Bridgestone Faces Shareholder Suits

Thursday, January 25th 2001, 12:00 am

By: News On 6

NASHVILLE, Tenn. (AP) â€” A $110 million Michigan pension fund and a Colorado woman have filed shareholder lawsuits against Bridgestone Corp., accusing the Japanese company of covering up defects in its tires to keep its stock price and earnings inflated.

The suits, filed this month in U.S. District Court in Nashville, seek class-action status for all stockholders who lost money because of fallout from the massive tire recall by Bridgestone Corp.'s Nashville-based subsidiary, Bridgestone/Firestone Inc.

In August, Bridgestone/Firestone recalled 6.5 million tires amid accusations of design and manufacturing defects that caused blowouts and tread separations leading to thousands of crashes and hundreds of deaths.

Since then, U.S.-traded stock of Bridgestone has fallen from roughly $250 a share to below $100.

Bridgestone/Firestone and Ford Motor Co. already are defendants in hundreds of lawsuits filed across the nation over deaths and injuries from crashes involving Firestone tires installed on Ford Explorers. The two Nashville filings are believed to be the first shareholder lawsuits against the tiremaker.

Both lawsuits make similar claims, saying shareholders lost millions because stocks have plunged 50 percent in recent months, ``wiping out half the company's market value.'' The lawsuits allege the coverup lasted for 3 1/2 years.

According to the lawsuits, Bridgestone Corp. has 861 million shares of common stock outstanding, and 10 million American Depository Receipts, which each represent 10 shares of common stock.

The lawsuits say company officials ``schemed and pursued a common course of conduct and course of business that operated as a fraud or deceit on the purchasers of Bridgestone common stock and ADR.''

The first lawsuit was filed Jan. 3 by the pension fund for the city of Monroe, Mich. Pension fund officials and attorneys could not be reached Tuesday or Wednesday to say how much was invested in Bridgestone stock or how much money was lost.

The second suit was filed Monday on behalf of Patricia Ziemer, a Colorado woman who owned one share of stock in the company. She could not be reached for comment and her attorney, Darren J. Robbins of San Diego, declined to discuss her case. Lead attorney William Lerach did not return repeated phone calls Tuesday and Wednesday.

Bridgestone/Firestone did not return calls for comment.

The suits will be handled by U.S. District Judge J. ``Joe'' Haynes Jr.

Bridgestone/Firestone has conceded that poor tire design and manufacturing at its plant in Decatur, Ill., were partially responsible for defects, but the tire maker also blames Ford for errors in the design of the Explorer sport utility vehicles.

Bridgestone/Firestone set aside $750 million to cover the cost of the tire recall and potential legal liabilities, a move it said was not an admission of legal responsibility.

Bridgestone slashed its group profit forecast for the fiscal year through December 2000 to 13 billion yen ($111.4 million) from 67 billion yen ($574.1 million). The company will announce earnings for the period in February.

Bridgestone/Firestone is expected to post a loss of $500 million in 2000, its first loss in eight years.

â€”â€”â€”â€”

On the Net:

Bridgestone/Firestone: http://www.bridgestone-firestone.com

Ford Motor Co.: http://www.ford.com

Lawsuits filed by Milberg Weiss Bershad Hynes & Lerach LLC: http://www.milberg.com/bridgestone