| Company: | St. Paul Travelers Companies, Inc. |
| Ticker Symbol: | NYSE: STA |
| Class Period: | April 1, 2004 merger |
| Date Filed: | Aug-20-04 |
| Lead Plaintiff Deadline: | Oct-15-04 |
| Court: | District, MN |
| Allegations: |
A Class Action lawsuit was filed in the United States District Court for the District of Minnesota against The St. Paul Travelers Companies, Inc. ("St. Paul Travelers" or the "Company")(NYSE:STA)(formerly known as The St. Paul Companies, Inc. or "St. Paul") on behalf of a class (the "Class") consisting of former shareholders of Travelers Property Casualty Corp.'s ("Travelers") Class A and Class B common stock who acquired St. Paul's common stock pursuant to a St. Paul registration statement filed with the SEC in connection with St. Paul's stock-for-stock merger with Travelers on April 1, 2004.
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. Specifically, the complaint alleges that the Company failed to disclose and misrepresented that the Company materially underreported its large foreign tax burden and that as a result had inflated its net income or loss by 3% to 8% or $10 to $12 million and that the Company lacked adequate internal controls and was unable to ascertain its true financial condition.
The Complaint charges St. Paul and certain of the Company's officers and directors with violations of federal securities laws. Plaintiff claims that St. Paul's registration statement was materially false or misleading because it failed to disclose that: (a) there were significant disparities between the accounting and actuarial methods of St. Paul and Travelers, requiring St. Paul Travelers to increase its claims reserves by $1.171 billion to conform St. Paul's less conservative accounting and actuarial methods to that of Travelers; (b) St. Paul's then-existing exposure to certain adverse financial conditions of a construction contractor, a reduction in reinsurance recoverables, and other similar conditions, required St. Paul Travelers to increase its claims reserves by an additional $466 million; and (c) the aggregate $1.637 billion of required increase in claims reserves due to these existing but undisclosed facts relating to St. Paul would require St. Paul Travelers to record a significant charge to its income statement, adversely impacting earnings.
The true facts were disclosed to the market on July 23, 2004, when St. Paul Travelers revealed that certain conditions relating to St. Paul required the Company to increase its claims reserves by $1.6 billion. On August 5, 2004, St. Paul Travelers further announced that the required $1.6 billion increase in claims reserves would result in an operating loss of $310 million or $0.47 per basic and diluted share for the quarter.
The per share closing price of St. Paul common stock was $40.77 on April 1, 2004, the date on which each share of Travelers' Class A and Class B common stock was exchanged for 0.4334 share of St. Paul common stock pursuant to the materially false or misleading registration statement. By the time the true extent of the required reserve increase and its adverse effects against St. Paul Travelers were fully disclosed to the market on August 5, 2004, the per share price of St. Paul common stock had declined by $6.02 or 14.77% to close at $34.75 on August 5, 2004 -- causing massive losses to former Travelers shareholders.
If you acquired the securities of the defendants during the Class Period you may, no later than the Lead Plaintiff Deadline shown above, request that the Court appoint you as lead plaintiff through counsel of your choice. You may also choose to remain an absent class member. A lead plaintiff must meet certain requirements.
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. Specifically, the complaint alleges that the Company failed to disclose and misrepresented that the Company materially underreported its large foreign tax burden and that as a result had inflated its net income or loss by 3% to 8% or $10 to $12 million and that the Company lacked adequate internal controls and was unable to ascertain its true financial condition.
The Complaint charges St. Paul and certain of the Company's officers and directors with violations of federal securities laws. Plaintiff claims that St. Paul's registration statement was materially false or misleading because it failed to disclose that: (a) there were significant disparities between the accounting and actuarial methods of St. Paul and Travelers, requiring St. Paul Travelers to increase its claims reserves by $1.171 billion to conform St. Paul's less conservative accounting and actuarial methods to that of Travelers; (b) St. Paul's then-existing exposure to certain adverse financial conditions of a construction contractor, a reduction in reinsurance recoverables, and other similar conditions, required St. Paul Travelers to increase its claims reserves by an additional $466 million; and (c) the aggregate $1.637 billion of required increase in claims reserves due to these existing but undisclosed facts relating to St. Paul would require St. Paul Travelers to record a significant charge to its income statement, adversely impacting earnings.
The true facts were disclosed to the market on July 23, 2004, when St. Paul Travelers revealed that certain conditions relating to St. Paul required the Company to increase its claims reserves by $1.6 billion. On August 5, 2004, St. Paul Travelers further announced that the required $1.6 billion increase in claims reserves would result in an operating loss of $310 million or $0.47 per basic and diluted share for the quarter.
The per share closing price of St. Paul common stock was $40.77 on April 1, 2004, the date on which each share of Travelers' Class A and Class B common stock was exchanged for 0.4334 share of St. Paul common stock pursuant to the materially false or misleading registration statement. By the time the true extent of the required reserve increase and its adverse effects against St. Paul Travelers were fully disclosed to the market on August 5, 2004, the per share price of St. Paul common stock had declined by $6.02 or 14.77% to close at $34.75 on August 5, 2004 -- causing massive losses to former Travelers shareholders.
If you acquired the securities of the defendants during the Class Period you may, no later than the Lead Plaintiff Deadline shown above, request that the Court appoint you as lead plaintiff through counsel of your choice. You may also choose to remain an absent class member. A lead plaintiff must meet certain requirements.
If you feel you qualify for damages or remedies that might be awarded in this class action please fill in our form on the right to submit your complaint.
If your injustice does not match the complaint described above, please use this form to register your complaint. Thank you.
