NEW YORK, Oct. 29, 2002 (PRIMEZONE) -- Abbey Gardy, LLP commenced a Class Action lawsuit in the United States District Court for the District of Minnesota on behalf of a class (the "Class") of all persons who purchased securities of The St. Paul Companies ("St. Paul" or the "Company") (NYSE:SPC) between November 5, 2001 and July 9, 2002, inclusive (the "Class Period").
The Complaint names as defendants St. Paul, Chief Executive Officer J.S. Fishman and Chief Financial Officer Thomas A. Bradley. The Complaint alleges that defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder, by issuing a series of material misrepresentations to the market during the Class Period thereby artificially inflating the price of St. Paul securities.
The Complaint alleges that during the Class Period, defendants failed to make adequate disclosures or take adequate reserves concerning litigation filed in 1993 in California state court known as Western MacArthur Co. et al. v. United States Fidelity & Guaranty Co., et al, Case No. 721595-7 (consolidated with Case No. 828101-2, Superior Court of California, Alameda County) (the "Western MacArthur litigation").
Plaintiff claims that although trial of the Western MacArthur litigation commenced in approximately March 2002, the Company first disclosed the existence of the litigation on or about May 15, 2002, but did not disclose or quantify the amount or general magnitude of potential exposure to liability which St. Paul might suffer as a result of the litigation, nor did the Company increase its reserves at that time. On June 3, 2002, the Company announced that a settlement had been reached whereby St. Paul would pay almost $1 billion to satisfy the claims reflected in the litigation, although the Company's SEC filings stated that as of December 31, 2001, the Company's net reserves for asbestos claims was only $367 million.
The Complaint charges that the Company tried to disguise the impact of the Western MacArthur litigation settlement by focusing on the alleged after-tax impact of the litigation and falsely claiming that $150 million of the litigation payments could be charged to the Company's reserves, and that a subsequent SEC filing by the Company reflected St. Paul's failure to take adequate reserves for its potential liability in the litigation. News of the Western MacArthur litigation settlement caused the price of the Company's stock to decline during the Class Period from a high of $49.20 on November 5, 2001 to a low of $34.65 on July 9, 2002, the last day of the Class Period.
Plaintiff seeks to recover damages on behalf of all those who purchased or otherwise acquired St. Paul securities during the Class Period. If you purchased or otherwise acquired St. Paul securities during the Class Period, and either lost money on the transaction or still hold the securities, you may wish to join in the action to serve as lead plaintiff. If you purchased St. Paul securities during the Class Period, you may, no later than December 17, 2002, request that the Court appoint you as lead plaintiff.
A lead plaintiff is a representative party that acts on behalf of other class members in directing the litigation. In order to be appointed lead plaintiff, the Court must determine that the class member's claim is typical of the claims of other class members, and that the class member will adequately represent the class. Under certain circumstances, one or more class members may together serve as "lead plaintiffs." Your ability to share in any recovery is not, however, affected by the decision whether or not to serve as a lead plaintiff.
Abbey Gardy, LLP has been retained as one of the law firms to represent the Class. The attorneys at Abbey Gardy, LLP have extensive experience in securities class action cases, and have played lead roles in major cases resulting in the recovery of hundreds of millions of dollars to investors. If you would like to discuss this action or if you have any questions concerning this Notice or your rights as a potential class member or lead plaintiff, you may contact Nancy Kaboolian, Esq. of Abbey Gardy, LLP at (800) 889-3701 or email Nkaboolian@abbeygardy.com.
More information on this and other class actions can be found on the Class Action Newsline at www.primezone.com/ca