/raid1/www/Hosts/bankrupt/CAR_Public/060609.mbx
C L A S S A C T I O N R E P O R T E R
Friday, June 9, 2006, Vol. 8, No. 114
Headlines
ACCREDITED HOME: Faces Md. Consumer Suit Over Second Lien Loans
ACCREDITED HOME: Seeks Review of Ill. Suit's Class Certification
APPLICA CONSUMER: Recalls Coffee Makers Due to Fire Hazard
ARAMARK CORP: Faces Suit in Del. Over Proposed Share Disposal
BRISTOL-MYERS: Paying $750M to Compensate Earnings Fraud Victims
CARDINAL HEALTH: Faces Suit in Mo. Over Accounting Obligations
CRITICAL PATH: N.Y. Court Mulls Approval for IPO Suit Settlement
DETROIT EDISON: Canadian Environmental, Injury Lawsuit Lapses
DUANE READE: Faces New Overtime Wage Lawsuit in S.D. N.Y.
DYNAMICS RESEARCH: Court Partially Dismisses Mass. Employee Suit
EXXON MOBIL: Transfers $1B in Settlement of Fla. Dealers Lawsuit
GOLD KIST: Reaches Settlement for FLSA Violations Suit in Ala.
GUAM: Faces July Deadline to Determine Retirees' COLA Increases
HEWLETT-PACKARD: Recalls Digital Cameras Due to Fire Hazard
LEADIS TECHNOLOGY: Calif. Securities Suit's Dismissal Appealed
LIVE NATION: "Heerwagen" Plaintiff Voluntarily Nixes N.Y. Suit
LIVE NATION: Seeks Consolidation of Suits Over Ticket Prices
LTD COMMODITIES: Recalls Lighted Ficus Trees Due to Fire Hazard
MEDTRONIC INC: Milberg Weiss Removed in Suit Over Defibrillators
MICRON TECHNOLOGIES: Calif. Court Certifies Price-Fixing Lawsuit
MOLINA HEALTHCARE: Seeks Dismissal of Securities Suit in Calif.
MORTON INDUSTRIAL: Faces Suit in Ga. Over MMC Merger Agreement
NETZERO: Faces Calif. Suit Over Cancelled Internet Accounts
NEW CENTURY: Court Orders Recovery for Defendants in "Overman"
NEW CENTURY: Parties Consider Settling La. FLSA Violations Suit
NEW CENTURY: Reduction of Class Size Sought in Ind. FCRA Suit
NORTHEN MARIANA: Garment Factory Workers to Get Checks in Weeks
PRICELINE.COM: N.Y. Court Mulls Approval for IPO Suit Settlement
SHELLY'S PRIME: Workers File Lawsuit Alleging FLSA Violation
STATION CASINOS: Sexual Harassment Suit Hearing Reset to June
THESTREET.COM: N.Y. Court Mulls Approval for IPO Suit Settlement
TNS INC: Cement Masons Files Securities Fraud Suit in E.D. Va.
TNS INC: Discovery Ongoing in Del. Suit Over Share Disposal Plan
TOWER SEMICONDUCTOR: Appeals Court Dismisses N.Y. Stock Lawsuit
TRAVEL COS: Ind. Sues Web Sites Accused of Cutting Tax Remits
TRAVEL COS: Ill. County Court Dismisses Occupancy Tax Lawsuit
TRAVEL COS: Wins Favorable Ruling in Penn. Occupancy Tax Lawsuit
TROPICAL SPORTSWEAR: July Trial Set for $8M IPO Suit Settlement
UNITED PARCEL: Wins Favorable Ruling in Delivery Refund Lawsuit
UNITED STATES: Antitrust Suit Against Medical Schools Dismissed
WASHINGTON MUTUAL: Faces Labor Law Violations Lawsuit in N.Y.
ZIPREALTY INC: $4.2M Deal for Agents Suit Gets Final Approval
Asbestos Alert
ASBESTOS LITIGATION: Suits v. TriMas Swell from 1,609 to 1,620
ASBESTOS LITIGATION: Ballantyne Settles Bercu Suit Filed in N.Y.
ASBESTOS LITIGATION: Active Claims v. Dana Corp. Decrease to 76T
ASBESTOS LITIGATION: Building Materials Corp. Faces 1,900 Claims
ASBESTOS LITIGATION: Met-Pro, Unit Settles Pump and Fluid Claims
ASBESTOS LITIGATION: Chicago Bridge & Iron Has 480 Active Claims
ASBESTOS LITIGATION: Kaiser Aluminum Posts $963.7M Receivable
ASBESTOS LITIGATION: Everest Re Group Has $561.6M Loss Reserves
ASBESTOS LITIGATION: Foster Wheeler Has 164,240 Open U.S. Claims
ASBESTOS LITIGATION: Foster Wheeler's U.K. Units Face 325 Claims
ASBESTOS LITIGATION: Foster Wheeler Posts $447M Liability
ASBESTOS LITIGATION: Odyssey Re Incurs $280M Unpaid Losses, LAE
ASBESTOS LITIGATION: American Int'l Reserves $4.297B for Losses
ASBESTOS LITIGATION: W.R. Grace Has 890 Property Damage Claims
ASBESTOS LITIGATION: W.R. Grace Faces Personal Injury Claimants
ASBESTOS LITIGATION: W.R. Grace Carries $960M Excess Coverage
ASBESTOS LITIGATION: W.R. Grace Sees $226.1M Cleanup Liability
ASBESTOS LITIGATION: Crane Faces Insurers' Suit in Conn. Court
ASBESTOS LITIGATION: Corning Inc. Named in 11,300 Injury Cases
ASBESTOS LITIGATION: Union Carbide Records $111M Liability in 1Q
ASBESTOS LITIGATION: Union Carbide Contends With 143,806 Claims
ASBESTOS LITIGATION: Union Carbide Corp. Has $503Mil Receivable
ASBESTOS LITIGATION: Japan Govt. to Pay Victims Based on New Law
ASBESTOS LITIGATION: $140Bil Fund Plan May be Revived by Senate
ASBESTOS LITIGATION: Equitas Raises Claims Reserves by GBP128Mil
ASBESTOS LITIGATION: UK Widow Wins GBP92T Payout v. John Cotton
ASBESTOS LITIGATION: Grace Lawyers Seek to Bar Gov't. Witnesses
New Securities Fraud Cases
KINDER MORGAN: Charles J. Piven Files Securities Fraud Lawsuit
PXRE GROUP: Howard G. Smith Files Securities Fraud Suit in N.Y.
ST JUDE: Scott + Scott Sets June Lead Plaintiff Filing Deadline
VONAGE HOLDINGS: Kahn Gauthier Files N.J. Securities Fraud Suit
VONAGE HOLDINGS: Faces Expanded Securities Fraud Suit in N.J.
XERIUM TECHNOLOGIES: Lerach Coughlin Files Mass. Securities Suit
*********
ACCREDITED HOME: Faces Md. Consumer Suit Over Second Lien Loans
---------------------------------------------------------------
Accredited Home Lenders, Inc. is defendant in a purported class
action in the U.S. District Court for the District of Maryland
over second lien loans.
In March 2006, the company was served with a class action
complaint, "Cabrejas v. Accredited Home Lenders, Inc.," brought
in the Circuit Court for Prince George's County, Maryland,
according to the company's May 10, 2006 Form 10-Q filing with
the U.S. Securities and Exchange Commission for the period ended
March 31, 2006.
The complaint alleges that the company origination of second
lien loans in Maryland violated the Maryland Secondary Mortgage
Loan Law and Consumer Protection Act in that fees charged on
such loans exceeded 10% of the respective loan amounts.
Plaintiffs seek to recover, on behalf of themselves and
similarly situated individuals, damages, disgorgement of fees,
pre-judgment interest, declaratory and injunctive relief,
attorneys' fees, and any other relief the court may grant.
On April 13, 2006, the company removed the action to the U.S.
District Court for the District of Maryland.
According to the regulatory filing in May, a motion to certify a
class has not yet been filed, and there has been no ruling on
the merits of either the plaintiff's individual claims or the
claims of the putative class.
ACCREDITED HOME: Seeks Review of Ill. Suit's Class Certification
----------------------------------------------------------------
Accredited Home Lenders, Inc., asked the Circuit Court for
Madison County, Illinois to reconsider its ruling granting class
certification to the lawsuit filed against it over residential
mortgage loans fees, according to company's May 10, 2006 Form
10-Q filing with the U.S. Securities and Exchange Commission for
the period ended March 31, 2006.
In December 2002, the company was served with a complaint and
motion for class certification in the class action, "Wratchford
et al. v. Accredited Home Lenders, Inc.," which was brought in
Madison County, Illinois under the Illinois Consumer Fraud and
Deceptive Business Practices Act, the consumer protection
statutes of the other states in which the company does business
and the common law of unjust enrichment.
The complaint alleges that the company has a practice of
misrepresenting and inflating the amount of fees it pays to
third parties in connection with the residential mortgage loans
that it funds.
Plaintiffs claim to represent a nationwide class consisting of
others similarly situated, that is, those who paid the company
to pay, or reimburse the company's payments of, third-party fees
in connection with residential mortgage loans and never received
a refund for the difference between what they paid and what was
actually paid to the third party.
Plaintiffs are seeking to recover damages on behalf of
themselves and the class, in addition to pre-judgment interest,
post-judgment interest, and any other relief the court may
grant.
On Jan. 28, 2005, the court issued an order conditionally
certifying:
-- a class of Illinois residents with respect to the
alleged violation of the Illinois Consumer Fraud and
Deceptive Business Practices Act who, since Nov.
19, 1997, paid money to AHL for third-party fees in
connection with residential mortgage loans and never
received a refund of the difference between the amount
they paid to AHL and the amount AHL paid to the third
party and
-- a nationwide class of claimants with respect to an
unjust enrichment cause of action included in the
original complaint who, since Nov. 19, 1997 paid
money to AHL for third-party fees in connection with
residential mortgage loans and never received a refund
of the difference between the amount they paid AHL and
the amount AHL paid the third party.
The court conditioned its order limiting the statutory consumer
fraud act claims to claimants in the State of Illinois on the
outcome of a case pending before the Illinois Supreme Court in
which one of the issues is the propriety of certifying a
nationwide class based on the Illinois Consumer Fraud and
Deceptive Business Practices Act.
That case has now been decided in a manner favorable to the
company's position, and, in light of this ruling, AHL intends to
petition the Illinois Supreme Court for a supervisory order
reversing the lower court's class certification decision, the
lower court having denied the company's motion for
reconsideration of the court's order granting class
certification and the court's denial of the company's request
for leave to take an interlocutory appeal of such order.
There has not yet been a ruling on the merits of either the
plaintiffs' individual claims or the claims of the class.
APPLICA CONSUMER: Recalls Coffee Makers Due to Fire Hazard
----------------------------------------------------------
Applica Consumer Products Inc., of Miramar, Florida, in
cooperation with the U.S. Consumer Product Safety Commission
recalled about 420,000 Black & Decker brand thermal coffeemaker.
The company said the coffeemaker may not turn off as programmed,
causing the unit to overheat and melt, and posing a risk of fire
and burn injury.
Applica has received 14 reports of the coffeemakers overheating.
This resulted in one report of a minor burn, and 12 reports of
minor property damage to kitchen cabinets, countertops and
floors.
The coffeemakers make up to 8 cups of coffee and have a
programmable countertop feature. The coffeemakers are silver
and black with a stainless steel carafe. Model numbers TCM800
and TCM805 are printed on the rating plate on the bottom of the
coffeemaker.
Black & Decker Brand Thermal Coffeemakers are manufactured in
China and are being sold at home improvement and discount
department retailers nationwide from March 2004 through April
2006, for about $40.
Consumers are advised to stop using the product immediately and
contact Applica for instructions on receiving a replacement
Black & Decker Brand household product.
Picture of the recalled coffee maker:
http://www.cpsc.gov/cpscpub/prerel/prhtml06/06175.jpg.
For additional information, contact Applica, Phone: (800) 239-
7145 between 8:30 a.m. and 5 p.m. ET Monday through Friday, Web
site at http://www.acprecall.com.
ARAMARK CORP: Faces Suit in Del. Over Proposed Share Disposal
-------------------------------------------------------------
ARAMARK Corp. and each of its directors are defendants in two
purported class actions in the Court of Chancery of the state of
Delaware in New Castle County in relation to the proposed sale
of the company's outstanding shares.
Filed on May 1, 2006, the putative class actions were brought by
shareholders alleging breaches of the duty of loyalty by the
company's directors in connection with a proposal from a group
of investors led by Joseph Neubauer to acquire all of the
outstanding shares of the company.
The cases make claims for monetary damages, injunctive relief
and attorneys' fees and expenses, according to the company's May
10, 2006 Form 10-Q filing with the U.S. Securities and Exchange
Commission for the period ended March 31, 2006.
BRISTOL-MYERS: Paying $750M to Compensate Earnings Fraud Victims
----------------------------------------------------------------
The U.S. Securities and Exchange Commission said Bristol-Myers
Squibb Company will start distributing $750 million to
compensate shareholders injured by fraudulent earnings
management at the company.
The distribution fund includes $150 million Bristol-Myers paid
to settle fraud charges brought by the Commission.
The fund also includes $300 million Bristol-Myers paid to settle
a related civil class action, and $300 million paid by the
company in a deferred prosecution agreement with the U.S.
Attorney's Office in New Jersey to address the company's
criminal liability. Recent orders entered by federal courts in
New Jersey and New York allowed for the coordinated
distribution.
"[Thurs]day's distribution exemplifies the SEC's commitment to
corporate accountability and investor restitution," said SEC
Chairman Christopher Cox. "The penalty we are imposing will help
to compensate injured shareholders as well as deter future
misconduct. It will improve confidence in the fairness of our
capital markets by reminding both companies and investors that
the market cops are on the beat."
On Aug. 4, 2004, without admitting or denying the allegations in
the Commission's complaint, Bristol-Myers consented to be
permanently enjoined from violating certain provisions of the
federal securities laws. The company also agreed to remedial
measures and to pay $150 million to compensate investors. By
distributing the money under a single distribution plan,
administrative costs are substantially reduced.
In A $185 million settlement was reached in the consolidated
securities class action filed in the U.S. District Court for the
District of New Jersey against Bristol-Myers Squibb Co., its
former chairman of the board and chief executive officer,
Charles A. Heimbold, Jr., and its former chief scientific
officer, Peter S. Ringrose, Ph.D. (Class Action Reporter, May
30, 2006).
The suit claimed the defendants disseminated materially false
and misleading statements and/or failed to disclose material
information concerning the safety, efficacy and commercial
viability of VANLEV, a drug in development, between Nov. 8, 1999
and Apr. 19, 2000 (Class Action Reporter, May 30, 2006).
The claims administrator responsible for distributing the funds
paid by BMS to compensate injured shareholders is The Garden
City Group (Garden City), 105 Maxess Road, Melville, NY 11747-
3836, Phone: 1-800- 327-3664 (Toll Free).
For further information, contact Daniel R. Gregus, Phone: (312)
353-7423 Assistant Regional Director, Midwest Regional Office.
The New Jersey suit is "Bristol-Myers Squibb Securities
Litigation, Case No. 3:00-cv-01990-SRC-JJH," filed in the U.S.
District Court for the District of New Jersey under Judge
Stanley R. Chesler, with referral to Judge John J. Hughes.
Representing the plaintiffs are:
(1) Robert J. Berg of Bernstein Liebhard & Lifshitz, LLP,
2050 Center Avenue, Suite 200, Fort Lee, NJ 07024,
Phone: (201) 592-3201, E-mail: berg@bernlieb.com;
(2) Leo W. Desmond, Thirteen Main Street, Suite Four,
Sparta, NJ 07871, Phone: (973) 726-4242;
(3) Gary S. Graifman of Kantrowitz, Goldhamer & Graifman,
Esqs., 210 Summit Avenue, Montvale, NJ 07645, Phone:
(201) 391-7000, E-mail: ggraifman@kgglaw.com; and
(4) Allyn Zissel Lite and Michael E. Patunas of Lite
Depalma Greenberg & Rivas, LCC, Two Gateway Center,
12th Floor, Newark, NJ 07102-5003, Phone: (973) 623-
3000, E-mail: alite@ldgrlaw.com and
mpatunas@ldgrlaw.com.
Representing the defendants is William J. O'Shaughnessy of
Mccarter & English, Esqs., Four Gateway Center, 100 Mulberry
Street, P.O. BOX 652, Newark, NJ 07101-0652, Phone: (973) 622-
4444, E-mail: woshaughnessy@mccarter.com.
CARDINAL HEALTH: Faces Suit in Mo. Over Accounting Obligations
--------------------------------------------------------------
More than 70 Medicine Shoppe franchise owners representing 82
stores have filed legal action against Medicine Shoppe
International, Inc. and its parent company, Cardinal Health,
Inc. The action was filed June 2, 2006, in Missouri through the
American Arbitration Association as required by the parties'
agreement.
The group of franchisees is comprised of members of the Pharmacy
Franchise Owners Association (PFOA), which is made up of 220
Medicine Shoppe and Medicap franchise owners -- approximately 20
percent of the total domestic franchisees of Medicine Shoppe.
In the filing, the franchisees lay out several key factors that
have led to filing the action, including:
-- Medicine Shoppe's failure to provide accountings of, and
failure to perform, marketing and advertising
obligations;
-- Medicine Shoppe's continued use of a broken and archaic
business model;
-- breaches of licensee agreements;
-- Cardinal Health's conflicts of interest and anti-
competitive activities;
-- the sale of the Managed Pharmacy Benefits Network; and
-- encroachment on protected sales territories.
The demand for arbitration seeks redress for breach of contract,
breach of the implied covenant of good faith and fair dealing,
violation of unfair trade practice laws, violations of anti-
trust laws, and violations of state franchise laws.
Participants in the action are seeking relief against Cardinal
Health for tortious interference with contractual relations,
violations of unfair trade practice laws, and violation of
antitrust laws.
"As a result of significant changes in the pharmacy industry and
the evolution of the franchise business, the original franchise
fees imposed on franchisees have become overwhelming and have
made it impractical to compete and survive," says PFOA president
and MSI franchisee Todd Pendergraft. "Our previous efforts to
address these serious issues with Medicine Shoppe and Cardinal
Health have proven unsuccessful."
Franchisees filed the legal action through Miami-based Zarco
Einhorn Salkowski & Brito P.A., a commercial litigation firm
that is internationally recognized for providing expert legal
services in franchisor/franchisee cases.
"Cardinal Health's vast pharmaceutical empire has pitted a
variety of its subsidiaries' interests against the interests of
The Medicine Shoppe franchisees. These conflicts have
consistently been resolved with an eye toward achieving Cardinal
Health's short-term profits, at the expense of the Medicine
Shoppe franchisees' long-term success," says Robert Zarco,
senior partner with Zarco Einhorn Salkowski & Brito P.A.
PFOA was formed in February 2004 by a small group of Medicine
Shoppe franchisees to improve the value of system services,
protect the business equity of franchise owners and provide
leverage and structure to negotiate with suppliers and Medicine
Shoppe on key topics like distribution, licensing agreements,
reimbursement and marketing. Since that time, PFOA membership
has grown steadily to 220 stores.
PFOA, which is incorporated and requires members to financially
support the organization, was formed in part to address the
concern that Medicine Shoppe's Owners Advisory Council does not
have sufficient leverage to create improvements or affect change
within the system. Medicine Shoppe distribution programs are
negotiated through Cardinal Health.
"PFOA gives us negotiating power in an age where profit margins
are under attack and the number of Medicine Shoppe franchise
pharmacies is on the decline," Pendergraft says. "Our members
agree that we simply have to do something to address these
inequities."
In 2005, PFOA renewed and extended a preferred supplier
arrangement with AmerisourceBergen Corp., a leading distributor
of pharmacy products and services to independent community
pharmacies. Under the terms of the agreement, AmerisourceBergen
is the primary supplier of goods and services to PFOA member
stores through 2008.
For more information about PFOA, contact Todd Pendergraft,
Phone: 918-451-3784, Web site: http://www.pfoai.org,
The franchisees are represented by Robert Zarco of Zarco Einhorn
Salkowski & Brito, P.A., International Place, Suite 2700, 100
S.E. 2nd Street, Miami, Florida 33131, Phone: 305-374-5418, Fax:
305-374-5428.
CRITICAL PATH: N.Y. Court Mulls Approval for IPO Suit Settlement
----------------------------------------------------------------
The U.S. District Court for the Southern District of New York
has yet to issue an order with respect to the final approval of
the settlement of the consolidated securities class action
against Critical Path, Inc., according to the company's May 16,
2006 Form 10-Q filing with the U.S. Securities and Exchange
Commission for the period ended March 31, 2006.
Beginning in July 2001, a number of securities class action
complaints were filed against the company, and certain of its
former officers and directors and underwriters in connection
with the company's initial public offering of common stock in
the U.S. District Court for the Southern District of New York.
Individuals who allege that they purchased Critical Path common
stock at the initial and secondary public offerings between
March 29, 1999 and Dec. 6, 2000 filed the purported class action
complaints.
The complaints allege generally that the prospectus under which
such securities were sold contained false and misleading
statements with respect to discounts and excess commissions
received by the underwriters. It also claims allegations of
"laddering" whereby underwriters required their customers to
purchase additional shares in the aftermarket in exchange for an
allocation of IPO shares.
They seek an unspecified amount in damages on behalf of persons
who purchased the company's common stock during the specified
period.
Similar complaints have been filed against 55 underwriters and
more than 300 other companies and other individuals. The more
than 1,000 complaints have been consolidated into a single
action.
The company has reached an agreement in principle with the
plaintiffs to resolve the cases. The proposed settlement
involves no monetary payment by the company and no admission of
liability.
The court has preliminarily approved the settlement. However,
the settlement is subject to final approval by the court, which
has not yet occurred.
For more details, visit http://www.iposecuritieslitigation.com/.
DETROIT EDISON: Canadian Environmental, Injury Lawsuit Lapses
-------------------------------------------------------------
A purported class action against The Detroit Edison Co. in the
Superior Court of Justice in Ontario, Canada has lapsed
procedurally, according to the company's May 10, 2006 Form 10-Q
filing with the U.S. Securities and Exchange Commission for the
period ended March 31, 2006.
The company was named as one of approximately 21 defendant
utility companies in a class action filed in the Superior Court
of Justice in Ontario, Canada. The plaintiffs, a class
comprised of current and prior residents living in Ontario, and
their respective family members and/or heirs, claim that the
defendants emitted and continue to emit pollutants that have
harmed the plaintiffs.
As a result, the plaintiffs are seeking damages of approximately
CDN$49.1 billion for alleged negligence, approximately CDN$4.1
billion per year until the defendants cease emitting pollutants,
punitive and exemplary damages of CDN$1 billion, and such other
relief as the court deems appropriate.
Detroit Edison was never served with the complaint as required
by Canadian rules of civil procedure. As a result, this action
has lapsed procedurally.
DUANE READE: Faces New Overtime Wage Lawsuit in S.D. N.Y.
---------------------------------------------------------
Duane Reade, Inc. is defendant in a purported a class action,
"Enamul Chowdhury v. Duane Reade Inc. and Duane Reade Holdings,
Inc.," pending in the U.S. District Court for the Southern
District of New York.
On April 2006, the company was served with the purported class
action complaint. Originally filed on March 24, 2006, the suit
alleges that, from a period beginning March 2000, the company
incorrectly classified certain employees in an attempt to avoid
paying overtime to such employees, thereby violating the Fair
Labor Standards Act and New York law.
The complaint seeks an unspecified amount of damages.
The suit is "Chowdhury v. Duane Reade, Inc., et al., Case No.
1:06-cv-02295-MGC," filed in the U.S. District Court for the
Southern District of New York under Judge Miriam Goldman
Cedarbaum.
Representing the plaintiffs is Seth Richard Lesser of Locks Law
Firm, PLLC, 110 East 55th Street, New York, NY 10022, Phone:
212-838-3333, Fax: 212-838-3735, E-mail: slesser@lockslawny.com.
Representing the defendants are Gerald Thomas Hathaway and
Frances Mollie Nicastro of Littler Mendelson, P.C., 885 Third
Avenue 16th Floor, New York, NY 10022, Phone: 212-583-2684 and
(212) 583-2688, Fax: 212-832-2719, E-mail: ghathaway@littler.com
and fnicastro@littler.com.
DYNAMICS RESEARCH: Court Partially Dismisses Mass. Employee Suit
----------------------------------------------------------------
Dynamics Research Corp. intends to appeal a portion of the U.S.
District Court for the District of Massachusetts' partial
dismissal of a purported class action alleging violations of the
Fair Labor Standards Act and certain provisions of Massachusetts
General Laws. The suit was filed on June 28, 2005.
The company believes that its practices comply with the Fair
Labor Standards Act and Massachusetts General Laws. The company
intends to vigorously defend itself and has sought to have the
complaint dismissed from federal court and addressed in
accordance with the company's mandatory Dispute Resolution
Program for the arbitration of workplace complaints.
On April 10, 2006, the court entered an order granting in part
the company's motion to dismiss the civil action filed in that
court against the company, and to compel compliance with its
mandatory Dispute Resolution Program.
The company intends to appeal a portion of the court's decision
to the effect that a class action waiver set forth in the
dispute resolution program is not enforceable.
The suit is, "Skirchak et al. v. Dynamics Research Corporation,
Case No. 1:05-cv-11362-MEL," filed in the U.S. District Court
for the District of Massachusetts under Judge Morris E. Lasker.
Representing the plaintiffs is Elayne N. Alanis, 3rd Floor, 10
Tremont St., Boston, MA 02108, Phone: 617-263-1203, Fax: 617-
723-4729, E-mail: ealanislaw@verizon.net.
Representing the defendants are: Carrie J. Campion, Jeffrey B.
Gilbreth and David S. Rosenthal of Nixon Peabody, LLP, 100
Summer Street, Boston, MA 02110, Phone: 617-345-1045, 617-345-
1000 and 617-345-6183, Fax: 866-812-2847, E-mail:
ccampion@nixonpeabody.com, jgilbreth@nixonpeabody.com and
drosenthal@nixonpeabody.com.
EXXON MOBIL: Transfers $1B in Settlement of Fla. Dealers Lawsuit
----------------------------------------------------------------
Exxon Mobil Corp. has transferred $1.075 billion in payment of
the settlement with the Exxon dealers in the suit, "Allapattah
v. Exxon Dealer," according to a May 16 statement in Exxon
Dealer Class Action Web site. The money is now on deposit with
the financial institution selected by a court to hold the funds.
Moreover, the District Court's order approving the settlement
was not appealed and is now final.
The class notice, which has been mailed to all claimants,
provides many details about the settlement. In summary, the
settlement provides that:
Claimants will receive a full recovery of all compensatory
damages and will receive prejudgment interest through Oct. 31,
2005, for all claims filed by Dec. 19, 2005 that are approved by
the Special Master in the claims process.
The claims process will continue, but upon final approval of the
settlement, Exxon will not be involved in the claims process any
longer and will not appeal any aspect of the case. As a result,
it is anticipated that the claims process will move more quickly
and there will be much less risk of adverse results on
individual claims.
The state governments of the 35 states in which dealer stations
were located will participate in the claims process to ensure
that the proper claimants are being paid. Class counsel will
continue to be involved in the prosecution of every claim and
will do everything possible to move claims to payment as quickly
as possible. All of Exxon's set-off claims (counterclaims)
against individual claimants will be dismissed.
Any unclaimed money left in the fund after all legitimate claims
are paid will go to the states, rather than Exxon, on behalf of
the rightful owners to be held pursuant to the states' unclaimed
property statutes.
The statement said the class counsels have continued to
aggressively advance claims before the Special Master. They
anticipate that those claims which have already been approved by
the Special Master will be eligible for payment in three to five
months.
On April 27, 2006, the District Court held a hearing regarding
attorneys' fees and costs. Further proceedings regarding the
allocation of fees among class counsel and the named plaintiffs
were commenced on May 3 in the Chambers of Judge Alan S. Gold.
Supreme Court Ruling
In a 5-4 decision, the U.S. Supreme Court ruled on June 23, 2005
that all dealers, including those whose claims are worth less
than $50,000, were properly included in the class. The majority
opinion was written by Justice Anthony Kennedy, who adopted the
arguments asserted by the lawyers for the class. Justices
Ginsburg and Stevens wrote dissenting opinions.
For more details, visit http://www.exxondealerclassaction.com,
http://www.exxondealerattorneys.com.
The case is Allapattah Services, Inc. et al. v. Exxon
Corporation, Case No. CASE NO. 91-0986-CIV-Gold/Simonton," filed
in the U.S. District Court for the Southern District of Florida.
Eugene E. Stearns, Esq. and Mark Dikeman of Stearns Weaver
Miller Weissler Alhadeff & Sitterson, P.A represent the
plaintiff.
GOLD KIST: Reaches Settlement for FLSA Violations Suit in Ala.
--------------------------------------------------------------
Gold Kist Inc. settled the purported class action, "Nicholas
Leech v. Gold Kist Inc.," which was pending in the U.S. District
Court for the Northern District of Alabama, claiming that the
company violated certain provisions of the Fair Labor Standards
Act.
Filed on Nov. 3, 2005 by an employee of the company, the suit
alleges that Gold Kist failed to pay the plaintiff for time he
has spent:
-- waiting in line before each shift to receive certain
clothing and equipment that he wears while working;
-- putting on that clothing and equipment; and
-- taking off the clothing and equipment, and turning it
back in, after each shift ends.
Plaintiff is seeking an unspecified amount of unpaid overtime
wages allegedly earned, plus liquidated damages in the same
amount, plus attorneys' fees, costs and interest.
Plaintiff filed the suit as an opt-in collective action under
the FLSA, claiming that an unspecified number of allegedly
"similarly situated" employees should be permitted to join
together with him to pursue this lawsuit as a collective action
against the company.
The proposed class would consist of any and all persons employed
as hourly employees by the company at any time during the three
years preceding the filing of the plaintiff's complaint.
This matter was settled with the plaintiff in April 2006,
according to the company's May 10, 2006 Form 10-Q filing with
the U.S. Securities and Exchange Commission for the period ended
March 31, 2006.
The suit is "Leech v. Gold Kist Inc., Case No. 4:05-cv-02280-
CLS," filed in the U.S. District Court for the Northern District
of Alabama under Judge C. Lynwood Smith, Jr.
Representing the plaintiffs are David R. Arendall, Stephanie S.
Woodard and Allen Durham Arnold of Arendall & Associates, 2018
Morris Avenue, Third Floor, Birmingham, AL 35203, Phone: 252-
1550, Fax: 252-1556, E-mail: dra@arendalllaw.com,
aarnold@arendalllaw.com and ssw@arendalllaw.com.
Representing the defendants are George A. Harper, D. Chris
Lauderdale and David R. Wylie of Jackson Lewis, LLP, One Liberty
Square, 55 Beattie Place, Suite 800, Greenville, SC 29601,
Phone: 864-232-7000, Fax: 864-235-1381, Fax: 864-235-1385, E-
mail: harperg@jacksonlewis.com, lauderdc@jacksonlewis.com and
wylied@jacksonlewis.com.
GUAM: Faces July Deadline to Determine Retirees' COLA Increases
---------------------------------------------------------------
Guam Superior Court Judge Arthur Barcinas has set a July 26,
2006 deadline for the local government to come up with
calculations on the cost-of-living allowance increases it owes
retirees, according to the Pacific Daily News.
Guam's Retirement Fund Director Paula Blas was subpoenaed on
June 6 in relation to the suit. She was ordered to produce all
the necessary documents needed for the case, but she was only
able to provide some of the documents, according to the report.
The judge was asking for a complete list of retirees and the
benefits they were entitled to receive.
Judge Barcinas lifted the subpoena while telling the agency to
make the calculations. But then he warned that following the
hearing, he will force attorneys to appear in court every week
until the matter is resolved, according to the report. He also
ordered the government to file a formal summary of the actions
they are doing to comply with the order.
Guam has filed a motion challenging court-ordered retroactive
COLA increases. It is set to argue the motion on July 26, 2006.
The COLA increases were due to more than 4,000 retirees for the
years 1990 and 1995. Judge Barcinas, in an oral ruling,
determined that the formula for most of the payout will be based
on the consumer price index of 1988. The lawsuit was filed in
1993 and based on a law that was implemented in 1988 but
repealed in 1995.
Payments to retirees are estimated at between $30 million and
$100 million, according to the report.
Representing the government is Dooley Roberts & Fowler LLP,
Suite 201, Orlean Pacific Plaza, 865 South Marine Drive,
Tamuning 96913, Guam, Phone: 617-646-1222, Fax: 671-646-1223,
Web site: http://www.guamlawoffice.com.
HEWLETT-PACKARD: Recalls Digital Cameras Due to Fire Hazard
-----------------------------------------------------------
Hewlett-Packard Company, of Palo Alto, California, in
cooperation with the U.S. Consumer Product Safety Commission,
recalled about 224,000 HP Photosmart R707 Digital Cameras. It
recalled about 679,000 of the same produce worldwide.
The company said the digital camera can cause certain non-
rechargeable batteries, such as the Duracell CP-1, to overheat
when the camera is connected to an AC adapter or docking
station, posing a fire hazard.
HP has received one report of a camera catching fire, damaging
the camera and its docking station, and causing minor smoke
damage to the room. No injuries have been reported.
This recall involves the HP Photosmart R707 digital camera. The
HP logo and the model name and number are printed on the front
of the camera.
HP Photosmart R707 Digital Cameras were manufactured in China
and are being sold at electronic, computer and camera stores, as
well as Web retailers nationwide from August 2004 through April
2006 for between $250 and $400.
Consumers are advised to stop using the recalled cameras and
contact HP as they have developed a firmware update that
prevents the camera from applying a charge to a non-rechargeable
battery. Consumers can download this update at
http://www.hp.comor contact HP directly. Consumers are advised
not use single-use, non-rechargeable batteries until the
firmware has been updated. Consumers are encouraged to update
the firmware even if they do not use or intend to use a non-
rechargeable battery.
Picture of recalled digital camera:
http://www.cpsc.gov/cpscpub/prerel/prhtml06/06176.jpg.
For additional information, visit HP's Web site at
http://www.hp.comor call HP toll-free at (866) 304-7117 between
6 a.m. and 6 p.m. MT Monday through Friday; or contact Jennifer
Pershall, Phone: (360) 735-7962, E-mail:
Jennifer.pershall@hp.com.
LEADIS TECHNOLOGY: Calif. Securities Suit's Dismissal Appealed
--------------------------------------------------------------
Plaintiffs in the consolidated securities class action against
Leadis Technology, Inc., and certain of its officers and
directors are appealing the dismissal of their suit to the U.S.
Court of Appeals for the Ninth Circuit.
On March 2, 2005, a securities class action was filed in the
U.S. District Court for the Northern District of California
against the defendants.
The complaint alleges the defendants violated Sections 11 and 15
of the Securities Act of 1933 by making allegedly false and
misleading statements in the company's registration statement
and prospectus filed on June 16, 2004 for the company's initial
public offering.
Another similar action was filed on March 11, 2005. On April
20, 2005, the court consolidated the two actions.
The consolidated complaint seeks unspecified damages on behalf
of a class of purchasers that acquired shares of the company
common stock pursuant to its registration statement and
prospectus.
The claims appear to be based on allegations that at the time of
the IPO demand for the company's color organic light-emitting
diodes products was already slowing due to competition from one
of its existing customers and that the company failed to
disclose that it was not well positioned for continued success
as a result of such competition. On Oct. 28, 2005, the company
and other defendants filed a Motion to Dismiss the lawsuit.
By a March 1, 2006 order, the court granted defendants' motion
to dismiss, with prejudice, and a judgment was entered in favor
of the company and all other defendants.
On or about March 28, 2006, the plaintiffs filed a notice of
appeal with the U.S. Court of Appeals for the Ninth Circuit,
where it is now pending.
The suit is "Safron Capital Corporation v. Leadis Technology,
Inc. et al., Case No. 3:05-cv-00882-CRB," filed in the U.S.
District Court for the Northern District of California under
Judge Charles R. Breyer.
Representing the plaintiffs is Patrick J. Coughlin, Lerach
Coughlin Stoia Geller Rudman & Robbins, LLP, 100 Pine Street,
Suite 2600, San Francisco, CA 94111, Phone: 415/288-4545, Fax:
415-288-4534, E-mail: patc@mwbhl.com.
Representing the defendants are Grant P. Fondo and Laura R.
Smith of Cooley Godward, LLP, Five Palo Alto Square, 3000 El
Camino Real, Palo Alto, CA 94306-2155, Phone: 650 843-5458, Fax:
650 857-0663, E-mail: gfondo@cooley.com or smithlr@cooley.com.
LIVE NATION: "Heerwagen" Plaintiff Voluntarily Nixes N.Y. Suit
--------------------------------------------------------------
Plaintiff in the class action "Heerwagen v. Clear Channel Comm.,
et al.," filed a Notice of Voluntary Dismissal with the U.S.
District Court for the Southern District of New York in relation
to her case against Live Nation, Inc. and other defendants.
The company was named as a defendant in a lawsuit filed by
Melinda Heerwagen on June 13, 2002. Plaintiff, on behalf of a
putative class consisting of certain concert ticket purchasers,
alleges that anti-competitive practices for concert promotion
services by the company nationwide caused artificially high-
ticket prices.
On Aug. 11, 2003, the court ruled in the company's favor,
denying the plaintiff's class certification motion. Plaintiff
appealed this decision to the U.S. Court of Appeals for the
Second Circuit, and oral argument was held on Nov. 3, 2004.
On Jan. 10, 2006, the U.S. Court of Appeals for the Second
Circuit affirmed the ruling in the company's favor by the
District Court.
On Jan. 17, 2006, plaintiff filed a Notice of Voluntary
Dismissal of her action in the Southern District of New York.
The suit is "Heerwagen v. Clear Channel Comm., et al., Case No.
2:02-cv-04503-JES," filed in the U.S. District Court for the
Southern District of New York under Judge John E. Sprizzo.
Representing the plaintiffs is Stephen J. Fearon, Jr., Squitieri
& Fearon, L.L.P., 420 Fifth Avenue, 18th Floor, New York, NY
10018, Phone: (212) 575-2092, E-mail: stephen@sfclasslaw.com.
Representing the company is Jonathan M. Jacobson, Wilson Sonsini
Goodrich & Rosati(NYC), 12 East 49th Street, 30th Flr., New
York, NY 10017, Phone: 212-999-5858, Fax: 212-999-5899, E-mail:
jjacobson@wsgr.com.
LIVE NATION: Seeks Consolidation of Suits Over Ticket Prices
------------------------------------------------------------
Live Nation, Inc. asked the Judicial Panel on Multidistrict
Litigation to transfer to a single federal district court for
coordinated pre-trial proceedings several purported class
actions and any similar ones commenced in the future, which
alleges that anti-competitive practices for concert promotion
services by the company caused artificially high-ticket prices.
Initially, the company is defendant in putative class actions
filed by several plaintiffs in the U.S. District Courts in
Philadelphia, Miami, Los Angeles, Chicago, and New Jersey. The
suits are:
(1) "Cooperberg v. Clear Channel Communications, Inc., et
al., Civ. No. 2:05-cv-04492 (E.D. Pa.)";
(2) "Diaz v. Clear Channel Communications, Inc., et al.,
Civ. No. 05-cv-22413 (S.D. Fla.)";
(3) "Thompson v. Clear Channel Communications, Inc., Civ.
No. 2:05-cv-6704 (C.D. Cal.)";
(4) "Bhatia v. Clear Channel Communications, Inc., et al.,
Civ. No. 1:05-cv-05612 (N.D. Ill.)"; and
(5) "Young v. Clear Channel Communications, et al., Civ.
Action No. 06-277-WHW (D.N.J.)."
The claims made in these actions are substantially similar to
claims made in the "Heerwagen v. Clear Channel Comm., et al.,
case no. 2:02-cv-04503-JES," except that the geographic markets
alleged are statewide or more local in nature, and the members
of the putative classes are limited to individuals who purchased
tickets to concerts in the relevant geographic markets alleged.
The company filed its answers in all actions, and it has denied
liability. On Dec. 5, 2005, the company filed a motion before
the Judicial Panel on Multidistrict Litigation to transfer the
above-listed actions and any similar ones commenced in the
future to a single federal district court for coordinated pre-
trial proceedings. The company intends to vigorously defend all
claims in all of the actions.
LTD COMMODITIES: Recalls Lighted Ficus Trees Due to Fire Hazard
----------------------------------------------------------------
LTD Commodities LLC, of Bannockburn, Illinois, in cooperation
with the U.S. Consumer Product Safety Commission, recalled 2,500
Lighted Ficus Tree.
The company said the lights attached to the ficus tree have
undersized and exposed wires, which pose a risk of electric
shock and fire hazards. No injuries were reported.
The pre-lit 5-foot ficus tree inside a bamboo basket includes a
green light string featuring 70 clear mini bulbs wrapped and
attached throughout the leaves and around the trunk. A silver
holograph UL sticker and cautionary label with UL File number
E254698, Model no. WL-70/2C is attached to the end of the cord.
At the end of the decorative light string is a tag with the
marking "E254698" and model number WL-70/2C.
The lighted ficus trees were manufactured in China and are being
sold by catalogs nationwide and shipped between Nov. 27, 2005
and Dec. 11, 2005 for about $24.
Consumers are advised to stop using the lights, remove the light
string from the ficus tree and destroy the lights by cutting the
cord. Consumers with affected lights will receive a free, new
UL-listed light string set with shipments starting June 12,
2006.
Pictures of the recalled lighted ficus trees:
http://www.cpsc.gov/cpscpub/prerel/prhtml06/06554a.jpg
http://www.cpsc.gov/cpscpub/prerel/prhtml06/06554b.jpg
For additional information, contact LTD Commodities toll-free at
(866) 736-3654 between 7:30 a.m. and 4 p.m. CT Monday through
Friday, or visit their Web site: http://www.ltdcommodities.com.
MEDTRONIC INC: Milberg Weiss Removed in Suit Over Defibrillators
----------------------------------------------------------------
James Rosenbaum, chief judge of the U.S. District Court in
Minnesota, removed Milberg Weiss Bershad & Schulman LLP from the
steering committee in a product liability lawsuit filed against
Medtronic Inc. because of the law firm's recent indictment on
fraud charges, according to Reuters.
Milberg Weiss and senior partners, David Bershad and Steven
Schulman have been indicted for alleged conspiracy to pay
kickbacks to plaintiffs in class actions.
In the Medtronic suit, the judge allowed Milberg lawyer,
Mitchell Breit to represent individual clients in the case.
Medtronic is facing a consolidated federal product liability
case over its recalled implantable heart defibrillators.
Originally, it faced approximately 30 putative class actions and
approximately 25 individual actions filed in various
jurisdictions.
The suits were lodged after the company issued an advisory in
2005 about a potential battery shorting mechanism that may occur
in a subset of its implantable cardioverter defibrillators and
cardiac resynchronization therapy defibrillators.
Four additional putative class actions were filed in Canada.
The Marquis complaints generally allege strict liability,
negligence, warranty and other common law and/or statutory
claims. It is seeking compensatory and punitive damages.
Two of the cases involve claims of third party payors for
reimbursement of costs associated with the field action. The
punitive class action complaints also seek class certification.
MICRON TECHNOLOGIES: Calif. Court Certifies Price-Fixing Lawsuit
----------------------------------------------------------------
Judge Phyllis J. Hamilton of the U.S. District Court for the
Northern District of California certified a proposed class
action against Micron Technologies and a number of other
computer memory manufacturers, claiming the companies illegally
conspired to fix the price of computer memory.
Filed in 2002, the suit asserts that Micron and other
manufacturers of Dynamic Random Access Memory (DRAM) reached an
agreement to limit the productions to bolster sagging prices.
Other defendants in the suit are:
-- Micron Technology, Inc.,
-- Micron Semiconductor Products, Inc.,
-- Crucial Technology, Inc.,
-- Infineon Technologies AG,
-- Infineon Technologies North America Corp.,
-- Samsung Electronics Co., Ltd.,
-- Samsung Semiconductor, Inc.,
-- Mosel Vitelic Corporation,
-- Mosel Vitelic Corporation (USA),
-- Nanya Technology Corporation,
-- Nanya Technology Corporation USA,
-- Winbond Electronics Corporation,
-- Winbond Electronics Corporation America,
-- Elpida Memory, Inc.,
-- Elpida Memory (USA), Inc.,
-- NEC Electronics America, Inc.
The defendants in the case controlled a vast majority of DRAM
production at the time of filing, an industry with revenue
estimated at $20 billion.
"As a result of conducting exhaustive discovery, we are
confident that we can show that a price-fixing conspiracy was in
play," said Tony Shapiro, one of the lead attorneys representing
the plaintiffs. "We believe that this case is the best way --
perhaps the only way -- for the plaintiffs to recover damages."
DRAM is a necessary component in a wide variety of electronics
including personal computers, cellular telephones, digital
cameras and many other devices. DRAM allows for the storage and
retrieval of electronic data.
The suit was brought by 11 technology companies that purchased
DRAM from Micron who claim they overpaid for DRAM because of the
alleged price-fixing scheme. Now certified as a class action,
the suit represents thousands of companies in the U.S. that
purchased DRAM from the defendants.
According to the complaint, beginning in 1999 the price for DRAM
began falling dramatically, dipping below the cost of
production. Then, in September 2001, DRAM prices spiked and by
February 2002 reached as high as $4.50, the complaint states.
In mid-2002, media reports cited statements by DRAM manufacturer
Mosel Vitelic's vice president Thomas Chang that the company
held price-fixing meetings with other manufacturers where they
agreed to reduce production to boost prices.
In 2002, the Antitrust Division of the Department of Justice
began an investigation of price-fixing by a number of the
defendants.
"The ruling is an important step in our efforts to hold Micron
and the other defendants accountable," Mr. Shapiro added.
The original lawsuit claiming antitrust violations under The
Sherman Act by Micron and other defendants was filed in June of
2002, and after a number of similar suits were filed, the cases
were consolidated and moved to U.S. District Court in San
Francisco.
The lawsuit asks the court to issue a permanent injunction to
end the price-fixing activities, and award the plaintiffs and
members of the class damages, which are trebled under antitrust
laws.
Judge Hamilton granted every aspect of the plaintiffs' motion to
certify the class, rejecting numerous arguments put forth by the
defendants. The certified class includes anyone who purchased
DRAM directly from the defendants between April 1, 1999 and June
22, 2002.
Copies of the complaint and class-certification order are
available for viewing at http://www.hbsslaw.com.
The suit is "In Re Dynamic Random Access Memory (DRAM) Antitrust
Litigation, Case No. M:02-cv-01486-PJH," filed in the U.S.
District Court for the Northern District of California under
Judge Phyllis J. Hamilton with referral to Judge Joseph C.
Spero.
Representing the plaintiffs are:
(1) Steve W. Berman of Hagens Berman Sobol Shapiro LLP,
1301 Fifth Avenue, Suite 2900, Seattle, WA 98101,
Phone: 206-623-7292, Fax: 206-623-0594, E-mail:
steve@hbsslaw.com;
(2) Garrett D. Blanchfield, Jr. of Reinhardt Wendorf &
Blanchfield, East 1250 First National Bank Building
322 Minnesota Street, St. Paul, MN 55101, Phone: 651-
287-2100, Fax: 651-287-2103, E-mail:
g.blanchfield@rwblawfirm.com;
(3) Francis A. Bottini, Jr. of Wolf Haldenstein Adler
Freeman & Herz LLP, Symphony Towers, 750 B Street
Suite 2770, San Diego, CA 92101, Phone: 619/239-4599,
Fax: 619-234-4599, E-mail: bottini@whafh.com;
(4) Jeffrey J. Corrigan of Spector Roseman & Kodroff PC
1818 Market Street, 25th Floor, Philadelphia, PA 19103,
Phone: 215-496-0300, E-mail: jcorrigan@srk-law.com;
(5) Laurence D. King of Kaplan Fox & Kilsheimer LLP, 555
Montgomery Street, Suite 1501, San Francisco, CA 94111,
Phone: 415/772-4700, Fax: (415) 772-4707, E-mail:
lking@kaplanfox.com; and
(6) Anthony D. Shapiro of Hagens Berman Sobol Shapiro LLP,
1301 Fifth Avenue, Suite 2900, Seattle, WA 98101,
Phone: 206-623-7292, Fax: 206-623-0594, E-mail:
tony@hbsslaw.com.
Representing the defendants are:
(1) Kevin Arquit of Simpson Thacher & Bartlett LLP, 425
Lexington Avenue, New York, NY 10017-3954, Phone: 212-
455-2000;
(2) G. Michael Barnhill of Womble Carlyle Sandridge & Rice
PLLC, One Wachovia Center, Suite 3500, 301 College
Street, Charlotte, NC 28202-6025, Phone: 704-331-4900,
Fax: 704-331-4955;
(3) Daniel Lee Alexander of O'Melveny & Myers LLP, 400
South Hope Street, Los Angeles, CA 90071, Phone: 213-
430-6000, Fax: 213-430-6407, E-mail:
dalexander@omm.com;
(4) Debra L. Bouffard of Sheehey Furlong & Behm PC, P.O.
Box 66, Burlington, VT 05402-0066, Phone: 802-864-9891,
E-mail: dbouffard@sheeheyvt.com; and
(5) Aton Arbisser of Kaye Scholer LLP, 1999 Avenue of the
Stars, Suite 1700, Los Angeles, CA 90067, L.A., Phone:
310-788-1000, Fax: 310-788-1205, E-mail:
aarbisser@kayescholer.com.
MOLINA HEALTHCARE: Seeks Dismissal of Securities Suit in Calif.
---------------------------------------------------------------
Molina Healthcare, Inc. filed a motion to dismiss the
consolidated securities class action pending against it in the
U.S. District Court for the Central District of California.
Beginning on July 27, 2005, a series of securities class action
complaints were filed on behalf of persons who acquired
company's stock between Nov. 3, 2004 and July 20, 2005.
The class action complaints were consolidated into a single
consolidated action, Case No. CV 05-5460 GPS (SHx), and a lead
plaintiff later appointed.
On March 13, 2006, the lead plaintiff filed its consolidated
complaint. The consolidated complaint purports to allege claims
against the company, J. Mario Molina, John C. Molina, and Joseph
W. White for alleged violations of the Securities Exchange Act
of 1934 arising out of the company's announcement of its
guidance for the 2005 fiscal year.
On May 1, 2006, the defendants filed a motion to dismiss the
consolidated complaint for failure to state a claim upon which
relief can be granted. The lead plaintiff has until June 15,
2006 to file a response to the motion to dismiss.
The suit is "William G. Hunt v. Molina Healthcare Inc., et al.,
Case No. CV 05-5460 GPS (SHx)," filed in the U.S. District Court
for the Central District of California under Judge S. James
Otero with referral to Judge Stephen J. Hillman.
Representing the plaintiffs are:
(1) Christopher Kim and Lisa J. Yang of Lim Ruger & Kim,
1055 W. 7th St., Ste. 2800, Los Angeles, CA 90017,
Phone: 213-955-9500, E-mail: lisa.yang@lrklawyers.com
and christopher.kim@lrklawyers.com;
(2) Richard A. Maniskas and Marc A. Topaz of Schiffrin &
Barroway, 280 King of Prussia Road, Radnor, PA 19087,
Phone: 610-667-7706; and
(3) Tricia L. McCormick of Lerach Coughlin Stoia Geller
Rudman and Robbins, 655 West Broadway, Suite 1900, San
Diego, CA 92101, Phone: 619-231-1058, E-mail:
triciam@lerachlaw.com.
MORTON INDUSTRIAL: Faces Suit in Ga. Over MMC Merger Agreement
--------------------------------------------------------------
Morton Industrial Group, Inc. is defendant in a purported class
action pending in the U.S. District Court for the Northern
District of Georgia over its merger agreement with MMC Precision
Merger Corp. (Merger Sub), according to the company's May 16,
2006 Form 10-Q filing with the U.S. Securities and Exchange
Commission for the period ended April 1, 2006.
On March 22, 2006, the company entered into an Agreement and
Plan of Merger under which Merger Sub, a wholly owned subsidiary
of MMC Precision Holdings Corp., will merge with and into the
company with the company being the surviving corporation and a
direct wholly owned subsidiary of MMC Precision.
On March 27, 2006, a complaint was filed in the Superior Court
of Fulton County, Georgia, against the company, the members of
the its board of directors, MMC Precision, Merger Sub (the MMC
Entities) and Brazos Private Equity Partners, LLC.
The company and directors have denied the allegations against
them and have filed joinders in the Notice of Removal filed by
Brazos and the MMC Entities in the U.S. District Court for the
Northern District of Georgia.
The complaint alleges, among others that:
-- the consideration offered shareholders pursuant to the
merger of the company and Merger Sub announced on March
23, 2006 is inadequate and not entirely fair to all of
the company's shareholders;
-- that the company's disclosures regarding the merger are
false and misleading; and
-- that members of the board of directors have breached
their fiduciary duties in connection with the proposed
transaction, and that Brazos and the MMC Entities aided
and abetted the alleged breaches of fiduciary duties.
The complaint, which purports to be filed by a shareholder of
the company, includes a request for declaration that the action
be maintained as a class action. It seeks, among others,
damages and injunctive relief prohibiting the company from
concluding the proposed merger.
The suit is "Kahn v. Morton Industrial Group, et al., Case No.
1:06-cv-01008-CAP," filed in the U.S. District Court for the
Northern District of Georgia under Judge Charles A. Pannell.
Representing the plaintiffs are:
(1) Martin D. Chitwood of Chitwood Harley Harnes, LLP, 1230
Peachtree Street, N.E., 2300 Promenade II, Atlanta, GA
30309, Phone: 404-873-3900, Fax: 404-876-4476, E-mail:
mdc@classlaw.com;
(2) James S. Notis of Gardy & Notis, LLP, Suite 110, 440
Sylvan Avenue, Englewood Cliffs, NJ 07632, Phone: 201-
567-7377, Fax: 201-567-7337; and
(3) Harold B. Obstfeld of Harold B. Obstfeld, P.C., 20th
Floor, 100 Park Avenue, New York, NY 10017, Phone: 212-
696-1212, Fax: 212-696-1398.
Representing the defendants are, Nickolas P.T. Chilivis and John
D. Dalbey of Chilivis Cochran Larkins & Bever, 3127 Maple Drive,
N.E., Atlanta, GA 30305, Phone: 404-233-4171, Fax: 404-261-2842,
E-mail: npc@cclblaw.com and jdd@cclblaw.com.
NETZERO: Faces Calif. Suit Over Cancelled Internet Accounts
-----------------------------------------------------------
NetZero, a brand name of United Online, Inc., is defendant in a
purported consumer class action in the Superior Court of the
State of California, County of Los Angeles.
On March 6, 2006 plaintiff Anthony Piercy filed the suit against
NetZero claiming that it continues to charge consumers fees
after they cancel their Internet access account.
NetZero has not yet filed or served its formal response to the
complaint, according to United Online's May 10, 2006 Form 10-Q
filing with the U.S. Securities and Exchange Commission for the
period ended March 31, 2006.
NEW CENTURY: Court Orders Recovery for Defendants in "Overman"
--------------------------------------------------------------
A California appeals court ordered the recovery of costs for New
Century Financial Corp. and New Century Mortgage, who were both
named in a class action filed in September 2002, alleging
violations of the state's consumer fraud laws, according to the
company's May 10, 2006 Form 10-Q filing with the U.S. Securities
and Exchange Commission for the period ended March 31, 2006.
Robert E. Overman and Martin Lemp filed a class action complaint
in the Superior Court of Alameda County, California, against the
New Century Entities, U.S. Bancorp, Loan Management Services,
Inc., and certain individuals affiliated with Loan Management
Services.
The complaint alleges violations of the California Consumers
Legal Remedies Act, Unfair, Unlawful and Deceptive Business and
Advertising Practices in violation of Business & Professions
Code Sections 17200 and 17500, Fraud-Misrepresentation and
Concealment and Constructive Trust/ Breach of Fiduciary Duty and
damages including restitution, compensatory and punitive
damages, and attorneys' fees and costs.
The New Century Entities filed a Section 128.7 sanctions motion
seeking dismissal of the case. On Dec. 8, 2003, the court
granted the motion for sanctions against the plaintiffs for
filing a first amended complaint with allegations against the
New Century Entities that were devoid of evidentiary support and
ordered the claims stricken without prejudice.
On Jan. 27, 2004, the court entered a judgment of dismissal
without prejudice in favor of the New Century Entities. The
plaintiffs filed a notice of appeal on Feb. 20, 2004 from the
judgment entered in favor of the New Century Entities and the
order granting the New Century Entities' motion for sanctions.
Plaintiffs also filed a motion with the appellate court to
consolidate this appeal with three additional appeals sought in
similar cases against other lenders.
On May 28, 2004, the court denied the motion. On June 10, 2005,
the court of appeals dismissed plaintiff's appeal for lack of
appellate jurisdiction. On Aug. 10, 2005, the court entered an
order holding that the New Century Entities should recover their
costs.
NEW CENTURY: Parties Consider Settling La. FLSA Violations Suit
---------------------------------------------------------------
Settlement discussions are ongoing in the collective action
pending in the U.S. District Court for the Middle District of
Louisiana against New Century Financial Corp. and New Century
Mortgage, alleging violations of the Fair Labor Standards Act.
In April 2003, two former, short-term employees, Kimberly A.
England and Gregory M. Foshee, filed a complaint seeking class
action status against the New Century Entities, Worth Funding,
Inc., now known as New Century Credit Corp., and The Anyloan Co.
now known as Home123 Corp.
The action was removed on May 12, 2003 from the 19th Judicial
District Court, Parish of East Baton Rouge, State of Louisiana
to the U.S. District Court for the Middle District of Louisiana
in response to the New Century Entities', Worth's and Anyloan's
Petition for Removal.
The complaint alleges failure to pay overtime wages in violation
of FLSA. Plaintiffs filed an additional action in 19th Judicial
District Court, Parish of East Baton Rouge, Louisiana on Sept.
18, 2003, adding James Gray as a plaintiff and seeking unpaid
wages under state law, with no class claims.
This second action was removed on Oct. 3, 2003 to the U.S.
District Court for the Middle District of Louisiana, and was
ordered consolidated with the first action. In April 2004, the
U.S. District Court unilaterally de-consolidated the James Gray
individual action.
In September 2003, plaintiffs also filed a motion to dismiss
their claims in Louisiana to enable them to join in a
subsequently filed case in Minnesota entitled, "Klas vs. New
Century Financial Corp., et al."
The New Century Entities, Worth and Anyloan opposed the motion
and the court agreed with their position and refused to dismiss
the plaintiffs' case, as it was filed first.
The Klas case was consolidated with this case and discovery is
proceeding. The New Century Entities, Worth and Anyloan filed a
motion to dismiss Worth and Anyloan as defendants. The court
granted the motion to dismiss in April 2004.
On June 28, 2004, the New Century Entities filed a motion to
reject conditional certification of a collective action. That
motion to reject the class was granted on June 30, 2005.
Plaintiffs had 30 days to file individual actions against the
New Century Entities, and approximately 450 actions were filed.
Settlement discussions, commenced at mediation in January 2006,
are ongoing, according to the company's May 10, 2006 Form 10-Q
filing with the U.S. Securities and Exchange Commission for the
period ended March 31, 2006.
The suit is "England v. New Century Financial Corp. et al., Case
No. 3:05-cv-00490-FJP-SCR," filed in the U.S. District Court for
the Middle District of Louisiana under Judge Frank J. Polozola.
Representing the plaintiffs are Stanley P. Baudin, Christopher
L. Coffin and Patrick Wayne Pendley of Pendley Law Firm, P.O.
Drawer 71, 24110 Eden St., Plaquemine, LA 70764-0071, Phone:
225-687-6396, Fax: 225-687-6398, E-mail:
sbaudin@pendleylawfirm.com, ccoffin@pendleylawfirm.com or
pwpendley@pendleylawfirm.com.
NEW CENTURY: Reduction of Class Size Sought in Ind. FCRA Suit
-------------------------------------------------------------
Plaintiffs filed a motion with the U.S. District Court for the
Northern District of Indiana seeking to reduce the proposed size
of the class in the lawsuit filed against New Century Mortgage
Corp., alleging violations of the Fair Credit Reporting Act.
The suit was filed by Perrie Bonner and Darrell Bruce against
the company, and Home123 Corp. in April 2005. It claimed the
company and Home123 accessed consumer credit reports without
authorization because the prescreened offers of credit did not
qualify as firm offers of credit.
The proposed class consists of all persons in Indiana, Illinois
and Wisconsin who received the prescreened offers from April 20,
2003 to May 10, 2005.
The company and Home 123 filed their answer to the complaint on
June 30, 2005. In September 2005, plaintiffs filed a motion for
class certification and on Nov. 1, 2005, the company and Home123
filed a motion for judgment on the pleadings.
In April 2006, plaintiffs filed a motion for leave to modify the
proposed class definitions by reducing the size of the class to
just the Northern District of Indiana.
The suit is "Bonner et al.v. Home123 Corp. et al, Case No. 2:05-
cv-00146-PPS-APR," filed in the U.S. District Court for the
Northern District of Indiana under Judge Philip P Simon.
Representing the plaintiffs are Daniel A. Edelman, Jeremy P.
Monteiro of Edelman Combs Latturner & Goodwin LLC, 120 S LaSalle
Street Suite 1800, Chicago, IL 60603, Phone: 312-739-4200, Fax:
312-419-0379, E-mail: CourtECL@aol.com or jmonteiro@edcombs.com.
Representing the company are Victoria R. Collado PHV, Lucia Nale
PHV, Diane R. Sabol PHV of Mayer Brown Rowe and Maw LLP, 71 S
Wacker Drive, Chicago, IL 60606, Phone: 312-782-0600, Fax: 312-
701-7711, E-mail: vcollado@mayerbrownrowe.com,
lnale@mayerbrownrowe.com, drsabol@mayerbrownrowe.com.
NORTHEN MARIANA: Garment Factory Workers to Get Checks in Weeks
---------------------------------------------------------------
U.S. District Court Judge Alex Munson of the Northern Mariana
Islands held a status conference hearing on the settlement of
the class action against the commonwealth's garment factories on
June 6, according to the Saipan Tribune.
At the hearing, plaintiffs' lawyer Pamela Parker told the judge
via telephone that the disbursement of checks to the workers may
be completed by the end of the month. A San Francisco firm that
is representing the plaintiffs will compute the amount due to
workers, said Timothy H. Bellas, chairman of the Garment
Oversight Board. About 20,000 to 25,000 workers who were
allegedly made to work in sweatshop conditions are entitled to
benefit from the distribution. The recipients are in China,
Philippines, Bangladesh, among others.
Mr. Bellas distributed the board's repatriation program to all
counsels present at the hearing, according to the report. The
budge is approximately $7 million, which is the rough figure and
based on the report that they submitted.
Judge Munson set the hearing to know the status of the
distribution of the settlement money, and to hear a report from
claims administrator Gilradi and Co. LLC, a representative of
the counsel for the class action plaintiffs, and The Garment
Oversight Board.
The suit was filed by New York law firm Milberg Weiss Bershad &
Schulman LLP in 1999 on behalf of some garment workers. A
settlement reached five years after, provides an award close to
$20 million (Class Action Reporter, May 29, 2006). The money is
to be distributed as:
Payment to workers $5.8 million
Claims administrator of the distribution fund $500,000
Repatriation fund for garment workers $400,000
Monitoring fund $4 million
Milberg Trust fund $565,254.80
Plaintiffs lawyer $8.75 million
The trust fund is to be administered by the non-profit Tides
Foundation.
Representing the defendants is Steven Pixley.
PRICELINE.COM: N.Y. Court Mulls Approval for IPO Suit Settlement
----------------------------------------------------------------
The U.S. District Court for the Southern District of New York
has yet to issue an order with respect to the final approval of
the settlement of the consolidated securities class action
against priceline.com, Inc., according to the company's May 10,
2006 Form 10-Q filing with the U.S. Securities and Exchange
Commission for the period ended March 31, 2006.
On March 16, March 26, April 27, and June 5, 2001, respectively,
four putative class action complaints were filed in the U.S.
District Court for the Southern District of New York naming the
following as defendants:
-- priceline.com, Inc.,
-- Richard S. Braddock,
-- Jay Walker,
-- Paul Francis,
-- Morgan Stanley Dean Witter & Co.,
-- Merrill Lynch,
-- Pierce,
-- Fenner & Smith, Inc.,
-- BancBoston Robertson Stephens, Inc. and
-- Salomon Smith Barney, Inc.
The suits are numbered, 01 Civ. 2261, 01 Civ. 2576, 01 Civ. 3590
and 01 Civ. 4956. "Shives et al. v. Bank of America Securities
LLC et al., 01 Civ. 4956," also names other defendants and
states claims unrelated to the company.
The complaints allege, among other things, that priceline.com
and the individual defendants violated the federal securities
laws by issuing and selling priceline.com common stock in
priceline.com's March 1999 initial public offering without
disclosing to investors that some of the underwriters in the
offering, including the lead underwriters, had allegedly
solicited and received excessive and undisclosed commissions
from certain investors.
By Orders of Judge Mukasey and Judge Scheindlin dated Aug. 8,
2001, these cases were consolidated for pre-trial purposes with
hundreds of other cases, which contain allegations concerning
the allocation of shares in the initial public offerings of
companies other than priceline.com, Inc. An order by Judge
Scheindlin dated Aug. 14, 2001 consolidated these cases for all
purposes: 01 Civ. 2261; 01 Civ. 2576; and 01 Civ. 3590.
On April 19, 2002, plaintiffs filed a consolidated amended class
action complaint in these cases. This consolidated amended
class action complaint makes similar allegations to those
described above but with respect to both the company's March
1999 initial public offering and the company's August 1999
second public offering of common stock.
The named defendants together with other issuer defendants in
the consolidated litigation, filed a joint motion to dismiss on
July 15, 2002. Those who filed the motion are:
-- priceline.com, Inc.,
-- Richard S. Braddock,
-- Jay S. Walker,
-- Paul E. Francis,
-- Nancy B. Peretsman,
-- Timothy G. Brier,
-- Morgan Stanley Dean Witter & Co.,
-- Goldman Sachs & Co.,
-- Merrill Lynch,
-- Pierce, Fenner & Smith, Inc.,
-- Robertson Stephens, Inc. (as successor-in-interest to
BancBoston),
-- Credit Suisse First Boston Corp. (as successor-in-
interest to Donaldson Lufkin & Jenrette Securities
Corp.),
-- Allen & Co., Inc. and Salomon Smith Barney, Inc.
-- Priceline,
-- Richard Braddock,
-- Jay Walker,
-- Paul Francis,
-- Nancy Peretsman, and
-- Timothy Brier,
On Nov. 18, 2002, the cases against the individual defendants
were dismissed without prejudice and without costs. In
addition, counsel for plaintiffs and the individual defendants
executed Reservation of Rights and Tolling Agreements, which
toll the statutes of limitations on plaintiffs' claims against
those individuals.
On Feb. 19, 2003, Judge Scheindlin issued an opinion and order
granting in part and denying in part the issuer's motion. None
of the claims against the company were dismissed.
On June 26, 2003, counsel for the plaintiff class announced that
they and counsel for the issuers had agreed to the form of a
Memorandum of Understanding to settle claims against the
issuers.
The terms of that memorandum provide that the insurers of the
issuers will guarantee class members $1 billion in recoveries
and that settling issuer defendants will assign to the class
members certain claims that they may have against the
underwriters. Issuers also agree to limit their abilities to
bring certain claims against the underwriters.
If recoveries in excess of $1 billion are obtained by the class
from any non-settling defendants, the settling defendants'
monetary obligations to the class plaintiffs will be satisfied;
any amount recovered from the underwriters that is less than $1
billion will be paid by the insurers on behalf of the issuers.
A special committee of the priceline.com board of directors
approved the Memorandum, which is subject to the approval of
each issuer, on July 3, 2003. Thereafter, counsel for the
plaintiff class and counsel for the issuers agreed to the form
of a Stipulation and Agreement of Settlement with defendant
issuers and individuals.
The settlement agreement implements the Memorandum and contains
the same material provisions. On June 11, 2004, a special
committee of the priceline.com Board of Directors authorized the
company's counsel to execute the settlement agreement on behalf
of the company. The settlement agreement is subject to final
approval by the court and the process to obtain that approval is
still pending.
The suit is "In Re: Priceline.com IPO Securities Litigation,
1:01-cv-02261-SAS," filed in the U.S. District Court for the
Southern District of New York, under Judge Shira A. Scheindlin.
For more details, visit http://www.iposecuritieslitigation.com/.
SHELLY'S PRIME: Workers File Lawsuit Alleging FLSA Violation
------------------------------------------------------------
Five former employees of Shelly's Prime Steak, Stone Crab &
Oyster Bar is filing a suit alleging the company misappropriated
tips and paid workers less than the minimum wage in violation of
the federal Fair Labor Standards Act.
According to the complaint, "Defendants routinely take a portion
of the tips earned by servers, bussers, bartenders, and runners,
and redistribute them to restaurant managers. Defendants take
another part of the workers' tips and apply it to the fees that
credit card companies charge the restaurant. Both of these
policies, as applied to the Shelly's workers, violate the Fair
Labor Standards Act and the New York Labor Law. This lawsuit
seeks to recover the misappropriated tips and return them to the
workers who earned them."
The lawsuit also alleges that the restaurant routinely fails to
pay the statutory minimum wage for all hours worked, and fail to
pay them proper overtime rate for all hours worked in excess of
40 hours per week.
Outten & Golden and co-counsel, the Asian American Legal Defense
& Education Fund, will seek to have the lawsuit certified as a
class action that includes servers, runners, bussers, and
bartenders who have worked at Shelly's New York -- which is
located in midtown Manhattan near Carnegie Hall -- since June 7,
2000.
The lead plaintiff, David Mohney, a New York resident and former
server at the restaurant, stated, "Behind the elegant facade at
Shelly's New York are the often unseen workers whose efforts may
go unnoticed but do not deserve to go unpaid. We brought this
legal action because we believe we are entitled to take home the
tips and wages we earned."
The other plaintiffs are Solvie Karlstrom, of New York; Benjamin
McGroarty, of Los Angeles, California; and Christel Ferguson, of
Queens, N.Y.
They worked at the Fireman restaurants between 2001 and 2005
employees who also are members of the Restaurant Opportunities
Center in New York (ROC-NY), a worker's rights organization.
Defendants in the case include:
-- owner Sheldon Fireman;
-- The Fireman Group Cafe Concepts Inc., also known as The
Fireman Hospitality Group;
-- the general manager of Shelly's;
-- the vice president of operations of The Fireman Group;
and
-- the chief financial officer of The Fireman Group.
The lawsuit is the second case this year filed in federal court
against one of Mr. Fireman's restaurants, according to the
complaint. In January, more than 50 current and former
employees of the Redeye Grill, also members of ROC- NY, filed a
suit alleging similar violations of federal and state laws.
According to a 2005 ROC-NY report, "Behind the Kitchen Door:
Pervasive Inequality in New York City's Thriving Restaurant
Industry," these lawsuits reflect a trend in the New York City
restaurant industry. Sixty percent of the workers surveyed
reported wage and hour violations and 25 percent reported tip
misappropriations.
"Blatant labor law violations can generate tremendous legal
liability for the restaurant industry. Lawsuits like this are
causing many industries to conform their pay practices to state
and federal law. the company hope that this lawsuit will put
the New York restaurant industry on the path to change as well,"
according to Justin M. Swartz, an attorney at Outten & Golden
LLP of New York, who represents the plaintiffs.
Anjana Samant, an attorney at Outten & Golden LLP, added, "The
New York state labor law means what it says: tips belong to the
servers who worked for them, not their supervisors."
Saru Jayaraman, Executive Director of ROC-NY, stated, "As one of
the most prominent restaurant groups in New York City, the
Fireman Hospitality Group is in an excellent position to set a
high standard for fair and just working conditions in the
restaurant industry. We hope that these legal actions will
cause Shelly's and Redeye Grill to become examples for
restaurants throughout the City to follow."
The case is "Mohney et al. v. Shelly's Prime Steak, Stone Crab &
Oyster Bar," No. 06 CV 4270.
For more information, contact Justin M. Swartz, Esq. or Anjana
Samant, Esq. both of Outten & Golden LLP, New York, Phone: (212)
245-1000; or Saru Jayaraman Executive Director - Restaurant
Opportunities Center (ROC-NY), Phone: (917) 226-3713.
STATION CASINOS: Sexual Harassment Suit Hearing Reset to June
-------------------------------------------------------------
A June 6 hearing of a class action filed against the managers of
Thunder Valley Casino has been postponed until 8:30 a.m. on June
20, 2006, according to the Sacramento Bee.
The western Placer County, California-based company is facing a
suit filed by former women employees alleging they were victims
of sexual harassment and job discrimination as employees at the
casino, owned by the Untied Auburn Indian Community. Also named
in the suit filed in Placer Superior Court is casino manager,
Curtis Broome.
In November, a Placer County court commissioner dismissed the
plaintiffs' claim on grounds that the tribe's status as a
sovereign nation exempts it from state and federal employment
law.
Plaintiffs are expected pursue their suit against Station
Casinos Inc., the Nevada-based corporation that manages
Thunder Valley, as the women's non-Indian employer. The judge
will decide on the June hearing whether to uphold the sovereign
nation exclusion, or let the case proceed.
The complaint contends that fewer than five Indians are employed
at Thunder Valley, and that the casino pays 24 percent of its
net income to Station as management fee.
The plaintiffs are Corinn Medina, Cheryl Dalton, Sundi Lyons,
Cynthia Walden, Kathy Robillard, Amarissa Dillhyon and Elizabeth
Ward. They are residents of Placer and Sacramento counties.
All worked at the casino in 2003 and 2004. They are alleging a
variety of allegations, including sexual harassment, age
discrimination and wrongful dismissal. They are asking
unspecified monetary damages, including punitive and exemplary
damages.
Debra Smith, an attorney with Equal Rights Advocates in San
Francisco, is lawyer for the former employees.
THESTREET.COM: N.Y. Court Mulls Approval for IPO Suit Settlement
----------------------------------------------------------------
The U.S. District Court for the Southern District of New York
has yet to issue an order with respect to the final approval of
the settlement of the consolidated securities class action
against TheStreet.com, Inc.
On Dec. 5, 2001, a class action alleging violations of the
federal securities laws was filed in the U.S. District Court for
the Southern District of New York against:
-- the company,
-- certain of the company's former officers and directors,
and
-- James J. Cramer, a current director, and
-- certain underwriters of the company's initial public
offering (The Goldman Sachs Group, Inc., Chase H&Q,
Thomas Weisel Partners LLC, FleetBoston Robertson
Stephens, and Merrill Lynch Pierce Fenner & Smith,
Inc.).
Plaintiffs allege that the underwriters of company's initial
public offering violated the securities laws by failing to
disclose certain alleged compensation arrangements, such as
undisclosed commissions or stock stabilization practices, in the
offering's registration statement.
Thus, they seek damages and statutory compensation against each
defendant in an amount to be determined at trial, plus pre-
judgment interest thereon, together with costs and expenses,
including attorneys' fees.
Similar suits were filed against more than 300 other issuers
that had initial public offerings between 1998 and December
2001, and they have all been consolidated into a single action.
Pursuant to a court order dated Oct. 9, 2002, each of the
individual defendants to the action, including Mr. Cramer, has
been dismissed without prejudice.
On June 8, 2004, the company and its individual defendants,
together with the company's insurance carriers, entered into a
settlement with the plaintiffs. The settlement is subject to a
hearing on fairness and approval by the court overseeing the
litigation.
Although the suit against the company is an independent cause of
action vis-a-vis the lawsuits pending against other issuers in
the consolidated proceeding, and no issuer is liable for any
wrongdoing allegedly committed by any other issuer, the proposed
settlement between the plaintiffs and the issuers is being done
on a collective basis.
Generally, under the terms of the settlement in exchange for the
delivery by the company insurers and those of the other
defendants of an undertaking,
-- guaranteeing that the plaintiffs will recover, in the
aggregate, at least $1 billion from the underwriters,
and
-- the assignment to the plaintiffs by the issuers of their
interests in claims against the underwriters for excess
compensation in connection with their IPOs,
the plaintiffs will release the non-bankrupt issuers from all
claims against them and their individual defendants. The
bankrupt issuers will receive a covenant not to sue. The costs
and expenses of the settlement are expected to be borne by the
company's insurers.
Pursuant to an Opinion and Order dated Feb. 15, 2005, the court,
subject to certain minor modifications, preliminarily approved
the settlement. Such modifications have been made and were
approved by the court pursuant to an Order dated Aug. 31, 2005.
The court also appointed the Notice Administrator for the
settlement and ordered that notice of the settlement be
distributed to all settlement class members beginning Nov. 15,
2005.
The settlement fairness hearing was held on April 24, 2006.
For more details, visit http://www.iposecuritieslitigation.com/.
TNS INC: Cement Masons Files Securities Fraud Suit in E.D. Va.
--------------------------------------------------------------
TNS, Inc. is defendant in a purported securities class action in
the U.S. District Court for the Eastern District of Virginia.
The company and John J. McDonnell, Jr., chief executive officer,
and Henry H. Graham, Jr., chief financial officer, are
defendants in a putative class action filed in connection with
the company's secondary public offering of common stock in
September 2005.
The Cement Masons and Plasterers Joint Pension Trust,
purportedly on behalf of itself and others similarly situated,
filed the putative class action as, "Cement Masons & Plasterers
Joint Pension Trust v. TNS, Inc., et al., Case No. 1:06 CV 363,
CMH/BRP," on April 4, 2006.
Plaintiff claims that the Registration Statement filed in
connection with the secondary offering negligently failed to
disclose that:
-- TNS' agreement with the Pepsi Bottling Group, Inc.
to provide cashless vending to Pepsi had been
delayed beyond Aug. 7, 2005;
-- TNS was generating less revenues and income than it had
anticipated from its contract with the Royal Bank of
Scotland, because Royal Bank purportedly had overstated
the number of transactions that TNS would be
responsible for processing for Royal Bank; and
-- TNS' International Services Division was experiencing
declining revenues during that time period because of
unfavorable foreign exchange rates.
This action is in the preliminary phase; thus the timing and
course of the litigation are not predictable, and, as a result,
management cannot estimate a range of possible loss.
However, TNS intends to take appropriate steps to defend against
the lawsuit, the outcome of which could have a material adverse
affect on the financial condition or future operating results of
TNS.
The first identified complaint is "Cement Masons and Plasters
Joint Pension Trust, et al. v. TNS Inc., et al.," filed in the
U.S. District Court for the Eastern District of Virginia.
Plaintiff firms in this or similar case:
(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) Federman & Sherwood, 120 North Robinson, Suite 2720,
Oklahoma City, OK, 73102, Phone: 405-235-1560, E-mail:
wfederman@aol.com;
(3) Goldman Scarlato & Karon, PC, Phone 888-753-2796;
(4) Kahn Gauthier Swick, LLC, 650 Poydras St. Suite 2150,
New Orleans, LA, 70130, Phone: (504) 455-1400, E-mail:
lewis.kahn@kglg.com;
(5) Lerach Coughlin Stoia Geller Rudman & Robbins, LLP,
(Melville), 58 South Service Road, Suite 200, Melville,
NY, 11747, Phone: 631.367.7100, Fax: 631.367.1173;
(6) Roy Jacobs & Associates, 350 Fifth Avenue Suite 3000,
New York, NY, 10118, E-mail:
classattorney@pipeline.com; and
(7) Schatz & Nobel, P.C., 330 Main Street, Hartford, CT,
06106, Phone: 800.797.5499, Fax: 860.493.6290, E-mail:
sn06106@AOL.com.
TNS INC: Discovery Ongoing in Del. Suit Over Share Disposal Plan
----------------------------------------------------------------
Parties in the purported class action against TNS, Inc. in
relation to the acquisition of its outstanding shares entered
into a letter agreement that provides the defendants with an
open-ended extension of time to answer or otherwise respond to
the plaintiff's complaint.
The company and the members of its board of directors are
defendants in a putative shareholder class action that seeks to
enjoin the non-binding proposal announced on March 13, 2006 from
senior management of the company to acquire all outstanding
shares of TNS.
Paul Schwartz, purportedly on behalf of himself and others
similarly situated, filed the suit, captioned: "Schwartz v. TNS,
Inc., et al., C.A. No. 2000-N," on March 13, 2006 in Delaware
Chancery Court for New Castle County.
Plaintiff alleges that injunctive relief is necessary because
the company and the members of the board of directors allegedly
breached their fiduciary duties to TNS shareholders by allegedly
causing the company to negotiate for the sale of TNS at an
unfair price, depriving TNS' public shareholders of the maximum
value to which they purportedly are entitled.
Plaintiff further alleges that members of the board of directors
also breached their fiduciary duties by allegedly not taking
adequate measures to ensure that the interests of TNS' public
shareholders are properly protected, as the terms of the
proposed transaction allegedly are grossly unfair to the
shareholders.
On April 3, 2006, the plaintiff and the defendants entered into
a letter agreement that:
-- provides the defendants with an open-ended extension of
time to answer or otherwise respond to the plaintiff's
complaint, and
-- holds discovery and other matters in the case in
abeyance pending an agreement on a management buy-out
proposal or other form of transaction.
TOWER SEMICONDUCTOR: Appeals Court Dismisses N.Y. Stock Lawsuit
---------------------------------------------------------------
The U.S. Court of Appeals for the Second Circuit affirmed the
August 2004 decision of the U.S. District Court for the Southern
District of New York to dismiss the class action filed in July
2003 against Tower Semiconductor Ltd. and certain directors and
shareholders.
The decision of the Court of Appeals may be subject to motions
for appeal/or rehearing by the plaintiff and there is therefore
no assurance that the decision of the Court of Appeals is a
final disposition of the action.
In 2003, a securities class action was filed against Tower
Semiconductor, Ltd. and certain of its shareholders and
directors, including Eli Harari, its president and chief
executive officer and a company board member in the U.S.
District Court for the Southern District of New York on behalf
of U.S. holders of the company's ordinary shares as of the close
of business on April 1, 2002 (Class Action Reporter, Aug. 14,
2003).
The lawsuit alleges that the company and certain of its
directors made false and misleading statements in a proxy
solicitation to its shareholders regarding a proposed amendment
to a contract between the company and certain of its
shareholders.
The plaintiffs are seeking unspecified damages and attorneys'
and experts' fees and expenses.
For more information, contact Ilanit Vudinsky of Tower
Semiconductor, Phone: +972-4-650-6434, E-mail:
ilanitvu@towersemi.com.
TRAVEL COS: Ind. Sues Web Sites Accused of Cutting Tax Remits
-------------------------------------------------------------
Marshall County, Indiana is filing a case against online travel
Web sites, alleging the firms are underpaying taxes to the city
for "brokering" hotel rooms, the SouthBendTribune.com reports.
The travel agencies are accused of negotiating a low, wholesale
rate with hotel companies for unbooked rooms and adding a fee to
rent the room at a profit to online bookers. They allegedly
calculate the hotel and motel taxes they must pay based on the
low wholesale rate initially paid for the room, when it should
be on the price paid by the end user.
A similar suit was filed in Fulton County Superior Court against
Expedia.com, Hotwire.com, Orbitz.com and Travelocity.com. The
claims in the suit are similar to that of a federal class action
filed in November by Rome, Cartersville, and Hart County in
Georgia. The suit alleged that potentially more than 100 cities
and counties in Georgia lost millions of dollars in taxes that
could have been used to support tourist attractions. Other
states, including California, North Carolina and Ohio have lodge
similar lawsuits (Class Action Reporter, April 4, 2006).
Marshall County will be represented by David Holmes of Holmes &
Walter, LLP, 116 West Plymouth Street, Bremen, IN 46506, Phone:
(574) 546-4022, Fax: (574) 546-2144.
TRAVEL COS: Ill. County Court Dismisses Occupancy Tax Lawsuit
-------------------------------------------------------------
A judge in Cook County, Chicago threw out all claims against one
of the defendants and dismissed the plaintiffs' breach of
contract claim against the others in a class suit filed against
online travel companies, including Travelocity, Priceline,
Orbitz and Expedia in Chicago.
The suit's claims are similar to that of a federal class action
filed in November by Rome, Cartersville, and Hart County in
Georgia. The suit alleged potentially more than 100 cities and
counties in Georgia lost millions of dollars in taxes by the
practice of travel agencies of calculating taxes based on
wholesale rate on hotel rooms offered to online bookers rather
than on the final price paid by the end user. Other states,
including California, North Carolina and Ohio face similar
lawsuits (Class Action Reporter, April 4, 2006).
The plaintiffs are now left with only one claim in their
purported class action case.
"These dismissals show that a growing number of courts are not
buying what the plaintiffs' contingency fee lawyers are
selling," said Art Sackler, executive director of The
Interactive Travel Services Association. "The courts are
rejecting the tactic of quickly filing lawsuits without first
following administrative procedures for determining tax
liability."
The online travel companies are good corporate citizens who use
the power of the Internet to give travelers more choices and
bring millions of dollars in additional tourism revenue to
cities everywhere. These rulings are not just a win for the
online travel companies, they are also a victory for the
millions of travelers who use the Internet to find and book
their travel reservations.
The city of Atlanta in Georgia filed a similar case against a
dozen online travel Web sites alleging the firms are not
forwarding some taxes to the city. The suit was filed in Fulton
County Superior Court against Expedia.com, Hotwire.com,
Orbitz.com and Travelocity.com. (Class Action Reporter, April 4,
2006).
TRAVEL COS: Wins Favorable Ruling in Penn. Occupancy Tax Lawsuit
----------------------------------------------------------------
A Philadelphia court dismissed the city of Philadelphia's entire
lawsuit against online travel companies including Travelocity,
Priceline, Orbitz and Expedia, according to the Interactive
Travel Services Association.
The suit's claims are similar to that of a federal class action
filed in November by Rome, Cartersville, and Hart County in
Georgia. The suit alleged potentially more than 100 cities and
counties in Georgia lost millions of dollars in taxes by the
practice of travel agencies of calculating taxes based on
wholesale rate on hotel rooms offered to online bookers rather
than on the final price paid by the end user. Other states,
including California, North Carolina and Ohio face similar
lawsuits (Class Action Reporter, April 4, 2006).
In throwing out the suit, the court ruled that the case did not
belong before the court. The court rejected the "sue first-ask
questions later" approach advocated by class-action law firms
and stated that "This court is not in the business of original
tax collections, nor should it be."
"These dismissals show that a growing number of courts are not
buying what the plaintiffs' contingency fee lawyers are
selling," said Art Sackler, Executive Director of ITSA. "The
courts are rejecting the tactic of quickly filing lawsuits
without first following administrative procedures for
determining tax liability."
The online travel companies are good corporate citizens who use
the power of the Internet to give travelers more choices and
bring millions of dollars in additional tourism revenue to
cities everywhere. These rulings are not just a win for the
online travel companies, they are also a victory for the
millions of travelers who use the Internet to find and book
their travel reservations.
TROPICAL SPORTSWEAR: July Trial Set for $8M IPO Suit Settlement
---------------------------------------------------------------
The U.S. District Court for the Middle District of Florida will
hold a fairness hearing on July 10, 2006 at 9:00 a.m. for the
proposed $8,000,000 settlement in the matter, "Reina, et al., v.
Tropical Sportswear International Corp., et al., Case No. 8:03-
CV-1958-T-23TGW."
The case was brought on behalf of all persons and entities who
purchased or otherwise acquired the common stocks of Tropical
Sportswear International Corp. on the open market between June
27, 2001 and Jan. 14, 2004, inclusive, including TSI common
stock issued under or traceable to the TSI prospectus dated May
23, 2002 filed in connection with TSI's secondary public
offering, and were damaged thereby.
The hearing will be held before the Honorable Thomas G. Wilson
in the Sam M. Gibbons, U.S. Courthouse, 801 North Florida Ave.,
Tampa, Florida 33602.
Deadline for submission of a proof of claim is on Sept. 8, 2006.
Objections and exclusions to and from the settlement are due on
June 5, 2006.
For more details, contact:
(1) Maya Saxena of Milberg Weiss Bershad & Schulman, LLP,
Tower One, 5200 Town Center Road, Suite 600, Roca
Raton, Florida 33486, (Palm Beach Co.), Phone: 561-361-
5000, Telecopier: 561-367-8400, E-mail:
msaxena@milbergweiss.com, Web site:
http://www.milbergweiss.com;
(2) Jack Reise of Lerach Coughlin Stoia Geller Rudman &
Robbins, LLP, 197 South Federal Highway, Suite 200,
Boca Raton, Florida 33432, (Palm Beach Co.), Phone:
561-750-3000 and 888-262-3131, Fax: 561-750-3364, E-
mail: JReise@lerachlaw.com, Web site:
http://www.lerachlaw.com;and
(3) Tropical Sportswear International Securities
Litigation, c/o Rust Consulting, Inc., Claims
Administrator, P.O. Box 1801, Faribault, MN 55021-1849,
Phone: 1-800-549-1836, Web site:
http://www.tropicalsportswearsettlement.com/.
UNITED PARCEL: Wins Favorable Ruling in Delivery Refund Lawsuit
---------------------------------------------------------------
Madison County Circuit Judge Don Weber dismissed a class action
filed against United Parcel Service Inc. by a customer wanting a
$5 refund when he did not receive an "overnight" package at a
time promised by the company, The Madison St. Clair Record
reports.
Judge Weber said in his order that UPS' guarantee for a refund
in case it fails to deliver packages by an agreed time was
adequately disclosed and known to the plaintiff. UPS shipping
document and service guide promises to either attempt delivery
by a stated time or refund or credit the "entire" shipping
charge. Under it, UPS grants $14.95 refund for the late
delivery overnight and $9.95 for second day delivery. Customers
have 15 days to ask for a refund or credit if UPS failed to
attempt delivery by the time promised.
The suit was filed by the Wood River-based Lakin Law Firm in
2002 on behalf of Jeffrey Hicks of Financial Planning Advisors.
Mr. Hicks had asked the judge to rewrite the contract and
fashion a new "common law" remedy despite UPS' refund and credit
policy.
According to Judge Weber, "This 'common law' remedy would result
in each class member receiving $5 less that the contractual
remedy stated in the UPS guarantee. But if successful, this
purported nationwide class action would generate millions of
dollars in plaintiff's attorney's fees, according to the report.
Mr. Hicks is represented by Gerald Walters of The Lakin Law
Firm, P.C., 300 Evans Avenue, P.O. Box 229, Wood River, Illinois
62095-0229 (Madison Co.), Phone: 618-254-1127, Telecopier: 618-
254-0193.
Representing UPS is Troy Bozarth, a partner at Burroughs,
Hepler, Broom, MacDonald, Hebrank & True of Edwardsville, Two
Mark Twain Plaza, Suite 300, 103 West Vandalia Street, P.O. Box
510 Edwardsville, Illinois 62025-0510 (Madison Co.), Phone: 618-
656-0184, Telecopier: 618-656-1364.
UNITED STATES: Antitrust Suit Against Medical Schools Dismissed
---------------------------------------------------------------
District Judge Paul L. Friedman dismissed a putative antitrust
class action brought against the nation's leading medical
schools and teaching hospitals.
The U.S. Court of Appeals for the District of Columbia Circuit
affirmed that a federal statute, enacted in April 2004 to
protect the nation's graduate medical education system, barred
allegations of a nationwide antitrust conspiracy to depress the
compensation of medical residents.
The linchpin of the alleged antitrust conspiracy was the Match,
a decades- old system that ensures that graduating medical
students and medical residency programs are matched according to
their respective preferences. The Match is an integral part of
the nation's graduate medical education system, the preeminent
training system for young doctors in the world. In response to
plaintiffs' suit, Congress passed a statute stating that
participation in the Match was lawful under the antitrust laws
and barring evidence of Match- related conduct in support of any
antitrust claim.
In the recent opinion, the Court of Appeals held that
plaintiffs' complaint "falls squarely within both the exemption
and the bar" of the statute, and that "it is hard to imagine a
more precise fit between the language of a statute and a
lawsuit."
The decision by the Court of Appeals unanimously affirmed Judge
Friedman's rulings.
Accordingly, it affirmed the district court's dismissal of the
complaint with prejudice, and refused to permit an amendment to
the complaint, finding that any proposed amendment would not be
"consistent with the challenged pleading." The court also
rejected plaintiffs' challenges to the constitutionality of the
statute.
The D.C. Circuit's ruling represents the successful culmination
of an integrated legislative and litigation strategy led by
Covington & Burling.
Representing a group of seven of the 29 defendant institutions,
Covington played a lead role throughout the defense of the case.
Jim Atwood, co-chair of the firm's Antitrust Practice Group,
argued the appeal for all defendants before the D.C. Circuit.
Also on the Covington team were partners Gregg H. Levy, John E.
Hall, and Eric H. Holder and associates Derek Ludwin and Brent
F. Powell.
For more information, contact James R. Atwood or Gregg H. Levy
both of Covington & Burling, Phone: +1-415-591-7002, or +1-202-
662-5292, E-mail: jatwood@cov.com or glevy@cov.com.
WASHINGTON MUTUAL: Faces Labor Law Violations Lawsuit in N.Y.
-------------------------------------------------------------
Former employees of Washington Mutual Inc. in New York,
California and Illinois filed a case against Washington Mutual
Inc. in the U.S. District Court for the Eastern District of New
York.
The named plaintiffs are Dewone Westerfield, of Grand Rapids,
Michigan, Charlotte Machado of Trussville, Alabama, and Patricia
Kemesies, of East Islip, New York. They allege violations of
the federal Fair Labor Standards Act and various state labor
laws.
Ms. Kemesies worked as a home loan consultant at a Washington
Mutual center in Hauppauge, New York. Ms. Machado worked for
the company in Modesto, California and Mr. Westerfield worked
for the company at a Chicago office.
The suit contends the company violated labor laws by failing to
pay overtime wages and the federal minimum wage of $5.15 per
hour worked.
According to the complaint, the Washington Mutual home loan
consultants regularly work hours in excess of 40 per week and
have not received overtime compensation for all hours worked.
If the loans they handle are not approved, the consultants may
receive no pay for the long hours they work, and this practice
violates the minimum wage law.
Attorney Paul J. Lukas, of Nichols Kaster & Anderson, said, "We
allege that the unlawful conduct has been widespread, repeated
and consistent. We believe that Washington Mutual has willfully
committed widespread violations of the FLSA, and that the
company knew that these employees and others performed work that
required overtime pay and minimum wages."
Attorney Jack A. Raisner, of Outten & Golden said, "The law does
not allow employers to avoid paying overtime compensation to
people who handle mortgages and loans on a strictly commission
basis. Paying them less than minimum wage when their
commissions dip is particularly harsh given the long hours these
people work."
The law firms of Nichols Kaster & Anderson, PLLP, of
Minneapolis, Minnesota, and Outten & Golden LLP, of New York,
will seek to have the case certified as a collective action that
includes current or former home loan consultants -- also
referred to as loan officers and loan originators -- who worked
for Washington Mutual nationwide.
The suit is "Westerfield et al. v. Washington Mutual, Inc., Case
No. 1:06-cv-02817-CBA-JMA," filed in the U.S. District Court for
the Eastern District of New York under Judge Carol B. Amon with
referral to Judge Joan M. Azrack.
Representing the plaintiffs are:
(1) Donald H. Nichols, Paul J. Lukas and Michele R. Fisher
all of Nichols Kaster & Anderson, PLLP, 4600 IDS
Center, 80 South 8th Street, Minneapolis, Minn. 55402,
Phone: (877) 448-0492 or (612) 256-3200, E-mail:
nichols@nka.com, lukas@nka.com and fisher@nka.com,
Website: http://www.nka.comand
http://www.overtimecases.com;and
(2) Jack A. Raisner, Adam T. Klein and Justin M. Swartz all
of Outten & Golden LLP, 3 Park Avenue, 29th Floor,
New York, N.Y. 10016, Phone: (877) 468-8836 or (212)
245-1000, E-mail: jar@outtengolden.com,
atk@outtengolden.com and jms@outtengolden.com, Website:
http://www.outtengolden.com.
ZIPREALTY INC: $4.2M Deal for Agents Suit Gets Final Approval
-------------------------------------------------------------
The Superior Court of the State of California, County of San
Diego, Central Division, granted final approval to the
settlement of the class, "Sullivan, et al. v. ZipRealty, Case
No. GIC851801."
On Aug. 3, 2005, the company was named in a class action filed
by two former employee agents. Plaintiffs alleged, among
others, that the company's expense allowance policies violated
California law. The company reached an agreement to settle this
claim in exchange for a payment of $4.2 million.
The agreement, which included a full release from any further
liability on this issue, was granted preliminary court approval
on Oct. 21, 2005 and final court approval on Feb. 10, 2006.
The company has made full payment under the settlement
agreement, according to its May 10, 2006 Form 10-Q filing with
the U.S. Securities and Exchange Commission for the period ended
March 31, 2006.
Asbestos Alert
ASBESTOS LITIGATION: Suits v. TriMas Swell from 1,609 to 1,620
--------------------------------------------------------------
TriMas Corp. is a party to about 1,620 pending cases involving
about 19,022 claimants alleging personal injury from asbestos
exposure, as of March 31, 2006.
As of February 28, 2006, the Company faced about 1,609 pending
asbestos-related cases involving an aggregate of about 19,952
claimants. (Class Action Reporter, April 7, 2006)
The asbestos-containing materials were used in gaskets, made or
distributed by certain Company subsidiaries for use in the
petrochemical refining and exploration fields. Moreover, the
Company acquired distribution firms that had formerly
distributed gaskets of other manufacturers.
Settlement costs, exclusive of defense costs, for all cases,
some of which were filed over 13 years ago, have been about
US$3.4 million. To date, its primary insurance has covered about
50 percent of the Company's settlement and defense costs for
asbestos litigation.
Effective February 14, 2006, the Company entered into an
agreement with its first level excess carriers regarding the
coverage to be provided to it for asbestos claims when the
primary insurance is exhausted.
The agreement makes coverage available to the Company that might
otherwise be disputed by the carriers and provides a methodology
for the administration of asbestos litigation defense and
indemnity payments. The agreement allocates payment liability
among the primary carrier, excess carriers and the Company's
subsidiary.
Based in Bloomfield Hills, Michigan, TriMas Corp. has three
units: Cequent Group, Rieke Packaging Systems, Industrial
Specialties, and Fastening Systems. The Company makes a variety
of products from SUV and truck parts, packaging, consumer
products, tools, andagricultural equipment. The Company was a
subsidiary of Metaldyne Corp.
ASBESTOS LITIGATION: Ballantyne Settles Bercu Suit Filed in N.Y.
----------------------------------------------------------------
Ballantyne of Omaha Inc. settled an asbestos-related case during
March 2006 in the Supreme Court of the State of New York.
Originally filed on June 27, 2003, the case was entitled Bercu
v. BICC Cables Corp., et al.
Administrative costs rose to US$1.4 million or 11 percent of
revenue compared to US$1.2 million or 9.5 percent in 2005. The
increase was due to employee severance costs incurred as a
result of planned workforce reductions as well as for legal
expenses to settle the Company's remaining asbestos suit.
Compliance and compensation costs were also higher during 2006
but were offset to a degree by lower bonus expenses.
Based in Omaha, Nebraska, Ballantyne of Omaha Inc. supplies
motion picture theater equipment, such as film projectors and
sound systems, used by major theater chains such as AMC
Entertainment and Regal Entertainment.
ASBESTOS LITIGATION: Active Claims v. Dana Corp. Decrease to 76T
----------------------------------------------------------------
Dana Corp. had about 76,000 active pending asbestos-related
product liability claims at March 31, 2006, including 9,000
claims that were settled but awaiting final documentation and
payment.
The Company experienced a drop in active pending product
liability claims, from about 88,000 at September 30, 2005 to
about 77,000 at December 31, 2005. (Class Action Reporter, May
5, 2006)
At March 31, 2006, the Company had accrued US$96 million for
indemnity and defense costs for pending asbestos-related product
liability claims, compared to US$98 million at December 31,
2005. The Company estimated its potential liability through 2020
to be within a range of US$70 million to US$120 million.
At March 31, 2006 and December 31, 2005, the Company had
recorded US$78 million as an asset for probable recovery from
its insurers for the pending claims and currently projected
demands.
At December 31, 2005, the Company had recorded a receivable of
US$8 million in connection with an October 2005 settlement
agreement with one of its insurers. The Company received a
payment of US$2 million in the 2006-1st quarter. Moreover, the
Company had a net amount recoverable from its insurers and
others of US$19 million at March 31, 2006, compared to US$15
million at December 31, 2005.
Until 2001, most of the Company's claims were administered by
the Center for Claims Resolution, which settled claims for its
member firms on a shared settlement cost basis. In that year,
the CCR was reorganized and discontinued.
Since 2001, the Company has controlled its legal strategy and
settlements, using Peterson Asbestos Consulting Enterprise, a
unit of Navigant Consulting Inc., to administer its claims, bill
its insurance carriers and assist it in claims negotiation and
resolution.
Through March 31, 2006, the Company had paid US$47 million to
claimants and collected US$29 million from its insurance
carriers regarding these claims. At March 31, 2006, the Company
had a net receivable of US$13 million.
Based in Toledo, Ohio, Dana Corp. makes car parts, in which its
core products include axles, brakes, and driveshafts, as well as
engine, filtration, fluid-system, sealing, and structural
products. Dana filed for bankruptcy early in 2006.
ASBESTOS LITIGATION: Building Materials Corp. Faces 1,900 Claims
----------------------------------------------------------------
Building Materials Corp. of America, as of April 2, 2006, was
named a defendant in about 1,900 alleged bodily injury claims
related to the inhalation of asbestos fibers.
The Company assumed and agreed to pay the first US$204.4 million
of liabilities for asbestos injury claims of its parent, G-I
Holdings Inc. As of March 30, 1997, the Company paid all of its
assumed asbestos liabilities. In January 2001, G-I Holdings
filed for bankruptcy.
On February 2, 2001, the U.S. Bankruptcy Court for the District
of New Jersey issued a temporary restraining order enjoining any
existing or future claimant from bringing or prosecuting an
asbestos claim against the Company. On February 22, 2002, the
court converted the temporary restraints into a preliminary
injunction.
On February 7, 2001, G-I Holdings sought a declaratory judgment
that the Company has no successor liability for asbestos claims
against G-I Holdings and that it is not the alter ego of G-I
Holdings.
One of the parties to this matter, the Official Committee of
Asbestos Claimants, filed a counterclaim against the Company
seeking a declaration that BMCA has successor liability for
Asbestos Claims against G-I Holdings and that BMCA is the alter
ego of G-I Holdings.
On May 13, 2003 the U.S. District Court for the District of New
Jersey overseeing the G-I Holdings' Bankruptcy Court withdrew
the reference of the BMCA action from the Bankruptcy Court, and
this matter will be heard by the District Court.
On July 26, 2005, one party in the BMCA action, the legal
representative of future demand holders in the G-I bankruptcy,
was dismissed from the case. The court has advised the parties
that they should expect the trial in February 2007.
Based in Wayne, New Jersey, Building Materials Corp. of America,
deals primarily in shingles. The Company also makes flashing,
vents, and complete roofing systems.
ASBESTOS LITIGATION: Met-Pro, Unit Settles Pump and Fluid Claims
----------------------------------------------------------------
Met-Pro Corp. and one of its divisions have either been
dismissed from or have settled a number of asbestos claims, in
which the parties were named as pump and fluid handling
defendants.
The Company stated that most of the asbestos-related lawsuits
against it have not advanced beyond the early stages of
discovery. However, several cases are on schedules leading to
trial.
Beginning 2002, the Company and this division began to be named
as co-defendants in asbestos suits filed mainly in Mississippi
by plaintiffs against a number of industrial firms including
those in the pump and fluid handling industries.
The Company and this division have been named as pump and fluid
handling defendants in suits filed in New York and Maryland. The
Company and this division have also been named together with
many other pump and fluid handling defendants in these suits in
other states.
The complaints have been general and speculative, alleging that
the Company and the division sold unidentified asbestos-
containing products and engaged in other related actions, which
caused injuries and loss to the plaintiffs.
Based in Harleysville, Pennsylvania, Met-Pro Corp.'s operations
are conducted in two business segments: the manufacture and sale
of product recovery/pollution control equipment, and the
manufacture and sale of fluid handling equipment.
ASBESTOS LITIGATION: Chicago Bridge & Iron Has 480 Active Claims
----------------------------------------------------------------
Chicago Bridge & Iron Co. N.V. is a defendant in lawsuits
alleging exposure to asbestos at the workplace, involving about
2,954 plaintiffs, as of March 31, 2006. Of those claims, about
480 claims were pending and 2,474 have been closed through
dismissals or settlements.
The Company denied ever having been a manufacturer, distributor
or supplier of asbestos products.
As of December 31, 2005, the Company was named a defendant in
suits alleging exposure to asbestos involving about 2,900
plaintiffs. Of those claims, about 467 claims were pending and
2,433 have been closed through dismissals or settlements.
As of March 31, 2006 and December 31, 2005, the claims alleging
exposure to asbestos that have been resolved have been dismissed
or settled for an average settlement amount per claim of about
US$1,000.
With respect to unasserted claims, the Company cannot identify a
population of potential claimants with certainty to determine
the probability of a loss and to make a reasonable estimate of
liability.
At March 31, 2006, the Company had accrued US$1.1 million for
liability and related expenses, compared with US$1.3 million at
December 31, 2005.
COMPANY PROFILE
Chicago Bridge & Iron Company NV
Polarisavenue 31
2132 JH Hoofddorp
The Netherlands
Phone: +31-23-568-5660
Fax: +31-20-578-9589
http://www.chicago-bridge.com
Description:
The Company is a global specialty engineering and construction
firm. The Company serves the hydrocarbon, energy, power
generation, and water storage and treatment industries.
ASBESTOS LITIGATION: Kaiser Aluminum Posts $963.7M Receivable
-------------------------------------------------------------
Kaiser Aluminum and Chemical Corp., a Kaiser Aluminum Corp.
subsidiary, recorded a long-term receivable for estimated
asbestos-related insurance recoveries of US$963.7 million in the
2006-1st quarter.
KACC's accrued liabilities for asbestos and certain other
personal injury, which is subject to compromise, was US$1.115.0
billion at March 31, 2006 and December 31, 2005.
KACC has been a co-defendant in lawsuits, in which the claimants
allege that their injuries were caused by exposure to asbestos
or asbestos-containing products made or sold by KACC or as a
result of employment or association with it. The suits relate to
products KACC has not sold for more than 20 years.
As of the February 12, 2002 bankruptcy filing date, about
112,000 asbestos claims were pending. At the filing date, KACC
had accrued US$610.1 million in respect of asbestos and other
similar personal injury claims.
In 2005 and in the 2006-1st quarter, KACC entered into
conditional settlement agreements with insurers under which the
insurers agreed to pay about US$442 million in respect of all
coverage under certain policies having a combined face value of
about US$539 million.
The Court-approved settlements have several conditions, with a
legislative contingency and are only payable to the trusts being
set up under the Kaiser Aluminum Amended Plan upon emergence.
One set of insurers paid about US$137 million into a separate
escrow account in November 2005. As of March 31, 2006, the
insurers had paid US$219.3 million into the Escrow Funds.
During April 2006, KACC entered into another conditional
insurance settlement agreement with an insurer. Under this
settlement, the insurer agreed to pay a stipulated percentage
(37.5%) of the costs and liquidation values of asbestos-related
and silica-related injury claims liquidated by the applicable
trust that will be set up under the Kaiser Aluminum Amended
Plan.
The insurer would make quarterly payments to the trusts, subject
to invoices from the trusts on liquidation values and expenses
and subject to caps on the amount to be paid in any quarter,
which caps range from between US$9.9 million and US$17 million.
The quarterly payments are payable over the period October 2006
through July 2016. The maximum total payable pursuant under the
conditional settlement agreement is US$567.9 million.
Based in Foothill Ranch, California, Kaiser Aluminum & Chemical
Corp. is a wholly owned subsidiary of Kaiser Aluminum Corp. Its
main line of business is the production of fabricated aluminum
products.
ASBESTOS LITIGATION: Everest Re Group Has $561.6M Loss Reserves
---------------------------------------------------------------
Everest Re Group Ltd. had gross asbestos loss reserves of
US$561.6 million at March 31, 2006, of which US$306.5 million
was for assumed business and US$255 million was for direct
business.
The Company had incurred losses and loss adjustment expenses of
US$698.9 million for the three months ended March 31, 2006; an
increase of 4.6 percent compared with US$668.3 million for the
three months ended March 31, 2006. The increase in prior period
reserve development was partially offset by lower unfavorable
reserve adjustments for asbestos & environmental expenses of
US$9.3 million.
The Company's asbestos claims involve potential liability for
bodily injury from exposure to asbestos or for property damage
resulting from asbestos or asbestos-containing products. The
Company's asbestos and environmental liabilities stem from Mt.
McKinley Insurance Co.'s direct insurance business and
subsidiary Everest Reinsurance Co.'s assumed reinsurance
business.
In connection with the acquisition of Mt. McKinley, which has
exposure to asbestos and environmental claims, LM Property and
Casualty Insurance Co. provided reinsurance to Mt. McKinley
covering 80 percent, or US$160 million, of the first US$200
million of any adverse development of Mt. McKinley's reserves as
of September 19, 2000 and The Prudential Insurance Co. of
America guaranteed LM's obligations to Mt. McKinley.
In the past 3 years, the Company concluded settlements or
reached agreement in principle with 13 of its high profile
policyholders.
The Company has identified 10 policyholders based on their past
claim activity and potential future liabilities as "High Profile
Policyholders" and its settlement efforts are directed at such
policyholders, in part because their exposures have developed to
the point where both the policyholder and the Company have
sufficient information to be motivated to settle.
Based in Hamilton, Bermuda, Everest Re Group Ltd. is the holding
company for Everest Reinsurance Co., an underwriter of property
& casualty reinsurance and insurance. The Company offers
specialized underwriting in several areas, including property &
casualty, marine, aviation, surety, medical malpractice,
directors and officers' liability, and professional errors and
omissions liability.
ASBESTOS LITIGATION: Foster Wheeler Has 164,240 Open U.S. Claims
----------------------------------------------------------------
Foster Wheeler Ltd. has 164,240 open asbestos-related claims
pending in the U.S. at the end of the 2006-1st quarter as
opposed to 167,800 claims at the end of the 2005-4th quarter.
In these claims, plaintiffs claim damages for personal injury
alleged to have arisen from exposure to or use of asbestos in
connection with work allegedly done by the Company's units
before and during the 1970s.
In the U.S., the Company's total asbestos-related assets was at
US$318,000,000 for period ending March 31, 2006, compared with
US$320,000,000 for the period ending December 30, 2005.
In the U.S., the Company's total asbestos-related liabilities
was at US$497,600,000 for the period ending March 31, 2006,
compared with US$516,000,000 for the period ending December 30,
2005.
The amount spent on asbestos litigation, defense, and case
resolution was US$18,400,000 for the three months ended March
31, 2006 and US$22,500,000 for the three months ended April 1,
2005.
The Company funded US$16,400,000 of the payments made during the
three months ended March 31, 2006, while all remaining amounts
were paid from insurance settlement proceeds. Through March 31,
2006, total indemnity costs paid were about US$525,300,000 and
total defense costs paid were about US$140,400,000, prior to
insurance recoveries.
As of March 31, 2006, total asbestos-related liabilities were
comprised of an estimated liability of US$205,300,000 relating
to open claims being valued and an estimated liability of
US$292,300,000 relating to future unasserted claims.
At yearend 2005, the Company increased its liability for
asbestos indemnity and defense costs through 2020 to
US$516,000,000. In connection with updating its estimated
asbestos liability and related asset, the Company recorded a
loss of US$113,700 in the 2005-4th quarter.
As of March 31, 2006, the Company's estimated value of its
asbestos insurance asset contested by its subsidiaries' insurers
in ongoing litigation was at US$115,000,000.
Based in Clinton, New Jersey, Foster Wheeler Ltd. builds
business process and power generating facilities. The Company
operates through two business groups. It also builds, owns, and
leases cogeneration and independent power projects.
ASBESTOS LITIGATION: Foster Wheeler's U.K. Units Face 325 Claims
----------------------------------------------------------------
Subsidiaries of Foster Wheeler Ltd. in the United Kingdom had
325 open asbestos-related claims as of March 31, 2006. To date,
783 claims have been filed against the Company's U.K.
subsidiaries.
The Company's U.K. subsidiaries contended that out of the 747
claims received to date, 306 remained open at December 30, 2005.
(Class Action Reporter, April 21, 2006)
As of March 31, 2006, the Company had recorded total liabilities
of US$26,400,000 comprised of an estimated liability relating to
open claims of US$3,100,000 and an estimated liability relating
to future unasserted claims of US$23,300,000.
Of the total, US$1,000,000 is recorded in accrued expenses and
US$25,400,000 is recorded in asbestos-related liability. An
asset in an equal amount was recorded for the expected U.K.
asbestos-related insurance recoveries, of which US$1,000,000 is
recorded in accounts and notes receivable and US$25,400,000 is
recorded as asbestos-related insurance recovery receivable.
The liability and asset estimates are based on a U.K. court of
appeal ruling that pleural plaque claims do not amount to a
compensable injury. If this ruling will be reversed, the
asbestos liability and asset recorded in the U.K. would be about
US$66,200,000.
Based in Clinton, New Jersey, Foster Wheeler Ltd. builds
business process and power generating facilities. The Company
operates through two business groups. It also builds, owns, and
leases cogeneration and independent power projects.
ASBESTOS LITIGATION: Foster Wheeler Posts $447M Liability
---------------------------------------------------------
Foster Wheeler Ltd. recorded its total asbestos-related
liability at US$447,953,000 for the three months ended March 31,
2006 compared to US$266,163,000 for the three months ended
December 31, 2005.
For the three months ended March 31, 2006, the Company's total
asbestos-related insurance recovery receivable was at
US$318,255,000, compared with US$321,008,000 for the three
months ended December 31, 2005.
As of March 31, 2006, the Company's total cash and short-term
investments were US$425.6 million, compared with US$372.7
million at the end of the 2005-4th quarter, and US$333.2 million
at the end of the 2005-1st quarter.
Of the US$425.6 million at quarter-end 2006, US$303.0 million
was held by non-U.S. subsidiaries. Adjusting for the US$75.3
million proceeds from the exercise of warrants, the cash balance
at the end of the 2006-1st quarter decreased by US$22.4 million,
compared with year-end 2005.
This decrease was due to a build-up in net working capital
requirements as a result of the increasing volume of
reimbursable business and the funding by the Company of US$16.4
million of its asbestos liabilities while active settlement
negotiations with unsettled insurers continue.
Based in Clinton, New Jersey, Foster Wheeler Ltd. builds
business process and power generating facilities. The Company
operates through two business groups. It also builds, owns, and
leases cogeneration and independent power projects.
ASBESTOS LITIGATION: Odyssey Re Incurs $280M Unpaid Losses, LAE
----------------------------------------------------------------
Odyssey Re Holdings Corp.'s asbestos-related gross unpaid losses
and loss adjustment expenses amounted to US$280,981,000 for the
period ending March 31, 2006, compared with US$234,528,000 for
the same period in 2005.
The Company's asbestos-related net unpaid losses and LAE were
US$137,656,000 for the period ending March 31, 2006. This
compared to US$84,812,000 for the same period in 2005.
The Company has exposure to losses from asbestos, environmental
pollution and latent injury damage claims and resulting
exposures. Exposure arises from reinsurance contracts in which
the Company has assumed liabilities, on an indemnity or
assumption basis, from ceding firms, in connection with general
liability insurance policies issued by these firms.
As of March 31, 2006, the Company's gross unpaid asbestos and
environmental losses and LAE were US$320.3 million. This
represented 6.3 percent of total gross unpaid losses and LAE.
As of December 31, 2005, the Company's gross unpaid A&E and LAE
were US$315.1 million, or 6.2 percent of total gross unpaid
losses and LAE.
As of March 31, 2006, the Company's survival ratio for A&E
related liabilities is 11 years. The Company's underlying
survival ratio for environmental liabilities is eight years and
for asbestos liabilities is 11 years.
The Company's current estimates of its asbestos losses and LAE
reserves, net of reinsurance, are US$137.7 million.
For the three months ended March 31, 2006, the Company incurred
US$15,000,000 for gross asbestos-related losses and LAE.
Based in Stamford, Connecticut, Odyssey Re Holdings Corp. writes
treaty reinsurance through its London Market, EuroAsia, and
Americas divisions. Its casualty lines include general and auto
liability, professional liability, and accident and health. The
Company offers marine, aerospace, and surety reinsurance.
ASBESTOS LITIGATION: American Int'l Reserves $4.297B for Losses
---------------------------------------------------------------
American International Group Inc. posted US$4,297,000,000 gross
asbestos-related reserves for losses and loss expenses for the
period ending March 31, 2006, with US$1,788,000,000 net reserves
calculated for the same period.
At the period ending March 31, 2005, the Company had
US$2,546,000,000 gross asbestos reserve for losses and loss
expenses and US$1,055,000,000 net reserve for losses and loss
expenses.
The Company's combined asbestos and environmental reserve for
losses and loss expenses at the period ending March 31, 2006 was
US$5,202,000,000 gross and US$2,189,000,000 net.
At the period ending March 31, 2005, the Company's combined A&E
reserve for losses and loss expenses was US$3,477,000,000 gross
and US$1,487,000,000 net.
The Company included incurred but not reported losses in its
reserve for loss and loss expenses. At March 31, 2006, the
Company's IBNR asbestos losses were US$3,314,000,000 gross and
US$1,425,000,000 net. At March 31, 2005, the Company's IBNR
asbestos losses were US$1,864,000,000 gross and US$786,000,000
net.
At March 31, 2006, the Company's combined asbestos and
environmental IBNR losses were US$3,886,000,000 gross and
US$1,681,000,000 net. At March 31, 2005, the Company's combined
A&E IBNR losses were US$2,418,000,000 gross and US$1,034,000,000
net.
The Company's asbestos survival ratio for claims at March 31,
2006 was 14.7 gross and 17.8 net. At March 31, 2005, the
survival ratio was 9.8 gross and 12.7 net.
The Company's combined A&E survival ratio for claims at March
31, 2006 was 12.4 gross and 13.5 net. At March 31, 2005, the
survival ratio was 8.5 gross and 10.1 net.
The survival ratio is derived by dividing the current carried
loss reserve by the average payments for the three most recent
calendar years for these claims. The ratio is a simplistic
measure estimating the number of years it would be before the
current ending loss reserves for these claims would be paid off
using recent year average payments.
Many factors, like aggressive settlement procedures, mix of
business and level of coverage provided, have a significant
effect on the amount of A&E reserves and payments and the
resultant survival ratio.
The Company had 7,247 asbestos-related claims for the three
months ended March 31, 2006 and 7,685 claims for the three
months ended March 31, 2005.
The Company had 17,170 A&E claims for the three months ended
March 31, 2006 and 15,729 claims for the three months ended
March 31, 2005.
American International Group Inc.'s U.S. services include the
provision of property/casual, life, and specialty insurance to
commercial, institutional, and individual customers. The Company
also provides reinsurance, life insurance and retirement
services, asset management and financial services in more than
130 countries. The Company is based in New York City.
ASBESTOS LITIGATION: W.R. Grace Has 890 Property Damage Claims
--------------------------------------------------------------
W.R. Grace & Co. had about 890 outstanding asbestos-related
property damage claims, as of March 31, 2006, following the
reclassification, withdrawal or expungement of claims.
As of February 21, 2006, the Company faced about 990 outstanding
property damage claims. (Class Action Reporter, March 24, 2006)
Grace has been named defendant in property damage and personal
injury lawsuits relating to previously sold asbestos-containing
products.
The plaintiffs in property damage suits seek to have the
defendants pay for the cost of removing, containing or repairing
the asbestos-containing materials in the affected buildings.
Out of 380 property damage cases filed before the April 2, 2001
filing date, 140 were dismissed without payment or settlement
amounts. Judgments were entered in favor of Grace in nine cases,
excluding cases settled following appeals of judgments in favor
of Grace.
Judgments were entered in favor of the plaintiffs in eight
cases, one of which is on appeal, for a total of US$86.1
million. Two hundred seven property damage cases were settled
for a total of US$696.8 million. Sixteen cases remain pending,
including the one on appeal.
Of the 16 pending cases, eight relate to Zonolite Attic
Insulation, and eight relate to former asbestos-containing
products, two of which also are alleged to involve ZAI.
About 4,300 more property damage claims were filed before the
March 31, 2003 claims bar date established by the Bankruptcy
Court.
Eight of the ZAI cases were filed as purported class action
suits in 2000 and 2001. Moreover, eight suits were filed as
purported class actions in 2004 and 2005 with respect to persons
and homes in Canada.
These cases seek damages and equitable relief, including the
removal, replacement and disposal of insulation. As a result of
the filing, the eight U.S. cases have been transferred to the
Bankruptcy Court.
Based in Columbia, Maryland, W.R. Grace & Co.'s Davison
Chemicals unit makes silica-based products, chemical catalysts,
and refining catalysts. Its Performance Chemicals unit makes
concrete and cement additives, packaging sealants, and
fireproofing chemicals. The Company's customers include
chemicals firms, oil refiners, and construction firms.
ASBESTOS LITIGATION: W.R. Grace Faces Personal Injury Claimants
---------------------------------------------------------------
W.R. Grace & Co. continues to contend with asbestos personal
injury claimants who alleged adverse health effects from
exposure to asbestos-containing products formerly made by the
Company.
Through the April 2, 2001 bankruptcy filing date, 16,354
personal injury suits with about 35,720 claims were dismissed
without payment or settlement amounts and about 55,489 suits
with about 163,698 claims were disposed of for a total of
US$645.6 million. As of the filing date, 129,191 claims for
personal injury were pending against Grace.
As of March 31, 2006 and December 31, 2005, the total recorded
asbestos-related liability balance was US$1.7 billion and is
"subject to compromise."
The amount recorded at March 31, 2006 includes the US$1.613
billion maximum amount reflected as a condition in the January
13, 2005 amended plan of reorganization and US$87 million
related to pre-Chapter 11 contractual settlements and judgments.
As Grace is willing to proceed with confirmation of the Plan
with a funding amount of up to US$1.613 billion, during the
2004-4th quarter, Grace accrued and took a charge of US$714.8
million to increase its recorded asbestos-related liability to
reflect the maximum amount allowed as a condition in the plan.
This amount, plus US$87.0 million for pre-Chapter 11 contractual
settlements and judgments, brings the total recorded asbestos-
related liability as of March 31, 2006 and December 31, 2005 to
US$1.7 billion.
Based in Columbia, Maryland, W.R. Grace & Co.'s Davison
Chemicals unit makes silica-based products, chemical catalysts,
and refining catalysts. Its Performance Chemicals unit makes
concrete and cement additives, packaging sealants, and
fireproofing chemicals. The Company's customers include
chemicals firms, oil refiners, and construction firms.
ASBESTOS LITIGATION: W.R. Grace Carries $960M Excess Coverage
-------------------------------------------------------------
W.R. Grace & Co., as of March 31, 2006, had about US$960 million
asbestos-related excess coverage for more than 56 solvent
insurers.
In addition to the about US$960 million of excess coverage with
solvent insurers, Grace had about US$317 million of excess
coverage with insolvent or non-paying insurance carriers.
Grace bought insurance policies that provide coverage for years
1962 to 1985 with respect to asbestos-related lawsuits and
claims. Since 1985, insurance coverage for asbestos liabilities
has not been commercially available to Grace.
With one exception, coverage disputes regarding Grace's primary
insurance policies have been settled, and the settlement amounts
paid in full. Grace's excess coverage is for loss above certain
levels. The levels vary from policy to policy, creating "layers"
of excess coverage, some of which are triggered before others.
Grace has entered into settlement agreements with excess
insurance carriers. These settlements involve amounts paid and
to be paid to Grace. The unpaid maximum aggregate amount for
settled insurers available under these settlement agreements is
about US$477 million.
Regarding asbestos personal injury claims, the settlement
agreements require that the claims be spread over the claimant's
exposure period and that each insurer pay a portion of each
claim based on the amount of coverage provided during each year
of the total exposure period.
Grace has no agreements in place with insurers with respect to
about US$483 million of excess coverage, which is at layers of
coverage that have not yet been triggered, but certain layers
would be triggered if the amended plan of reorganization was
approved at the recorded asbestos-related liability of US$1.7
billion.
Grace estimates that, assuming an ultimate payout of asbestos-
related claims equal to the recorded liability of US$1.7
billion, it should be entitled to about US$500 million of
insurance recovery.
The Company's asbestos-related insurance at March 31, 2006 and
December 31, 2005 was US$500 million.
Based in Columbia, Maryland, W.R. Grace & Co.'s Davison
Chemicals unit makes silica-based products, chemical catalysts,
and refining catalysts. Its Performance Chemicals unit makes
concrete and cement additives, packaging sealants, and
fireproofing chemicals. The Company's customers include
chemicals firms, oil refiners, and construction firms.
ASBESTOS LITIGATION: W.R. Grace Sees $226.1M Cleanup Liability
--------------------------------------------------------------
W.R. Grace & Co.'s estimated liability for vermiculite-related
remediation was US$226.1 million at March 31, 2006 and US$226.2
million at December 31, 2005.
The liability includes US$54.5 million and cost of remediation
of vermiculite processing sites outside of Libby, Montana. The
estimate does not include the cost to clean up the Grace-owned
mine site at Libby.
In November 1999, Region 8 of the U.S. Environmental Protection
Agency checked into alleged high levels of asbestos-related
disease related to Grace's former mining activities in Libby.
This investigation led the EPA to undertake more probes and to
carry out response actions in and around Libby.
On March 30, 2001, the EPA filed a suit in U.S. District Court
for the District of Montana, Missoula Division under the
Comprehensive Environmental Response, Compensation and Liability
Act for the recovery of costs allegedly incurred by the U.S. in
response to the release or threatened release of asbestos in the
Libby area relating to former mining activities.
These costs include cleaning and demolition of tainted
buildings, excavation and removal of contaminated soil, health
screening of Libby residents and former mine workers, and
investigation and monitoring costs.
In the suit, the EPA sought a declaration of Grace's liability
that would be binding in future actions to recover further
response costs.
In December 2002, the Court granted the motion for partial
summary judgment on a number of issues that limited Grace's
ability to challenge the EPA's response actions.
In January 2003, a trial was held on the rest of the issues,
which involved the reasonableness and adequacy of documentation
of the EPA's cost recovery claims through December 31, 2001.
On August 28, 2003, the Court ruled in favor of the United
States that requires Grace to reimburse the Government for
US$54.5 million and interest in costs expended through December
2001, and for all appropriate future costs to complete the clean
up.
The Ninth Circuit Court of Appeals upheld the District Court's
rulings. Grace has appealed this case to the U.S. Supreme Court.
Based in Columbia, Maryland, W.R. Grace & Co.'s Davison
Chemicals unit makes silica-based products, chemical catalysts,
and refining catalysts. Its Performance Chemicals unit makes
concrete and cement additives, packaging sealants, and
fireproofing chemicals. The Company's customers include
chemicals firms, oil refiners, and construction firms.
ASBESTOS LITIGATION: Crane Faces Insurers' Suit in Conn. Court
--------------------------------------------------------------
Crane Co. continues to face an asbestos-related insurance
lawsuit filed in Connecticut state court by five of the
Company's insurers within two corporate insurer groups.
Filed on January 21, 2005, the suit sought injunctive and
declaratory relief against the Company and dozens of the
Company's other insurers. The suit also sought temporary and
permanent injunctive relief restraining the Company from joining
more settlement talks with representatives of asbestos
plaintiffs or agreeing to any settlement.
The suit sought these conditions unless the Company permitted
the plaintiff insurers to both join discussions and have an
opportunity to consider whether to consent to any proposed
settlement, or unless the Company elected to waive coverage
under the insurers' policies. The plaintiffs also sought
expedited discovery on the Company's proposed global settlement.
On April 8, 2005, the insurer plaintiffs filed an amended
complaint raising five counts against the Company. The amended
complaint seeks:
(i) Declaratory relief regarding the Company's rights to
coverage under the policies;
(ii) Declaratory relief regarding the Company's alleged breaches
of the policies in connection with an alleged increase in
asbestos claim counts;
(iii) A declaration of no coverage in connection with allegedly
time-barred claims;
(iv) Declaratory relief against the Company and the other
insurer defendants for allocation of damages that may be covered
under the insurance policies; and
(v) Preliminary and permanent injunctive relief.
On April 18, 2005, the Company moved to dismiss the claims for
injunctive relief on the grounds that the Court had no
jurisdiction to consider the claims because they were
speculative and unripe.
On October 19, 2005, the Court denied the Company's dismissal
motion, ruling that the injunctive claims were not unripe.
However, the Court noted that the Company later could seek
summary judgment in connection with the injunctive claims if
discovery shows them to be without factual basis.
Based in Stamford, Connecticut, Crane Co. makes industrial
products, including fluid handling equipment, engineered
materials, merchandising systems, and controls. The Company
serves the power generation, general aviation, commercial
construction, food and beverage, and chemical industries.
ASBESTOS LITIGATION: Corning Inc. Named in 11,300 Injury Cases
--------------------------------------------------------------
Corning Inc. is named in about 11,300 cases, with about 43,600
claims, alleging asbestos-related injuries, which have been
covered by insurance.
Corning and PPG Industries Inc. each own 50 percent of the
capital stock of Pittsburgh Corning Corp. Over a period of more
than two decades, PCC and several other defendants have been
named in numerous suits with claims alleging asbestos personal
injury.
On April 16, 2000, PCC filed for Chapter 11 reorganization in
the U.S. Bankruptcy Court for the Western District of
Pennsylvania. As of the filing, PCC had in excess of 140,000
open claims.
More than 100,000 claims have been filed with PCC after its
filing. As a result of PCC's bankruptcy filing, Corning recorded
an after-tax charge of US$36 million in 2001 to fully impair its
investment in PCC and discontinued recognition of equity
earnings.
At the time PCC filed for bankruptcy, there were about 12,400
claims pending against Corning in state court alleging various
theories of liability based on exposure to PCC's asbestos
products and requesting monetary damages in excess of US$1
million per claim.
Once known for its kitchenware and lab products, Corning Inc.
now provides optical fiber and cable products and communications
network equipment. The Company is based in Corning, New York.
ASBESTOS LITIGATION: Union Carbide Records $111M Liability in 1Q
----------------------------------------------------------------
Union Carbide Corporation's current asbestos-related liabilities
for the three months ended March 31, 2006 were US$111 million
and US$121 million for the three months ended December 31, 2005.
UCC's non-current asbestos-related liabilities for the three
months ended March 31, 2006 was US$1.366 billion and US$1.384
billion at December 31, 2005.
For the three months ended March 31, 2006, UCC's current
asbestos-related insurance receivables were US$86 million. At
December 31, 2005, UCC's current receivables were US$117
million.
For the three months ended March 31, 2006, UCC's non-current
asbestos-related insurance receivables were US$797 million
compared to US$818 million for the three months ended December
31, 2005.
Based in Houston, Texas, Union Carbide Corp. makes chemicals
such as ethylene and propylene, which are converted into
polyethylene and polypropylene. The Company also produces
ethylene oxide used to make polyester fibers and ethylene glycol
used to make antifreeze.
ASBESTOS LITIGATION: Union Carbide Contends With 143,806 Claims
---------------------------------------------------------------
Union Carbide Corporation recorded about 143,806 asbestos-
related claims pending against it at March 31, 2006, compared to
198,682 claims at March 31, 2005.
At March 31, 2006, UCC had 96,027 individual claimants, compared
to 130,404 claimants at March 31, 2005.
UCC is and has been involved in asbestos-related lawsuits filed
in state courts during the past three decades. These suits
allege personal injury resulting from exposure to asbestos-
containing products and seek actual and punitive damages.
The alleged claims relate to products that UCC sold in the past,
alleged exposure to asbestos-containing products located on
UCC's premises, and UCC's responsibility for asbestos suits
filed against a former subsidiary, Amchem Products Inc.
Plaintiffs are unable to show that they have suffered
compensable loss as a result of exposure, or that injuries
incurred resulted from exposure to UCC's products.
The Company noted that there are 47,779 asbestos claimants in
2006 and 68,278 claimants in 2005 that had claims against UCC
and Amchem.
Plaintiffs' lawyers sue dozens or hundreds of defendants in
individual suits on behalf of hundreds or thousands of
claimants. The damages alleged are not identified as to UCC,
Amchem or any other defendant. There are no personal injury
cases in which only UCC or Amchem are the sole named defendants.
The asbestos-related liability for pending and future claims was
US$1.5 billion at December 31, 2005. About 39 percent of the
recorded liability related to pending claims and about 61
percent related to future claims. UCC determined that no change
to the accrual was required at March 31, 2006.
The asbestos-related liability for pending and future claims was
US$1.5 billion at March 31, 2006. About 38 percent of the
recorded liability related to pending claims and about 62
percent related to future claims.
Based in Houston, Texas, Union Carbide Corp. makes chemicals
such as ethylene and propylene, which are converted into
polyethylene and polypropylene. The Company also produces
ethylene oxide used to make polyester fibers and ethylene glycol
used to make antifreeze.
ASBESTOS LITIGATION: Union Carbide Corp. Has $503Mil Receivable
---------------------------------------------------------------
Union Carbide Corporation's receivable for insurance recoveries
related to its asbestos liability was US$503 million at March
31, 2006 and US$535 million at December 31, 2005.
At March 31, 2006 and December 31, 2005, US$398 million of the
receivable for insurance recoveries was related to insurers that
are not signatories to the 1985 Wellington Agreement and do not
have agreements regarding their asbestos insurance coverage.
At December 31, 2002, UCC increased the receivable for insurance
recoveries related to its asbestos liability to US$1.35 billion.
The insurance receivable was determined after a review of
applicable insurance policies and the 1985 Wellington Agreement,
to which UCC and its liability insurers are signatory parties,
as well as other insurance settlements, with due consideration
given to applicable deductibles, retentions and policy limits,
and taking into account the solvency and historical payment
experience of various insurance carriers.
In September 2003, UCC filed a comprehensive insurance coverage
case, now proceeding in the Supreme Court of the State of New
York, County of New York, seeking to confirm its rights to
insurance for various asbestos claims and to facilitate an
orderly and timely collection of insurance proceeds.
This suit was filed against insurers that are not signatories to
the Wellington Agreement and do not have agreements in place
with UCC regarding their asbestos-related insurance coverage, in
order to facilitate an orderly resolution and collection of
insurance policies and to resolve issues that the insurance
carriers may raise.
Through the 2006-1st quarter, UCC reached settlements with
several of the carriers involved in this litigation.
After a further review of its insurance policies, UCC states
that its recorded receivable for insurance recoveries from all
insurance carriers is probable of collection.
Based in Houston, Texas, Union Carbide Corp. makes chemicals
such as ethylene and propylene, which are converted into
polyethylene and polypropylene. The Company also produces
ethylene oxide used to make polyester fibers and ethylene glycol
used to make antifreeze.
ASBESTOS LITIGATION: Japan Govt. to Pay Victims Based on New Law
----------------------------------------------------------------
Japan's Environment Ministry said it would compensate victims of
asbestos-related diseases, based on a new asbestos relief law,
even if victims had received compensation from Kubota Corp., The
Yomiuri Shimbun reports.
The new law stipulates the Government will not pay benefits if
others compensate for damages.
Under the new law, medical expenses and about JPY100,000 monthly
medical benefits are paid to patients suffering from
mesothelioma and lung cancer caused by asbestos, and JPY3
million condolence money is paid to bereaved families.
Kubota's payout was given to those living near its old asbestos-
handling plant, the Kanzaki factory in Amagasaki, Hyogo
Prefecture, where victims had contracted asbestos-related health
problems.
Environment Minister Yuriko Koike said Kubota's and other
companies' compensation could not be considered as payments for
damage, and the Government would not accordingly adjust payments
under the new law.
ASBESTOS LITIGATION: $140Bil Fund Plan May be Revived by Senate
---------------------------------------------------------------
Supporters of the proposed US$140 billion fund for asbestos
exposure victims try to reprise the plan by convening a Senate
Judiciary Committee hearing to consider another approach,
Bloomberg reports.
Sen. Arlen Specter, a Pennsylvania Republican, and Sen. Patrick
Leahy, a Vermont Democrat, are the authors of the proposed fund
bill.
The fund would end asbestos litigation that has forced almost 80
firms into bankruptcy. Individuals would get from US$25,000 to
US$1.1 million depending on the gravity of their illness.
The Senate stopped the bill in February when supporters failed
by one vote to gather the support of the 60 senators needed to
override an objection that the measure would violate the Budget
Act by adding to the federal deficit.
Opponents argue that taxpayers could end up paying victims
because claims would exceed the contributions of the firms that
made asbestos-containing products and their insurers.
The opponents got a boost from Douglas Holtz-Eakin, former head
of the Congressional Budget Office, who warned the proposal may
mean a new taxpayer burden. When Mr. Holtz-Eakin headed the CBO
in 2005, it warned that there might not be enough money to pay
all claims.
Senate Republican leader Bill Frist, a Tennessee Republican,
said he wouldn't bring up the measure again without public
pledges from 60 senators that they would vote to overcome all
procedural hurdles and clear the way for a final roll call.
The bill is opposed by small and medium-sized firms that have
used insurance to pay asbestos judgments and would face
financial hardship if forced to make annual contributions to the
fund based on their past liability.
To address this concern, Sen. Specter proposed a new formula for
contributions and letting those firms pay 5 percent of adjusted
cash flow yearly.
ASBESTOS LITIGATION: Equitas Raises Claims Reserves by GBP128Mil
----------------------------------------------------------------
Equitas Ltd., the company set up in 1996 to assume Lloyd's of
London's liability exposures, raised its asbestos-related
reserves by GBP128 million, or US$240 million, in its financial
year ended March 31, Reuters reports.
Chief Executive Scott Moser said, "While we have once again
produced solid operational results, we have had to increase
reserves and we continue to face serious threats to our ultimate
success."
A planned US$140 billion trust fund to pay for U.S. asbestos
claims, to which Equitas would have contributed, has been the
subject of political debate.
Asbestos claims represent the most serious threat to Equitas,
and the Company said it had continued to make progress in
resolving claims with settlements with some of its biggest
claimants, reducing its exposure.
In the latest financial year, Equitas said it had completed 18
major asbestos settlements, though efforts to reach agreements
with reinsurers were less successful.
Asbestos reserves stood at GBP2.2 billion on March 31. Equitas
said it had reduced net liabilities to GBP3.8 billion from
GBP3.9 billion a year ago.
Chairman Hugh Stevenson said, "While it is disappointing to
report a further increase in our reserves, we cannot escape the
fact that our liabilities are still measured in billions of
pounds. The majority of claims facing us are not expected to be
paid for many years and remain subject to considerable
volatility."
Equitas assumed all the market's pre-1993 liabilities so that
Lloyd's could continue underwriting.
ASBESTOS LITIGATION: UK Widow Wins GBP92T Payout v. John Cotton
---------------------------------------------------------------
U.K.-based widow Aileen Gardner won GBP92,500 in an out-of-court
settlement from John Cotton Group of Mirfield, West Yorkshire,
for the wrongful death of her husband, Jack, from mesothelioma
in October 2001.
Mrs. Gardner's payout and costs were secured with the help of
Helen Ashton, of law firm Irwin Mitchell.
While working for John Cotton between 1958 and 1960, Mr. Gardner
allegedly came into contact with asbestos fibers while unloading
and cleaning old hessian sacks, which had contained asbestos.
Ms. Ashton said, "The John Cotton Group, via their solicitors,
continually attempted to discourage Mrs. Gardner from pursuing
her claim for compensation. It was only on the day before the
trial was due to start that the Company finally made a realistic
proposal for settlement and compensation for Mrs. Gardner was
agreed."
According to Ms. Ashton, the Company disputed it had employed
Mr. Gardner, despite him providing a statement confirming his
employment there, as well as drawing a detailed sketch plan of
the inside of the factory. A witness subsequently came forward
to confirm that Mr. Gardner had worked for the Company.
In his statement Mr. Gardner said, "The process of unloading the
sacks and placing them in a metal tube for cleaning meant I
would breathe in asbestos dust in the air. Asbestos is very
difficult to remove and the fibers would frequently get stuck in
my clothes, hair and on the floor of the factory, which I would
regularly sweep in order to keep clean."
ASBESTOS LITIGATION: Grace Lawyers Seek to Bar Gov't. Witnesses
---------------------------------------------------------------
W.R. Grace & Co.'s attorneys and certain of its former
executives sought a ruling from the court to keep prosecutors
from calling certain experts and witnesses at their upcoming
asbestos-related trial, The Associated Press reports.
The attorneys argued in part that the experts are unable to
specify the cause of any asbestos-related illnesses.
In a motion, the attorneys are requesting a hearing on the
matter in U.S. District Court in Missoula.
According to the motion, defense attorneys want to keep
prosecutors from calling 48 "victim witnesses," on whom medical
records have been provided, or presenting expert testimony on
the witnesses' diagnoses.
A grand jury in 2005 charged that the Company and several of its
managers conspired to conceal health risks posed by asbestos at
the firm's vermiculite mine near Libby, Montana. The mine closed
in 1990.
The trial has been scheduled to begin this fall, though defense
attorneys have sought to push it back and also requested
separate trials for the defendants.
New Securities Fraud Cases
KINDER MORGAN: Charles J. Piven Files Securities Fraud Lawsuit
--------------------------------------------------------------
The Law Offices Of Charles J. Piven, P.A. initiated a class
action against Kinder Morgan, Inc. (NYSE: KMI) on behalf of
holders of KMI common stock. The case is pending in the U.S.
District Court for the District of Kansas.
The complaint charges Kinder Morgan and certain of its officers
and directors with violations of their fiduciary obligations to
the company's shareholders because certain members of management
are seeking to take the company private at an inadequate and
unfair price and Kinder Morgan's directors have failed to
announce any active auction or open bidding procedures best
calculated to maximize shareholder value.
For more information, contact Charles J. Piven of Law Offices Of
Charles J. Piven, P.A. Baltimore, Maryland, Phone: (410) 332-
0030.
PXRE GROUP: Howard G. Smith Files Securities Fraud Suit in N.Y.
---------------------------------------------------------------
The Law Offices of Howard G. Smith initiated a securities class
action on behalf of shareholders who purchased or otherwise
acquired securities of PXRE Group Ltd. (NYSE: PXT) between July
28, 2005 and Feb. 16, 2006, inclusive. The class action was
filed in the U.S. District Court for the Southern District of
New York.
The complaint alleges that defendants violated federal
securities laws by issuing a series of material
misrepresentations to the market during the class period
concerning the company's business and financial performance,
thereby artificially inflating the price of PXRE securities. No
class has yet been certified in the above action.
Interested parties have until July 3, 2006, in which to move for
Lead Plaintiff status in the case.
For more details, contact Howard G. Smith, Esquire of Law
Offices of Howard G. Smith, 3070 Bristol Pike, Suite 112,
Bensalem, Pennsylvania 19020, Phone: (215) 638-4847 or (888)
638-4847, Web site: http://www.howardsmithlaw.com.
ST JUDE: Scott + Scott Sets June Lead Plaintiff Filing Deadline
---------------------------------------------------------------
Scott + Scott, LLC reminds investors that they have June 9, 2006
in which to request that the Court for appointment as lead
plaintiff in a securities fraud class action against St. Jude
Medical, Inc. and certain officers.
On May 4, 2006, Scott + Scott filed a class action in the U.S.
District Court for the District of Minnesota on behalf of St.
Jude securities purchasers during the period Jan. 25, 2006
through April 4, 2006.
The complaint alleges that defendants made misstatements and
omitted information regarding the sales success and prospects of
a key St. Jude Medical product -- its implantable cardioverter
defibrillator systems. The company pushed sales of ICD's into
4Q:05 so as to inflate its stock price.
On April 4, the company announced that it would materially miss
sales projections made just weeks earlier. The company also
stated that it was undertaking an intensive customer review to
determine the cause of its sales shortfall.
On this announcement, St. Jude stock prices fell to $36.25 on
April 4, 2006, on trading volume of 51.6 million shares, off
$5.05 from the previous day's closing price of $41.30.
For more details, contact Scott + Scott, LLC, Phone: (800) 404-
7770 and (860) 537-5537, E-mail: scottlaw@scott-scott.com, Web
site: http://www.scott-scott.com.
VONAGE HOLDINGS: Kahn Gauthier Files N.J. Securities Fraud Suit
---------------------------------------------------------------
Kahn Gauthier Swick, LLC, filed a class action in the U.S.
District Court for the District of New Jersey on behalf of
purchasers of the common stock of Vonage Holdings Corp.
The complaint filed by KGS alleges the company and certain named
officers and underwriters violated the federal securities laws
by publishing a materially false and misleading joint
Registration Statement and Proxy-Prospectus in connection with
its May 24, 2006 Initial Public Offering.
Specifically, the complaint alleges that defendants failed to
ensure that IPO shares distributed to their retail customers
were done so in compliance with SEC and Exchange rules.
According to the complaint, defendants violated these rules to
create artificial demand for their IPO, after they realized that
interest in the Vonage Offering was low among institutional
investors.
The complaint also charges that, because the company had
indemnified underwriters against the risk that Vonage customers
would not pay for their IPO shares, that the underwriters who
were responsible for distributing the shares and maintaining the
Vonage customer accounts, also failed to conduct a proper due
diligence investigation in connection with the Vonage IPO.
Thus, as a result of many inexperienced and unsuitable investors
being improperly allocated significant numbers of shares in the
IPO, and because of other problems related thereto, once sold,
Vonage shares declined more than 30% in the first seven trading
days. The decline in value of these shares has been
substantially exacerbated by many Vonage customers now refusing
to pay for their shares.
KGS has represented institutions and large investors in diverse
actions and has significant experience in securities class
action contingent-fee litigation. KGS encourages any fund
managers or large investors who suffered losses as a result of
their investment in Vonage to
For more details, contact Lewis Kahn of KGS, Phone: 1-866-467-
1400, ext. 100 or 504-648-1850, E-mail: lewis.kahn@kglg.com, Web
site: http://www.kglg.com/case/case.asp?lngCaseId=4830.
VONAGE HOLDINGS: Faces Expanded Securities Fraud Suit in N.J.
-------------------------------------------------------------
The law firm Berger & Montague, P.C. filed an expanded
securities class action in the U.S. District Court for the
District of New Jersey on behalf of all persons and entities who
acquired common stock pursuant or traceable to the initial
public offering of Vonage Holdings Corp. beginning on May 23,
2006.
The suit alleges that defendants violated sections 11, 12, and
15 of the Securities Act of 1933, 15 U.S.C. Sec. 77k, 771(a)(2)
and 77o.
The complaint also contends Vonage's IPO Prospectus omitted and
misstated key facts concerning Vonage's products, services,
management, Customer Directed Share Program, and the timing,
mechanics and conduct of the IPO. More specifically, plaintiff
alleges that defendants:
-- misstated that Vonage's products and technology would
work generally across all Internet providers when, in
fact, Vonage's technology platform has experienced
numerous deficiencies carrying data over the networks of
certain Internet service providers such as Time Warner
Inc.'s AOL unit;
-- misstated that Vonage's technology was sufficient to
accommodate properly facsimile transmissions when, in
fact, the company uses an unreliable computer network
protocol that results in faxes not being transmitted
properly;
-- failed to disclose adequately important facts regarding
certain of its senior management team, including that
Chief Executive Officer Snyder had overseen Tyco's ADT
Security division at a time when accounting
improprieties in that division led Tyco to take a $600
million accounting charge, among other things, and that
Chief Financial Officer Rego had been a senior financial
officer of Winstar Communications when that company had
allegedly engaged in securities fraud, accounting
improprieties and false revenue recognition practices,
and ultimately filed for bankruptcy; and
-- misrepresented key aspects of Vonage's IPO process
including the timing of when shares would be delivered,
class members' ability to transact in the shares, and
that Vonage's Customer Directed Share Program would be
"centrally administered" and work properly, among other
things.
Named as defendants in the suit are Vonage, co-lead underwriters
Citigroup Global Markets Inc., Deutsche Bank Securities Inc. and
UBS Securities LLC, Chairman Jeffrey A. Citron, CEO Michael
Snyder, CFO John S. Rego, and Directors Peter Barris and J.
Sanford Miller.
A copy of the complaint is available at the Berger firm's
website, http://www.bergermontague.com.
For more information, contact Michelle Principato, legal
assistant, E-mail: mprincipato@bm.net, or Lawrence J. Lederer,
Esq., or Lane L. Vines, Esq., all of Berger & Montague, P.C.,
+1-800-424-6690, or +1-215-875-3000.
The suit is "Gibbons v. Vonage Holdings Corp., et al., Case No.
3:06-cv-02531-SRC-TJB," filed in the U.S. District Court for the
District of New Jersey under Judge Stanley R. Chesler with
referral to Judge Tonianne J. Bongiovanni. Representing the
plaintiffs is Lisa J. Rodriguez of Trujillo Rodriguez &
Richards, LLP, 8 Kings Highway West, Haddonfield, NJ 08033,
Phone: (856) 795-9002, E-mail: lisa@trrlaw.com.
XERIUM TECHNOLOGIES: Lerach Coughlin Files Mass. Securities Suit
----------------------------------------------------------------
The Lerach Coughlin Stoia Geller Rudman & Robbins, LLP initiated
a class action in the U.S. District Court for the District of
Massachusetts on behalf of all those who purchased the common
stock of Xerium Technologies Inc. (XRM) pursuant and/or
traceable to the company's initial public offering on or about
May 16, 2005 to Nov. 15, 2005. The suit is seeking to pursue
remedies under the Securities Act of 1933.
The complaint charges Xerium and certain of its officers and
directors with violations of the Securities Act. Xerium engages
in the manufacture and supply of consumable products used in the
production of paper.
The complaint alleges that the Prospectus and Registration
Statement issued in connection with the company's initial public
offering on or about May 16, 2005, contained untrue statements
of material facts, omitted to state other facts necessary to
make the statements made not misleading and was not prepared in
accordance with the rules and regulations governing its
preparation.
Specifically, the complaint alleges that, at the time of the
IPO, Xerium was undergoing "Cost Reduction Programs" which were
negatively impacting its business and forcing it to have
customers seek out other producers.
Among other things, the Prospectus purported to warn about the
potential negative impact of these programs but failed to
disclose that the company's business was then being negatively
impacted by the Cost Reduction Programs and the loss of business
associated therewith.
According to the complaint, on Nov. 14, 2005, Xerium issued a
press release announcing its financial results for the third
quarter of 2005, the period ending Sept. 30, 2005.
The company also reported that its cost reduction programs had
severely impacted its results, causing the company to experience
declining net income. In response to this announcement the
price of Xerium common stock dropped from $9.51 per share to
$6.85 per share on extremely heavy trading volume.
Plaintiff seeks to recover damages on behalf of all those who
purchased the common stock of Xerium pursuant and/or traceable
to the company's initial public offering on or about May 16,
2005 through Nov. 15, 2005, (Class).
For more details, contact Samuel H. Rudman or David A. Rosenfeld
of Lerach Coughlin, Phone: 800/449-4900 or 619/231-1058, E-mail:
wsl@lerachlaw.com, Web site:
http://www.lerachlaw.com/cases/xerium/.
*********
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