Lehman ABS Corporation ("LABS" or the Company) is a subsidiary of an American global financial services firm that was founded in 1847.

The original Complaint alleges that Defendants violated Sections 11 and 15 of the Securities Act of 1933. The Complaint alleges that in January 2004, pursuant to a January 16, 2001 trust agreement between Lehman ABS Corporation ('LABS'; the 'Depositor') and U.S. Bank Trust National Association, LABS transferred $150,144,000 aggregate principal amount of 7 3/8% Debentures, Series B, due 2032 (the 'Debentures') issued by Verizon New York Inc. to the Corporate Backed Trust Certificates, Verizon New York Debenture-Backed Series 2004-1 Trust which issued Corporate Backed Trust Certificates, Verizon New York Debenture-Backed Series 2004-1 (the 'Certificates'). An additional $55,144,000 of Debentures were issued later in January. Pursuant to January 2004 Prospectus Supplements to a Prospectus dated November 8, 2002, 8,205,760 Certificates were offered to the investing public at a price of $25 per Certificate.

Specifically, on May 7, 2004, LABS announced that on May 4, 2004, Verizon had filed a Form 15 with the SEC whereby it had elected to suspend its duty to file periodic reports under certain sections of the Securities Exchange Act of 1934 with respect to Verizon New York, and that pursuant to the terms of the Trust, it must be terminated. Verizon's May 4, 2004 announcement triggered an 'event of default' which triggered the sale of the Debentures. Then on May 11, 2004, the Trustee announced that the sole assets of the Trust, $205,144,000 principal amount of Debentures, would be liquidated. On May 11, 2004, the last day of trading, the Certificates closed at $22.00. Notice was sent to holders of the Certificates informing them that they could receive liquidation proceeds under the Trust Agreement or their pro rata portion of the underlying securities of the Trust. They were informed that this election must be made by May 24, 2004 at 3:00 p.m. if they wanted to receive the securities. Otherwise, the Debentures would be sold at the market price beginning on May 25, 2004 and the sales would be completed by May 27, 2004.

The Complaint further alleges that the Prospectus was materially misleading because it omitted to state material information that Defendants had an obligation to disclose. Verizon New York was 1 of 16 domestic operating companies owned by Verizon that filed reports with the SEC. While the Prospectus generally described Verizon's failure to continue as an SEC filer as one of the potential events of default, it failed to disclose that, as of February 2003, Verizon had already deregistered the public indebtedness of six of its domestic operating telephone companies (GTE Southwest Inc., Verizon Delaware Inc., Verizon Hawaii Inc., Verizon Northwest Inc., Verizon Washington DC Inc. and Verizon West Virginia Inc.), and that those deregistrations were made pursuant to a program Verizon had established in early 2003 to change funding procedures and reduce costs, which plan included possible deregistration of domestic operating telephone companies with public indebtedness, including Verizon New York. This information was material to an investor's decision whether to purchase the Certificates, particularly in light of the fact that a sale of the Debentures in the open market could yield substantially less than the $25 per Certificate paid by the Class members. The Complaint alleges that Defendants failed to conduct a reasonable investigation of Verizon with respect to the events of default. The potential for triggering events of a default are key to the value of debentures. Had Defendants done so, they would have discovered Verizon's plan to reduce its indebtedness, which included the deregistration of some or all of its domestic operating companies.

The Defendants named in the Complaint are Lehman ABS Corp., U.S. Bank Trust National Association, Corporate Backed Trust Certificates Verizon New York Debenture-Backed Series 2004-1 Trust, Lehman Brothers Inc., RBC Dain Rauscher and Banc Of America Securities LLC.

According to an article dated June 5, 2006, Plaintiff investors' class action under §§11, 12(a)(2) and 15 of the Securities Act of 1933 alleged that offering prospectuses for Defendants' corporate backed trust certificates ("CBTCs"), containing bonds issued by Verizon New York Inc., ("VZNY"), omitted material information concerning deregistration of certain regional operating companies. The court dismissed Plaintiffs claims, noting that the prospectuses explicitly stated that the issuers made no disclosures about VZNY but rather encouraged investors to refer to VZNY's SEC filings. Citing Azzolini v. CorTS Trust II for Provident Financial Trust I, In re WorldCom Inc. Securities Litigation and 70 F.R. 1506 and 1552, the court held that Defendants were under no duty, in law or regulation, to disclose the February 2003 deregulations. In holding Defendants entitled in making their limited disclosure the court noted that SEC regulations supported their contention that in saying 'look at VZNY' they made all necessary disclosure.