On May 8, 2003, Wolf Haldenstein Adler Freeman & Herz LLP filed a class action lawsuit in the United States District Court for the Southern District of New York on behalf of purchasers of UnumProvident Corporate-Backed Trust Securities ("CorTS") Certificates pursuant to an initial public offering on or about April 18, 2001 and/or in the aftermarket for CorTS through and including March 24, 2003 (the 'Class Period').
The complaint entitled, Azzolini vs. CorTS Trust II for Provident Financial Trust I, et al. 03 cv 3257, can be viewed by clicking the link to the right.
The complaint charges CorTS Trust II for Provident Financial Trust I, UnumProvident, Salomon Smith Barney and certain UnumProvident officers with violations of the Securities Exchange Act of 1934 and with violations of the Securities Act of 1933. UnumProvident Corporation is the parent holding company for a group of insurance and non-insurance companies that collectively operate throughout North America and in the United Kingdom, Japan and Argentina. UnumProvident's principal operating subsidiaries are Unum Life Insurance Company of America, Provident Life and Accident Insurance Company, The Paul Revere Life Insurance Company (Paul Revere Life) and Colonial Life & Accident Insurance Company (Colonial).
UnumProvident, through its subsidiaries, is a provider of group and individual disability insurance. It also provides a complementary portfolio of other insurance products, including long-term care insurance, life insurance, employer- and employee-paid group benefits and related services. According to the CorTS IPO prospectus, UnumProvident Corporation guaranteed the payment of distributions on the Underlying Capital Securities but only to the extent that the Underlying Issuer had funds legally and immediately available therefor.
On April 18, 2001, the first day of the class period, the CorTS were issued pursuant to the Prospectus and Registration Statement and began to publicly trade. The trust consisted of a single class of certificates, which represented interests in the trust and the certificates would only be paid through the trust. Therefore, the CorTS would only be paid if UnumProvident paid the original trust. During the Class Period, UnumProvident falsely reported financial results because it did not properly account for the long-term impairment of its investments. Moreover, the financial information was inflated due to UnumProvident's overzealous denial of legitimate claims of its insureds through, what one federal judge deemed 'a comprehensive system for targeting and terminating expensive claims." The financial statements and related press releases by UnumProvident identified above contained statements that were materially false and misleading when made. On March 24, 2003, UnumProvident issued a press release in which they stated their intentions to restate financial statements from previous years. This put the payments of the CorTS in jeopardy and caused the CorTS to lose almost 50% of their value.
Additional cases were filed on behalf of investors. On July 8, 2003, motions were made to consolidate the various cases and appoint lead plaintiff and counsel. On September 3, 2003, the Judicial Panel on Multidistrict Litigation transferred the cases to the Eastern District of Tennessee. The district court consolidated these actions under the caption, "Azzolini v. CorTs Trust II for Provident Financial Trust, et al," 03-CV-1003, and appointed Wolf Haldenstein Co-Lead Counsel for Lead Plaintiff.
On March 19, 2004, plaintiffs filed an amended consolidated complaint and on April 19, 2004, defendants filed a motion to dismiss. On September 12, 2005, the court issued a Memorandum and Order granting the motion to dismiss filed by the Company. On January 12, 2006, plaintiffs filed a notice of appeal regarding the court's decision dismissing the action.
Wolf Haldenstein has extensive experience in the prosecution of securities class actions and derivative litigation in state and federal trial and appellate courts across the country. The firm has approximately 60 attorneys in various practice areas; and offices in Chicago, New York City, San Diego, and West Palm Beach. The reputation and expertise of this firm in shareholder and other class litigation has been repeatedly recognized by the courts, which have appointed it to major positions in complex securities multi-district and consolidated litigation.
If you wish to discuss this action or have any questions, please contact Wolf Haldenstein Adler Freeman & Herz LLP at 270 Madison Avenue, New York, New York 10016, or by telephone at (800) 575-0735 (Fred Taylor Isquith, Esq., Gustavo Bruckner, Esq., Michael Miske, Esq., George Peters, Esq., or Derek Behnke).