GRAND RAPIDS, Mich. - A federal judge in Michigan on Nov. 29 approved a settlement between a group of shareholders and directors and officers of a corporation that puts in place certain corporate governance measures (Westchester Putnam Counties Heavy and Highway Laborers Local 60 Benefit Funds, et al. v. Stephen P. MacMillan, et al., No. 10-cv-00284, W.D. Mich.).
WILMINGTON, Del. - The foreign representatives of bankrupt Japanese microchip manufacturer Elpida Memory Inc. on Dec. 3 filed a brief in the U.S. Bankruptcy Court for the District of Delaware arguing that the court should approve its motion to sell certain assets to speed the company's global reorganization process (In Re: Elpida Memory Inc., No. 12-10947, Chapter 15, D. Del. Bkcy.).
LOS ANGELES - The federal judge in California presiding over the bankruptcy fraud proceeding of former Major League Baseball player Lenny Dykstra has sentenced him to 6-1/2 months in federal prison, a source told Mealey Publications Dec. 4. The sentence was handed down Dec. 3 (U.S. v. Lenny Kyle Dykstra, No. 11-00415, Chapter 7, C.D. Calif.).
FORT LAUDERDALE, Fla. - A shareholder told a Florida federal court on Nov. 30 that presuit demand upon a company's board of directors would have been futile because a majority of the board is not disinterested because they face a substantial likelihood of liability because of certain alleged misinformation that the board made public (Todd Deehl, Derivatively on Behalf of Mako Surgical Corporation, v. Maurice R. Ferre, et al., No. 12-cv-61238, S.D. Fla.).
WASHINGTON, D.C. - The U.S. Supreme Court on Dec. 3 declined to review the Sixth Circuit U.S. Court of Appeals ruling that participants in General Motors Corp.'s 401(k) plans - who alleged that State Street Bank and Trust Co., an independent fiduciary and investment manager for the plans, breached its fiduciary duties under the Employee Retirement Income Security Act (ERISA), 29 U.S.C.S. § 1001 et seq. by waiting until March 31, 2009, to begin divesting the plans of their holdings in company stock - sufficiently alleged causation under ERISA Section 409(a) and that State Street did not meet the requirements for the safe harbor of ERISA Section 404(c) (State Street Bank and Trust Company v. Raymond M. Pfeil, et al., No. 12-256, U.S. Sup.).
DETROIT - A Michigan federal judge on Nov. 30 declined to dismiss a class action lawsuit alleging that a health insurance company's conduct of incorporating "most favored nation" (MFN) clauses into its contracts with hospitals results in antitrust violations; the judge said the plaintiffs sufficiently stated plausible claims of injury under an antitrust case (The Shane Group Inc., et al. v. Blue Cross Blue Shield of Michigan, No.10-14360, E.D. Mich.; 2012 U.S. Dist. LEXIS 170201).
NEW YORK - A federal district court did not err in dismissing a lead plaintiff's securities class action complaint against a Chinese clothing and apparel company and others because the lead plaintiff failed to plead any of its federal securities law claims, a Second Circuit U.S. Court of Appeals panel ruled Nov. 29 (Westend Group v. Mecox Land Ltd., et al., No. 12-1326, 2nd Cir.; 2012 U.S. App. LEXIS 24541).
ATLANTA - Affirming a federal court's decision, the 11th Circuit U.S. Court of Appeals on Nov. 30 determined that a sublease transferred by the Federal Deposit Insurance Corp. to Iberiabank after it took over the assets of a failed bank is still intact, finding that the FDIC acted within its power to enforce contracts and that a termination clause in the sublease is unenforceable against Iberiabank as the FDIC's trustee (Iberiabank v. Beneva 41-I LLC, et al., No. 11-11195, 11th Cir.; 2012 U.S. App. LEXIS 24696).
CHICAGO - The Seventh Circuit U.S. Court of Appeals on Nov. 29 affirmed the approval of the "rising tide" method used by a receiver to distribute a convicted Ponzi schemer's remaining assets to victims of the $22.6 million scheme, finding that a district court did not abuse its discretion in approving the receiver's distribution plan (Securities and Exchange Commission v. William A. Huber, et al., No. 12-1285, 7th Cir.; 2012 U.S. App. LEXIS 24547). View a complimentary copy of the opinion in the pdf attached below.
KANSAS CITY, Mo. - A majority panel of the Missouri Court of Appeals on Nov. 28 reversed a lower court's decision and remanded a shareholder derivative suit against a company's directors and officers, holding that the shareholder not making presuit demand upon the company's board was excused (New England Carpenters Pension Fund v. David S. Haffner, et al, No. SD31320, Mo. App., Southern Dist., 1st Div.; 2012 Mo. App. LEXIS 1513).
NEW YORK - A Facebook shareholder told a New York federal court on Nov. 28 that facts raise a reasonable doubt regarding the independence of members of Facebook's board of directors and that, therefore, failure to make presuit demand upon the board is excused (Hal Hubuschman v. Mark Zuckerberg, et al., No. 12-cv-07553, S.D. N.Y.). View related prior history, 2012 U.S. Dist. LEXIS 129427.
NEW YORK - A federal judge in New York did not err in dismissing a Racketeer Influenced and Corrupt Organizations Act (RICO) 18 U.S.C.S. §§ 1961 et seq. claim in a shareholder derivative lawsuit because the shareholder did not show that the defendants' failure to assert the Private Securities Litigation Reform Act (PSLRA) as an affirmative defense in its answer to the complaint was an automatic waiver of the defense, a Second Circuit U.S. Court of Appeals panel ruled Nov. 28 (David Gilmore v. Abby Gilmore, et al., No. 11-4091, 2nd Cir.; 2012 U.S. App. LEXIS 24403).
PORTLAND, Ore. - A federal judge in Oregon on Nov. 28 denied a credit-reporting agency's motion for partial summary judgment in a Fair Credit Reporting Act (FCRA) lawsuit, ruling that the agency failed to show that no material issue of fact exists showing that a consumer was denied credit as a result of erroneous information provided in her credit report (Julie Miller v. Equifax Information Services LLC, No. 11-1231, D. Ore.; 2012 U.S. Dist. LEXIS 168894).
PHILADELPHIA - The Third Circuit U.S. Court of Appeals on Nov. 29 ruled that a debtor owed taxes to the U.S. government because the statute of limitations had been suspended during the time she filed two bankruptcies (United States of America v. Marion Balice, No. 12-2765, Chapter 13, 3rd. Cir.; 2012 U.S. App. LEXIS 24567).
NEW YORK - The federal bankruptcy judge presiding over the Chapter 11 bankruptcy of law firm Dewey & LeBoeuf on Nov. 29 gave the Official Committee of Unsecured Creditors authority to prosecute three former partners in connection with the collapse of the firm, which led to its bankruptcy (In Re: Dewey & LeBoeuf, No. 12-12321, Chapter 11, S.D. N.Y. Bkcy.). Subscribers may view the order available within the full article.
GREENVILLE, S.C. - A federal judge in South Carolina on Nov. 29 dismissed a suit in which a student loan debtor sought review of the Department of Education's (DOE) decision to offset her income tax refunds and Social Security benefits in order to collect on her defaulted Direct Parent Loan for Undergraduate Students (PLUS) loan, finding that the loan is not eligible for a teacher loan forgiveness program (Reina Chavez-Romero v. U.S. Department of Education, No. 11-01639, D. S.C.; 2012 U.S. Dist. LEXIS 169258).
WILMINGTON, Del. - A group of secured creditors in the Chapter 11 bankruptcy of alternative energy company Satcon Technology Corp. (STC) on Nov. 27 filed a brief in the U.S. Bankruptcy Court for the District of Delaware objecting to the debtor's emergency motion seeking authorization to enter a settlement in which it would incur post-petition trade debt (In Re: Satcon Technology Corporation, No. 12-12869, Chapter 11, D. Del. Bkcy.).
WILMINGTON, Del. - The State of Wisconsin on Nov. 29 filed a brief in the U.S. Bankruptcy Court for the District of Delaware arguing that bankrupt NewPage Corp.'s Chapter 11 reorganization plan should not be confirmed because it would hinder the state's ability to enforce various environmental laws it alleges that the company has violated (In Re: NewPage Corporation, No. 11-12804, Chapter 11, D. Del. Bkcy.).
RIVERSIDE, Calif. - The California Public Employees' Retirement System (CalPERS) filed a brief in the U.S. Bankruptcy Court for the Central District of California seeking relief from the automatic stay of the City of San Bernardino's Chapter 9 bankruptcy proceeding in order to pursue its rights to ensure that the city is making post-petition contributions to the retirement fund (In Re: City of San Bernardino, No. 12-28006, Chapter 9, C.D. Calif. Bkcy.).
HOUSTON - Remanding a Federal Deposit Insurance Corp. lawsuit against Morgan Stanley & Co. LLC to state court is proper under the equitable remand provision of 28 U.S. Code Section 1452(b), a federal judge in Texas ruled in a Nov. 27 opinion (Federal Deposit Insurance Corp., as receiver for Franklin Bank S.S.B., v. Morgan Stanley & Co. LLC, f/k/a Morgan Stanley & Co. Inc., No. 12-1777, S.D. Texas).
NEW YORK - The indenture trustee in the Chapter 11 bankruptcy of Hawker Beechcraft on Nov. 27 filed a brief in the U.S. Bankruptcy Court for the Southern District of New York objecting to Hawker Beechcraft's plan of reorganization (In Re: Hawker Beechcraft Inc., No. 12-1877, Chapter 11, S.D. N.Y. Bkcy.). Subscribers may view the brief available within the full article.
WASHINGTON, D.C. - U.S. Supreme Court Justice Antonin Scalia on Nov. 27 issued a short order denying bankrupt American Airlines Inc.'s application to stay a Fifth Circuit U.S. Court of Appeals ruling that will permit a vote on whether a union can represent the airline's passenger service agents (American Airlines Inc. v. National Mediation Board, No. 12A512, Chapter 11, U.S. Sup.). View related prior history, 2012 U.S. App. LEXIS 20603.
NEW ORLEANS - A panel of the Fifth Circuit U.S. Court of Appeals on Nov. 28 ruled that a Texas bankruptcy court properly denied the enforcement of the reorganization plan filed by Mexican glassmaker Vitro SAB de CV on grounds that creditors were not scheduled to receive a distribution close to what they were owed (Ad Hoc Group of Vitro Noteholders v. Vitro SAB de CV [In the Matter of: Vitro SAB de CV], No. 12-10542, Chapter 11, 5th Cir.).
NEW YORK - The dismissal of a man's claims that the law firm representing his mortgage lender and his loan servicer violated the Fair Dept Collection Practices Act (FDCPA) 15 U.S.C.S. § 1692e, and Connecticut Unfair Trade Practices Act (CUTPA) was affirmed Nov. 27 by a Second Circuit U.S. Court of Appeals panel that agreed with a federal judge that the plaintiff failed to state claims under the statutes (Michael V. Gabriele v. American Home Mortgage Servicing Inc., et al., No. 12-985-cv, 2nd Cir.; 2012 U.S. App. LEXIS 24478).
ALBANY, N.Y. - A federal judge in New York on Nov. 28 granted default judgment in favor of the U.S. government, finding that a student loan debtor owes the government $3,321.46 in unpaid principal and prejudgment interest, as well as post-judgment interest and fees. (United States of America v. Robert A. Steinkamp, No. 12-00132, N.D. N.Y.; 2012 U.S. Dist. LEXIS 168606).