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BREACH OF CONTRACT Arthritis drug dispute settles for $300 million North Chicago, Ill. (AP)-Abbott Laboratories Inc. has agreed to pay more than $300 million to Cambridge Antibody Technology Group PLC in a settlement over royalties for the rheumatoid arthritis drug Humira. The settlement calls for Abbott to pay British-based Cambridge Antibody $255 million, along with five annual payments of about $9.4 million beginning in January 2006 that will be contingent on continued sales of Humira. North Chicago-based Abbott also will pay Cambridge a reduced royalty rate of about 2.7%, down from about 5.1%. A British court ruled late last year that Abbott should pay the higher royalty rate, instead of the 2% it had been paying. Abbott appealed, and the settlement heads off a hearing on the case that was scheduled to start this week. GOVERNMENT CONTRACTS Engineering firm settles DOJ suit for $12.5M Alisa Viejo, Calif. (AP)-Engineering firm Fluor Corp. has paid $12.5 million to settle a lawsuit brought by the U.S. Department of Justice over Fluor’s handling of government contracts. The settlement resolves a dispute involving the company’s distribution of overhead expenses for government contracts between 1995 and 1998. SEX ABUSE Connecticut archdiocese reaches $22M settlement Hartford, Conn. (AP)-The Roman Catholic Archdiocese of Hartford agreed on Oct. 31 to pay $22 million to 43 people who said they were molested by priests. The alleged abuse dates back as far as the 1960s and involved 14 priests or retired priests. Parents tried to bring it to the attention of Archbishop John Francis Whealon in 1983 but were threatened with legal action by the archdiocese, said attorney Jason Tremont, a lawyer for the 43 people. The archdiocese said that six of the priests are dead and four are retired. Three others are no longer active in ministry. One priest remains active, and a sexual abuse review panel determined that allegations against him were not credible. SHAREHOLDER SUIT Qwest will pay $400M to settle class action Denver (AP)-Qwest Communications International Inc. has tentatively agreed to a $400 million settlement of a key shareholder lawsuit. The proposed settlement, which must be approved by the courts, would resolve claims against the company, some former executives and its board of directors, but not former Chief Executive Joseph Nacchio and former Chief Financial Officer Robert Woodruff. It would cover tens of thousands of shareholders who purchased Qwest securities between May 24, 1999, and July 28, 2002. Under the terms of the proposed settlement, Qwest would pay $400 million in three cash payments: $100 million would be paid within 30 days after the court tentatively approves the settlement, $100 million would be paid within 30 days after the settlement gets final approval and $200 million plus interest would be paid by Jan. 15, 2007. The Securities and Exchange Commission said that fraud at Qwest occurred between April 1999 and March 2002, allowing it to report improperly approximately $3 billion in revenue that facilitated its 2000 merger with U S West Inc. Among other things, the SEC said that Qwest repeatedly booked revenue from one-time sales of equipment and fiber-optic swaps while falsely claiming to investors that the income was recurring. Qwest later restated earnings from 2000 and 2001 to erase about $2.2 billion in revenue. The shareholder lawsuits alleged that Qwest, the former officers and board members concealed information about the revenue. TRADE SECRETS Motorola settles suit with ex-president for $11.5M Schaumburg, Ill. (AP)-Motorola Inc., the world’s No. 2 mobile phone maker, said that it has agreed to settle a lawsuit against its former president, Mike Zafirovski, for $11.5 million in cash and other requirements. Motorola sued Zafirovski, claiming that his new job as chief executive officer of Nortel Networks Corp. could risk disclosure of Motorola’s trade secrets. The telecommunications-equipment maker, which is based in Brampton, Ontario, Canada, was not named as a defendant in the lawsuit. Motorola said that the settlement “reaffirms Zafirovski’s obligations to protect Motorola’s trade secrets and confidential information.” It also includes an $11.5 million cash payment to Motorola. WHISTLEBLOWER SUIT Drug maker, DOJ settle false claims charges Washington (AP)-King Pharmaceuticals Inc. has agreed to pay more than $124 million to resolve claims that it charged federal and state governments too much for its drug products over nine years, the U.S. Department of Justice has announced. Bristol, Tenn.-based King is the latest drug maker to settle allegations of deceptive pricing first raised by whistleblowers. The settlements exceed $3.1 billion. King engaged in “systemic and widespread misreporting” of its drug prices to the Medicaid program for low-income Americans, the Veterans Administration and other government programs from 1994 to 2002, the government said. The company, which makes generic and brand-name pharmaceuticals, agreed to pay $124 million plus interest. The allegations involve complicated pricing structures that are intended to ensure that the government pays no more than the best price drug makers negotiate with private customers. In accordance with the False Claims Act, whistleblower Edward Bogart will receive 15% to 25% of the settlement.

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