, 2005 from mesothelioma, a cancer of the chest lining caused by asbestos exposure. An inquest into his death at Flax Bourton indicated that Mr. Batty had come into contact with asbestos while working for the Royal Navy on board HMS Balfour. He worked on the ship from 1951 to 1965 in the engine rooms repairing diesel fuel systems. Former colleague William James said they had both been exposed to large amounts of white and blue asbestos. Mr. James said they were not aware of the dangers of asbestos and no precautions were taken. He added that anyone who served in the Navy in the 1960s must have inhaled asbestos because it would have swept through the ventilation system. Speaking after the inquest, one of Mr. Batty's daughters, Diane Burring, said that the family aims to highlight the problem and get funding to put into medical research. She emphasized that one of the problems that would have to be remedied is the fact that those who served in the Royal Navy are exempt from compensation. "People who have been exposed to asbestos are not routinely screened, only experimental treatment is available, and compensation is only paid to veterans who left the Royal Navy after 1987," Ms. Burring added. ASBESTOS LITIGATION: Contractor Insists Rubble Is Asbestos-free --------------------------------------------------------------- The manager of a West Cumbrian demolition site is disputing claims that it gave away asbestos-contaminated building rubble to the public, the News & Star reports. Contractor Bob Bell, of Metaphase Demolition, believes the scare has been blown out of proportion and argues that the materials given away were clean. He explained that the asbestos removal at the site was carried out by professionals and was disposed of properly. As previously disclosed in the June 3, 2005 edition of the Class Action Reporter, the Environment Agency launched an investigation after the incident became known. The rubble came from the demolished Kangol factory building in Frizington owned by Lancashire-based Orm Developments Ltd. It is believed a number of people helped themselves to the building material advertised as "free crushed rubble" for a variety of uses including laying garden paths. The contractors have been in the process of flattening and transforming the building into a housing estate. A sign next to the site had invited local people to help themselves to the rubble for free. Mr. Bell added that the site was monitored for air pollution during demolition and results came back, saying that levels were within the guidelines. He admitted however, that some bits of asbestos fell from the factory roof. He insisted that this asbestos was cleared up afterwards. He also stated that he knows who took the rubble, citing that they were mainly farmers. However the Environment Agency, who later discovered traces of asbestos, still wants to hear from anyone who took rubble from the site. A spokesman warned that all types of asbestos, even the sheets type, pose a risk to one's health. He also noted that local people might have taken from the unsupervised pile without the site manager knowing. The agency can be contacted at its emergency hotline, 0800 807060. Meanwhile, residents and councilors spoke out at last week's annual meeting of Frizington parish council, condemning the incident. Council chairman Peter Connolly objected at the Environment Agency's statement that the rubble would have to be properly disposed at the taker's own expense. The council took a stand in demanding that the contractors "put matters right." ASBESTOS LITIGATION: UK Council Urges Firms to Comply with Rules ---------------------------------------------------------------- The Redbridge Council is urging firms to recognize the importance of complying with asbestos regulations. This warning comes after the Health and Safety Executive disclosed that asbestos is the biggest occupational health risk ever faced by British workers. In 2002, the Control of Asbestos at Work Regulations was developed to protect workers from being exposed to asbestos, which causes various respiratory illnesses including fatal a fatal cancer, mesothelioma. Businesses are required to have a survey and sign an asbestos register, which provides evidence of the substance being removed or controlled. It imposes a duty on firms to have a management plan for all non-domestic buildings. A spokesman from Environmental Applications, an asbestos removal company in Ongar, Essex, that covers Redbridge, carried out a telephone survey and claimed many companies showed a lack of compliance by hundreds of firms. Redbridge Council's public protection has a contractor to carry out the removal of asbestos and encourages firms to deal with asbestos removal safely. For further details, visit public protection at www.redbridge.gov.uk or call 020 8554 5000. The Health and Safety Executive helpline, 0845 345 0055, provides advice about asbestos removal, control and regulation. ASBESTOS LITIGATION: HSE to File Charges Against Derby Council -------------------------------------------------------------- The Health and Safety Executive will proceed with the case against Derby City Council for allegedly committing violations after asbestos was disturbed at a primary school 15 months ago. The agency plans to file the case at Derby Magistrates Court next month. As previously reported in the May 20, 2005 edition of the Class Action Reporter, Silverhill Primary was shut for eight weeks after asbestos was discovered during routine maintenance work. The contamination happened during the replacement of up to 30 windows. Contractors broke wall panels exposing the asbestos from February 16 last year, but the problem was not discovered until March 9. The incident exposed 400 pupils and staff to the potentially fatal substance over a three-week period. More than GBP750,000 had been spent for the decontamination after asbestos was discovered last March. The school reopened in May 2004 after being closed for three months. Air tests revealed high levels of brown asbestos dust, which can lead to fatal lung conditions, and the less harmful white asbestos. The Institute of Occupational Medicine found that the contamination risks were greatest to cleaning staff and some teachers but likely to be minimal for the pupils. The council faces two charges of failing to ensure the safety of employees. The headteacher at the time, Philip Robinson, is also charged with failing to ensure the health and safety of others. And Peter Westran, director of Horizon Windows and Glass, of Chaddesden, is charged with failing to ensure the safety of employees. ASBESTOS LITIGATION: UK Locals Alarmed Over Dumped Bags on Road --------------------------------------------------------------- Edinburgh residents condemned several workmen who left six bags of asbestos waste lying overnight unattended on a path frequently used by children and dog walkers, the Daily Record reports. Stirling firm Darren Morgan Civil Engineering and Surfacing were removing old asbestos pipes on behalf of Scottish Water. The toxic material was left over from work taking place on nearby Salvesen Crescent. A spokesman for the Company denied the asbestos waste had been left unattended overnight. Contracts manager Gary Morgan said its workmen did nothing wrong as the toxic bags were "out of harm's reach." He added that the asbestos material is placed in barriers and kept inside the site. However, Scottish Water admitted there had been a delay in placing the bags in storage. He apologized to residents for the panic that ensued but reassured them that water pipes are considered a low hazard and that there was a "very low risk of possible contamination." A spokeswoman for Edinburgh City Council warned that dumping the asbestos in a public place is an offense that could lead to prosecution. She added that the council's open-space task forces were not licensed to pick up special waste. ASBESTOS LITIGATION: UK Navy Stoker Dies from Asbestos Exposure --------------------------------------------------------------- An inquest recorded a verdict of death from industrial death in the case of a royal navy stoker, an Upper Norwood resident, who was exposed to asbestos while serving on warships 60 years earlier. William Nelson served on ships riddled with the deadly fibers during and after the Second World War. He was on the minesweeper Nepal and the aircraft carrier Implacable between 1942 and 1946. He had worked in the ships' boiler rooms and engine rooms where asbestos was widely used for lagging. However, it was also revealed during the inquest that after this period, his work as a carpenter and builder might have exposed him further to asbestos. About six decades later, he started suffering from the symptoms of mesothelioma, a lethal cancer of the lung linings, caused by inhalation of asbestos fibers. He died last January 14 at the age of 79. Consultant physician Dr. Andrew Miller told the inquest that Mr. Nelson had developed severe chest pains shortly before his death. Coroner Dr. Roy Palmer agreed with pathologist Professor Sir Colin Berry's findings that the cause of death was mesothelioma. ASBESTOS LITIGATION: NSW Queen Honors Asbestos Victims' Advocate ---------------------------------------------------------------- Among those given Queen's Birthday honors in New South Wales, asbestos-victim advocate Bernie Banton vowed to never stop seeking compensation for asbestos victims, the AAP reports. The vice-president of the Asbestos Diseases Foundation of Australia, Mr. Banton, said he is grateful for the recognition of his fight to get compensation from the manufacturer of asbestos-related products James Hardie. He may only have 20 percent of his lung capacity left, but he said that would never stop him battling for justice. Commenting on his appointment as a Member of the Order of Australia, Mr. Banton said, "It's a wonderful honor and a recognition of the fight that we've been able to take up on behalf of asbestos victims." The 58-year-old, who worked for James Hardie as a planer operator for six years in the 1970s, was diagnosed with asbestosis in 1999. His brother Ted also worked at the plant and died of the asbestos-related illness mesothelioma in 2001. Another brother, Albert, 70, also worked at the factory and has asbestosis. James Hardie Industries NV has agreed in principle to set aside about $1.5 billion to compensate asbestos victims over the next four decades. However, it is yet to sign a final agreement with unions, victim groups and the NSW government. ASBESTOS LITIGATION: Toxins at Power Station Alarm Australians -------------------------------------------------------------- A former power station in Spencer Street, Melbourne, is riddled with asbestos, endangering the health of city residents and workers. Environmental science group Enviroprotect issued a report warning that residents around the site may suffer exposure due to the "unbound and friable nature of the asbestos." The report, compiled in February, also raised the possibility of water contamination since several underground tanks and tunnels link the site with the Yarra River. Company manager Helen Bouzas recommended an immediate cleanup of the site. EnviroProtect has a five-year association with the site, advising potential buyers on environmental and workplace safety issues. The report was issued to consultant KordaMentha, which acts on behalf of MFS Investment Management Ltd. The former power station, which occupies almost an entire city block, has been one of the city's most notorious derelict sites since the city council stopped operating it in 1982. Several residential towers surround the site. Police have declared the building a "no go" zone. The Victoria Police Association has directed members not to enter the site. Private owners and public authorities have distanced themselves from the problem. The environmental report estimates the clean- up costs at almost $19 million, casting doubt over the viability of any redevelopment. In 2002, the Melbourne City Council sold the property for $4 million to Sydney developer Malcolm Sharpe, whose Key Securities Investment Group has since gone into liquidation. The site is now in the hands of the mortgagee, Queensland-based MFS Investment Management Ltd., which refused responsibility for cleaning up the site, arguing that its role is to dispose of the property and reimburse Mr. Sharpe's many creditors. Last week a spokesman for Major Projects Minister John Lenders said the property was not the Government's problem. Despite a recent pledge by Lord Mayor John So to deal with city eyesores, the council has washed its hands of the contaminated site it used to own. One developer interested in buying the property has even raised the possibility of suing the council over the contamination. Victoria's Environmental Protection Authority said that despite serving numerous notices on the property developer, it has not been able to convince the company to fund the cleanup. EPA's Mick Bourke said that the agency has served notices on various parties but that no person or group has claimed responsibility for the cleanup. ASBESTOS LITIGATION: UK Asbestos Claims Seen to Rise Until 2015 --------------------------------------------------------------- Citing more medical diagnoses and an increased awareness of victims' rights, a city solicitor revealed that claims against companies for asbestos-related illnesses are soaring, anticipating these figures to rise steadily until 2015. Godrey Morgan, whose Clarence-Road based law firm is a specialist in asbestos cases, said his firm had already seen a rise of 50 percent in the number of cases it was dealing with compared to last year. The law firm deals with asbestos claims from Norwich and all round the UK. Mr. Morgan said most claims his firm dealt with were from people exposed to asbestos in the 1940s to 1970s but he was dealing with one case where a client was exposed as recently as 1985. He also said he was calling for all types of asbestos to be banned from all buildings. "I think it should be the active responsibility of the owners of old buildings to get rid of it and it should stop being used at all because it's too dangerous," Mr. Morgan added. John Carter, head of personal injuries at Norwich-based law firm Steeles, expects that the number of claims will rise over the next 10 to 20 years. He said the challenge lies on identifying the insurers of the companies involved. Dr. Ian Gibson MP for Norwich North has predicted the rise in numbers of asbestos related diseases over the next 40 years will place a heavy financial burden at the door of the NHS. ASBESTOS LITIGATION: UK Inquest Proves Death was Work-related ------------------------------------------------------------- At an inquest in Norwich, central Norfolk district coroner Jacqueline McClay recorded a verdict of death by industrial disease, finding without a doubt that a former worker's death was asbestos-related. Wilfred Wilson died last March 11 at the Norfolk and Norwich Hospital at the age of 78. He was diagnosed with malignant mesothelioma in August of last year. His widow Brenda, who had been married to her husband for 53 years, said that Mr. Wilson had been healthy all of his life until he fell ill last year. He complained of breathing problems last March 7 and was confined in the hospital but he died a few days later. During his working life, he worked in the boot and shoe industry, the Merchant Navy, in steel, as a welder and as a site engineer, all jobs that potentially offered contact with asbestos. Welders in particular used to wear protective clothing containing asbestos. The post mortem examination said the presence of asbestos bodies showed a significant exposure to asbestos in the past. Mrs. Wilson confirmed that after the diagnosis, her husband began legal proceedings against a former employer over exposure to asbestos and that the case was still ongoing. ASBESTOS LITIGATION: MT School Sounds Alarm After Asbestos Find --------------------------------------------------------------- Authorities sealed off the fourth floor of the University of Montana's Science Complex last week after maintenance officials found unacceptably high levels of asbestos dust in an office. Tom Javins, assistant director of maintenance for UM's Facilities Services, said that no air samples have indicated any risk. However, a dust sample indicates an unacceptable level in the surface dust in at least one location. After workers were sent home, a licensed asbestos abatement contractor was brought in to clean up the dust over the weekend. The asbestos-contaminated dust is believed to be from fireproofing on steel beams in the ceiling since there hasn't been any construction in the area, said Hugh Jesse, UM's director of Facilities Services. This week, a contractor will open up the ceiling panels and begin removing the fireproofing from beams above the suite of offices where the dust was first found. Later, the fireproofing material above surrounding offices will be removed, and eventually, the entire building will be evaluated for traces of asbestos in the air and dust. Built in the early 1970s when it was common to use materials containing asbestos, the Science Complex has been regularly assessed for traces of airborne asbestos since the 1980s. Three years ago, UM officials started checking air samples quarterly, and last year, they began sampling the air each month. ASBESTOS LITIGATION: PCI Lays Grounds for Opposing Asbestos Bill ---------------------------------------------------------------- In response to the Senate Judiciary Committee's approval of legislation to create an asbestos trust fund, the Property Casualty Insurers Association of America reiterated its opposition to the bill "unless substantial improvements addressing insurer concerns are made." In a letter to Senate Majority Leader Bill Frist (R-Tenn.) and Senate Minority Leader Harry Reid (D-Nev.), PCI president and CEO Ernie Csiszar pointed to several key deficiencies with the legislation, notably the fund's potential for leakage to the tort system, the funding mechanism, and its proposed sunset language. Specifically, the letter outlines the following concerns: (1) Permitting claims short of final verdict or judgment to remain outside the system constitutes significant additional leakage from the system and extra costs for insurers by expanding the number of cases that will fall outside of the fund; (2) S. 852 does not contain any language prohibiting a workers' compensation claimant from collecting twice for the same claim, once from the no-fault trust fund and again in the no-fault workers' compensation system. Nor is there any provision protecting a defendant or insurer from paying twice for the same claim; (3) The legislation would require insurers to contribute US$46 billion to the trust fund, without any assurances that the program would end the current abusive asbestos lawsuit system; and (4) In the event the fund fails for any reason in its early years, insurers will find themselves back in the tort system and will be required to pay remaining asbestos claims and transaction costs, in addition, to the significant payments already made to the fund. The letter also established that allowing the fund to sunset at any time after start-up would mean that insurers would bear a greater risk than defendant participants because insurers are providing a disproportionate share (US$20.6 billion) of the up- front funding in the first five years. If claims are to be returned to the tort system after any future sunset, they should be brought in federal court. "PCI strongly believes now is the time for Congress to take action on the abuses in asbestos litigation. Unfortunately, S. 852 as currently reported is unacceptable as a solution to this problem," the letter concludes. PCI is composed of more than 1,000 member companies, representing the broadest cross-section of insurers of any national trade association. PCI members write over US$173 billion in annual premium, 39.4 percent of the nation's property/casualty insurance. ASBESTOS LITIGATION: FL Law's Medical Criteria Meet Challenges -------------------------------------------------------------- Florida's Asbestos and Silica Compensation Act or HB1019, which requires that plaintiffs meet a minimum level of specific medical criteria before they can pursue a claim in the court system, faces opposition from people who claim that the legislation that Gov. Jeb Bush has pledged to sign goes too far. Advocates said that hundreds of sick people with legitimate claims would be unable to sue to recover damages once the measure goes into effect on July 1, 2005. They asserted that an estimated 4,500 lawsuits would disappear from court dockets throughout the state next month and will be placed in a holding pattern. Asbestos has been mined and used commercially since the 1880s and is best known for its use as insulation in flooring, roofs and water pipes. By the time its harmful effects were widely publicized in the 1970s, an estimated 27 million workers had been exposed to the fibers, a 1982 study found. However, the diseases it causes don't manifest themselves for decades. Miami attorney David Jagolinzer, who specializes in asbestos- related claims, said the legislature ignored established medical standards when it set new rules about what proof people must provide to show that asbestos destroyed their lungs. He said that there are some who will not be able to meet the medical criteria even though doctors have said they are sick. Asbestos cases flocked to Palm Beach County after a ruling in 1997 that awarded US$31 million to a Mississippi electrician dying of cancer, in the case against Owens-Corning Fiberglas Co. The number of cases in the county peaked in 2002 with a total of 3,400 cases. Palm Beach County Circuit Judge Tim McCarthy has reduced that number by dismissing cases that have no connection to the area. He said that about 500 cases are still pending and about 80 that he dismissed for improper venue are still on appeal. Judge McCarthy said that by setting such tough medical standards, the legislature is preventing Florida asbestos victims from getting compensation. He believes that funds established by asbestos manufacturers would most probably run out by the time victims get sick enough to meet the criteria. In the meantime, Mr. Jagolinzer said, he is making plans to challenge the Florida law as unconstitutional. He argued that it is unlawful to stop people from seeking punitive damages and for setting new rules for people who have already filed suit. ASBESTOS LITIGATION: DEP to Monitor Remediation of PA Property -------------------------------------------------------------- Pennsylvania Department of Environmental Protection officials assured residents that state and federal agencies would constantly monitor the remediation of an asbestos-contaminated property where a proposed 17-story building is set to rise. In a meeting with Ambler Borough Council, DEP representatives George Horvat and Ragesh Patel confirmed that allowing Kane Core developers to build the Water's Edge high-rise would pose health risks but that the property is already considered risky in its current state. "Our concern is the same as your concern, to prevent community exposure [to the asbestos] as much as possible," Mr. Patel said. According to the DEP officials, the material at the property, near the intersection of Maple and Butler avenues in West Ambler, is scrap asbestos pipes or shingles. A 2001 study revealed there is 25 percent or less asbestos material in the soil on the site. Kane Core has laid out plans for lessening the amount of asbestos dust by keeping the site damp. Mr. Horvat explained that workers and vehicles alike would go through a stringent exit procedure to prevent contamination. He said once the remediation process is over, the DEP has no further responsibility on site. However, issues like how much liability the developer would have and how the building would come down would be included in the site's operation and maintenance plan. In addition, the remediation process could be phased over five years, with inspections at first every week, then every two weeks, then monthly, quarterly and yearly. The council will decide in July on a date to hold a rezoning hearing for the site. ASBESTOS LITIGATION: Trade Unions Seek Global Ban on Asbestos ------------------------------------------------------------- Trade unions, represented by over 4,000 workers, employers and governments from around the world, urged governments to ban the use of asbestos as building materials. The unions, who made the call at the 2005 annual conference of the International Labour Organization in Geneva, Switzerland, aims to put an end to the deaths and suffering caused by asbestos. Guy Ryder, the General Secretary of the International Confederation of Free Trade Unions, said that the group would soon announce the beginning of a country-by-country process in banning asbestos. ICFTU, which represents 145 million workers in 154 countries and territories, stated that asbestos killed over 100,000 people every year throughout the world. About 40 countries have already banned asbestos and nearly 80 more that still actively use asbestos will be called upon to stop such activities. Global unions had formally written to every government attending the ILO conference, asking for their involvement in banning asbestos or in supporting a world ban on the commercialization and use of the product. Trade unions at the ILO met last week to plan campaign activities until next year, when they hope the ILO would agree to work toward an all-out asbestos ban. The International Agency for Research on Cancer of the World Health Organization has declared asbestos a proven human carcinogen, which can cause lung cancer, malignant mesothelioma and gastrointestinal cancers. Despite previous hopes that chrysotile asbestos may be safe, scientific evidence proves that it can also cause cancer. Mr. Ryder said that unions would extend their appeal to employer, trade union and civil society organizations within every country to get involved in the ban, as a matter of urgency and human decency. If planned properly, he said that employment impacts of the ban could be offset through positive employment transition. Mr. Ryder told ICFTU affiliates throughout the world, "I am convinced that with targeted action from all us in each country, we will have a measurable effect on the implementation of our policy and on the realization of an effective world ban of asbestos." ASBESTOS LITIGATION: EPA Warns of Soil Contamination on MT Road --------------------------------------------------------------- The Environmental Protection Agency is investigating a "significant" soil contamination by asbestos along the road shoulder on Montana Highway 37 north of Libby, The Western News reports. Jim Christiansen, on-site cleanup coordinator for the EPA, said that as of this time, the EPA's main concern is the highway maintenance workers. Soil samples taken along the road shoulders showed asbestos levels of less than 1 percent, which is EPA's current cleanup trigger. However, Mr. Christiansen said there is no danger to motorists using the highway. He stressed that air-monitoring tests do not detect the presence of asbestos fibers along the right-of-way and the contamination is limited to the immediate shoulders of the highway right-of-way. The agency received data showing asbestos contamination along both sides of the road from the north side of the Kootenai River Bridge to the Rainy Creek area, where W.R. Grace's vermiculite mining and processing facilities were located. A soil sampling team found visible vermiculite in several locations along the highway, suggesting the material might have spilled from trucks coming from the mine to the expansion plant that was located between the river and railroad tracks in Libby. Mr. Christiansen said there is considerable information available that convinced him the contamination is from spillage and that vermiculite from the mine was not used as fill or base on the highway or as winter sanding material. To help determine potential impacts of the contamination, the EPA reviewed personal air samples taken in 2000-2001 from truck drivers, bikers and walkers using the stretch of highway where the contamination was found. The results showed no significant exposures. Other than monitors near the former screening plant, outdoor air samples from properties near the highway showed no elevated levels of asbestos. At the end of May, the EPA set up 12 air monitors at various points along the highway and collected samples during the day while vehicles used the road. The samples showed no elevated levels of asbestos. Meanwhile, the EPA is discussing what steps to take and how they can proceed. The agency is recommending that area residents avoid using the highway shoulders until the area is cleaned up or until further notice. ASBESTOS LITIGATION: MP Fears Rise in Claims Filed by Ex-miners --------------------------------------------------------------- Asbestos-related compensation claims by former miners in South Yorkshire town Barnsley are set to soar, claimed Michael Clapham, Barnsley West and Penistone MP. Mr. Clapham fears a rise in the number of ex-miners diagnosed with asbestos-related illnesses in the next few years as there can be a 40-year "incubation period" before symptoms show. Asbestos was used extensively underground in brake linings, boiler rooms, on pipes and in miners' lamps. Weston Park cancer hospital in Sheffield has reported an increase in mesothelioma patients and a spokesman said this was expected to continue. Barnsley solicitors Raleys is already dealing with about 70 compensation cases linked to asbestos. Partner Carol Gill said, "We have issued a number or proceedings and have had some decisions in our clients' favor. We can quite confidently say there was asbestos underground." Ex-miner Barry Crossland, aged 65, of Manor Park, Silkstone, spent almost 20 years at Houghton Main and Darfield pits. Last year he was diagnosed with pleural plaque, a thickening of the lung linings. As a worker in the pits, he said that he was never provided any safety clothing or mask and was never warned of the health risks in inhaling asbestos fibers. Mr. Clapham, chair of an all-party safety and health group, said he intends to press Barnsley hospital officials to make the drug, Alimta, available for mesothelioma sufferers. Alimta (Pemetrexed) has been proven to extend the life expectancy of patients with malignant pleural mesothelioma an average of 12 months, compared with six to eight months on existing treatments. It has been shown to manage symptoms, reduce pain and treat shortness of breath. Malignant mesothelioma is a cancer of the outer covering of the lung or abdominal cavity, and is frequently associated with past exposure to asbestos. The disease can be dormant for up to 25 years before symptoms develop, but it is very aggressive and painful, with most people given only three to 12 months to live. ASBESTOS LITIGATION: MN Appeals Court Reverses Ruling V. API Inc ---------------------------------------------------------------- The Court of Appeals of Minnesota on June 7, 2005 reversed a decision of the Dakota District Court to deny the motion for summary judgment filed by non-settling defendants. The Appeals Court ruled that respondent A.P.I. cannot pursue claims for contribution and indemnity against these companies, which include Mac Arthur Company, Illinois Tool Works, Inc., and Egan Companies, Inc. Larry Bunce, an ironworker, brought action against various defendants that sold, manufactured, or distributed asbestos containing products, and one defendant, A.P.I., Inc., brought third-party complaint against companies, seeking indemnity and contribution. After Mr. Bunce and A.P.I. entered into Pierringer release, third-party companies moved for summary judgment on contribution claim. The Pierringer release protects the nonsettling defendants who choose to go to trial with the plaintiff from ever having to pay more than their fair share of the verdict; at trial, they are free to try and shift the negligence blame onto the settling defendant. The settling defendant is protected because a Pierringer release settles once and for all the fixed amount it owes the plaintiff, even if the nonsettling defendants successfully shift all of the negligence blame onto the settling defendant at trial. The third-party defendants filed the motion before Judge Michael T. DeCourcy. The court denied the motion, to which the companies promptly appealed. Larry Bunce was employed as an ironworker from 1961 to 1994. On April 4, 2003, he filed a suit against 14 defendants, including A.P.I., Inc., alleging that he contracted mesothelioma as a result of his exposure to asbestos-containing products that were manufactured, sold, or distributed by the defendants. A.P.I. subsequently filed third-party complaints against several entities, including Illinois Tool Works, Inc.; Turner Construction Company; Gagnon, Inc.; Azco, Inc.; Insulation Sales Company; and Egan Companies, Inc., who were not sued directly by Mr. Bunce. A.P.I. alleged that if Mr. Bunce sustained the damages as alleged in his complaint, those injuries and damages were caused by negligence, strict liability, and breach of warranty of the third-party defendants. A.P.I. alleged that since Mr. Bunce recovered a judgment against the company, it would be entitled to full indemnity or contribution from the third-party defendants. On July 9, 2003, the district court granted Mr. Bunce's motion to sever respondent's third-party claims so that his claims could proceed to trial without delay. On the morning of his scheduled trial, he settled his case against A.P.I. with a Pierringer release in exchange for the settlement payment. The district court subsequently dismissed the suit against A.P.I. with prejudice. Mr. Bunce died a few weeks later. In September 2003, appellants and third-party defendants Illinois Tool Works, Inc., Turner Construction, Gagnon, Azco, and Insulation Sales moved for summary judgment on A.P.I.'s contribution claim, arguing that respondent had no contribution or indemnity rights against the third-party defendants because it had settled its differences with a Pierringer release. Appellant Egan Companies joined in the motion. On February 25, 2004, appellants sought the district court's permission to file a motion to reconsider its ruling. The district court denied permission to bring the proposed motion to reconsider, but granted the motion to certify to this court two questions as important and doubtful. This court consolidated the appeals by Illinois Tool Works, et al. and by Egan Companies. The Appeals Court agreed with the third-party defendants' argument that because A.P.I. and Mr. Bunce executed a standard Pierringer release, it cannot pursue claims for contribution or indemnity against nonsettling defendants. A Pierringer release cuts off the nonsettling defendants cross-claims for contribution as a matter of law. The Court also held that Mr. Bunce's death, certainly untimely and not in contemplation by any of the parties, does not eradicate the Pierringer release. The Appeals Court ruled that the district court erred in allowing A.P.I. to proceed with its claims on the theory that all possible claims against the third-party defendants have disappeared. In addition, this Court ruled that A.P.I. did not pay more than its fair share of common liability. Kyle B. Mansfield, Stephen L. Wilson, Foley & Mansfield, P.L.L.P., Minneapolis, MN, represented Illinois Tool Works, Inc., et al. Jon P. Parrington, Pustorino, Tilton, Parrington & Lindquist, PLLC, Minneapolis, MN, represented Egan Companies, Inc. Thomas R. Thibodeau, David M. Johnson, Thibodeau, Johnson, & Feriancek, PLLP, Duluth, MN, stood for respondent A.P.I., Inc. ASBESTOS LITIGATION: Residents Fear Health Risk from Abatement -------------------------------------------------------------- Shinfield residents expressed fears for their health after contractors removed asbestos from a nearby site without informing them. George Wimpey SW Ltd. is developing the site to put up about 80 homes. It applied for a license to remove asbestos from the Health and Safety Executive and was given the blessing of Wokingham planners in April. While workers at the site were supplied with specialist clothes and masks, the residents had no protection. They suspect that they were at risk from exposure to the carcinogenic material but were not warned or given safety equipment because there is no legal requirement to provide it. The residents also complained of the failure of the HSE or the company carrying out the work to inform them of the risks so that they could take precautions. David Tuck, whose home backs onto the site, said that pets could walk through the site and return to their homes, spreading the asbestos fibers. "It just seems systematic of what is happening in Shinfield at the moment and nobody is taking a blind bit of notice of what people in the village want," Mr. Tuck added. HSE spokesman Rob Kelly confirmed a licensed contractor removed asbestos from the site over an 85-day period. Wokingham District Council spokeswoman Andrea Jenkins said that since the work is taking place on private land, the contractors would inform the HSE and not the council. ASBESTOS LITIGATION: Asbestos Roofs of Garages Pose Health Risks ---------------------------------------------------------------- Possibly landing the taxpayer with a GBP1 million repair bill, a town hall report on the state of the borough's 3,000 garages stated that many asbestos roofs built in the 1940s and 1950s pose a "serious health and safety issue." Officials explained that these garages have increasingly become a focus for anti-social behavior, vandalism and fly tipping. They estimated that resultant problems with the structures could cost GBP350 a garage to safely replace existing roofs with metal or concrete sheeting. They are aware of the probability that the health of individuals who have come into contact with the loose asbestos fibers have been affected. Housing bosses have received more than 150 complaints in three years, and spent GBP60,000 repairing and boarding up derelict garages and removing fly tips. The council's yearly maintenance budget is around GBP200,000. The current report showed that less than two-thirds of garages are in use, while 70% of those are used for storage. The officers believe more than 10% of sites could be sold off to provide around 100 family homes for renting. Weekly rents, currently GBP5.72 for garages and GBP1.69 for bases, could also rise by 100%, with cash pumped back into maintenance programs. Housing officers have now drawn up a five-year plan to encourage more people to use them. It will also investigate ways to cut spending on garages, while releasing some land for housing. They aim to make each garage site suitable for development within six months. ASBESTOS LITIGATION: Aussie Urges Study on Asbestos-Lined Pipes --------------------------------------------------------------- A Shoalhaven resident is calling for an independent study to look at the effects of ingesting asbestos in drinking water after discovering that water pipes through the city were lined with the hazardous material. Bob Steptoe has written to Shoalhaven City Council, who gave reassurances that the pipes are safe. However, Mr. Steptoe is determined to push for further investigation, citing that he would prefer that an independent study be conducted to prove that there are no particles in the water and that it is harmless to human health. Mr. Steptoe's apprehension increased when he found that the US Environment Protection Authority has not yet established whether the presence of asbestos in water is a definite carcinogen. Shoalhaven Water manager John Gould said there was little evidence to suggest asbestos in water was harmful. He also stated that water pipes in Shoalhaven contain asbestos, as do thousands of other pipes throughout the nation and the world. The National Health and Medical Research Council which established the Australian Drinking Water guidelines states that a number of extensive epidemiological studies have been carried out, and on the basis of this information, there is no excess risk of cancer with asbestos in drinking water. ASBESTOS LITIGATION: KY County Residents Plan to Reject Landfill ---------------------------------------------------------------- Citing health and safety issues, the residents of north Warren County intend to ask the Board of Adjustments to reject a conditional use permit application for a construction landfill, Bowling Green Daily News reports. Contractors Waste Services has filed an application for a conditional use permit on two tracts of land at Harry Cherry Road and Willis Road in order to operate two one-acre construction demolition debris landfills. The 17-acre property is zoned for agriculture. Ernie Glass of Richardsville Road said he received a notice from the City-County Planning Commission of Warren County announcing the application and the Board of Adjustments meeting. Ewell Upton of Clark Circle also plans to attend and protest the application. He fears that harmful chemicals like asbestos could drain into the water system, citing that a government survey had considered the land unsuitable for a dump. Environmental Planning and Assistance Coordinator Stan Reagan said regulating the material at the landfill is the responsibility of the state's Department for Environmental Protection Division of Waste Management. He said the materials bound for the proposed landfill should not be harmful for the environment adding that asbestos is not a material that is going into the landfill. Instead, he said that asbestos would be directed to special fills that take household and industrial wastes, petroleum, contaminated soil, and other materials. Seeking to allay the residents' worries, Andy Gillies, executive director of the planning commission, said a public hearing would be held at 7 p.m. on June 23 in the Warren County Courthouse. ASBESTOS LITIGATION: A.P.I. Files Amended Plan of Reorganization ---------------------------------------------------------------- A.P.I. Inc. delivered to the U.S. Bankruptcy Court for the District of Minnesota its Second Amended Plan of Reorganization. As initially provided for in the first chapter 11 Plan filed, unimpaired claims, consisting of holders of wage, employee benefits, and general unsecured claims will be paid in full on the Plan's effective date. Secured creditors LaSalle Bank National Association and Wells Fargo Bank National Association will retain their liens on the Debtor's property. Asbestos personal injury claims will be transferred to an Asbestos Trust on the Effective Date. API will convey US$14.5 million to the Asbestos Trust. The Debtor's parent company, APi Group, Inc. will pay the Asbestos Trust US$500,000 on the Effective Date. The Initial Payments will be used to: (1) Pay all amounts payable to professionals, engaged by the Official Committee of Asbestos Personal Injury Claimants and the Official Representative for Future Asbestos Personal Injury Claimants other than those retained by the Debtor; and (2) Pay US$250,000 to the law firm of Sieben Polk LaVerdiere & Dusich, P.A. for services rendered and expenses incurred in connection with the negotiation of this Plan. The balance will be used to partially pay asbestos claimants. API will pay the Trust 80 quarterly payments of US$325,000 starting on the fourth month from the Effective Date. The Debtor needs to pay the Trust a total of US$26 million. James Baillie, Esq., at Fredrikson & Byron P.A., represents the Debtor in its restructuring. When the Debtor filed for protection from its creditors, it listed total assets of US$34,702,179 and total debts of US$63,000,000. Headquartered in St. Paul, Minnesota, A.P.I. Inc., f/k/a A.P.I. Construction Company is a wholly owned subsidiary of the API Group, Inc., and is an industrial insulation contractor. The Company filed for chapter 11 protection on January 5, 2005 (Bankr. D. Minn. Case No. 05-30073). ASBESTOS LITIGATION: UK Prime Minister Backs Global Asbestos Ban ---------------------------------------------------------------- Amid warnings that asbestos-related diseases will worsen poverty in the developing world, Prime Minister Tony Blair is seeking to impose a global asbestos ban. He said that efforts at the moment to achieve this goal are being coursed through the United Nations environment program. Mr. Blair said that he recognizes that asbestos can have serious effects on people's health and would actually ruin attempts to eradicate poverty. He noted that the EU had already banned the use of asbestos throughout its member states. Labor's Michael Clapham, Barnsley West and Penistone MP, had urged the Prime Minister to head the campaign as part of his agenda for Britain's presidencies of the G8 and the EU. Action on African poverty and climate change have been set as priorities when the leaders of some of the world's richest nations meet in Scotland next month for the G8 summit. Mr. Clapham asserted that there are good reasons for the worldwide ban, in particular, because manufacturing has shifted to the developing world. Hence, the suffering and death brought on by exposure to the carcinogenic material would certainly add to poverty. "And it will go on adding to poverty unless we can bring in a ban very similar to the one that's been introduced throughout the industrial world," added Mr. Clapham. ASBESTOS LITIGATION: Toxic Exposure Caused Navy Officer's Death --------------------------------------------------------------- Held in London earlier this week, an inquest concluded that a former senior Royal Navy officer died from exposure to asbestos on submarines decades ago. Peter Luce, aged 63, of Bildestone, Suffolk, served in the navy for 20 years before becoming a management consultant. A former lieutenant commander, he transferred from submarines to surface vessels later in his navy career. The inquest established that in Mr. Luce's early years as a sub-mariner, he had come into contact with asbestos-lagged piping. The coroner recorded a verdict of industrial disease to Mr. Luce's death in May from a form of asbestos-related lung cancer. ASBESTOS LITIGATION: ABB to Submit Settlement Plan on June 23 ------------------------------------------------------------- Swiss-based engineering group ABB Ltd. (NYSE: ABB) will submit a reworked asbestos settlement plan to a U.S. court on June 23, the Company said in a statement. A U.S. bankruptcy judge earlier this week ordered the parties in the asbestos case of ABB Ltd. to file their revised settlement papers no later than June 24. Judge Judith Fitzgerald of the bankruptcy court for western Pennsylvania in Pittsburgh also set a July 7 hearing on the terms of the settlement. "There is no problem; we are fully on track," press spokesman Thomas Schmidt said. ABB has around 100,000 asbestos lawsuits pending in the U.S., stemming from people who claim to have been exposed to the fiber products manufactured at ABB's U.S. Combustion Engineering unit. The Company moved to resolve its asbestos problems in March by offering to pay an additional US$232 million to claimants. That money was on top of the US$1.2 billion that ABB had already agreed to contribute to a settlement under an earlier plan, which was thrown out by a U.S. court last year. The settlement would cap claims from former workers who made products containing potentially carcinogenic asbestos. Steven Kazan, who represents claimants with cancer, said the lawyers from all sides were meeting to proof-read the documents and said he hoped papers could be filed as soon as the end of this week. Mr. Kazan said the "overwhelming bulk" of the revised settlement would go to cancer victims, and almost all of the money in total would go to cancer patients and those with the lung condition asbestosis. ABB is one of many companies attempting to use U.S. bankruptcy processes to shield its ongoing operations from liabilities related to products they ceased making decades ago. ASBESTOS LITIGATION: Traders Watch Cape PLC for Settlement Plans ---------------------------------------------------------------- Market traders closely observed building materials group Cape PLC earlier this week as they speculated that the Company was about to reveal details of a fundraising to settle future UK asbestos-related claims, The Telegraph reports. The company, which used to mine asbestos, is believed to be completing its long-term financing plans to address the asbestos issue. Dealers speculated the group is considering placing new shares at around the 110p-a-share level to raise money. In 2004, the Company reached an out-of-court settlement to compensate 7,500 workers at its South Africa facilities who had suffered asbestos-related diseases. The litigation was hailed as a landmark case for its victims. Last year Cape posted a pre-tax profit of GBP5.8 million, after paying out GBP3.7 million in compensation. Dealers said the group was eager to put its asbestos past behind it, as the amount of future damages are difficult to predict and experts calculate that in general the number of claims are yet to peak. Cape shares dropped to a low of 4�p in November 2002 on uncertainties about the asbestos litigation. The following year the group settled with its claimants in South Africa but not in the UK. Cape shares were pegged last Wednesday at 131�p. ASBESTOS LITIGATION: OK Rep. Asks for Scoring of Asbestos Deal -------------------------------------------------------------- Intending to do "fact-finding" before approaching any other member, a prominent conservative in the House is raising concerns about the cost of the asbestos bill in relation to federal spending. In a letter distributed as part of the Republican Study Committee's weekly Internet update, Rep. Ernest Istook (R-Okla.) requested Congressional Budget Office Director Douglas Holtz- Eakin to score the asbestos-claims bill before it moves to the House. He said he sent the request to the CBO because he was concerned that House members had been left out of the negotiations. As previously reported in the June 3, 2005 edition of the Class Action Reporter, the committee voted 13-5 for the bill that would eliminate asbestos lawsuits and create a 30-year fund financed by companies facing litigation and their insurers. It awaits a floor vote in the Senate before moving to the House Judiciary Committee. Mr. Istook said the bill "might be a backdoor way of undermining the cutting that we're trying to do on federal spending, especially mandatory spending." Mr. Istook noted that he had not yet "established a position" on the bill but wrote that he had "been informed that [its] resolution fund would add billions of dollars to the public debt that would take decades to pay off." He also wrote that the bill's "interest costs would consume much of the value of the fund" and that it would "be unable to pay all valid claims" and "create a gigantic, wasteful bureaucracy." A spokesman from the Mr. Istooks's office said it would release the estimate once it is received. ASBESTOS LITIGATION: Business Group Aims to Expose Flaws in Bill ---------------------------------------------------------------- The Coalition for Asbestos Reform, a group of small and medium sized businesses and major insurance companies, has engaged a team of veteran campaign, advertising and public relations professionals to launch a major national campaign to educate U.S. businesses and policymakers about the serious flaws in the asbestos liability legislation approved by the Senate Judiciary Committee last month. The press release related that as a part of the effort, C.A.R. has hired Fleishman-Hillard, one of the largest PR agencies in the U.S., and its affiliate, Mercury Public Affairs, an advertising and research firm with experience in more than 20 Senate campaigns. The campaign will explain the effect of the Specter-Leahy bill on hundreds of businesses that face potential asbestos liability, most of whom are unaware of the devastating impact of US$140 billion in new taxes S. 852 authorizes to finance the trust fund mandated by the bill. The C.A.R. campaign is launched at a time when S. 852 has hit rough water after clearing the Senate Judiciary Committee in late May. Several Republican Senators who supported the bill in committee have warned they will oppose it on the floor unless substantial changes are made. In addition, Governor Rick Perry of Texas strongly criticized the bill in a letter to President Bush, describing it as "deeply flawed" and saying S. 852 would "not only be harmful to Texas, it would counter the civil justice reform philosophy we have pursued in Texas in recent years." C.A.R.'s Executive Director, Tom O'Brien, urged Senators to recognize that the bill is not in the best interests of either the business community or victims of asbestos poisoning. "We continue, however, to work with Senators Specter and Leahy and other members of the committee to address the fundamental flaws of this legislation," Mr. O'Brien said. "Most of the affected companies do not realize S. 852 enacts a new tax that shifts billions of dollars in liability away from the companies that created the asbestos crisis and onto companies that prudently managed their risk and purchased insurance to protect their stockholders and employees. Then it cancels the insurance coverage of those companies." C.A.R. shares the concerns of several Republican and Democratic Senators on the Judiciary Committee who expressed skepticism about the financial viability of the compensation scheme envisioned by S. 852 and its US$140 billion trust fund. "Widespread doubt about the long-term solvency of the trust fund, and even its short-term solvency, undermine claims that S. 852 will reduce the uncertainty faced by businesses and asbestos victims alike under the current tort system," Mr. O'Brien said. "In fact, S. 852 will create greater uncertainty for everyone except the few big companies who would be allowed to escape the billions of dollars in costs for which they are responsible. C.A.R. also questions whether the time has passed for a trust fund solution to the asbestos litigation crisis. "In the past three or four years, the states have stepped forward with medical criteria approaches that have won broad support and other reforms that have reduced the number of frivolous lawsuits," Mr. O'Brien said. "We believe the Congress should look to those models for a federal approach to asbestos reform-not the trust fund model currently contained in S. 852." ASBESTOS LITIGATION: Esso Makes GBP90T Settlement with Ex-worker ---------------------------------------------------------------- Esso Petroleum Co. Ltd. reached a GBP90,000 out-of-court settlement with a former worker, who was diagnosed with the terminal asbestos-related cancer, mesothelioma, in April 2004. Gerald Read, aged 80, a widower, worked as a scaffolder at the Esso oil refinery at Fawley, Hampshire, between 1968 and 1981, where his job involved preparing the scaffolding and boards that laggers used when replacing old asbestos. He claims however that he had never worked directly with asbestos. Esso settled out-of-court without accepting any liability. A spokesman for Esso said that asbestos was widely used throughout the industry as an insulating material in the 1950s and 1960s. However, he declared that the refinery stopped the use of asbestos as an insulation medium in 1967. Since then, the Company has replaced asbestos that has been damaged or removed for maintenance purposes with modern insulation. Exxon Mobil subsidiary Esso Petroleum refines, distributes, and markets petroleum products in the United Kingdom. It also operates the UK's biggest privately owned underground oil pipeline distribution network. ASBESTOS LITIGATION: Widow Urges More Medical Research in the UK ---------------------------------------------------------------- A widow called for more research into asbestos-related diseases after her husband succumbed to asbestos-related lung cancer due to occupational exposure. Robert Martin, aged 63, died at Queen Elizabeth Hospital, Stadium Road, Woolwich, after developing lung cancer. As a plasterer, he worked with asbestos for over 25 years. In an inquest last week, Mr. Martin's wife Avril told Southwark Coroner's Court, "I wish there could be more formal research so, if they catch the disease a bit earlier, something can be done." Pathologist Dr. Peter Jerreat said malignant mesothelioma, which was diagnosed in 2004, had led to tumors in his lungs. Coroner John Sampson recorded a verdict of industrial disease, which he says, is a result of inhalation of asbestos fibers in the workplace. ASBESTOS ALERT: UT Restaurant Files Suit V. Far West Roofing Inc ---------------------------------------------------------------- The owners of a Marie Callender's restaurant filed a lawsuit against Far West Roofing Inc. for violating air quality standards in removing asbestos during roof replacement. According to the suit, the Riverton-based roofing company spent several days replacing the Fort Union area restaurant's leaky roof but failed to remove an underlying layer of asbestos- containing felt. The state Air Quality Board informed the restaurant owners of the violations and ordered the felt removed. This incident resulted to the owners incurring cleanup costs and penalty fees to the state of more than US$20,000. The U.S. Environmental Protection Agency subsequently charged the restaurant with misdemeanor negligent release of hazardous emissions. The restaurant paid the resulting US$50,000 fine and has had to make several other environmental improvements, the suit states. Company Profile: Far West Roofing Inc. 14463 Vantage Cir Riverton, UT 84065 Phone: (801) 253-7799 ASBESTOS ALERT: GA Court Reverses in Landers v. Medical Center -------------------------------------------------------------- The Court of Appeals of Georgia on June 2, 2005 reversed a trial court ruling that had denied the motion for summary judgment in the case captioned, Landers et al. v. The Medical Center of Central Georgia et al., which had an employee filing a suit for the doctor's failure to inform him promptly of a lung cancer diagnosis. Donald Landers brought this negligence action against his employer and against the doctor who performed his medical examination after both failed to advise him of the results of his chest x-ray. The trial court denied the doctor's motion for summary judgment, finding that, under regulations adopted to implement the Occupational Safety and Health Act of 1970, an employment examiner owes a duty to inform an examinee directly of all the results of a medical examination, which are not available until after the conclusion of the physical examination. The doctor appealed, contending he is entitled to summary judgment because an employment examiner owes no legal duty to an examinee. In addition, the doctor contended that the employer's failure to provide Mr. Landers a copy of the x-ray report constitutes an intervening cause. For about 20 years, Mr. Landers worked for North Brothers, Inc. and NB Environmental, Inc. as an insulation installer. As part of his job, he handled asbestos materials. Since the early 1990s, North Brothers, in accordance with OSHA regulations, required Mr. Landers to submit to a yearly medical examination with a physician it chose and compensated. At the time, North Brothers had a contract with Work Horizons, an occupational medicine practice, to perform employment medical examinations to check each asbestos worker for signs of asbestos-related diseases and to certify that he was physically capable of using a negative-pressure respirator. On January 29, 1998, Vincent Greico, a Work Horizons doctor, performed Mr. Landers' annual employment medical examination, which included a chest x-ray, pulmonary function or lung capacity test, and a physical examination of his upper body. At the end of the exam, Dr. Greico told him his pulmonary function test and physical examination were fine and gave him a written report titled "Physician's Opinion" to take to North Brothers. In that document, Dr. Greico indicated that he had detected no medical conditions that would place Mr. Landers at an increased risk of health impairment from asbestos exposure and cleared him to wear a respirator. He further certified that he informed Mr. Landers of the results of the examination and of any medical conditions that may result from asbestos exposure. Upon his return to work, his supervisor told him that he "passed" the medical examination and was cleared to use a respirator. The x-ray was routinely delivered to Work Horizon's affiliated hospital to be evaluated by a qualified "B-reader" or Board- certified radiologist, who noted a "vague opacity" in the lung, and recommended more tests. This was a serious finding for a patient who worked with asbestos, a known carcinogenic agent, and possibly indicated a life-threatening problem. Dr. Greico received this report and prepared a notice to North Brothers quoting the radiologist's findings and recommendation and indicating that Mr. Landers needed follow up with his personal physician. Despite his intention and despite having the contact information on file, Dr. Greico took no action to relay the radiologist's report directly because he expected North Brothers to give Mr. Landers a copy of the notice. North Brothers personnel, however, put the notice in Mr. Landers' personnel file without providing a copy to their employee. A year later, Dr. Greico again performed the annual medical examination. Without referring to the 1998 chest x-ray or the radiologist's report during the examination, he again cleared Mr. Landers to wear a respirator. Within a few days, Dr. Greico received a report showing the spot on the lung. Dr. Greico telephoned Mr. Landers and told him about the results of his most recent chest x-ray, and asked him what he had done about the situation since the 1998 x-ray. Alerted to the spot on his lung for the first time, Mr. Landers sought medical care and learned he had advanced lung cancer. Mr. Landers brought this action for damages, and his wife asserted a claim for loss of consortium, against the doctor and the doctor's employer, the Medical Center of Central Georgia, Inc. and Central Georgia Health Systems, Inc., jointly doing business as Work Horizons as well as against North Brothers. He alleged that the one-year delay in the diagnosis of his lung cancer allowed the disease to worsen, made treatment more difficult, and made the prognosis for successful treatment less favorable. Dr. Greico argued that he is entitled to judgment as a matter of law because Mr. Landers failed to set out facts supporting the first element of a negligence claim, a duty of care. The Appeals Court agreed with Dr. Greico's contention that OSHA regulations cannot support a finding of a legal duty because the regulations impose duties only on employers. The Court also believed that Dr. Greico is entitled to judgment on the basis that the undisputed facts show that there existed no doctor- patient relationship from which a duty of care would arise. It is a well-settled principle of Georgia law that there can be no liability for malpractice in the absence of a physician-patient relationship. Company Profile: NB Environmental Inc 1554 Old Frankfort Pike Phone: 404-627-6281 Medical Center of Central Georgia 777 Hemlock Street Macon, Georgia Phone: 478-633-1353 Central Georgia Health Systems, Inc Macon, Georgia Phone: 478-633-7107 or 478-633-1527 ASBESTOS ALERT: EPA Imposes $3T Fine on CA Demolition Contractor ---------------------------------------------------------------- The Environmental Protection Agency imposed a US$3,000 fine on a local business for an alleged violation of federal asbestos regulations, The Daily Bulletin reports. MLE Environmental Technologies of Rancho Cucamonga reportedly violated the Clean Air Act in 2001 in the demolition of several structures in Imperial County. Caltrans had hired MLE to remove about 556 square feet of asbestos material from the structures before tearing them down. MLE demolished the structures in September 2001 but allegedly failed to submit a written notification of its intention to demolish the property to the EPA beforehand. Company Profile: MLE Environmental Technologies C/o Victor Muniz P.O. Box 4606 Rancho Cucamonga CA 91701 New Securities Fraud Cases BOMBARDIER INC.: Schoengold Sporn Lodges Amended Complaint in NY ---------------------------------------------------------------- The law firm of Schoengold Sporn Laitman & Lometti, P.C. ("SSL&L") initiated an amended class action complaint (the "Amended Complaint") against Bombardier Inc., Bombardier Capital, Inc., Bombardier Capital Mortgage Securitization Corporation and certain current and former officers and directors to include purchasers of Bombardier Capital Mortgage Securitization Pass-Through Certificates (the "Certificates") Series 1998-A, 1998-B, 1998-C, 1999-A, 1999-B and 2001-A during the period February 7, 2000 through February 7, 2005 (the "Class Period"). The Amended Compliant asserts claims under Sections 10 and 20 of the Securities Exchange Act of 1934. The case is currently pending in the Southern District of New York before Judge Shira A. Scheindlin. The Amended Complaint alleges that, during the Class Period, the prospectus disseminated in connection with the offering of the Certificates and subsequent statements by defendants, contained materially false and misleading statements concerning the quality of the manufactured housing loans which served as collateral for the Certificates. The misstatements included that the loans were issued only after careful scrutiny of borrower credit when, in fact, borrower creditworthiness was regularly disregarded. The truth only began to be partially revealed as extraordinarily high delinquency and foreclosure rates persisted with respect to the collateral leading to a series of rating downgrades, including in 2004. Under recent amendments to the securities laws, if you purchased the Bombardier Certificates during the Class Period, you may request that the Court appoint you lead plaintiff. However, you must do so before August 15, 2005. SSL&L was established in 1962 and has specialized in securities fraud litigation for over 35 years. Recently in 2004, SSL&L achieved a $39 million settlement as sole lead counsel in the prosecution of the securities litigation against Nicor, Inc. In 2003, Federal District Judge McMahon in commending on SSL&L's prosecution of another securities fraud action noted "Through (SSL&L's) efforts, after intensive investigation, concentrated litigation and extensive arm's-length bargaining, and without the benefit of any governmental agency's investigation, Class Counsel have secured a settlement fund which confers an excellent benefit to the Class." For more details, contact Joel P. Laitman, Esq. or Frank R. Schirripa, Esq. of Schoengold Sporn Laitman & Lometti, P.C., 19 Fulton Street, Suite 406, New York, NY, 10038, Phone: 212-964-0046, Fax: 212-267-8137 or (866) 348-7700, E-Mail: shareholderrelations@spornlaw.com, Website: http://www.spornlaw.com. BROCADE COMMUNICATIONS: Wechsler Harwood Lodges Stock Suit in CA ---------------------------------------------------------------- The law firm of Wechsler Harwood LLP filed a Federal Securities fraud class action suit on behalf of all purchasers of the common stock of Brocade Communication Systems, Inc. (Nasdaq:BRCD) acquiring the stock between February 21, 2001 and May 15, 2005, both dates inclusive (the "Class Period"). The action, entitled, Sreenivas v. Brocade Communication Systems, Inc., et al., Case No. (not yet assigned), is pending in the United States District Court for the Northern District of California, and names as defendants, the Company and certain of its senior officers and directors. 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. More specifically, the complaint alleges that defendants failed to disclose and misrepresented material adverse facts, which were known to defendants or recklessly disregarded by them. In particular, the Complaint alleges that during the Class Period defendants: (1) improperly accounted for the cost of stock-based compensation; (2) did not follow appropriate option granting guidelines; and (3) lacked adequate internal controls. As a consequence of the foregoing, the Complaints alleges the Company's financial results were in violation of Generally Accepted Principles and were materially inflated at all relevant times. On January 6, 2005, Brocade announced that as a result of an internal review it expected to restate its financial statements for fiscal years ending 2002 and 2003 to record additional stock-based compensation expense. The news shocked the market. On January 7, 2005, shares of Brocade fell $0.52 per share or 7.51 percent to close at $6.40 per share. On January 24, 2005, the Brocade announced that it expected to record additional stock-based compensation charges. On this news shares of Brocade fell another $0.57 per share or about 10 percent, on January 24 and January 25, 2005, to close at $5.83 per share. Then, on May 16, 2005, before the markets opened, the Company announced that it will restate its financial statements for the fiscal years ending 2002 through 2004 to record additional charges for stock- based compensation expense. On this news, shares of Brocade fell $0.12 per share or 2.91 percent, on May 17, 2005, to close at $4.01 per share. For more details, contact Craig Lowther, Wechsler Harwood Shareholder Relations Department of Wechsler Harwood LLP, 488 Madison Avenue, 8th Floor, New York, NY, 10022, Phone: (877) 935-7400, E-mail: clowther@whesq.com. CRAY INC.: Milberg Weiss Lodges Securities Fraud Suit in W.D. WA ---------------------------------------------------------------- The law firm of Milberg Weiss Bershad & Schulman LLP initiated a class action lawsuit was filed today, on behalf of purchasers of the securities of Cray Inc. ("Cray" or the "Company") (Nasdaq: CRAY) between October 23, 2002, and May 9, 2005, inclusive (the "Class Period"), seeking to pursue remedies under the Securities Exchange Act of 1934 (the "Exchange Act"). The action is pending in the United States District Court for the Western District of Washington before the Honorable James Robart, against defendants Cray, James E. Rottsolk and Scott J. Poteracki. The complaint alleges that throughout the Class Period defendants consistently forecasted significant foreseeable revenue growth, from about $155 million in 2002, to about $220 million in 2003 and to $300 million by 2004. To help achieve this impressive growth, defendants also issued tens of millions of dollars in stock in follow on offerings, and also used over $115 million of Cray stock to acquire OctigaBay, a company that also purported to supply Cray with additional marketable technologies. Unbeknownst to investors, however, the Company could not achieve sustained periods of revenue growth and profitability and lacked an adequate system of internal controls. Beginning on March 16, 2005, defendants began to issue a series of disclosures that ultimately revealed the Company's complete lack of an internal system of financial and operational controls, as particularized in the complaint, sparking a decline in Cray's stock price. On May 9, 2005, the final day of the Class Period, Cray revealed that it had received a Notice of Potential Delisting from the Nasdaq. During the Class Period, Cray insiders sold a total of 933,474 of their personally held shares of Cray common stock for gross proceeds of $8,374,416. For more details, contact Steven G. Schulman, Peter E. Seidman or Andrei V. Rado of Milberg Weiss Bershad & Schulman LLP, One Pennsylvania Plaza, 49th fl., New York, NY, 10119-0165, Phone: (800) 320-5081, E-mail: sfeerick@milbergweiss.com, Web site: http://www.milbergweiss.com. DITECH COMMUNICATIONS: Milberg Weiss Files Securities Suit in CA ---------------------------------------------------------------- The law firm of Milberg Weiss Bershad & Schulman LLP announces that a class action lawsuit on behalf of purchasers of the securities of Ditech Communications Corporation ("Ditech" or the "Company") (Nasdaq: DITC) between August 25, 2004 and May 26, 2005, inclusive (the "Class Period"), seeking to pursue remedies under the Securities Exchange Act of 1934 (the "Exchange Act"). The action, case number C05-02406 -JSW, is pending in the United States District Court for the Northern District of California before the Honorable Jeffrey S. White, against defendants Ditech, Timothy K. Montgomery (CEO, Pres., Chairman) and William J. Tamblyn (CFO). This action involves materially false and misleading misrepresentations and omissions by defendants regarding two aspects of Ditech's business: (1) Voice Quality Assurance ("VQA") Services: During the Class Period, defendants represented that Ditech had received two significant VQA orders from new customers in Asia. The Company touted this as the first success in its efforts to enter the VQA market in a rapidly growing geographical area. In fact, however, the orders were not solidified. The purported customers were not obligated to, and, as it turned out, did not purchase the services; (2) Misrepresentations Regarding the Impact of the Merger Between Sprint and Nextel: In December 2004, Nextel (which accounted for over 40% of Ditech's revenues) announced a merger with Sprint. Given the importance of Nextel to Ditech's business, certain securities analysts posited that the cost cutting and integration of Nextel and Sprint operations might result in less business for Ditech. In response, defendants represented that the merger should not be of concern to Ditech investors and that it was "quite good" for the Company. In fact, as defendants knew or recklessly disregarded, the Nextel-Sprint merger posed a serious threat to Ditech's business, one that could erase nearly half of its revenues. While the price of Ditech shares was artificially inflated by defendants' false statements and failures to disclose, Company insiders, including defendants Montgomery and Tamblyn, sold a total of 320,000 of their personally held Ditech shares for gross proceeds of $6,715,650. Investors began to learn the truth about the purported VQA orders on November 3, 2004, when the Company announced that the highly-touted orders had not shipped, causing the Company to miss its revenue goals for the second quarter of 2005 and calling into question the Company's VQA expansion plans. The price of Ditech common stock fell by 25.5% to $16.60 per share in response to the announcement, on unusually heavy trading volume. Defendants, however, maintained this was merely a "delay" and that they still expected the orders to ship, a claim that defendants knew, or recklessly disregarded, was misleading. The truth about the impact of the Nextel-Sprint merger on Ditech was revealed after the close of trading on May 26, 2005. At that time, Ditech announced that orders from Nextel dropped substantially as a result of the Nextel-Sprint merger and that a continuing decline in orders was expected. Although defendants did not directly address the issue in this release, the promised VQA sales to the two new customers from Asia still did not materialize, nearly a year after defendants supposedly "secured" the orders. In response to this announcement, Ditech common stock dropped by 38%, to $7.79 per share, on unusually heavy trading volume. For more details, contact Steven G. Schulman, Peter E. Seidman or Andrei V. Rado of Milberg Weiss Bershad & Schulman LLP, One Pennsylvania Plaza, 49th fl., New York, NY, 10119-0165, Phone: (800) 320-5081, E-mail: sfeerick@milbergweiss.com, Web site: http://www.milbergweiss.com. DITECH COMMUNICATIONS: Schatz & Nobel Lodges Stock Lawsuit in CA ---------------------------------------------------------------- The law firm of Schatz & Nobel, P.C. initiated a lawsuit seeking class action status in the United States District Court for the Northern District of California on behalf of all persons who purchased the securities of Ditech Communications Corp. (Nasdaq: DITC) ("Ditech") between August 25, 2004 and May 26, 2005 (the "Class Period"). The Complaint alleges that Ditech and certain of its officers and directors violated federal securities laws by making misrepresentations regarding Ditech's business condition. Specifically, Defendants represented that Ditech had received two significant Voice Quality Assurance ("VQA") orders from new customers in Asia. Ditech touted this as the first success in its efforts to enter the VQA market in a rapidly growing geographical area. In fact, the orders were not solidified. The purported customers were not obligated to, and, did not purchase the services. Additionally, it is alleged that Ditech misrepresented the impact of the merger between Sprint and Nextel. Given the fact that Nextel accounted for over 40% of Ditech's revenues, certain securities analysts posited that the cost cutting and integration of Nextel and Sprint operations might result in less business for Ditech. In response, defendants represented that the merger should not be of concern to Ditech investors and that it was "quite good" for the Company. In fact, as defendants knew the Nextel-Sprint merger posed a serious threat to Ditech's business, one that could erase nearly half of its revenues. While the price of Ditech shares was artificially inflated by defendants' false statements and failures to disclose, Company insiders sold a total of 320,000 of their personally held Ditech shares for gross proceeds of $6,715,650. For more details, contact Wayne T. Boulton of Schatz & Nobel, Phone: +1-800-797-5499, E-mail: sn06106@aol.com, Web site: http://www.snlaw.net. DREAMWORKS ANIMATION: Wechsler Harwood Lodges Stock Suit in CA -------------------------------------------------------------- The law firm of Wechsler Harwood LLP filed a Federal Securities fraud class action suit on behalf of all purchasers of the common stock of DreamWorks Animation SKG, Inc. (NYSE:DWA) acquiring the stock between January 3, 2005 and May 10, 2005, both dates inclusive (the "Class Period"). The action, entitled, "Presuti v. DreamWorks Animation SKG, Inc., et al.", Case No. 05-cv-4229(GHK)(VKB), is pending in the United States District Court for the Central District of California, and names as defendants, the Company and certain of its senior officers and directors. A copy of the complaint can be obtained from the Court or can be viewed on Wechsler Harwood web site at: www.whesq.com. 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. More specifically, the complaint alleges that DreamWorks, a developer and producer of CG animated films, and the other defendants failed to disclose and misrepresented material adverse facts, which were known to defendants or recklessly disregarded by them. In particular, the Complaint alleges that during the Class Period, defendants made materially false and misleading statements regarding the Company's business and prospects, including statements regarding the continuing strong sales of its "Shrek 2" DVD. Then, on May 10, 2005, one or more Company insiders leaked inside information to a reporter at Newsweek. The same day, Newsweek ran a story titled "Insiders say DreamWorks is about to report surprisingly bad results," which stated that "the studio expects to report earnings substantially below the 60 cents per share that Wall Street analysts have estimated for the quarter." After the market closed on May 10, 2005, DreamWorks released its financial and operating results for Q1 2005 and reported revenues and earnings far short of previous guidance and analysts' expectations of earnings of $0.58 a share on revenue of $175.2 million. As a result of the defendants' false statements, DreamWorks' stock price traded at inflated levels during the Class Period, increasing to as high as $41.09 per share. However, when the truth was revealed in the Newsweek story and DreamWorks' press release on May 10, 2005, the Company's shares fell to below $33 per share. For more details, contact Craig Lowther, Wechsler Harwood Shareholder Relations Department of Wechsler Harwood LLP, 488 Madison Avenue, 8th Floor, New York, NY, 10022, Phone: (877) 935-7400, E-mail: clowther@whesq.com. MAGMA DESIGN: Charles J. Piven Files Securities Fraud Suit in CA ---------------------------------------------------------------- The Law Offices Of Charles J. Piven, P.A. initiated a securities class action on behalf of shareholders who purchased, converted, exchanged or otherwise acquired the common stock of Magma Design Automation, Inc. (NASDAQ: LAVA) between October 23, 2002 and April 12, 2005, inclusive (the "Class Period"). The case is pending in the United States District Court for the Northern District of California against defendant Magma and one or more of its officers and/or directors. The action charges that defendants violated federal securities laws by issuing a series of materially false and misleading statements to the market throughout the Class Period, which statements had the effect of artificially inflating the market price of the Company's securities. No class has yet been certified in the above action. For more details, contact the Law Offices Of Charles J. Piven, P.A., The World Trade Center-Baltimore, 401 East Pratt Street, Suite 2525, Baltimore, MD, 21202, Phone: 410/986-0036 E-mail: hoffman@pivenlaw.com. OCA INC.: Pomerantz Haudek Lodges Securities Fraud Lawsuit in LA ---------------------------------------------------------------- The law firm of Pomerantz Haudek Block Grossman & Gross LLP initiated a class action lawsuit on behalf of purchasers of securities of the Orthodontic Centers of America ("OCA" or the "Company") (NYSE:OCA) during the period from May 18, 2004 through June 7, 2005, inclusive (the "Class Period"). The complaint was filed in the United States District Court, Eastern District of Louisiana. The Complaint charges that OCA, which provides management services to orthodontists, and its two senior officers, Bartholomew F. Palmisano, Sr., (CEO) and David E. Verret (CFO), defrauded investors by improperly recognizing revenues. On June 7, 2005, OCA announced that the Company was unable to file its already delayed year end report for 2004, and needed to restate its quarterly financial statements for 2004. OCA admitted, among other things, that it had materially overstated its patient receivables and patient revenue for the first three quarters of 2004. Following this announcement, OCA's stock price plummeted by $1.53 per share, to close at $2.50 per share, and has since fallen further to under $1.50 per share, a total drop of more than 66%. For more details, contact Teresa Webb of Pomerantz Haudek Block Grossman & Gross LLP, Phone: (888) 476-6529, E-mail: tlwebb@pomlaw.com, Web Site: http://www.pomlaw.com. POSSIS MEDICAL: Reinhardt Wendorf Files Securities Lawsuit in MN ---------------------------------------------------------------- The law firm of Reinhardt Wendorf & Blanchfield initiated a class action lawsuit in the United States District Court for the District of Minnesota, on behalf of shareholders who purchased or otherwise acquired the securities of Possis Medical, Inc. ("Possis" or "the Company") (Nasdaq:POSS) between September 24, 2002 and August 24, 2004 (the "Class Period"). The Complaint alleges that during the Class Period Possis and certain of the Company's executive officers issued materially false and misleading financial statements to the investing public regarding its financial outlook and the prospects for its key product, the AngioJet System, in violation of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b 5 promulgated thereunder. Possis Medical, Inc. engages in the development, manufacture, and marketing of medical devices. During the Class Period, defendants made numerous positive statements regarding the Company's financial performance and prospects. Plaintiff claims defendants' omissions and material misrepresentations during the Class Period artificially inflated Possis' stock price, inflicting damages on investors. The Complaint alleges that during the Class Period defendants failed to disclose and/or misrepresented material adverse facts, including that: (1) the AngioJet System, the Company's key product, was not more effective than existing alternatives, including competing drug therapies, nor did AngioJet reduce significant procedural complications or significantly increase positive benefits such as improved blood flow or other similar effects; (2) the AngioJet could not be expanded as a "technology platform" because AngioJet was not in the first instance effective for routine use in a broad range of heart attack patients to reduce the size of a patient's damaged tissue area; and (3) as a result of the foregoing problems, Possis could not maintain its projected revenue growth or achieve sustained revenue growth targets as high as 35%. Additionally, the Complaint alleges that defendants misled investors concerning the safety, efficacy and prospects of the AngioJet because it enabled defendants to artificially inflate the price of Possis shares and then allowed defendants and other Company insiders to sell more than 361,730 shares of their privately held Possis stock to the unsuspecting public for proceeds in excess of $7.07 million while in possession of material adverse, non-public information about the Company. On August 24, 2004, it was disclosed that AngioJet failed to demonstrate clinical superiority in the majority of heart attack patients, causing Possis' share price to plummet more than 38%. As a result, the Company lost almost 40% of its market capitalization after Possis shares traded down more than $11.75 per share, to $19.00 per share, as defendants lowered the Company's 2005 earnings and revenue guidance. For more details, contact Garrett D. Blanchfield of Reinhardt Wendorf & Blanchfield, Phone: (800) 465-1592 or (651) 287-2100, Fax: (651) 287-2103, E-mail: g.blanchfield@rwblawfirm.com. STOCKERYALE INC.: Leo W. Desmond Lodges Securities Lawsuit in NH ---------------------------------------------------------------- The Law Offices of Leo W. Desmond initiated securities class action on behalf of shareholders who acquired StockerYale, Inc. (Nasdaq:STKR) securities between April 19, 2004 and May 23, 2005 inclusive (the "Class Period") on behalf of purchasers of the firm's securities between April 19, 2004 and May 23, 2005. The action, captioned Nickalus T. Holt v. StockerYale, Inc., is pending in the United States District Court for the District of New Hampshire against defendants StockerYale, Mark W. Blodgett (CEO, President and Chairman), Francis J. O'Brien (former CFO), Richard P. Lindsay (current CFO), and Ricardo A. Diaz (COO). No class has yet been certified in the above actions. The suit alleges that defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10(b)(5) promulgated thereunder, 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 Leo W. Desmond, Esq. of Law Offices of Leo W. Desmond, Phone: (888) 337-6663 or (973) 726-4242, E-mail: Information@SecuritiesAttorney.com, Web site: http://www.SecuritiesAttorney.com. TIBCO SOFTWARE: Wechsler Harwood Lodges Securities Lawsuit in CA ---------------------------------------------------------------- The law firm of Wechsler Harwood LLP filed a Federal Securities fraud class action suit on behalf of all purchasers of the common stock of TIBCO Software, Inc. ("TIBCO" or the "Company") (Nasdaq:TIBX) acquiring the stock between September 21, 2004 and March 1, 2005, both dates inclusive (the "Class Period"). The action, entitled, Guzzetti v. TIBCO Software, Inc., et al., Case No. (not yet assigned), is pending in the United States District Court for the Northern District of California, and names as defendants, the Company and certain of its senior officers and directors. 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. More specifically, the complaint alleges that TIBCO, a company engaging in the development and marketing of software solutions for the integration of business information, processes, and applications, and other defendants failed to disclose and misrepresented material adverse facts which were known to defendants or recklessly disregarded by them, including that: (1) the Staffware PLC integration was not yet complete; (2) the failed integration of Staffware was causing material disruptions for the Company; (3) the failed Staffware integration caused a paralysis of leadership in the Company's European management, which resulted in a lack of execution in all European markets for the Company; (4) as such, the Company was unable to close any licensing deals that resulted in revenue of more than $5 million; and (5) the Company did not maintain an adequate system of internal financial, operational or disclosure controls so as to reasonably assure the accuracy, completeness and veracity of the Company's public statements and representations to investors. On March 1, 2005, defendants announced that TIBCO's results for the first quarter of fiscal year 2005 were well below guidance. Even worse, during TIBCO's first quarter of fiscal year 2005 conference call, defendants revealed that Staffware not only remained unintegrated, but because of integration- related problems, European sales had been paralyzed. News of this shocked the market. Shares of TIBCO fell $1.86 per share, or 20.9 percent, to close at $7.04 per share on unusually heavy trading volume. For more details, contact Craig Lowther, Wechsler Harwood Shareholder Relations Department of Wechsler Harwood LLP, 488 Madison Avenue, 8th Floor, New York, NY, 10022, Phone: (877) 935-7400, E-mail: clowther@whesq.com. WILLBROS GROUP: Baron & Budd Lodges Securities Fraud Suit in TX --------------------------------------------------------------- The law firm of Baron & Budd, P.C. initiated a class action lawsuit in the United States District Court for the Southern District of Texas on behalf of purchasers of Willbros Group, Inc. (NYSE:WG)("Willbros" or the "Company") securities during the period between May 6, 2002 and May 16, 2005, inclusive (the "Class Period"). The complaint alleges that Willbros Group, Inc. has violated federal securities laws by issuing false or misleading information and that the Company failed to disclose and misrepresented the following material adverse facts which were known to defendants or recklessly disregarded by them. Specifically, the complaint alleges: (1) that the Company was violating the Foreign Corrupt Practices Act by bribing foreign officials in order to obtain business in Bolivia, Nigeria, and Ecuador; (2) Willbros filed false tax returns, failed to file required tax returns, and failed to pay certain taxes in locations outside of the United States which materially overstated the Company's financial results and exposed the Company to potential fines and penalties; (3) that the Company was participating in undisclosed related party transactions; (4) that the Company lacked adequate internal controls; and (5) that as a result of the above, the Company's reported financial results were materially overstated at all relevant times and were not prepared in conformity with Generally Accepted Accounting Principles ("GAAP") and were materially false when issued. After the market closed on May 16, 2005, Willbros announced the results of the Audit Committee's internal investigation into the circumstances behind the Company's tax assessment and other illegal activities, stating that the Company will restate its previously issued financial statements for the fiscal years 2002, 2003, and the first nine months of 2004. The restatement is expected to reduce net income between a range of $7.2 and $9.2 million. This news shocked the market and the Company's stock plummeted $4.92 per share, more than 30%, from its May 16, 2005 closing price of $15.92 to its close on May 17, 2005 at $11.00. For more details, contact Randall K. Pulliam, Esq. or Max Jodry of Baron & Budd, P.C., Phone: (800) 222-2766, E-mail: info@baronbudd.com, Web site: http://www.baronandbudd.com. ********* 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 2004. All rights reserved. ISSN 1525-2272. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The CAR subscription rate is $575 for six months delivered via e-mail. 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