/raid1/www/Hosts/bankrupt/CAR

/raid1/www/Hosts/bankrupt/CAR_Public/090422.mbx C L A S S A C T I O N R E P O R T E R Wednesday, April 22, 2009, Vol. 11, No. 78 Headlines BASIN WATER: Agreement to Settle Securities Suit Reached in Feb. BLOCKBUSTER INC: Tex. Judge Denies Motion in "Harris" Litigation CONSTAR INT'L: No Argument Date Yet for Certification Appeal G. WILLI-FOOD: Faces Consumer Fraud Litigation in Israeli Court GILEAD SCIENCES: U.S. Supreme Court Declines to Hear Appeal GLOBALSTAR INC: Appeal to Dismissal of Securities Suit Pending GLOBALSTAR INC: Pursues Dismissal of "Stickrath" Suit in Calif. IRWIN UNION: Pursues Dismissal of Two Lawsuits Over CBNV Loans KNIGHTS MARINE: Faces Foreign Workers' Suit Over Job Conditions LENNAR CORP: Faces Fla. Litigation Over Chinese-Made Drywall LIFECARE HOLDINGS: Still Faces Hurricane Katrina Lawsuits in La. LOWE'S HOME: FACTA Violations Suit Removed to Ill. Federal Court MFS LTD: Execs, Auditor Face Investors' Suit in Sydney Court MUTUAL OF OMAHA: Reaches $15M Deal in Insurance Policies Lawsuit NATURE'S SUNSHINE: 2011 Trial Set for Utah Securities Fraud Suit PUTNAM INVESTMENTS: Judge Dismisses Claims in Market Timing Case ROCKIES REGION: Final Settlement Approval Hearing Set on April 7 SELECT COMFORT: Faces Consumer Fraud Litigation in California SYNCORA HOLDINGS: Bid to Dismiss Sewer Ratepayers' Case Pending SYNCORA HOLDINGS: Still Faces N.Y. Consolidated Securities Suit TENNESSEE VALLEY: Seeks Dismissal of Coal-Ash Sludge Spill Suits TRI-UNION SEAFOODS: Court Allows Mercury-in-Tuna Suit to Proceed UNITED RENTALS: Parties Agree to Settles Stock Inflation Lawsuit New Securities Fraud Cases J.P. JEANNERET: Lowey Dannenberg Files Securities Fraud Lawsuit MERIDIAN CAPITAL: Coughlin Stoia Files Securities Fraud Lawsuit ********* BASIN WATER: Agreement to Settle Securities Suit Reached in Feb. ---------------------------------------------------------------- Basin Water, Inc., on Feb. 19, 2009, reached an agreement in principle to settle a consolidated purported securities fraud class-action lawsuit filed in the U.S. District Court for the Central District of California. On Dec. 27, 2007, and Jan. 2, 2008, two purported securities class-action complaints were filed against Basin Water, Inc., Peter L. Jensen, Michael M. Stark and Thomas C. Tekulve for violations of the Exchange Act. These lawsuits, which contain similar allegations, are captioned, "Poulos v. Basin Water, et al., Case No. CV 07-8359 GW (FFMx)," and "Nofer v. Basin Water, et al., Case No. CV 08- 0002 SGL (JCRx)." The suits, among other things, allege that the Basin defendants "issued materially false and misleading statements regarding the company's business and financial results" because the company "had not adequately accounted for reserves in connection with its legacy system contracts." The plaintiffs allege a putative class period between May 14, 2007, and Nov. 13, 2007, and do not claim a specific amount of damages. The lawsuits were subsequently consolidated, and on Oct. 3, 2008, a Consolidated Amended Complaint (CAC) was filed which alleges that the company deliberately understated the reserves it took for certain unprofitable contracts, and committed various intentional violations of GAAP during a putative class period between Nov. 14, 2006 and Aug. 8, 2008. The suit does not state a specific amount of damages. On Feb. 19, 2009, the company and its insurance carriers reached an agreement in principle to settle the class action with representatives of the class. The settlement is still subject to preparation of a final settlement agreement, following which the company would intend to seek preliminary approval from the Court so that class members can receive notice of the settlement, providing them with the opportunity to accept its terms or to opt out and choose whether to pursue their own individual claims. Following a fair period of notice to the class, it would be the company's intention to seek final Court approval of the settlement and the dismissal of all claims against Basin Water. The company denies all of the allegations in the lawsuit and believes that its disclosures were appropriate under the law. Nevertheless, it has agreed to settle the litigation in order to avoid costly and time-consuming litigation. The company does not expect a cash effect of the settlement as the entire settlement amount is expected to be paid by its liability insurers, according to the company's March 31, 2009 Form 10-K filing in the U.S. Securities and Exchange Commission for the fiscal year ended Dec. 31, 2008. Basin Water, Inc. -- http://www.basinwater.com/-- is a provider of process solutions for a range of customers, which include designing, building, implementing and servicing systems for the treatment of contaminated groundwater, the treatment of wastewater, waste reduction and resource recovery. BLOCKBUSTER INC: Tex. Judge Denies Motion in "Harris" Litigation ---------------------------------------------------------------- Judge Barbara M. G. Lynn of the U.S. District Court for the Northern District of Texas has denied a motion by Blockbuster, Inc. that sought to compel arbitration in the matter, "Cathryn Elaine Harris, et al. v. Blockbuster, Inc., Case No. 3:2009-cv- 00217," Wendy Davis of MediaPost News reports. The judge found that the arbitration clause in Blockbuster's terms and conditions agreement with its customers was illusory because Blockbuster reserves the right to modify the terms "at its sole discretion" and "at any time." The class-action lawsuit was filed as a result of Blockbuster's participation in Facebook's ill-fated Beacon ad program, which notified members about their friends' e-commerce activity, according to the MediaPost News report. In the year-old lawsuit, Dallas County resident Cathryn Elaine Harris alleged that Blockbuster violated the federal Videotape Privacy Protection Act by sharing information about her movie rentals and sales with Facebook without first obtaining her written consent, reports MediaPost News. MediaPost News reported that Ms. Harris is asking for at least $2,500 for each violation of the statute, a law passed in 1988 after a newspaper obtained the video rental records of U.S. Supreme Court nominee Robert Bork. CONSTAR INT'L: No Argument Date Yet for Certification Appeal ------------------------------------------------------------ The U.S. Court of Appeals for the Third Circuit has yet to schedule an oral argument date for the class certification appeal in a consolidated securities class-action lawsuit filed against Constar International, Inc. The company and certain of its present and former directors, along with Crown Holdings, Inc., as well as various underwriters, were named defendants in the consolidated putative securities class action suit, captioned "In re Constar International Inc. Securities Litigation, Master File No. 03-CV- 05020." This action, pending in the U.S. District Court for the Eastern District of Pennsylvania, is a consolidation of two complaints: -- "Parkside Capital LLC v. Constar International Inc. et al., Case No. 03-5020," filed on Sept. 5, 2003; and -- "Walter Frejek v. Constar International Inc. et al., Case No. 03-5166," filed on Sept. 15, 2003. A consolidated and amended complaint, filed June 17, 2004, generally alleges that the registration statement and prospectus for the company's initial public offering of its common stock on Nov. 14, 2002 contained material misrepresentations and/or omissions. The plaintiffs claim that the defendants in these lawsuits violated Sections 11 and 15 of the Securities Act of 1933. They seek class-action certification and an award of damages and litigation costs and expenses. Under the company's charter documents, an agreement with Crown and an underwriting agreement with Crown and the underwriters, the company has incurred certain indemnification and contribution obligations to the other defendants with respect to this lawsuit. The court has previously denied the company's motion to dismiss for failure to state a claim upon which relief may be granted, as well as the company's motion for judgment on the pleadings. On May 7, 2007, the Special Master issued a Report and Order granting the plaintiffs' motion for class certification. The company filed objections to the Report and Order. The Court later overruled the company's objections, adopting the Special Master's Report and Order, and granted the plaintiffs' motion for class certification. On March 18, 2008, the company filed a Rule 23(f) Petition in the U.S. Court of Appeals for the Third Circuit seeking leave to take an immediate appeal from the class certification ruling. On April 30, 2008, the Third Circuit entered an Order granting the company's Rule 23(f) Petition. According to the company's March 31, 2009 Form 10-K filing in the U.S. Securities and Exchange Commission for the fiscal year ended Dec. 31, 2008, the parties have briefed the appeal. A date has not yet been set for oral argument. At the company's request, the Special Master has agreed to stay all further proceedings before the District Court pending the outcome of the appeal, with the exception of certain limited discovery. The suit is "In re Constar International Inc. Securities Litigation, Master File No. 03-CV-05020," filed in the U.S. District Court for the Eastern District of Pennsylvania, Judge Edmund V. Ludwig, presiding. Representing the plaintiffs are: Stephanie M. Beige, Esq. (beige@bernlieb.com) Bernstein Liebhard & Lifshitz, LLP 10 East 40th Street New York, NY 10016 Phone: 212-779-1414 Andrew J. Brown, Esq. (andrewb@lcsr.com) Milberg Weiss Berghad Hynes & Lerach, LLP 401 B. Street, STE. 1700 San Diego, CA 92101 Phone: 619-231-1058 - and - Darren J. Check, Esq. (dcheck@sbclasslaw.com) Schiffrin & Barroway, LLP 280 King of Prussia Road Radnor, PA 19087 Phone: 610-667-7706 Representing the defendants are: Steven B. Feirson, Esq. (steven.feirson@dechert.com) Michael L. Kichline, Esq. (michael.kichline@dechert.com) Scott A. Thompson, Esq. (scott.thompson@dechert.com) Dechert, Price & Rhoads 1717 Arch Street, 4000 Bell Atlantic Tower Philadelphia, PA 19103-2793 Phone: 215-994-2749 215-994-2390 Fax: 215-994-2222 G. WILLI-FOOD: Faces Consumer Fraud Litigation in Israeli Court --------------------------------------------------------------- G. Willi-Food International Ltd. (NASDAQ: WILC), on April 16, 2009, had been served with a purported class action lawsuit. The complaint alleges that the Company misled its customers by illegal marking of a product that the Company imports and sells as "suger free", according to The Israeli Consumer Protection Law, 1981. The group which the lawsuit desires to represent are any Israeli resident who bought this product due to such person's preference for a "suger free" or a "reduced suger" product. According to the plaintiff, the Group consists of 2,000 customers. The plaintiff appraises its own damages at NIS 2,000 (approximately USD 500) and the damages of the entire Group to be NIS 4 million (approximately USD 1 million). At this preliminary stage, the Company is examining the plaintiff's alleged claims, and it will respond and relate to the allegations, to the extent necessary, after its examination and after consulting with its legal advisors. G. Willi-Food International Ltd. -- http://www.willi-food.co.il -- is one of Israel's largest food importers and a single-source supplier of one of the world's most extensive ranges of quality kosher food products. It currently imports, markets and distributes more than 2,500 food products manufactured by some 120 top-tier suppliers throughout the world to more than 1,500 customers. Willi-Food excels in identifying changing tastes in its markets and sourcing high-quality kosher products to address them. The Company also operates several subsidiaries: its subsidiary, Gold Frost Ltd., develops and distributes kosher chilled and frozen dairy food products internationally together with its Danish dairy distributor subsidiary; the joint venture with the Baron Family engages in the global import, export and distribution of kosher products worldwide; and Shamir Salads is a leading international manufacturer and distributor of pre- packaged chilled Mediterranean dips and spreads. GILEAD SCIENCES: U.S. Supreme Court Declines to Hear Appeal ----------------------------------------------------------- The U.S. Supreme Court declined to hear Gilead Sciences, Inc.'s appeal of a finding that shareholders in a securities fraud class-action lawsuit against the drugmaker sufficiently alleged a causal relationship between the increase in sales from Gilead's forbidden off-label marketing of its HIV drug Viread � artificially inflating the drug's value for a time � and a later drop in the company's stock price, Law360 reports. The high court's decision was in connection to an earlier ruling wherein the U.S. Court of Appeals for the Ninth Circuit reversed the dismissal by the U.S. District Court for the Northern District of California of the fourth amended complaint in a consolidated securities fraud class-action lawsuit against Gilead Sciences, Inc. (Class Action Reporter, Nov. 21, 2008). On May 12, 2006, the federal court executed orders dismissing in its entirety and with prejudice the fourth consolidated amended complaint associated with a purported class-action suit against: -- the company, -- the chief executive officer, -- chief financial officer, -- former executive vice president of operations, -- executive vice president of research and development, -- senior vice president of manufacturing, and -- senior vice president of research. The complaint is generally alleging that the defendants violated federal securities laws, specifically Sections 10(b) and 20(a) of the U.S. Securities Exchange Act of 1934, as amended, and Rule 10b-5 promulgated by the Securities and Exchange Commission, by making certain alleged false and misleading statements. The plaintiffs have appealed the dismissal. On Aug. 11, 2008, the U.S. Court of Appeals for the Ninth Circuit reversed the district court's decision and will remand the case to the district court, according to the company's Oct. 31, 2008 Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended Sept. 30, 2008. The suit is "In re Gilead Sciences Securities litigation, Case No. 03-CV-4999," filed with the U.S. District Court for the Northern District of California, Judge Martin J. Jenkins presiding. Representing thee plaintiffs are: Eric J. Belfi, Esq. (ebelfi@labaton.com) Labaton Sucharow & Rudoff LLP 100 Park Avenue New York, NY 10017 Phone: 212-907-0878 Fax: 212-818-0477 - and - Robert S. Green, Esq. (RSG@CLASSCOUNSEL.COM) Green Welling LLP 595 Market Street, Suite 2750 San Francisco, CA 94105 Phone: 415-477-6700 Fax: 415-477-6710 Representing the defendants are: John C. Dwyer, Esq. (dwyerjc@cooley.com) Grant P. Fondo, Esq. (gfondo@cooley.com) Cooley Godward, LLP Five Palo Alto Square, 3000 El Camino Real Palo Alto, CA 94306-2155 Phone: 650-843-5000 Fax: 650-857-0663 GLOBALSTAR INC: Appeal to Dismissal of Securities Suit Pending -------------------------------------------------------------- An appeal from the dismissal of the consolidated purported class-action lawsuit against Globalstar, Inc. is pending before the U.S. Second Circuit Court of Appeals. On Feb. 9, 2007, the first of three purported class-action suits was filed against the company, its CEO and its CFO in the Southern District of New York alleging that Globalstar's registration statement related to its initial public offering in November 2006 contained material misstatements and omissions and seeking damages and recission under various provisions of the Securities Act of 1933. The Court consolidated the three cases as "Ladmen Partners, Inc. v. Globalstar, Inc., et al., Case No. 1:07-CV-0976 (LAP)," and appointed Connecticut Laborers' Pension Fund as lead plaintiff. On Sept. 30, 2008, the court granted the company's motion to dismiss the plaintffs' Second Amended Complaint with prejudice. Plaintiffs appealed to the U.S. Second Circuit Court of Appeals. Plaintiffs filed their brief on Jan. 29, 2009, and the company's responsive brief was filed March 30, 2009, according to its March 31, 2009 Form 10-K filing in the U.S. Securities and Exchange Commission for the fiscal year ended Dec. 31, 2008. Globalstar, Inc. -- http://www.globalstar.com/-- is a provider of mobile voice and data communication services via satellite. Using in-orbit satellites and ground stations, which it refers to as gateways, the company offers voice and data communications services to government agencies, businesses and other customers in over 120 countries. GLOBALSTAR INC: Pursues Dismissal of "Stickrath" Suit in Calif. --------------------------------------------------------------- Globalstar, Inc. continues to pursue dismissal of the purported class-action complaint styled, "Stickrath v. Globalstar, Inc." On April 7, 2007, Kenneth Stickrath and Sharan Stickrath filed a purported class-action complaint against the company in the U.S. District Court for the Northern District of California, Case No. 07-cv-01941. The complaint is based on alleged violations of California Business & Professions Code � 17200 and California Civil Code Section 1750, et seq., the Consumers' Legal Remedies Act. The plaintiffs claim that the amount in controversy exceeds $5.0 million but do not allege any particular damages incurred. In July 2008, the company filed a motion to deny class certification and a motion for summary judgment. The court deferred action on the class certification issue but granted the motion for summary judgment on Dec. 22, 2008. The court did not, however, dismiss the case with prejudice but rather allowed counsel for plaintiffs to amend the complaint and substitute one or more new class representatives. On Jan. 16, 2009, counsel for the plaintiffs filed a Third Amended Class Action Complaint. The company filed its answer on Feb. 2, 2009. The company will continue to seek to have class certification denied and the case dismissed with prejudice, according to its March 31, 2009 Form 10-K filing in the U.S. Securities and Exchange Commission for the fiscal year ended Dec. 31, 2008. Globalstar, Inc. -- http://www.globalstar.com/-- is a provider of mobile voice and data communication services via satellite. Using in-orbit satellites and ground stations, which it refers to as gateways, the company offers voice and data communications services to government agencies, businesses and other customers in over 120 countries. IRWIN UNION: Pursues Dismissal of Two Lawsuits Over CBNV Loans -------------------------------------------------------------- Irwin Union Bank and Trust Co., a subsidiary of Irwin Financial Corp., continues to pursue the dismissal of two purported class- action lawsuits in connection with loans it purchased from Community Bank of Northern Virginia. The lawsuits were filed against or named Irwin Union Bank as a defendant in 2004 and later consolidated for pre-trial procedures in the U.S. District Court for the Western District of Pennsylvania, claiming that Community Bank of Northern Virginia was allegedly engaged in a lending arrangement involving the use of its charter by certain third parties who charged high fees that were not representative of the services rendered and not properly disclosed as to the amount or recipient of the fees. The lawsuits, which are both seeking class-action status, are: -- "Hobson v. Irwin Union Bank and Trust Company," and -- "Kossler v. Community Bank of Northern Virginia." Both lawsuits are at a preliminary stage with motions to dismiss pending in each case, according to the company's March 31, 2009 Form 10-K filing in the U.S. Securities and Exchange Commission for the fiscal year ended Dec. 31, 2008. Irwin Financial Corp. -- http://www.irwinfinancial.com/-- provides financial services throughout the U.S. and Canada. The Company focuses primarily on the extension of credit to consumers and small businesses, as well as providing the ongoing servicing of those customer accounts. Through its direct and indirect subsidiaries, Irwin Financial operates three major lines of business: commercial banking, commercial finance and home equity lending. Its direct and indirect major subsidiaries include Irwin Union Bank and Trust Co., a commercial bank, which together with Irwin Union Bank, F.S.B., a federal savings bank, which conducts the Company's commercial banking activities; Irwin Commercial Finance Corp., a commercial finance subsidiary, and Irwin Home Equity Corp., a consumer home equity lending company. KNIGHTS MARINE: Faces Foreign Workers' Suit Over Job Conditions ------------------------------------------------------------- Knights Marine & Industrial Services, Inc., and Five Star Contractors LLC are facing a purported class-action lawsuit that alleges foreign workers on temporary visas in Mississippi were forced to live in storage buildings and were not given the jobs and pay they were promised, The Associated press reports Ten Brazilians sued the two companies on April 20, 2009 in the U.S. District Court for the Southern District of Mississippi, accusing the defendants of racketeering, breach of contract, and fraud, according to the AP report. The workers allege they paid thousands of dollars to come to Mississippi in hopes of high-paying jobs that didn't materialize, reports The Associated Press. The suit seeks class-action status to cover all workers brought to the United States by the companies in 2006 and 2007, The Associated Press reported. LENNAR CORP: Faces Fla. Litigation Over Chinese-Made Drywall ------------------------------------------------------------ Lennar Corp. faces a class-action lawsuit brought on behalf of homeowners who bought houses built with Chinese-made drywall and claim it emits gases that make people sick, Alex Veiga of The Associated Press reports. The lawsuit was filed last month in the U.S. District Court for the Southern District of Florida, according to a filing with the Securities and Exchange Commission by the company. The plaintiffs claim they bought two homes built by the company that were made with the Chinese drywall, which they contend emits sulfur gasses and other fumes, reports The Associated Press. Lennar said its subcontractors used drywall made in China during the construction of its homes primarily in 2005 and 2006. The company said some of the material contains high levels of sulfur and may emit sulfur-based gases. The builder said it has been inspecting homes that it built that might have had the Chinese drywall and paying to have it and other components, such as ventilation and air conditioning systems, replaced, according to the AP report. The homebuilder, meanwhile, has sued the Chinese drywall manufacturer and its distributors, The Associated Press reported. LIFECARE HOLDINGS: Still Faces Hurricane Katrina Lawsuits in La. ---------------------------------------------------------------- LifeCare Holdings, Inc. remains a named defendant in various civil lawsuits and actions filed with the Louisiana Patient Compensation Fund by former patients at Memorial Medical Center who allege damages as a result of injuries sustained during Hurricane Katrina. Tenet Healthsystem Memorial Medical Center, Inc., the company's former landlord, is also named as a defendant in these actions. In one of these cases, the plaintiffs' counsel is seeking class -action certification to represent other individuals who were also patients or present at Memorial Medical Center at the time of Hurricane Katrina. In addition to disputing the merits of the allegations in these suits, the company said that certification of a class in these actions is not appropriate and that each of these cases should be adjudicated independently. The company reported no development in these matters in its March 31, 2009 Form 10-K filing in the U.S. Securities and Exchange Commission for the fiscal year ended Dec. 31, 2008. LifeCare Holdings, Inc. -- http://www.lifecare-hospitals.com/-- operates 19 long term acute care hospitals located in nine states. Long term acute care hospitals specialize in the treatment of medically complex patients who typically require extended hospitalization. LOWE'S HOME: FACTA Violations Suit Removed to Ill. Federal Court ---------------------------------------------------------------- A purported class-action lawsuit against a store of Lowe's Home Centers, Inc. claiming it neglected its duty to protect customers from identity theft and credit card fraud under the Fair and Accurate Transaction Act (FACTA) was removed to federal court, Amelia Flood of The St. Clair Record reports. The case was slated for a case management conference before Judge David Hylla of Madison County Circuit Court on April 29, 2009. However, Lowe's filed a notice of removal April 13, 2009. The case has been transferred from the Madison County Circuit to the U.S. District Court for the Southern District of Illinois, according to The St. Clair Record report. The St. Clair Record reported that Lowe's argued in the notice that the federal courts have jurisdiction over the case because the class action suit argues that the company violated federal law. Amelia Flood of The St. Clair Record previously reported that the lawsuit was filed by Doris J. Masters, represented by Brad Lakin of LakinChapman in Wood River, on Oct. 2, 2008 in Madison County Circuit Court, case number 2008-L-910. Ms. Masters claims the Glen Carbon Lowe's, located at 159 Whistle Stop Dr., negligently provided a receipt listing her entire credit card number (Class Action Reporter, April 16, 2009). Under FACTA, merchants who accept credit and debit cards can only print receipts showing the last five digits of a customer's card. The measure is meant to protect consumers from identity theft as well as credit and debit card fraud, according to The St. Clair Record report. According to the 2003 law, stores had three years to update their equipment to print the correct receipts. Masters' suit contends that the Lowe's "willfully violated this law and failed to protect plaintiff (and others similarly situated)," because it printed Ms. Masters' full 16 digit card number on Oct. 15, 2007, nearly a year after the grace period ended. The suit contends the proposed class includes at least 100 people. The plaintiff is seeking statutory damages between $100 and $1,000 per class member, punitive damages, court costs and attorney's fees. The St. Clair Record reported that on March 3, 2009, Ms. Masters filed a stipulation that amended the defendant in the suit from Lowe's Companies Inc. to Lowe's Homes Centers, Inc. The change, according to the stipulation, came because Lowe's Companies Inc. did not own or operate the store in question but rather acted as a holding company only. Lowe's Companies Inc. is based in North Carolina. To date, only the plaintiff, Doris J. Masters, has filed papers in the case set before Madison County Circuit Judge David Hylla, reports The St. Clair Record. MFS LTD: Execs, Auditor Face Investors' Suit in Sydney Court ------------------------------------------------------------ Senior executives of the failed Gold Coast finance company MFS Limited, including its founder Michael King are facing a purported class-action lawsuit accusing of deceiving thousands of unitholders who deposited and lost the bulk of more than $1 billion in a mortgage fund managed by the group, The Sydney Morning Herald reports. An AU$1 billion class-action has been launched in the Federal Court in Sydney against the fund's auditor KPMG and its manager MFS Investment Management. In a statement of claim, a copy of which was obtained by The Sydney Morning Herald, it is alleged the executives in the finance group offered misleading information in the product disclosure statements provided to investors in the Premium Income Fund. These statements asserted that the directors of MFSIM would only make secured loans, carry out their "duties with integrity and diligence according to the law" and take an "arms length commercial approach" to transactions. The statement of claim alleges the opposite was the case. According to the claim, "MFSIM and MFS engaged in conduct, in relation to a financial product or a financial service, which was misleading or deceptive or was likely to deceive in contravention of � the Corporations Act," reports The Sydney Morning Herald. It also alleges MFSIM, which is now owned by the Queensland asset manager Wellington Capital, failed to ensure unsecured loans made to several MFS investment vehicles were made on "arms length" commercial terms. The Sydney Morning Herald reported that the bulk of the loans or investments made by the fund were with other investment vehicles run by MFS and MFS itself. "MFSIM had not properly assessed the assets and liabilities of each guarantor in order to determine their creditworthiness," it is alleged, according to The Sydney Morning Herald report. The statement of claim alleges several loans were made to MFS related entities "that lacked financial resources, or [were] otherwise unwilling or unable, to make interest payments or to repay the capital". The claim, lodged by Sydney firm Carneys Lawyers, has also claimed the fund's auditor KPMG failed in its duties. It said the KPMG partner Andrea Waters, who was responsible for the audit of the MFSIM's compliance plan, "failed to exercise reasonable care, skill and diligence." It is alleged she failed to obtain sufficient knowledge of the activities of the fund to enable her to identify and understand the transactions, reported The Sydney Morning Herald. MUTUAL OF OMAHA: Reaches $15M Deal in Insurance Policies Lawsuit ---------------------------------------------------------------- Mutual of Omaha Insurance Co. and two other companies agreed to pay $15 million to settle a purported class-action lawsuit alleging that the companies performed actuarial work incorrectly on long-term care insurance policies, The Kansas City Business Journal reports. The suit originally was filed in 2002 in Jackson County Circuit Court in Independence by by Macon, Mo., residents Eric and Carol Chalgren, according to Gregory Leyh, lead class counsel with Gregory Leyh PC in Gladstone, reports The Kansas City Business Journal. According to Mr. Leyh, because of the defective actuarial work done on the long-term care insurance policies, the policies went through four premium increases, despite being sold as level- premium policies. The class included 1,169 members, Missouri residents who bought the policies between 1995 and 1997, Mr. Leyh tells The Kansas City Business Journal. American Heritage Life Insurance Co. and Wakely and Associates Inc. also were defendants in the suit, according to The Kansas City Business Journal report. NATURE'S SUNSHINE: 2011 Trial Set for Utah Securities Fraud Suit ---------------------------------------------------------------- A tentative Jan. 24, 2011 trial is slated for the consolidated securities fraud class-action lawsuit pending against Nature's Sunshine Products, Inc. in the U.S. District Court for the District of Utah. Between April 3, 2006 and June 2, 2006, five separate shareholder class-action lawsuits were filed against the company and certain of its present and former officers and directors in the U.S. District Court for the District of Utah. These matters were consolidated and on Nov. 3, 2006, the plaintiffs filed a Consolidated Complaint against the company, its Chief Executive Officer and former director, Douglas Faggioli, its former Chief Financial Officer, Craig D. Huff, and a former director and former Chair of its Audit Committee, Franz L. Cristiani. The consolidated complaint asserts three separate claims on behalf of purchasers of the company's common stock: -- a claim against Mr. Faggioli and the company for violation of Section 10(b) of the Exchange Act and Rule 10b-5 promulgated thereunder, alleging that Mr. Faggioli made a series of alleged material misrepresentations to the investing public; -- a claim against Mr. Faggioli and the company for violation of Section 10(b) and Rule 10b-5, alleging that Mr. Faggioli made a series of misrepresentations to the company's then independent auditor, KPMG, LLP, for the purpose of obtaining unqualified or "clean" audit opinions and review opinions from KPMG concerning certain of the annual and quarterly financial statements; and -- a claim against Messrs. Faggioli, Huff and Cristiani for violation of Section 20(a) of the Exchange Act, alleging that the individual defendants have "control person" liability for the previously-alleged violations by the company. The Consolidated Complaint seeks an unspecified amount of compensatory damages, together with interest thereon, litigation costs and expenses, including attorneys' fees and expert fees, and any such other and further relief as may be allowed by law. On Jan. 5, 2007, the company and Messrs. Faggioli, Huff and Cristiani moved to dismiss the Consolidated Complaint in its entirety. On May 21, 2007, the court issued its decision denying the motion in large part, but shortening the proposed class period on one of the plaintiffs' claims. On June 6, 2007, the company and the other defendants answered the Consolidated Complaint, wherein they denied all allegations of wrongdoing and raised a number of affirmative defenses. On Nov. 1, 2007, the plaintiffs filed their motion for class certification, which the company opposed. On Sept. 25, 2008, the court granted the plaintiffs' motion for class certification in part, establishing the class as all persons who purchased or otherwise acquired the company's common stock, and were damaged thereby, from March 16, 2005 to March 20, 2006. On May 9, 2008, at the invitation of the court based upon recent case law developments, the company filed a motion to dismiss the plaintiffs' second cause of action (a 10b-5 claim based on non- public representations to KPMG). The plaintiffs opposed this motion. On Sept. 23, 2008, the court granted the company's motion and dismissed the plaintiffs' second cause of action. The case is currently in the early stages of discovery. Trial is not scheduled to commence until Jan. 24, 2011, according to the company's March 31, 2009 Amendment to its registration statement on Form 10 filing with the U.S. Securities and Exchange Commission. The suit is "Hyman v. Nature's Sunshine Products et al., Case No. 2:06-cv-00267-TS-SA," filed in the U.S. District Court for the District of Utah, Judge Ted Stewart, presiding. Representing the plaintiffs is: John R. Climaco, Esq. Climaco Lefkowtiz Peca Wilcox & Garofoli 55 Public Sq., Ste 1950 Cleveland, OH 44113-1972 Phone: (216) 621-8484 - and - Gary A. Dodge, Esq. Hatch James & Dodge 10 W Broadway, Ste. 400 Salt Lake City, UT 84101 Phone: (801) 363-6363 e-mail: gdodge@hjdlaw.com Representing the defendants are: Karen Pieslak Pohlmann, Esq. (kpohlmann@morganlewis.com) Morgan Lewis & Bockius, P.A. 1701 Market St. Philadelphia, PA 19103-2921 Phone: (215) 963-5000 - and - Erik A. Christiansen, Esq. (ecf@parsonsbehle.com) Parsons Behle & Latimer 201 S. Main St., Ste. 1800 P.O. Box 45898 Salt Lake City, UT 84145-0898 Phone: (801) 532-1234 PUTNAM INVESTMENTS: Judge Dismisses Claims in Market Timing Case ---------------------------------------------------------------- J. Frederick Motz of the U.S. District Court for the District of Maryland dismissed the remaining 10b-5 claims against Putnam Investments in a purported class-action lawsuit over mutual fund market timing, Andrew Longstreth of Am Law Litigation Daily reports. Finding that the alleged damages had been fully offset by the restitution Putnam paid in regulatory settlements, Judge Motz dismissed the last remaining claims made against Putnam in the litigation, entitled, "In Re Mutual Funds Investment Litigation, MDL No. 04-MD-15863, Civil No. JFM-04-560," according to the Am Law Litigation Daily report. A copy of the dismissal order is available free of charge at: http://ResearchArchives.com/t/s?3bbe ROCKIES REGION: Final Settlement Approval Hearing Set on April 7 ---------------------------------------------------------------- Final approval hearing of the settlement of a consolidated class-action complaint in Colorado against Petroleum Development Corp. (PDC), the Managing General Partner (MGP) of Rockies Region 2007 Limited Partnership, was expected on April 7, 2009. On May 29, 2007, Glen Droegemueller, individually and as representative plaintiff on behalf of all others similarly situated, filed a class action complaint against PDC in the District Court, Weld County, Colorado alleging that the MGP underpaid royalties on gas produced from wells operated by the Managing General Partner in the State of Colorado. The plaintiff seeks declaratory relief and to recover an unspecified amount of compensation for underpayment of royalties paid by the MGP pursuant to leases. The MGP moved the case to Federal Court on June 28, 2007, and on July 10, 2007, it filed its answer and affirmative defenses. A second similar Colorado class-action suit was filed against the MGP in the U.S. District Court for the District of Colorado on Dec. 3, 2007, by Ted Amsbaugh, et al. On Dec. 31, 2007, the plaintiffs in this second action filed a motion to consolidate the case with the Droegemueller action. On Jan. 28, 2008, the Court granted the plaintiff's motion to consolidate the action with the Droegemueller Action. The court approved a stay in proceedings until Sept. 22, 2008, while the parties pursued mediation of the matter. Although Rockies Region was not named as a party in the suit, the lawsuit states that it relates to all wells operated by the MGP, which includes a majority of the company's 75 wells in the Wattenberg field. On Oct. 10, 2008, the court issued preliminary approval of a settlement agreement. According to its March 31, 2009 Form 10-K filing in the U.S. Securities and Exchange Commission for the fiscal year ended Dec. 31, 2008, the portion of the proposed settlement related to the company's wells for all periods through Dec. 31, 2008 is $78,105. This amount, plus legal costs of $7,863, were recorded to fully accrue for the settlement through Dec. 31, 2008. In November 2008, the MGP paid into an escrow account, on behalf of the company, amounts due under the settlement. These amounts will be deducted from future Partnership distributions. Notice of the settlement was mailed to members of the class- action suit in the fourth quarter 2008, and the final settlement approval hearing is expected on April 7, 2009. Bridgeport, W.Va.-based Rockies Region 2007 Limited Partnership engages in the exploration and development of oil and natural gas properties. The company was organized as a limited partnership on May 22, 2007, in accordance with the laws of the State of W.Va. Upon completion of a private placement of its securities, the company was funded and commenced business activities on Aug. 31, 2007. SELECT COMFORT: Faces Consumer Fraud Litigation in California ------------------------------------------------------------- Select Comfort Corp. faces a purported class-action lawsuit in San Jose, Calif., alleging a defect in the company's Sleep Number beds can cause them to incubate dangerous mold, the Raleigh (N.C.) News & Observer reports. Attorney Robert Gagliasso's law firm is heading up the lawsuit against Select Comfort, alleging the company knew of the defect and concealed its existence, according to the Raleigh (N.C.) News & Observer report. Mr. Gagliasso alleges in the suit that while not all of the beds will face mold problems, they all create an ideal situation for mold to grow due to collected internal moisture, reports the Raleigh (N.C.) News & Observer. The plaintiffs in the lawsuit are seeking unspecified damages for health problems they allegedly occurred as a result of the bed mold, the Raleigh (N.C.) News & Observer reports. SYNCORA HOLDINGS: Bid to Dismiss Sewer Ratepayers' Case Pending --------------------------------------------------------------- The motion to dismiss a sewer ratepayers' class-action suit filed against one of Syncora Holdings, Ltd.'s operating businesses, Syncora Guarantee Inc., and other defendants, remains pending, according to the company's March 31, 2009 Form 10-K filing in the U.S. Securities and Exchange Commission for the fiscal year ended Dec. 31, 2008. On June 17, 2008, Charles Wilson, on behalf of himself and a class consisting of every Jefferson County, Alabama sewer ratepayer since January 1, 1993, filed the suit. The lawsuit alleges that through the wrongful conduct of the members of the Jefferson County Commission, most notably Larry Langford, the County incurred a bonded indebtedness of approximately US$3.2 billion relating to improvements to its sewer system. The complaint alleges that the commissioners, in a conspiracy with several individuals, financial companies, law firms, and bond insurers, completed several swap transactions whereby the bonds, which were primarily fixed interest securities, were swapped to variable rate and auction rate securities. These swaps, the complaint alleges, were done primarily to facilitate the inappropriate payment of exorbitant fees to several bond brokers and financial advisors. With respect to the bond insurers, including Syncora Guarantee, the complaint alleges that the insurers negligently insured the bonds while allowing themselves to become undercapitalized and downgraded by the rating services, which in turn downgraded the bonds. The plaintiffs allege damages on the ground that their sewer rates are much higher than they otherwise would have been without the wrongdoing of all parties. The company has filed a motion to dismiss, which is currently pending before the court. Plaintiffs have also voluntarily dismissed Jefferson County taxpayers as members of the putative class, leaving only the sewer system ratepayers. Several of the defendants have filed motion seeking recusal of the Judge based on his daughter being a Jefferson County ratepayer, and thus a member of the putative class of plaintiffs. Syncora Holdings, Ltd. -- http://www.scafg.com/Holdings/-- formerly Security Capital Assurance Limited, is a holding company whose operating subsidiaries provide financial guarantee insurance, reinsurance, and other credit enhancement products to the public finance and structured finance markets throughout the U.S. and internationally. The company's businesses consists of Syncora Guarantee Inc. (formerly XL Capital Assurance Inc.) and its wholly owned subsidiary, XL Capital Assurance (U.K.) Limited (XLCA-UK) and Syncora Guarantee Re Ltd. (formerly XL Financial Assurance Ltd.). The segments of the company are financial guarantee insurance and financial guarantee reinsurance. The financial guarantee insurance segment offers financial guarantee insurance policies and credit-default swaps contracts. The financial guarantee reinsurance segment reinsures financial guarantee policies and CDS contracts issued by other monoline financial guarantee insurance companies. SYNCORA HOLDINGS: Still Faces N.Y. Consolidated Securities Suit --------------------------------------------------------------- Syncora Holdings Ltd. still faces a consolidated securities fraud class-action lawsuit in the U.S. District Court for the Southern District of New York. In December 2007 and January 2008, three class-action lawsuits were commenced in the U.S. District Court for the Southern District of New York. They are: -- "Brickman Investments, Inc. v. Security Capital Assurance Ltd et al.," -- "2 West, Inc. v. Security Capital Assurance Ltd et al.," and -- "Clarke v. Security Capital Assurance Ltd et al." Two of the lawsuits were filed on behalf of all persons who purchased the company's common shares in the secondary public offering by XL Insurance Ltd., as selling shareholder, on or about June 6, 2007. The third lawsuit was filed on behalf of all persons who purchased or otherwise acquired the company's securities from April 23, 2007, through Dec. 10, 2007, including those who purchased shares in the secondary offering. The complaints name the company, its president and chief executive officer, its former executive vice president and chief financial officer, and XL Insurance, as defendants, and they allege various violations of the U.S. Securities Act and the U.S. Exchange Act by the defendants. Two of the complaints also name the lead underwriters of the secondary offering as defendants. The complaints include claims that the defendants' public statements, including the registration statement and prospectus related to the secondary offering, contained false and misleading statements and omitted to disclose material facts necessary to make the statements contained therein not misleading. On April 24, 2008, an order was entered consolidating these actions under the caption "In re Security Capital Assurance Ltd. Securities Litigation," and appointing the Employees' Retirement System of the State of Rhode Island as lead plaintiff. On Aug. 6, 2008, a consolidated amended complaint was filed. The consolidated amended complaint adds Edward Hubbard, Executive Vice President, as well as Richard Heberton, former chief credit officer of XL Capital Assurance, Inc., as defendants and expands the class period to include all persons who acquired the company's securities from March 15, 2007, to March 18, 2008. No further developments in the matter were reported in the company's March 31, 2009 Form 10-K filing in the U.S. Securities and Exchange Commission for the fiscal year ended Dec. 31, 2008. The suit is "In Re: Security Capital Assurance Ltd. Securities Litigation, Case No. 1:07-cv-11086-DAB," filed in the U.S. District Court for the Southern District of New York, Judge Deborah A. Batts, presiding. Representing the plaintiffs are: Gregory M. Egleston, Esq. (egleston@bernlieb.com) Bernstein Liebhard & Lifshitz, LLP 10 East 40th Street New York, NY 10016 Phone: 212-779-1414 e-mail: 212-779-3218 Irving Bizar, Esq. (Ibizar@Ballonstoll.com) Ballon, Stoll, Bader and Nadler 729 Seventh Avenue, 17th Floor New York, NY 10019 Phone: 212-575-7900 Fax: 212-764-5060 - and - Richard A Speirs, Esq. (rspeirs@zsz.com) Zwerling, Schachter & Zwerling 41 Madison Avenue New York, NY 10010 Phone: 212-223-3900 Fax: 212-371-5969 TENNESSEE VALLEY: Seeks Dismissal of Coal-Ash Sludge Spill Suits ---------------------------------------------------------------- The Tennessee Valley Authority filed motions in the U.S. District Court for the Eastern District of Tennessee, seeking for the dismissal of all seven lawsuits brought by residents claiming damages from the Dec. 22, 2008 spill of coal-ash sludge at the Kingston Fossil Plant, Scott Barker of The Knoxville News Sentinel reports. In motions filed on April 17, 2009, TVA claims its actions maintaining a coal-ash retention pond are covered under the discretionary function doctrine, which, with exceptions, prevents a federal government entity from being sued for planning and carrying out policy. The spill dumped 5.4 million cubic yards of coal-ash into the Emory River and surrounding countryside. No one was injured, but the deluge destroyed three houses and buried nearby property, according to The Knoxville News Sentinel report. Though TVA acknowledged its responsibility to clean up the spill, the utility said in a statement: "We also have a responsibility to be good financial stewards for the 9 million ratepayers of the Tennessee Valley. This is an important balance to maintain." The Knoxville News Sentinel reported that TVA estimates cleanup costs could reach $825 million, excluding litigation costs and regulatory penalties. The utility has bought more than 70 affected pieces of property at a cost of $20 million. Elizabeth Alexander, Esq., an attorney who represents clients in one of the cases, told The Knoxville News Sentinel that plaintiffs would try to block TVA's move. U.S. District Judge Tom Varlan issued an order on April 17, 2009 giving plaintiffs in the four-class-action and three non-class- action complaints until July 10, 2009 to respond. Judge Varlan also set guidelines for evidence discovery, limiting it for now to information on the question of the discretionary function doctrine and punitive damages claims, reports The Knoxville News Sentinel. TRI-UNION SEAFOODS: Court Allows Mercury-in-Tuna Suit to Proceed ---------------------------------------------------------------- The U.S. Supreme Court ruled that a New Jersey woman can sue tuna fish producer, Tri-Union Seafoods LLC, over the mercury poisoning she allegedly suffered from eating the company's canned albacore tuna, Chris Rizo of Legal Newsline reports. Previously, Tri-Union Seafoods asked the U.S. Supreme Court to review the case. Without comment, the justices allowed an appeals court ruling in the matter to stand, according to the Legal Newsline report. Deborah Fellner, whose diet consisted almost exclusively of canned tuna for five years, sued Tri-Union Seafoods, the maker of Chicken of the Sea brand tuna, for failing to warn her of the dangers of eating its tuna fish product, reports Legal Newsline. She sued under the New Jersey Product Liability Act over her alleged exposure to methylmercury and other harmful compounds contained in Chicken of the Sea tuna fish products from 1999 to 2004, Legal Newsline reported. Legal Newsline reported that the San Diego, Calif.-based company argued that it was not responsible for her claimed illness, arguing that the U.S. Food and Drug Administration does not consider canned tuna fish worthy of mercury warnings to consumers. Judge Dennis Cavanaugh of the U.S. District Court for the District of New Jersey threw out the lawsuit, but the U.S. Court of Appeals for the third circuit reinstated the class-action lawsuit, report Legal Newsline. Law.com previously reported that the U.S. Court of Appeals for the Third Circuit has revived a class-action suit against Tri- Union Seafoods, the manufacturer of Chicken-of-the-Sea brand tuna, brought by consumers who claimed they were never warned that excessive consumption of the product could lead to mercury poisoning (Class Action Reporter, Sept. 8, 2008). According to Law.com, the appellate court's three-judge panel unanimously found that a lower court improperly dismissed the suit, captioned "Fellner v. Tri-Union Seafoods," on the grounds that it was pre-empted by U.S. Food & Drug Administration regulations. Thus, the recent ruling reverses the decision by Judge Dennis M. Cavanaugh, of the U.S. District Court for the District of New Jersey. "The FDA has promulgated no regulation concerning the risk posed by mercury in fish or warnings for that risk, has adopted no rule precluding states from imposing a duty to warn, and has taken no action establishing mercury warnings as misbranding under federal law or as contrary to federal law in any other respect," Senior U.S. Circuit Judge Walter K. Stapleton wrote. Judge Stapleton, in an opinion joined by Judge Dolores K. Sloviter and Judge D. Brooks Smith, concluded that Deborah Fellner's lawsuit does not conflict with the FDA's regulatory scheme for the risks posed by mercury in fish "because the FDA simply has not regulated the matter." Law.com recounts that defense lawyers had argued that Ms. Fellner's "duty-to-warn" claim conflicted with the FDA's decision to forego any warnings in order to avoid scaring consumers away from a useful product. Specifically, John A. Kiernan, Esq., of Bonner Kiernan Trebach & Crociata argued that the FDA would deem any warning false and misleading because it would not "balance out the negative . . . information with positive information about the numerous healthy attributes of canned tuna." Judge Stapleton disagreed, saying "the FDA took no action to preclude state warnings -- at least, no binding action via ordinary regulatory procedures." The Third Circuit found that Judge Cavanaugh had improperly equated the FDA's decision to issue a consumer advisory with actual regulation. Judge Cavanaugh, in his January 2007 decision, said that "the FDA's regulatory scheme is the result of over 10 years of data collection and study," and that the plaintiffs were effectively asking the court to disregard the FDA's "deliberately nuanced response" to the issue of mercury in seafood. Judge Stapleton noted that, in the advisory, the FDA offered advice to women who are or may become pregnant about selecting and eating fish. In doing so, Stapleton said, the FDA did not "specifically regulate" anything, but instead gave "non-binding advice to a class of consumers." As a result, Judge Stapleton said, the FDA advisory did not "promulgate a federal legal standard" with which Ms. Fellner's state law claims could potentially conflict. "The mere fact that the FDA chose to warn only certain 'at risk' consumers, rather than all consumers, does not create a conflict," Judge Stapleton further wrote. "The advisory does recommend continued fish consumption within certain parameters, but that recommendation is clearly not inconsistent with a warning against excess consumption." The report recounts that Ms. Fellner originally filed the suit in the Superior Court of New Jersey, alleging that her diet consisted almost exclusively of Chicken-of-the-Sea tuna for five years, causing her to contract severe mercury poisoning, and that Tri-Union Seafood had failed to warn consumers of the risk of excessive tuna consumption. Tri-Union later removed the suit to federal court and sought dismissal on federal pre-emption grounds, citing a California court's decision to dismiss a consumer suit brought by former California Attorney General Bill Lockyer. According to Law.com, while the California suit was pending, the FDA had sent a letter to Mr. Lockyer that said the FDA's prior regulatory actions pre-empt the state's suit because tuna canning companies would be unable to comply both with the FDA's approach and state law. The letter warned Mr. Lockyer that his suit would "frustrate the FDA's carefully considered federal approach" to the issue of mercury in fish. Subsequently, in May 2006, the California Superior Court agreed with the FDA and found the suit was indeed pre-empted by federal law. Now, the Third Circuit's recent ruling directly conflicts with the California court's decision, finding that the FDA's opinion that such suits are pre-empted is not entitled to deference from the courts because the agency has never truly regulated mercury levels in fish. "While the FDA may well have the authority to promulgate a regulatory scheme which would preclude any state duty to warn consumers of the risks of mercury in tuna, it simply has not done so," Judge Stapleton wrote. Ms. Fellner is represented by Adina H. Rosenbaum, Esq., and Brian Wolfman, Esq., of the Public Citizen Litigation Group in Washington, D.C., along with William O. Crutchlow, Esq., and Khalid Elhassan, Esq., of Eichen Levinson & Crutchlow in Edison, N.J. UNITED RENTALS: Parties Agree to Settles Stock Inflation Lawsuit ---------------------------------------------------------------- United Rentals, Inc. shareholders have agreed to settle a securities fraud class-action accusing the company and its executives of artificially inflating stock prices, which plummeted after the U.S. Securities and Exchange Commission revealed it was investigating the company's accounting methods, Law360 reports. Shareholder plaintiffs filed the motion for settlement on April 17, 2009 in the U.S. District Court for the District of Connecticut, according to the Law360 report. New Securities Fraud Cases J.P. JEANNERET: Lowey Dannenberg Files Securities Fraud Lawsuit --------------------------------------------------------------- Lowey Dannenberg Cohen & Hart, P.C. filed a class action lawsuit in the United States District Court, Southern District of New York, against defendants J.P. Jeanneret Associates, Inc., John P. Jeanneret, Paul L. Perry, Ivy Asset Management Corporation, Bank of New York Mellon Corporation, and Margolin, Winer & Evens LLP, on behalf of all persons, other than Defendants, who invested in Income-Plus Investment Fund, from January 1, 1999 to the present, to recover damages caused by Defendants' violations of the federal securities laws and common law claims, including breach of fiduciary duties. The case name is styled, "Local 73 Annuity Fund, et al. v. J.P. Jeanneret Associates, Inc., et al." This Complaint alleges that during the Class Period, unknown to Income-Plus Investors, Defendants failed to perform the necessary due diligence that they were being compensated to perform as investment advisors, managers and fiduciaries, and proximately caused millions of dollars in losses by placing the Plaintiffs' investment assets of Income-Plus in entities managed by Bernard Madoff. Defendants either knew or were reckless in not realizing that the Income-Plus Investment Fund's assets that were placed with Madoff were at risk because his enterprise was a massive Ponzi scheme. Defendants ignored numerous red flags, including the abnormally high and stable positive investment results reportedly achieved by Madoff regardless of market conditions; inconsistencies between Bernard L. Madoff Investment Securities, LLC's publicly available financial information concerning its assets and the purported amounts that Madoff managed for clients; and the fact that BMIS was audited by a small, obscure accounting firm. Jeanneret issued an Offering Memorandum for Income-Plus Investment Fund that was false and misleading because it falsely stated that Jeanneret would conduct thorough due diligence with respect to Income-Plus' investments. Plaintiffs allege that Defendants Jeanneret, Ivy, and Ivy's parent company, Bank of New York, failed to perform the represented due diligence and oversight, and abdicated their fiduciary duties to the investors by entrusting the Plaintiffs' assets with Madoff. Plaintiffs further allege that Defendant Margolin negligently failed to conduct a proper audit of Income- Plus' financial statements. Plaintiffs have alleged claims on behalf of the Class for violations of Sections 10(b) and 20(a) of the Exchange Act, Rule 10b-5, as well as breach of fiduciary duty, negligence and breach of contract. A request for lead plaintiff status must satisfy certain criteria and be made on or before June 17, 2009. For more details, contact: Barbara Hart (Bhart@lowey.com) Thomas M. Skelton (Tskelton@lowey.com) Vincent Briganti (Vbriganti@lowey.com) Lowey Dannenberg Cohen & Hart, P.C. White Plains Plaza One North Broadway White Plains, NY 10601-2310 Phone: (914) 997-0500 Web site: http://www.lowey.com MERIDIAN CAPITAL: Coughlin Stoia Files Securities Fraud Lawsuit --------------------------------------------------------------- Coughlin Stoia Geller Rudman & Robbins LLP announced that a class action has been commenced on behalf of an institutional investor in the United States District Court for the Southern District of New York on behalf of all investors who acquired shares in Meridian Capital Partners, Inc. funds of hedge funds managed by Meridian Diversified Fund Management, LLC between January 2, 2008 and December 11, 2008, seeking to recover losses resulting from Meridian Diversified's placement of significant amounts of investor money into funds managed by Bernard Lawrence Madoff and his firm, and who were damaged thereby. The action includes a sub-class of those employee benefit plans which invested with Meridian Diversified during the Class Period, asserting claims under the Employee Retirement Income Security Act of 1974 for breach of fiduciary duty. The complaint charges Meridian, Meridian Diversified and their officers and/or partners with violations of the Securities Exchange Act of 1934, the Securities Act of 1933 and ERISA. Meridian is an alternative investment adviser offering funds of hedge funds to institutional and high net worth investors and acts as the managing member of Meridian Diversified. The complaint alleges that Meridian Diversified placed significant amounts of investor money into funds managed by Madoff and his firm. Madoff has now been charged with running what may be the largest Ponzi scheme ever. Unknown to investors in its Funds, Meridian Diversified had invested 6% to 8% of its clients' funds in Madoff-managed investments. This was contrary to the duties Meridian Diversified had to its investors of good faith and fair dealing and contrary to the representations Meridian Diversified had made regarding its processes for selecting fund managers. As a result of defendants' breaches of fiduciary duty and false statements, investors made additional investments in the Funds and/or held shares they would have redeemed. Plaintiff seeks to recover damages on behalf of all investors who acquired shares in Meridian Funds managed by Meridian Diversified during the Class Period and whose shares were invested in entities run by Madoff and all employee benefit plans which invested with Meridian Diversified and whose assets were invested in whole or in part by Meridian Diversified in any Madoff-related investment during the Class Period. A request for lead plaintiff status must satisfy certain criteria and be made on or before June 20, 2009. For more details, contact: David A. Rosenfeld, Esq. (djr@csgrr.com) Coughlin Stoia Geller Rudman & Robbins LLP Phone: 800-449-4900 or 619-231-1058 Web site: http://www.csgrr.com/cases/meridiancapital/ ********* 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 research, 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 S. Senorin, Stephanie T. Umacob, Gracele D. Canilao, and Peter A. Chapman, Editors. Copyright 2009. All rights reserved. ISSN 1525-2272. 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