NEW YORK, Sept. 29, 2004 (PRIMEZONE) -- Pomerantz Haudek Block Grossman & Gross LLP (www.pomerantzlaw.com) has filed a class action lawsuit in the United States District Court for the District of Minnesota on behalf of former shareholders of Travelers Property Casualty Corp. ("Travelers") Class A and Class B common stock who exchanged their shares in Travelers for shares of the St. Paul Travelers Companies, Inc. ("St. Paul") (NYSE:STA) common stock pursuant to the April 1, 2004 merger of St. Paul and Travelers.
The lawsuit was filed against Travelers, the St. Paul Companies, Inc., St. Paul Travelers and their top executives, CEO Jay Fishman and CFO Jay Benet; St. Paul's former CFO Thomas Bradley; and Travelers' former CEO, Robert Lipps.
According to the Complaint, it is alleged that both St. Paul and Travelers failed to disclose that St. Paul utilized a markedly different method for calculating insurance reserves than that utilized by Travelers and that applying Travelers' methodology, as was required, would result in the necessity of having to increase reserves on St. Paul's insurance policies by over $1 billion - approximately 12 percent of the value of St. Paul as determined by the merger consideration.
On June 17, 2004, news regarding this issue began to trickle out to shareholders, and St. Paul stock began to decline, falling from $41.10 on that date to $35.66 on July 23, 2004, the date that the exact size of the needed reserve adjustment -- $1.6 billion - was first announced. Then on August 5, 2004, following the announcement that St. Paul reported a net loss for the second quarter ended June 30, 2004 of $275 million, or $0.42 per basic and diluted share, compared to net income of $441 million or $1.02 per basic share and $1.01 per diluted share in the prior year quarter, the price of St. Paul common stock closed at $34.75, representing a 14.77% decline from its price on August 1, 2004.
If you received shares of St. Paul pursuant to the April 1, 2004 merger, you have until October 15, 2004 to ask the Court to appoint you as one of the lead plaintiffs for the Class. In order to serve as lead plaintiff, you must meet certain legal requirements. If you wish to review a copy of the Complaint, to discuss this action or have any questions, please contact Andrew G. Tolan, Esq. of the Pomerantz firm at 888-476-6529 (or (888) 4-POMLAW), toll free, or at agtolan@pomlaw.com by e-mail. Those who inquire by e-mail are encouraged to include their mailing address and telephone number.
The Pomerantz firm, which has offices in New York, Chicago and Washington, D.C., is acknowledged as one of the premier firms in the areas of corporate, securities, and antitrust class litigation. Founded by the late Abraham L. Pomerantz, known as the dean of the class action bar, the Pomerantz firm pioneered the field of securities class actions. Today, more than 50 years later, the Pomerantz firm continues in the tradition he established, fighting for the rights of the victims of securities fraud, breaches of fiduciary duty, and corporate misconduct. The Firm has recovered numerous multimillion-dollar damages awards on behalf of class members.