/raid1/www/Hosts/bankrupt/CAR_Public/071210.mbx
C L A S S A C T I O N R E P O R T E R
Monday, December 10, 2007, Vol. 9, No. 244
Headlines
AOL TIME: Centerpoint Energy Distributes $27M to Noteholders
BRADLEY PHARMACEUTICALS: Investors' Certification Bid Dropped
BRADLEY PHARMACEUTICALS: Faces N.J. Suits Over Founder’s Offer
BROOKDALE SENIOR: Still Faces Suits Over Sale to Ventas Realty
CABLEVISION SYSTEMS: Executes Settlement of N.Y. Investor Suits
CANADIAN BANK: Toronto Law Firms to Disclose Overtime Suit Today
CENTERPOINT ENERGY: LPSC Oks Calcasieu Parish Review Settlement
CHRYSLER MOTORS: Sued in Mo. Over Cummins Engines Warranties
FERRO CORP: Ohio Court Approves $4M ERISA Litigation Settlement
FERRO CORP: Plaintiffs Voluntarily Dismiss Ohio Securities Suit
FISERV TRUST: Court Mulls Appeal on Calif. Suit's Certification
FISERV TRUST: Plaintiffs' Bid to Halt CheckFree Purchase Junked
HOMESTEAD FINANCIAL: Homebuyer Sues in Mo. Over Interest Rates
LG ELECTRONICS: Faces N.J. Suit Over Toxic Water in Refrigerator
METLIFE INC: Continues to Face Demutualization Case in N.Y.
METLIFE INC: Ontario Court Dismisses Canadian Policyholders Suit
METROPOLITAN LIFE: Still Faces Improper Sales Practices Claims
METROPOLITAN PROPERTY: Suit Over Medical Provider Fees Abandoned
MINNESOTA: Minneapolis Accused of Bias Against Black Police
OHIO: Police Radio-Room Employees Sue Over Sick Leave Policy
RC2 CORP: Recalls Feeding Seats with Straps that Could Detach
RC2 CORP: Recalls Potty Training Seats on Paint's High Lead
RESTORATION HARDWARE: Faces Cal. Suit Over Sears Purchase Offer
TARGET CORP: Accused of Falsely Labeling Milk as Organic
TIDEWATER FINANCE: Hearing on Repossession Suit Deal Set Today
TIME WARNER: $2.65B Settlement of Securities Fraud Suit Proceeds
TIME WARNER: Seeks Dismissal of Staro Asset's Litigation in N.Y.
TIME WARNER: Awaits Approval of Homestore.com Suit Settlement
TIME WARNER: N.Y. Court Mulls Motion to Dismiss ERISA Fraud Suit
New Securities Fraud Cases
GENESCO INC: Bernard Gross Files Securities Fraud Suit in Tenn.
LEAP WIRELESS: Schiffrin Barroway Files Cal. Securities Lawsuit
MERRILL LYNCH: Alfred Yates Files Securities Fraud Suit in N.Y.
SECURITY CAPITAL: Coughlin Stoia Files Securities Fraud Suit
VERIFONE HOLDINGS: Johnson Bottini Announces Securities Lawsuit
*********
AOL TIME: Centerpoint Energy Distributes $27M to Noteholders
------------------------------------------------------------
CenterPoint Energy Resources was notified in July 2007 of the
acceptance of its claim in connection with the 2002 AOL Time
Warner, Inc. securities and ERISA class action litigation by
receipt of approximately $32 million from the independent
settlement administrator appointed by the United States District
Court, Southern District of New York.
Pursuant to the terms of the Indenture governing the Company’s
2% Zero Premium Exchangeable Subordinated Notes (ZENS), in
August 2007, the Company distributed to current ZENS holders
approximately $27 million, which amount represented the portion
of the payment received which was attributable to the reference
shares of Time Warner Common stock corresponding to each ZENS.
This distribution reduced the contingent principal amount of the
ZENS from $848 million to $821 million. The litigation
settlement was recorded as other income and the distribution to
ZENS holders was recorded as other expense during the third
quarter of 2007.
The AOL Time Lawsuit
Securities fraud class actions were filed against AOL Time,
certain current and former executives of the company. These
lawsuits were filed in U.S. District Courts for the Southern
District of New York, the Eastern District of Virginia, and the
Eastern District of Texas.
Plaintiffs claim that the company failed to disclose AOL's
declining advertising revenues and that the company and AOL
inappropriately inflated advertising revenues in a series of
transactions.
Certain of the lawsuits also allege that certain of the
individual defendants and other insiders at the company
improperly sold their personal holdings of Time Warner stock,
that the company failed to disclose that the AOL-Historic
Time Warner Merger was not generating the synergies anticipated
at the time of the announcement of the merger and, further, that
the company inappropriately delayed writing down more than $50
billion of goodwill.
All of these lawsuits have been centralized in the U.S. District
Court for the Southern District of New York for coordinated or
consolidated pretrial proceedings -- along with the federal
derivative lawsuits and certain lawsuits brought under Employee
Retirement Income Security Act -- under the caption, "In re AOL
Time Warner Inc. Securities and 'ERISA' Litigation."
The Minnesota State Board of Investment was designated lead
plaintiff for the consolidated securities actions and filed a
consolidated amended complaint on April 15, 2003, adding
additional defendants, including:
-- additional officers and directors of the company,
-- Morgan Stanley & Co.,
-- Salomon Smith Barney Inc.,
-- Citigroup Inc.,
-- Banc of America Securities LLC, and
-- JP Morgan Chase & Co.
Plaintiffs also added additional allegations, including that the
company made material misrepresentations in its registration
statements and joint proxy statement-prospectus related to the
AOL-Historic Time Warner Merger and in its registration
statements pursuant to which debt securities were issued in
April 2001 and April 2002, allegedly in violation of Section 11
and Section 12 of the U.S. Securities Act of 1933.
In July 2005, the company reached an agreement in principle for
the settlement of the case. The court granted initial approval
to the settlement in September 2005. On April 6, 2006, the
court entered an order granting final approval of the
settlement.
The class consists of those who purchased, exchanged or
otherwise acquired publicly traded common stock of AOL, and/or
bought or sold options on AOL common stock during the period
Jan. 27, 1999 through Jan. 11, 2001, and/or purchased, exchanged
or otherwise acquired publicly traded common stock and bonds of
Time Warner and/or bought or sold options on Time Warner common
stock during the period Jan. 11, 2001 through and including Aug.
27, 2002.
Settlement Terms
In exchange for the dismissal of all claims against all
defendants, Time Warner and Ernst & Young have paid $2.4 billion
and $100 million, respectively, into the Settlement Account. In
addition, $150 million set aside as part of the Time Warner
settlement with the U.S. Department of Justice (the DOJ Funds),
has also been placed in the settlement account as part of this
settlement.
The $2.65 billion in settlement monies have been earning
interest for the securities class since Oct. 7, 2005. Time
Warner also paid $300 million to the SEC Fair Fund.
For more details, contact:
AOL Time Warner, Inc. Securities Litigation
c/o Gilardi & Co., Settlement Administrator
P.O. Box 808061, Petaluma, CA 949475-8061
Phone: (877) 800-7852
E-mail: aoltimewarnersettlement@gilardi.com
Web site: http://www.aoltimewarnesettlement.com
BRADLEY PHARMACEUTICALS: Investors' Certification Bid Dropped
-------------------------------------------------------------
Plaintiffs in a securities fraud class action filed against
Bradley Pharmaceuticals, Inc. in the U.S. District Court of New
Jersey have withdrawn their motion for class certification
without prejudice.
Initially, the company, along with certain of its officers and
directors, were named defendants in 13 federal securities class
actions that were consolidated on May 5, 2005 in the U.S.
District Court of New Jersey.
In the amended consolidated complaint, filed on June 20, 2005,
the plaintiffs allege violations of Sections 10(b) and 20(a) of
the U.S. Securities Exchange Act of 1934 and Rule 10b-5
promulgated thereunder, arising out of disclosures that
plaintiffs allege were materially false and misleading.
Plaintiffs also allege that the company and the individual
defendants falsely recognized revenue. Plaintiffs sought an
unspecified amount of compensatory damages in an amount to be
proven at trial.
The company and the individual defendants filed their initial
response on July 20, 2005 seeking to dismiss the amended
consolidated complaint in its entirety with prejudice.
On March 23, 2006, the Court issued an order denying the
Company’s motion to dismiss the federal securities class action.
Pursuant to a June 28, 2006 Scheduling Conference with the Court
and the Court’s Pretrial Scheduling Order of that date,
discovery in the federal securities class action has begun.
Plaintiffs filed a motion for class certification on Jan. 15,
2007. Defendants filed their response on April 2, 2007.
On April 23, 2007, the court issued an order staying further
deadlines in this matter pending the completion of mediation
between the parties. The mediation was held on June 13, 2007,
but a resolution was not reached.
On Sept. 4, 2007, Plaintiffs withdrew their motion for class
certification without prejudice to re-file the motion.
The suit is “Esposito v. Bradley Pharmaceuticals, Inc. et al.,”
filed in the U.S. District Court for the District of New Jersey
under Judge Faith S. Hochberg with referral to Judge Patty
Shwartz.
Representing the plaintiffs is:
Joseph J. Depalma, Esq.
Lite, Depalma, Greenberg & Rivas, LLC
Two Gateway Center, 12th Floor
Newark, NJ 07102-5003
Phone: (973) 623-3000
E-mail: jdepalma@ldgrlaw.com
Representing the defendant is:
James P. Flynn of Epstein, Esq.
Becker & Green, PC
Two Gateway Center, 12th Floor
Newark, NJ 07102-5003
Phone: (973) 642-1900
E-mail: jflynn@ebglaw.com
BRADLEY PHARMACEUTICALS: Faces N.J. Suits Over Founder’s Offer
--------------------------------------------------------------
Bradley Pharmaceuticals, Inc. continues to face five complaints
in New jersey Court with regards to Daniel Glassman’s May 29,
2007 public announcement wherein he disclosed his intent to
propose an acquisition of the Company’s outstanding shares.
Mr. Glassman is the founder, president and chief executive of
the Company and the holder of nearly all of the Company’s Class
B common stock.
The complaints allege that the genesis and consideration of this
proposal are breaches of the Board of Directors’ fiduciary
duties and that the proposed transaction does not meet the
entire fairness standard.
The complaints seek, among other relief, to enjoin defendants
from further breaching their fiduciary duties and from
consummating the proposal.
Four of those complaints are styled as class actions and were
filed in the Law or Chancery divisions in New Jersey state
court.
The complaints were consolidated in the Law Division and have
been adjourned pending a conference with the judge scheduled for
Dec. 14, 2007.
The fifth complaint is styled as both a class and derivative
action and was filed in the U.S. District Court of New Jersey.
In the federal action, plaintiff has until Dec. 14, 2007 to file
an amended complaint and defendants have until Jan. 18, 2008 to
answer or otherwise respond to the amended complaint.
The company reported no development in the matter in its Nov. 8,
2007 Form 10-Q Filing with the U.S. Securities and Exchange
Commission for the quarterly period ended Sept. 30, 2007.
Bradley Pharmaceuticals, Inc. -- http://www.bradpharm.com/-- is
a specialty pharmaceutical company that acquires, develops and
markets prescription and over-the-counter products in niche
therapeutic markets, including dermatology, podiatry,
gastroenterology and women’s health.
BROOKDALE SENIOR: Still Faces Suits Over Sale to Ventas Realty
--------------------------------------------------------------
Brookdale Senior Living, Inc. continues to face two purported
class actions in New York and Delaware arising out of the sale
of certain facilities of the company to Ventas Realty Limited
Partnership in 2004.
The first action was, “David T. Atkins et al. v. Apollo Real
Estate Advisors, L.P., et al.,” filed in the U.S. District Court
for the Eastern District of New York on Sept. 15, 2005, by
current and former limited partners in 36 investing
partnerships.
On March 17, 2006, a third amended complaint was filed in the
action. The third amended complaint was brought on behalf of
current and former limited partners in 14 investing
partnerships.
It names as defendants, among others, the company, Brookdale
Living Communities, Inc. (BLC), a subsidiary of the company,
GFB-AS Investors, LLC (GFB-AS), a subsidiary of BLC, the general
partners of the 14 investing partnerships, which are alleged to
be subsidiaries of GFB-AS, Fortress Investment Group, an
affiliate of the company’s largest stockholder, and R. Stanley
Young, its former chief financial officer.
The nine count third amended complaint alleges, among other
things:
-- that the defendants converted for their own use the
property of the limited partners of 11 partnerships,
including through the failure to obtain consents the
plaintiffs contend were required for the sale of
facilities indirectly owned by those partnerships to
Ventas;
-- that the defendants fraudulently persuaded the limited
partners of three partnerships to give up a valuable
property right based upon incomplete, false and
misleading statements in connection with certain
consent solicitations;
-- that certain defendants, including GFB-AS, the general
partners, and our former Chief Financial Officer, but
not including the Company, BLC, or Fortress, committed
mail fraud in connection with the sale of facilities
indirectly owned by the 14 partnerships at issue in the
Action to Ventas;
-- that certain defendants, including GFB-AS and its
former Chief Financial Officer, but not including the
Company, BLC, the general partners, or Fortress,
committed wire fraud in connection with certain
communications with plaintiffs in the Action and
another investor in a limited partnership;
-- that the defendants, with the exception of the Company,
committed substantive violations of the Racketeer
Influenced and Corrupt Organizations Act;
-- that the defendants conspired to violate RICO;
-- that GFB-AS and the general partners violated the
partnership agreements of the 14 investing
partnerships;
-- that GFB-AS, the general partners, and the company’s
former Chief Financial Officer breached fiduciary
duties to the plaintiffs; and
-- that the defendants were unjustly enriched.
The plaintiffs have asked for damages in excess of $100.0
million on each of the counts described above, including treble
damages for the RICO claims.
On April 18, 2006, the company filed a motion to dismiss the
claims with prejudice, which remains pending before the court,
and plan to continue to vigorously defend the Action.
A putative class action was also filed on March 22, 2006, by
certain limited partners in four of the same partnerships
involved in the Action. The suit was filed in the Court of
Chancery for the State of Delaware as “Edith Zimmerman et al. v.
GFB-AS Investors, LLC and Brookdale Living Communities, Inc.”
On Nov. 21, 2006, an amended complaint was filed in the Second
Action. The putative class in the Second Action consists only
of those limited partners in the four investing partnerships who
are not plaintiffs in the Action. BLC and GFB-AS were named as
defendants in the Second Action.
The complaint alleges a claim for breach of fiduciary duty
arising out of the sale of facilities indirectly owned by the
investing partnerships to Ventas and the subsequent lease of
those facilities by Ventas to subsidiaries of BLC.
The plaintiffs seek, among other relief, an accounting, damages
in an unspecified amount, and disgorgement of unspecified
amounts by which the defendants were allegedly unjustly
enriched.
On Dec. 12, 2006, the company filed an answer denying the claim
asserted in the amended complaint and providing affirmative
defenses.
On Dec. 27, 2006, the plaintiffs moved to certify the Action as
a class action. Both the plaintiffs and defendants have served
document production requests and the first action is currently
in the beginning stages of document discovery. The company also
intends to vigorously defend the Second Action.
The company reported no development in the matter in its Nov. 8,
2007 Form 10-Q Filing with the U.S. Securities and Exchange
Commission for the quarterly period ended Sept. 30, 2007.
Brookdale Senior Living, Inc. -- http://www.brookdaleliving.com/
-- is an operator of senior living facilities in the U.S. with
546 facilities in 35 states and the ability to serve over 51,000
residents. The company offers its residents access to a full
continuum of services across all sectors of the senior living
industry. BSL operates in four segments: independent living,
assisted living, retirement centers/continuing care retirement
communities (CCRCs) and management services.
CABLEVISION SYSTEMS: Executes Settlement of N.Y. Investor Suits
---------------------------------------------------------------
Parties in shareholder suits relating to an October 2006 offer
by the Dolan Family Group to acquire all of the outstanding
shares of Cablevision Systems Corp. have executed a stipulation
of settlement.
In October 2006, a number of shareholder class actions were
filed in New York Supreme Court, Nassau County against
Cablevision and its individual directors relating to the Oct. 8,
2006 offer by the Dolan Family Group to acquire all of the
outstanding shares of Cablevision's common stock, except for the
shares held by the Dolan Family Group.
These lawsuits allege breaches of fiduciary duty and seek
injunctive relief to prevent consummation of the proposed
transaction and compensatory damages.
The trial court ordered expedited discovery, which began in
November 2006.
On Jan. 12, 2007, the Special Transaction Committee of
Cablevision's Board of Directors received a revised proposal
from the Dolan Family Group to acquire all of the outstanding
shares of common stock of Cablevision, except for the shares
held by the Dolan Family Group.
On Jan. 16, 2007, the Special Transaction Committee delivered a
letter to Charles F. Dolan and James L. Dolan, rejecting as
inadequate the revised proposal.
On May 2, 2007, Cablevision entered into a merger agreement
pursuant to which the Dolan Family Group will obtain ownership
of all of the common stock equity of Cablevision.
Lawyers representing shareholders in these lawsuits and in an
action involving claims for alleged options backdating (that is
also pending in the Nassau County Supreme Court) actively
participated in the negotiations, which led to improvements to
the financial terms of the transaction as well as significant
contractual protections for shareholders.
The parties have agreed in principle to the dismissal of the
pending going private litigation, subject to approval of a
settlement by the Nassau County Supreme Court.
Lawyers representing shareholders in certain of the Transactions
Lawsuits, in consultation with lead counsel for the plaintiffs
in the Nassau County Supreme Court options backdating
litigations, participated in the negotiations to improve the
financial terms of the Proposed Merger as well as to add certain
contractual provisions designed to protect the rights of
shareholders.
Based upon the above events and circumstances, and the role that
the lead counsel for the plaintiffs in the Transactions Lawsuits
played in connection with the Proposed Merger, the parties
subsequently reached a memorandum of understanding for the
dismissal of the Transactions Lawsuits (and of the going-private
claim in the cases pending in the U.S. District Court for the
Eastern District of New York), subject to approval of a
settlement by the Nassau County Supreme Court, and for the
transfer to Cablevision, if the Proposed Merger were to be
consummated, of the options-related derivative claims pending in
the Nassau County Supreme Court and in the U.S. District Court
for the Eastern District of New York.
Pursuant to the memorandum of understanding, the parties
executed a stipulation of settlement as of Sept. 18, 2007.
Cablevision Systems Corp. -- http://www.cablevision.com/-- is a
cable operator in the U.S. that operates cable programming
networks, entertainment businesses and telecommunications
companies.
CANADIAN BANK: Toronto Law Firms to Disclose Overtime Suit Today
----------------------------------------------------------------
Lawyers representing claimants in an unpaid overtime class
action against Canadian Imperial Bank of Commerce (CIBC) will
provide on Dec. 10, details of a new class action they are
initiating against a second national Canadian bank.
In June, Toronto bank teller Dara Fresco, sued CIBC in Ontario
Superior Court on behalf of 10,000 current and former non-
management employees across Canada (Class Action Reporter, June
7, 2007). Ms. Fresco, represented by Attorney Douglas Elliott,
claims the bank owes her about $50,000 for overtime work in the
past 10 years.
The suit further alleges that CIBC assigns non-management
employees heavy tasks that are almost impossible to complete
within regular working hours and are discouraged to claim
overtime.
The action, which is considered to be the “largest unpaid class
action ever launched in Canada,” seeks approximately CA$600
million in damages.
On November 15, 2007 plaintiff's lawyers filed evidence in
support of certifying the class action from current and former
CIBC employees representing every province and two territories.
Today, Douglas Elliott of Roy Elliott Kim O'Connor LLP and Louis
Sokolov of Sack Goldblatt Mitchell LLP will introduce the lead
plaintiff in the new unpaid overtime lawsuit, the second against
a major Canadian bank.
The news conference to announce the bank, the lead plaintiff and
the class in the new suit will be on Dec. 10, 2007 at 10:00 a.m.
at the Offices of Roy Elliott Kim O'Connor LLP, 200 Front St
West, 23rd floor, Workers Compensation Building.
The announcement will be made by Doug Elliott, Partner, Roy
Elliott Kim O'Connor LLP; Louis Sokolov, Partner, Sack Goldblatt
Mitchell LLP; and Bill Selnes, Partner, Kapoor, Selnes & Klimm,
Saskatchewan.
To set up interviews, please contact Allison Stokes, (416) 504-
8464, stokes@mediaprofile.com; Rachel Thexton, (604) 609-6153,
rachel@mediaprofile.com.
Plaintiffs’ counsels are:
Douglas Elliott, Esq.
REKO LLP Barristers
200 Front Street West, 23rd Floor
P.O. Box #45
Toronto, ON M5V 3K2
Phone: 416 362 1989
Fax: 416 362 6204
E-mail: info@reko.ca
- and -
Steven Barrett, Esq.
Louis Sokolov, Esq.
Sack Goldblatt Mitchell LLP
20 Dundas Street West, Suite 1100
Toronto, Ontario M5G 2G8
Phone: 416-977-6070
Toll Free: 1-800-387-5422
Fax: 416-591-7333
CENTERPOINT ENERGY: LPSC Oks Calcasieu Parish Review Settlement
---------------------------------------------------------------
The Louisiana Public Service Commission (LPSC) issued an order
approving a Stipulated Settlement in a review initiated by the
plaintiffs in the Calcasieu Parish litigation, a suit filed
against CenterPoint Energy Resources (CERC) over gas or gas
services overcharges.
In February 2003, a lawsuit was filed in state court in Caddo
Parish, Louisiana against CERC with respect to rates charged to
a purported class of certain consumers of natural gas and gas
service in the State of Louisiana.
In February 2004, another suit was filed in state court in
Calcasieu Parish, Louisiana against CERC seeking to recover
alleged overcharges for gas or gas services allegedly provided
by CERC to a purported class of certain consumers of natural gas
and gas service without advance approval by the LPSC.
At the time of the filing of each of the Caddo and Calcasieu
Parish cases, the plaintiffs in those cases filed petitions with
the LPSC relating to the same alleged rate overcharges. The
Caddo and Calcasieu Parish cases have been stayed pending the
resolution of the proceedings by the LPSC.
In August 2007, the LPSC issued an order approving a Stipulated
Settlement in the review initiated by the plaintiffs in the
Calcasieu Parish litigation. In that proceeding, CERC’s gas
purchases were reviewed back to 1971.
The review concluded that CERC’s gas costs were “reasonable and
prudent”, but CERC agreed to credit to jurisdictional customers
approximately $920,000 related to certain off-system sales,
including interest. A regulatory liability was established and
the Company began refunding that amount to jurisdictional
customers in September 2007. A similar review related to the
Caddo Parish litigation remains pending at the LPSC.
The range of relief sought by the plaintiffs in the Caddo Parish
case includes injunctive and declaratory relief, restitution for
the alleged overcharges, exemplary damages or trebling of actual
damages, civil penalties and attorney’s fees.
In this case, the Company, CERC and their affiliates deny that
they have overcharged any of their customers for natural gas and
believe that the amounts recovered for purchased gas have been
in accordance with what is permitted by state and municipal
regulatory authorities. The Company and CERC do not expect the
outcome of this matter to have a material impact on the
financial condition, results of operations or cash flows of
either the Company or CERC.
CHRYSLER MOTORS: Sued in Mo. Over Cummins Engines Warranties
------------------------------------------------------------
Chrysler Motors, LLC is facing a class-action complaint filed in
the U.S. District Court for the Western District of Missouri
accusing it of not honoring warranties for Cummins diesel
engines, model years 1998-2004 and 2006.
Named plaintiffs Laura and Mark Woodruff filed the complaint on
behalf of all persons, corporations and other entities who
purchased and/or own vehicles containing a Cummins Diesel Engine
manufactured by defendants for the model years 1998-2004 and
2006.
They pray for:
-- a judgment against defendants in an amount shown by the
evidence;
-- injunctive relief requiring defendants to recognize the
period during which the Cummins Diesel Engine Limited
Warranty covers vehicles begins to run after the end of
the Basic Limited Warranty period and, therefore
requiring defendants to cover the cost of repairing all
parts covered by the Cummins Diesel Engine Limited
Warranty;
-- costs and attorney's fees; and
-- for such other and further relief as the court deems
just and proper under the circumstances.
The suit is "Laura Woodruff et al. v. Chrysler Motors, LLC et
al.," filed in the U.S. District Court for the Western District
of Missouri.
Representing plaintiffs are:
Timothy W. Van Ronzelen
Kari A. Schulte
Cook, Vetter, Doerhoff & Landwehr, P.C.
231 Madison
Jefferson City, Missouri 65101
Phone: 573/635-7977
Fax: 573/635-7417
E-mail: mclement@cvdl.net or tvanronzelen@cvdl.net
- and -
Mark T. Kempton
Spencer W. Eisenmenger
Kempton & Russell, LLC
114 East 5th Street
Sedalia, Missouri 65301
Phone: 660/827-0314
Fax: 660/8271200
E-mail: mark@kemptonrussell.com or
spencer@kemptonrussell.com
FERRO CORP: Ohio Court Approves $4M ERISA Litigation Settlement
---------------------------------------------------------------
The U.S. District Court for the Northern District of Ohio
granted final approval to a $4 million settlement of a purported
class action filed against Ferro Corp. over alleged violations
of the Employee Retirement Income Security Act.
On June 10, 2005, a putative class action was filed against
Ferro Corp., and certain former and current employees alleging
breach of fiduciary duty with respect to ERISA plans.
In October 2006, the parties reached a settlement in principle
that would result in the dismissal of the lawsuit, with
prejudice, in exchange for a settlement amount of $4.0 million,
of which $3.4 million was paid by the Company’s liability
insurer and $0.6 was paid by the Company.
The court granted preliminary approval to the settlement on Nov.
3, 2006. It gave final approval on September 2007, thus ending
this lawsuit.
The suit is “Duquette v. Ferro Corp., et al., Case No. 1:05-cv-
01594-JMM,” filed in the U.S. District Court for the Northern
District of Ohio under Judge John M. Manos.
Representing the plaintiffs are:
Patrick J. Perotti, Esq.
Dworken & Bernstein
60 South Park Place
Painsville, OH 44077
Phone: 440-352-3391
Fax: 440-352-3469
E-mail: pperotti@dworkenlaw.com
Ronen Sarraf, Esq.
Sarraf Gentile
Ste. 1005, 485 Seventh
Avenue, New York, NY 10018
Phone: 212-868-3610
Fax: 212-918-7967
- and -
Ralph M. Stone, Esq.
Shalov Stone & Bonner
Ste. 1000, 485 7th Street
New York, NY 10018
Phone: 212-239-4340
Fax: 212-239-4310
E-mail: rstone@lawssb.com
Representing the defendants is:
Steven A. Friedman, Esq.
Squire, Sanders & Dempsey
4900 Key Tower, 127 Public Square
Cleveland, OH 44114
Phone: 216-479-8327
Fax: 216-479-8777
E-mail: sfriedman@ssd.com
FERRO CORP: Plaintiffs Voluntarily Dismiss Ohio Securities Suit
---------------------------------------------------------------
Plaintiffs in a consolidated securities fraud class action filed
against Ferro Corp. in the U.S. District Court for the Northern
District of Ohio voluntarily dismissed their case with
prejudice.
In a July 23, 2004, press release, Ferro announced that its
Polymer Additives business performance in the second quarter of
2004 fell short of expectations and that its Audit Committee
would investigate possible inappropriate accounting entries in
Ferro's Polymer Additives business.
A consolidated putative securities class action arising from and
related to the July 23, 2004 announcement was filed in the U.S.
District Court for the Northern District of Ohio against Ferro,
its deceased former chief executive officer, its chief financial
officer, and a former operating vice president of Ferro.
The claim is based on alleged violations of federal securities
laws.
In June 2007, the U.S. District Court for the Northern District
of Ohio dismissed the plaintiffs’ complaint, after which the
plaintiffs appealed the District Court decision to the Sixth
Circuit Court of Appeals.
In September 2007, however, the plaintiffs filed a voluntary
dismissal, with prejudice, of their appeal, thus ending this
litigation.
Ferro Corp. -- http://www.ferro.com-- is a producer of
specialty materials and chemicals. It manages its businesses in
eight business units, which are organized as six segments:
Performance Coatings (comprising Tile Coating Systems and
Porcelain Enamel), Electronic Materials, Color and Glass
Performance Materials, Polymer Additives, Specialty Plastics and
Other Businesses (comprising Pharmaceuticals and Fine
Chemicals).
FISERV TRUST: Court Mulls Appeal on Calif. Suit's Certification
---------------------------------------------------------------
The U.S. Court of Appeals for the Ninth Circuit has yet to rule
on an appeal by Fiserv Trust Co. regarding a decision by the
U.S. District Court for the Central District of California to
certify a class in a lawsuit filed by investors who maintained
self-directed individual retirement accounts administered by
Fiserv Trust.
The suit alleges that Fiserv Trust, which serves as a custodian
and administrator of investment accounts, knew or should have
known that third parties were perpetrating an alleged Ponzi
scheme and that it breached its contractual and common law
duties and aided and abetted the scheme by not advising the
plaintiffs to avoid investing in the alleged scheme.
It was brought on behalf of a class of investors who maintained
self-directed individual retirement accounts administered by
Fiserv Trust and others who invested in the alleged scheme,
including investors that were never customers of Fiserv Trust,
and seeks compensatory damages of $120 million and punitive
damages.
The California federal court has certified a class in the
lawsuit (Class Action Reporter, May 14, 2007).
In May 2007, a petition for permission to appeal the class
certification order was granted by the U.S. Court of Appeals for
the Ninth Circuit, and the class certification is being
appealed.
The company reported no development in the matter in its Nov. 8,
2007 Form 10-Q Filing with the U.S. Securities and Exchange
Commission for the quarterly period ended Sept. 30, 2007.
The suit is “Jerome Jenson et al. v. First Trust Company et al.,
Case No. 2:05-cv-03124-ABC-CT,” filed in the U.S. District Court
for the Central District of California under Judge Audrey B.
Collins with referral to Judge Carolyn Turchin.
Representing the plaintiffs is:
Lionel Z. Glancy, Esq.
Glancy Binkow and Goldberg
1801 Avenue of the Stars, Suite 311
Los Angeles, CA 90067
Phone: 310-201-9150
E-mail: info@glancylaw.com
Representing the defendants is:
Casey N. Carrington, Esq.
Gibson Dunn and Crutcher
333 South Grand Avenue
Los Angeles, CA 90071
Phone: 213-229-7000
E-mail: ccarington@gibsondunn.com
FISERV TRUST: Plaintiffs' Bid to Halt CheckFree Purchase Junked
---------------------------------------------------------------
Fiserv Trust Co. faces a purported class action in Delaware in
connection with its proposed acquisition of CheckFree Corp.
On Aug. 30, 2007, following the announcement of the Company’s
proposed acquisition of CheckFree Corp., a class action
complaint was filed in the Delaware Court of Chancery against
Fiserv, CheckFree, and individual directors of CheckFree.
The complaint alleges, among other things, that there was
insufficient disclosure in the proxy statement distributed by
CheckFree to its stockholders in connection with the CheckFree
special meeting of stockholders to approve the proposed
acquisition and that the consideration to be paid to such
stockholders is not sufficient.
On Oct. 10, 2007, this case was consolidated with another class
action, also filed in the Delaware Court of Chancery, in which
the Company was not named as a defendant.
The plaintiffs in the consolidated action are seeking injunctive
and monetary relief.
Also on Oct. 10, 2007, the plaintiffs filed a motion for a
preliminary injunction to postpone the CheckFree special meeting
of stockholders and the closing of the acquisition. This motion
was denied on Oct. 18, 2007.
Fiserv Trust Co. -- http://www.fiserviss.com– a.k.a. Fiserv
Investment Support Services offers trust, custodial, and back
office services, including advisor, investment administration,
institutional retirement plan, and financial institution
services.
HOMESTEAD FINANCIAL: Homebuyer Sues in Mo. Over Interest Rates
--------------------------------------------------------------
Homestead Financial, d.b.a. Endeavor Capital, and Countrywide
Home Loans are facing a class-action complaint filed in the
Circuit Court of St. Louis county, State of Missouri, alleging
the companies defrauded homebuyers.
Named plaintiff Christine Bales proposes to represent all
persons within the State of Missouri for whom, during the five
years prior to the filing of the suit, Homestead acted as
mortgage broker and
(1) arranged a home loan with an interest rate higher than
the lender's par rate,
(2) failed to disclose the par rate to borrower, and
(3) was paid a yield spread premium by Countrywide or
another member of the proposed defendants' class.
She wants the court rule on:
(a) whether Homestead acted as mortgage broker for borrower
and the other members of plaintiffs' class;
(b) whether Homestead obtained home loans for borrower and
the other members of plaintiffs' class with interest
rates higher than lender's par rate and was paid a
yield spread premium by a lender;
(c) whether Homestead as a mortgage broker owed borrower
and the other members of plaintiffs' class a fiduciary
duty;
(d) whether Homestead's practice of obtaining home loans
for borrower and the other members of plaintiffs' class
with interest rates higher than the lender's par rate
is a breach of Homestead's fiduciary duty;
(e) whether Homestead and lenders had agreements and an
understanding to perform the acts of Homestead's breach
of fiduciary duty and performed acts in furtherance of
the agreements;
(f) whether this action is maintainable as a plaintiffs'
class action;
(g) whether this action is maintainable as a defendants'
class action; and
(h) whether the members of the plaintiffs' class are
entitled to recovery against lenders for actual and
punitive damages and an award of attorney's fees under
the MPA, Section 407.025, RSMo.
Plaintiff prays that the court grant the following relief:
-- enter an order certifying this action as a plaintiffs'
class action, and appointing the named plaintiff as
representative of the plaintiffs' class;
-- enter an order appointing Green Jacobson & Butsch, P.C.
as counsel and lead counsel for the plaintiffs' class;
-- enter judgment in favor of plaintiff and the members of
the plaintiffs' class and against defendant Homestead
Financial, for actual damages in the sum to be proven at
trial and equal to Homestead's compensation received in
borrowers' transactions, the excess interest paid to
date, the present value of the difference between the
amount of interest due under each class member's home
loan with lenders and the amount of interest due at the
lender's par rate, and such other damages as may be
proven at trial;
-- enter judgment in favor of plaintiff and the members of
the plaintiffs' class and against defendant Homestead
for punitive damages totaling the sum of three times
each class members' damages;
-- enter judgment awarding class counsel from a common fund
reasonable attorneys' fees and all expenses of this
action and to require defendant Homestead to pay the
costs and expenses of class notice and claim
administration; and
-- award plaintiff and the members of the plaintiffs' class
prejudgment interest, post-judgment interest, costs, and
any further and additional relief as to which they may
be entitled.
The suit is "Christine Bales et al. v. Homestead Financial et
al., Case No. 07SL-CC010172," filed in the Circuit Court of St.
Louis County, state of Missouri.
Representing plaintiffs are:
Jonathan F. Andres
Fernando Bermudez
Matthew R. Fields
Green Jacobson & Butsch, P.C.
7733 Forsyth Blvd., Suite 700
Clayton, MO 63105
Phone: (314) 862-6800
Fax: 314) 862-1606
E-mail: andres@stlouislaw.com or
bermudez@stlouislaw.com or
fields@stlouislaw.com
LG ELECTRONICS: Faces N.J. Suit Over Toxic Water in Refrigerator
----------------------------------------------------------------
LG Electronics USA Inc. is facing a class-action complaint filed
in the U.S. District Court for the District of New Jersey
claiming a refrigerator it made produced chilled water and ice
cubes laced with toxic substances, Hugh R. Morley of the
NorthJersey.com reports.
Named plaintiff Marco Palmeri claims that tests of the water
from a refrigerator he bought from LG showed that the water
contained high levels of toxic and potentially carcinogenic
volatile organic compounds. The compounds included
ethylbenzene, styrene and toluene.
Mr. Palmeri works for the Connecticut Department of Health. He
had the water tested at the department's public health
laboratory and at another facility, according to the report.
The suit says Mr. Palmeri "was told by an LG customer service
employee that the company was already aware of the plastic odor
that emanated from the dispenser."
The suit, which was filed as a class action, alleges LG
committed consumer fraud, breach of express warranty, product
liability and unjust enrichment. It seeks damages and a court
order requiring that LG repair and replace defective
refrigerators.
John Taylor, a spokesman for LG Electronics told NorthJersey.com
that none of those chemicals are part of the refrigerator's
coolant. He acknowledged receiving a complaint from the
Connecticut Department of Health, but said the company's own
testing of a different sample did not replicate these claims on
any of the units that it tested.
The suit is “Palmeri et al. v. LG Electronics USA, Inc. et al.,
Case Number: 2:2007cv05706,” filed in the U.S. District Court
for the District of New Jersey, under Judge Judge Joseph A.
Greenaway, Jr., with referral to Judge Madeline C. Arleo.
METLIFE INC: Continues to Face Demutualization Case in N.Y.
-----------------------------------------------------------
The U.S. District Court for the Eastern District of New York
certified a class in the matter “In re MetLife Demutualization
Litigation,” which is one of several lawsuits challenging the
fairness of the company's plan of reorganization, as amended and
the adequacy and accuracy of its disclosure to policyholders
regarding the plan.
The suit was filed against which was filed on April 18, 2000
against Metropolitan Life Insurance Co., and MetLife, Inc.
In this class action plaintiffs served a second consolidated
amended complaint in 2004.
In that complaint, plaintiffs assert violations of the
Securities Act of 1933 and the U.S. Securities Exchange Act of
1934 in connection with the plan, claiming that the Policyholder
Information Booklets failed to disclose certain material facts
and contained certain material misstatements. The suit is
seeking rescission and compensatory damages.
On June 22, 2004, the court denied the defendants' motion to
dismiss the claim of violation of the U.S. Securities Exchange
Act of 1934.
The court had previously denied defendants' motion to dismiss
the claim for violation of the Securities Act of 1933. In 2004,
the court reaffirmed its earlier decision denying defendants'
motion for summary judgment as premature.
On July 19, 2005, this federal trial court certified this
lawsuit as a class action against Metropolitan Life and the
MetLife. Metropolitan Life asked the court to reconsider the
decision. On May 9, 2007, the court denied the motion to vacate
to certification order.
The suit is "In Re Metlife Demutulization Litigation, cv 00-
2258," filed in the U.S. District Court for the Eastern District
of New Year under Judge Thomas C. Platt.
MetLife, Inc. -- http://www.metlife.com/-- is a provider of
insurance and other financial services with operations
throughout the United States and the regions of Latin America,
Europe, and Asia Pacific. Through its domestic and
international subsidiaries and affiliates, MetLife offers life
insurance, annuities, automobile and homeowners insurance,
retail banking and other financial services to individuals, as
well as group insurance, reinsurance and retirement & savings
products, and services to corporations and other institutions.
The Company is organized into five operating segments:
Institutional, Individual, Auto & Home, International and
Reinsurance, as well as Corporate & Other.
METLIFE INC: Ontario Court Dismisses Canadian Policyholders Suit
----------------------------------------------------------------
A Ontario Superior Court dismissed the suit “Fotia, et al. v.
MetLife, Inc., et al.” that was filed on behalf of a proposed
class of certain former Canadian policyholders against the
Holding Company, Metropolitan Life, and Metropolitan Life
Insurance Company of Canada.
The case was filed on April 3, 2001. Plaintiffs’ allegations
concern the way that their policies were treated in connection
with the demutualization of Metropolitan Life; they seek
damages, declarations, and other non-pecuniary relief. Pursuant
to an order dated October 9, 2007, this lawsuit has been
dismissed.
METROPOLITAN LIFE: Still Faces Improper Sales Practices Claims
--------------------------------------------------------------
Over the past several years, numerous claims, including class
actions, alleging improper marketing or sales of individual life
insurance policies, annuities, mutual funds or other products
have been filed against:
-- Metropolitan Life;
-- New England Mutual Life Insurance Company, New England
Life Insurance Company and New England Securities
Corporation (collectively New England);
-- General American Life Insurance Company;
-- Walnut Street Securities, Inc. and MetLife Securities,
Inc. (MSI)
As of September 30, 2007, there were approximately 140 sales
practices litigation matters pending against the Company. The
Company continues to vigorously defend against the claims in
these matters. Some sales practices claims have been resolved
through settlement.
In April 2007, Metropolitan Life and General American settled a
large number of individual sales practices litigation matters
which had been brought in Pennsylvania state court. Other sales
practices claims have been won by dispositive motions or have
gone to trial. Most of the current cases seek substantial
damages, including in some cases punitive and treble damages and
attorneys’ fees. Additional litigation relating to the Company’s
marketing and sales of individual life insurance, mutual funds
or other products may be commenced in the future.
Two putative class actions involving sales practices claims were
filed against Metropolitan Life in Canada.
(1) In “Jacynthe Evoy-Larouche v. Metropolitan Life Ins.
Co. (filed in Quebec Superior Court in March 1998),”
plaintiff alleges misrepresentations regarding
dividends and future payments for life insurance
policies and seeks unspecified damages.
(2) In “Ace Quan v. Metropolitan Life Ins. Co. (filed in
Ontario Gen. Div. on April 1997),”
plaintiff alleges breach of contract and negligent
misrepresentations relating to, among other things,
life insurance premium payments and seeks damages,
including punitive damages.
Regulatory authorities in a small number of states have had
investigations or inquiries relating to Metropolitan Life’s, New
England’s, General American’s, MSI’s or Walnut Street’s sales of
individual life insurance policies or annuities or other
products. Over the past several years, these and a number of
investigations by other regulatory authorities were resolved for
monetary payments and certain other relief.
The Company may continue to resolve investigations in a similar
manner. The Company believes adequate provision has been made in
its consolidated financial statements for all probable and
reasonably estimable losses for sales practices claims against
Metropolitan Life, New England, General American, MSI and Walnut
Street.
METROPOLITAN PROPERTY: Suit Over Medical Provider Fees Abandoned
----------------------------------------------------------------
Metropolitan Property and Casualty Insurance Company (MPC) is
facing Property and Casualty Actions in various stages of
litigation.
In October, plaintiff in a putative nationwide class action
filed against MPC in Minnesota in relation to the payment of
medical provider fees voluntarily dismissed the lawsuit.
There are a number of lawsuits, including a few putative class
actions, pending in Louisiana and Mississippi against MPC
relating to Hurricane Katrina. The lawsuits include claims by
policyholders for coverage for damages stemming from Hurricane
Katrina, including for damages resulting from flooding or storm
surge.
An August 30, 2007 deadline for filing actions in Louisiana has
resulted in the receipt of additional individual, “mass” and
class actions against insurance carriers, including MPC. It is
reasonably possible that additional actions will be filed in
other states. The Company intends to continue to defend
vigorously against these matters, although appropriate matters
may be resolved as part of the ordinary claims adjustment
process.
(1) “Stern v. Metropolitan Casualty Ins. Co.” filed in the
Southern District of Florida on October 18, 1999
A putative class action seeking compensatory damages and
injunctive relief has been filed against MPC’s subsidiary,
Metropolitan Casualty Insurance Company, in Florida alleging
breach of contract and unfair trade practices with respect to
allowing the use of parts not made by the original manufacturer
to repair damaged automobiles.
Discovery is ongoing and a motion for class certification is
pending. The Company is vigorously defending against the claims
in this matter.
(2) “Shipley v. St. Paul Fire and Marine Ins. Co. and
Metropolitan Property and Casualty Ins. Co.” filed in
Illinois Circuit Court, Madison County on February 26
and July 2, 2003
Two putative nationwide class actions have been filed against
MPC in Illinois. One suit claims breach of contract and fraud
due to the alleged underpayment of medical claims arising from
the use of a purportedly biased provider fee pricing system. A
motion for class certification has been filed and briefed.
The second suit currently alleges breach of contract arising
from the alleged use of preferred provider organizations to
reduce medical provider fees covered by the medical claims
portion of the insurance policy. A motion for class
certification has been filed and briefed.
A third putative nationwide class action relating to the payment
of medical provider fees was filed against MPC in Minnesota.
(3) “Davis Chiropractic, PA, et. al. v. MetLife Auto & Home
and Metropolitan Property and Casualty Ins. Co.” filed
in the District of Minnesota on July 9, 2007
On October 25, 2007, plaintiff voluntarily dismissed this
lawsuit.
The Company is vigorously defending against the remaining claims
in these matters.
MINNESOTA: Minneapolis Accused of Bias Against Black Police
-----------------------------------------------------------
Vickie Evans-Nash of Minnesota Spokesman-Recorder reports that
the Black Police Officers Association had filed a racial
discrimination class action against the City of Minneapolis
The announcement, which was made by some Minneapolis residents,
follows the demotion of a number of Black police officers on the
Minneapolis Police force, according to the report. The
plaintiffs named in the lawsuit are Lieutenant Lee Edwards,
Lieutenant Donald Harris, Lieutenant Medaria Arradondo, Sergeant
Charles Adams and Sergeant Dennis Hamilton. It includes an
individual lawsuit against Minneapolis Police Chief Tim Dolan.
The lawsuit also alleges obstructive actions of the Minneapolis
Civil Rights Department and detail a consistent pattern of
discrimination against African American officers and other
officers of color that dates back more than 20 years of service
of the most senior officer named in report.
Specifically, the suit alleges longstanding departmental racism,
magnified by the demotions of three key black cops within a
year. It also alleges discrimination against three black
lieutenants and two black sergeants, according to David Chanen
and Terry Collins of Star Tribune.
OHIO: Police Radio-Room Employees Sue Over Sick Leave Policy
------------------------------------------------------------
Columbus is facing a class action filed by a group of current
and former Columbus police radio-room employees who claim the
city's sick-leave policy violates federal law, The Columbus
Dispatch reports.
The suit was filed by former radio-room employees Lisa Lee,
Paula Lee and Teresa Ruby and current employees Cheri Bowman and
Carrie Best in the U.S. District Court for the Southern District
of Ohio on Dec. 4, 2007. It was centered at a directive of the
Police Division requiring employees who return to work after
illness or injury to provide supervisors with a document, signed
by a doctor, describing the nature of their medical condition.
Those who do not follow the directive are allegedly refused
work, charged with unexcused absences, suspended or terminated.
Among those affected by the policy were employees who took
approved leaves under the Family and Medical Leave Act,
plaintiffs attorney Michael DeWitt said.
According to the suit, under federal law, such information must
be treated as a confidential medical record and "employees'
chain of command are not authorized by statute to have access to
confidential medical information."
Mr. Dewitt said that although the police directive, issued
before 2004, applies to the entire division, it appears that it
has been enforced only in the radio room.
The lawsuit seeks compensatory, punitive damages for the
plaintiffs, and lost wages and benefits for those who were
fired.
Defendants are the City of Columbus, Ohio, Mitchell Brown, James
Jackson, Gary Thatcher, Gary Dunlap, Larry Yates, Frances
Gramlich and Mark Valentino.
The suit is "Lee et al. v. The City of Columbus, Ohio et al.,
Case No. 2:2007-cv-01230," filed in the U.S. District Court for
the Southern District of Ohio before Gregory L. Frost with
referral to Judge Norah McCann King.
RC2 CORP: Recalls Feeding Seats with Straps that Could Detach
-------------------------------------------------------------
RC2 Corp. is voluntarily recalling three styles of The First
Years(R) Newborn-to-Toddler Reclining Feeding Seat due to
malfunctioning restraining straps that may disengage and could
permit the child to slip out of the seat. Approximately 100,000
reclining feeding seats were manufactured and distributed
through mass and specialty retailers in the U.S. and another
25,000 in Canada between November 8, 2006 and May 10, 2007.
Only reclining feeding seats manufactured after November 8, 2006
are affected by the recall. The three styles included in the
recall vary only in color and seat-pad decoration. Excluded from
the recall are all The First Years Newborn-to-Toddler Reclining
Feeding Seats with either an "R" stamped inside a raised circle
located on the far left and right sides of the seatback or those
with waist strap slots that are 9 inches apart.
Parents and caregivers should immediately stop using the
recalled feeding chairs. RC2 received 38 reports of
malfunctioning restraining straps, including 12 instances of
children falling from the seat. None of the falls required
medical attention.
There is no need for consumers to return the reclining feeding
seat. Working closely with the CPSC, RC2 has determined that the
malfunctioning restraint strap can be easily replaced in the
home, using a replacement strap provided free of charge by the
company. Instructions for ordering and replacing the strap are
available on the company's website: http://www.recalls.rc2.com,
or assistance is available by calling the RC2 Consumer Care
Center at (866) 725-4407 toll free.
"Our focus is on ensuring that our products are safe for
children. So, to correct a situation in which our product may
not be performing properly, we are providing parents and
caregivers with a safe and easy replacement solution. We
sincerely apologize for the worry this recall may cause parents
and caregivers," said Curtis W. Stoelting, chief executive
officer of RC2 Corp. "Everyone at RC2 is working to ensure that
the straps are replaced quickly, so parents can again use this
feeding seat with confidence."
Manufactured in the U.S., the reclining feeding seats have
restraining straps that fit through slots on the bottom portion
of the seat back. The affected seats have slots that are too
wide, which may cause the restraining straps to disengage from
the seat back and could permit the child to slip out of the
seat. The free replacement restraining straps contain metal
clips which are sewn onto the end of each waist strap, thereby
eliminating the risk the straps might pull through the slot in
the seatback.
Complete recall information including full-color photos and
assistance in identifying the affected products is available on
RC2's recall website: http://www.recalls.rc2.comor from RC2's
Consumer Care Center, which can be reached toll-free at
(866)725-4407. As part of its public outreach efforts, RC2 is
notifying retailers to remove the recalled items from their
store shelves and inventories and display posters illustrating
the recalled products.
RC2 Corporation -- http://www.rc2.com-- is a leading designer,
producer and marketer of innovative, high-quality toys,
collectibles, and infant products that are targeted to consumers
of all ages.
RC2 CORP: Recalls Potty Training Seats on Paint's High Lead
-----------------------------------------------------------
RC2 Corp. is voluntarily recalling two styles of The First
Years(R) 3-in-1 Flush & Sounds Potty training seats due to the
discovery of excess levels of lead in surface paint on 5-inch
rectangular plaques inserted into the backs of the training
seats.
Approximately 123,000 plaques were used in potty training seats
sold to U.S. and Canadian mass and specialty retailers between
April 2006 and August 2007. Approximately 37,000 additional
plaques were not used in training seats and have been
quarantined by the company. There have been no reports of
illness or injury related to the plaques.
Working closely with the U.S. Consumer Product Safety
Commission, RC2 determined that the potential safety issue can
be readily corrected in the home with a clear protective cover
available free-of-charge from the company. The easily-applied
protective cover is a permanent solution that eliminates a
child's access to the plaque. There is no need to return the
recalled potty training seat to the company, and the potty
training seat can continue to be used. Until the protective
cover arrives, consumers should keep the seat away from young
children when not in use. Instructions for ordering a protective
cover are available on the company's website:
http://www.recalls.rc2.com,or assistance is available by
calling the RC2 Consumer Care Center at (866) 725-4407 toll
free.
"We sincerely apologize for the worry this recall may cause
parents and caregivers, but know that child safety must always
be our single most important priority," said Curt Stoelting,
chief executive officer of RC2 Corp. "Throughout the summer RC2
has worked very hard to establish new safeguards as part of our
new Multi-Check Safety System. Today, all of RC2's contract
manufacturers are fully engaged and implementing the Multi-
Check's expanded testing program and paint control procedures
along with several other preventative measures. Unfortunately,
the plaques that prompted this recall were produced several
months before the Multi-Check System was implemented."
Each potty training seat assembly has either a yellow chair with
a green removable seat and a purple lift-out pot or a blue chair
with a white removable seat and green lift-out pot. The potty
makes flushing sounds and says words of encouragement when the
handle on the side of the seat is pushed down. The plaque,
picturing the "100 Acre Wood" from the Winnie the Pooh story, is
molded on the chair back. The affected plaques were produced
between December 2005 and March 2006 by a contract manufacturer
in China and contain the Tigger character, which is painted with
an orange color that may contain excess levels of lead. The
contract manufacturer that produced these plaques is no longer
making products for RC2.
Discovered during on-going product testing, results from an
independent third-party testing laboratory indicated excess
levels of lead in surface paint on a sample plaque. While many
of the plaques conform to safety standards, testing as part of a
subsequent internal investigation verified excess lead levels on
plaques from three tracking codes.
Complete recall information, including full color photos of the
affected products, is available on RC2's recall website:
http://www.recalls.rc2.com,or from RC2's Consumer Care Center,
which can be reached toll-free at (866)725-4407.
RC2 Corporation -- http://www.rc2.com-- is a leading designer,
producer and marketer of innovative, high-quality toys,
collectibles, and infant products that are targeted to consumers
of all ages.
RESTORATION HARDWARE: Faces Cal. Suit Over Sears Purchase Offer
---------------------------------------------------------------
Law Offices of Brian M. Felgoise, P.C. announced that a class
action has been commenced in the Superior Court of California on
behalf of shareholders of Restoration Hardware, Inc. (RSTO) in
connection with the offer by Sears Holdings Corp. to acquire all
of the outstanding shares of RSTO.
The lawsuit against certain officers and directors is seeking
for the highest possible offer for the public shares.
For more information, contactL
Brian M. Felgoise, Esquire
261 Old York Road, Suite 423
Jenkintown, Pennsylvania, 19046
Phone: (215) 886-1900
TARGET CORP: Accused of Falsely Labeling Milk as Organic
--------------------------------------------------------
A lawsuit filed Dec. 4 in the U.S. District Court in Minnesota
accuses Target Corp. of selling Archer Farms milk with an
organic label that didn't belong there.
The lawsuit against the Minneapolis-based retailer names an
Indiana couple, Patrick and Caryn Hudspeth, as plaintiffs.
It seeks class-action status for customers who purchased
organic-labeled Archer Farms milk from Dec. 5, 2003, through
Oct. 15 of this year. Archer Farms is a Target private-label
brand. Colorado-based Aurora Organic Dairy, which is not named
as a defendant in the lawsuit, supplied the milk.
This is the latest legal volley in a battle over whether Aurora
-- the largest supplier of private-label organic milk -- is
following the rules required to earn the distinction. Previous
lawsuits have named Aurora.
Target in a statement said it stands behind the status of Archer
Farms organic milk and Aurora.
"This lawsuit is inconsistent with the fact that the United
States Department of Agriculture has reviewed and confirmed the
organic certification of Aurora Dairy Farms and its products,"
the statement said. "We are not aware of any ongoing
investigations of Aurora Dairy Farms. It is disappointing that
these types of lawsuits are attempting to override the USDA and
regulate the organic industry and retailers with their own
beliefs of what constitutes an organic product."
Sonja Tuitele, a spokeswoman for Aurora Organic Dairy, said the
dairy's milk has always been organic. "Our consent agreement
with the (USDA) confirms that our organic certifications have
always been and continue to be organic," she said.
The USDA entered into the consent agreement in August that would
allow Aurora Organic Dairy to continue to operate as a certified
organic dairy as long as it met several conditions during a one-
year probationary review period. They include removing certain
animals from the organic herd and ceasing to apply the organic
label to certain milk, according to a release from the USDA.
The lawsuit, which doesn't specify a dollar amount, said the
Hudspeths purchased what they believed to be organic milk at a
premium price from Target because they believed it contained
fewer additives and was healthier for their family than
nonorganic milk. They used the milk to prepare formula for their
children.
They allege in the lawsuit that Target's milk was not organic
according to federal law, and the suit identifies several
violations by the Aurora Organic Dairy from a USDA
investigation. Among the violations are that Aurora:
-- Represented its milk or milk products as "organic" when
in fact they were not.
-- After an entire distinct herd had been converted to
organic production, failed to maintain all cows under
organic management from the last third of gestation.
-- Removed its dairy cows from an organic operation and
subsequently managed those cows on a nonorganic
(noncertified) operation before being sold, labeled or
represented as organically produced.
The suit is “Hudspeth et al v. Target Corp., Case Number:
0:2007cv04755,” filed in the U.S. District Court for the
District of Minnesota, under Judge Patrick J. Schiltz, with
referral to Judge Jeanne J. Graham.
TIDEWATER FINANCE: Hearing on Repossession Suit Deal Set Today
--------------------------------------------------------------
Officials from Tidewater Finance Co. are set to appear in an
Ohio courthouse today to settle a $3.2 million class action
regarding its repossession practices, Deirdre Fernandes of The
Virginian-Pilot reports.
Tidewater Finance based in Hampton Roads, Virginia Beach
provides loans for vehicles, furniture and homes. Its motor
credit division provides loans nationwide, primarily to low-
income borrowers.
The suit was filed in relation to Tidewater Finance's
repossession in 2004 of a Ford minivan that belonged to Lawanda
and Donald Wade Jr. The Wades alleged that in Tidewater
Finance's notice of auction for the vehicle, the company did not
provide a complete address of the auction.
The Wades needed to know the address to get the vehicle back, or
if they wanted to bring bidders to the auction who could pump up
the sale price of the minivan, thereby reducing the amount the
couple owed Tidewater, Ronald Frederick, a lawyer representing
the plaintiffs, told The Virginian-Pilot.
According to the report, the Wades also alleged that the company
didn't tell them they could get the minivan back by paying $25
of the $300 repossession fee, with the rest added onto their
loan balance.
Tidewater Finance has denied the allegations.
As part of the settlement, Tidewater Finance preliminarily
agreed to establish a $700,000 settlement fund and forgo
outstanding payments of at least $2.5 million owed to the
company, and cancel any record of deficient balances.
Tidewater's local lawyer is James Sheeran.
Tidewater is owned by L.M. Sandler & Sons, the Beach-based real-
estate development company.
Representing plaintiffs is:
Ronald Frederick, Esq.
Ronald Frederick Law Offices
55 Public Sq # 1300
Cleveland, OH 44113
Phone: (216) 502-1055
(216) 781-3434
TIME WARNER: $2.65B Settlement of Securities Fraud Suit Proceeds
----------------------------------------------------------------
The administration of the $2.65 billion settlement of the
lawsuit, “AOL Time Warner, Inc. Securities & 'ERISA' Litigation,
Case No. 02 Civ. 5575” is ongoing.
During the Summer and Fall of 2002, 30 shareholder class actions
were filed in various U.S. District Courts naming as defendants
the Company, certain current and former executives of the
Company and, in several instances, America Online, Inc.
The complaints purported to be made on behalf of certain
shareholders of the Company and alleged that the Company made
material misrepresentations and/or omissions of material fact in
violation of Section 10(b) of the Exchange Act, Rule 10b-5
promulgated thereunder, and Section 20(a) of the Exchange Act.
Plaintiffs claimed that the Company failed to disclose AOL’s
declining advertising revenues and that the Company and AOL
inappropriately inflated advertising revenues in a series of
transactions.
Certain of the lawsuits also alleged that certain of the
individual defendants and other insiders at the Company
improperly sold their personal holdings of Time Warner stock,
that the Company failed to disclose that the January 2001 merger
of America Online, Inc. (now AOL LLC) and Time Warner Inc., now
known as AOL-Historic TW Merger, was not generating the
synergies anticipated at the time of the announcement of the
merger and, further, that the Company inappropriately delayed
writing down more than $50 billion of goodwill.
The lawsuits sought an unspecified amount in compensatory
damages.
All of these lawsuits were centralized in the U.S. District
Court for the Southern District of New York for coordinated or
consolidated pre-trial proceedings (along with the federal
derivative lawsuits and certain lawsuits brought under ERISA)
under the caption, “In re AOL Time Warner Inc. Securities and
'ERISA' Litigation.”
The Minnesota State Board of Investment (MSBI) was designated
lead plaintiff for the consolidated securities actions and filed
a consolidated amended complaint on April 15, 2003, adding
additional defendants including additional officers and
directors of the Company, Morgan Stanley & Co., Salomon Smith
Barney Inc., Citigroup Inc., Banc of America Securities LLC and
JP Morgan Chase & Co.
Plaintiffs also added additional allegations, including that the
Company made material misrepresentations in its registration
statements and joint proxy statement-prospectus related to the
AOL-Historic TW Merger and in its registration statements
pursuant to which debt securities were issued in April 2001 and
April 2002, allegedly in violation of Section 11 and Section 12
of the Securities Act of 1933.
The Settlement
In July 2005, the Company reached an agreement in principle with
MSBI for the settlement of the consolidated securities actions.
The settlement is reflected in a written agreement between the
lead plaintiff and the Company.
On Sept. 30, 2005, the court issued an order granting
preliminary approval of the settlement and certified the
settlement class.
The court issued an order dated April 6, 2006 granting final
approval of the settlement, and the time to appeal that decision
has expired.
In connection with reaching the agreement in principle on the
securities class action, the Company established a reserve of $3
billion during the second quarter of 2005 reflecting the MSBI
settlement and other pending related shareholder and ERISA
litigation.
Pursuant to the MSBI settlement, in October 2005, Time Warner
paid $2.4 billion into a settlement fund (MSBI Settlement Fund)
for the members of the class represented in the action, and
Ernst & Young LLP paid $100 million.
In connection with the settlement, the $150 million previously
paid by Time Warner into a fund in connection with the
settlement of the investigation by the DOJ was transferred to
the MSBI Settlement Fund.
In addition, the $300 million the Company previously paid in
connection with the settlement of its SEC investigation will be
distributed to investors through the MSBI settlement process
pursuant to an order issued by the U.S. District Court for the
District of Columbia on July 11, 2006.
On Oct. 27, 2006, the court awarded to plaintiffs’ counsel fees
in the amount of $147.5 million and reimbursement for expenses
in the amount of $3.4 million, plus interest accrued on such
amounts since Oct. 7, 2005, the date the Company paid $2.4
billion into the MSBI Settlement Fund; these amounts are to be
paid from the MSBI Settlement Fund.
On May 2, 2007, the court entered an order directing an initial
distribution of these funds. Administration of the MSBI
settlement is ongoing, according to Time Warner's Nov. 7, 2007
Form 10-Q Filing with the U.S. Securities and Exchange
Commission for the quarterly period ended Sept. 30, 2007.
For more details, contact:
AOL Time Warner, Inc. Securities Litigation
c/o Gilardi & Co., Settlement Administrator
P.O. Box 808061
Petaluma, CA 949475-8061
Phone: (877) 800-7852
E-mail: aoltimewarnersettlement@gilardi.com
Web site: http://www.aoltimewarnersettlement.com/
TIME WARNER: Seeks Dismissal of Staro Asset's Litigation in N.Y.
----------------------------------------------------------------
Time Warner, Inc. is seeking for a dismissal of the purported
securities fraud class action, “Staro Asset Mgmt. v. AOL Time
Warner, et al., Case No. 1:02-cv-09345-SWK,” which is pending in
the U.S. District Court for the Southern District of New York.
On Nov. 11, 2002, Staro Asset Management, LLC filed a putative
class action complaint in the U.S. District Court for the
Southern District of New York on behalf of certain purchasers of
Reliant 2.0% Zero-Premium Exchangeable Subordinated Notes for
alleged violations of the federal securities laws.
Plaintiff is a purchaser of subordinated notes, the price of
which was purportedly tied to the market value of Time Warner
stock. Plaintiff alleges that the Company made misstatements
and/or omissions of material fact that artificially inflated the
value of Time Warner stock and directly affected the price of
the notes.
Plaintiff seeks compensatory damages and/or rescission.
This lawsuit has been consolidated for coordinated pretrial
proceedings under the caption, “In Re: AOL Time Warner, Inc.
Securities and ERISA Litigation, Case No. 1:02-cv-05575-SWK.”
On Sept. 27, 2007, the Company filed a motion to dismiss this
action based on plaintiff’s failure to take any action to
prosecute the case for nearly four years.
The suit is “Staro Asset Mgmt. v. AOL Time Warner, et al., Case
No. 1:02-cv-09345-SWK,” filed in the U.S. District Court for the
Southern District of New York under Judge Shirley Wohl Kram.
Representing the plaintiffs is:
James Stuart Notis, Esq.
Gardy & Notis, LLP
440 Sylvan Avenue, Suite 110
Englewood Cliffs, NJ 07632
Phone: (201) 567-7377
Fax: (201) 567-7337
E-mail: jnotis@gardylaw.com
Representing the defendants are:
Peter T. Barbur, Esq.
Cravath, Swaine & Moore LLP
825 Eighth Avenue
New York, NY 10019
Phone: (212) 474-1000
Fax: (212) 474-3700
E-mail: pbarbur@cravath.com
- and -
Carl Spencer Kravitz, Esq.
Zuckerman Spaeder, LLP
1800 M Street, N.W., Suite 1000
Washington, DC 20036-5802
Phone: (202) 778-1873
Fax: (202) 822-8106
E-mail: ckravitz@zuckerman.com
TIME WARNER: Awaits Approval of Homestore.com Suit Settlement
-------------------------------------------------------------
The U.S. District Court for the Central District of California
has yet to grant final approval to a consolidated securities
fraud class action against Homestore.Com, Inc., Time Warner,
Inc. and two former employees of its America Online division.
On Nov. 15, 2002, the California State Teachers' Retirement
System (CalSTeRS) filed an amended consolidated complaint in the
U.S. District Court for the Central District of California on
behalf of a putative class of purchasers of stock in
Homestore.com, Inc.
Plaintiff alleges that the Company engaged in a scheme to
defraud its shareholders in violation of Section 10(b) of the
Exchange Act.
The Company and two former employees of its America Online
division were named as defendants in the amended consolidated
complaint because of their alleged participation in the scheme
through certain advertising transactions entered into with
Homestore.
Motions to dismiss filed by the Company and the two former
employees were granted on March 7, 2003, and a final judgment of
dismissal was entered on March 8, 2004.
On April 7, 2004, plaintiff filed a notice of appeal in the U.S.
Court of Appeals for the Ninth Circuit. The Ninth Circuit heard
oral argument on this appeal on Feb. 6, 2006 and issued an
opinion on June 30, 2006 affirming the lower court’s decision
and remanding the case to the district court for further
proceedings.
On Sept. 28, 2006, plaintiff filed a motion for leave to amend
the complaint, and on Dec. 18, 2006, the court held a hearing
and denied plaintiff’s motion.
In addition, on Oct. 20, 2006, the Company joined its co-
defendants in filing a petition for certiorari with the U.S.
Supreme Court, seeking reconsideration of the Ninth Circuit’s
decision.
In December 2006, the Company reached an agreement with
plaintiff to settle its claims against the Company and its
former employees.
The court issued preliminary approval of this settlement on Aug.
6, 2007. The settlement agreement remains subject to final
approval by the district court, according to the Time Warner's
Nov. 7, 2007 Form 10-Q Filing with the U.S. Securities and
Exchange Commission for the quarterly period ended Sept. 30,
2007.
The suit is “T. Jeffrey Simpson, et al v. Homestore.Com, Inc.,
et al., Case No. 2:01-cv-11115-RSWL-CW,” filed in the U.S.
District Court for the Central District of California, under
Judge Ronald S.W. Lew.
Representing the plaintiffs are:
Peter E. Borkon, Esq.
Joseph W. Cotchett, Esq.
Robert B. Hutchinson, Esq.
Mark Cotton Molumphy, Esq.
Bruce L. Simon, Esq.
Cotchett Pitre Simon & McCarthy
SF Airport Office Ctr., 840 Malcolm Rd., Ste 200
Burlingame, CA 94010
Phone: 650-697-6000
E-mail: bsimon@cpsmlaw.com
swilliams@cpsmlaw.com
Representing the defendants are:
George Borden, Esq.
F. Whitten Peters, Esq.
Ana C. Reyes, Esq.
Ryan T. Scarborough, Esq.
Williams & Connolly, 725 12th St. NW
Washington, DC 20005-5901
Phone: 202-434-5000
E-mail: gborden@wc.com
areyes@wc.com
- and -
Thad Alan Davis, Esq.
John B. Quinn, Esq.
Quinn Emanuel Urquhart Oliver & Hedges
865 S Figueroa St., 10th Fl.
Los Angeles, CA 90017-2543
Phone: 213-624-7707
TIME WARNER: N.Y. Court Mulls Motion to Dismiss ERISA Fraud Suit
----------------------------------------------------------------
The U.S. District Court for the Southern District of New York
has yet to rule on a motion that seeks to dismiss a class action
alleging violations of the Employee Retirement Income Security
Act against Time Warner, Inc., among others.
On Jan. 17, 2002, Community Leader volunteers filed a class
action in the U.S. District Court for the Southern District of
New York against the America Online, Inc., Time Warner, Inc.,
and AOL Community, Inc.
Plaintiffs allege that they are entitled to pension and/or
welfare benefits and/or other employee benefits subject to
ERISA.
In March 2003, plaintiffs filed and served a second amended
complaint, adding as defendants the Company's Administrative
Committee and the AOL Administrative Committee.
On May 19, 2003, the Company, America Online and AOL Community,
Inc. filed a motion to dismiss and the Administrative Committees
filed a motion for judgment on the pleadings. Both of these
motions are pending.
Time Warner reported no development in the matter in its Nov. 7,
2007 Form 10-Q Filing with the U.S. Securities and Exchange
Commission for the quarterly period ended Sept. 30, 2007.
The suit is “Hallissey, et al v. AOL Time Warner Inc., et al.,
case no. 1:02-cv-00423-KTD,” filed in the U.S. District Court
for the Southern District of New York, under Judge Kevin Thomas
Duffy.
Representing the plaintiffs are:
Lynn Beth Bayard, Esq.
Lewis Richard Clayton, Esq.
Paul, Weiss, Rifkind, Wharton & Garrison LLP
1285 Avenue of the Americas
New York, NY 10019
Phone: (212) 373-3215
Fax: (212) 373-2070
E-mail: lclayton@paulweiss.com
Representing the Company is:
Leon Greenberg, Esq.
Leon Greenberg, P.C.
225 Broadway Suite 612
New York, NY 10007
Phone: (212) 227-4841
New Securities Fraud Cases
GENESCO INC: Bernard Gross Files Securities Fraud Suit in Tenn.
---------------------------------------------------------------
Law Offices Bernard M. Gross, P.C. announced that a class action
has been commenced in the United States District Court for the
Middle District of Tennessee, 07cv1183, on behalf of purchasers
of the common stock of Genesco, Inc. between April 20, 2007 and
November 26, 2007, inclusive.
The complaint charges Genesco and certain of its officers and
directors with violations of the Securities Act of 1934.
Genesco is in the footwear business. The complaint alleges that
during the Class Period, defendants made false and misleading
statements concerning Genesco's business and prospects. As a
result of their representations, Genesco was seen as an
attractive acquisition target for Foot Locker, Inc. and others.
Subsequently, The Finish Line, Inc. made an increased offer,
based on Genesco's purported success. When the truth about
Genesco's results began to be revealed, however, Finish Line
indicated it would no longer pursue the acquisition. Then, on
November 26, 2007, Genesco received a subpoena from the U.S.
Attorney's office for the Southern District of New York seeking
documents related to its merger agreement and in connection with
alleged violations of federal fraud statutes. On this news,
Genesco's stock plunged to $25.44 per share on November 27,
2007, almost a 16% drop.
Interested parties may move the court no later than February 4,
2008 for lead plaintiff appointment.
For more information, contact:
Susan R. Gross, Esq.
Deborah R. Gross, Esq.
Law Offices Bernard M. Gross, P.C.
The Wanamaker Bldg
100 Penn Sq. East, Suite 450
Philadelphia, PA 19103
Telephone: 866-561-3600 (toll free) or 215-561-3600
E-mail: susang@bernardmgross.com or
debbie@bernardmgross.com
Website: http://www.bernardmgross.com
LEAP WIRELESS: Schiffrin Barroway Files Cal. Securities Lawsuit
---------------------------------------------------------------
The law firm of Schiffrin Barroway Topaz & Kessler, LLP filed a
class action in the United States District Court for the
Southern District of California on behalf of all purchasers of
securities of Leap Wireless International, Inc. from January 7,
2005 through November 9, 2007, inclusive.
The Complaint charges Leap and certain of its officers and
directors with violations of the Securities Exchange Act of
1934.
Leap, together with its subsidiaries, is a wireless
communications carrier that offers digital wireless service
under the Cricket and Jump Mobile brands in the United States.
More specifically, the Complaint alleges that the Company failed
to disclose and misrepresented the following material adverse
facts which were known to defendants or recklessly disregarded
by them:
(1) that the Company's service and equipment revenues and
costs were misstated in its financial statements;
(2) that the Company's operating expenses were understated
in its financial statements;
(3) that the Company's financial statements were not
prepared in accordance with Generally Accepted
Accounting Principles ("GAAP");
(4) that the Company lacked adequate internal and financial
controls; and
(5) that, as a result of the foregoing, the Company's
financial statements were materially false and
misleading at all relevant times.
On November 9, 2007, the Company shocked investors when it
announced that its financial statements from fiscal year 2004
through the second quarter of 2007 should not be relied upon,
and would be restated. The restated financial statements for
these periods would correct errors in the Company's previously
reported service revenues, equipment revenues and operating
expenses.
The Company revealed that the restatements would "result in a
net cumulative reduction of approximately $20 million in service
revenues and approximately $20 million in operating income," as
could result in the Company's default under a senior secured
credit agreement with approximately $890 million in borrowings
outstanding. This default would arise from the Company having
breached its representations regarding the presentation of its
prior financial statements. On this news, the Company's shares
declined $21.38 per share, or nearly 37 percent, to close on
November 9, 2007 at $36.72 per share, on unusually heavy trading
volume.
Plaintiff seeks to recover damages on behalf of class members.
Interested parties may move the court no later than January 28,
2008 for lead plaintiff appointment.
For more information, contact:
Darren J. Check, Esq.
Richard A. Maniskas, Esq.
Schiffrin Barroway Topaz & Kessler, LLP
280 King of Prussia Road
Radnor, PA 19087
Phone: 1-888-299-7706 (toll free) or 1-610-667-7706
E-mail: info@sbtklaw.com
MERRILL LYNCH: Alfred Yates Files Securities Fraud Suit in N.Y.
---------------------------------------------------------------
The Law Office of Alfred G. Yates Jr., PC has filed a class
action in the Southern District of New York on behalf of all
those who purchased or otherwise acquired the securities of
Merrill Lynch & Co., Inc. during the expanded Class Period of
October 17, 2006 and November 7, 2007, inclusive.
The complaint charges Merrill and certain of its officers and
directors with violations of the Securities Exchange Act of
1934. More specifically, the Complaint alleges that Merrill had
gone aggressively into Collateralized Debt Obligations ("CDOs"),
securities backed by pools of assets including mortgages, which
generated higher yields in the short term but which would be
devastating to the Company as the real estate market continued
to soften and the risky loans led to losses.
According to the Complaint, the Company failed to disclose and
misrepresented the following material adverse facts which were
known to defendants or recklessly disregarded by them:
(1) that the Company had failed to fully disclose the
extent of its exposure to collateralized debt
obligations ("CDOs");
(2) that the Company had failed to timely write-down the
value of its CDOs as conditions in the housing and
credit markets deteriorated;
(3) as such, the Company's investment portfolio was
impaired;
(4) that, as a result of the above, the Company would be
forced to take substantial charges in its third quarter
2007 to remedy such failures, causing the Company to
suffer a net loss in the quarter;
(5) that the Company lacked adequate internal and financial
controls; and
(6) that, as a result of the foregoing, the Company's
financial statements were materially false and
misleading at all relevant times.
On October 5, 2007, Merrill acknowledged that it would have to
take a $4.5 billion charge for the third quarter 2007 for
mortgage and credit problems. Then, on October 24, 2007, Merrill
issued a press release before the market opened announcing that
the Company would take an $7.9 billion charge for the third
quarter, instead of the $4.5 billion previously announced. In
reaction to this news of its largest quarterly loss in its 93
year history, Merrill's stock closed at $63.22 on October 24,
2007, down from the previous day's close of $67.12.
Following what it characterized as Merrill's "startling"
announcement, on October 25, 2007, Standard & Poor's Ratings
Services reduced Merrill's credit rating. Subsequently, on
October 25, 2007, Merrill's stock closed at $60.90. Then, on
November 2, 2007, it was reported that Merrill may have engaged
in hedge fund deals designed to cover up and delay the reporting
of losses to its CDO portfolio. On this news, the Company's
shares declined an additional $4.91 per share, or almost 8
percent, to close on November 2, 2007 at $57.28 per share, on
heavy trading volume.
Finally on November 7, 2007 Merrill acknowledged that federal
regulators were investigating matters related to its holdings of
high-risk mortgage debt and it disclosed further details of its
7.9 billion total net losses related to its U.S. ABS CDO
positions and warehouses, as well as its U.S. sub-prime mortgage
related assets. On this news, the Company's shares fell an
additional $2.38 per share, or 4.2 percent, to close on November
7, 2007 at $53.99 per share, on heavy trading volume.
Interested parties may move the court no later than January 2,
2008 for lead plaintiff appointment.
Alfred G. Yates, Jr., Esq.
Law Office of Alfred G. Yates Jr., PC, Pittsburgh
Toll Free: 800-391-5164 or 412-391-5164
Fax: 412-471-1033
E-mail: yateslaw@aol.com
SECURITY CAPITAL: Coughlin Stoia Files Securities Fraud Suit
------------------------------------------------------------
Coughlin Stoia Geller Rudman & Robbins LLP filed a class action
in the United States District Court for the Southern District of
New York on behalf of all persons who purchased the common stock
of Security Capital Assurance, Ltd. in the Company's secondary
public offering on or about June 6, 2007.
The complaint charges Security Capital and certain of its
officers and directors with violations of the Securities Act of
1933.
Security Capital, through its subsidiaries, provides financial
guaranty insurance, reinsurance, and other credit enhancement
products to the public finance and structured finance markets in
the United States and internationally.
On or about May 25, 2007, Security Capital filed a Form S-1/A
Registration Statement (the "Registration Statement") with the
Securities and Exchange Commission ("SEC") for the Secondary
Offering. On or about June 6, 2007, the Prospectus (the
"Prospectus") with respect to the Secondary Offering, which
forms part of the Registration Statement, became effective and
more than 9.6 million shares of Security Capital common stock
were sold to the public at $31.00 per share, thereby raising
more than $300 million.
The complaint alleges that the Registration Statement and
Prospectus contained untrue statements of material facts because
they failed to disclose that:
(i) the Company was materially exposed to extremely risky
structured financial credit derivatives; and
(ii) the Company was materially exposed to residential
mortgage-backed securities relating to sub-prime real
estate mortgages.
Plaintiff seeks to recover damages on behalf of all purchasers
of Security Capital common stock in the Secondary Offering.
For more information, contact:
Samuel H. Rudman
David A. Rosenfeld
Coughlin Stoia Geller Rudman & Robbins LLP
Phone: 800-449-4900
E-mail: djr@csgrr.com
VERIFONE HOLDINGS: Johnson Bottini Announces Securities Lawsuit
---------------------------------------------------------------
Johnson Bottini, LLP announced that a class action has been
commenced in the United States District Court for the Northern
District of California on behalf of purchasers of the common
stock of VeriFone Holdings, Inc. between September 1, 2006 and
November 30, 2007, inclusive, seeking to pursue remedies under
the Securities Exchange Act of 1934 (the "Exchange Act").
The complaint charges VeriFone and certain of its officers and
directors with securities fraud and violations of the Exchange
Act.
According to the complaint, during the Class Period, defendants
issued materially false and misleading statements that
misrepresented and failed to disclose:
(a) that the Company's in-transit inventory was grossly
overvalued due to accounting errors related to
allocation of manufacturing and distribution overhead
to inventory;
(b) that the Company's gross margin projections were
overstated;
(c) that the Company was not on track to achieve
profitability in 2007, but rather losses due to
problems related to the Company's acquisition of Lipman
Electronic Engineering, Ltd.; and
(d) that based on the foregoing, Defendants' positive
statements about the Company's earnings and prospects
were lacking a reasonable basis at all times.
On December 3, 2007, VeriFone announced that it will be forced
to restate its financial results for 2007 due to admitted
accounting errors. Upon this news, shares of the Company's stock
fell 46% to $26. Over the next three trading days, the stock
declined further and closed at $20.20 on December 6, 2007 on
additional news that the credit rating agencies may downgrade
VeriFone's debt due to the Company's planned restatement of its
2007 financial results.
Plaintiff seeks to recover damages on behalf of a Class
consisting of all persons other than Defendants who purchased
the common stock of VeriFone between September 1, 2006 and
November 30, 2007, inclusive, seeking to pursue remedies under
the Exchange Act.
Interested parties may move the court no later than February 4,
2008 for lead plaintiff appointment.
For more information, contact:
Johnson Bottini, LLP
Frank A. Bottini
Phone: 619-230-0063
E-mail: frankb@johnsonbottini.com
*********
S U B S C R I P T I O N I N F O R M A T I O N
Class Action Reporter is a daily newsletter, co-published by
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Mendoza, Editors.
Copyright 2007. All rights reserved. ISSN 1525-2272.
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