/raid1/www/Hosts/bankrupt/CAR

/raid1/www/Hosts/bankrupt/CAR_Public/060804.mbx C L A S S A C T I O N R E P O R T E R Friday, August 4, 2006, Vol. 8, No. 154 Headlines ADE CORP: Court Yet to Approve Settlement of Suit Over Merger ADOLOR CORP: Asks Pa. Court to Dismiss Securities Fraud Lawsuit AIR FRANCE: Safety Board Ends Investigation Over Toronto Crash ARCHDIOCESE OF PHILADELPHIA: Plaintiffs Pursue RICO Lawsuit AT&T CORP: Court Stays Proceedings in EFF's Wiretapping Lawsuit AVON PRODUCTS: Court Denies Motion to Strike "Blakemore" Class AVON PRODUCTS: Fla. Court Denies Class Status for "Roqueta" Suit AVON PRODUCTS: Seeks Dismissal of N.Y. Consolidated Stock Suit BUNN-O-MATIC: Expands 2005 Recall of Defective Coffeemakers CONSECO INC: Expects to Spend $100M in Insurance Suit Settlement ELMIRA BUSINESS: Students Sue N.Y. School Over Alleged Fraud EL PASO: Settles Consolidated Shareholder Suit in Tex. for $273M ETON CORP: Recalls Radio with Batteries Posing Fire Hazard EMESS DESIGN: Recalls Children's Night Lamp with Glass Window EXELON CORP: Court Refuses to Dismiss Some Braidwood Suit Claims GANNETT CO: ERISA Violations Suit Remains Pending in Colo. Court GLOBAL HORIZONS: Court Certifies Thai Migrant Workers' H-2A Suit GMH COMMUNITIES: Faces Several Securities Fraud Suits in Pa. HARLEY-DAVIDSON: Wis. Court Orders Securities Suit Consolidation HARLEY-DAVIDSON: Wis. Court Orders Consolidation of ERISA Suit HARLEY-DAVIDSON: Wis. Supreme Court to Review Cam Bearing Suit HARTFORD FINANCIAL: Faces Multidistrict Litigation in N.J. Court HSBC FINANCE: Discovery in Ill. Securities Fraud Suit Extended JOURNAL SENTINEL: Court Gives Preliminary OK to Subscribers Suit LOUSIANA: Livingston Parish School Board Faces Sex-Bias Lawsuit NORTHERN TRUST: Subsidiary Settles Enron Suit in Tex. for $37.5M OHIO: Youngstown Allowed to Intervene in Mahoning Jail Lawsuit ORKIN EXTERMINATING: Faces Personal Injury Suits in Fla., Ga. RENT-A-CENTER INC: Court Nixes Plaintiffs Request for Review RENT-A-CENTER INC: "Colon" Attorneys Want to Add New Plaintiff RENT-A-CENTER INC: Continues to Face Labor Lawsuits in Calif. RENT-A-CENTER INC: Mulls Appeal of N.J. Court Ruling in "Perez" RENT-A-CENTER INC: Tex. Court Mulls Stock Suit Certification SUTTER HEALTH: Calif. Court Approves Uninsured Patients' Suit Asbestos Alert ASBESTOS LITIGATION: Sealed Air Liability Stays at $512.5M in 2Q ASBESTOS LITIGATION: Ashland Reserves $592M in 2Q for Litigation ASBESTOS LITIGATION: Lone Star Notes 15 Dismissed Exposure Suits ASBESTOS LITIGATION: Lockheed Martin Wins Appeal in Durham Suit ASBESTOS LITIGATION: Court Grants Reassignment Motion in PA Suit ASBESTOS LITIGATION: Armstrong Has $91.5M Insurance Receivable ASBESTOS LITIGATION: EnPro Ind. Earns $4.2M Net Income in 2Q2006 ASBESTOS LITIGATION: New Claims v. EnPro Drop to 4,200 in 2Q06 ASBESTOS LITIGATION: Aqua-Chem Demands $10M Costs from Coca-Cola ASBESTOS LITIGATION: Hercules Has $6.5M Net Assets, Liabilities ASBESTOS LITIGATION: N.Y. Court Affirms Ruling in Favor of Board ASBESTOS LITIGATION: St. Paul Reserves $4.28B in 2Q For Claims ASBESTOS LITIGATION: BorgWarner's Claims Drop to 61,000 in 2Q06 ASBESTOS LITIGATION: Rockwell, Units Deal With Exposure Lawsuits ASBESTOS LITIGATION: ABB Ltd. Records $217M Obligations in 2Q06 ASBESTOS LITIGATION: U.S. Steel Corp. Cases Drop From 480 to 230 ASBESTOS LITIGATION: BorgWarner Faces Insurance Suit in Illinois ASBESTOS LITIGATION: Del. Court Denies Goodyear Dismissal Motion ASBESTOS LITIGATION: Rohm and Haas Prepares for Premises Claims ASBESTOS LITIGATION: Ladish Co. Dismissed from 4 Cases in Ill. ASBESTOS LITIGATION: Enbridge Has $3.3M Liabilities for Cleanup ASBESTOS LITIGATION: Eastman Chemical Records 1,500 Claims in 2Q ASBESTOS LITIGATION: Exelon Corp. Reserves $48M for Claims in 2Q ASBESTOS LITIGATION: W.R. Grace Records $1.7B Liability in 2Q06 ASBESTOS LITIGATION: Corning Inc. Posts $124M Settlement Expense ASBESTOS LITIGATION: Federal-Mogul Deals With Fel-Pro Litigation ASBESTOS LITIGATION: Federal-Mogul Liabilities Hit $1.54B in 2Q ASBESTOS LITIGATION: Federal-Mogul Records $1.32B T&N Liability ASBESTOS LITIGATION: Federal-Mogul Has $213.6M Claims Liability ASBESTOS LITIGATION: Fireman's Fund Seeks Review of ASARCO Deal ASBESTOS LITIGATION: ASARCO Moves to Approve LMI Settlement Deal ASBESTOS LITIGATION: Hardie, NSW Govt. Move Deadline to Aug. 31 ASBESTOS LITIGATION: Va. Court Awards $10.4M to Shipyard Widow ASBESTOS LITIGATION: Widow Seeks $20M in Exposure Suit v. Alcoa ASBESTOS LITIGATION: Officials Link Factory Hazard to Illnesses ASBESTOS LITIGATION: U.K. Widow Gets Payout for Husband's Death New Securities Fraud Cases EQUINIX INC: Faces Suit Over Back-Dated Stock Option Grants NORTHFIELD LABORATORIES: Lead Plaintiff Filing Deadline Extended PAR PHARMACEUTICALS: Wolf Popper Files Securities Suit in N.J. SUNTERRA CORP: Schatz & Nobel Announces Nev. Securities Filing ********* ADE CORP: Court Yet to Approve Settlement of Suit Over Merger ------------------------------------------------------------- The U.S. District Court for the District of Massachusetts has yet to grant final approval to the settlement of a class action filed against ADE Corp., each of the company's directors, KLA- Tencor Corp. and South Acquisition Corp., a wholly owned subsidiary of KLA-Tencor, in connection with a merger agreement among the defendants. On Feb. 22, 2006, the company entered into a definitive Agreement and Plan of Merger with KLA-Tencor and South. Pursuant to the Merger Agreement, each share of the company's common stock was to be exchanged for 0.64 shares of KLA-Tencor common stock on a fixed basis. On May 26, 2006, the company entered into a definitive Amended and Restated Agreement and Plan of Merger with KLA-Tencor and South. The Amended Merger Agreement amended and restated the Merger Agreement, and changed the consideration payable to the company's stockholders from 0.64 shares of KLA-Tencor common stock to $32.50 in cash per share of the company's common stock. The Amended Merger Agreement provides that, among other things, upon the terms and subject to the conditions set forth in the Amended Merger Agreement, South will merge with and into the company, with the company continuing as the surviving corporation and a wholly owned subsidiary of KLA-Tencor. The company's stockholders approved the merger on July 13, 2006. Consummation of the merger is subject to customary closing conditions, including the approval of German antitrust authorities. The Class Action Dean Drulias, a purported stockholder of the company, filed the suit on June 7, 2006 in Massachusetts Superior Court, Norfolk County. The suit alleges that in connection with the merger, the directors of the company breached their fiduciary duties, the company's preliminary proxy statement related to the merger contained inaccurate statements of material facts and omitted material facts, and KLA-Tencor aided and abetted the company's directors in their alleged breaches of fiduciary duties. The complaint sought a determination that the class-action status was proper, an injunction preventing the merger or, if the merger were consummated, a rescission of the merger, and the payment of compensatory damages and other fees and costs. Subsequent Proceedings The defendants removed the action to the U.S. District Court for the District of Massachusetts. On June 14, 2006, the company filed a definitive proxy statement with the U.S. Securities and Exchange Commision and mailed it to all of the company's stockholders of record as of the close of business on May 30, 2006. On June 27, 2006, plaintiff filed an amended complaint that alleged, among other things, that, in connection with the merger, the directors of the company breached their fiduciary duties, the company's definitive proxy statement related to the Merger contained inaccurate statements of material facts and omitted material facts and KLA-Tencor aided and abetted the company's directors in their alleged breaches of fiduciary duties. The amended complaint sought a determination that the class action status was proper, an injunction preventing the merger unless certain disclosures were made in advance of the merger, and the payment of compensatory damages and other fees and costs. Plaintiff has not identified or alleged an amount of damages that are sought in the action. On June 30, 2006, plaintiff filed a motion for a preliminary injunction and a hearing on the motion took place on July 6, 2006. On July 7, 2006, a supplement to the definitive proxy statement was mailed to all of the company's stockholders of record as of the close of business on May 30, 2006, and the court was notified that defendants and plaintiff were in settlement discussions. On July 11, 2006, the court dismissed the action as settled and without prejudice. The parties continued their settlement discussions; and, on July 19, 2006, entered into a Memorandum of Understanding agreeing in principle to settle all claims brought on behalf of the putative class. However, effectuation of the settlement embodied in the MOU is contingent on, among other things, the Court's review and final approval of the settlement, and entry of a final order and judgment. Therefore, on July 28, 2006, the parties requested that the court reopen the action. The court has not yet acted in response to the parties' request. The suit is "Drulias v. ADE Corp., et al., Case No. 1:06-cv- 11033-PBS," filed in the U.S. District Court for the District of Massachusetts under Judge Patti B. Saris with referral to Judge Leo T. Sorokin. Representing the plaintiffs are: (1) Richard B. Brualdi of The Brualdi Law Firm, 29 Broadway Suite 2400, New York, NY 10006, US, Phone: 212-952- 0602, Fax: 212-952-0608, E-mail: rbrualdi@brualdilawfirm.com; and (2) Theodore M. Hess-Mahan of Shapiro Haber & Urmy, LLP, 53 State Street, Boston, MA 02108, Phone: 617-439-3939, Fax: 617-439-0134, E-mail: ted@shulaw.com. Representing the defendants are: (i) Barry S. Pollack of Sullivan & Worcester, LLP, One Post Office Square, Boston, MA 02109, Phone: 617-338-2910, Fax: 617-338-2880, E-mail: bpollack@sandw.com; and (ii) Euripides D. Dalmanieras of Foley Hoag, LLP, World Trade Center - West, 155 Seaport Boulevard, Boston, MA 02210-2600, Phone: 617-832-3006, Fax: 617-832-7000, E- mail: edalmani@foleyhoag.com. ADOLOR CORP: Asks Pa. Court to Dismiss Securities Fraud Lawsuit --------------------------------------------------------------- Adolor Corp. is asking the U.S. District Court for the Eastern District of Pennsylvania to dismiss the consolidated securities class action filed against it, its director and certain officers. On April 21, 2004, a lawsuit was filed in the U.S. District Court for the Eastern District of Pennsylvania against the company, one of its directors and certain of its officers, seeking unspecified damages on behalf of a putative class of persons who purchased common stock between Sept. 23, 2003 and Jan. 14, 2004. The complaint alleges violations of Section 10(b) and section 20(a) of the U.S. Securities Exchange Act of 1934, in connection with the announcement of the results of certain studies in the company's Phase III clinical trials for Entereg(R), which allegedly had the effect of artificially inflating the price of the company's common stock. This suit has been consolidated with three subsequent actions asserting similar claims under the caption, "In re Adolor Corporation Securities Litigation, No. 2:04-cv-01728." On Dec. 29, 2004, the District Court issued an order appointing the Greater Pennsylvania Carpenters' Pension Fund as lead plaintiff. The appointed lead plaintiff filed a consolidated amended complaint on Feb. 28, 2005. The complaint purported to extend the class period, so as to bring claims on behalf of a putative class of Adolor shareholders who purchased stock between Sept. 23, 2003 and Dec. 22, 2004. The complaint also adds as defendants the board of directors, asserting claims against them and the other defendants for violation of Section 11 and Section 15 of the Securities Act of 1933 in connection with the company's public offering of stock in November 2003. The company and its management and director defendants moved to dismiss the Complaint on April 29, 2005. The plaintiffs responded to the motion to dismiss on June 28, 2005, and the defendants' reply was filed on Aug. 12, 2005. The company reported no material development in the case at its July 31, 2006 Form 10-Q filing with the U.S. Securities and Exchange Commission for the period ended June 30, 2006. The suit is "Greater Pennsylvania Carpenters Pension Fund v. Adolor Corp., et al., Case No. 2:04-cv-01728-RBS," filed in the U.S. District Court for the Eastern District of Pennsylvania, under Judge R. Barclay Surrick. The consolidated suit is "In re Adolor Corporation Securities Litigation, No. 2:04-cv-01728." Representing the plaintiffs are: (1) Ramzi Abadou, Laura Andracchio, Nicholas J. Licato, Scott Saham, Lerach Coughlin Stoia & Robbins LLP, 401 B St., STE. 1700, San Diego CA, 92101, Phone: 619-231- 1058, E-mail: ramzia@lcsr.com; and (2) Marc S. Henzel, Law Offices of Marc S. Henzel, 273 Montgomery Avenue, Suite 202, Bala Cynwyd PA 19004, Phone: 610-660-8000, E-mail: mhenzel182@aol.com. Representing the defendants are: (i) Michael S. Doluisio, Jeffrey G. Weil, Dechert, Price & Rhoads, 1717 Arch Street, 4000 Bell Atlantic Tower, Philadelphia PA 19103-2793, Phone: 215-994-2749, Fax: 215-994-2222, E-mail: michael.doluisio@dechert.com; and (ii) John A. Ducoff, Allan E. Kraus, Jason Rockwell, Laurie B. Smilan, Latham & Watkins LLP, One Newark Center 16th floor, Newark, NJ 07101-3174, Phone: 973-639-1234. AIR FRANCE: Safety Board Ends Investigation Over Toronto Crash -------------------------------------------------------------- The Transportation Safety Board of Canada has made a draft of a report into its investigation of the Air France Flight 358 Accident at Toronto Lester B. Pearson International Airport, the AP WorldStream reports. They have examined whether human error, mechanical failure or bad weather were to blame for the Aug. 2, 2005 crash. However, investigators still will not reveal what caused the crash as it has yet to be reviewed by the Board for approval or amendments, the report said. Transportation Safety Board Christian Plouffe said that if the board determines there are urgent safety concerns, it could issue a warning before the final document is made public. In August 2005, an Air France Airbus A340-313 aircraft, on a flight from Charles de Gaulle airport in Paris, France, with 12 crewmembers and 297 passengers on board, overran the end of the runway and came to a rest in a ravine just outside the perimeter of Toronto's Lester B. Pearson International Airport (Class Action Reporter, Nov. 8, 2005). All passengers and crewmembers were able to evacuate before a post-crash fire consumed most of the aircraft fuselage. Two crew members and 10 passengers were seriously injured. Initial findings indicated that there was nothing wrong with the aircraft. However, Real Levasseur, the lead investigator pointed out that because a machine is working fine, doesn't mean that the machine-man interface was working perfectly. Dozens of the passengers have joined a class action against Air France, according to the report. An Aug. 10, 2005 report of The Epoch Times said that a CA$75 million class action was filed by one of the passengers on board the Airbus A340. The suit names Suzanne Deak of Toronto as plaintiff on behalf of all 297 passengers on board teh plane. Representing the Flight 358 passengers is Mary Schiavo of The Law Firm of Motley Rice LLC, P.O. Box 1792, Mt. Pleasant, S.C. 29465, Phone: (843) 216-9138 or 1-800-768-4026 (toll free), E- mail: mschiavo@motleyrice.com. ARCHDIOCESE OF PHILADELPHIA: Plaintiffs Pursue RICO Lawsuit ----------------------------------------------------------- Plaintiffs in a class action over allegations of federal racketeering and conspiracy laws violations against the Archdiocese of Philadelphia have asked a federal judge to deny a motion by the defendant to dismiss the case, according to Philly.com. The Archdiocese of Philadelphia asked a federal court on July 17 to reject the suit. The request came in a response by the archdiocese to a suit filed on June by 12 people claiming they had been abused by various Catholic priests from 1956 to 1985. Plaintiffs claim their civil rights were violated and that the priests named in the suit engaged in a "massive conspiracy to cover up and effectively perpetuate" the abuses. They are seeking unspecified damages for "severe mental and physical injuries." The suit names as defendants the archdiocese, Cardinals Justin Rigali and Anthony Bevilacqua, and the estate of Cardinal John Krol. In its response, the archdiocese cited cites 65 federal and state court rulings in support of its motion to dismiss. It argued that the Racketeer Influenced and Corrupt Organizations Act was not enacted until 1970, which is way beyond the 1940 date of the alleged conspiracy and racketeering activity (Class Action Reporter, July 21, 2006). A 1987 U.S. Supreme Court decision adopted a four-year statute of limitations on RICO claims, and the time period begins "when the plaintiffs knew or should have known of the injury," the decision said, according to the report. The archdiocese also argued that federal courts "have made clear" that civil RICO claims may not be pursued to recover personal-injury damages. Further, regarding claims that the plaintiffs were deprived of their civil rights, the archdiocese said that the allegation of conspiracy was not based on racial or class discrimination, as the law requires. In recent court filings, plaintiffs said that the Supreme Court decision did not address issues related to exactly when a civil RICO claim accrues or under what circumstances the limitations period commences. They also said the archdiocese "erroneously characterized" their claims in federal court as personal-injury claims, when in fact their claims were for injuries to property or business. Six plaintiffs have filed their suit in Philadelphia Common Pleas court. Archdiocese of Philadelphia: http://archdiocesephl.org/ AT&T CORP: Court Stays Proceedings in EFF's Wiretapping Lawsuit --------------------------------------------------------------- Chief Judge Vaughn R. Walker of the U.S. District Court for the Northern District of California temporarily stayed proceedings in "Hepting et al. v. AT&T Corp. et al." Defendant AT&T Corp. has administratively moved for an interim stay pending the court's determination of motions by AT&T and the government for a stay of proceedings pending appeal. After plaintiffs filed an opposition to AT&T's motion, the court ordered that all further proceedings in this litigation shall be stayed until further order of the court. AT&T's and the government's motions for a stay of proceedings pending appeal have been fully briefed, and will be heard on Aug. 8, 2006, at 2:00 p.m. During the pendency of this interim stay, AT&T need not answer plaintiffs' amended complaint. On July 31, the U.S. government petitioned the court for permission to appeal the district court's order denying the government's motion to dismiss the action. It said that the case warrants an immediate appeal because the district court has, in a highly unusual action, overruled the government's assertion of the state secrets privilege, and has thereby placed at risk particularly sensitive national security interests. The question is presented for appeal is whether the district court erred in rejecting an assertion of the state secrets privilege by the director of National Intelligence, and therefore in denying the government's motion to dismiss this action. A copy of the government's petition is available for free at: http://ResearchArchives.com/t/s?eee On Aug. 1, the Electronic Frontier Foundation, which filed the suit in January, submitted opposition to AT&T's administrative motion for an interim stay. EFF said that AT&T invokes the government's state secrets privilege and presents an administrative motion asking it to stop the plaintiffs' case cold -- in its entirety-by issuing a temporary stay pending the court's decision on its motion for a stay pending the Ninth Circuits' ruling on AT&T's and the government's separate interlocutory appeals of the court's July 20 order. An interim stay is both unnecessary and unjust, EFF said. It is unnecessary because, as explained in detail in plaintiffs' July 31 brief in response to the order to show cause, significant portions of the case can move forward without risk to the government's asserted state secrets, and, AT&T's concerns about answering in light of the government's claimed privilege, if the court deems them sufficient, can be addressed without the need for a stay. It is allegedly unjust because plaintiffs should have the opportunity to have as much of the litigation as possible ready to proceed promptly upon the appeals courts' decision. EFF's opposition for a stay is available for free at: http://ResearchArchives.com/t/s?eef Case Background Plaintiffs allege that AT&T and its holding company, AT&T Inc., are collaborating with the National Security Agency in a massive warrantless surveillance program that illegally tracks the domestic and foreign communications and communication records of millions of Americans. The first amended complaint, filed on Feb. 22, 2006, claims that AT&T and AT&T Inc. have committed violations of: -- the First and Fourth Amendments to the U.S. Constitution (acting as agents or instruments of the government) by illegally intercepting, disclosing, divulging and/or using plaintiffs' communications; -- Section 109 of Title I of the Foreign Intelligence Surveillance Act of 1978, 50 USC SS 1809, by engaging in illegal electronic surveillance of plaintiffs' communications under color of law; -- Section 802 of Title III of the Omnibus Crime Control and Safe Streets Act of 1968, as amended by section 101 of Title I of the Electronic Communications Privacy Act of 1986 (ECPA), 18 USC SS 2511(1)(a), (1)(c), (1)(d) and (3)(a), by illegally intercepting, disclosing, using and/or divulging plaintiffs' communications; -- Section 705 of Title VII of the Communications Act of 1934, as amended, 47 USC S 605, by unauthorized divulgence and/or publication of plaintiffs' communications; -- Section 201 of Title II of the ECPA (Stored Communications Act), as amended, 18 USC SS 2702(a)(1) and (a)(2), by illegally divulging the contents of plaintiffs' communications; -- Section 201 of the Stored Communications Act, as amended by section 212 of Title II of the USA PATRIOT Act, 18 USC SS 2702(a)(3), by illegally divulging records concerning plaintiffs' communications to a governmental entity and (7) California's Unfair Competition Law, Cal Bus & Prof Code SS 17200 et seq, by engaging in unfair, unlawful and deceptive business practices. The complaint seeks certification of a class action and redress through statutory damages, punitive damages, restitution, disgorgement and injunctive and declaratory relief. On April 28, 2006, AT&T moved to dismiss this case contends that plaintiffs lack standing, and that it is entitled to statutory, common law and qualified immunity. Earlier, the judge declined to hear motions by EFF to issue a preliminary injunction against the alleged data collection until after he considers whether to dismiss the case (Class Action Reporter, June 13, 2006). After hearing oral arguments on June 23, the court denied the government's motion to dismiss, or in the alternative, for summary judgment on the basis of state secrets and denied AT&T's motion to dismiss. A copy of the court decision is available free of charge at: http://ResearchArchives.com/t/s?e2a Meanwhile, attorneys for the U.S. government and other parties suing AT&T Corp. have asked a Judicial Panel on Multidistrict litigation to consolidate the suit, according to the Jurist. The government wants about 20 purported class actions filed against the company be consolidated and assigned to the U.S. District Court for the District of Columbia. The plaintiffs' lawyer in the San Francisco case urged the panel to give the consolidated cases to U.S. District Judge Vaughn Walker. A decision from the panel is expected in three to six weeks, according to the report (Class Action Reporter, Aug. 1, 2006). The suit is "Hepting, et al. v. AT&T Corp., et al., Case No. 3:06-cv-00672-VRW," filed in the U.S. District Court for the Northern District of California under Judge Vaughn R. Walker. Representing the plaintiffs are: (1) Cindy Ann Cohn of Electronic Frontier Foundation, 454 Shotwell Street, San Francisco, CA 94110, Phone: 415- 436-9333 x 108, Fax: (415) 436-9993, E-mail: cindy@eff.org; and (2) Jeff D. Friedman of 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: JFriedman@lerachlaw.com. Representing the defendants are: Bruce A. Ericson and Jacob R. Sorensen of Pillsbury Winthrop Shaw Pittman, LLP, 50 Fremont St., Post Office Box 7880, San Francisco, CA 94120-7880, Phone: (415) 983-1000, Fax: (415) 983-1200, E-mail: bruce.ericson@pillsburylaw.com and jake.sorensen@pillsburylaw.com. AVON PRODUCTS: Court Denies Motion to Strike "Blakemore" Class -------------------------------------------------------------- A California Court of Appeal denied Avon Products, Inc.'s motion to strike the plaintiffs' asserted nationwide class in the lawsuit, "Blakemore, et al. v. Avon Products, Inc., et al.," pending in the Superior Court of the State of California, Los Angeles County. Commenced in March 2003, the purported class action was filed on behalf of Avon sales representatives who, "since March 24, 1999, received products from Avon they did not order, thereafter returned the unordered products to Avon, and did not receive credit for those returned products." The complaint seeks unspecified compensatory and punitive damages, restitution and injunctive relief for alleged unjust enrichment and violation of the California Business and Professions Code. The company filed demurrers to the original complaint and three subsequent amended complaints, asserting that they failed to state a cause of action. The Superior Court sustained the company demurrers and dismissed plaintiffs' causes of action except for the unjust enrichment claim of one plaintiff. The court also struck plaintiffs' class allegations. Plaintiffs sought review of these decisions by the Court of Appeal of the State of California and, in May 2005, the Court of Appeal reinstated the dismissed causes of action and the class allegations. In January 2006, the company filed a motion to strike the plaintiffs' asserted nationwide class. In February 2006, the trial court declined to grant the motion, but instead certified the issue to the Court of Appeal on an interlocutory basis. In April 2006, the Court of Appeal denied the company's motion and instructed the trial court to consider the issue at a subsequent point in the proceedings. The suit is "Blakemore et al v. Avon Products, Inc., B174825, B175973" filed in the Superior Court of California, Los Angeles County under Judge Wendell Mortimer. Representing the plaintiffs is Jeffrey Huron of the Huron Law Group, 1875 Century Park East, Suite 1000, Los Angeles, CA 90067, Phone: 310-284-3400, Fax: 310-772-0037, Web site: http://www.huronlaw.com. AVON PRODUCTS: Fla. Court Denies Class Status for "Roqueta" Suit ---------------------------------------------------------------- The U.S. District Court for the Southern District of Florida denied class-action status to a lawsuit filed against Avon Products, Inc., styled, "Roqueta v. Avon Products, Inc., et al.," which alleges deceptive trade practices. The suit was originally commenced in April 2005 in the Circuit Court of the Eleventh Judicial Circuit in and for Miami-Dade County, Florida. It seeks general damages, special damages and punitive damages for alleged violations of the Florida Deceptive and Unfair Trade Practices Act and Florida statutes regarding misleading advertisements, and for negligent and fraudulent misrepresentation. The purported class includes "all persons who have purchased skin care products from the defendant that have been falsely advertised to have an 'anti-cellulite' or cellulite reducing effect." The company removed the action to the U.S. District Court for the Southern District of Florida and moved to dismiss the complaint for failure to state a claim upon which relief can be granted. In August 2005 the court dismissed plaintiff's claims for negligent and fraudulent misrepresentation, with prejudice. The court also dismissed plaintiff's remaining claims but granted plaintiff leave to amend her complaint, which she has done. In July 2006, the court issued an order denying a motion by the plaintiff to certify this action as a class action. Plaintiff has not yet indicated whether she will seek to appeal the court's order. AVON PRODUCTS: Seeks Dismissal of N.Y. Consolidated Stock Suit -------------------------------------------------------------- Avon Products, Inc. is asking the U.S. District Court for the Southern District of New York to dismiss a consolidated class securities action field against the company, a company officer and two officer/directors. In August 2005, the company reported the filing of class action complaints for alleged violations of the federal securities laws in actions, "Nilesh Patel v. Avon Products, Inc. et al." and "Michael Cascio v. Avon Products, Inc. et al.," respectively, which subsequently have been consolidated. A consolidated amended class action complaint for alleged violations of the federal securities laws was filed in the consolidated action in December 2005 in the U.S. District Court for the Southern District of New York (Master File Number 05-CV- 06803) under the caption, "In re Avon Products, Inc. Securities Litigation." The consolidated action, brought on behalf of purchasers of the company's common stock between Feb. 3, 2004 and Sept. 20, 2005, seeks damages for alleged false and misleading statements "concerning Avon's operations and performance in China, the U.S. . . . and Mexico." It also asserts that during the class period certain officers and directors sold shares of the company's common stock. In February 2006, the company filed a motion to dismiss the consolidated amended class action complaint, asserting, among other things, that it failed to state a claim upon which relief may be granted. The suit is "In re Avon Products, Inc. Securities Litigation, Case No. 1:05-cv-06803-LAK," filed in the U.S. District Court for the Southern District of New York under Judge Lewis A. Kaplan. Representing the plaintiffs are: (1) Brian Philip Murray of Murray, Frank & Sailer, LLP, 275 Madison Avenue, Ste. 801, New York, NY 10016, Phone: 212-682-1818, Fax: 212-682-1892, E-mail: bmurray@murrayfrank.com; and (2) Joel P. Laitman of Schoengold Sporn Laitman & Lometti, P.C., 19 Fulton Street, New York, NY 10038, Phone: (212) 964-0046. Representing the defendants is Peter C. Hein of Wachtell, Lipton, Rosen & Katz, 51 West 52nd Street, New York, NY 10019, Phone: 212-403-1237, Fax: (212) 403-2000, E-mail: PCHein@wlrk.com. BUNN-O-MATIC: Expands 2005 Recall of Defective Coffeemakers ----------------------------------------------------------- Bunn-O-Matic Corp. of Springfield, Illinois, in cooperation with the U.S. Consumer Product Safety Commission, extended a June 2005 recall of about 561,000 Bunn home coffeemakers. The company said the coffeemaker's plastic pour-in bowl and lid can melt or ignite due to an electrical failure, posing burn and fire hazards to consumers. Bunn-O-Matic has received 16 additional incident reports involving the bowl or lid melting or igniting in these units, including seven reports of minor property damage. No injuries have been reported. The recall involves Bunn home coffeemakers with model numbers GR-10B, GR-10W, B-10B, B-10W, and BT-10B -- including any of those same model numbers ending in the additional letter D -- with six-digit date codes (1) ending in "04" with the two middle digits between "21" and "52" or (2) ending in "05" with the two middle digits between "01" and "40". (If the date code has a seventh digit, consumers should ignore the last digit and use the first six digits.) The model number and date code are stamped on a small white or silver sticker on the bottom of the coffeemaker. The 10-cup Bunn coffeemakers have either a black or white plastic base and top, and measure 14 1/4inches high by 7-inches wide by 13 3/4 - inches deep. The word "BUNN" is printed on the front of the machine in chrome. These coffeemakers were manufactured in the U.S. and are being sold at department and hardware stores nationwide between May 2004 and January 2006 for about $100. Picture of the recalled coffeemakers: http://www.cpsc.gov/cpscpub/prerel/prhtml06/06220.jpg Consumers are advised to unplug the coffeemaker and allow it to cool for at least three hours before checking if they have one of the recalled units. Consumers can contact the firm to obtain a free factory repair, a free in-home repair kit, or purchase a new unit at a discount. For more information, call Bunn-O-Matic at (800) 385-2652 between 7 a.m. and 6 p.m. CT Monday through Friday or visit: http://www.regcen.com/bunnrecall CONSECO INC: Expects to Spend $100M in Insurance Suit Settlement ---------------------------------------------------------------- Conseco, Inc. reached a tentative settlement in the class action litigation referred to as "In Re Conseco Life Insurance Company Cost of Insurance Litigation." The settlement, which involved policies sold by insurance companies that were subsequently acquired by Conseco, is subject to a court fairness hearing and other conditions. As a result of the settlement, the company expects to record additional expenses of approximately $100.3 million, after taxes, in the quarter ended June 30, 2006. Conseco is scheduled to announce its quarterly earnings results after the market closes on Aug. 2, 2006. James Hohmann, Conseco's interim chief executive, said, "Implementation of this settlement will resolve a significant historical issue and will allow our current management team, our associates, our regulators and our rating agencies to focus more fully on Conseco's progress toward becoming a leading provider of life insurance, supplemental health insurance and annuities for middle America. Despite this charge, the insurance subsidiaries continue to maintain a strong capital position for the protection of all policyholders. Although we have not completed our second quarter statutory financial statements, we estimate that our consolidated risk-based capital ratio (a non- GAAP measure) will exceed 330% as of June 30, 2006." In April, 2005, Conseco, Inc. and certain subsidiaries including principally Conseco Life Insurance Company, have been named in numerous purported class actions and individual lawsuits alleging, among other things, breach of contract, fraud and misrepresentation with regard to a change made in the way monthly deductions are calculated for insurance coverage (Class Action Reporter, April 21, 2005). These cases relate to life insurance policies sold primarily under the names "Lifestyle" and "Lifetime". Approximately 6,500 policies were subject to the change. Many of these nationwide purported class actions were filed in federal courts across the U.S. The Judicial Panel on Multidistrict Litigation consolidated these lawsuits into the case now referred to as "In Re Conseco Life Insurance Co. Cost of Insurance Litigation, Cause No. MDL 1610," filed in the U.S. District Court for the Central District of California. The complaint seeks unspecified compensatory, punitive and exemplary damages and specifically alleges, among other things, that the change made in the way monthly deductions are calculated for insurance coverage enabled Conseco, Inc. to add $360 million to its balance sheet. The suit is "In re Conseco Life Insurance Co. Cost of Insurance Litigation, MDL-1610," filed in the U.S. District Court for the Central District of California under Judge A. Howard Matz ELMIRA BUSINESS: Students Sue N.Y. School Over Alleged Fraud ------------------------------------------------------------ Thirty-four present and former students of Elmira Business Institute in New York are suing the school for several alleged deceptive practices, according to Press & Sun-Bulletin. The suit was filed in state Supreme Court in Broome County. It is seeking unspecified monetary damages, refund of tuition paid by students, and a directive to stop the school from continuing to commit the alleged deceptive practices. According to the report, the suit alleges that: -- EBI engaged in deceptive practices by advising students that credits earned at EBI were transferable to other colleges when in most cases this was not the case; -- EBI personnel placed undue pressure on students to enroll immediately and those who were able to escape the initial interview were hounded by e-mails and telephone calls, some at their places of employment; -- students were coerced into enrolling before EBI knew their academic or financial status; and -- EBI engaged in deceptive and fraudulent practices by exercising total control over grants and loans made to students. EBI is a privately owned business college offering degree and certificate programs. It has a campus in Elmira and a campus in Vestal that opened in May 2003. Representing the students is Ronald R. Benjamin. Representing the school is Paul Sheppard at Hinman, Howard & Kattell, LLP 700 Security Mutual Building, 80 Exchange Street, P.O. Box 5250 Binghamton, New York 13902-5250 (Broome Co.), Phone: 607-723- 5341, Fax: 607-723-6605, Web Site: http://www.hhk.com. EL PASO: Settles Consolidated Shareholder Suit in Tex. for $273M ---------------------------------------------------------------- El Paso Corp. reached settlements of its shareholder class action and derivative lawsuits as part of its ongoing efforts to resolve legacy litigation and focus on the company's two core businesses, natural gas pipelines and exploration and production. First, El Paso announced that it has reached agreement in principle to settle all shareholder class action litigation filed on behalf of purchasers of El Paso securities between Feb. 22, 2000 and Feb. 17, 2004. Under the terms of the agreement El Paso and its insurers will pay a total of $273 million to the plaintiffs. El Paso will contribute approximately $48 million and its insurers will contribute approximately $225 million. Since El Paso previously reserved a substantial portion of its contribution in prior periods, the settlement will have no material impact on its second quarter financial results. Within 45 days, the parties intend to submit a Stipulation of Settlement to the court seeking preliminary approval of this settlement. Second, El Paso settled an associated derivative lawsuit that made similar claims to those in the class action litigation. The settlement involved the payment of approximately $17 million, which was fully funded by El Paso's insurers, of which approximately $12 million will be used to fund the settlement of the shareholder litigation. The court has approved this settlement. "These settlements resolve the last major legacy issue for El Paso," said Doug Foshee, president and chief executive officer of El Paso Corporation. "We believe this is the right course of action for our stakeholders as we eliminate litigation uncertainty and allow investors to focus on the progress of our company." El Paso and its current and former directors and officers did not admit liability or fault for the matters alleged in the lawsuits. Twenty-eight purported shareholder class actions were consolidated in federal court in Houston, Texas. The lawsuits allege violations of federal securities laws against the company and several of its current and former officers and directors. (Class Action Reporter, March 10, 2006). It includes allegations regarding the accuracy or completeness of press releases and other public statements made by the firm during the class period from 2000 through early 2004 related to alleged wash trades, mark-to-market accounting, off-balance sheet debt, the overstatement of natural gas and oil reserves and manipulation of the California energy market. The purported shareholder class actions filed in the U.S. District Court for the Southern District of Texas, Houston Division, are: (1) Marvin Goldfarb, et al v. El Paso Corporation, William Wise, H. Brent Austin, and Rodney D. Erskine, filed July 18, 2002; (2) Residuary Estate Mollie Nussbacher, Adele Brody Life Tenant, et al v. El Paso Corporation, William Wise, and H. Brent Austin, filed July 25, 2002; (3) George S. Johnson, et al v. El Paso Corporation, William Wise, and H. Brent Austin, filed July 29, 2002; (4) Renneck Wilson, et al v. El Paso Corporation, William Wise, H. Brent Austin, and Rodney D. Erskine, filed Aug. 1, 2002; (5) Sandra Joan Malin Revocable Trust, et al v. El Paso Corporation, William Wise, H. Brent Austin, and Rodney D. Erskine, filed Aug. 1, 2002; (6) Lee S. Shalov, et al v. El Paso Corporation, William Wise, H. Brent Austin, and Rodney D. Erskine, filed Aug. 15, 2002; (7) Paul C. Scott, et al v. El Paso Corporation, William Wise, H. Brent Austin, and Rodney D. Erskine, filed Aug. 22, 2002; (8) Brenda Greenblatt, et al v. El Paso Corporation, William Wise, H. Brent Austin, and Rodney D. Erskine, filed Aug. 23, 2002; (9) Stefanie Beck, et al v. El Paso Corporation, William Wise, and H. Brent Austin, filed Aug. 23, 2002; (10) J. Wayne Knowles, et al v. El Paso Corporation, William Wise, H. Brent Austin, and Rodney D. Erskine, filed Sept. 13, 2002; (11) The Ezra Charitable Trust, et al v. El Paso Corporation, William Wise, Rodney D. Erskine and H. Brent Austin, filed Oct. 4, 2002. El Paso Corporation -- http://www.elpaso.com-- provides natural gas and related energy products in a safe, efficient, and dependable manner. The company owns North America's largest natural gas pipeline system and one of North America's largest independent natural gas producers. ETON CORP: Recalls Radio with Batteries Posing Fire Hazard ---------------------------------------------------------- Eton Corp., of Palo Alto, California, in cooperation with the U.S. Consumer Product Safety Commission, is recalling about 1,700 units of Eton E1XM-Model AM/FM/SW/XM-Ready Radios. The company said the battery in this radio can overheat and possibly rupture when using the AC adapter, posing a fire and burn hazard to consumers. Eton has received one report of a battery overheating. No injuries have been reported. The E1XM-model AM/FM/SW/XM-ready radios that are included in the recall have serial numbers from 3,067 through 5,642. The serial number is listed underneath the flap on the back of the unit. The Eton logo is located on the bottom left-hand corner of the unit. The XM radio logo and "e1" are written in the upper right corner of the radio. The unit is silver, and measures about 13- inches wide by 7.5-inches high by 2.5-inches deep. These portable radios were manufactured in India and are being sold at electronic stores and catalog, and on-line retailers from November 2004 through February 2006 for about $500. Picture of the recalled portable radio: http://www.cpsc.gov/cpscpub/prerel/prhtml06/06180.jpg Consumers are advised to stop using the recalled radios immediately, and call Eton Corp. for a refund or replacement product. For more information call Eton Corp. at (800) 872-2228 between 8 a.m. and 4:30 p.m. PT Monday through Friday, or visit the firm's Website: http://www.etoncorp.com EMESS DESIGN: Recalls Children's Night Lamp with Glass Window ------------------------------------------------------------- Emess Design Group LLC, of Ellwood City, Pennsylvania, in cooperation with the U.S. Consumer Product Safety Commission, is recalling about 9,500 units of Hampton Bay Transitional Collection Fire Truck and Bulldozer Accent Lamp with Night Lights. The company said the glass window of the fire truck and bulldozer night light can become dislodged, fall and shatter into small pieces. This poses a laceration hazard and a serious risk of injury if ingested by a small child. Emess Design group has received one report of the glass window of the lamp breaking in a store. No injuries have been reported. The recalled children's lamps have a red toy fire truck or yellow toy bulldozer base that sits on a 6-inch wide by 9.75- inch long hand-painted wood base. SKU No. 167-367 is printed on the bottom of the base of the fire truck lamp and SKU No. 167- 939 is printed on the bottom of the bulldozer lamp. The fire truck and bulldozer have glass windows. The overall assembled dimensions are about 12 inches wide by 20.5 high. "Made in China" is printed on the bottom of the lamps. Hampton Bay is printed on the box only. These lamps were manufactured in China and are being sold exclusively at The Home Depot stores nationwide from January 2006 through June 2006 for about $40. Pictures of the recalled lamps: http://www.cpsc.gov/cpscpub/prerel/prhtml06/06221.jpg Consumers are advised to stop using the recalled lamps immediately and return the item to The Home Depot store for a full refund. For additional information, contact Emess Design Group at (800) 678-2579 8 a.m. to 5 p.m. ET Monday through Friday or visit the firm's Web site: http://www.emessdesign.com EXELON CORP: Court Refuses to Dismiss Some Braidwood Suit Claims ---------------------------------------------------------------- Exelon Corp. remains a defendant in three class actions filed in state and federal courts in Illinois over allegations that it spilled more than six million gallons of tritium-laced water from its Braidwood Nuclear Power Plant into the surrounding community over a 10-year period and failed to notify residents and regulatory officials. On March 13, 2006, a class action was filed against the company, Exelon Generation Co. and Commonwealth Edison Co., as the prior owner of Braidwood, in U.S. District Court for the Northern District of Illinois on behalf of all persons who live or own property within 10 miles of Braidwood. The plaintiffs primarily seek: -- a court-supervised fund for medical monitoring for risks associated with alleged exposures to tritium; and -- compensation for diminished property values. Exelon filed a motion to dismiss the case, contending that the plaintiffs cannot meet the dose threshold required to maintain a public liability action under the Price-Anderson Act. This motion was denied. On March 14 and 23, 2006, 37 area residents filed two separate but identical lawsuits against the same defendants in the Circuit Court of Will County, Illinois alleging property contamination and seeking compensation for diminished property values. The company removed these cases to federal court, and all three cases were assigned to the same District Court judge. It has submitted its answer to the class action. The company's motions to dismiss the amended complaints in the other two lawsuits were denied in part on July 19, 2006. The court dismissed all claims premised on violations of Illinois environmental statutes. The company had a deadline to answer the other claims by Aug. 3, 2006. The court has set a schedule for a class certification motion and discovery for all three suits. The federal suit is "Duffin et al. v. Exelon Corp. et al., Case No. 1:06-cv-01382," filed in the U.S. District Court for the Northern District of Illinois under Judge Suzanne B. Conlon. Representing the plaintiffs is Nicholas Evans Sakellariou of McKeown, Fitzgerald, Zollner, Buck, Hutchison & Ruttle, 2455 Glenwood Avenue, Joliet, IL 60432, Phone: (815) 729-4800. GANNETT CO: ERISA Violations Suit Remains Pending in Colo. Court ---------------------------------------------------------------- Gannett Co., Inc. continues to face a class action filed in the U.S. District Court for the District of Colorado, alleging violations of the Employee Retirement Income Security Act. On Dec. 31, 2003, two employees of the company's television station KUSA in Denver filed the suit against the company and the Gannett Retirement Plan on behalf of themselves and other similarly situated individuals who participated in the Plan after Jan. 1, 1998, the date that certain amendments to the Plan took effect. The plaintiffs allege, among other things, that the current pension plan formula adopted in that amendment violated the age discrimination accrual provisions of the ERISA. The plaintiffs seek to have their post-1997 benefits recalculated and seek other equitable relief. The suit is "Wells, et al. v. Gannett Retire Plan, et al., Case No. 1:03-cv-02671-RPM," filed in the U.S. District Court for the District of Colorado under Judge Richard P. Matsch. Representing the plaintiffs are: (1) John Hathaway Evans, Jr. and Robert F. Hill of Hill & Robbins, P.C., 1441 - 18th Street #100, Denver, CO 80202, U.S.A, Phone: 303-296-8100, Fax: 303-296-2388, E-mail: johnevans@hillandrobbins.com and roberthill@hillandrobbins.com; and (2) Douglas R. Sprong of Korein Tillery, LLC, 701 Market Street #300, St. Louis, MO 63101, U.S.A, Phone: 314- 241-4844, Fax: 314-588-7036, E-mail: dsprong@koreintillery.com. Representing the defendants are: (i) Kerri Atencio, Michael S. Beaver and Parker Whitfield Dragovich of Holland & Hart, LLP, Phone: 719-475-6474 and 303-290-1600, Fax: 303-290-1606, E-mail: kjatencio@hollandhart.com, mbeaver@hollandhart.com and pdragovich@hollandhart.com; and (ii) Margaret A. Clemens of Nixon Peabody, LLP, Clinton Square, P.O. Box 31051, Rochester, NY 14603, U.S.A, Phone: 585-263-1453, Fax: 585-263-1600, E-mail: MClemens@nixonpeabody.com. GLOBAL HORIZONS: Court Certifies Thai Migrant Workers' H-2A Suit ---------------------------------------------------------------- U.S. Magistrate Judge Michael Leavitt of the U.S. District Court for the Eastern District of Washington granted class-action status to a suit filed by Yakima Valley farm Thai migrant workers against Los Angeles-based labor contractor Global Horizons, and president Mordechai Orian, the Associated Press reports. In June, Seattle law firm Stritmatter Kessler Whelan Withey Coluccio and the Center for Justice in Spokane initiated a lawsuit in the U.S. District Court for the Eastern District of Washington on behalf of three Thai migrant farm workers against Global Horizons and Mr. Orian (Class Action Reporter, June 16, 2006). The suit alleges the defendants violated the federal Fair Labor Standards Act, the state Farm Labor Contractors Act, state wage and contract laws. The suit further contends that while working in the Yakima Valley they -- Ratthapon Yapunya, Somkhit Nasee and Wisit Kampilo, who were hired to work at Valley Fruit Orchards of Wapato and Green Acre Farms of Harrah in 2004 and 2005 -- were underpaid, housed in substandard conditions and promised work that didn't materialize. The lawsuit alleged that the workers were not given a minimum of eight hours of work a day, five days a week at that hourly rate in violation of their agreements with Global Horizons, which offered workers an hourly wage set at $8.71. The judge ruled that three plaintiffs may proceed with the lawsuit for all Thai workers brought to the Yakima Valley in 2004 and Hawaii in 2004 and 2005 to harvest fruit under the federal H-2A guest-worker program, name of the temporary visa given to workers after employers have shown they cannot find U.S. workers for the job. There were about 170 Thai workers in the Yakima Valley in 2004 and about 90 in 2005. Global Horizons authorized one of its agents in Thailand, AACO International Recruiting Ltd., to find workers for the H-2A jobs. Under the rules of the H-2A program, employers are required to provide travel expenses, room and board, and pay what is known as an "adverse effect wage rate." The suit is "Perez-Farias et al v. Global Horizons Inc. et al., Case No. 2:05-cv-03061-MWL," filed in the U.S. District Court for the Eastern District of Washington under Judge Michael W. Leavitt. Representing the defendants are: (1) Howard W Foster of Johnson & Bell LTD - IL, 33 West Monroe Street, Suite 2700, Chicago, IL 60603-5404, Phone: 312-372-0770, Fax: 312-372-9818, E-mail: fosterh@jbltd.com; (2) Jeffrey Cole Loudon of Talbott Simpson and Davis P.S., 308 N 2nd Street, Yakima, WA 98901, Phone: 509-575- 7501, E-mail: jloudon@talbottlaw.com; (3) Paul Hamilton Beattie of Edgley & Beattie PS, 201 East D Street, Yakima, WA 98901, Phone: 509-248-1717, Fax: 15092481573, E-mail: hrappgray@aol.com. Representing the plaintiffs are: (1) Mirta Laura Contreras of Columbia Legal Services - YAK, 6 South Second Street, Suite 510, Yakima, WA 98901, Phone: 509-575-5593, E-mail: laura.contreras@columbialegal.org; (2) Lori A. Jordan Isley of Columbia Legal Services - YAK 6 South Second Street, Suite 510, Yakima, WA 98901, Phone: 509-575-5593, E-mail: lori.isley@columbialegal.org; (2) Devra Sigle Hermosilla of Paine Hamblen Coffin Brooke & Miller - SPO, 717 W Sprague Avenue, Suite 1200, Spokane, WA 99201-3503, Phone: 509-455-6000, E-mail: dhermosi@painehamblen.com; (3) Richard W Kuhling of Paine Hamblen Coffin Brooke & Miller - SPO, 717 W Sprague Avenue, Suite 1200, Spokane, WA 99201-3503, Phone: 509-455-6000, Fax: 15098380007, E-mail: rkuhling@painehamblen.com; and (4) Joachim Morrison of Columbia Legal Services - WEN, 200 Palouse Street, Suite 201, Wenatchee, WA 98801-2235, Phone: 509-662-9681, Fax: 15096629684, E-mail: joe.morrison@columbialegal.org. GMH COMMUNITIES: Faces Several Securities Fraud Suits in Pa. ------------------------------------------------------------ GMH Communities Trust is a defendant in several purported securities fraud class actions pending in the U.S. District Court for the Eastern District of Pennsylvania. On April 5, 2006, the company, Gary M. Holloway Sr., company chairman, president and chief executive officer; and Bradley W. Harris, the company's former chief financial officer, were named defendants in a class action complaint. The complaint states that the plaintiff has filed a federal class action on behalf of purchasers of the publicly traded securities of the company between Oct. 28, 2004 and March 10, 2006 (class period). The plaintiff seeks to pursue remedies under the U.S. Securities Act of 1933 and the U.S. Securities Exchange Act of 1934. Plaintiff alleges that defendants issued a series of false and misleading financial results regarding the company to the market during the class period, and more specifically, failed to disclose: -- that the company's earnings, net income and revenues were materially inflated and expenses were materially understated; -- that the company's funds from operations were materially inflated; -- that the company lacked adequate internal controls; -- that the company's reported financial results were in violation of generally accepted accounting principles, or Generally Accepted Accounting Principles; and -- that as a result of the foregoing, the company's financial results were materially inflated at all relevant times. Plaintiff alleges claims under Section 11 of the Securities Act with respect to all of the defendants; Section 12(a)(2) of the Securities Act with respect to the company; Section 15 of the Securities Act with respect to Mr. Holloway and Mr. Harris; Section 10(b) and Rule 10b-5 of the Exchange Act with respect to all of the defendants; and Section 20(a) of the Exchange Act with respect to Mr. Holloway and Mr. Harris. On April 11, 2006, April 20, 2006, April 27, 2006 and May 15, 2006, four additional class action complaints were filed with the court against the defendants by separate law firms, and additional complaints may be filed in the near future until the court has certified a class and a lead plaintiff has been named. Each of these additional filed complaints alleges the same claims against the defendants as described above with respect to the complaint filed on April 5, 2006, except that the complaint filed on April 20, 2006 restricts the class period to purchasers of the publicly traded securities of the company to the time period between May 5, 2005 and March 10, 2006. The first identified complaint is "Iris Martin, et al. v. GMH Communities Trust, et al.," filed in the U.S. District Court for the Eastern District of Pennsylvania. Plaintiff firms in this or similar case(s) are: (1) Berger & Montague, PC, 1622 Locust Street, Philadelphia, PA, 19103, Phone: 800.424.6690, Fax: 215.875.4604, E-mail: investorprotect@bm.net; (2) Brodsky & Smith, LLC, 11 Bala Avenue, Suite 39, Bala Cynwyd, PA, 19004, Phone: 610.668.7987, Fax: 610.660.0450, E-mail: esmith@Brodsky-Smith.com; (3) Chitwood Harley Harnes, LLP, 2300 Promenade II, 1230 Peachtree Street, N.E., Atlanta, GA, 30309, Phone: (888) 873-3999, Fax: (404) 876-4476, E-mail: attorney@chitwoodlaw.com; (4) Federman & Sherwood, 120 North Robinson, Suite 2720, Oklahoma City, OK, 73102, Phone: 405-235-1560, E-mail: wfederman@aol.com; (5) Finkelstein, Thompson & Loughran, 1050 30th Street, NW, Washington, DC, 20007, Phone: 202.337.8000, Fax: 202.337.8090, E-mail: contact@ftllaw.com; (6) Kahn Gauthier Swick, LLC, 650 Poydras St. Suite 2150, New Orleans, LA, 70130, Phone: (504) 455-1400, E-mail: lewis.kahn@kglg.com; (7) Law Offices of Brian M. Felgoise, P.C., Esquire at 261 Old York Road, Suite 423, Jenkintown, PA, 19046, Phone: 215.886.1900, E-mail: securitiesfraud@comcast.net; (8) Law Offices of Charles J. Piven, P.A., World Trade Center-Baltimore, 401 East Pratt Suite 2525, Baltimore, MD, 21202, Phone: 410.332.0030, E-mail: pivenlaw@erols.com; (9) Lerach Coughlin Stoia Geller Rudman & Robbins, LLP, 58 South Service Road, Suite 200, Melville, NY, 11747, Phone: 631.367.7100, Fax: 631.367.1173; (10) Motley Rice, LLC, One Georgia Center, 600 West Peachtree Street, Suite 800, Atlanta, GA, 30308, Phone: 1-800-768-4026, E-mail: webmaster@motleyrice.com; (11) Pomerantz Haudek Block Grossman & Gross, LLP, 100 Park Avenue, 26th Floor, New York, NY, 10017-5516, Phone: 212.661.1100, Fax: 212.661.8665, E-mail: info@pomerantzlaw.com; (12) Schatz & Nobel, P.C., 330 Main Street, Hartford, CT, 06106, Phone: 800.797.5499, Fax: 860.493.6290, E-mail: sn06106@AOL.com; and (13) Schiffrin & Barroway, LLP, 3 Bala Plaza E, Bala Cynwyd, PA, 19004, Phone: 610.667.7706, Fax: 610.667.7056, E- mail: info@sbclasslaw.com. HARLEY-DAVIDSON: Wis. Court Orders Securities Suit Consolidation ---------------------------------------------------------------- The U.S. District Court for the Eastern District of Wisconsin ordered the consolidation of several securities fraud class actions pending against Harley-Davidson, Inc. and certain of its officers. Initially, the company was faced with several shareholder class actions filed between May 18, 2005 and July 1, 2005. The suits named as defendants several company officers, including: -- Jeffrey L. Bleustein, -- James M. Brostowitz, -- R. Jon Flickinger, -- John A. Hevey, -- Ronald M. Hutchinson, -- Gail A. Lione, -- James A. McCaslin, -- W. Kenneth Sutton, Jr., -- Donna F. Zarcone, and -- James L. Ziemer The complaints allege securities law violations and seek unspecified damages relating generally to the company's April 13, 2005 announcement that it was reducing short-term production growth and planned increases of motorcycle shipments from last year's 317,000 units to a new 2005 target of 329,000 units compared to its original target of 339,000 units. On Feb. 14, 2006, the court ordered the actions consolidated and appointed lead plaintiffs and co-lead plaintiffs' counsel. The first identified complaint in the litigation is "Raymond Kadagian, et al. v. Harley-Davidson, Inc., et al., Case No. 05- CV-00547," filed in the U.S. District Court for the Eastern District of Wisconsin under Judge Charles N. Clevert, Jr. Representing the plaintiffs are: (1) Darren J. Robbins of Lerach Coughlin Stoia Geller Rudman & Robbins, LLP, 655 W Broadway - Ste. 1900, San Diego, CA 92101, Phone: 619-231-1058, Fax: 619-231- 7423; and (2) Guri Ademi of Ademi & O'Reilly, LLP, 3620 E. Layton Ave., Cudahy, WI 53110, Phone: 414-482-8000, Fax: 414- 482-8001, E-mail: gademi@ademilaw.com. Representing the defendants are: (i) Sari M. Alamuddin of Morgan Lewis & Bockius, LLP, 77 W. Wacker Dr. - 5th Fl., Chicago, IL 60601, Phone: 312- 324-1158, Fax: 312-324-1001, E-mail: salamuddin@morganlewis.com; and (2) Nancy J. Sennett of Foley & Lardner, LLP, 777 E. Wisconsin Ave., Milwaukee, WI 53202-5300, Phone: 414- 297-5522, Fax: 414-297-4900, E-mail: nsennett@foley.com. HARLEY-DAVIDSON: Wis. Court Orders Consolidation of ERISA Suit -------------------------------------------------------------- The U.S. District Court for the Eastern District of Wisconsin ordered the consolidation of a purported class action over allegations of Employee Retirement Income Security Act violations against Harley-Davidson, Inc. with other pending federal securities and derivatives actions against the company for administrative purposes. The court made the order on Feb. 15. Filed on Aug. 25, 2005, the suit was brought against the company, the Administrative Committee of Harley-Davidson, Inc., and these company employees, officers, and directors: -- Harold A. Scott, -- James M. Brostowitz, -- James L. Ziemer, -- Gail A. Lione, -- Barry K. Allen, -- Richard I. Beattie, -- Jeffrey L. Bleustein, -- George H. Conrades, -- Judson C. Green, -- Donald A. James, -- Sara L. Levinson, -- George L. Miles, Jr., and -- James A. Norling In general, the ERISA complaint includes factual allegations similar to those in the shareholder class actions and alleges on behalf of participants in certain Harley-Davidson retirement savings plans that the plan fiduciaries breached their ERISA fiduciary duties. The suit is "Bosman v. Harley-Davidson Inc., et al., Case No. 2:05-cv-00912-CNC," filed in the U.S. District Court for the Eastern District of Wisconsin under Judge Charles N. Clevert, Jr. Representing the plaintiffs are: (1) Noah M. Golden-Krasner of Law Offices of Noah Golden- Krasner, 354 W. Main St., Madison, WI 53703, Phone: 608-441-8924, Fax: 608-442-9494, E-mail: noah@mainstreetjustice.com; (2) Thomas J. McKenna of Gainey & McKenna, 485 5th Ave. - 3rd Fl., New York, NY 10017, Phone: 212-983-1300; and (3) Mark C. Rifkin of Wolf Haldenstein Adler Freeman & Herz, LLP, 270 Madison Ave. - 10th Fl., New York, NY 10016, Phone: 212-545-4762, Fax: 212-545-4653, E-mail: rifkin@whafh.com. Representing the defendants are: (i) Charles C. Jackson of Morgan Lewis & Bockius, LLP, 77 W. Wacker Dr. - 5th Fl., Chicago, IL 60601, Phone: 312- 324-1156, Fax: 312-324-1001, E-mail: charles.jackson@morganlewis.com; and (ii) Nancy J. Sennett and Rebecca E. Wickhem of Foley & Lardner, LLP, 777 E. Wisconsin Ave., Milwaukee, WI 53202-5300, Phone: 414-297-5522 and 414-297-5681, Fax: 414-297-4900 and 414-297-4900, E-mail: nsennett@foley.com and rwickhem@foley.com. HARLEY-DAVIDSON: Wis. Supreme Court to Review Cam Bearing Suit -------------------------------------------------------------- The Wisconsin Supreme Court will review a consumer class action filed against Harley-Davidson, Inc. over its 1999 and early-2000 model year Harley-Davidson motorcycles equipped with Twin Cam 88 and Twin Cam 88B engines. In January 2001, the company, on its own initiative, notified each owner of 1999 and early-2000 model year Harley-Davidson motorcycles equipped with Twin Cam 88 and Twin Cam 88B engines that the company was extending the warranty for a rear cam bearing to 5 years or 50,000 miles. Subsequently, on June 28, 2001, a putative nationwide class action was filed against the company in state court in Milwaukee County, Wisconsin. The suit was amended Sept. 28, 2001. The complaint alleged that this cam bearing is defective and asserted various legal theories. The complaint sought unspecified compensatory and punitive damages for affected owners, an order compelling the company to repair the engines, and other relief. On Feb. 27, 2002, the company's s motion to dismiss the amended complaint was granted by the court and the amended complaint was dismissed in its entirety. An appeal was filed with the Wisconsin Court of Appeals. On April 12, 2002, the same attorneys filed a second putative nationwide class action against the company in state court in Milwaukee County, Wisconsin relating to this cam bearing issue and asserting different legal theories than in the first action. The complaint sought: -- unspecified compensatory damages; -- an order compelling the company to repair the engines; and -- other relief. On Sept. 23, 2002, the company's motion to dismiss was granted by the court, the complaint was dismissed in its entirety, and no appeal was taken. On Jan. 14, 2003, the Wisconsin Court of Appeals reversed the trial court's Feb. 27, 2002 dismissal of the complaint in the first action, and the company petitioned the Wisconsin Supreme Court for review. On March 26, 2004, the Wisconsin Supreme Court reversed the Court of Appeals decision and dismissed the remaining claims in the action. On April 12, 2004, the same attorneys filed a third action in the state court in Milwaukee County, on behalf of the same plaintiffs from the action dismissed by the Wisconsin Supreme Court. The court dismissed this third action on July 26, 2004. In addition, the plaintiffs in the original case moved to reopen that matter and amend the complaint to add new causes of action, which motion was denied on Aug. 23, 2004. The plaintiffs filed a notice of appeal to the Wisconsin Court of Appeals from the latter dismissal. On Sept. 9, 2004, Milwaukee County Circuit Court refused to allow the reopening or amendment. Plaintiffs again appealed to the Wisconsin Court of Appeals, and on Dec. 13, 2005, the Court of Appeals again reversed the trial court. On Jan. 12, 2006, the company filed a petition for review with the Wisconsin Supreme Court, which was granted. The Wisconsin Supreme Court will hear this latest appeal, according to the company's July 31, 2006 Form 10-Q filing with the U.S. Securities and Exchange Commission for the period ended June 25, 2006. The company believes that the 5-year/50,000 mile warranty extension it announced in January 2001 adequately addressed the condition for affected owners, and the company intends to continue to vigorously defend this matter. HARTFORD FINANCIAL: Faces Multidistrict Litigation in N.J. Court ---------------------------------------------------------------- The Hartford Financial Services Group is a defendant in a multidistrict litigation over alleged insurance fraud in the U.S. District Court for the District of New Jersey, according to the company's July 27, 2006 Form 10-Q filing with the U.S. Securities and Exchange Commission for the period ended June 30, 2006. The two consolidated amended complaints filed under the multidistrict litigation relate to its conduct in connection with the sale of property-casualty insurance, and with the sale of group benefits products. The company and several of its subsidiaries are named in both complaints. The actions assert, on behalf of a class of persons who purchased insurance through the broker defendants, claims under the Sherman Act, the Racketeer Influenced and Corrupt Organizations Act, state law, and in the case of the group benefits complaint, claims under Employee Retirement Income Security Act arising from conduct similar to that alleged in New York Attorney General Eliot Spitzer's civil complaint over insurance fraud. The class period alleged is 1994 through the date of class certification, which has not yet occurred. The complaints seek treble damages, injunctive and declaratory relief, and attorneys' fees. The company also has been named in two similar actions filed in state courts, which the defendants have removed to federal court. Those actions currently are transferred to the court presiding over the multidistrict litigation. HSBC FINANCE: Discovery in Ill. Securities Fraud Suit Extended -------------------------------------------------------------- The discovery schedule in the consolidated securities class action pending in the U.S. District Court for the Northern District of Illinois against HSBC Finance Corp. and other defendants was extended indefinitely. In August 2002, the company restated previously reported consolidated financial statements. The restatement related to certain MasterCard and Visa co-branding and affinity credit card relationships and a third party marketing agreement, which were entered into between 1992 and 1999. All were part of the company's Credit Card Services segment. In consultation with its prior auditors, Arthur Andersen LLP, the company treated payments made in connection with these agreements as prepaid assets and amortized them in accordance with the underlying economics of the agreements. Its current auditor, KPMG LLP, advised the company that, in its view, these payments should have either been charged against earnings at the time they were made or amortized over a shorter period of time. The restatement resulted in a $155.8 million, after-tax, retroactive reduction to retained earnings at Dec. 31, 1998. As a result of the restatement, and other corporate events, including, e.g., the 2002 settlement with 50 states and the District of Columbia relating to real estate lending practices, HSBC Finance Corp., and its directors, certain officers and former auditors, have been involved in various legal proceedings, some of which purport to be class actions. A number of these actions allege violations of federal securities laws, were filed between August and October 2002, and seek to recover damages in respect of allegedly false and misleading statements about the company's common stock. These legal actions have been consolidated into a single purported class action, "Jaffe v. Household International, Inc., et al., No. 02 C 5893 (N.D. Ill., filed Aug. 19, 2002)." A consolidated and amended complaint was filed on March 7, 2003. On Dec. 3, 2004, the court signed the parties' stipulation to certify a class with respect to the claims brought under Section 10 and Section 20 of the U.S. Securities Exchange Act of 1934. The parties stipulated that plaintiffs will not seek to certify a class with respect to the claims brought under Section 11 and Section 15 of the Securities Act of 1933 in this action or otherwise. The amended complaint purports to assert claims under the federal securities laws, on behalf of all persons who purchased or otherwise acquired the company's securities between Oct. 23, 1997 and Oct. 11, 2002, arising out of alleged false and misleading statements in connection with the company's sales and lending practices, the 2002 state settlement agreement referred to above, the restatement and the HSBC merger. The amended complaint, which also names as defendants Arthur Andersen LLP, Goldman, Sachs & Co., and Merrill Lynch, Pierce, Fenner & Smith, Inc., fails to specify the amount of damages sought. In May 2003, the company, and other defendants, filed a motion to dismiss the complaint. On March 19, 2004, the court granted in part, and denied in part the defendants' motion to dismiss the complaint. The court dismissed all claims against Merrill Lynch, Pierce, Fenner & Smith, Inc. and Goldman Sachs & Co. The court also dismissed certain claims alleging strict liability for alleged misrepresentation of material facts based on statute of limitations grounds. The claims that remain against some or all of the defendants essentially allege the defendants knowingly made a false statement of a material fact in conjunction with the purchase or sale of securities, that the plaintiffs justifiably relied on such statement, the false statement(s) caused the plaintiffs' damages, and that some or all of the defendants should be liable for those alleged statements. On Feb. 28, 2006, the court also dismissed all alleged Section 10 claims that arose prior to July 30, 1999, shortening the class period by 22 months. Discovery schedule provided that all factual discovery must be completed by May 12, 2006. While expert witness discovery must be completed by July 24, 2006. The discovery schedule has been extended and no final cut-off has been established, according to the company's July 31, 2006 Form 10-Q filing with the U.S. Securities and Exchange Commission for the period ended June 30, 2006. Separately, one of the defendants, Arthur Andersen, entered into a settlement of the claims against Andersen. This settlement received court approval in April 2006. The suit is "Jaffe v. Household Intl Inc, et al., case no. 1:02- cv-05893," filed in the U.S. District Court for the Northern District of Illinois under Judge Ronald A. Guzman. Representing the plaintiffs is Gary L. Specks, Kaplan, Fox & Kilsheimer LLP, 203 North LaSalle Street, Suite 2100, Chicago, IL 60601, Phone: (312) 558-1584. JOURNAL SENTINEL: Court Gives Preliminary OK to Subscribers Suit ---------------------------------------------------------------- The Milwaukee County Circuit Court gave preliminary approval to the settlement of a class action against Journal Sentinel, Inc., a subsidiary of Journal Communications, Inc., over the company's reporting of the subscriber base of the Milwaukee Journal Sentinel. On April 25, 2005, a lawsuit was filed against Journal Sentinel, Inc., a subsidiary of Journal Communications, Inc., in Milwaukee County Circuit Court. The suit was filed by Shorewest Realtors, which sought to bring a class action on behalf of Milwaukee Journal Sentinel advertisers. It alleges that the newspaper improperly inflated its circulation numbers from 1996 onward. Shorewest sought disgorgement or restitution by Journal Sentinel of alleged improperly collected charges (with interest), plus an unspecified amount of damages. Journal Sentinel, Inc. filed a motion to dismiss the plaintiff's claims on July 20, 2005 and the court subsequently dismissed Shorewest's contract-base cause of action. On May 30, 2006, the parties filed a proposed settlement agreement with the court. Although Journal Sentinel and its counsel continue to believe the claims lack merit, and Shorewest and its counsel continue to believe the claims have merit, by agreeing to a settlement, the parties avoid the costs and risks of additional litigation on terms that are mutually agreeable. The settlement is on behalf of a proposed class of advertisers similar to Shorewest who placed ads in the Milwaukee Journal Sentinel between Jan. 1, 1999 and Dec. 31, 2005. The proposed settlement received preliminary approval from the court on June 16, 2006. Journal Sentinel publishes the flagship Milwaukee Journal Sentinel newspaper as well as a range of other print and electronic products, primarily serving southeast Wisconsin people and businesses. In addition to the daily and Sunday newspaper, Journal Sentinel produces Web products and services through its Journal Interactive division, including JSOnline.com and PackerInsider.com. For more information, contact Sara Leuchter- Journal (Investor Relations), Phone: 414-224-2633, E-mail: swilkins@journalcommunications.com LOUSIANA: Livingston Parish School Board Faces Sex-Bias Lawsuit --------------------------------------------------------------- The American Civil Liberties Union and the ACLU of Louisiana filed a lawsuit on behalf of 13-year-old eighth grader Michelle Selden who wants to have the same educational opportunities as boys. She wants to stop the Livingston Parish School Board from segregating students on the basis of sex in the coming school year. Joe Cook, executive director of ACLU of Louisiana said that school officials cannot ignore the law and sex segregate classes based on broad gender stereotypes about psychological differences between boys and girls. He adds, "As an example, they have bought into some bizarre ideas like 'boys need to practice pursuing and killing prey, while girls need to practice taking care of babies.'" At the end of the school year last May, the parents of current and future students at Southside Junior High were informed of the school's decision to immediately halt co-education and instead, force the children into single-sex classrooms. The change came without community involvement or opportunity for parents to participate in the decision making process. With the new policy, students allegedly have no choice about a mandatory assignment to sex-segregated classrooms. There is no co- educational option. Mandatory single-sex education has long been decried as creating a divisive system with the potential to harm both boys and girls, a statement from ACLU states. The educational theories that promote such a split are too often based on faulty research and radically inaccurate gender stereotypes, the statement said. Yet despite such programs being declared unlawful, Southside has decided to pursue such a course of action. According to ACLU, "the end result is that children of both sexes will be harmed." For instance, one of the sex segregation proponents the school district has relied on asserts that teachers should not look male students in the eye or smile at them. Another asserts that girls are only adept at math theory during the few days in their menstrual cycle while their estrogen is surging." "I have always had boys in my classes before when I have gone to school," according to Ms. Selden, who is bringing the lawsuit. "I think that having boys in the class has not made it hard for me to learn. I think that boys and girls should be treated the same way by teachers and that it is unfair for girls to be taught one way and boys to be taught another." The lawsuit comes on the heels of a demand letter sent last week to Southside officials in the Livingston Parish School District. The letter called for an immediate stop to plans to segregate students on the basis of sex in the coming school year. The school district has said that they do not intend to reverse the decision to segregate the students. " "We all want to ensure that our children have access to the best education possible," said Emily Martin of the ACLU Women's Rights Project. "Mandatory single-sex education is counter to that principle, and it's the kids who bear the brunt of these discriminatory policies." A copy of the ACLU complaint is available free of charge at: http://ResearchArchives.com/t/s?ed5 The suit is "Selden v. Livingston Parish School Board et al., Case No. 3:06-cv-00553-FJP-DLD," filed in the U.S. District for the Middle District of Louisiana under Judge Frank J. Polozola, with referral to Judge Docia L. Dalby. Representing the plaintiffs are: (1) Emily J. Martin of the American Civl Liberties Union Foundation, 125 Broad Street, 18th Floor, New York, NY 10004, Phone: 212-549-2615, Fax: 212-549-2580; and (2) Ronald Lawrence Wilson, 932 Washington Avenue, New Orleans, LA 70130, Phone: 504-525-4361, Fax: 504-525- 4380, E-mail: cabral2@aol.com. Representing the defendants is Carey Thompson Jones, P.O. Box 700, 8371 Rushing Road E, Denham Springs, LA 70727-0700, Phone: 225-664-0077, Fax: 225-664-9477. NORTHERN TRUST: Subsidiary Settles Enron Suit in Tex. for $37.5M ---------------------------------------------------------------- The U.S. District Court for the Southern District of Texas gave final approval to the settlement of an Enron-related class action filed against several companies, including a subsidiary of Northern Trust Corp. Individual participants in the employee pension benefit plans sponsored by Enron Corp. sued various corporate entities and individuals, including the Northern Trust's subsidiary in its capacity as the former directed trustee of the Enron Corp. Savings Plan and former service-provider for the Enron Corp. Employee Stock Ownership Plan. The lawsuit made claims, inter alia, for breach of fiduciary duty to the plan participants, and sought equitable relief and monetary damages in an unspecified amount against the defendants. On Sept. 30, 2003, the court denied the subsidiary's motion to dismiss the complaint as a matter of law. In an amended consolidated complaint filed on Jan. 2, 2004, plaintiffs continued to assert claims against the bank and other defendants under the Employee Retirement Income Security Act of 1974, seeking a finding that defendants are liable to restore to the benefit plans and the plaintiffs hundreds of millions of dollars of losses allegedly caused by defendants' alleged breaches of fiduciary duty. On March 31, 2006, the Northern Trust announced that the subsidiary had reached an agreement with counsel for the plaintiffs in the Enron lawsuit to seek approval of a settlement of that class action at $37.5 million, all of which will be paid by the Corporation's insurance carriers. On July 24, 2006, the court gave final approval to the settlement. As part of the settlement, Northern Trust gave up any claim it had against Enron, presently in bankruptcy, arising out of or relating to the Enron employee benefit plans. OHIO: Youngstown Allowed to Intervene in Mahoning Jail Lawsuit -------------------------------------------------------------- Judge David D. Dowd, Jr. of the U.S. District Court for the Northern District of Ohio granted a motion filed by the city of Youngstown to intervene in a class action over operations at Mahoning County jail, according to Vindy.com. In March 2005, Judge Dowd found that the lockup was overcrowded and unsafe. To avoid jail overcrowding, Judge Dowd, Judge Dan A. Polster and U.S. 6th Circuit Court of Appeals Judge Alice M. Batchelder set plans to issue orders concerning possible inmate releases. However, the City of Youngstown opposed any existing or future prisoner release orders and subsequently filed a motion to intervene in the case. Federal judges rejected the attempt on the city's failure to file a legal motion setting forth a claim or defense for which intervention is sought. Youngstown renewed its bid to intervene on July 27. It included in its motion a resolution allowing the city law department to oppose release of prisoners that judges have ordered held in the jail. On Aug. 2, Judge Dowd signed an order permitting the city to intervene. Case Background The suit was filed on Nov. 14, 2003 against the County of Mahoning, Dave Ludt, Edward J. Reese, Randall A. Wellington, and Vicki Allen Sherlock. Named as plaintiffs are James Joseph Mancini, Joshua Baird, Kevin Whitacker, Leland Scott, Maurice Barnes, Mike Hamad, Nathaniel Roberts, and Rodney Gray The suit is "Roberts, et al. v. County of Mahoning, Ohio, A Local Government Entity, et al., Case No. 4:03-cv-02329-DDD," filed in the U.S. District Court for the Northern District of Ohio under Judge David D. Dowd, Jr. Representing the plaintiffs are Robert P. Armbruster and Thomas Kelley of Armbruster, Kelley, Kot, Honeck & Baker, Ste. 720, 159 South Main Street, Akron, OH 44308, Phone: 330-434-2113, Fax: 330-434-2158, E-mail: robattarm@aol.com and tkelley1@neo.rr.com. Representing the defendants is Sharon K. Hackett, Office of the Prosecuting Attorney, Mahoning County, 120 Market Street, Youngstown, OH 44503, Phone: 330-740-2330, Fax: 330-740-2366. Representing the Intervenor is Anthony J. Farris, City of Youngstown, Department of Law, 26 South Phelps Street, Youngstown, OH 44503, Phone: 330-742-8874, Fax: 330-742-8867, E- mail: ajf@cityofyoungstownoh.com. ORKIN EXTERMINATING: Faces Personal Injury Suits in Fla., Ga. ------------------------------------------------------------- Orkin Exterminating Co. is a defendant in a number of lawsuits that allege the company damaged plaintiffs as a result of its services. Some lawsuits or arbitrations have been filed, including, "Ernest W. Warren and Dolores G. Warren, et al. v. Orkin Exterminating Co., Inc., et al.," and "Francis D. Petsch, et al. v. Orkin Exterminating Company, Inc., et al.," in which the plaintiffs are seeking certification of a class. The cases originate in Georgia and Florida. In another, case, "Cynthia Garrett v. Orkin, Inc.," an arbitration originating in Florida in which the plaintiff was seeking certification of a class, the arbitrators, in July 2006, issued a ruling denying certification of the class. Atlanta-based Orkin, Inc. -- http://www.orkin.com-- is an industry leader in essential pest control services and protection against termite damage, rodents and insects in the U.S., Canada, Mexico, Panama and Costa Rica. For more information, contact Martha Craft, Orkin, Inc. Media Contact, Phone: 404-888-2217.1 RENT-A-CENTER INC: Court Nixes Plaintiffs Request for Review ------------------------------------------------------------ The California Court of Appeals denied plaintiffs' appeal of a ruling by the California Superior Court for Los Angeles that refuses to remove the trial judge handling the purported class action alleging wage and hour law violations against Rent-A- Center, Inc. Two suits "Jeremy Burdusis, et al. v. Rent-A-Center, Inc., et al." and "Israel French, et al. v. Rent-A-Center, Inc." were initially filed in October 2001. They allege that the company violated various provisions of state law regarding overtime, lunch and work breaks, and that the company failed to pay all wages due to its California employees. The same law firm seeking to represent the purported class in "Pucci" is seeking to represent the purported class in "Burdusis." The "Burdusis" and "French" proceedings are pending before the same judge in California. On March 24, 2003, the "Burdusis" court denied the plaintiffs' motion for class certification in that case, which the company views as a favorable development in that proceeding. On April 25, 2003, the plaintiffs in "Burdusis" filed a notice of appeal of that ruling, and on May 8, 2003, the "Burdusis" court, at its request, stayed further proceedings in "Burdusis" and "French" pending the resolution on appeal of the court's denial of class certification in "Burdusis." In June 2004, the "Burdusis" plaintiffs filed their appellate brief. The company's response brief was filed in September 2004, and the "Burdusis" plaintiffs filed their reply in October 2004. On Feb. 9, 2005, the California Court of Appeals reversed and remanded the trial court's denial of class certification in "Burdusis" and directed the trial court to reconsider its ruling in light of two other recent appellate court decisions, including the opinions of the California Supreme Court in "Sav- On Drugs Stores, Inc. v. Superior Court," and of the California appeals court in "Bell v. Farmers Insurance Exchange." After remand, the plaintiffs filed a motion with the trial court seeking to remove from the case the trial court judge who previously denied their motion for class certification. The trial court denied the motion. In response, plaintiffs' filed a petition for writ of mandate with the California Court of Appeals requesting review of the trial court's decision. The California Court of Appeals heard oral arguments in this matter on Aug. 29, 2005, and ruled against the plaintiffs, denying the requested relief. The case is now being returned to the trial court as previously ordered. Rent-A-Center, Inc., (NASDAQ/NNM: RCII), headquartered in Plano, Texas, operates 2,762 company-owned stores nationwide and in Canada and Puerto Rico. For more information, contact David E. Carpenter, Phone: 972- 801-1214, E-mail: dcarpenter@racenter.com. RENT-A-CENTER INC: "Colon" Attorneys Want to Add New Plaintiff -------------------------------------------------------------- Plaintiffs attorneys in the class action, "Colon v. Thorn Americas, Inc.," which was filed in New York against Rent-A- Center, Inc. seek to add another plaintiff to the case. The original plaintiff filed the class action in November 1997 in New York state court. The company in connection with the Thorn Americas, Inc. acquisition assumed this matter. The plaintiff acknowledges that rent-to-own transactions in New York are subject to the provisions of New York's Rental Purchase Statute but contends the Rental Purchase Statute does not provide the company immunity from suits for other statutory violations. Plaintiff alleges the company has a duty to disclose effective interest under New York consumer protection laws, and seeks damages and injunctive relief for failure to do so. The suit also alleges violations relating to excessive and unconscionable pricing, late fees, harassment, undisclosed charges, and the ease of use and accuracy of payment records. In the prayer for relief, the plaintiff requests class certification, injunctive relief requiring the company to cease certain marketing practices and price rental purchase contracts in certain ways, unspecified compensatory and punitive damages, rescission of the class members contracts, an order placing in trust all moneys received by the company in connection with the rental of merchandise during the class period, treble damages, attorney's fees, filing fees and costs of suit, pre- and post- judgment interest, and any further relief granted by the court. Plaintiff has not alleged a specific monetary amount with respect to the request for damages. The proposed class includes all New York residents who were party to the company's rent-to- own contracts from Nov. 26, 1994. In November 2000, following interlocutory appeal by both parties from the denial of cross-motions for summary judgment, the company obtained a favorable ruling from the Appellate Division of the State of New York, dismissing the plaintiff's claims based on the alleged failure to disclose an effective interest rate. The plaintiff's other claims were not dismissed. Plaintiff moved to certify a statewide class in December 2000. The court heard the plaintiff's class certification motion on Nov. 7, 2001 and, on Sept. 12, 2002, the court issued an opinion denying in part and granting in part the plaintiff's requested certification. The opinion grants certification as to all of the plaintiff's claims except the plaintiff's pricing claims pursuant to the Rental Purchase Statute, as to which certification was denied. The parties have differing views as to the effect of the court's opinion, and accordingly, the court granted the parties permission to submit competing orders as to the effect of the opinion on the plaintiff's specific claims. Both proposed orders were submitted to the court on March 27, 2003, and on May 30, 2003, the court held a hearing regarding such orders. No clarifying order has yet been entered by the court. From June 2003 until May 2005, there was no activity in this case. On May 18, 2005, the company filed a motion to dismiss the plaintiff's claim and to decertify the class, based upon the plaintiff's failure to schedule her claim in this matter in her earlier voluntary bankruptcy proceeding. Plaintiff opposed the motion and asked the court to grant it an opportunity to find a substitute class representative in the event the court determined Ms. Colon was no longer adequate. On Jan. 17, 2006, the court issued an order denying that motion, but noted that no motion to intervene to add additional class representatives had been filed. On March 14, 2006, plaintiffs' counsel filed a motion seeking leave to intervene Shaun Kelly as an additional class representative. In response to plaintiffs' motion, the court ordered the parties to confer regarding a possible mediation and ruled that the company could depose Mr. Kelly before filing any objection to his intervention. Plaintiffs' counsel has not responded to the company's request to schedule Mr. Kelly's deposition. If the court ultimately allows Mr. Kelly to intervene and enters a final certification order, the company intends to pursue an interlocutory appeal of such certification order. RENT-A-CENTER INC: Continues to Face Labor Lawsuits in Calif. ------------------------------------------------------------- Rent-A-Center, Inc. remains a defendant in two labor violations suits that were coordinated on March 7, 2005 before the Los Angeles County Superior Court. One of the suits, "Eric Shafer, et al. v. Rent-A-Center, Inc.," is a state-wide class action originally filed on May 20, 2002, in the Superior Court of California for Los Angeles County. The other case "Victor E. Johnson, et al. v. Rent-A-Center, Inc.," was filed on Feb. 24, 2004, in the Orange County Superior Court. Plaintiffs in these actions allege that the company improperly classified its California store managers as exempt from overtime under California wage and hour law and failed to pay them overtime. In addition, they allege that the company failed to provide its California store managers with meal and rest periods, failed to pay store managers overtime due when their employment ended, and engaged in unfair business practices. Plaintiffs' seek to recover back overtime wages and accompanying waiting time penalties, civil penalties under California Labor Code Section 2699, certain injunctive relief and attorneys fees. On July 15, 2005, plaintiffs filed their motion for class certification. The company opposed plaintiffs' motion. The hearing on plaintiffs' motion for class certification was held on May 12, 2006. On June 23, 2006, the court granted class certification as to plaintiffs' claims for back overtime wages and accompanying waiting time penalties, and as to plaintiffs' unfair business practices claim. The court denied class certification as to plaintiffs' meal and rest period claims and as to plaintiffs' claim for civil penalties under California Labor Code Section 2699. Plaintiffs assert that the class includes all store managers employed by the company in California since September 1998, which they estimate to be 700 to 1,000 members. Equivalent hourly rates for annual salaries paid to the class members ranged from approximately $16.83 to $31.25 per hour based on a 40-hour workweek. Plaintiffs assert that store managers were required to work approximately 10-20 hours of overtime per week. Overtime wages would be calculated at 1.5 times the hourly rate. In addition, California law provides for a waiting time penalty in the amount of thirty days' compensation when all compensation due to an employee is not paid upon separation. The court's class certification ruling is procedural only and does not address the merits of plaintiffs' claims. Rent-A-Center, Inc., (NASDAQ/NNM: RCII), headquartered in Plano, Texas, operates 2,762 company-owned stores nationwide and in Canada and Puerto Rico. For more information, contact David E. Carpenter, Phone: 972- 801-1214, E-mail: dcarpenter@racenter.com. RENT-A-CENTER INC: Mulls Appeal of N.J. Court Ruling in "Perez" --------------------------------------------------------------- Rent-A-Center, Inc. is considering an appeal to the U.S. Supreme Court in relation to the Supreme Court of New Jersey's reinstatement of certain claims made by a plaintiff against the company in the putative class action, "Hilda Perez v. Rent-A- Center, Inc." The suit was filed in the Superior Court, Law Division, Camden County, New Jersey on March 21, 2003. It arose out of several rent-to-own contracts Ms. Perez entered into with the company. The requested class period is April 23, 1999 to the present. In her amended complaint, Ms. Perez alleges on behalf of herself and a class of similarly situated individuals that the rent-to- own contracts she entered into with the company violated New Jersey's Retail Installment Sales Act (RISA) and, as a result, New Jersey's Consumer Fraud Act because such contracts imposed a time price differential in excess of the 30% per annum interest rate permitted under New Jersey's criminal usury statute. Ms. Perez alleges that RISA incorporates the 30% interest rate limit, limiting time price differentials to 30% per annum. Ms. Perez seeks reimbursement of the excess fees and/or interest contracted for, charged and collected, together with treble damages, and an injunction compelling the company to cease the alleged violations. She seeks pre-judgment and post-judgment interest, together with attorneys' fees and costs and disbursements. Following the filing of her amended complaint, the company filed a counterclaim to recover the merchandise retained by Ms. Perez after she ceased making rental payments. Ms. Perez answered the counterclaim, denying liability and claiming entitlement to the items she rented from the company. In August 2003, Ms. Perez moved for partial summary judgment and the company cross-moved for summary judgment. In January 2004, the trial court held that rent-to-own transactions are not covered by RISA nor subject to the interest rate limit in New Jersey's criminal usury statute. The court granted the company's cross-motion, dismissing Ms. Perez's claims under RISA and the CFA. Ms. Perez then appealed to the Superior Court of New Jersey, Appellate Division. Oral argument before the Appellate Division occurred in December 2004, and in February 2005 the Appellate Division rejected Ms. Perez's arguments and ruled in the company's favor on all of her claims. Ms. Perez subsequently appealed to the Supreme Court of New Jersey, who heard oral arguments in November 2005. On March 15, 2006, the Supreme Court of New Jersey reversed the judgment of the trial court and the Appellate Division and remanded the case to the trial court for reinstatement of Ms. Perez's complaint and for further proceedings. In its decision, the Supreme Court held that rent-to-own contracts in New Jersey are "retail installment contracts" under RISA, and that RISA incorporates the 30% interest rate cap in New Jersey's criminal usury statute. The court rejected the company's legal arguments and reinstated Ms. Perez's claims under RISA and the CFA. The company then filed a motion for reconsideration with the Supreme Court of New Jersey, and in response, the court issued an order on July 10, 2006 stating that the March 15, 2006 decision is prospective, except that it applies to plaintiff and, if the trial court certifies a class, to the members of the class. The company is currently considering an appeal to the U.S. Supreme Court. Such an appeal must be filed no later than Oct. 9, 2006. Rent-A-Center, Inc., (NASDAQ/NNM: RCII), headquartered in Plano, Texas, operates 2,762 company-owned stores nationwide and in Canada and Puerto Rico. For more information, contact David E. Carpenter, Phone: 972- 801-1214, E-mail: dcarpenter@racenter.com. RENT-A-CENTER INC: Tex. Court Mulls Stock Suit Certification ------------------------------------------------------------ The U.S. District Court for the Eastern District of Texas has yet to rule on the motion for class certification of the securities lawsuit filed against Rent-A-Center, Inc. and certain of its current and former officers and directors Filed on Jan. 4, 2002, the putative class action, "Terry Walker, et al. v. Rent-A-Center, Inc., et al.," alleged that the defendants violated Sections 10(b) and/or Section 20(a) of the U.S. Securities Exchange Act and Rule 10b-5 promulgated thereunder by issuing false and misleading statements and omitting material facts regarding the company's financial performance and prospects for the third and fourth quarters of 2001. The complaint purported to be brought on behalf of all purchasers of the company's common stock from April 25, 2001 through Oct. 8, 2001 and sought damages in unspecified amounts. The court later consolidated similar complaints with the "Walker" suit in October 2002. On Nov. 25, 2002, the lead plaintiffs in the "Walker" suit filed an amended consolidated complaint, which added certain of the company's outside directors as defendants to the Exchange Act claims. The amended complaint also added additional claims that the company, and certain of its current and former officers and directors, violated various provisions of the Securities Act as a result of alleged misrepresentations and omissions in connection with an offering in May 2001 and also added the managing underwriters in that offering as defendants. On Feb. 7, 2003, the company, along with certain officer and director defendants, filed a motion to dismiss the matter as well as a motion to transfer venue. In addition, the company's outside directors named in the matter separately filed a motion to dismiss the Securities Act claims on statute of limitations grounds. On Feb. 19, 2003, the underwriter defendants also filed a motion to dismiss the matter. The plaintiffs filed response briefs to these motions, to which the company replied on May 21, 2003. A hearing was held by the court on June 26, 2003 to hear each of these motions. On Sept. 30, 2003, the court granted the company's motion to dismiss without prejudice, dismissed without prejudice the outside directors' and underwriters' separate motions to dismiss and denied the company's motion to transfer venue. In its order on the motions to dismiss, the Court granted the lead plaintiffs leave to replead the case within certain parameters. On July 7, 2004, the plaintiffs again repled their claims by filing a third amended consolidated complaint, raising allegations of similar violations against the same parties generally based upon alleged facts not previously asserted. The company, along with certain officer and director defendants and the underwriter defendants, filed motions to dismiss the third amended consolidated complaint on Aug. 23, 2004. A hearing on the motions was held on April 14, 2005. On July 25, 2005, the court ruled on these motions, dismissing with prejudice the claims against the outside directors as well as the underwriter defendants, but denying the company's motion to dismiss. In evaluating this motion to dismiss, the court was required to view the pleadings in the light most favorable to the plaintiffs and to take the plaintiffs' allegations as true. On Aug. 18, 2005, the company filed a motion to certify the dismissal order for an interlocutory appeal, which was denied on Nov. 14, 2005. Discovery in this matter has now commenced. A hearing on class certification was held on June 22, 2006. The court has made no ruling on class certification. The suit is "Walker, et al. v. Rent-A-Center, et al., Case No. 5:02-cv-00003-DF," filed in the U.S. District Court for the Eastern District of Texas under Judge David Folsom. Representing the plaintiffs are: (1) Bradley Earl Beckworth of Nix Patterson & Roach - Daingerfield, 205 Linda Drive, Daingerfield, TX 75638, Phone: 903-645-7333, Fax: 19036454415, E-mail: bbeckworth@nixlawfirm.com; and (2) Thomas Emerson Bilek of Hoeffner & Bilek, LLP, 1000 Louisiana, Suite 1302, Houston, TX 77002, Phone: 713- 227-7720, Fax: 17132279404, E-mail: tbilek@hb-legal.com. Representing the defendants are Anne Marie Rodgers and Darryl Wade Anderson of Fulbright & Jaworski, 1301 McKinney, Suite 5100, Houston, TX 77010-3095, Phone: 713/651-5473, Fax: 713-651- 6652 and 17136515246, E-mail: arodgers@fulbright.com and danderson@fulbright.com. SUTTER HEALTH: Calif. Court Approves Uninsured Patients' Suit ------------------------------------------------------------- Sacramento Superior Court Judge David W. Abbott granted preliminary approval to a settlement of a consolidated class action filed against Sutter Health over pricing and collection practices for uninsured patients at its affiliate hospitals. The settlement resolves the named plaintiffs' and class members' claims against Sutter and its affiliated hospitals. As part of the settlement, class members will be entitled to make a claim for refunds or deductions of between 25% to 45% from their prior hospital bills. For the next three years, Sutter hospitals have also agreed to maintain discounted pricing policies for uninsureds that will make Sutter's pricing for uninsureds comparable to the pricing for patients with private insurance. In addition, Sutter has agreed to maintain more compassionate collections policies that will protect uninsureds who fall behind in their payments. Commenting on the settlement, plaintiffs' attorney and Lieff Cabraser partner Kelly M. Dermody stated, "This settlement is groundbreaking and substantial. Sutter has effectively ended price discrimination against uninsureds and has agreed to maintain policies that will protect uninsureds from unfair collections practices going forward. We hope that other hospital systems follow this positive trend in fair hospital pricing for the uninsured." The proposed class includes all persons who: -- received hospital services from a Sutter-affiliated hospital between September 3, 2000 and August 3, 2006; and -- were uninsured at the time of treatment. The consolidated lawsuit was filed by six uninsured patients on behalf of themselves and hundreds of thousands of uninsured patients at Sutter-affiliated hospitals in California, alleging that Sutter charged uninsured patients excessive and unfair prices for medical treatment and services given at Sutter- affiliated hospitals, and engaged in aggressive and unfair collections practices. The lawsuits claim that Sutter violated numerous laws by "charging unfair, unreasonable and inflated prices for medical care to its uninsured patients who are generally the least able to pay." The suits also claim that Sutter "pursues aggressive collection techniques that often result in lawsuits, judgments, garnishments and bankruptcies against uninsured patients." The suits seek to require Sutter to make restitution to uninsured patients and for "injunctive relief" to prohibit such practices in the future (Class Action Reporter, September 15, 2004). Stutter denies wrongdoing and liability in the case. More information about the settlement can be found at www.lieffcabraser.com/sutterhealth.htm Representing the plaintiffs is Kelly M. Dermody of Lieff Cabraser Heimann & Bernstein, LLP, 275 Battery Street, 30th Floor San Francisco, CA 94111, Phone: (415) 956-1000, Fax: (415) 956-1008, E-mail: kdermody@lchb.com. Asbestos Alert ASBESTOS LITIGATION: Sealed Air Liability Stays at $512.5M in 2Q ---------------------------------------------------------------- Sealed Air Corporation recorded a US$512.5 million asbestos settlement liability as of June 30, 2006, unchanged from June 30, 2005, according to a Company press release dated July 26, 2006, filed with the U.S. Securities and Exchange Commission. As of March 31, 2006 and Dec. 31, 2005, the Company's asbestos settlement liability was US$512.5 million. (Class Action Reporter, May 5, 2006) For the quarters ended June 30, 2006 and June 30, 2005, the Company's effects of assumed issuance of asbestos settlement shares both amounted to US$9 million. Based in Saddle Brook, New Jersey, Sealed Air Corp.'s main product segment, Food Packaging, produces Cryovac shrink films, absorbent pads, and foam trays used by food processors and supermarkets to protect meat and poultry. ASBESTOS LITIGATION: Ashland Reserves $592M in 2Q for Litigation ---------------------------------------------------------------- Ashland Inc.'s non-current asbestos litigation reserve was US$592 million as of June 30, 2006, compared with US$534 million as of June 30, 2005. The Company's non-current asbestos litigation reserve was US$500 million as of March 31, 2006 and US$521 million as of Sept. 30, 2005. (Class Action Reporter, June 16, 2006) As of June 30, 2006, the Company's non-current asbestos insurance receivable was US$446 million, compared with US$374 million as of June 30, 2005. As of March 31, 2006, the Company's non-current asbestos insurance receivable was US$345 million, comparable to US$370 million as of Sept. 30, 2005. (Class Action Reporter, June 16, 2006) Based in Covington, Kentucky, Ashland Inc.'s Chemicals unit has two subsidiaries. Ashland Distribution buys chemicals and plastics, then blends and repackages them for distribution. Ashland Specialty Chemical makes specialty resins and polymers, adhesives, and chemicals for water treatment. ASBESTOS LITIGATION: Lone Star Notes 15 Dismissed Exposure Suits ---------------------------------------------------------------- Lone Star Technologies Inc.'s subsidiary, Lone Star Steel Co. LP, had 15 asbestos-related lawsuits dismissed or are pending dismissal, out of 47 suits Steel is faced with for the past seven years. Of the 47 suits, 22 have been settled or are pending settlement for about US$300,000 in the aggregate. Steel has been named a defendant in suits alleging that certain individuals were exposed to asbestos on the defendants' premises. The plaintiffs are seeking unspecified damages. Steel did not make or distribute asbestos-containing products. In 2003, Lone Star's inactive subsidiary Zinklahoma Inc. has been named defendant in seven suits alleging that the plaintiffs had contracted mesothelioma as the result of exposure to asbestos in products made by the defendants and John Zink Co. Five of these suits have been dismissed and one was settled for less than US$0.1 million. In 1987, Lone Star acquired the stock of Zink and sold the assets of the former Zink to Koch Industries Inc. in 1989. Lone Star renamed the now-inactive subsidiary "Zinklahoma Inc." Lone Star retained, and agreed to indemnify Koch against certain pre- closing liabilities of Zink. Koch continues to operate the business as John Zink Co. LLC. Moreover, Zink LLC has been named in 10 suits in which the plaintiffs, five of whom have mesothelioma, allege exposure to asbestos in Zink's products. Four of these cases have been dismissed. Koch seeks indemnification from Lone Star with respect to these six pending suits alleging exposure to asbestos. Based in Dallas, Texas, Lone Star Technologies Inc.'s oil field products include casing, tubing, and line pipe. The Company's specialty tubing is used in precision mechanical applications. ASBESTOS LITIGATION: Lockheed Martin Wins Appeal in Durham Suit --------------------------------------------------------------- The U.S. Court of Appeals, Ninth Circuit, reversed the district court decision to an asbestos-related suit filed by Gerald Durham, ruling in favor of Lockheed Martin Corporation. The Panel, comprised of Judges Alex Kozinksi, Ferdinand F. Fernandez, and Terry J. Hatter, Jr., handed down the decision of Case No. 04-15243 on April 26, 2006. Mr. Durham alleged that his lung cancer was caused by exposure to asbestos while working as an electronics technician for the U.S. Air Force and Air Force Reserves for 30 years. On Aug. 7, 2003, Mr. Durham sued Lockheed Martin and 60 other defendants in Calif. Superior Court. On Aug. 15, 2003, Mr. Durham served Lockheed Martin. Lockheed did not file a notice of removal until Sept. 24, 2003, more than 30 days after it had been served with the complaint, but less than 30 days after it had received Mr. Durham's interrogatory responses. After Lockheed removed, Mr. Durham moved to remand to state court, claiming that Lockheed's removal was untimely. The district court remanded the case to state court and awarded Mr. Durham US$9,113.99 in costs and attorney's fees because Lockheed's removal was untimely. Lockheed appealed the award of costs and fees. The Appeals Court ruled that a defendant has 30 days to remove a case on diversity or federal question grounds. The Appeals Court considered whether the 30-day clock is reset if the defendant later discovers the case is also removable on federal officer grounds. Accordingly, the Appeals Court reversed the district court's award of fees and costs to Mr. Durham. Robert W. Loewen, Sarah M. Schlosser, Andrea M. Neuman of Gibson, Dunn & Crutcher in Irvine, Calif.; Charles H. Hakke, of Gibson, Dunn & Crutcher in Washington, D.C.; and Steven E. Knott, Guy P. Glazier of Knott & Glazier LLP in Los Angeles, Calif. represented Lockheed Martin Corp. Gilbert L. Purcell, Alan R. Brayton, Lloyd F. Leroy, and David L. Fiol of Brayton Purcell in Novato, Calif., represented Gerald Durham. ASBESTOS LITIGATION: Court Grants Reassignment Motion in PA Suit ---------------------------------------------------------------- The U.S. District Court, W.D. Pa., granted Treesdale Inc.'s and Pittsburgh Metals Purifying Co.'s motion for reassignment of an insurance-related asbestos action filed by Westchester Fire Insurance Co. and North River Insurance Co. Magistrate Judge Amy Reynolds Hay handed down the decision of Case No. CIV.A. 05-1523 on April 19, 2006. Westchester Fire and North River filed the suit, seeking the reformation of certain comprehensive general liability insurance policies issued by the two insurers between 1986 and 1991 to include asbestos exclusions. These exclusions were allegedly inadvertently omitted from the policies. At the time Westchester Fire and North River sued, they indicated that this case was related to a previously terminated action in the Court, Liberty Mutual Insurance Co. v. Treesdale Inc. and Pittsburgh Metals Purifying Co., Civil Action No. 02- 2179. In the cited case, Liberty Mutual filed a declaratory judgment action, seeking a determination of its rights and obligations under umbrella excess liability insurance policies issued to Treesdale between 1975 and 1985. This action involved suits initiated against Pittsburgh Metals by individuals claiming to have sustained bodily injury as a result of exposure to asbestos-containing products made or sold by Pittsburgh Metals. Treesdale and Pittsburgh Metals moved for reassignment, arguing that the case is not related to Liberty Mutual and should be reassigned. The Liberty Mutual dispute concerned interpretation of a non- cumulation clause to determine the amount of coverage owed. According to the complaint in the instant case, the question presented is not the amount of coverage but whether coverage is owed at all. The Court granted Treesdale's and Pittsburgh Metals' reassignment motion, and the case was returned to the Clerk of Court for random assignment. Christopher R. Carroll and Kristin V. Gallagher of Carroll, McNulty & Kull, Basking Ridge, N.J., Kevin P. Lucas of Manion, McDonough & Lucas, Pittsburgh, Pa., represented Westchester Fire Insurance Co. and North River Insurance Co. ASBESTOS LITIGATION: Armstrong Has $91.5M Insurance Receivable -------------------------------------------------------------- Armstrong Holdings Inc.'s non-current insurance receivable for asbestos-related liabilities was US$91.5 million as of June 30, 2006, compared with US$88.8 million as of Dec. 31, 2005. As of June 30, 2006 and Dec. 31, 2005, the Company's asbestos- related liability amounted to US$3.190 billion, subject to compromise. As of June 30, 2006 and Dec. 31, 2005, the Company recorded a US$98.6 million insurance asset in respect of asbestos claims. About US$79 million of the US$98.6 million asset was determined from agreed coverage in place. Of the US$98.6 million, about US$7 million has been recorded as a current asset as of June 30, 2006. On May 23, 2006, a confirmation hearing commenced and concluded with oral arguments on July 11, 2006. At that hearing, the Court heard testimony and received evidence relating to the Unsecured Creditors Committee's objection that the Company's modified Plan of Reorganization unfairly discriminates against the unsecured creditors, based on the size of the present and future asbestos liability implied by the modified plan. Judge Eduardo C. Robreno took the matter under advisement and is expected to issue his decision "in the near future." Based in Lancaster, Pennsylvania, Armstrong Holdings, Inc. is the holding firm for Armstrong World Industries and its Armstrong Floor Products unit. AWI makes flooring products, acoustical ceilings, and suspended-ceiling systems for finishing and refurbishing commercial, industrial, and residential structures. ASBESTOS LITIGATION: EnPro Ind. Earns $4.2M Net Income in 2Q2006 ---------------------------------------------------------------- EnPro Industries Inc. reported a net income of US$4.2 million or US$0.10 a share for the 2006-2nd quarter, according to a Company press release dated July 27, 2006, filed with the U.S. Securities and Exchange Commission. Net income in 2006 was reduced by asbestos-related expenses of US$0.59 a share, compared with US$0.07 a share in 2005. In the 2005-2nd quarter, net income was US$21.1 million, or US$0.99 a share. The increase in asbestos-related expenses was due to the full allocation during the 2006-2nd quarter of all remaining solvent asbestos insurance to pending and estimated future asbestos- related claims against EnPro subsidiaries. Before asbestos charges and other significant items, income in the 2006-2nd quarter was US$17.2 million, or US$0.79 a share, a 17 percent improvement over the 2005-2nd quarter, when income before asbestos charges and other significant items was US$14.7 million, or US$0.69 a share. Sales in the 2006-2nd quarter were US$226.7 million, a 3 percent improvement over the 2005-2nd quarter, when they were US$219.4 million. For the six months ended June 30, 2006, net income was US$19.0 million or US$0.88 a share, compared with US$31.1 million, or US$1.46 a share, in 2005. Income before asbestos charges and other significant items was US$35.2 million, or US$1.64 a share, in the first half of 2006, an improvement of over 20 percent compared to the first half of 2005, when income before asbestos charges and other significant items was US$29.2 million, or US$1.37 a share. Sales in the first half of 2006 were US$455.0 million, a 5 percent increase over the first half of 2005, when sales were US$431.9 million. Ernie Schaub, President and CEO, said, "Asbestos-related cash outflows were substantially lower compared to the second quarter of last year, even though our asbestos-related expenses increased significantly as our remaining insurance was fully allocated to pending and estimated future claims. Over the next several years as asbestos claims are resolved, we expect to collect over US$500 million of solvent insurance coverage." Based in Charlotte, North Carolina, EnPro Industries Inc. makes engines, engineered products, and sealing systems. The Company also makes heavy-duty, medium-speed diesel, and natural gas engines. ASBESTOS LITIGATION: New Claims v. EnPro Drop to 4,200 in 2Q06 -------------------------------------------------------------- EnPro Industries Inc. noted that new asbestos-related claim filings against the Company decreased by 50 percent to 4,200 in the first half of 2006, according to a Company press release dated July 27, 2006, filed with the U.S. Securities and Exchange Commission. In the past 12 months, 11,000 new claims were filed. In the first half of 2006, net cash outflows for asbestos claims and expenses were US$23.5 million, a slight decline from the first half of 2005, when they were US$23.9 million. During the 2006-2nd quarter, all remaining solvent insurance for asbestos was fully allocated to pending and estimated future claims, and the Company recorded a US$20.7 million charge. At the end of the 2006-1st quarter, the Company had about US$37 million of unallocated insurance available for asbestos claims. As of June 30, 2006, the Company's current asbestos liability was US$65.5 million, compared with US$81.6 million as of Dec. 31, 2005. As of June 30, 2006, the Company's non-current asbestos liability was US$220.1 million, compared with US$189.7 million as of Dec. 31, 2006. The Company's current asbestos insurance receivable was US$105.6 million as of June 30, 2006, compared with US$104.7 million as of Dec. 31, 2005. The Company's non-current asbestos insurance receivable was US$299.4 million as of June 30, 2006, compared with US$388.1 million as of Dec. 31, 2005. For the six months ended June 30, 2006, the Company's asbestos receivables, net of liabilities, were US$2.1 million, compared with (US$17.1 million) for the six months ended June 30, 2005. For the quarter ended June 30, 2006, the Company's asbestos- related expenses were US$20.7 million, compared with US$2.6 million for the quarter ended June 30, 2005. For the six months ended June 30, 2006, the Company's asbestos-related expenses were US$25.6 million, compared with US$6.8 million for the six months ended June 30, 2005. Based in Charlotte, North Carolina, EnPro Industries Inc. makes engines, engineered products, and sealing systems. The Company also makes heavy-duty, medium-speed diesel, and natural gas engines. ASBESTOS LITIGATION: Aqua-Chem Demands $10M Costs from Coca-Cola ---------------------------------------------------------------- Aqua-Chem Inc. demanded that The Coca-Cola Co. reimburse it for about US$10 million for out-of-pocket asbestos litigation- related expenses. From 1970 to 1981, Coca-Cola owned Aqua-Chem, in which a division made certain boilers that had gaskets that Aqua-Chem bought from outside suppliers. Years after the Company sold Aqua-Chem, the former unit received its first asbestos-related lawsuit, involving a component of some of the gaskets. In September 2002, Aqua-Chem notified the Company that it is obligated for certain costs and expenses associated with its asbestos litigation. Aqua-Chem has also demanded that the Company must be obliged to Aqua-Chem for any future liabilities and expenses that are excluded from coverage under the applicable insurance or for which there is no insurance. The parties sought to resolve this dispute, which was stayed by agreement of the parties pending the outcome of litigation filed in Wisconsin by certain insurers of Aqua-Chem. Five plaintiff insurance firms filed a declaratory judgment action against Aqua-Chem, the Company and 16 defendant insurance firms sought a determination of the parties' rights and liabilities under policies issued by the insurers and reimbursement for amounts paid by plaintiffs in excess of their obligations. Aqua-Chem and the Company later agreed with five of the insurers in the Wisconsin insurance coverage litigation, and those insurers will pay funds into an escrow account for payment of costs arising from the asbestos claims against Aqua-Chem. Aqua-Chem has also agreed with an additional insurer regarding payment of the insurer's policy proceeds for Aqua-Chem's asbestos claims. Based in Atlanta, Georgia, The Coca-Cola Co. owns four soft- drink brands: Coca-Cola, Diet Coke, Fanta, and Sprite. The firm sells about 400 drink brands, including coffee, juice, sports drinks, and tea, in about 200 nations. The Company owns about 36 percent of Coke bottler Coca-Cola Enterprises. ASBESTOS LITIGATION: Hercules Has $6.5M Net Assets, Liabilities --------------------------------------------------------------- Hercules Inc.'s net asbestos-related assets and liabilities was US$6.5 million, for the six months ended June 30, 2006, according to a Company press release, dated July 26, 2006, filed with the U.S. Securities and Exchange Commission. For the six months ended June 30, 2005, the Company's net asbestos-related assets and liabilities was US$15.2 million. Based in Wilmington, Delaware, Hercules Inc.'s pulp and paper division supplies water-treatment and functional performance chemicals and services to the pulp and paper industry. Its Aqualon unit makes thickeners for water-based products such as latex paints, printing inks, and oral hygiene products. ASBESTOS LITIGATION: N.Y. Court Affirms Ruling in Favor of Board ---------------------------------------------------------------- The New York Supreme Court, Appellate Division, affirmed the decision of the Workers' Compensation Board to dismiss the claim of Ivan Ilovar, an employee of Consolidated Edison Inc. for 23 years. The Panel, comprised of Judges Crew III, Mugglin, Rose, Lahtinen, and Kane, handed down the decision on April 27, 2006. While working for Consolidated Edison, Mr. Ilovar was exposed to asbestos. At that time, he was also diagnosed with nonwork- related asthma and he suffered a nonwork-related heart attack. In September 1993, then 61-year-old Mr. Ilovar retired. In 1999, he was diagnosed with work-related asbestosis. His claim for workers' compensation benefits was established for an occupational disease. The date of disablement was set as Dec. 14, 1999 and he was initially classified with a permanent partial disability. In a Nov. 28, 2001 decision, a Board panel observed that Mr. Ilovar's asbestosis could not have been a factor in his decision to retire in 1993 because he had not been found to have that disabling condition before 1999. The case was restored to the hearing calendar for further development, and Mr. Ilovar was found to have an overall permanent total disability that was 75 percent causally related to asbestosis. In a Dec. 11, 2003 decision, a Board panel determined that Mr. Ilovar's continued absence from the labor market after the date of disablement would support a finding of no causally related loss of earnings. On Dec. 22, 2004, the Board ruled ruled that there was no relationship between Mr. Ilovar's asbestosis and his loss of earnings. Mr. Ilovar appealed. The Board's latest decision clarified that it recognized that Mr. Ilovar had already withdrawn for reasons other than his asbestosis and found that there was no proof of any loss of earnings caused by his asbestosis. Accordingly, the Supreme Court affirmed the Workers' Compensation Board decision. Frank Gulino of Brecher, Fishman, Pasternack, Popish, Heller, Reiff & Walsh of New York City, N.Y. represented Ivan Ilovar. David W. Faber of Cherry, Edson & Kelly of Hempstead represented Consolidated Edison Inc. and another respondent. ASBESTOS LITIGATION: St. Paul Reserves $4.28B in 2Q For Claims -------------------------------------------------------------- St. Paul Travelers Cos. Inc. net asbestos-related reserves was US$4.280 billion for the 2006-2nd quarter, compared with US$4.364 billion for the 2006-1st quarter. As of the 2006 2nd-quarter, the Company's year-to-date net asbestos reserves were US$4.346 billion, compared with US$3.932 billion for the 2005-2nd quarter. Based in St. Paul, Minnesota, St. Paul Travelers Cos. Inc. offers personal and commercial liability and casualty, property, workers' compensation, auto, marine, and other coverage to companies in North America and the United Kingdom. ASBESTOS LITIGATION: BorgWarner's Claims Drop to 61,000 in 2Q06 --------------------------------------------------------------- BorgWarner Inc. had about 61,000 pending asbestos-related product liability claims as of June 30, 2006, in which about 51,000 of the outstanding claims are pending in three jurisdictions where significant tort reform activities are underway. As of March 31, 2006, the Company had about 67,800 pending claims, in which about 58,000 are pending in three jurisdictions. (Class Action Reporter, May 5, 2006) The Company, or parties it indemnifies, continues to face asbestos-related personal injury actions. Management said that the Company's involvement is limited because these claims relate to a few types of automotive friction products, made many years ago that had encapsulated asbestos. In the six months of 2006, of the about 9,600 claims resolved, only 77, or 0.8 percent, resulted in any payment being made to a claimant by or on behalf of the Company. In 2005, of the about 38,000 claims resolved, only 295, or 0.8 percent, resulted in any payment being made to a claimant by or on behalf of the Company. As of June 30, 2006, the Company had a receivable of US$5.7 million due to funding settlements before reimbursement by some of the secondary layer insurers under this arrangement. The Company is expecting to fully recover these amounts. At June 30, 2006, the Company had an estimated liability of US$36.6 million for future claims resolutions, with a related asset of US$36.6 million to recognize the insurance proceeds receivable by the Company for estimated losses related to claims that have yet to be resolved. At Dec. 31, 2005, the comparable value of the insurance receivable and accrued liability was US$41 million. Based in Auburn Hills, Michigan, BorgWarner Inc., which was formerly known as BorgWarner Automotive, makes power train products for automakers worldwide. The Company operates 43 manufacturing facilities worldwide. ASBESTOS LITIGATION: Rockwell, Units Deal With Exposure Lawsuits ---------------------------------------------------------------- Rockwell Automation Inc., and its subsidiaries co-defend in lawsuits alleging personal injury from exposure to asbestos that was used in some components of the Company's products years ago. However, most of the complaints do not identify any of the Company's products or specify which of these claimants were exposed to asbestos attributable to the Company's products. When Company products appear to be identified, they are from divested businesses, and the Company is indemnified for most of the costs. Historically, the Company has been dismissed from most of these claims with no payment to claimants. On Feb. 12, 2004, the Company initiated litigation in the Milwaukee County Circuit Court to enforce the insurance policies against Nationwide Indemnity Co. and Kemper Insurance, the insurance carriers that provided insurance coverage to the Company's former Allen-Bradley subsidiary. The insurance carriers have paid some past defense and indemnity costs and have agreed to pay most future defense and indemnity costs for Allen-Bradley asbestos claims, subject to policy limits. If either carrier becomes insolvent or the policy limits of either carrier are exhausted, the Company's share of future defense and indemnity costs may increase. Based in Milwaukee, Wisconsin, Rockwell Automation Inc. operates through two segments. Its control systems unit makes industrial automation products. The power systems unit offers power transmission products, bushings, clutches, motor brakes, conveyor pulleys, couplings, bearings, and mechanical drives. ASBESTOS LITIGATION: ABB Ltd. Records $217M Obligations in 2Q06 --------------------------------------------------------------- ABB Ltd.'s current asbestos obligations stood at US$217 million as of June 30, 2006, compared with US$1.128 billion as of Dec. 31, 2005. As of June 30, 2006, the Company's non-current asbestos-related obligations stood at US$340 million. The Company maintains additional obligations of about US$89 million related to the Plan of Reorganization of its ABB Lummus Global Inc. subsidiary, and also for additional liabilities of its Combustion Engineering subsidiary. On March 1, 2006, the U.S. District Court for Delaware confirmed CE's Plan and made it effective on April 21, 2006. On April 20, 2006, the 30,298,913 ABB shares reserved to cover part of ABB's asbestos liabilities were contributed to the CE Asbestos Personal Injury Trust. Moreover, in the 2006-2nd quarter ABB made payments of about US$17 million to the PI Trust. On April 20, 2006, CE contributed US$236 million of assets, included in Receivables, net and Financing receivables, representing insurance receivable assets, including restricted cash received from insurance carriers under settlement agreements, to the PI Trust. On the same date, CE also transferred its remaining asbestos liabilities, US$267 million, included in Asbestos obligations, and formally issued a US$20-million convertible note, classified as non-current Asbestos obligation, to the PI Trust under the Plan. On April 21, 2006, the Company filed a separate asbestos-related pre-packaged Plan of Reorganization for Lummus with the U.S. Bankruptcy Court. On June 29, 2006, the Bankruptcy Court confirmed the Plan and the District Court affirmed it on July 21, 2006. The Lummus Plan should be final by the end of August 2006. Based in Zurich, Switzerland, ABB Ltd.'s power technologies division provides the power supply industry with equipment and services for transmission, distribution, and automation. The automation technologies unit offers equipment used to monitor and control processes in plants and utilities. The Company used to be called Asea Brown Boveri. ASBESTOS LITIGATION: U.S. Steel Corp. Cases Drop From 480 to 230 ---------------------------------------------------------------- United States Steel Corporation was a defendant in about 230 active asbestos-related cases involving about 4,050 plaintiffs as of June 30, 2006, compared with about 480 active cases involving about 6,400 plaintiffs as of March 31, 2006. As of Dec. 31, 2005, U.S. Steel was a defendant in about 500 active cases involving about 8,400 plaintiffs. During the first six months of 2006, settlements and dismissals resulted in the disposition of about 4,700 claims and U.S. Steel paid about US$1.4 million in settlements. New filings added about 350 claims. Many of these cases involve multiple defendants, from 50 to more than 100. More than 3,800, or about 94 percent, of these claims are pending in jurisdictions which permit filings with massive numbers of plaintiffs. These claims against U. S. Steel fall into three major groups: (1) Claims made under certain federal and general maritime laws by employees of the Great Lakes Fleet or Intercoastal Fleet, former operations of U.S. Steel; (2) Claims made by persons who allegedly were exposed to asbestos at U.S. Steel facilities; and (3) Claims made by industrial workers allegedly exposed to products formerly manufactured by U.S. Steel. U.S. Steel defends in cases in which a total of about 100 plaintiffs allege that they are suffering from mesothelioma. The potential for damages against defendants may be greater in cases in which the plaintiffs can prove mesothelioma. In cases in which claims have been asserted against U.S. Steel, the plaintiffs have been unable to establish any causal relationship to U.S. Steel or its products or premises. Historically, about 89 percent of the cases against U.S. Steel did not specify any damage amount or stated that the damages sought exceeded the amount required to establish jurisdiction of the court in which the case was filed. Jurisdictional amounts generally range from US$25,000 to US$75,000. Based in Pittsburgh, Pennsylvania, United States Steel Corp. produces sheet and semi-finished steel, tubular and plate steel, and tin products. The Company's customers are in the automotive, construction, petrochemical, and steel service center industries. ASBESTOS LITIGATION: BorgWarner Faces Insurance Suit in Illinois ---------------------------------------------------------------- BorgWarner Inc. and certain of its other historical general liability insurers face an asbestos-related declaratory judgment action in the Circuit Court of Cook County, Ill. filed by Continental Casualty Co. and related firms. Continental Casualty provided the Company with both primary and additional layer insurance, and defends and indemnifies the Company in its pending asbestos-related product liability claims, in conjunction with other insurers. Filed in January 2004, the suit sought to determine the extent of insurance coverage available to the Company including whether the available limits exhaust on a "per occurrence" or an "aggregate" basis, and to determine how the applicable coverage responsibilities should be apportioned. On Aug. 15, 2005, the Court issued an interim order regarding the apportionment matter. The interim order has the effect of making insurers responsible for all defense and settlement costs pro rata to time-on-the- risk, with the pro-ration method to hold the insured harmless for periods of bankrupt or unavailable coverage. Appeals of the interim order were denied. However, the issue is reserved for appellate review at the end of the action. Based in Auburn Hills, Michigan, BorgWarner Inc., which was formerly known as BorgWarner Automotive, makes power train products for automakers worldwide. The Company operates 43 manufacturing facilities worldwide. ASBESTOS LITIGATION: Del. Court Denies Goodyear Dismissal Motion ---------------------------------------------------------------- The Superior Court of Delaware, New Castle County, denied the dismissal motion filed by The Goodyear Tire & Rubber Co. in an asbestos-related action filed by multiple plaintiffs. Judge Susan C. Del Pesco handed down the decision of the case on March 13, 2006. The Goodyear Tire & Rubber Co. is an Ohio corporation with its principle place of business in Ohio. The Company had filed a motion to dismiss this action based on interests of justice. The Court ruled that the provision relied on is a codification of the due process protection of the U.S. Constitution, which is implicated when a State seeks to exercise jurisdiction over a nonresident. The provision does not supply a basis for dismissing the plaintiff's claim. The Court denied the Company's motion to dismiss based on interests of justice. ASBESTOS LITIGATION: Rohm and Haas Prepares for Premises Claims --------------------------------------------------------------- Rohm and Haas Co. has reserved undisclosed amounts for premises asbestos-related cases that the Company said are probable and estimable. As a result of the bankruptcy of asbestos producers, plaintiffs' attorneys have focused on peripheral defendants, including the Company, which had asbestos on its premises. These premises cases have historically been dismissed or settled for minimal amounts because of the minimal likelihood of exposure at Company facilities. The Company noted that the demands against firms with older manufacturing facilities in the U.S., including the Company, are rising. The Company noted pending suits filed against subsidiary Morton International Inc. related to employee exposure to asbestos at a manufacturing facility in Weeks Island, La. with more suits expected. The Company expects that most of these cases will be dismissed because they are barred under workers' compensation laws. However, cases involving asbestos-caused malignancies may not be barred under Louisiana law. Morton has been sued for asbestos matters in the former Friction Division of the former Thiokol Corp., which merged with Morton in 1982. To date, settlement amounts have been minimal and many cases have been closed with no payment. Based in Philadelphia, Pennsylvania, Rohm and Haas Co. operates 150 manufacturing and research sites worldwide. Sales take place in more than 100 countries and total more than US$6 billion annually. In 1999 Rohm and Haas acquired Morton International, maker of Morton salt and of specialty chemicals. ASBESTOS LITIGATION: Ladish Co. Dismissed from 4 Cases in Ill. -------------------------------------------------------------- Ladish Co. Inc. has been dismissed from four out of six asbestos-related cases pending in Illinois and from most cases in Mississippi, as of July 28, 2006. As of May 9, 2006, the Company disclosed that it had been dismissed from two out of six asbestos-related cases pending in Illinois. (Class Action Reporter, May 26, 2006) From time to time, the Company faces legal proceedings relating to claims arising out of its operations in the normal course of business. The Company has been a defendant in asbestos cases in Mississippi and six asbestos cases in Illinois. The Company has never made or processed asbestos. The Company's exposure to asbestos involves products the Company bought from third parties. Based in Cudahy, Wisconsin, Ladish Co. Inc. designs and makes high-strength forged and cast metal components for aerospace and industrial markets. Jet engine parts, missile components, landing gear, helicopter rotors, and other aerospace products generate more than 90 percent of the Company's sales. The Company was established in 1905. ASBESTOS LITIGATION: Enbridge Has $3.3M Liabilities for Cleanup --------------------------------------------------------------- Enbridge Energy Partners LP recorded US$3.3 million in current liabilities for remediation, as of June 30, 2006, compared with US$4 million as of Dec. 31, 2005. The liabilities are to address remediation of contaminated sites, materials containing asbestos, management of hazardous waste material disposal, and outstanding air quality measures for certain of the Company's liquids and natural gas assets. As of March 31, 2006, the Company recorded US$3.5 million in current liabilities and US$5.2 million in long-term liabilities. (Class Action Reporter, May 5, 2006) As of June 30, 2006, the Company recorded US$4.9 million in long-term liabilities, compared with US$4.8 million as of December 31, 2005. Based in Houston, Texas, Enbridge Energy Partners LP, which was formerly known as Lakehead Pipe Line Partners, owns the 1,900- mile US portion of the world's longest liquid petroleum pipeline. Enbridge Energy Management LLC owns an 18 percent stake in the Company. ASBESTOS LITIGATION: Eastman Chemical Records 1,500 Claims in 2Q ---------------------------------------------------------------- Eastman Chemical Co. intends to successfully defend itself against about 1,500 pending asbestos-related claims or to settle them on acceptable terms, according to the Company's latest quarterly report filed with the U.S. Securities and Exchange Commission. In the 2005-4th quarter, the Company also posted 1,500 pending asbestos-related claims. (Class Action Reporter, March 17, 2006) Over the years, the Company co-defends in lawsuits in various state courts in which plaintiffs have alleged injury due to asbestos exposure at the Company's manufacturing sites. Plaintiffs have sought unspecified monetary damages and other relief. These cases have historically been dismissed or settled. In recently filed cases, plaintiffs alleged exposure to asbestos-containing products allegedly made by the Company. Based on its investigation to date, the Company said that it made limited amounts of an asbestos-containing plastic product between the mid-1960s and the early 1970s. The Company's investigation has found no evidence that any of the plaintiffs worked with or around any product alleged to have been made by the Company. The Company has finalized an agreement with an insurer that issued primary general liability insurance to certain Company predecessors prior to the mid-1970s. The agreement stipulated that the insurer will provide coverage for a portion of certain of the Company's defense costs and payments of settlements or judgments in connection with asbestos-related suits. Based in Kingsport, Tennessee, Eastman Chemical Co. has developed into a producer of chemicals, fibers, and plastics. ASBESTOS LITIGATION: Exelon Corp. Reserves $48M for Claims in 2Q ---------------------------------------------------------------- Exelon Corporation's subsidiary, Exelon Generation Co. LLC, has reserved about US$48 million for asbestos-related bodily injury claims at June 30, 2006, compared with US$50 million at Dec. 31, 2005. As of June 30, 2006, about US$8 million of this amount related to 110 open claims presented to Exelon Generation, while the remaining US$40 million is for estimated future asbestos-related bodily injury claims expected to arise through 2030. At March 31, 2006, Exelon Generation reserved about US$49 million in total for asbestos-related bodily injury claims. (Class Action Reporter, May 5, 2006) Exelon Generation recorded an undiscounted US$43 million pre-tax charge for its estimated portion of all estimated future asbestos-related personal injury claims estimated to be presented through 2030. The US$43 million pre-tax charge was recorded as part of operating and maintenance expense in Exelon Generation's Consolidated Statements of Income and Comprehensive Income in 2005 and reduced net income by US$27 million after tax. Based in Chicago, Illinois, Exelon Corp. distributes electricity to more than 5 million customers in northern Illinois, including Chicago, and in southeastern Pennsylvania, including Philadelphia, through subsidiaries Commonwealth Edison Co. and PECO Energy Co. ASBESTOS LITIGATION: W.R. Grace Records $1.7B Liability in 2Q06 --------------------------------------------------------------- W.R. Grace & Co.'s long-term asbestos-related liability remained at US$1.7 billion for the quarters ended June 30, 2006 and Dec. 31, 2005, according to a Company press release, dated July 27, 2006, filed with the U.S. Securities and Exchange Commission. For the quarter ended March 31, 2006, Grace disclosed an asbestos-related liability of US$1.7 billion. (Class Action Reporter, April 28, 2006) For the quarters ended June 30, 2006 and Dec. 31, 2005, Grace's long-term asbestos-related insurance stood at US$500 million. For the quarter ended March 31, 2006, Grace recorded US$500 million asbestos-related insurance that it expects to realize after one year. (Class Action Reporter, April 28, 2006) Based in Columbia, Maryland, W.R. Grace & Co. has restructured from six product groups into two major units. Grace's Davison Chemicals unit makes silica-based products, chemical catalysts, and refining catalysts that help produce refined products from crude oil. Its Performance Chemicals unit makes concrete and cement additives, packaging sealants, and fireproofing chemicals. ASBESTOS LITIGATION: Corning Inc. Posts $124M Settlement Expense ---------------------------------------------------------------- Corning Inc. recorded US$124 million asbestos settlement expense, for the six months ended June 30, 2006, including US$114 million. The US$114 million reflected the increase in the value of the Company's common stock since Dec. 31, 2005, and US$10 million to reflect changes in the estimated fair value of other components of the settlement offer. For the six months ended June 30, 2005, the Company recorded asbestos settlement expense of US$131 million, including US$121 million reflecting the increase in the value of Corning's common stock from Dec. 31, 2004 to June 30, 2005, and US$10 million to reflect changes in the estimated fair value of the other components of the proposed asbestos settlement. In the 2006-2nd quarter, the Company recorded a credit to the asbestos settlement expense of US$61 million, including US$68 million reflecting the decrease in the value of Corning's common stock from March 31, 2006 to June 30, 2006, and US$7 million to adjust the estimated fair value of the other components of the proposed asbestos settlement. In the 2005-2nd quarter, the Company recorded asbestos settlement expense of US$143 million, including US$137 million for the increase in the value of Corning's common stock from March 31, 2005 to June 30, 2005, and a US$6 million charge to adjust the estimated fair value of the other components of the proposed asbestos settlement. Based in Corning, New York, Corning Inc. makes fiber-optic cable, which it invented more than 30 years ago. Once known mainly for its kitchenware and lab products, the Company now provides optical fiber and cable products and communications network equipment. Other business segments include environmental technologies and life sciences. ASBESTOS LITIGATION: Federal-Mogul Deals With Fel-Pro Litigation ---------------------------------------------------------------- Federal-Mogul Corporation is dealt with asbestos-related claims regarding its Fel-Pro subsidiary, according to the Company's Quarterly Report, on Form 10-Q, reported to the U.S. Securities and Exchange Commission. Prior to the restructuring proceedings, Fel-Pro was named a defendant in product liability cases involving asbestos, primarily involving gasket or packing products. Fel-Pro was a defendant in about 34,000 pending claims as of the Company's Oct. 1, 2001 petition date. Over 32,000 of these claims were transferred to a federal court, where they were pending. Prior to the Company's restructuring proceedings, the Company was sued in its own name as a defendant in multiple lawsuits brought by claimants alleging injury from exposure to asbestos due to its ownership of certain assets involved in gasket making. As of the petition date, the Company defended in about 61,500 pre-petition pending claims. Over 40,000 of these claims were transferred to a federal court, where they were pending. Based in Southfield, Michigan, Federal-Mogul Corp. makes components for cars, trucks, and construction vehicles, with products including chassis and engine parts, pistons, and sealing systems. ASBESTOS LITIGATION: Federal-Mogul Liabilities Hit $1.54B in 2Q --------------------------------------------------------------- Federal-Mogul Corporation's asbestos-related liabilities reached US$1.543 billion in the 2006-2nd quarter. In the 2005-4th quarter, the Company's asbestos-related liabilities were US$1.532 billion. Based in Southfield, Michigan, Federal-Mogul Corp. makes components for cars, trucks, and construction vehicles, with products including chassis and engine parts, pistons, and sealing systems. ASBESTOS LITIGATION: Federal-Mogul Records $1.32B T&N Liability --------------------------------------------------------------- Federal-Mogul Corporation recorded US$1.326 billion asbestos- related liability for its T&N Ltd. unit and two U.S. subsidiaries, at June 30, 2006. The liability represented the Company's estimate prior to restructuring proceedings for claims currently pending and those, which the Company estimated to be asserted and paid through 2012. At March 31, 2006, the Company recorded US$1.3 billion asbestos related liability, compared with US$1,316.1 million at Dec. 31, 2005. T&N and the two U.S. units defend in court actions in the United States alleging personal injury resulting from exposure to asbestos or asbestos-containing products. T&N is subjected to asbestos-disease litigation in the United Kingdom and France. As of the Oct. 1, 2001 petition date, T&N Ltd. defended in about 115,000 pending personal injury claims. The two U.S. subsidiaries were defendants in about 199,000 pending personal injury claims. As of June 30, 2006, the Company recorded US$650 million insurance recoverable. Based in Southfield, Michigan, Federal-Mogul Corp. makes components for cars, trucks, and construction vehicles, with products including chassis and engine parts, pistons, and sealing systems. ASBESTOS LITIGATION: Federal-Mogul Has $213.6M Claims Liability --------------------------------------------------------------- Federal-Mogul Corporation recorded a combined US$213.6 million asbestos liability for two of its businesses, Abex and Wagner, at June 30, 2006 and Dec. 31, 2005. The liability represented the Company's estimate prior to restructuring proceedings for claims currently pending and those, which the Company estimated to be asserted and paid through 2012. Formerly owned by Cooper Industries LLC, Abex and Wagner defend in court actions in the U.S. alleging personal injury from exposure to asbestos or asbestos-containing products. These claims mainly involve vehicle safety and performance products. At June 30, 2006 and Dec. 31, 2005, Abex's asbestos-related liability was US$129.5 million. At June 30, 2006 and Dec. 31, 2005, Wagner's asbestos-related liability was US$84.1 million. As of the Oct. 1, 2001 petition date, Abex had about 66,000 pending claims and Wagner had about 33,000 pending claims. The Company's liability regarding claims alleging exposure to Wagner products arose from the 1998 stock purchase from Cooper of the corporate successor by merger to Wagner Electric Co. The liability of the Company with respect to claims alleging exposure to Abex products arose from a contractual liability entered into in 1994 by the predecessor to the Company whose stock the Company purchased in 1998. In July 2006, Cooper, Pneumo Abex Corp., the Company, the asbestos claimants committee, the representative for future asbestos claimants, and various other relevant parties, signed a non-binding term sheet reflecting a global settlement that will provide two alternative means of resolving all of Cooper's and Pneumo's claims against the Company arising out of the Abex asbestos litigation and the related alleged indemnity obligations. Under one alternative, Cooper will contribute US$756 million to a trust to be established under the Bankruptcy Code, consisting of US$256 million in cash and a US$500 million promissory note, in consideration for Cooper and Pneumo being protected from current and future Abex asbestos claims by the Plan's channeling injunction which will channel all the Abex asbestos claims to the trust. As of June 30, 2006, the Abex insurance recoverable was US$112.6 million. Wagner also maintained product liability insurance coverage for some of the time that it made asbestos-containing products. This coverage is shared with other third-party companies. Based in Southfield, Michigan, Federal-Mogul Corp. makes components for cars, trucks, and construction vehicles, with products including chassis and engine parts, pistons, and sealing systems. ASBESTOS LITIGATION: Fireman's Fund Seeks Review of ASARCO Deal --------------------------------------------------------------- U.S. Bankruptcy Court Judge Richard Schmidt approves the Compromise and Settlement Agreement among ASARCO LLC, the Official Committee of Unsecured Creditors for the Asbestos Subsidiary Debtors, and Robert C. Pate, future claims representative, regarding procedures to resolve the Derivative Asbestos Claims. Fireman's Fund Insurance Co. asks the Court to reconsider and vacate its order on the Settlement Agreement among ASARCO, the Asbestos Committee and the FCR. Anthony S. Cox, Esq., at Hermes Sargent Bates, in Dallas, Texas, notes that: (a) During the July 19, 2006, hearing, the Court deferred any ruling until FFIC's objections had been resolved; (b) The Court ordered the parties to discuss FFIC's objections and to reconvene for a status conference on Aug. 22, 2006; and (c) FFIC has commenced discussions with proponents of the settlement but which have not yet been concluded. FFIC complains that the Settlement did not address its objections. The proponents of the Settlement Agreement did not even mention FFIC in the Settlement, Mr. Cox points out. Furthermore, the Settlement does not provide for FFIC's participation in the contemplated estimation litigation process. During the status conference, ASARCO and the Asbestos Committee stated that they prefer to enter into an insurance neutrality stipulation to resolve FFIC's concerns, Mr. Cox recounts. However, the Court has already approved the Settlement before discussions and culmination of the discussions on the matter has been reached. FFIC further asks the Court to: (a) Include in any case management order governing any estimation proceedings appropriate protective "insurance neutrality" terms to the effect that any estimation of the Asbestos Claims is not binding to FFIC for any insurance coverage; and (b) Permit it to fully and meaningfully participate in any estimation proceeding. (ASARCO Bankruptcy News, Issue No. 26; Bankruptcy Creditors' Service, Inc., 215/945-7000) ASBESTOS LITIGATION: ASARCO Moves to Approve LMI Settlement Deal ---------------------------------------------------------------- Based on a number of alter-ego theories, asbestos claims filed against Asbestos Subsidiary Debtors Lac d'Amiante du Quebec Ltee, CAPCO Pipe Co. Inc., Cement Asbestos Products Co., Lake Asbestos of Quebec Ltd., and LAQ Canada Ltd., were also asserted against ASARCO LLC, Jack L. Kinzie, Esq., at Baker Botts L.L.P., in Dallas, Texas, relates. To provide coverage for the alleged asbestos claims, ASARCO purchased several insurance policies from certain London Market Insurers. In 2001, ASARCO and the Asbestos Debtors sued the LMIs and Fireman's Fund Insurance Co. in the U.S. District Court of Nueces County, 105th Judicial District, Texas, in connection with their rights for coverage in the insurance policies. In 2004, ASARCO and the Asbestos Debtors commenced discussions with the LMIs and members of the asbestos plaintiffs' bar regarding the global resolution of present and future asbestos claims. More than a year ago, ASARCO, the Future Claims Representative, the Official Committee of Unsecured Creditors for the Asbestos Debtors and the LMIs renewed settlement discussions. Negotiations have been complex but ultimately, the parties have entered into a settlement agreement to settle and release all claims and insurance rights relating to the Subject Insurance Policies, Mr. Kinzie relates. The salient terms of the Settlement Agreement are: (a) The Participating LMIs will buy back their Insurance Rights in the Subject Insurance Policies for US$18,943,000, which will be paid into an interest bearing escrow account; A full-text copy of the Escrow Agreement is available for free at http://bankrupt.com/misc/lmi_escrowagreement.pdf (b) ASARCO, the Asbestos Committee and the FCR reserve all rights to apportion the settlement amount among the estates; (c) Funds from the escrow will be used under the terms of the Escrow Agreement and the balance will remain in the escrow account subject to the provisions of the Escrow Agreement; (d) If the Court does not approve the Settlement Agreement, the Settlement Amount will be refunded from the escrow account to the Participating LMIs; (e) ASARCO will indemnify the Participating LMIs against all claims brought by third parties relating to the policies until the time the Participating LMIs receive the protections of a Section 524(g) injunction; (f) ASARCO will obtain a Section 105 injunction, enjoining all claims against the Participating LMIs during the pendency of its Chapter 11 case; (g) ASARCO will obtain a Section 524(g) injunction that will replace the Section 105 injunction at the confirmation of a plan of reorganization; (h) The final order approving the Settlement Agreement must, among other things, find that: * The sale, assignment and transfer of the Insurance Rights is in good faith and satisfied the Requirements of Section 363(m) of the Bankruptcy Code; * The pre-524(g) indemnity is an actual and necessary post- petition cost of preserving the estates; and * The insurance rights may be sold, assigned, or transferred, free and clear of the interests of the asbestos claimholders; (i) The Final Settlement Order and any plan must classify the Pre-524(g) Indemnity as an allowed administrative expense; (j) If the Section 524(g) injunction is later ruled unconstitutional and as a result, is successfully collaterally attacked and modified in a way that materially prejudices the Participating LMIs, ASARCO will indemnify the insurers; (k) The Section 524(g) trust created under a plan will provide quarterly claim reports for the Participating LMIs' reinsurance and reporting purposes, and the LMIs will exercise their best efforts to keep the substance of the reports confidential; and (l) If federal asbestos reform legislation is enacted into law by the later of Jan. 31, 2007, or the adjournment of the current Congress, then ASARCO will return the Settlement Amount to the Participating LMIs. Accordingly, ASARCO asks the Court to approve its Settlement Agreement with the LMIs. A full-text copy of the LMI Settlement Agreement is available for free at http://bankrupt.com/misc/lmi_settlementagreement.pdf Mr. Kinzie argues that without the Settlement Agreement, each of the claims from the Texas Coverage Action is likely to result in expensive, time-consuming and risky litigation. "The Participating LMI[s] have vigorously defended the Texas Coverage Action, asserting a litany of defenses and claims. ASARCO could receive nothing should the Participating LMI[s] prevail at trial." By a June 12, 2006 Court Order, the Claro Group's contingent fee agreement, which entitles the Claro Group to about US$427,500 of the settlement amount, has been approved by the Court. Accordingly, ASARCO asks the Court to allow payment of the Claro Group's contingent fee from the escrow account upon approval of the Claro Group's final fee application. (ASARCO Bankruptcy News, Issue No. 26; Bankruptcy Creditors' Service, Inc., 215/945-7000) ASBESTOS LITIGATION: Hardie, NSW Govt. Move Deadline to Aug. 31 --------------------------------------------------------------- James Hardie Industries NV and the New South Wales Government have extended the formal deadline for finalizing the Company's asbestos compensation scheme to Aug. 31, 2006, The Sydney Morning Herald reports. At issue is the Australian Tax Office's decision that a new fund established to handle personal injury compensation payments will not be endorsed as a tax-exempt charity. The Company and the NSW Government set a June 30, 2006 completion date when both parties agreed on the scheme on December 2005. A June 23, 2006 ATO tax ruling pushed the deadline to July 31, 2006. Former Appeal Court Judge Roddy Meagher and commercial barrister Tom Bathurst advised the Company that the fund complies with the legal requirements for tax exemption as a charitable trust. The Company's solicitors, Atanaskovic Hartnell, the NSW Attorney-General's Department, and PricewaterhouseCoopers advised the Company that the new trust's structure satisfies the tax law. However, the Company is expecting that a negotiated solution would deliver a faster result than a court challenge. Australian Prime Minister John Howard and Treasurer Peter Costello have hinted that one option, which could overcome the ATO objections, would be to restructure the trust. Restructuring could involve changes to the governance arrangements or to the destination for any residue after all personal injury claims have been paid. Prime Minister Howard and Mr. Costello have also suggested that the Company should seek ATO clarification about how much tax would be payable. In July 2006, Hardie CEO Louis Gries said the ATO ruling could force the new fund to pay income tax on both its investment earnings and on the regular contributions it will receive from Hardie. The former is expected to result in a tax bill of around AUD100 million over the anticipated 40-year life of the fund, while the latter could reach AUD1.4 billion. If the ATO would rule that only tax payable would be on investment income, the Australian Council of Trade Unions, which dealt on behalf of unions and asbestos support groups, and the NSW Govt. are expected to pressure Hardie to foot the bill. ASBESTOS LITIGATION: Va. Court Awards $10.4M to Shipyard Widow -------------------------------------------------------------- A jury of the Newport News Circuit Court in Virginia awarded US$10.4 million to Wanda Jones, a widow of a former shipyard worker who died of lung cancer after four years of working with asbestos-containing materials, The Washington Times reports. Robert Hatten, Mrs. Jones' attorney, called the verdict in the wrongful death lawsuit a landmark one because one-third of the judgment will come from John Crane Inc., which has refused to settle other asbestos cases. The judgment is split with two other firms: Johns Manville Corporation, a Berkshire Hathaway unit that makes roofing and insulation, and Garlock Sealing. Mrs. Jones' husband, Buddy, was diagnosed with mesothelioma. He spent four years sealing pumps and making gaskets at Newport News Shipbuilding in the 1960s. When Mr. Jones got sick in late 2004, his doctor thought it was pneumonia. Then he found the tumors in Mr. Jones' lungs. Mr. Jones died within a year. The shipyard stopped using asbestos-containing products in the mid-1980s. John Crane attorney Ed Mueller said the Company, which stopped making asbestos-containing products in the 1980s, would appeal the verdict. ASBESTOS LITIGATION: Widow Seeks $20M in Exposure Suit v. Alcoa --------------------------------------------------------------- Carolyn Welch has sued Alcoa Inc. and is seeking US$20 million damages for the death of her husband, Donald, who worked for the Company's Tennessee plant, Associated Press reports. Mr. Welch was a contractor and died last July 2006 of cancer that Mrs. Welch said was caused by asbestos. She claimed the Company did not warn her husband of the dangers or existence of asbestos. Alcoa officials said they are reviewing the suit and deciding their next step. ASBESTOS LITIGATION: Officials Link Factory Hazard to Illnesses --------------------------------------------------------------- The New York State Health Department linked asbestos-related disease to a former W.R. Grace & Co. plant located in Weedsport, N.Y., The Post-Standard reports. A State health study concluded that several former workers at the former W.R. Grace Zonolite Co. insulation factory in Weedsport had developed asbestos-related diseases, probably from exposure on the job. The state began its study after federal health officials learned that vermiculite from Libby was used at the local plant. However, it remained unclear if the plant also put the surrounding community at risk. State health officials are now completing a wider study looking for asbestos-related cancers and lung disease in the surrounding community. Claire Pospisil, a spokeswoman for the State Health Department in Albany, declined to say how many former workers in Weedsport developed asbestos-related diseases. State officials do not know how many people worked at the Weedsport plant between 1963 and 1989. The larger number who may have been exposed to asbestos in dust clouds coming from the Weedsport plant are the roughly 1,900 people who lived in the area in the 1970s. The Zonolite factory operated from 1963 until 1989. It is on a federal priority list of 28 locations nationwide that received asbestos-contaminated vermiculite from a mine in Libby, Mont. Since the Libby mine closed in 1993, studies found that former workers have a death rate from asbestosis, a lung disease that is 60 times as high as the national average. ASBESTOS LITIGATION: U.K. Widow Gets Payout for Husband's Death --------------------------------------------------------------- Sheila Wood has received "substantial" compensation for an undisclosed amount, for the death of her husband, Harold, to asbestos-related disease, North-West Evening Mail reports. Mr. Wood developed mesothelioma after his exposure to asbestos at Vickers shipyard and while working for British Rail. He died in October 2004, four-and-a-half months after he was diagnosed with the lung disease. Mr. Wood was first exposed to asbestos when he was 15. Mr. Wood's job at Vickers entailed him to deliver messages to foremen and managers on board the ships. The job saw him walk through areas where asbestos was being used. His employer never told him that the dust was harmful. In 1955, Mr. Wood left Vickers to work for British Rail as a cleaner at the Barrow marshalling yard. His duties included cleaning steam engines after fitters in the sheds had serviced them. It was his job to sweep away asbestos dust. In 1958, Mr. Wood returned to Vickers shipyard to work as a fireman. His duties involved working alongside welders and burners and using asbestos cloth. Insurers offered settlement days before the claim was due in court in Newcastle. New Securities Fraud Cases EQUINIX INC: Faces Suit Over Back-Dated Stock Option Grants ----------------------------------------------------------- The law firm of Stull, Stull & Brody commenced a shareholder lawsuit against certain members of the board of directors and certain executive officers of Equinix, Inc. The complaint alleges that certain current and prior officers and directors manipulated the prices of executive and director stock option grants (a.k.a. back-dated stock options). Such practice of awarding stock options to executives and directors at artificially low prices is alleged to violate the company's internal documents, such as the company's stock option plan, as well as state laws governing officer and director fiduciary duties and/or federal laws governing securities and taxation. In addition, the practice results in lower payments to companies, results in those companies under-reporting compensation expenses, and permits directors, officers and/or executives to unjustifiably reap millions and billions of dollars which should be disgorged and returned to the corporate coffers thereby contributing to the financial health of the company. For more details, contact Tzivia Brody, Esq. of Stull, Stull & Brody, 6 East 45th Street, New York, NY 10017, Phone: (800) 337- 4983, Fax: (212) 490-2022, E-mail: ssbny@aol.com, Web site: http://www.ssbny.com. NORTHFIELD LABORATORIES: Lead Plaintiff Filing Deadline Extended ---------------------------------------------------------------- On April 17, 2006, Scott + Scott, LLC, filed a securities class action in the U.S. District Court for the Northern District of Illinois against Northfield Laboratories, Inc. and Chief Executive Stephen A. Gould for violations of the U.S. Securities Exchange Act of 1934. The case originally was filed on behalf of Northfield securities purchasers between Feb. 20, 2004, and Feb. 21, 2006. The class period, however, has been extended to include Northfield securities purchasers between Dec. 22, 2003, and Feb. 21, 2006, inclusive. In addition, the court recently extended the time that investors may seek lead plaintiff appointment until Aug. 16, 2006. Northfield primarily develops PolyHeme, a blood substitute, which is currently the subject of a Phase III clinical trial. According to the complaint, unbeknownst to investors, despite glowing reviews of its current PolyHeme study, Northfield failed to disclose material adverse facts from its earlier PolyHeme studies. The complaint alleges that in publicly discussing Northfield's current PolyHeme study during the class period, defendants concealed the fact that: -- in an earlier PolyHeme study 10 of 81 surgery patients suffered heart attacks, compared with zero of 71 who received regular blood transfusions; -- the company did not know why the heart attacks had occurred in the earlier trials; -- entire communities were now subject to the undisclosed risks resulting from the company's concealment and lack of knowledge regarding the earlier trial outcomes; and -- the earlier adverse clinical results had been withheld from prospective patients for the company's latest clinical trials. Failure to disclose these adverse facts served to artificially inflate Northfield's stock price during the class period, harming investors. Finally, on Feb. 22, 2006, The Wall Street Journal revealed the previously hidden findings of the earlier PolyHeme studies. On this news, Northfield's stock price tumbled, losing $0.59 or 4.8%, from its closing price of $12.23 on Feb. 21, 2006, to close at $11.64 on Feb. 22, 2006, on heavy volume of over 4.1 million shares, nearly ten times normal trading volume. For more details, contact Scott + Scott, Phone: (800) 404-7770, (860) 537-5537, E-mail: scottlaw@scott-scott.com, Web site: http://www.scott-scott.com. PAR PHARMACEUTICALS: Wolf Popper Files Securities Suit in N.J. -------------------------------------------------------------- Wolf Popper, LLP, filed a securities fraud lawsuit in the U.S. District Court for the District of New Jersey on behalf of all persons who purchased the securities of Par Pharmaceutical Companies, Inc. between April 29, 2004 and July 5, 2006. Defendants include Par and certain of its senior officers and directors. The action alleges that during the class period, Defendants reported financial results that were materially inflated as a result of accounting errors. These errors included a $55 million understatement of customer credits and uncollectible customer deductions, which had the effect of inflating Par's reported revenue and operating profits. Additionally, Par has announced that it will write-off approximately $15 million in inventory due to flawed physical inventory procedures. As a result of its internal review, Par has announced it will be restating its previously reported financial results for the fiscal years 2004, 2005 and the first quarter of 2006. On this news, on July 6, 2006, shares of Par fell $4.78 per share, losing approximately 26% of its value to close at $13.47 per share. On July 24, 2006 Par filed a Form 8-K with the SEC stating that it had been informed by the SEC that the SEC is conducting an informal investigation of Par related to Par's restatement of its financial statements. All motions for appointment as Lead Plaintiff must be filed with the Court by Sept. 15, 2006. For more details, contact Emily DeMuro, Investor Relations and Robert Finkel, Esq. of Wolf Popper, LLP, Phone: 212-759-4600 and 877-370-7703, Fax: 212-486-2093 and 877-370-7704, E-mail: edemuro@wolfpopper.com and rfinkel@wolfpopper.com, Web site: http://www.wolfpopper.com. SUNTERRA CORP: Schatz & Nobel Announces Nev. Securities Filing -------------------------------------------------------------- The law firm of Schatz & Nobel, P.C. announces that a lawsuit seeking class -tion status was filed in the U.S. District Court for the District of Nevada on behalf of all persons who purchased or otherwise acquired the publicly traded securities of Sunterra Corp. between Aug. 14, 2003 and May 17, 2006. The complaint alleges that defendants violated federal securities laws by issuing a series of materially false statements regarding the company's growth. Specifically, defendants concealed the following: -- Sunterra's reported expenses were materially understated; -- the company's "record" financial results were the result of defendants' accounting manipulations; -- Sunterra's reported net income was grossly inflated; and -- as a result, Sunterra's projections for fiscal 2006 were grossly inflated and Sunterra was in technical default on its subordinated note agreement. On May 3, 2006, Sunterra announced that pursuant to an internal investigation, the company determined that it had underpaid withholding taxes in Spain on wages paid to Sunterra Europe employees and that it had voluntarily made a payment of $3.1 million to Spanish tax authorities. Then on May 17, 2006, Sunterra announced that it had received a letter from The Nasdaq Stock Market on May 15, 2006, indicating that, as a result of the company not timely filing the Quarterly Report on Form 10-Q for the quarter ended March 31, 2006, Sunterra was not in compliance with Nasdaq's filing requirement, and that unless the company requested a hearing, the company's securities would be delisted from The Nasdaq National Market. As the above revelations seeped into the market, Sunterra stock fell 34% from its Class Period high of $16.72 per share. Interested parties may, no later than Sept. 11, 2006, request that the Court for appointment as lead plaintiff of the class. For more details, contact Wayne T. Boulton and Nancy A. Kulesa of Schatz & Nobel, Phone: (800) 797-5499, E-mail: sn06106@aol.com, Web site: http://www.snlaw.net. ********* A list of Meetings, Conferences and Seminars appears in each Wednesday's edition of the Class Action Reporter. Submissions via e-mail to carconf@beard.com are encouraged. Each Friday's edition of the CAR includes a section featuring news on asbestos-related litigation and profiles of target asbestos defendants that, according to independent researches, collectively face billions of dollars in asbestos-related liabilities. ********* S U B S C R I P T I O N I N F O R M A T I O N Class Action Reporter is a daily newsletter, co-published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland USA. Glenn Ruel Senorin, Maria Cristina Canson, and Janice Mendoza, Editors. Copyright 2006. All rights reserved. ISSN 1525-2272. 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