LexisNexis® Legal Newsroom
Bankruptcy Judge Approves $275M Stock Purchase Deal For K-V Discovery Solutions

NEW YORK - The federal bankruptcy judge presiding over the Chapter 11 proceeding of pharmaceutical company K-V Discovery Solutions Inc. on June 7 approved a $275 million stock purchase plan that will help the company exit bankruptcy (In Re: K-V Discovery Solutions Inc., No. 12-13346, Chapter 11, S.D. N.Y. Bkcy.).

4th Circuit Upholds Cigarette Trafficking Conviction

RICHMOND, Va. - The Fourth Circuit U.S. Court of Appeals affirmed the cigarette trafficking conviction of a man who bought cigarettes in Virginia and sold them in New York, saying in a June 6 opinion that Congress expressly allowed government agents to use contraband cigarettes in law enforcement operations (United States of America v. Nawaf M. Hasan, No. 12-4442, 4th Cir.; 2013 U.S. App. LEXIS 11385).

Magistrate Judge Refuses To Bifurcate Discovery In Loan Modification Class Action

NEW YORK - A federal judge in New York on June 4 denied a loan servicer's request to bifurcate discovery in a class action lawsuit accusing it of violating the state's unfair and deceptive trade practices act when processing loan modification applications under the Home Affordable Modification Program (HAMP), finding that allowing the plaintiffs to proceed with discovery related to their claims and class certification would not be unduly burdensome to the defendant (Ranujoy D. Pandit, et al. v. Saxon Mortgage Services Inc., No. 11-3935, E.D. N.Y.; 2013 U.S. Dist. LEXIS 79111).

Court Affirms Disclosure Of Chrysotile Study Data, Georgia-Pacific Communications

NEW YORK - The failure of Georgia-Pacific LLC (GP) to disclose its intimate involvement in supposedly objective scientific studies on the effects of chrysotile asbestos warranted disclosure of the underlying data and in-camera review of communications between a study author and its counsel, a New York court held June 6 (Matter of New York City Asbestos Litigation; Weitz & Luxenberg v. Georgia-Pacific LLC, No. 9535, N.Y. Sup. App. Div., 1st Dept.).

MFGI Customers: Insurance Payments For MFGH Officers Should Be Fixed At $40M

NEW YORK - A group calling itself the customer representatives in an ongoing class action against former directors and officers of MF Global Inc. (MFGI), an affiliate of bankrupt MF Global Holdings Ltd. (MFGH), on June 6 filed a brief arguing that the cap on what insurers can pay defendants to cover defense costs should be set at a "hard cap" limit of $40 million (In Re: MF Global Holdings Ltd., No. 11-15059, Chapter 11, S.D. N.Y. Bkcy.).

2nd Circuit Affirms Dismissal Of State, Federal Claims In Securities Lawsuit

NEW YORK - A federal district court did not err in dismissing a consolidated securities lawsuit against debenture sellers because investors failed to plead any of the state or federal securities law claims, a Second Circuit U.S. Court of Appeals panel ruled June 3 (D. Kent Sissel, et al. v. Maxine Eimicke, et al., Nos. 12-952 and 12-965, 2nd Cir.; 2013 U.S. App. LEXIS 11059).

New York Justice: Railroad Owed Duty To Cashier At Company-Exclusive Diner

NEW YORK - A railroad can be held liable for asbestos exposures suffered by a cashier at a diner operated exclusively for the employees of that railroad, a New York justice held in an opinion posted June 6 (Morton Frieder and Rosalind Frieder v. Long Island Railroad, et al., No. 190212/12, N.Y. Sup., New York Co.).

Judge Grants Preliminary Injunction Against Insurance Broker's Former Employee

NEW YORK - A New York federal judge on June 4 granted a preliminary injunction prohibiting an insurance broker's former employee from future violations of an employee agreement with regard to the confidentiality and nonsolicitation provisions (Dewitt Stern Group Inc. v. Richard Eisenberg, No. 13-3060, S.D. N.Y.; 2013 U.S. Dist. LEXIS 78598).

AMR Reorganization Plan Would Issue Stock In New Company To Satisfy Some Claims

NEW YORK - Bankrupt AMR Corp., the parent company of American Airlines Inc., on June 5 filed a declaration supporting its amended Chapter 11 reorganization plan that calls for the full satisfaction of general unsecured guaranteed claims by issuing new common stock in the company formed by the merger of American Airlines with US Airways Inc. (In Re: AMR Corp., No. 11-15463, Chapter 11, S.D. N.Y. Bkcy.).

2nd Circuit Lifts Stay On 2-Pill Plan B Contraceptive, Expedites FDA's Appeal

NEW YORK - The Second Circuit U.S. Court of Appeals on June 5 said the federal government failed to meet the standard to obtain a stay of a lower court order that the Food and Drug Administration immediately make the older, two-pill Plan B emergency contraceptive available without prescription and without age or sales restrictions (Annie Tummino, et al. v. Margaret Hamburg, et al., No. 13-1690, 2nd Cir.).

Trial Court Properly Dismissed Asbestos Coverage Suit, N.Y. Appeals Panel Says

NEW YORK - The First Department New York Supreme Court Appellate Division on June 4 found that a trial court did not err in dismissing an asbestos coverage suit filed by excess insurers because the issues in the New York suit will be litigated in a similar suit filed in Delaware state court (Century Indemnity Co. et al., v. Liberty Mutual Insurance Co. et al., No. 9380 105491/10, N.Y. Sup., App. Div., 1st Dept.; 2013 N.Y. App. Div. LEXIS 3873).

2nd Circuit Affirms Decision For TASER In Personal Injury Case

NEW YORK - The Second Circuit U.S. Court of Appeals on June 4 upheld summary judgment for the defendant in a product liability action, concluding that warnings regarding potential injuries contained in a release form were sufficient (Jeff Kandt v. TASER International Inc., No. 12-3041, 2nd Cir.; 2013 U.S. App. LEXIS 11143).

Panel Affirms Ruling In Insurers' Favor In Directors, Officers Coverage Dispute

NEW YORK - The Second Circuit U.S. Court of Appeals on June 4 held that excess insurance policies' plain language requires the "payment of losses" and not simply the accrual of liability to reach the attachment points to trigger excess coverage, affirming a lower court's ruling in favor of two excess insurers in a directors and officers liability coverage dispute (Mehdi Ali, et al. v. Federal Insurance Co., et al., No. 11-5000, 2nd Cir.; 2013 U.S. App. LEXIS 11157).

Judge: Future Attorney Fees Will Lead To More Than $75,000 In Damages

BALTIMORE - A federal judge in Maryland on June 3 refused to remand a lawsuit brought by a man claiming that his mortgage lender and loan servicer violated the terms of a settlement agreement, after finding that his request for attorney fees will exceed $10,000 and, thus, result in a request for damages in excess of the $75,000 jurisdictional limit (Derick Williams v. The Bank of New York Mellon, et al., No. CCB-13-680, D. Md.; 2013 U.S. Dist. LEXIS 77364).

MF Global, Bank Of America Agree That $4M Claim Is Allowed

NEW YORK - Bankrupt MF Global Holdings Ltd.(MFGH) and Bank of America on May 31 stipulated to an agreement in a federal bankruptcy court in New York in which the bank will be allowed to make an unsecured claim for $4 million against MFGH (In Re: MF Global Holdings Ltd., No. 11-15059, Chapter 11, S.D. N.Y. Bkcy.).

2nd Circuit: Allegations Of Fraudulent Conveyance Belong To Bankruptcy Trustee

NEW YORK - The Second Circuit U.S. Court of Appeals on June 3 affirmed a district court's ruling determining that allegations of fraudulent conveyances by directors of a bankrupt company were the property of the bankruptcy trustee, not individual investors in the debtor company (D. Kent Sissel, et al. v. Maxine Eimicke, et al., No.12-952, Chapter 11, 2nd Cir.; 2013 U.S. App. LEXIS 11059).

2nd Circuit Vacates Denial Of Petition To Confirm International Award

NEW YORK - After determining that a New York federal court did not initially decide whether a Brazilian entity and others agreed to arbitration disputes, the Second Circuit U.S. Court of Appeals on June 3 vacated a ruling that denied a petition to confirm an international arbitration award in a dispute over a purchase and sale agreement (VRG Linhas Aereas S.A. v. Matlinpatterson Global Opportunities Partners II L.P., et al., No. 12-593, 2nd Cir.; 2013 U.S. App. LEXIS 11074).

2nd Circuit Reverses Dismissal Of Claims Of Firings Due To Union Membership

NEW YORK - A federal district court erred in dismissing a class of unionized Connecticut state employees' claims that their First Amendment rights were violated when they were fired based on their union membership and the plaintiffs' claims against the governor and the secretary of Connecticut's Office of Policy and Management in their individual capacities, the Second Circuit U.S. Court of Appeals ruled May 31 (State Emp Bargaining Agent Coalition, Ind & O/B/O all of its members, et al. v. John G. Rowland, I/O as Gov. of the State of Connecticut, et al., No. 11-3061, 2nd Cir.; 2013 U.S. App. LEXIS 10970).

2nd Circuit Reverses: Oprah Winfrey's Use Of Phrase Not Fair

NEW YORK - A New York federal judge erroneously dismissed allegations of trademark infringement, false designation of origin and reverse confusion emanating from Oprah Winfrey's adoption of the slogan "Use Your Power," the Second Circuit U.S. Court of Appeals ruled May 31 (Simone Kelly-Brown and Own Your Power Communications Inc. v. Oprah Winfrey et al., No. 12-1207, 2nd Cir.).

Bankruptcy Judge Allows FAA Claims Of More Than $20M Against AMR Corp.

NEW YORK - The federal bankruptcy judge presiding over the Chapter 11 proceeding of AMR Corp., the parent company of American Airlines Inc., on May 31 ruled that the Federal Aviation Administration has allowed claims of more than $20 million against AMR and its affiliates (In Re: AMR Corp., No.11-15463, Chapter 11, S.D. N.Y. Bkcy.).

Several State-Law Claims Against Apple Are Dismissed On Eve Of Antitrust Trial

NEW YORK - The federal judge in New York overseeing the multidistrict litigation against Apple Inc. on claims that the company conspired with several publishers to fix prices of electronic books approved the dismissal of several state-law claims on May 29, just days before the June 3 trial date (In re: Electronic Books Antitrust Litigation, No. 11 MD 2293, S.D. N.Y.; State of Texas, et al. v. Penguin Group $(USA$) Inc., et al., No. 12 Civ. 3394, S.D. N.Y.).

Panel Says No Duty To Defend; Insured Failed To Comply With Notice Provision

NEW YORK - An insurer has no duty to defend or indemnify its insured for a personal injury claim because the insured failed to comply with the insurance policy's notice provisions, the First Department Appellate Division of the New York Supreme Court said May 28 (Richard Rivera v. Core Continental Construction 3 LLC, et al., No. 302797/10, N.Y. Sup., App. Div. 1st Dept.; 2013 N.Y. App. Div. LEXIS 3711).

2nd Circuit Says Affiliate Of Bankrupt A&P Did Not Violate Lease

NEW YORK - A panel of the Second Circuit U.S. Court of Appeals on May 29 ruled that an affiliate of bankrupt The Great Atlantic & Pacific Tea Co. Inc. did not violate its lease by failing to get consent from its landlord to sublet part of its storefront to another business (Gator Monument Partners v. The Great Atlantic & Pacific Tea Company Inc. $(In Re: The Great Atlantic & Pacific Tea Company Inc.$), No. 12-3466, Chapter 11, 2nd Cir.; 2013 U.S. App. LEXIS 10741).

Motion To Add Plaintiffs To Brookhaven Laboratory Suit Denied In New York Court

RIVERHEAD, N.Y. - The Suffolk County, N.Y., Supreme Court posted an order May 29 denying a motion to intervene in a lawsuit against the operator of the Brookhaven National Laboratory; the plaintiffs were granted leave to refile the motion with sufficient details to satisfy statutory causation pleading requirements (Barbara Osarczuk, et al. v. Associated Universities Inc., No. 2836/1996, N.Y. Sup., Suffolk Co.; 2013 N.Y. Misc. LEXIS 2248).

Bankruptcy Judge OKs Deal With Dewey & LeBoeuf CEO, Insurer For More Than $19.5M

NEW YORK - The federal bankruptcy judge presiding over the Chapter 11 bankruptcy case of former law firm Dewey & LeBoeuf on May 30 approved a settlement valued at more than $19.5 million reached among the Dewey & LeBoeuf Liquidation Trust, XL Specialty Insurance Co. and Steven H. Davis, which resolves all claims held by the Liquidation Trust against Davis and XL (In Re: Dewey & LeBoeuf, No. 12-12321, Chapter 11, S.D. N.Y. Bkcy.).