NEW YORK Exide
Technologies Inc., a major manufacturer and supplier of
lead-acid batteries, is facing a class-action lawsuit in
connection with alleged arsenic emissions at its Vernon,
Calif., recycling facility.
The lawsuit, filed in U.S.
District Court in California on behalf of those who purchased
securities of Exide Technologies, alleges that the company
failed to disclose that it had exposed nearly 110,000 residents
near the facility to dangerously high levels of pollutants,
including arsenic. The suit also alleges that the company knew
that it would be unable to meet its debt repayment obligations
and other pledges and promises under its debt agreements and
The South Coast Air Quality
Management District, a government-run smog-control agency, in
late March approved an assessment indicating that residents
near the Vernon facility had faced an elevated risk of cancer
due to arsenic emissions, according to court documents. Shortly
thereafter, Los Angeles City Council members held a public
hearing asking the government to file charges against the
company to reduce the alleged health risks.
Exide announced in early April
that it had retained Lazard Ltd., a New York-based financial
advisory firm specializing in corporate restructuring. As news
of the announcement broke, Exides stock plummeted nearly
47 percent to $1.37 per share before trading was halted.
While some industry sources
believe that the Milton, Ga.-based company may be headed for
bankruptcy, there are those who believe the company has
alternative restructuring plans.
"I think its long overdue
for Exide to change their advisors," said Craig Irwin, an
analyst and senior vice president at Los Angeles-headquartered
Wedbush Securities Inc., whose coverage includes Exide. "Also,
I am not so sure that whats happening is an attempt to
representatives could not be reached for comment.