NEW YORK, Aug. 23, 2004 (PRIMEZONE) -- Murray, Frank & Sailer LLP announces that it filed a complaint in the United States District Court for the District of Minnesota against 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 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.
Murray, Frank & Sailer LLP and its predecessor firms have devoted its practice to shareholder class actions and complex commercial litigation for more than thirty years and have recovered hundreds of millions of dollars for shareholders in class actions throughout the United States.
If you are a member of the Class described above, you may, no later than October 15, 2004, move the Court to serve as lead plaintiff of the class. Shareholders outside the United States may also join the action, regardless of where they live or which exchange was used to purchase the securities. To serve as lead plaintiff, however, you must meet certain legal requirements. You can join this class action online at http://www.murrayfrank.com/CM/NewCases/NewCases.asp. If you would like to discuss this action, this announcement, or your rights and interests, please contact plaintiff's counsel Eric J. Belfi or Aaron D. Patton of Murray, Frank & Sailer LLP.