JPMorgan To Pay $20 Million For Alleged Misuse Of Lehman Funds

    WASHINGTON, D.C. - JPMorgan Chase Bank NA on April 3 agreed to pay $20 million to settle a U.S. Commodity Futures Trading Commission (CFTC) suit alleging that it mishandled Lehman Brothers Inc. customers' funds during Lehman's collapse (In re: JPMorgan Chase Bank NA, No. 12-17, CFTC).

    Direct Marketer Velo Holdings Files For Chapter 11 Bankruptcy With Debts Of $713M

    NEW YORK - Velo Holdings Inc., the parent company of direct marketing services company V2V Holdings LLC, on April 2 filed for Chapter 11 bankruptcy in the U.S. Bankruptcy Court for the Southern District of New York, citing $713 million in liabilities and only $350 million in assets (In Re: Velo Holdings Inc., No. 12-11384, Chapter 11, S.D. N.Y. Bkcy.).

    9th Circuit: Subscribers Fail To Allege That Cable Companies Harm Competition

    SAN FRANCISCO - Cable and satellite television subscribers' allegations that television programmers and distributors violated federal antitrust law by bundling channels failed to sufficiently allege injury to competition, as opposed to injury to consumers, the Ninth Circuit U.S. Court of Appeals ruled March 30 in affirming the dismissal of the subscribers' claims (Rob Brantley, et al. v. NBC Universal, Inc., et al.,  No. 09-56785, 9th Cir.; 2012 U.S. App. LEXIS 6441).

    Directors And Officers Say Committee Recommends Dismissal Of Shareholder Suit

    LOS ANGELES - The defendants in a shareholder derivative lawsuit say in a Dec. 2 filing in California federal court that the suit should be dismissed because a special committee assigned by the company's board of directors has determined that the company should not support the litigation (IP Telesis, Inc, on behalf of itself and all other stockholders of Velocity Networks, Inc. v. Velocity Networks, Inc., et al., No. 11-cv-09950, C.D. Calif.).

    D.C. Circuit Affirms, Reverses Orders In Suit Against Fannie Mae

    WASHINGTON, D.C. - In a derivative suit arising from Federal National Mortgage Association's (Fannie Mae) accounting issues, the District of Columbia Circuit U.S. Court of Appeals on March 30 affirmed an order substituting Fannie Mae's conservator, the Federal Housing Finance Agency (FHFA), as plaintiff, reversed the denial of the FHFA's motion for voluntary dismissal and vacated as moot the granting of Fannie Mae's motion to dismiss on the grounds of claim preclusion (James Kellmer v. Franklin Raines, et al., No. 09-5253, D.C. Cir.; 2011 U.S. App. LEXIS 26245).

    Judge: Investor Fails To Plead Scienter Against Medical Device Manufacturer

    GRAND RAPIDS, Mich. - A federal judge in Michigan on March 30 dismissed an amended securities class action complaint, ruling that lead plaintiffs failed to plead an actionable misrepresentation, scienter or loss causation in making their federal securities law claims against a medical technology company and two of its senior officers (City of Pontiac General Employees' Retirement System, et al. v. Stryker Corp., et al., No. 10-520, W.D. Mich.).

    Shareholders Pleaded Material Misrepresentations In Securities Suit, Judge Rules

    NEW YORK - Lead plaintiffs in a securities class action lawsuit against Transocean Ltd. and others have properly pleaded material misrepresentations in making the federal securities law claims against the defendants for alleged misrepresentations made in connection with a merger between an oil and gas drilling contractor and Transocean, a federal judge in New York ruled March 30 (Bricklayers and Masons Local Union No. 5 Ohio Pension Fund v. Transocean Ltd., et al., No. 10-7498, S.D. N.Y.' 2012 U.S. Dist. LEXIS 46202).

    Plan Sponsor's Actions Related To Revenue Sharing Breached Fiduciary Duties

    JEFFERSON CITY, Mo. - The sponsor of 401(k) plans breached its fiduciary duties under the Employee Retirement Income Security Act by failing to monitor the record-keeping fees paid by the plans and by failing to negotiate rebates from the investment companies that offered products to the plans' participants, a federal judge in Missouri ruled March 31 (Ronald Tussey, et al. v. ABB, Inc., et al., No. 2:06-CV-04305-NKL, W.D. Mo.; 2012 U.S. Dist. LEXIS 45240).

    7th Circuit Vacates Dismissal Of Suit Against Ponzi Victim's Auditor

    CHICAGO - The Seventh Circuit U.S. Court of Appeals on April 3 vacated a district court's dismissal of a suit filed by the bankruptcy trustee of a Ponzi scheme victim mutual funds group against the group's auditor, ruling that the claim against the auditor is sufficient (Ronald R. Peterson, as Chapter 7 trustee for the estates of Lancelot Investors Fund, L.P., et al., v. McGladrey & Pullen, LLP, et al., No.10-3770, 7th Cir.; 2012 U.S. App. LEXIS 6608).

    Morgan Stanley Agrees To Review Foreclosure Actions Taken By Subsidiary

    WASHINGTON, D.C. - The Federal Reserve Board on April 3 announced that it had reached an agreement with Morgan Stanley in which the bank agreed to review foreclosure actions initiated by Saxon Mortgage Services Inc. in 2009 and 2010 for patterns of negligence and misconduct. Review attached consent order.

    Defendants Claim Board Members Cannot Be Sued For Breach Of Fiduciary Duty

    WILMINGTON, Del. - Defendants in a breach of fiduciary duty lawsuit brought by shareholders argue in an April 2 brief in a Delaware court that members of the company's board of directors cannot be sued for breach of fiduciary duty because they are protected by the company's certificate of incorporation (In Re Craftmade International, Inc. Shareholders Litigation, No. 6950-VCL, Del. Chanc.).  Subscribers may access the brief in support of motion to dismiss within the full update.

    DirecTV Files Complaint With FCC Over Bankrupt Tribune's Alleged Contract Failure

    WASHINGTON, D.C - DirecTV LLC filed a complaint with the Federal Communications Commission on April 2, contending that bankrupt Tribune Co. is reneging on its broadcast carriage agreement between the two companies, resulting in millions of DirecTV customers losing access to programming Tribune said it would provide (DirecTV LLC v. Tribune Company, No. N/A, FCC).   Subscribers may view the DirecTV complaint within the full update.

    Bankrupt Land America Proposes New $37.85M Deal With Insurers

    RICHMOND, Va. - Bankrupt Land America Financial Group Inc. on March 30 moved in the U.S. Bankruptcy Court for the Eastern District of Virginia for approval of a modified settlement agreement of $37.85 million with Certain Underwriters of Lloyd's, London, contending that initial objections to the deal had been addressed (In Re: Land America Financial Group Inc., No. 08-35994, Chapter 11, E.D. Va. Bkcy.).  Subscribers may view the motion within the full update.

    Settlement Offer In ATM Fee Case Does Not Moot Class Action, Judge Rules

    ST. LOUIS - Dismissal of a consumer class action lawsuit alleging a violation of the Electronic Funds Transfer Act (EFTA) is not proper because a bank's offer of judgment did not extend to putative class members, a federal judge in Missouri ruled March 30 (Gary Mertz v. Lindell Bank & Trust Co., No. 10-2098, E.D. Mo.; 2012 U.S. Dist. LEXIS 44835).

    Judge: Fund Failed To Plead Securities Claims With Requisite Scienter

    CHICAGO - Dismissal of a lead plaintiff's second amended securities class action complaint is proper, a federal judge in Illinois ruled March 29, because it failed to plead scienter, falsity or a material misrepresentation (Garden City Employees' Retirement System, et al. v. Anixter International Inc., No. 09-5641, N.D. Ill.; 2012 U.S. Dist. LEXIS 43196).

    MF Global Creditors Seek Direct Appeal To 2nd Circuit Regarding Segregated Accounts

    NEW YORK - A wealth management company that is a creditor in the Chapter 11 bankruptcy of MF Global Holdings Ltd. (MFGH) on March 30 moved in the U.S. Bankruptcy Court for the Southern District of New York for certification of its appeal to the Second Circuit U.S. Court of Appeals (In Re: MF Global Holdings Ltd., No. 11-15059, Chapter 11, S.D. N.Y. Bkcy.).  See related 2012 Bankr. LEXIS 995.  Subscribers may view the motion within the full article.

    9th Circuit Panel Says Shareholder Failed To Prove Presuit Demand Futility

    SAN FRANCISCO - Affirming a lower court's dismissal of a shareholder derivative lawsuit, a Ninth Circuit U.S. Court of Appeals panel on April 2 said in an unpublished opinion that the shareholder did not show that presuit demand on a company's board of directors would have been futile (In re: International Game Technology Derivative Litigation,  No. 10-16726, 9th Cir.; 2012 U.S. App. LEXIS 6582).

    AFA Foods, Citing 'Pink Slime' Outcry, Liquidity Crisis, Files For Bankruptcy

    WILMINGTON, Del. - AFA Foods Inc., the meat-processing company that became associated with a ground beef additive known as "pink slime," filed for Chapter 11 bankruptcy in the U.S. Bankruptcy Court for the District of Delaware on April 2, citing decreasing demand for its product and unfounded public outcry over the additive (In Re: AFA Investment Inc., No. 12-11127, Chapter 11, D. Del. Bkcy.).  Subscribers may view the filing in the full update.

    Directors And Officers Ask Court Not To Dismiss Action Without Prejudice

    HOUSTON - Arguing that a shareholder bringing a shareholder derivative lawsuit should not be allowed to voluntarily dismiss its suit without prejudice, directors and officers of a corporation urged a Texas federal court on March 29 to dismiss the suit with prejudice so the plaintiff could not move the case to a different forum (City of Sterling Heights Police & Fire Retirement System, Derivatively on behalf of Helix Energy Solutions Group, Inc. v. Owen Kratz, et al., No. 11-cv-02537, S.D. Texas).

    Federal Judge Dismisses All Claims Brought Against FDIC As Failed Bank's Receiver

    SAVANNAH, Ga. - In a case in which a plaintiff sued the Federal Deposit Insurance Corp. in its capacity as receiver for a failed bank, asserting fraud, breach of contract and other allegations, a federal judge in Georgia on March 30 denied the plaintiff's motion to remand and granted the FDIC's motion for summary judgment, dismissing the suit (Lokey v. Federal Deposit Insurance Corp., et al., No. 11-00146, S.D. Ga.; 2012 U.S. Dist. LEXIS 45579).

    Federal Judge Denies Arbitration In Loan Collection Suit Filed Against Santander

    CHICAGO - A federal judge in Illinois on April 2 denied a bank's motion to compel arbitration and stay proceedings in a suit in which a plaintiff alleges that the bank made unauthorized phone calls in an attempt to collect on a loan in violation of the Telephone Consumer Protection Act (TCPA) (Pereira v. Santander Consumer USA, Inc., No. 11-08987, N.D. Ill.; 2012 U.S. Dist. LEXIS 46155).

    Genzyme Shareholder Class Dismissed For Lack Of Scienter By Mass. Federal Judge

    BOSTON - A Massachusetts federal judge on March 30 dismissed a purported class action by shareholders of Genzyme Corp., finding that the plaintiffs failed to show scienter that the company and its executives failed to disclose problems at manufacturing plants and with one of its biologic drugs and inflated the company stock price (In Re: Genzyme Corporation, No. 09-11267; John Rahn, et al. v. Genzyme Corporation, et al.; Vivian Oh, et al. v. Genzyme Corp., et al., No. 1:09-cv-11299, D. Mass., Boston Div.; 2012 U.S. Dist. LEXIS 44336).

    Citing Debts Of $1.42B, Pinnacle Airlines Files For Chapter 11 Bankruptcy

    NEW YORK - Pinnacle Airlines Corp., the parent company of Pinnacle Airlines and Colgan Air, filed for Chapter 11 bankruptcy on April 2 in the U.S. Bankruptcy Court for the Southern District of New York, citing losses from the high cost of fuel (In Re: Pinnacle Airlines Corporation, No. 12-11343, Chapter 11, S.D. N.Y. Bkcy.).

    9th Circuit Affirms Credit Union's Summary Judgment Award In Lending Law Action

    SAN FRANCISCO - A federal judge in California did not abuse his discretion in awarding summary judgment to a credit union in a Truth in Lending Act (TILA) lawsuit, a Ninth Circuit U.S. Court of Appeals panel ruled March 29 after finding that a man submitted a sham affidavit in opposition to the defendant's motion (Sylwester Slojewski v. Polam Federal Credit Union, No. 11-15018, 9th Cir.; 2012 U.S. App. LEXIS 6379).

    Pfizer Shareholder Class OK'd By MDL Judge For Disclosures About Celebrex, Bextra

    NEW YORK - A New York federal judge overseeing the Pfizer Inc. securities multidistrict litigation on March 29 certified a class of shareholders who allege that their stock value was affected by misstatements and omissions concerning the safety of the pain drugs Celebrex and Bextra (In Re: Pfizer Inc. Securities Litigation, MDL Docket No. 1688, Nos. 04-cv-9866 and 05-md-1688, S.D. N.Y.; 2012 U.S. Dist. LEXIS 44330).