/raid1/www/Hosts/bankrupt/CAR_Public/060929.mbx
C L A S S A C T I O N R E P O R T E R
Friday, September 29, 2006, Vol. 8, No. 194
Headlines
AIMCO PROPERTIES: Seeks to Decertify FLSA Litigation in D.C.
AK STEEL: Ohio Court Bars Firm from Hiking Retiree Insurance Fee
ARMENIAN GENOCIDE: New Calif. Law Extends Claims Filing to 2016
ARVIDA/JMB PARTNERS: Continues to Face Homeowners' Suit in Fla.
ARVIDA/JMB PARTNERS: Faces Fla. Suit Over Defective Ridges Homes
BORLAND SOFTWARE: Del. Court Approves "Dieterich" Settlement
CALIFORNIA: Fresno School Retirees Sue Over Health Care Plan
CANADA: Privacy Rights Suit Against Penitentiary to Go to Trial
CATHOLIC HEALTHCARE: Court Okays New Deal in Price Gouging Suit
DYNEX CAPITAL: N.Y. Court Partially Dismisses Securities Lawsuit
DYNEX CAPITAL: Still Faces Suit by Delinquent Taxpayers in Pa.
ENRON CORP: Former CFO Gets 6-Year Sentence, Implicates Banks
EWE AG: Plaintiffs Drop Part of Complaint in Price Hike Suit
FIRST BANCORP: Still Faces Consolidated Securities Suit in P.R.
GAINSCO INC: Settlement Reached in Tex. Securities Fraud Lawsuit
GAINSCO INC: Facing Insurance Fraud Litigation in Florida
GAS PRICE INDEXING LITIGATION: Settlement Hearing Set Dec. 11
HEALTHSOUTH CORP: Ala. Court Approves ERISA Lawsuit Settlement
HEALTHSOUTH CORP: Settles Ala. Securities Fraud Suits for $445M
HOME SOLUTIONS: Faces Multiple Securities Fraud Suits in Tex.
IBIS TECHNOLOGY: Mass. Court Partially Dismisses Securities Suit
INSURANCE COS: Seeks Review of Ruling in FCRA Violations Lawsuit
ITRONICS INC: Faces Litigation in Ill. Over "Junk Faxes"
PEMCO AVIATION: Parties Enter Mediation in Ala. Racial Bias Case
VAXGEN INC: Continues to Face Securities Fraud Suits in Calif.
VIRBAC CORP: Del. Court Allows Cash Tender Offer to Proceed
WAL-MART: Mass. Superior Court Sets Oct. 25 Trial for Labor Suit
WYNN LAS VEGAS: Nev. Casino Dealers File Suit Over Tip-Sharing
ZIMBABWE: Activist Group Plans Suit Over Brutality at ZCTU Rally
ZURICH NORTH: Big "I" Files Amicus Brief on Broker Pay Suit Deal
Asbestos Alert
ASBESTOS LITIGATION: Met-Pro, Unit Resolve Pump and Fluid Claims
ASBESTOS LITIGATION: K-Sea Pursues Settlement on Remaining Case
ASBESTOS LITIGATION: Bookham Reserves $1.14M for Cleanup Costs
ASBESTOS LITIGATION: Pagano Suit v. Doe Run Resources Dismissed
ASBESTOS LITIGATION: Hardie Renews Final Funding Agreement Talks
ASBESTOS LITIGATION: Congoleum Files 10th Plan of Reorganization
ASBESTOS LITIGATION: Appeals Court Favors GP, UCC in Md. Suit
ASBESTOS LITIGATION: Wolseley plc Records 246 Outstanding Claims
ASBESTOS LITIGATION: Wash. Court Remands Bashore Suit v. Fraser
ASBESTOS LITIGATION: Supreme Court Denies Wilkinson Suit Review
ASBESTOS LITIGATION: Appeals Court Dismisses Cutler-Hammer Suit
ASBESTOS LITIGATION: Appeals Court Junks Davis' Suit v. M Slayen
ASBESTOS LITIGATION: Calif. Worker Sues 90 Firms in Ill. Court
ASBESTOS LITIGATION: OSHA Checks Removal Method in D.C. Tunnels
ASBESTOS LITIGATION: UK Teachers to Sue Authorities for Illness
ASBESTOS LITIGATION: Judge OKs Owens Corning Reorganization Plan
ASBESTOS LITIGATION: Mass. Widow Sues 94 Companies in Ill. Court
ASBESTOS LITIGATION: Federal-Mogul Resolves Ohio's $24M Claim
ASBESTOS LITIGATION: Calif. Man Charged for Clean Air Violations
ASBESTOS LITIGATION: Japan Gov't. Closes Hazardous Attractions
ASBESTOS LITIGATION: Royal & Sun Sells Troubled U.S. Subsidiary
New Securities Fraud Cases
DELL INC: Pomerantz Haudek Files Securities Fraud Suit in Tex.
ENCYSIVE PHARMACEUTICALS: Schatz & Nobel Announces Suit Filing
MEADE INSTRUMENTS: Finkelstein, Thompson Files Calif. Stock Suit
*********
AIMCO PROPERTIES: Seeks to Decertify FLSA Litigation in D.C.
------------------------------------------------------------
AIMCO Properties, L.P. and its subsidiary NHP Management Co.
filed motions to decertify a collective action filed against it
that alleges violations of the Fair Labor Standards Act.
Initially, a lawsuit was filed in the U.S. District Court for
the District of Columbia, alleging that defendants failed to pay
maintenance workers overtime for all hours worked in excess of
40 per week.
The suit attempts to bring a collective action under the FLSA
and seeks to certify state subclasses in California, Maryland,
and the District of Columbia.
Specifically, the plaintiffs contend that defendants failed to
compensate maintenance workers for time that they were required
to be "on-call." Additionally, the complaint alleges defendants
failed to comply with the FLSA in compensating maintenance
workers for time that they worked in excess of 40 hours in a
week.
In June 2005, the court conditionally certified the collective
action on both the on-call and overtime issues. Approximately
1,049 individuals opted in to the class. Defendants are moving
to decertify the collective action on both issues.
Because the court denied plaintiffs' motion to certify state
subclasses, on Sept. 26, 2005, the plaintiffs filed a class
action with the same allegations in the Superior Court of
California (Contra Costa County), and on Nov. 5, 2005 in
Montgomery County Maryland Circuit Court. The California case
has been stayed, and the defendants have moved to stay the
Maryland case as well.
The suit is "Chase, et al. V. AIMCO Properties, L.P., Case No.
1:03-cv-01683-JR," filed in the U.S. District Court for the
District of Columbia under Judge James Robertson.
Representing the plaintiffs is Richard N. Appel of Akin, Gump,
Strauss, Hauer & Feld, L.L.P., 1333 New Hampshire Avenue, NW
Washington, DC 20036-1511, Phone: (202) 887-4076, Fax: (202)
887-4288, E-mail: rappel@akingump.com.
Representing the defendants is Joseph Marc Sellers of Cohen,
Milstein, Hausfeld & Toll, P.L.L.C., 1100 New York Avenue, NW
Suite 500, West Tower, Washington, DC 20005, Phone: (202) 408-
4600, Fax: (202) 408-4699, E-mail: jsellers@cmht.com.
AK STEEL: Ohio Court Bars Firm from Hiking Retiree Insurance Fee
----------------------------------------------------------------
Judge Michael R. Barrett of the U.S. District Court for the
Southern District of Ohio upheld a preliminary injunction
barring AK Steel Corp. from implementing increases in its former
workers' health-insurance costs, according to Dave Greber of
Journal News.
AK Steel has filed an appeal, said Alan McCoy, the company's
vice president, government and public relations. An appeal
hearing has not been scheduled, the report said.
AK Steel retirees co-pay office visits and prescription drugs
only. In June, the company informed retirees that they have to
pay premiums for their health benefits. The change is to take
effect Oct. 1 and Jan. 1.
In July, nine retirees filed a suit in Cincinnati alleging
breach of labor contracts and of the Employee Retirement Income
Security Act welfare plans.
AK Steel also filed a lawsuit seeking judgment on the legality
of its planned changes, but later withdrew the case to
facilitate a "rapid resolution" to the case.
The retirees' complaint seek to represent two classes consisting
of:
-- hourly production, maintenance and service employees;
and
-- salaried non-exempt employees.
Included are spouses, surviving spouses and or dependents of
individuals, who worked under collective bargaining agreements
negotiated between the company and the Armco Employees
Independent Federation or a predecessor, who retired from such
employment between 1950 and the present, and whose retiree
benefits the company proposes to unilaterally change or
eliminate or seeks a declaration of its rights to do so.
The suit alleges violations of both the Labor Management
Relations Act of 1947 and Employee Retirement Income Security
Act of 1974.
The complaint is available free of charge at:
http://researcharchives.com/t/s?dfa
The suit is "Bailey et al. v. AK Steel Corp., Case No.
1:06-cv-00468-MRB," filed in the U.S. District Court for the
Southern District of Ohio under Judge Michael R. Barrett.
Representing the plaintiffs are David Marvin Cook and Stephen A.
Simon, 22 West Ninth Street, Cincinnati, OH 45202, Phone: 513-
721-6500 and 513-721-7500, E-mail: dcook@dmcllc.com and
ssimon@dmcllc.com.
ARMENIAN GENOCIDE: New Calif. Law Extends Claims Filing to 2016
---------------------------------------------------------------
Gov. Arnold Schwarzenegger signed on Sept. 25 Senate Bill 1524
that would extend the statute of limitations for claims by
Armenian genocide victims until Dec. 31, 2016, according to The
Metropolitan News-Enterprise.
Genocide victims or heirs living in the state may now go beyond
insurance policies and seek bank deposit claims until 2016.
This month, Judge Margaret M. Morrow of the U.S. District Court,
Central District of California allowed the class action by heirs
of Armenian genocide victims to proceed against the Turkish
branches of German banks Deutsche Bank and Dresdner Bank (Class
Action Reporter, Sept. 15, 2006).
In January 1916, nine months after the genocide began that
killed approximately 1.5 million Armenians in the Ottoman
Empire, a decree from the Ottoman Minister of Commerce and
Agriculture ordered all financial institutions operating within
the country's borders to turn over Armenian assets to the
government. Records show that as much as six million Turkish
gold pounds were seized along with real property, cash, bank
deposits and jewelry. The assets were eventually funneled to
European banks, including Deutsche and Dresdner banks.
Descendants of the Armenian Genocide filed a class action
against the Turkish branches of German banks Deutsche Bank and
Dresdner Bank on Jan. 13 (Class Action Reporter, Jan. 17, 2006).
The lawsuit seeks the recovery of millions of dollars of
Armenian money and property wrongfully withheld by the defendant
German banks following the Armenian Genocide. The lawsuit
charges that the banks have maintained possession of Armenian
families' money and assets deposited by Armenian families prior
to 1915 as well as assets looted by the Ottoman Turkish
government.
The lawsuit states that the banks profited from the atrocities
committed against the Armenian people in the Ottoman Turkish
Empire by concealing and preventing the recovery of assets
rightfully belonging to Armenian families.
The case is "Varoujan Deirmenjian, et al. v. Deutsche Bank,
A.G., Dresdner Bank, A.G., et al., CV 06-00774" filed in U.S.
District Court for the Central District of California.
For more information, contact Brian Kabateck of Kabateck Brown
Kellner LLP, Phone: 213-217-5000; E-mail: bsk@kbklawyers.com; or
Diane Zakian Rumbaugh of Rumbaugh Public Relations, Phone: 805-
493-2877; Mobile: 805-407-1888; E-mail: rumbaugh@earthlink.net;
or Mark Geragos of Geragos & Geragos, Phone: 213-625-3900; E-
mail: geragos@geragos.com.
ARVIDA/JMB PARTNERS: Continues to Face Homeowners' Suit in Fla.
---------------------------------------------------------------
Arvida/JMB Partners, L.P., its General Partner Arvida/JMB
Managers, Inc., and certain related and unrelated parties remain
as defendants in a purported class action pending in the Circuit
Court of the 17th Judicial Circuit in and for Broward County,
Florida.
The suit, "Rothal v. Arvida/JMB Partners Ltd. et al., Case No.
03-10709 CACE 12," was originally filed on or about June 20,
2003. In it, plaintiffs purport to bring a class action
allegedly arising out of construction defects occurring during
the development of Camellia Island in Weston, which has
approximately 150 homes.
On May 9, 2005, plaintiffs filed a nine count second amended
complaint seeking unspecified general damages, special damages,
statutory damages, prejudgment and post-judgment interest,
costs, attorneys' fees, and such other relief as the court may
deem just and proper.
Plaintiffs allege, among other things, that:
-- the homes were not built of high quality and adequate
construction;
-- the homes were not built in conformity with the South
Florida Building Code and plans on file with Broward
County, Florida;
-- the roofs were not properly attached or were
inadequate;
-- the truss systems and installation thereof were
improper; and
-- the homes suffer from improper shutter storm protection
systems.
Defendants have filed their answer to the amended complaint,
according to the ALP Liquidating Trust's Aug. 14, 2006 10-Q
filing with the U.S. Securities and Exchange Commission for the
period ended June 30, 2006.
ALP Liquidating Trust engages in liquidating the assets of
Arvida/JMB Partners, L.P., which transferred all of its
remaining assets to the trust at the time of its liquidation in
September 2005. Previously, Arvida/JMB Partners was engaged in
the development of resort and primary home communities for the
middle and upper income segments in the state of Florida, as
well as in Atlanta, Georgia and Highlands, North Carolina. ALP
Liquidating Trust was founded in 1987 and is based in Chicago,
Illinois.
ARVIDA/JMB PARTNERS: Faces Fla. Suit Over Defective Ridges Homes
----------------------------------------------------------------
Arvida/JMB Partners, L.P. was named defendant in a purported
class action in the Circuit Court of the Seventeenth Judicial
Circuit in and for Broward County, Florida.
The suit, "Osnovsky, et al. v. Arvida Co., Arvida/JMB Partners,
and Arvida Realty Co., Inc., Case No. 05015925," was filed on
Nov. 7, 2005. It was served on the Arvida defendants on Mar. 1,
2006.
Plaintiffs filed a three-count class action complaint for
alleged violations of state building code, failure to disclose
known defects in a residential real estate transaction, and
negligence, all in connection with injuries allegedly sustained
to their homes in the Ridges subdivision, a homeowners
association in Weston that has about 1,500 units.
Plaintiffs complain of alleged roofing defects in their homes,
among other things. Plaintiffs seek unspecified damages and the
opportunity to amend to add punitive damages, according to the
ALP Liquidating Trust's Aug. 14, 2006 10-Q filing with the U.S.
Securities and Exchange Commission for the period ended June 30,
2006.
ALP Liquidating Trust engages in liquidating the assets of
Arvida/JMB Partners, L.P., which transferred all of its
remaining assets to the trust at the time of its liquidation in
September 2005. Previously, Arvida/JMB Partners was engaged in
the development of resort and primary home communities for the
middle and upper income segments in the state of Florida, as
well as in Atlanta, Georgia and Highlands, North Carolina. ALP
Liquidating Trust was founded in 1987 and is based in Chicago,
Illinois.
BORLAND SOFTWARE: Del. Court Approves "Dieterich" Settlement
------------------------------------------------------------
The Chancery Court of the State of Delaware gave final approval
to the proposed settlement in the matter, "Dieterich v. Harrer,
et al., Case No. 024-N," which was filed against Borland
Software Corp. and Starbase Corp.
On Nov. 27, 2002, a stockholder class action and derivative
lawsuit, "Dieterich v. Harrer, et al., Case No. 02CC00350," was
filed against Starbase, and five former directors of Starbase in
the Superior Court of the state of California for Orange County,
claiming that the former directors had breached fiduciary duties
owed to Starbase and stockholders of Starbase.
The company is paying the costs of defending this litigation
pursuant to indemnification obligations under the merger
agreement relating to the company's acquisition of Starbase.
Following a series of motions, the case was dismissed without
prejudice on Aug. 20, 2003.
On Oct. 28, 2003, a stockholder class action relating to the
same matter was filed against the former directors of Starbase
in Chancery Court of the State of Delaware. It is alleging
breach of fiduciary duties by the former directors of Starbase.
The lawsuit also named as defendants the company and former
executive officers:
-- Dale Fuller,
-- Keith Gottfried,
-- Frederick Ball, and
-- Doug Barre
Defendants moved to dismiss the suit and in August 2004, the
Chancery Court granted in part and denied in part the motion to
dismiss. Discovery commenced in the second half of 2004.
Subsequently, there were discussions with the plaintiff
concerning a possible settlement of the litigation. As a result
of these discussions, a settlement was reached.
Under the settlement the company agreed to pay $475,000 and
actual costs to administer the settlement fund up to a maximum
of $25,000, in exchange for dismissal of the action and a full
and general release of all claims relating to or concerning the
factual and legal allegations in the complaint. Excluded are
claims by former Starbase shareholders who contend they did not
receive the full consideration to which they were entitled from
the acquisition by Borland. The settlement is conditioned on:
-- certification of the plaintiff class;
-- approval by the Delaware Chancery Court; and
-- satisfaction of all other legal requirements.
The parties executed a stipulation of settlement and proposed
scheduling order that was signed by the Vice Chancellor on Mar.
30, 2006. This triggered the requirement by the company to fund
the $475,000 settlement as well as the $25,000 for
administration fees within five business days. The company
funded the settlement within the required time limit.
On June 13, 2006, the Chancery Court entered an order finding
that the settlement was fair, adequate, and reasonable,
according to the company's Aug. 14, 2006 10-Q filing with the
U.S. Securities and Exchange Commission for the period ended
June 30, 2006.
Cupertino, California-based Borland Software Corp. (NASDAQ:
BORL) -- http://www.borland.com-- specializes in software
delivery optimization, which is the transformation of software
development from separate tasks into a managed and efficient
business process. To assist organizations with this
transformation, Borland offers platform-independent application
lifecycle management software designed to increase efficiency,
visibility and control over all phases of the software delivery
lifecycle, from deciding which software to create, to defining,
developing and delivering that software. It also offers
software process improvement services and educational services
to customers across the world. Borland conducts operations and
sell a substantial portion of its products outside the U.S. The
company maintains international offices in a number of foreign
countries and territories, including Australia, Canada, France,
Germany, Japan, Singapore and the United Kingdom.
CALIFORNIA: Fresno School Retirees Sue Over Health Care Plan
------------------------------------------------------------
Fresno Unified School District is facing a lawsuit filed by a
group of school retirees complaining against changes to
pensioners' health care benefits, the Fresno Bee reports.
The suit was filed about 20 retirees and the Fresno Unified
Retirees' Association. It is asking class-action status on
behalf of about 3,500 retirees who purports to be eligible for
district-paid health care for themselves, their spouses and
dependents.
It seeks an order stopping the school district from billing
retirees for health care, and the return of money paid by
retirees, including interest, and the restoration of their
health plan to its original form.
A plan agreed with the district and the retirees in June 1977
provides "lifetime" benefit to pensioners. The plan was changed
in 2005 to require retirees to pay health-care premiums and
administrative fees. Under the new deal, retirees pay premiums
that drop to $10 per month when they turn 65 and are free when
they turn 75.
One of the plaintiffs is retired district Superintendent Glen
Rathwick.
Representing the plaintiffs is Robert Bezemek of Oakland,
California (Alameda Co.).
CANADA: Privacy Rights Suit Against Penitentiary to Go to Trial
---------------------------------------------------------------
The Ontario Court of Appeal restored two of three claims
alleging breach by Kingston's Joyceville Penitentiary of
employees' privacy rights, reports say.
The suit, which is seeking class-action status, was filed in
Ontario's Superior Court of Justice by employees on behalf of an
estimated 400 to 600 employees and their spouses, whose home
addresses and phone numbers were accessed by inmates.
It accuses the correctional service of negligence, breach of
statutory duty and violation of employees' privacy rights.
Lawyer Christopher Edwards, who represents two named plaintiffs,
said that his initial knowledge of why the information was
spread out was that during a flood at the Kingston-area prison
in August 2003, someone instructed inmates to clean up the human
resources office. At some point, the address list was removed
from one of the filing cabinets, and was later allegedly found
to have circulated among inmates for two to three months.
A prison guard filed a complaint with the federal privacy
commissioner. The commissioner found that the employees' rights
to privacy had been breached. Last year, the federal government
denied three of those claims. Justice Michel Charbonneau
dismissed allegations that the correctional service breached its
statutory duty and a fiduciary duty, as well as the Charter
rights of Joyceville employees.
However, on Sept. 21, the Ontario Court of Appeal restored two
of those claims, saying questions about whether the correctional
service breached any special duty toward its employees is best
left for trial.
Named plaintiffs in the suit are Joyceville prison guard Donald
Smith and James Jackson.
CATHOLIC HEALTHCARE: Court Okays New Deal in Price Gouging Suit
---------------------------------------------------------------
The San Francisco Superior Court issued preliminary approval
that modified the settlement agreement of a class action against
Catholic Healthcare West in relation to hospital price gouging,
Sacramento Business Journal reports.
The initial agreement reached in May was changed to make
available a 35 percent discount or refund on bills of uninsured
patients who received treatment at a Catholic Healthcare West
hospital from July 1, 2001 through Sept. 25, 2006.
According to plaintiffs' counsel Kelly Dermody of Lieff,
Cabraser, Heimann & Bernstein LLP, the only major change is that
the agreement now provides that uninsured patients with incomes
of less than $250,000 per year will qualify for rates equivalent
to the highest managed-care plan or a discount of 25 percent,
whichever results in a lower bill.
Uninsured patients who wish to apply for greater discounts based
on economic need can apply for additional financial assistance.
The agreement essentially applies a charity-care policy adopted
by Catholic Healthcare in May 2004 to benefit about 700,000
uninsured patients who received care at Catholic Healthcare
hospitals after July 1, 2001.
The initial settlement amount was estimated at about $228
million, according to court documents.
Catholic Healthcare, which admitted no wrongdoing, also agreed
to maintain the charity-care policy unchanged for four more
years.
The Settlement
As part of the agreement, class members will be entitled to make
a claim for refunds or deductions from their prior hospital
bills pursuant to discounted pricing and collections policies
benefiting uninsured patients during the class period. In
addition, Catholic Healthcare has agreed to maintain its
uninsured pricing and collections policies going forward for at
least four years, among other things.
The lawsuit was filed by plaintiffs Adrienne Dancer and Amber T.
Howell on behalf of themselves and hundreds of thousands of
uninsured patients at Catholic Healthcare hospitals in
California, Nevada and Arizona, alleging that Defendant Catholic
Healthcare charged uninsured patients excessive and unfair
prices for medical treatment and services given at Catholic
Healthcare-affiliated hospitals, and engaged in aggressive and
unfair collections practices. Defendant denies wrongdoing and
liability in the case.
Proposed Class
The proposed class includes all persons who:
-- received hospital services from a Catholic Healthcare
West hospital between July 1, 2001 and the date of
preliminary settlement approval;
-- were uninsured at the time of treatment; and
-- earned less than $250,000 in gross annual household
income in the calendar year in which they received
hospital services.
The suit is "Dancer v. Catholic Healthcare West." Counsel for
named plaintiffs and class members are Kelly M. Dermody of Lieff
Cabraser Heimann & Bernstein, LLP, and Sid Backstrom of the
Scruggs Law Firm. More information about the settlement can be
found at http://www.lieffcabraser.com/chw.htm.
DYNEX CAPITAL: N.Y. Court Partially Dismisses Securities Lawsuit
----------------------------------------------------------------
Dynex Capital, Inc. and its subsidiary MERIT Securities Corp.
moved for reconsideration and interlocutory appeal of the
decision by the U.S. District Court for the Southern District of
New York that rejected their motion to dismiss a securities
fraud class action filed against them.
The Teamsters Local 445 Freight Division Pension Fund filed the
suit on Feb. 11, 2005. It purports to be a class action on
behalf of purchasers of MERIT Series 13 securitization financing
bonds, which are collateralized by manufactured housing loans.
The allegations include federal securities laws violations in
connection with the issuance in August 1999 by MERIT Securities
Corp. of the company's MERIT Series 13 bonds. The suit also
alleges fraud and negligent misrepresentations in connection
with MERIT Series 13.
On May 31, 2005, the Teamsters filed an amended class action
complaint. The amended complaint dropped all state common law
claims but added federal securities claims related to the MERIT
Series 12 securitization financing bonds.
The company filed a motion to dismiss the amended complaint on
July 15, 2005 to which Teamsters filed a response with the court
on Aug. 15, 2005.
On Feb. 10, 2006, the court dismissed the claims against Messrs.
Benedetti and Potts, but did not dismiss the claims against
Dynex and MERIT.
On Feb. 24, 2006, Dynex and MERIT moved for reconsideration and
interlocutory appeal of the court's order denying the motion to
dismiss Dynex and MERIT.
The suit is "Teamsters Local 445 Freight Division Pension Fund
et al v. Dynex Capital, Inc. et al., Case No. 1:05-cv-01897-HB,"
filed in the U.S. District Court for the Southern District of
New York, under Judge Harold Baer.
Representing the plaintiffs are Joel P. Laitman, Christopher
Lometti and Samuel P. Sporn, Schoengold & Sporn, P.C., 19 Fulton
Street, Suite 406, New York, NY 10038, Phone: 212-964-0046, Fax:
212-267-8137, E-mail: chris@spornlaw.com.
Representing the company are Monica Shelton Call, Eric Harrison
Feiler, Edward Joseph Fuhr, Terence James Rasmussen and Joseph
John Saltarelli of Hunton & Williams, LLP, (Richmond VA), 951
East Byrd Street, Richmond, VA 23219, Phone: (804)-788-8632,
Fax: (804)-788-8218, E-mail: trasmussen@hunton.com or
jsaltarelli@hunton.com.
DYNEX CAPITAL: Still Faces Suit by Delinquent Taxpayers in Pa.
--------------------------------------------------------------
Dynex Capital, Inc. and one of its subsidiaries, GLS Capital,
Inc., together with the County of Allegheny, Pennsylvania,
continue to face a purported class action in the Court of Common
Pleas.
Plaintiffs are two local businesses seeking status to represent,
as a class, delinquent taxpayers in Allegheny County whose
delinquent tax liens had been purchased by, and subsequently
assigned to GLS.
This lawsuit relates to the purchase by GLS of delinquent
property tax receivables from Allegheny County in 1997, 1998,
and 1999, and subsequent collection of certain amounts related
to the property tax receivables purchased.
The suit was initially filed in 1997, and challenges GLS' right
to charge certain attorney fees, costs and expenses, and
interest in the collection of delinquent property tax
receivables owned by GLS.
During 2005, the court held hearings in this matter, and has not
yet ruled on whether it will grant class-action status in the
litigation. Plaintiffs have not enumerated its damages in this
matter.
Glen Allen, Virginia-based Dynex Capital, Inc. (NYSE: DX) --
http://www.dynexcapital.com-- together with its subsidiaries,
is a specialty finance company organized as a real estate
investment trust that invests in loans and securities consisting
principally of single-family residential and commercial mortgage
loans. The company finances these loans and securities through
a combination of non-recourse securitization financing,
repurchase agreements and equity. It employs financing in order
to increase the overall yield on the invested capital.
ENRON CORP: Former CFO Gets 6-Year Sentence, Implicates Banks
-------------------------------------------------------------
Judge Kenneth Hoyt of the U.S. District Court for the Southern
District of Texas sentenced former Enron Corp. chief financial
officer, Any Fastow, to six years in prison, reports say.
In a sworn declaration filed with the federal court during his
sentencing hearing in Houston on Sept. 26, Mr. Fastow provided
information against several banks in relation to their role in
the collapse of the company. The banks include:
-- Barclays plc,
-- Credit Suisse First Boston,
-- Merrill Lynch,
-- Deutsche Bank,
-- Royal Bank of Canada, and
-- Toronto Dominion
A review of Mr. Fastow's sworn declaration and the thousands of
pages of internal documents show that the banks and Enron
allegedly engaged in three basic kinds of bogus financial deals:
* deals that involved generating false earnings through
sham deals and phony companies, which allowed Enron's
stock to continue to climb;
* the hiding of debt through the creation of shell
companies where bad Enron assets could be parked so they
would not show up on the books and prevent the market
from making a truthful evaluation of the company's
financial health; and
* transactions that used loans disguised to look like
investments that were reported as cash flow rather than
debt-thereby hiding the true nature of Enron's finances.
A copy of the sworn testimony is available for free at:
http://ResearchArchives.com/t/s?12a2
The document relates to Mark Newby et al. v. Enron Corp. et al.
Case Background
On April 8, 2002, Lerach Coughlin Stoia Geller Rudman & Robbins,
LLP filed a consolidated class action against Enron Corp. in the
U.S. District Court in Houston. The suit seeks relief for
purchasers of Enron publicly traded equity and debt securities
between Oct. 19, 1998 and Nov. 27, 2001.
The consolidated complaint charges certain Enron executives and
directors, its accountants, law firms, and banks with violations
of the federal securities laws and alleges that defendants
engaged in massive insider trading while making false and
misleading statements about Enron's financial performance.
Shareholders in the company lost billions after Enron revealed
in late 2001 it would incur losses of at least $1 billion and
would restate its financial results for 1997, 1998, 1999, 2000,
and the first two quarters of 2001, to correct errors that
inflated Enron's net income by $591 million.
On Dec. 2, 2001, Enron filed for Chapter 11 bankruptcy.
The U.S. District Court in Houston has denied a number of
motions to dismiss Lerach Coughlin's securities litigation. The
parties are currently engaged in discovery and motion practice;
depositions began in the summer of 2004, according to the law
firm.
Settlements
The lead plaintiff is the University of California Regents. The
university has now obtained more than $7.3 billion (including
interest) for Enron investors, including:
-- $13.5 million from Kirkland & Ellis LLP,
-- $72.5 million settlement from Arthur Andersen LLP,
-- $2.4 billion from Canadian Imperial Bank of Commerce,
-- $2.2 billion from JPMorganChase,
-- $2 billion from Citigroup,
-- $222.5 million from Lehman Brothers,
-- $69 million from Bank of America,
-- $168 million from Enron's outside directors, and
-- $32 million from Andersen Worldwide
Non-settling Defendants
The non-settling defendants include Merrill Lynch & Co.,
Barclays PLC, Toronto-Dominion Bank, Royal Bank of Canada,
Deutsche Bank AG and the Royal Bank of Scotland Group PLC.
The suit against Enron is "In Re: Enron Corp Securities, et al.
(4:02-md-01446)" filed in the U.S. District Court for the
Southern District of Texas under Judge Melinda Harmon.
Representing the defendants is J Mark Brewer of Brewer and
Pritchard, Three Riverway Ste 1800, Houston, TX 77056, Phone:
713-209-2950, Fax: 713-659-5302; E-mail: brewer@bplaw.com.
Contact for William S. Lerach of Lerach Coughlin: 655 West
Broadway, Ste 1900, San Diego, CA 92101, Phone: 619-231-1058.
EWE AG: Plaintiffs Drop Part of Complaint in Price Hike Suit
------------------------------------------------------------
Lawyers representing 64 German household customers suing utility
company EWE AG over a gas price increase from last August have
dropped part of their class action, according to Platts.
After a recent hearing at the district court of Aurich, a judge
found that the case affected anti-trust issues, hence it should
be decided by the cartel court at Hanover. An Oct. 6 hearing
will still decide on the final course of the case.
Plaintiffs had claimed EWE would be a monopoly in its supply
area and misuse its market dominant position at the expense of
customers.
EWE -- http://www.ewe.de/english/eng_presse.php-- is a multi-
service energy company, headquartered in Oldenburg in the German
federal state of Lower Saxony. In the energy sector, the
company's two core business areas are natural gas and
electricity.
FIRST BANCORP: Still Faces Consolidated Securities Suit in P.R.
---------------------------------------------------------------
First BanCorp remains a defendant in a consolidated securities
fraud class action filed in the U.S. District Court for the
District of Puerto Rico, according to its Sept. 26, 2006 Form
10-K/A filing with the U.S. Securities and Exchange Commission
for the fiscal year ended Dec. 31, 2004.
Initially, the company and certain of its officers and directors
and former officer and directors were named as defendants in
five separate securities class actions filed between Oct. 31,
2005 and Dec. 5, 2005, alleging violations of Sections 10(b) and
20(a) of the U.S. Securities Exchange Act of 1934.
All securities class actions have been consolidated into one
case, "In Re: First BanCorp Securities Litigations" currently
pending before the U.S. District Court for the District of
Puerto Rico.
The suit is "Fox v. First Bancorp, et al., Case No. 3:05-cv-
02148-GAG," filed in the U.S. District Court for the District of
Puerto Rico under Judge Gustavo A. Gelpi.
Representing the plaintiffs are:
(1) Charles S. Hey-Maestre of De Jesus, Hey & Vargas Law
Office, 1060 Borinquena St., Santa Rita Bldg., Suite C-
8, San Juan, PR 00925, Phone: 787-758-8950, Fax: 787-
758-8911, E-mail: fedcases@djhv-derechopr.com;
(2) Glenn Carl James-Hernandez of James Law Offices, PMB
501, 1353 Rd. 19, Guaynabo, PR 00966-2700, Phone: 787-
763-2888, Fax: 787-763-2881, E-mail:
jameslawoffices@centennialpr.net;
(3) Andres W. Lopez of Andres W. Lopez Law Office, 207 Del
Parque St., Third Floor, San Juan, PR 00912, Phone:
787-406-9075, Fax: 787-641-4544, E-mail:
andreswlopez@yahoo.com; and
(4) PHV Kevin McGee of Zwerling, Schachter & Swerling, LLP,
595 South Federal Highway, Suite 600, Boca Raton, FL
33432, US, Phone: 561-544-2500, Fax: 561-544-2501, E-
mail: kmcgee@zsz.com.
Representing the defendants are:
(i) PHV Joseph S. Allerhand of Weil, Gotshal & Manges, 767
Fifth Avenue, New York, NY 10153, US, Phone: (212) 310-
8945, Fax: (212) 310-8007, E-mail:
joseph.allerhand@weil.com; and
(ii) Eyck O. Lugo-Rivera of Martinez Odell & Calabria, P.O.
Box 190998, San Juan, PR 00919-0998, Phone: 787-274-
2903, Fax: 787-764-5664, E-mail: elugo@mocpr.com.
GAINSCO INC: Settlement Reached in Tex. Securities Fraud Lawsuit
----------------------------------------------------------------
A tentative settlement was reached in the purported class action
"Earl Culp, et al. v. GAINSCO, Inc., Glenn W. Anderson, and
Daniel J. Coots, Civil Action No. 4:04-CV-723-Y," which is
pending in the U.S. District Court for the Northern District of
Texas.
Mr. Anderson is the company's president and chief executive
officer, and Mr. Coots is the company's senior vice president
and chief financial officer.
The suit was initially filed in federal district court in
Florida and is a consolidation of two previously separately
pending actions filed at approximately the same time and
involving essentially the same facts and claims. It alleges
violations of the federal securities laws in connection with the
company's acquisition, operation and divestiture of its former
Tri-State, Ltd. subsidiary, a South Dakota company selling non-
standard personal auto insurance.
On March 29, 2004, plaintiff filed a Second Consolidated Amended
Class Action Complaint that is based on the same claims as the
previously consolidated proceedings.
The alleged class period begins on Nov. 17, 1999, when the
company issued a press release announcing its agreement to
acquire Tri-State, and ends on Feb. 7, 2002, when the company
issued a press release warning investors that it "expect[ed] to
report a significant loss for the fourth quarter and year ended
Dec. 31, 2001." The second amended complaint seeks class
certification for the litigation.
In general, the second amended complaint alleges that:
-- during the class period the company's press releases and
filings with the U.S. Securities and Exchange Commission
contained non-disclosures and deceptive disclosures in
respect of Tri-State;
-- that the company's press releases and filings with the
SEC disclosing the company's losses in 2000 and 2001
failed to disclose the alleged declining financial
condition and declining profitability of Tri-State; and
-- that the company's financial statements were not
prepared in accordance with generally accepted
accounting principles,
all in violation of Section 10(b) of the U.S. Securities
Exchange Act of 1934 and SEC Rule 10b-5 there under.
More particularly, the second amended complaint includes
allegations that:
-- the company issued a press release on Nov. 17, 1999
announcing the acquisition of Tri-State and stating that
the Tri-State acquisition was "expected to be minimally
accretive to earnings" in 2000;
-- the company failed to disclose that it had imposed more
lenient underwriting and claims procedures on Tri-
State's book of nonstandard personal automobile
insurance policies than Tri-State's former owners,
causing a reduction in Tri-State's net income;
-- the company hid problems it was having at Tri-State and
failed to disclose that Tri-State had lost profitability
almost immediately after the company acquired Tri-State
in January 2000;
-- the company "buried" Tri-State's financial performance
in its Lalande business segment or in the reporting of
the company's overall financial performance;
-- the company failed to disclose in a Form 8-K a lawsuit
it had filed on July 7, 2001 against Herb Hill, the
founder of Tri-State, contending that the Herb Hill
lawsuit was a material pending legal proceeding;
-- defendant Anderson hid Tri-State's performance from the
company's board of directors; and
-- the company violated generally accepted accounting
principles by failing to record an impairment in or
write-down of approximately $5.4 million in goodwill
attributable to the Tri-State acquisition until the
company announced the sale of Tri-State in August 2001
back to Herb Hill for $900,000.
The second amended complaint does not specify the amount of
damages plaintiff seeks. Discovery in the case has been
ongoing.
In July 2006, a tentative agreement was reached which, if
implemented, would result in a final settlement of the case,
according to the company's Aug. 14, 2006 10-Q filing with the
U.S. Securities and Exchange Commission for the period ended
June 30, 2006.
The suit is "Culp v. GAINSCO, Inc., et al., Case No. 4:04-cv-
00723," filed in the U.S. District Court for the Northern
District of Texas under Judge Terry R. Means.
Representing the plaintiffs are:
(1) Roger F. Claxton of Claxton & Hill, 3131 McKinney Ave.,
Suite 700 LB 103, Dallas, TX 75204-2471, Phone:
214/969-9029, Fax: 214/953-0583, E-mail:
claxtonhill@airmail.net;
(2) Jack Reise of Lerach Coughlin Stoia Geller Rudman &
Robbins - Boca Raton, 197 S. Federal Highway, Suite 200
Boca Raton, FL 33432, Phone: 561-750-3000, Fax: 561-
750-3364, E-mail: jreise@lerachlaw.com; and
(3) Kenneth J Vianale of Vianale & Vianale, 2499 Glades
Rd., Suite 112, Boca Raton, FL 33431, Phone: 561-392-
4750, Fax: 561/392-4775, E-mail: e-file@vianalelaw.com.
Representing the company is Mark T. Josephs of Jackson Walker -
Dallas, 901 Main St., Suite 6000, Dallas, TX 75202-3797, Phone:
214/953-6000, Fax: 214/953-5822, E-mail: mjosephs@jw.com.
GAINSCO INC: Facing Insurance Fraud Litigation in Florida
---------------------------------------------------------
GAINSCO, Inc. is a defendant in a purported class action filed
in U.S. District Court for the Middle District of Florida over
allegations that the company violated state insurance laws.
Early in the third quarter 2006, the company and two
subsidiaries were served with the putative lawsuit filed by Ruth
R. Arbelo, individually, and on behalf of all others similarly
situated, against GAINSCO, Inc., National Specialty Lines, Inc.
and MGA Insurance Co., Inc. (Case No. 2:06-cv-263-FtM-29DNF.)
The suit alleges that the defendants violated certain provisions
of Florida insurance laws with respect to the manner in which
finance charges are imposed on Florida residents in connection
with installment payments of insurance premiums. It thus seeks
damages in an unspecified amount in excess of $5 million and
other relief.
The suit is "Arbelo v. Gainsco, Inc., et al., Case No. 2:06-cv-
00263-JES-DNF," filed in the U.S. District Court for the Middle
District of Florida under Judge John E. Steele with referral to
Judge Douglas N. Frazier.
Representing the plaintiffs are:
(1) Marcus W. Viles of Viles & Beckman, LLC, 6350
Presidential Ct., Suite A, Ft. Myers, FL 33919, Phone:
239/334-3933, Fax: 239/334-7105, E-mail:
marcus@vilesandbeckman.com; and
(2) Scott Wm. Weinstein of Weinstein, Bavly & Moon, PA,
Suite 303, 2400 First St., Ft. Myers, FL 33901, US,
Phone: 239/334-8844, Fax: 239-334-1289, E-mail:
scott@weinsteinlawfirm.com.
Representing the defendants is Christopher S. Carver of Akerman
Senterfitt, 28th Floor, 1 SE 3rd Ave., Miami, FL 33131-1714, US,
Phone: 305/374-5600, Fax: 305/374-5095, E-mail:
christopher.carver@akerman.com.
GAS PRICE INDEXING LITIGATION: Settlement Hearing Set Dec. 11
-------------------------------------------------------------
The Superior Court of the state of California, County of San
Diego will, hold on Dec. 11, 2006, 10 a.m. a final approval
hearing for the settlement of the class action, "Natural Gas
Antitrust Cases I-IV, Price Indexing Cases, JCCP No. 4221, et
al."
The class consists of all residential and business consumers in
California who purchased natural gas for use (and excluding
purchases that they may have made for resale or to generate
electricity for resale) at any time from Jan. 1, 1999 through
Dec. 31, 2002.
The hearing will be at Superior Court of the State of
California, County of San Diego in the courtroom of the
Honorable Ronald S. Prager.
Deadline to file for exclusion and objection is Nov. 15, 2006.
The lawsuit alleges that defendants caused the price of natural
gas to increase by conducting prearranged "wash trades" -- the
contemporaneous purchase and sale of the same amount of natural
gas at the same price -- and by reporting false price and volume
information to trade publications that compile natural gas price
indices, in violation of California antitrust and unfair
competition laws, and that California business and residential
consumers paid more for natural gas as a result.
Defendants deny these allegations. Named defendants in the suit
are:
-- Coral Energy Resources, L.P.,
-- Dynegy Inc.,
-- WD Energy Services Inc., and
-- the Williams Companies Inc.
On Sept. 1, the court preliminarily approved the proposed
settlement, and provisionally certified a settlement class.
Under the settlement, in exchange for the release of all claims
arising out of the purchase of natural gas during the class
period or the conduct alleged in the action, the defendants will
provide total consideration to the class of $92.1 million, as
follows:
Coral $26 million
WD $20.5 million
Dynegy and affiliates $30 million
Williams $15.6 million
The benefits of the settlement will be passed through to
California natural gas ratepayers in the form of rate
reductions, credits, and/or rebates, subject to the approval of
the California Public Utilities Commission.
If the settlement is approved, "non-core" gas customers will be
invited to submit claims for their share of the settlement,
based on a formula. The two groups of class members will share
the benefits of the settlement as:
natural gas ratepayers - 44.3%
non-core gas customers - 55.7%
If the settlement is approved, class members will release the
settling defendants from any and all claims, causes of action,
demands, rights, actions, suits and requests for equitable,
legal and administrative relief of any kind or nature whatsoever
claims arising from or relating to:
(i) the facts alleged, including without limitation any and
all claims that were or could have been asserted
against the settling defendants under state and federal
antitrust laws, unfair competition statutes and common
law principles, unjust enrichment principles, or any
other common law, statutory or equitable theory; and
(ii) the purchase of natural gas during the class period,
including but not limited to the purchase of physical
natural gas and/or any transaction relating to,
dependent upon or derivative of the price of natural
gas.
The settlement does not release claims that any member of the
class may have against the settling defendants for bodily
injuries or physical damage to real or personal property.
The settlement does not release claims that any class member may
have against any settling defendant based solely on the
performance or non-performance of the parties under a contract
between the class member and a settling defendant.
The 20 law firms representing the Class will apply for
attorneys' fees and reimbursement of litigation expenses
incurred not to exceed, in the aggregate, 30% of the settlement
amount. The named plaintiffs will also apply for incentive
awards of not more than $10,000 each.
The court has appointed the law firms of Lieff, Cabraser,
Heimann & Bernstein, LLP; and Engstrom, Lipscomb and Lack as
lead counsel for the Class.
A copy of the Notice of Proposed Class Action Settlement is
available free of charge at:
http://ResearchArchives.com/t/s?128f
For more information, contact Barry R. Himmelstein of Lieff,
Cabraser, Heimann & Bernstein, LLP, Embarcadero Center West
275 Battery Street, 30th Floor, San Francisco, CA 94111-3339;
and Jeffrey M. Shohet of DLA Piper U.S. LLP, 401 B Street, Suite
1700, San Diego, CA 92101-4297.
HEALTHSOUTH CORP: Ala. Court Approves ERISA Lawsuit Settlement
--------------------------------------------------------------
The U.S. District Court for the Northern District of Alabama
gave final approval to the settlement in the consolidated class
action, "In re HealthSouth Corp. ERISA Litigation, Consolidated
Case No. CV-03-BE-1700-S."
In 2003, six lawsuits were filed against the company and some of
its current and former officers and directors alleging breaches
of fiduciary duties in connection with the administration of its
Employee Stock Benefit Plan. These lawsuits were later
consolidated.
The plaintiffs filed a consolidated complaint on Dec. 19, 2003
that alleged, generally, that fiduciaries to the ESOP breached
their duties to loyally and prudently manage and administer the
ESOP and its assets in violation of sections 404 and 405 of the
Employee Retirement Income Security Act of 1974, Section 1001 et
seq., of the U.S. Labor Code by failing to monitor the
administration of the ESOP, failing to diversify the portfolio
held by the ESOP, and failing to provide other fiduciaries with
material information about the ESOP.
The plaintiffs sought actual damages including losses suffered
by the plan, imposition of a constructive trust, equitable and
injunctive relief against further alleged violations of ERISA,
costs pursuant to Section 1132(g) of the Labor Code, and
attorneys' fees.
Plaintiffs also sought damages related to losses under the plan
as a result of alleged imprudent investment of plan assets,
restoration of any profits made by the defendants through use of
plan assets, and restoration of profits that the plan would have
made if the defendants had fulfilled their fiduciary
obligations.
Pursuant to an amended class action settlement agreement entered
into on March 6, 2006, all parties have agreed to a global
settlement of the claims in the ERISA action.
Under the terms of this settlement:
-- Michael Martin, a former chief financial officer of the
company, will contribute $350,000 to resolve claims
against him;
-- Richard Scrushy, former chief executive officer of the
company, and its insurance carriers will contribute $3.5
million to resolve claims against him; and
-- HealthSouth and its insurance carriers will contribute
$25 million to settle claims against all remaining
defendants, including HealthSouth.
In addition, if the company recovered any or all of the judgment
against Mr. Scrushy for the restitution of incentive bonuses
paid to him during 1996 through 2002, it will contribute the
first $1 million recovered to the class in the ERISA action.
On June 28, 2006, the court granted final approval to the
amended class action settlement agreement and the ERISA action
was dismissed with prejudice.
The suit is "In re HealthSouth Corp. ERISA Litigation,
Consolidated Case No. CV-03-BE-1700-S," filed in the U.S.
District Court for the Northern District of Alabama under Judge
Karon O. Bowdre.
Representing the plaintiffs are:
(1) Derek W. Loeser of Keller Rohrback, LLP, 1201 Third
Avenue, Suite 3200, Seattle, WA 98101-3052, Phone: 206-
224-1498, Fax: 206-623-3384, E-mail:
dloeser@kellerrohrback.com; and
(2) Richard R. Rosenthal of Law Offices of Richard R.
Rosenthal, P.C., 200 Title Building, 300 Richard
Arrington Jr. Blvd., North, Birmingham, AL 35203,
Phone: 252-1146, Fax: 252-4907, E-mail:
rosenthallaw@bellsouth.net.
Representing the defendants are:
(i) Arthur W. Leach of 4371 Quail Ridge Way, Norcross, GA
30092, Phone: 404-786-6443, E-mail:
art@arthurwleach.com; and
(ii) Leslie V. Moore of Moore & Associates, LLC, 4000 Eagle
Point Corporate Drive, Birmingham, AL 35242, Phone:
314-5709, E-mail: les.moore@mooreandassociatesllc.com.
HEALTHSOUTH CORP: Settles Ala. Securities Fraud Suits for $445M
---------------------------------------------------------------
HealthSouth Corp. entered into definitive agreements with:
-- the lead plaintiffs in the federal securities class
actions and the derivative actions,
-- as well as certain of its insurance carriers,
to settle litigation filed against HealthSouth, certain of its
former directors and officers and certain other parties in:
* the U.S. District Court for the Northern District of
Alabama; and
* the Circuit Court in Jefferson County, Alabama.
The suits are related to financial reporting and related
activity that occurred at the company during periods ended in
March 2003. These agreements memorialize the preliminary
settlement previously announced on Feb. 23, 2006.
Under the settlement agreements, federal securities and fraud
claims brought in the class action against HealthSouth and
certain of its former directors and officers will be settled for
consideration consisting of HealthSouth common stock and
warrants valued at $215 million and cash payments by
HealthSouth's insurance carriers of $230 million, or aggregate
consideration of $445 million.
In addition, the federal securities class action plaintiffs will
receive 25% of any net recoveries from future judgments obtained
by or on behalf of HealthSouth with respect to certain claims
against Richard Scrushy, the company's former chief executive
officer, Ernst & Young, the company's former auditors, and UBS,
the company's former primary investment bank, each of which
remains a defendant in the derivative actions as well as the
federal securities class actions.
The settlement is subject to the satisfaction of a number of
conditions, including final approval of the U.S. District Court.
The settlement agreement is also conditioned upon the approval
of bar orders in the federal securities and derivative
litigations by the U.S. District Court and the Circuit Court
that would, among other things, preclude certain claims by the
non-settling co-defendants against HealthSouth and the insurance
carriers relating to matters covered by the settlement
agreements.
The settlement agreement also requires HealthSouth to indemnify
the settling insurance carriers for any amounts that they are
legally obligated to pay to any non-settling defendants.
"This settlement represents another significant milestone in
HealthSouth's recovery and is a powerful symbol of the progress
we have made as a company," said HealthSouth President and CEO
Jay Grinney. "I would like to thank the many people who have
worked tirelessly over the last three years to settle this
litigation and help us continue to put the past behind us."
The settlement does not contain any admission of wrongdoing by
HealthSouth or any other settling defendant.
Securities to be issued by HealthSouth in connection with the
settlement will consist of an aggregate of 25,118,656 shares of
its common stock and eleven-year warrants to purchase an
aggregate of 40,756,326 additional shares of HealthSouth common
stock at an exercise price of $8.28 per share, in each case, as
the same will be adjusted by the proposed 1-for-5 reverse stock
split of HealthSouth's common stock, which, subject to
stockholder approval, is expected to become effective before the
end of October.
Settlement Excludes Ernst & Young, UBS
The settlement does not include Ernst & Young, UBS, Mr. Scrushy
or any former HealthSouth officer who entered a guilty plea or
was convicted of a crime in connection with the company's former
financial reporting activities.
Case Background
On June 24, 2003, the U.S. District Court for the Northern
District of Alabama consolidated a number of separate securities
lawsuits filed against the company.
The Consolidated Securities Action included two prior
consolidated cases:
-- "In re HealthSouth Corp. Securities Litigation, CV-98-J-
2634-S," and
-- "In re HealthSouth Corp. 2002 Securities Litigation,
Consolidated File No. CV-02-BE-2105-S,"
as well as six lawsuits filed in 2003.
Including the cases previously consolidated, the Consolidated
Securities Action comprised over 40 separate lawsuits. The
court divided the Consolidated Securities Action into two
subclasses:
(1) complaints based on purchases of the company's common
stock were grouped under the caption, "In re
HealthSouth Corp. Stockholder Litigation, Consolidated
Case No. CV-03-BE-1501-S," (the Stockholder Securities
Action), which was further divided into complaints
based on:
(a) purchases of the company's common stock in the open
market (grouped under the caption, "In re
HealthSouth Corp. Stockholder Litigation,
Consolidated Case No. CV-03-BE-1501-S," and
(b) claims based on the receipt of the company's common
stock in mergers (grouped under the caption,
"HealthSouth Merger Cases, Consolidated Case No.
CV-98-2777-S)."
Although the plaintiffs in the HealthSouth Merger Cases
have separate counsel and have filed separate claims,
the HealthSouth Merger Cases are otherwise consolidated
with the Stockholder Securities Action for all
purposes.
(2) complaints based on purchases of the company's debt
securities were grouped under the caption, "In re
HealthSouth Corp. Bondholder Litigation, Consolidated Case No.
CV-03-BE-1502-S," (the Bondholder Securities Action).
On Jan. 8, 2004, the plaintiffs in the Consolidated Securities
Action filed a consolidated class action complaint.
The complaint names the company as a defendant, as well as more
than 30 of its current and former employees, officers and
directors, the underwriters of its debt securities, and its
former auditor.
The complaint alleges, among other things:
(i) that the company misrepresented or failed to disclose
certain material facts concerning its business and
financial condition and the impact of the Balanced
Budget Act of 1997 on its operations in order to
artificially inflate the price of the company's common
stock;
(ii) that from Jan. 14, 2002 through Aug. 27, 2002, the
company misrepresented or failed to disclose certain
material facts concerning its business and financial
condition and the impact of the changes in Medicare
reimbursement for outpatient therapy services on the
company's operations in order to artificially inflate
the price of its common stock, and that some of the
individual defendants sold shares of such stock during
the purported class period; and
(iii) that Richard M. Scrushy instructed certain former
senior officers and accounting personnel to materially
inflate the company's earnings to match Wall Street
analysts' expectations, and that senior officers of
HealthSouth and other members of a self-described
"family" held meetings to discuss the means by which
the company's earnings could be inflated and that some
of the individual defendants sold shares of the common
stock during the purported class period.
The consolidated class action complaint asserts claims under
Sections 11, 12(a)(2) and 15 of the U.S. Securities Act, and
claims under Sections 10(b), 14(a), 20(a) and 20A of the 1934
Act.
On Feb. 22, 2006, the company reached a global, preliminary
settlement with the lead plaintiffs in the Stockholder
Securities Action, the Bondholder Securities Action, and the
derivative litigation, as well as with the company's insurance
carriers, to settle claims filed in those actions against the
company and many of its former directors and officers.
The suit is "In re HealthSouth Corp. Securities Litigation,
Master Consolidation File No. 2:03-cv-03-BE-1500-S," filed in
the U.S. District Court for the Northern District of Alabama
under Judge Karon O. Bowdre.
Representing the plaintiffs are Richard Bemporad of Lowey
Dannenberg Bemporad & Selinger, One North Lexington Avenue,
Floor 11, White Plains, NY 10601-1714, Phone: 1-914-997-0500, E-
mail: rbemporad@ldbs.com; and Max W. Berger of Bernstein
Litowitz Berger & Grossman, LLP, 1285 Avenue of the Americas,
New York, NY 10019, Phone: 1-212-554-1400, Fax: 1-212-554-1444,
E-mail: mwb@blbglaw.com.
Representing the defendants are W. Michael Atchison of Starnes
& Atchison, LLP, P.O. Box 598512, Birmingham, AL 35259-8512,
Phone: 868-6000, E-mail: wma@starneslaw.com; and Patrick J.
Ballard of Ballard Law Office, 2214 2nd Avenue North, Suite 100,
Birmingham, AL 35203, Phone: 321-9600, Fax: 323-9805, E-mail:
pjballard@ballardlawoffice.com.
HOME SOLUTIONS: Faces Multiple Securities Fraud Suits in Tex.
-------------------------------------------------------------
Home Solutions of America, Inc. was named as defendant in
several purported securities fraud class action filed in U.S.
District Court of the Northern District of Texas.
One of these suits was filed on June 20, 2006. Home Solutions
and the chief executive officer, president, and chief financial
officer of Home Solutions, are named as defendants in that
action.
The complaint alleges claims against Home Solutions and such
officers for violations of the U.S. Securities Act of 1934. The
complaint alleges that the defendants disseminated false and
misleading information to the public and misrepresented the
accuracy of the company's financial condition and future revenue
prospects.
It further alleges that the effect of the purported fraud was to
manipulate Home Solution's stock price so that the defendants
could profit from the manipulation. The action seeks damages in
an unspecified amount.
On June 27, 2006 and on July 6, 2006, two additional class
actions were filed in the same court. Home Solutions and its
directors are named as defendants in those actions.
The allegations in these two additional class actions are
substantially similar to those in the first lawsuit. The
actions seek damages in an unspecified amount.
The first identified complaint is "Margaret Hansen, et al. v.
Home Solutions of America, Inc., et al.," filed in the U.S.
District Court of the Northern District of Texas.
Plaintiff firms in this or similar case:
(1) Glancy Binkow & Goldberg, LLP, (LA), 1801 Ave. of the
Stars, Suite 311, Los Angeles, CA, 90067, Phone: (310)
201-915, Fax: (310) 201-916, E-mail:
info@glancylaw.com;
(2) Howard G. Smith, Attorney at Law, 3070 Bristol Pike,
Suite 112, Bensalem, PA, 19020, Phone: (215) 638-4847,
Fax: (215) 638-4867;
(3) Schatz & Nobel, P.C., 330 Main Street, Hartford, CT,
06106, Phone: 800.797.5499, Fax: 860.493.6290, E-mail:
sn06106@AOL.com; and
(4) Scott & Scott, LLC, P.O. Box 192, 108 Norwich Avenue,
Colchester, CT, 06415, Phone: 860.537.5537, Fax:
860.537.4432, E-mail: scottlaw@scott-scott.com.
IBIS TECHNOLOGY: Mass. Court Partially Dismisses Securities Suit
----------------------------------------------------------------
The U.S District Court in the District of Massachusetts granted
in part and denied in part a motion to dismiss the consolidated
securities fraud class action against Ibis Technology Corp. and
one of its officers.
Initially, these five securities class actions were filed
against the company and its president and chief executive:
-- "Martin Smolowitz v. Ibis Technology Corporation, et
al., Case No. 03-12613 (RCL)";
-- "Fred Den v. Ibis Technology Corporation, et al., Case
No. 04-10060 (RCL)";
-- "Weinstein v. Ibis Technology Corporation, et al., Case
No. 04-10088 (RCL)";
-- "George Harrison v. Ibis Technology Corporation, et
al., Case No. 04-10286 (RCL)"; and
-- "Eleanor Pitzer v. Ibis Technology Corporation, et al.,
Case No. 04-10446 (RCL)."
On June 4, 2004, the court entered an order consolidating these
actions as, "In re Ibis Technology Securities Litigation, Case
No. 04-10446 RCL."
On July 6, 2004, a consolidated amended class action complaint
was filed which alleges, among other things, that the company
violated federal securities laws by allegedly making
misstatements to the investing public relating to demand for
certain Ibis products and intellectual property issues relating
to the sale of the i2000 oxygen implanter. Plaintiffs are
seeking unspecified damages.
On Aug. 5, 2004, the company filed a motion to dismiss the
consolidated amended complaint on the grounds, among others,
that it failed to state a claim on which the relief could be
granted.
On Sept. 25, 2005, the Magistrate Judge issued a report and
recommendation recommending that the company's motion be granted
in part and denied in part.
The company and the plaintiffs both filed partial objections to
the report and recommendation with the court. On March 31,
2006, the court adopted the Magistrate Judge's report and
recommendation, and thus granted in part and denied in part the
company's motion to dismiss the plaintiffs' claims.
The suit is "In Re IBIS Technology Securities Litigation, Case
No. 1:04-cv-10446-RCL," filed in the U.S. District Court for the
District of Massachusetts under Judge Reginald C. Lindsay.
Representing the plaintiffs are:
(1) Theodore M. Hess-Mahan, Shapiro Haber & Urmy LLP, 53
State Street, Boston, MA 02108, Phone: 617-439-3939,
Fax: 617-439-0134, E-mail: ted@shulaw.com; and
(2) Gregory M. Nespole, Wolf, Haldenstein, Adler, Freeman &
Herz LLP, 270 Madison Avenue, New York, NY 10016,
Phone: 212-545-4600, Fax: 2112-545-4653, E-mail:
nespole@whafh.com.
Representing the company are:
(i) Christine A. S. Chung and Brian E. Pastuszenski,
Goodwin Procter LLP, Exchange Place, 53 State Street,
Boston, MA 02109, E-mail: cchung@goodwinprocter.com or
BPastuszenski@goodwinprocter.com; and
(ii) Laura M Stock of Goodwin Procter LLP, Exchange Place 53
State Street, Boston, MA 02109, Phone: 617-570-1709,
Fax: 617-523-1231, E-mail: lstock@goodwinprocter.com.
INSURANCE COS: Seeks Review of Ruling in FCRA Violations Lawsuit
----------------------------------------------------------------
The U.S. Supreme Court agreed on Sept. 29 to review a ruling by
the Ninth U.S. Circuit Court of Appeals, San Francisco in the
class actions:
-- "Safeco Insurance Co. v. Burr, 06-84," and
-- "GEICO General Insurance Co. v. Edo, 06-100."
The companies are accused of violating the Fair Credit Reporting
Act by not telling consumers low credit scores resulted in
higher quotes for insurance coverage.
The federal appeals court had ruled that companies must tell
consumers when credit scores result in higher insurance rates.
It also said companies can be found liable for violating federal
credit laws even without meeting a tougher "willful" legal
standard that requires the companies know they were breaking the
law.
"The Ninth Circuit's incorrect construction of the term
'willfully' will require costly, intrusive and needless
litigation under a standard likely to breed significant
confusion," the American Insurance Association and other
insurance groups said in a Supreme Court brief filed on the
appeals, according to Mark H. Anderson of Dow Jones Newswires
Washington.
The insurance industry wants the Supreme Court to overturn the
Ninth Circuit ruling on both the liability standard and the
disclosure requirements, the report said.
ITRONICS INC: Faces Litigation in Ill. Over "Junk Faxes"
--------------------------------------------------------
Itronics, Inc. is a defendant in a purported class action filed
in Cook County, Illinois over alleged "junk faxes."
In June 2006, the company was served with a lawsuit, alleging
that it faxed promotional information to the plaintiff who had
no prior business relationship with the company.
The suit seeks appropriate compensation under applicable law,
class-action status if there were faxes sent to other entities
in Illinois, and injunctive relief to prevent further faxes
being sent.
The company's legal counsel is working to have the suit
dismissed, according to the company's Aug. 14, 2006 10-QSB
filing with the U.S. Securities and Exchange Commission for the
period ended June 30, 2006.
Itronics Inc. (OTC: ITRO) -- http://www.itronics.com-- is an
environmental process technology company that operates two
business segments: Photochemical Fertilizer and Mining Technical
Services. The company is the inventor and developer of the
Beneficial Use Photochemical, Silver and Water Recycling
technology that produces environmentally beneficial GOLD'n GRO
fertilizers and silver bullion. Through its subsidiary,
Itronics Metallurgical, Inc., the company extracts more than 99%
of the silver and virtually all of the other toxic heavy metals
from used photoliquids and use this Beneficial Use
Photochemical, Silver and Water Recycling technology to produce
chelated liquid fertilizer sold under the trademark GOLD'n GRO,
animal repellant/fertilizer to be sold under the trademark
GOLD'n GRO Guardian, and silver bullion. The company also
provides process planning and technical services to the mining
industry through its Mining Technical Services segment.
PEMCO AVIATION: Parties Enter Mediation in Ala. Racial Bias Case
----------------------------------------------------------------
Parties agreed to mediation in the purported class action
pending in the U.S. District Court for the Northern District of
Alabama against the Pemco Aviation Group, Inc. and its
subsidiary, Pemco Aeroplex.
In December 1999, the company and Pemco Aeroplex were served
with the suit, alleging unlawful employment practices of race
discrimination and racial harassment by the company's managers,
supervisors and other employees.
The suit is seeking declaratory, injunctive relief and other
compensatory and punitive damages. It sought damages in the
amount of $75.0 million.
On July 27, 2000, the U.S. District Court determined that the
group would not be certified as a class since the plaintiffs
withdrew their request for class certification.
The Equal Employment Opportunity Commission subsequently entered
the case purporting a parallel class action. The court denied
consolidation of the cases for trial purposes, but provided for
consolidated discovery.
On June 28, 2002, a jury determined that there was no hostile
work environment in the original case and granted verdicts for
the company with regard to all 22 plaintiffs. Nine plaintiffs
elected to settle with the company prior to the trial.
On Dec. 13, 2002, the court granted the company summary judgment
in the EEOC case. That judgment was appealed to the 11th
Circuit Court of Appeals by the EEOC. The panel reinstated the
case to federal district court.
On Oct. 27, 2004, the company petitioned the 11th Circuit to
rehear the case en banc. The petition was denied on Dec. 23,
2004.
The company filed a petition for a Writ of Certiorari with the
U.S. Supreme Court on March 23, 2005, which was denied on Oct.
3, 2005. The case is now remanded to federal district court in
Birmingham, Alabama.
The parties have agreed to mediation, according to the company's
Aug. 14, 2006 10-Q filing with the U.S. Securities and Exchange
Commission for the period ended June 30, 2006.
The suit is "Thomas, et al. v. Pemco Aeroplex, Inc, et al., Case
No. 2:99-cv-03280-WMA," filed in the U.S. District Court for the
Northern District of Alabama under Judge William M. Acker, Jr.
Representing the plaintiffs are:
(1) Adedapo T Agboola, Darryl Bender of BENDER & AGBOOLA
LLC, 711 18th Street, North Birmingham, AL 35203,
Phone: 205-322-2500, Fax: 205-324-2120;
(2) Cheryl A Kidd, Simon & Associates, 1150 Financial
Center, 505 North 20th Street, Birmingham, AL 35203,
Phone: 205-324-2727, Fax: 205-324-2605; and
(3) Tyrone Quarles, UAB Office Of Counsel, 820
Administration Building, 1530 3rd Avenue, South
Birmingham, AL 35294-0108, Phone: 205-934-3474, Fax:
205-975-6079, E-mail: chill@uab.edu.
Representing the company are:
(i) Mitchell G. Allen, Stephen E. Brown, N. Lee Cooper of
Maynard Cooper & Gale, PC, AmSouth Harbert Plaza, Suite
2400, 1901 6th Avenue North Birmingham, AL 35203-2618,
Phone: 205-254-1000, Fax: 205-254-1999, E-mail:
mallen@maynardcooper.com, sbrown@maynardcooper.com,
lcooper@maynardcooper.com and jlee@maynardcooper.com;
and
(ii) Kenneth O. Simon of Christian & Small, LLP, Financial
Center, Suite 1800, 505 North 20th Street, Birmingham,
AL 35203-2696, Phone: 205-250-6622, Fax: 205-328-7234,
E-mail: KOS@csattorneys.com.
VAXGEN INC: Continues to Face Securities Fraud Suits in Calif.
--------------------------------------------------------------
VaxGen, Inc. remains a defendant in several purported securities
fraud class actions filed in the U.S. District Court for the
Northern District of California, according to the company's
Sept. 25, 2006 Form 10-K/A filing with the U.S. Securities and
Exchange Commission for the fiscal year ended Dec. 31, 2003.
On March 17, 2003, the suit "Janice Whitkens v. VaxGen, Inc., et
al., Civil Action No. C03-1129 JSW," was filed against the
company for violation of Sections 10(b) and 20(a) of the U.S.
Securities Exchange Act of 1934.
Named, as defendants are VaxGen, Inc., Chief Executive Officer
Lance K. Gordon and former President Donald P. Francis. The
plaintiff seeks to represent a class of persons who purchased
the company's securities between Aug. 6, 2002 and Feb. 26, 2003.
She alleges that the defendants misled investors about the
progress of certain clinical trials and the company's future
manufacturing and marketing plans.
Following the filing of the Whitkens complaint, several
additional class action complaints were filed in the same court,
each making identical or similar allegations against the same
defendants.
The first identified complaint is "Whitkens, et al. v. Vaxgen,
Inc., et al., Case No. 3:03-cv-01129-JSW," filed in the U.S.
District Court for the Northern District of California under
Judge Jeffrey S. White.
Representing the plaintiffs are:
(1) William S. Lerach of Lerach Coughlin Stoia Geller
Rudman & Robbins, LLP, 655 West Broadway, Suite 1900,
San Diego, CA 92101, Phone: 619-231-1058, Fax: 619-231-
7423, E-mail: e_file_sd@lerachlaw.com;
(2) Stuart L. Berman of Schiffrin & Barroway, LLP, 280 King
of Prussia Road, Radnor, PA 19087, Phone: 610/667-7706,
E-mail: sberman@sbclasslaw.com; and
(3) Robert S. Green of Green Welling, LLP, 595 Market
Street, Suite 2750, San Francisco, CA 94105, Phone:
415/477-6700, Fax: 415-477-6710, E-mail:
RSG@CLASSCOUNSEL.COM.
Representing the defendants is William S. Freeman and William S.
Freeman of Cooley Godward, LLP, Five Palo Alto Square, 3000 El
Camino Real, Palo Alto, CA 9406-2155, Phone: 650 843-5000, Fax:
650 857-0663, E-mail: freemanws@cooley.com and
freemanws@cooley.com.
VIRBAC CORP: Del. Court Allows Cash Tender Offer to Proceed
-----------------------------------------------------------
The Delaware Court of Chancery refused to enjoin the tender
offer for all of the outstanding publicly held shares of common
stock of Virbac Corp.
The Class Action
On Jan. 18, 2006, Richard Abrons, Myron Cohn and Martin Cohn
filed a lawsuit in their individual capacities and as a
purported class action on behalf of the company's public
shareholders against company executives Eric Maree, Pierre A.
Pagss, Michel Garaudet, Alec L. Poitevint, II, Jean L. Willk,
Richard W. Pickert, and:
-- Virbac Corp.,
-- Virbac S.A. (VBSA), and
-- Interlab S.A.S.
The lawsuit asserts claims for breach of fiduciary duty of
loyalty and unfair dealing, and defendants Messrs. Willk,
Poitevint, II and Pickert for breach of fiduciary duties of care
and good faith.
The plaintiffs seek certification of the purported class, a
preliminary and permanent injunction against the consummation of
the Tender Offer Proposal, an order declaring the Tender Offer
Proposal void and rescinding the Tender Offer Proposal, if it is
consummated, disgorgement of any profits or property received by
the defendants as a result of their alleged wrongful conduct,
unspecified money damages plus interest thereon against all
defendants (jointly and severally), attorneys' fees and expenses
incurred in connection with the lawsuit, and such other and
further relief that the Delaware Court may deem just and proper.
Court Ruling
In its opinion, issued Sept. 20, 2006, the court stated that the
alleged omissions on which plaintiffs based their motion "are
not key assumptions that would be material to a reasonable
investor ... [but] ... are minutiae that do not alter the total
mix of information," and concluded that "plaintiffs have failed
to meet their burden to prove a reasonable probability of
success on the merits."
The Tender Offer
In the tender offer, Labogroup Holding, Inc., an indirect wholly
owned subsidiary of Virbac S.A., has offered to purchase all of
the outstanding shares of Virbac Corp. common stock not already
owned by Virbac S.A., Labogroup and their subsidiaries, at $5.25
per Share, net to the seller in cash.
On Sept. 15, 2006, Virbac S.A. and Virbac Corp. announced that
the expiration date of the offer had been extended until 5 p.m.,
New York City time, on Sept. 25, 2006. Virbac S.A. stated that
it had extended the offer to provide stockholders with
additional time to review the Offer to Purchase dated Aug. 18,
2006 and the Supplement to the Offer to Purchase dated Sept. 8,
2006.
In connection with its announcement of the Delaware Court's
action, Virbac S.A. also announced that as of 5 p.m., New York
City time, on Sept. 20, 2006, approximately 2,735,733 shares had
been tendered and not withdrawn in the Offer.
BMO Capital Markets Corp. is acting as financial advisor and
Baker & McKenzie LLP is providing legal counsel to Virbac S.A.
BMO Capital Markets Corp. is also acting as dealer manager for
the Offer.
Houlihan Lokey Howard & Zukin is acting as financial advisor and
Latham & Watkins LLP is providing legal counsel to the Special
Committee of Virbac Corp.
WAL-MART: Mass. Superior Court Sets Oct. 25 Trial for Labor Suit
----------------------------------------------------------------
The Middlesex Superior Court scheduled an Oct. 25 trial for a
purported class action against Wal-Mart Stores, Inc., the Boston
Globe reports.
Judge Thomas Murtagh allowed to go to trial allegations that the
retailer violated state law by shortchanging workers, but threw
out claims that the employees are not given enough meal breaks.
The judge ruled that the workers could not pursue their meal
break claims because "there is no compensable law for missed,
interrupted, or shortened meal periods," invoked by their
lawyers.
The judge noted that under a separate section of the law, the
workers could have filed complaints with the Massachusetts
attorney general's office within 90 days after the violations
occurred, or filed a civil claim for damages within three years.
Boston attorney Robert Bonsignore filed the suit in July,
alleging that the Arkansas company violated an implied contract
when it did not honor its own corporate policies saying workers
were entitled to meal breaks based on the total number of hours
worked (Class Action Reporter, July 4, 2006). The workers
allege they were routinely denied time to eat during their
shifts.
According to Mr. Bonsignore, there was secret manipulation of
electronic pay records and at times, managers inserted unpaid
meal breaks or clocked people out a minute after they clocked
in, without any overtime paid at all.
Bay State employees are represented by Robert J. Bonsignore of
Bonsignore & Brewer, 23 Forest Street, Medford, MA 02155, Phone:
781-391-9400, Fax: 781-391-9496, E-mail: rbonsignore@aol.com,
Website: http://www.bandblaw.net/contact.shtml.
WYNN LAS VEGAS: Nev. Casino Dealers File Suit Over Tip-Sharing
--------------------------------------------------------------
Wynn Las Vegas is facing a lawsuit that seeks to end the
casino's 3-week-old tip-pooling program, the Las Vegas Gaming
Wire reports,
The suit was filed by casino dealers Daniel Baldonado and Joseph
Cesarz in U.S. District Court for the District of Nevada. It is
asking damages for compensation lost under the new tip-sharing
arrangements, which gave casino supervisors a share of dealers'
tips.
Court documents show that the two Wynn Las Vegas dealers believe
the Wynn policy violates Nevada state law covering tip pooling
because employers are sharing in the tips.
The suit asks for class-action status to include more than the
500 dealers affected by the change in the tips policy at the
resort.
Plaintiffs' lawyer Mark Thierman argued that the new tip-sharing
violates at least three Nevada laws:
-- Nevada Revised Statutes 608.100, which requires that
dealers be paid what they've earned;
-- another section of chapter 608 that prohibits improperly
withholding earned; and
-- Nevada Revised Statutes 608.120 that outlaws charging
workers illegal fee or commission to keep their jobs.
According to the lawsuit, the two dealers are seeking the wages
they lost because of the tip pooling and they want the program
stopped.
"(Wynn Las Vegas) breached ... contracts of employment by
unilaterally, illegally, and without cause, withholding certain
portions of the ... casino dealers' tip pool and paying such
portions to other persons who were not casino dealers and were
not entitled to such payments," the lawsuit said.
The new tip-sharing program, announced to dealers during three
separate shift meetings on Aug. 21, was part of a table-games
division restructuring designed to lessen the wage disparity
between dealers and front-line supervisors.
On Sept. 1, Wynn Las Vegas began allowing table game supervisors
to share in the tips earned by dealers.
Wynn Las Vegas President Andrew Pascal said the company had not
yet been served with court papers.
ZIMBABWE: Activist Group Plans Suit Over Brutality at ZCTU Rally
----------------------------------------------------------------
The Movement for Democratic Change is gathering evidence to
support a mass action against President Robert Mugabe and his
allies for police brutality during a peaceful labor protest
earlier this month.
"We have started the process of filing a class action at the
International Court of Justice in The Hague against [President]
Mugabe and [the] Zanu [(PF) government]," Morgan Tsvangirai,
leader of the Movement for Democratic Change, told correspondent
Gift Phiri of The Zimbabwean.
A peaceful protest for better pay and affordable HIV/Aids drugs
by Zimbabwe's umbrella trade union body, Zimbabwe Congress of
Trade Union, on Sept. 13 had led to a bloody encounter by
authorities and to the torture of labor labors in custody.
ZURICH NORTH: Big "I" Files Amicus Brief on Broker Pay Suit Deal
----------------------------------------------------------------
The Independent Insurance Agents & Brokers of America filed an
amicus curiae brief in opposition to part of the proposed class
settlement with Zurich North America insurers.
"The Big 'I' supports transparency in insurance transactions,
but is opposed to the portion of the settlement that would
require independent insurance agents and brokers to implement
for Zurich its obligation under the settlement to provide to
insureds a form describing the company's practices in
compensating agents and brokers," says Big "I" President Alex
Soto, also president of Miami, Florida-based InSource, Inc.
"The brief also explains our strong support for incentive
compensation and opposition to any prohibition on the payment of
legal incentive compensation to agents and brokers."
"Zurich should have the responsibility to provide to insureds
any disclosure form it is obligated by law or otherwise chooses
to provide about how it compensates agents and brokers," says
Big "I" Chief Executive Robert A. Rusbuldt. "Agents and brokers
should continue to have the latitude to customize their
interactions to the specific requests and needs of customers."
By having agents facilitate communication of complex information
about insurance transactions in a comprehensive way, it will be
meaningful to the consumer, so that information about agents'
and brokers' compensation arrangements is in the context of the
overall cost, coverage, and service being considered. Because
there are many components that determine the price of a policy,
singling out disclosure of agent and broker compensation does
not provide the consumer with sufficient transparency regarding
the cost of the insurance transaction, Mr. Soto explained.
"If other carriers follow the Zurich settlement approach of
requiring agents and brokers to implement carrier compensation
disclosures, the multitude of forms will exacerbate consumer
confusion significantly, and create inefficiencies in
independent agencies," says Mr. Rusbuldt. This will be
magnified even further for complex coverage involving layers of
coverage from different carriers. In effect, customers will
then be inundated and overwhelmed with varying disclosures,
which will be impossible to compare and understand, leading them
to ignore the disclosures altogether.
"If disclosures about compensation or any other aspect of
insurance transactions are not easily understood by customers or
are ignored, the transparency intended to promote greater
consumer understanding of insurance transactions and costs would
be entirely frustrated," says Debra L. Perkins, Big "I" EVP and
general counsel.
Ms. Perkins notes that greater efficiency and effectiveness in
monitoring compliance with the disclosure obligation will be
achieved by having it implemented by the company. It also will
allow regulators and the court to most easily monitor compliance
and address noncompliance since many brokers and agents who sell
Zurich's products around the country may not be subject to the
Court's jurisdiction.
"In addition, none of the measures in this settlement agreement
pending before the Court, or any of the other settlements
between carriers and regulators that are currently public, have
yet addressed compensation transparency for consumers when they
purchase insurance from captive agents or directly from
insurance companies," says Mr. Soto.
The Big "I" also points out in the brief that it opposes the bar
on Zurich's payment of incentive compensation to agents and
brokers in the future if 65% of the insurance companies in the
marketplace do not pay incentive compensation for a product,
line or segment of business.
"This limitation, if put in place, will harm consumers by making
it more difficult for some Main Street agents to remain in
business, which will decrease competition and lead to higher
prices, especially in rural and underserved markets where these
agencies are a primary channel for the distribution of
insurance, " added Mr. Rusbuldt. The brief notes that
ultimately it is not for state Attorneys General who created the
65% threshold to determine whether carriers should be permitted
to offer legal incentive compensation to agents and brokers or
how it should be disclosed to consumers.
Settlement Agreement
In March, Zurich Financial Services Group (Zurich) announced
that Zurich American Insurance Co. and its subsidiaries (ZAIC)
reached settlements with nine state attorneys general and one
insurance commissioner relating to their industry-wide
investigations into broker compensation and insurance placement
practices.
The agreements call for total payments of $171.7 million and
require the implementation of new disclosure and compliance
regimes. ZAIC did not admit to any violation of U.S. federal or
state laws as part of the settlements.
The Multi-State Agreement increases the $100 million settlement
fund amount set forth in the MOU to a total of $151.7 million,
and requires ZAIC to pay $20 million for state fees and costs.
The National Association of Insurance Commissioners' Broker
Activities Task Force (NAIC Task Force) assisted in developing a
regulatory settlement agreement with ZAIC that the insurance
commissioner from Florida has now executed. The NAIC Task Force
supported this settlement as a sound regulatory framework, and
had urged all state insurance regulators to consider joining it.
Some of these settlements are dependent on court approvals, as
well as various other conditions.
The nine state attorneys general who have executed settlement
agreements with ZAIC as part of the Multi-State Agreement are
those from California, Florida, Hawaii, Maryland, Massachusetts,
Oregon, Pennsylvania, Texas, and West Virginia.
The Multi-State Agreement will work in conjunction with a
proposed settlement between ZAIC and plaintiffs in a nationwide
class action against commercial insurers and brokers that is
pending in the U.S. District Court of the District of New
Jersey. In October 2005, ZAIC and lead plaintiffs in the class
action entered into the MOU that sets out the principal terms of
settlement of that action.
A copy of the Regulatory Settlement Agreement is available at:
http://ResearchArchives.com/t/s?127d
Asbestos Alert
ASBESTOS LITIGATION: Met-Pro, Unit Resolve Pump and Fluid Claims
----------------------------------------------------------------
Met-Pro Corporation and one of its units have either been
dismissed from or have settled a number of asbestos lawsuits, in
which the parties were pump and fluid-handling defendants.
Most of these cases have not progressed beyond the early stages
of discovery, although several cases in different jurisdictions
are scheduled for trial.
Starting 2002, the Company and one of its units were named
defendants in asbestos suits, filed in Mississippi, against
industrial firms, including those in the pump and fluid handling
industries.
The Company and this unit have been named as one of many pump
and fluid-handling defendants in asbestos suits filed in New
York and Maryland by individual plaintiffs. The Company and this
unit have also been named with many other pump and fluid
handling defendants in these types of cases in other states.
The complaints have been vague, general and speculative,
alleging that the Company and the unit, with other defendants,
sold unidentified asbestos-containing products, which caused
injury and loss to the plaintiffs.
The Company's insurers have hired attorneys who together with
the Company are defending these cases.
Based in Harleysville, Pa., Met-Pro Corp.'s operations are
conducted in two business segments: the manufacture and sale of
product recovery-pollution control equipment, and the
manufacture and sale of fluid handling equipment.
ASBESTOS LITIGATION: K-Sea Pursues Settlement on Remaining Case
---------------------------------------------------------------
K-Sea Transportation Partners L.P. is working to settle the
remaining asbestos-related case, out of 39 cases, filed against
predecessor EW Transportation LLC.
EW Transportation and its predecessors have been dismissed from
38 of these suits for an aggregate sum of about US$47,000.
The suits were filed by parties alleging damages from past
exposure to asbestos and second-hand smoke aboard some of the
vessels that the Company acquired from EW Transportation.
EW Transportation LLC has contractually agreed to retain any of
those liabilities that occurred prior to the Company's initial
public offering in January 2004.
EW Transportation would also indemnify the Company for up to
US$10 million of those liabilities until January 2014, and will
make available to the Company the benefit of certain indemnities
it received in connection with the purchase of certain vessels.
Based in Staten Island, N.Y., K-Sea Transportation Partners L.P.
operates a fleet of about 100 vessels, consisting mainly of tank
barges and the tugboats that propel them. The Company serves
major oil companies, refiners, and oil traders, mainly along the
coast of the northeastern U.S.
ASBESTOS LITIGATION: Bookham Reserves $1.14M for Cleanup Costs
--------------------------------------------------------------
Bookham Inc. has US$1,140,000 undiscounted provision relating to
potential costs of future asbestos remediation works, at July 1,
2006.
At July 5, 2005, the Company had an undiscounted provision
relating to potential costs of future remediation works of
US$1,004,000. (Class Action Reporter, Oct. 28, 2005)
The Company has provided for potential environmental liabilities
at sites where the Company could be required to remove asbestos
from its facilities after a change in U.K. legislation.
The Company expects the provision to be utilized in fiscal years
2007 and 2008.
Based in San Jose, Calif., Bookham Inc. engages in the design,
manufacture, and marketing of optical components, modules, and
subsystems that generate, detect, amplify, combine, and separate
light signals with primarily application in communications
networks.
ASBESTOS LITIGATION: Pagano Suit v. Doe Run Resources Dismissed
---------------------------------------------------------------
The Doe Run Resources Corporation reported that an asbestos
lawsuit, which the Company co-defended in, styled "Pagano, et
al. v. Anheuser-Busch, Inc., et al.," was dismissed with
prejudice on May 26, 2006.
Filed on Dec. 17, 2004, the case was filed against 43 defendants
by a person who did laundry for insulation workers in her
family.
The plaintiff alleged that the workers were exposed to asbestos
at Doe Run's Herculaneum, Mo. facility.
Based in St. Louis, Mo., The Doe Run Resources Corp. is involved
in mining, milling, smelting, and refining lead. The Company
operates in the U.S. and South America.
ASBESTOS LITIGATION: Hardie Renews Final Funding Agreement Talks
----------------------------------------------------------------
James Hardie Industries NV updated discussions with the New
South Wales Government and Australian Tax Office regarding the
Final Funding Agreement, which is aimed at compensating Hardie's
asbestos victims in Australia, according to a Company statement
dated Sept. 15, 2006.
The updates are aimed at resolving outstanding matters relating
to the FFA signed between James Hardie and the NSW Govt. in
December 2005.
Since the ATO's decision in June 2006 to refuse to endorse the
fund established for asbestos claimants as a charity, James
Hardie has been involved in discussions with the NSW Govt. and
ATO regarding the tax treatment of the Special Purpose Fund.
The Company is currently in discussions with the NSW Govt. in
relation to potential and limited amendments to the FFA and
related agreements to achieve a satisfactory outcome for all
stakeholders which would enable the substantive obligations
agreed in the FFA to be implemented in full.
Assuming that a satisfactory outcome is achieved with the NSW
Govt. and the ATO confirms the parties' understanding of the tax
outcomes, the Company said that it expects an extraordinary
general meeting of shareholders would be held within 10 weeks of
an agreement being reached.
Based in Sydney, Australia, James Hardie Industries NV uses
cellulose-reinforced fiber cement to create products for
residential and commercial construction, including siding,
external cladding, walls, fencing, and roofing. The Company
makes fiber-reinforced concrete pipe through its Hardie Pipe
business and roofing through Artisan Roofing.
ASBESTOS LITIGATION: Congoleum Files 10th Plan of Reorganization
----------------------------------------------------------------
Congoleum Corporation, a 55 percent-owned company of American
Biltrite Inc., filed its Tenth Modified Joint Plan of
Reorganization under Ch. 11 of the Bankruptcy Code, on Sept. 15,
2006, with the U.S. Bankruptcy Court for the District of New
Jersey.
Congoleum filed and proposed the Tenth Modified Plan jointly
with the official committee representing its unsecured asbestos
creditors. The modifications reflected in the Tenth Modified
Plan largely address the treatment that the holders of
Congoleum's 8.625% Senior Notes Due 2008 will receive under
Congoleum's proposed plan of reorganization.
In addition to the New Senior Notes and after the effective date
of the Tenth Modified Plan, the Bondholders may receive an
additional US$5 million from Congoleum, to be paid from the
proceeds of insurance recoveries, contingent upon the
consummation of certain insurance settlements and the receipt of
a threshold amount of insurance proceeds.
On Sept. 7, 2006, Congoleum entered into an agreement in
principle with the official committee representing its
bondholders and asbestos claimants' representatives on certain
amendments to Congoleum's pending Ch. 11 plan of reorganization.
As a result, the official bondholders committee has agreed to
support Congoleum's reorganization plan and will be withdrawing
the plan of reorganization it had previously filed jointly with
Continental Casualty Co. and Continental Insurance Co.
When entering the scheduling order on Sept. 11, 2006, Judge
Kathryn C. Ferguson set Oct. 26, 2006 as the date for the
disclosure statement hearing for Congoleum's proposed plan of
reorganization and for the plan of reorganization previously
filed jointly by the official bondholders committee with
Continental Casualty and Continental Insurance.
On Dec. 31, 2003, Congoleum filed a voluntary petition with the
U.S. Bankruptcy Court for the District of New Jersey (Case No.
03-51524) seeking relief under Ch. 11 of the U.S. Bankruptcy
Code as a means to resolve claims asserted against it related to
the use of asbestos in its products decades ago.
Based in Mercerville, N.J., Congoleum Corp.'s products include
plank flooring, resilient sheet flooring, do-it-yourself vinyl
tile, and laminate and commercial flooring. Congoleum markets
through a network of about 15 distributors in roughly 86
locations in North America.
ASBESTOS LITIGATION: Appeals Court Favors GP, UCC in Md. Suit
-------------------------------------------------------------
The Court of Appeals of Maryland affirmed the decision of the
Court of Special Appeals in an asbestos-related lawsuit, filed
by Elsie Benjamin and her children, in favor of Georgia-Pacific
Corporation and Union Carbide Corporation.
The Panel, comprised of Chief Judge Robert M. Bell, Judges Irma
S. Raker, Alan M. Wilner, Dale R. Cathell, Glenn T. Harrell,
Jr., Lynne A. Battaglia, and Clayton Greene, Jr., handed down
the decision of Case No. 52, Sept. Term, 2005 on Aug. 2, 2006.
On May 25, 1997, Robert L. Benjamin, Sr. died of mesothelioma.
On March 20, 2003, Mrs. Benjamin filed a survival action against
defendants, including Georgia-Pacific and Union Pacific in the
Circuit Court for Baltimore City.
In the same complaint, the Benjamin's children, Robert L.
Benjamin, II and Carol Jeffers, filed a wrongful death action
against the same defendants.
Union Carbide and Georgia-Pacific moved for summary judgment,
which were granted by the Trial Court.
On June 21, 2004, Mrs. Benjamin appealed to the Court of Special
Appeals. On May 3, 2005, the Court of Special Appeals affirmed
in part and reversed in part the Trial Court's judgment.
The Court of Appeals of Maryland granted the petition for
certiorari filed by Georgia-Pacific, Union Carbide, and Mrs.
Benjamin.
The Court of Appeals held that genuine issues of fact existed as
to when Mr. Benjamin's beneficiaries discovered the connection
between his asbestos exposure and mesothelioma, and evidence
established inquiry notice of cause of injury, as element of
discovery rule for commencing limitations period for survival
action.
The Court of Appeals affirmed the judgment of the Court of
Special Appeals.
Steven J. Parrott, Philip A. Kulinski, and Ariel C. Gruswitz of
DeHay & Elliston, L.L.P., in Baltimore, Md. represented the
petitioners/cross-respondents.
Laura A. Cellucci and George M. Church of Miles & Stockbridge
P.C., in Baltimore, Md. Represented the petitioners/cross-
respondents.
Timothy J. Hogan of the office of Peter T. Nicholl, in
Baltimore, Md. represented the respondent/cross-petitioner.
ASBESTOS LITIGATION: Wolseley plc Records 246 Outstanding Claims
----------------------------------------------------------------
Wolseley plc recorded 246 outstanding asbestos-related claims at
July 31, 2006, compared with 235 outstanding claims at July 31,
2005.
Environmental and legal liabilities include known and potential
legal claims and environmental liabilities from past events
where it is probable that a payment will be made and the amount
of the payment can be reasonably estimated. The Company reserved
GBP31 million in 2006 and GBP32 million in 2005.
At July 31, 2006, independent actuarial advisors have determined
the liability. The provision and the related receivable have
been stated on a discounted basis using a long-term discount
rate of 5.2 percent, compared with 4.5 percent in 2005.
Based in Theale, United Kingdom, Wolseley plc distributes
central heating equipment, fittings, lumber, pipes, underground
drainage equipment, valves, and other building materials from
more than 3,900 outlets in 13 countries in North America and
Europe. The Company's customers include builders, plumbing
installers, and building and mechanical contractors.
ASBESTOS LITIGATION: Wash. Court Remands Bashore Suit v. Fraser
---------------------------------------------------------------
The Court of Appeals of Washington, Division 1, reversed the
summary judgment decision in an asbestos-related lawsuit filed
by Debora Bashore, for the death of husband Randell, against
several asbestos manufacturers, including Fraser's Boiler
Service Inc. The Appeals Court remanded the case for further
proceedings.
The Appeals Court handed down the decision to Case No. 57182-6-I
on Sept. 18, 2006.
Mr. Bashore died of mesothelioma from asbestos exposure. Mrs.
Bashore filed suit in the Superior Court of King County for
personal injury and wrongful death against asbestos product
manufacturers and installers, including Fraser.
Mrs. Bashore presented evidence that in the 1970s, Fraser
repaired and cleaned boilers on ships at Lockheed Shipbuilding
Co.'s Seattle shipyard. She also produced her husband's social
security records, which showed that he worked for Lockheed
between July and December 1970. Mr. Bashore's social security
records listed Lockheed's location as Woodland Hills, Calif.
The Trial Court granted Fraser's motion for summary judgment.
Mrs. Bashore moved for reconsideration, which the Trial Court
denied.
Further, Mr. Bashore's mother confirmed that he lived in
Washington in 1970, and never lived in California. The Appeals
Court ruled that the Trial Court erred when it dismissed Mrs.
Bashore's motion for reconsideration.
The Appeals Court said that it could be reasonably inferred that
Mr. Bashore worked at Lockheed Shipyard in Seattle and was
exposed to asbestos from Fraser products while there.
Kristin Margret Houser and Janet L. Rice, of Seattle, Wash.,
represented Debora M. Bashore.
Carl Edward Forsberg and Catherine Elizabeth Jeannotte of
Forsberg & Umlauf PS, and Jennifer Diana Loynd of Seattle, Wash.
represented Fraser's Boiler Service Inc.
ASBESTOS LITIGATION: Supreme Court Denies Wilkinson Suit Review
---------------------------------------------------------------
The New York Supreme Court, Appellate Division, Third
Department, affirmed the Workers' Compensation Board ruling,
which had rejected an employer's application to review the
asbestos-related compensation case filed by Donna K. Wilkinson.
The Panel, comprised of Presiding Judge Anthony V. Cardona,
Judges D. Bruce Crew III, Edward O. Spain, Robert S. Rose, and
John A. Lahtinen, handed down the case's decision on Aug. 10,
2006.
After being diagnosed with a lung condition, Ms. Wilkinson filed
for workers' compensation benefits. In Aug. 8, 2003, a Workers'
Compensation Law Judge determined that Ms. Wilkinson suffered
from an occupational disease, which is causally related to her
1969 asbestos exposure while working for the employer, but that
she is not currently disabled due to that condition.
Ms. Wilkinson subsequently filed an application for review. The
self-insured employer, its third-party administrator, and other
potentially liable parties filed rebuttals to her application
for review before the Board.
On Jan. 29, 2004, the Board affirmed, finding that the rebuttals
were untimely and that the Workers' Compensation Judge's factual
findings were otherwise proper.
In February 2004, the employer and its third-party administrator
filed an application for Board review of the Workers'
Compensation Judge's August 2003 decision. On Oct. 4, 2004 the
Board denied the employer's application as untimely, and the
employer appealed.
The Supreme Court held that the Board did not abuse its
discretion in rejecting, as untimely, the employer's application
for review of decision granting Ms. Wilkinson's application for
benefits.
The Supreme Court affirmed the decision without costs.
Matthew R. Mead of Stockton, Barker & Mead, L.L.P., in Albany,
N.Y., represented Bendix Friction Corp. and other appellants.
Estelle Kraushar of Eliot Spitzer, Attorney General, New York
City, represented Workers' Compensation Board.
John M. Oliver of Sullivan, Cunningham, Keenan, Mraz, Oliver &
Violando, L.L.P., in Albany, N.Y., represented RSKCo. Claims
Services.
ASBESTOS LITIGATION: Appeals Court Dismisses Cutler-Hammer Suit
---------------------------------------------------------------
The Court of Appeals of Washington, Division 1, upheld a King
County Superior Court ruling, which dismissed an asbestos-
related lawsuit against Cutler-Hammer Inc. and its parent, Eaton
Corporation, for lack of evidence.
The Panel, comprised of Judges Anne Ellington, H. Joseph
Coleman, Susan R. Agid, handed down the decision of Case No.
56701-2-I on Sept. 11, 2006.
From 1959 to 1999, Jim Hautala worked at Weyerhauser Co. where
he was allegedly exposed to asbestos from Cutler and Eaton
products while repairing motors and generators and working with
arc chutes, starters, breakers, switch gear, and limit lamps.
From the 1940s through the 1970s, Cutler and Eaton made and sold
electrical equipment. Cutler and Eaton introduced its Citation
line of asbestos-containing motor starters about 1968. Between
the late 1970s and early 1980s, Cutler and Eaton removed the
asbestos from the Citation line.
Mr. Hautala worked with Cutler and Eaton products at
Weyerhaeuser. However, he was unable to recall the specific
products or time periods, and he could present no evidence
showing that any of the Cutler and Eaton products he worked with
had asbestos.
The Trial Court granted Cutler's motion for summary judgment.
Mr. Hautala did not give a basis for an inference that he was
exposed to asbestos in Cutler and Eaton products, because he did
not show that those products were present at his worksite.
The Appeals Court affirmed summary judgment of dismissal.
ASBESTOS LITIGATION: Appeals Court Junks Davis' Suit v. M Slayen
----------------------------------------------------------------
The California Court of Appeal, First District, Division 5,
upheld the San Francisco Superior Court's decision, which
granted M. Slayen & Associates Inc.'s motion for summary
judgment in an asbestos-related suit filed by Sam M. Davis, Jr.
The Panel, comprised of Presiding Justice Barbara J.R. Jones,
Justices Mark B. Simons and Terence L. Bruiniers, handed down
the decision of Case No. A112305 on Sept. 8, 2006.
Sam M. Davis worked as a seaman, first for the U.S. Navy and
then for the Military Sealift Command. In January 2003, he sued
M. Slayen & Associates Inc. and others alleging they had exposed
him to asbestos, in the San Francisco Superior Court.
San Francisco has adopted special rules that govern asbestos
litigation. Mr. Davis complied with San Francisco's rules and
filed his responses to the standard interrogatories. Those
responses failed to mention M. Slayen.
Noting this omission, M. Slayen moved for summary judgment,
arguing it was entitled to prevail because Mr. Davis' responses
failed to show he had worked with or around any asbestos-
containing products, which were made, supplied, distributed or
installed by M. Slayen.
Mr. Davis opposed M. Slayen's motion arguing it had not
satisfied its burden of proof.
The Trial Court granted M. Slayen's motion, ruling it had
presented evidence sufficient to shift the burden of proof, and
that Mr. Davis had not provided sufficient evidence to establish
a triable issue of fact.
Mr. Davis contended that the Trial Court erred when it granted
M. Slayen's motion for summary judgment.
The Appeals Court concluded that the evidence Mr. Davis
presented was insufficient to show there was a triable issue of
fact.
David Collins of Brayton-Purcell LLP in Novato, Calif.,
represented Sam M. Davis, Jr.
Mark Simon Kannett of Becherer, Kannett & Schweitzer in
Emeryville, Calif., and Angus MacKenzie MacLeod of Becherer,
Kannett & Schweitzer in Oakland, Calif., represented M. Slayen &
Associates Inc.
ASBESTOS LITIGATION: Calif. Worker Sues 90 Firms in Ill. Court
--------------------------------------------------------------
Allen Beyersdorf of California sued 90 defendants, for causing
his mesothelioma, in an asbestos lawsuit filed in Madison County
Circuit Court in Illinois on Sept. 21, 2006, The Madison St.
Clair Record reports.
The suit lists The Dow Chemical Co., Ford Motor Co., General
Electric Co., General Motors Corp., Honeywell International
Inc., John Crane Inc., Owens-Illinois Inc., Sears, and Viacom
Inc. as among the 90 defendants.
Mr. Beyersdorf seeks at least US$250,000 in damages for
negligence, willful and wanton acts, conspiracy, and negligent
spoliation of evidence.
Mr. Beyersdorf claimed he was employed from 1964 to 2006 as a
maintenance and factory worker in locations including Illinois.
He claimed that, during the course of his employment and during
home and automotive repairs, he was exposed to and inhaled,
ingested or otherwise absorbed asbestos fibers emanating from
certain products he was working with and around.
Mr. Beyersdorf said that he first became aware of his
mesothelioma in February 2003.
Mr. Beyersdorf claimed the defendants knew or should have known
that the asbestos fibers in their products had a toxic,
poisonous and highly deleterious effect upon the health of
people.
Mr. Beyersdorf alleged that the defendants included asbestos in
their products when adequate substitutes were available and
failed to provide any or adequate instructions concerning the
safe methods of working with and around asbestos. He also
claimed that the defendants failed to require and advise
employees of hygiene practices designed to reduce or prevent
carrying asbestos home.
Nicholas Angelides, John Barnerd, and Perry Browder of
SimmonsCooper in East Alton, Ill. represent Mr. Beyersdorf.
The case has been assigned to Circuit Court Judge Daniel Stack.
ASBESTOS LITIGATION: OSHA Checks Removal Method in D.C. Tunnels
---------------------------------------------------------------
The Occupational Safety and Health Administration is
investigating an Architect of the Capitol contractor for alleged
improper asbestos removal from underground utility tunnels near
Capitol Hill's restaurants, The Hill reports.
In August 2006, Christian Raley and Martin Blanchet, members of
the Capitol Power Plant tunnel crew, informed OSHA that the
asbestos removal was not done in accordance with federal rules.
The violation was reported in an Aug. 29, 2006 incident report
after the workers saw that the contractor, Waco Inc.
Environmental Contracting, did not properly erect containment
barriers around grates and manholes during removal.
Moreover, the report described several bags of contaminated
material as "ripped and a lot of loose asbestos material on the
bags and throughout the tunnel."
The Office of Compliance confirmed they had received a complaint
about Waco but forwarded the information to OSHA.
Local restaurants were not informed of the removal that took
place over the last few weeks up and down First Street, SE.
Eva Malecki, an AoC spokeswoman, said, "The AoC is exercising
contract oversight and enforcing contract provisions including
OSHA standards and have notified the contractor of deficiencies
AoC has identified."
When Waco removed about 1,000 bags of asbestos from the tunnels,
Ms. Malecki indicated that the contractor was responsible for
monitoring federal regulations. Tunnel employees who said the
repairs are part of a three-year-old work order have also
disputed the work in the Capitol complex's southeast corner.
Tunnel crew supervisor John Thayer indicated that the current
work done by the contractors is part of a plan to abate asbestos
and reinsulated on a section of the utility tunnels he had
approved in March 2003.
Revelations that the tunnels could cost up to US$200 million to
repair and about the level of danger to those working on them
spurred Senators Wayne Allard, a Colorado Republican, Dick
Durbin, an Illinois Democrat, and Barbara Mikulski, a Maryland
Democrat, to introduce and help pass an amendment to the
emergency supplemental spending bill that would provide nearly
US$28 million in federal funds to begin to repair the
infrastructure.
ASBESTOS LITIGATION: UK Teachers to Sue Authorities for Illness
---------------------------------------------------------------
Eight teachers from the United Kingdom prepare to sue their
education authorities after contracting asbestos-related
illnesses, Thames Laboratories reports.
The teachers said they contracted the diseases from inhaling
asbestos dust released after pinning the pupils' work to the
classroom walls.
Asbestos was used in building new schools up until the 1980s
when the dangers became better understood.
Teachers' unions across the U.K., blackpooltoday.co.uk said, are
warning their members of asbestos' dangers, with figures showing
that 70 teachers died of mesothelioma between 1991 and 2000.
Ken Cridland, Flyde secretary of the National Union of Teachers,
said, "The warning has come as a shock to a lot of teachers.
They don't realize the danger. The long-term effect is very
frightening. With a lot of teachers, it is only diagnosed 20
years later."
ASBESTOS LITIGATION: Judge OKs Owens Corning Reorganization Plan
----------------------------------------------------------------
Judge Judith Fitzgerald of the U.S. Bankruptcy Court for the
District of Delaware approved Owens Corning's Plan of
Reorganization, enabling it to emerge from Ch. 11 bankruptcy,
The Associated Press reports.
Judge Fitzgerald's ruling came more than five years after the
Company sought protection from creditors over health claims
related to its asbestos products.
Dave Brown, Company president and CEO, said, "We are pleased to
have court approval on a plan that deals fairly and equitably
with all our creditors and permanently resolves our asbestos
liability."
Judge Fitzgerald signed the order approving the plan after
saying in U.S. Bankruptcy Court for the Western District of
Pennsylvania that she would approve it.
Before the Company officially emerges from bankruptcy, Judge
John Fullam of the U.S. District Court for the Eastern District
of Pennsylvania must also approve the plan.
The plan shifts Owens Corning's US$7 billion in asbestos
liabilities off Company books and into a trust that will be
established for the plaintiffs.
The Company will pay more than US$5 billion to asbestos
claimants and as much as US$2.27 billion to holders of bank
debt.
The plan, filed in December 2005, follows years of litigation
between attorneys for asbestos claimants, owners of the
Company's bank debt and others.
In 2000, the Company sought Ch. 11 bankruptcy protection in an
effort to shield itself from claims for billions of dollars in
damages linked to asbestos products it made decades ago.
The reorganization plan has an effective date of Oct. 30, 2006.
ASBESTOS LITIGATION: Mass. Widow Sues 94 Companies in Ill. Court
----------------------------------------------------------------
Charlene Babbitt, representing husband John Babbitt's estate,
sued 94 defendant corporations in an asbestos-related lawsuit in
Madison County Circuit Court in Illinois on Sept. 19, 2006, The
Madison St. Clair Record reports.
Mrs. Babbitt seeks damages in excess of US$200,000, plus
punitive damages in an amount to punish the defendants for their
alleged misconduct.
The suit alleged Mr. Babbitt was exposed to asbestos while
employed as a maintenance worker, freight loader, mail carrier,
and cafeteria worker from 1963 to 2002. In the complaint, he was
from Massachusetts and worked at Illinois during his career.
However, the suit did not specify when or where.
Mr. Babbitt died on Sept. 24, 2002.
Mrs. Babbitt claimed the defendants intentionally or with a
reckless disregard for her husband's safety:
-- Included asbestos in their products, when the defendants knew
or should have known that the fibers would have a toxic,
poisonous and highly deleterious effect upon her health;
-- Included asbestos in their products when adequate substitutes
were available;
-- Failed to provide adequate warning to people working with and
around the products of the dangers of inhaling, ingesting or
otherwise absorbed fibers in them;
-- Failed to provide adequate instruction concerning the safe
methods of working with and around asbestos products; and
-- Failed to conduct tests on the asbestos-containing products,
made, sold or delivered by the defendants in order to determine
the hazards to which workers might be exposed.
Mrs. Babbitt also claimed her husband had been obligated to
spend money on medical expenses and experienced great physical
pain and mental anguish which prevented him from pursuing his
normal course of employment.
Nicholas Angelides, John Barnerd, and Perry Browder of
SimmonsCooper in East Alton, Ill. represent Mrs. Babbitt.
The case has been assigned to Circuit Judge Daniel J. Stack.
ASBESTOS LITIGATION: Federal-Mogul Resolves Ohio's $24M Claim
-------------------------------------------------------------
Federal-Mogul Corporation has reached a deal with the State of
Ohio that resolves nearly US$24 million in environmental damage
claims the State has been pursuing against the Company, The
Associated Press reports.
In papers filed with the U.S. Bankruptcy Court in Delaware, the
Company said Ohio agreed to reduce its claims against the
Company to US$2.3 million.
The State also agreed to up to 50 percent of any insurance
proceeds the Company obtains related to asbestos damage at its
former factory in McConnelsville, Ohio.
The Company said the pact resolves all debts owed by Federal-
Mogul's U.S. subsidiaries to the State.
The agreement is subject to approval by a U.S. Bankruptcy Judge
who will consider it at an Oct. 30, 2006 hearing.
ASBESTOS LITIGATION: Calif. Man Charged for Clean Air Violations
----------------------------------------------------------------
Wassim Mohammad Azizi, of Tracy, Calif., has been charged on
four felony violations of the federal Clean Air Act for
allegedly demolishing a Hayward building with asbestos without
proper permits and protection, InsideBayArea.com reports.
The indictment said 32-year-old Mr. Azizi buys, demolishes, and
renovates or rebuilds commercial properties, and did so at 27794
Mission Blvd. between Dec. 1, 2002 and Feb. 1, 2003.
However, Mr. Azizi did not notify the Environmental Protection
Agency and the Bay Area Air Quality Management District in
advance, the indictment claimed.
The indictment also claimed that Mr. Azizi did not remove all
the asbestos-containing materials from the building before
tearing it down, did not properly contain those materials at
demolition, and disposed of the debris by throwing it in a trash
bin, all in violation of the CAA.
Each count of violating the CAA is punishable by up to five
years in federal prison and a fine of up to US$250,000 plus
restitution.
Mr. Azizi was arrested in Tracy, Calif. and appeared first in
federal court in Sacramento, Calif. where a judge transferred
the case to the San Francisco-based Northern District of
California for prosecution.
ASBESTOS LITIGATION: Japan Gov't. Closes Hazardous Attractions
--------------------------------------------------------------
The Asahikawa Municipal Government in Hokkaido, Japan has shut
down a roller coaster and four other zoo attractions after
asbestos was found in some of them, Mainichi Daily News reports.
Asahikawa officials conducted tests for asbestos at the
Asahiyama Zoo after an enquiry from a visitor on Sept. 12, 2006.
Asbestos was found in three attractions, including the roller
coaster's brakes and a Ferris wheel's safety system.
The operations of a go-kart track and another ride were also
suspended.
The Municipal Govt. plans to close the roller coaster and the
go-kart track permanently, and dismantle them in order to make
space to accommodate the increasing number of visitors.
ASBESTOS LITIGATION: Royal & Sun Sells Troubled U.S. Subsidiary
---------------------------------------------------------------
Royal & Sun Alliance Insurance Group plc has sold its troubled
U.S. unit to Arrowpoint Capital, a buyout vehicle set up by its
U.S. management team, Forbes.com reports.
Royal & Sun said the disposal of the unit, which was closed to
new business in 2003 after being hit by asbestos-related
compensation claims, allowed it to make a clean break from all
legal liabilities in the U.S.
Under the deal, Royal & Sun will provide a GBP151 million
capital injection to the U.S. business, and will receive GBP158
million out of the unit's future revenues over the next four
years.
Overall, the transaction will result in a pretax loss of GBP443
million for Royal & Sun.
Gerald Farr, a Seymour Pierce analyst, said, "The deal's
effectively a management buy-out. The management knows more
about its ongoing liabilities than anyone else."
Chief executive Andy Haste said, "The sale of the U.S. operation
is the right deal for our shareholders and US policyholders."
New Securities Fraud Cases
DELL INC: Pomerantz Haudek Files Securities Fraud Suit in Tex.
--------------------------------------------------------------
Pomerantz Haudek Block Grossman & Gross, LLP, filed a class
action in the U.S. District Court Western District of Texas,
against Dell Inc. and certain officers, on behalf of purchasers
of the common stock of the company from Feb. 13, 2003 to Sept.
8, 2006, inclusive.
The complaint alleges violations of Section 10(b) and Section
20(a) of the Exchange Act and Rule 10b-5 promulgated thereunder.
Dell, headquartered in Round Rock, Texas, engages in the design,
development, manufacture, marketing, sale and support of various
computer systems and services to customers worldwide.
The complaint alleges that during the class period defendants
reported inflated financial results by misstating the company's
accrual and reserves on the company's balance sheet.
In August 2005, the U.S. Securities and Exchange Commission
began investigating the company's revenue recognition and
accounting practices, but Dell concealed the investigation from
investors.
However, unable to maintain the charade, defendants began
carving down sales and profit projections and Dell began missing
its own revenue, earnings per shares and unit sales growth
targets, causing significant declines in its stock price.
In order to support the company's stock price, defendants
continued concealing the full extent of Dell's demise and
promised a quick turnaround.
On Aug. 16, 2006, Dell announced it would be forced to recall
over 4 million laptop batteries citing a high combustion risk.
On Aug. 17, 2006 the company announced its fifth consecutive
quarter of disappointing results. Dell's profits fell 51% from
the same quarter one year earlier.
Finally, on Sept. 11, 2006 defendants disclosed that the company
would not be able to file its interim financial report for
second quarter 2007 and that the U.S. Attorney's Office for the
Southern District of New York had served Dell with a subpoena
requesting documents concerning its accounting and financial
reporting between 2002 and 2006.
Interested parties have until Nov. 13, 2006 to ask the court for
appointment as lead plaintiff for the class.
For more details, Teresa Webb of Pomerantz Haudek Block Grossman
& Gross, LLP, Phone: (888) 476-6529, E-mail: tlwebb@pomlaw.com.
ENCYSIVE PHARMACEUTICALS: Schatz & Nobel Announces Suit Filing
--------------------------------------------------------------
The law firm of Schatz & Nobel, P.C., announces that a lawsuit
seeking class-action status has been filed in the U.S. District
Court for the Southern District of Texas on behalf of all
persons who purchased the publicly traded securities of Encysive
Pharmaceuticals Inc. between Feb. 19, 2004 and March 24, 2006,
inclusive. Also included are those who purchased in a secondary
offering on or around Sept. 9, 2004.
The complaint alleges that Encysive, a biopharmaceutical
company, and certain of its officers and directors violated
federal securities laws by issuing a series of materially false
statements.
Specifically, defendants made misleading statements regarding
the success of Sitaxentan, or Thelin, a drug it was developing
to treat Pulmonary Arterial Hypertension, and stated that it had
completed Phase III development of Thelin.
During the class period, defendants led shareholders and
analysts to believe that U.S. Food and Drug Administration
approval was imminent and that such approval would make Thelin a
competitor to Acetelion Ltd.'s similar drug, Tracleer
(Bosentan).
However, after Encysive completed two successful public
offerings and the individual defendants received cash/stock
awards based on the apparent success of Thelin, the company's
shareholders learned that defendants had been less than
forthcoming with the true prospects for Thelin.
On March 27, 2006, U.S. regulators delayed approving Thelin
until they could get more data. The FDA sent Encysive a letter
asking for information and possibly more studies to determine if
Thelin was safe and effective for use in treating PAH. On this
news, Encysive shares fell 49%.
Interested parties have until Nov. 27, 2006 to ask the court for
appointment as lead plaintiff for 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.
MEADE INSTRUMENTS: Finkelstein, Thompson Files Calif. Stock Suit
----------------------------------------------------------------
The law firm of Finkelstein, Thompson & Loughran filed a class
action in the U.S. District Court for the Central District of
California on behalf of investors who purchased the publicly
traded securities of Meade Instruments, Inc. between Sept. 27,
2001 and Aug. 29, 2006.
The complaint alleges that, throughout the class period,
defendants misrepresented and omitted material facts concerning
Meade's backdating of stock option grants to its officers John
Diebel and Steven Murdock.
Specifically, plaintiff alleges that at all times during the
class period, Meade represented that the exercise price of all
stock options would be no less than the fair market value of
Meade's common stock, measured by the publicly traded closing
price for Meade stock on the day of the grant.
However, in reality, those options were backdated so their
exercise price correlated to a day on or near the day Meade's
stock hit its low price for the year, or directly in advance of
sharp increases in the price of Meade stock. Defendant Diebel
directly benefited by exercising these backdated options.
As the truth concerning Meade's practice of backdating option
grants gradually became known to the market from a variety of
sources, the price of Meade's stock fell $0.70, or 25%, between
May 22, 2006 and Aug. 29, 2006.
Interested parties have until Nov. 27, 2006 to ask the court for
appointment as lead plaintiff for the class.
For more details, contact Donald J. Enright, Esq. of
Finkelstein, Thompson & Loughran, Phone: +1-202-337-8000, E-
mail: contact@ftllaw.com.
*********
A list of Meetings, Conferences and Seminars appears in each
Wednesday's edition of the Class Action Reporter. Submissions
via e-mail to carconf@beard.com are encouraged.
Each Friday's edition of the CAR includes a section featuring
news on asbestos-related litigation and profiles of target
asbestos defendants that, according to independent researches,
collectively face billions of dollars in asbestos-related
liabilities.
*********
S U B S C R I P T I O N I N F O R M A T I O N
Class Action Reporter is a daily newsletter, co-published by
Bankruptcy Creditors' Service, Inc., Fairless Hills,
Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland
USA. Glenn Ruel Senorin, Maria Cristina Canson, and Janice
Mendoza, Editors.
Copyright 2006. All rights reserved. ISSN 1525-2272.
This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding, electronic
re-mailing and photocopying) is strictly prohibited without
prior written permission of the publishers.
Information contained herein is obtained from sources believed
to be reliable, but is not guaranteed.
The CAR subscription rate is $575 for six months delivered via
e-mail. Additional e-mail subscriptions for members of the same
firm for the term of the initial subscription or balance thereof
are $25 each. For subscription information, contact Christopher
Beard at 240/629-3300.
* * * End of Transmission * * *