CLEVELAND - Dismissal of a consumer's state and federal debt collection law claims is proper because the consumer failed to bring the claims within the proper statute of limitations periods, a federal judge in Ohio ruled Oct. 30 in dismissing the consumer's complaint (Paul Popov v. Litton Loan Servicing LP, et al., No. 12-169, N.D. Ohio; 2012 U.S. Dist. LEXIS 155471).
SAN FRANCISCO - A California federal magistrate judge on Oct. 30 found that a group of homeowners' claims that their mortgagee improperly forced them to maintain excessive flood insurance coverage failed because both the respective deeds of trust and federal law permit a lender to require flood insurance equal to the replacement cost value (RCV) of a home (Clifford McKenzie, et al. v. Wells Fargo Home Mortgage Inc., No. 3:11-cv-04965, N.D. Calif.; 2012 U.S. Dist. LEXIS 155480).
NEW YORK - The Official Committee of Unsecured Creditors in the Chapter 11 bankruptcy case of Eastman Kodak Co. on Oct. 31 moved in the U.S. Bankruptcy Court for the Southern District of New York for authority to prosecute and settle avoidance claims against the second-lien parties (In Re: Eastman Kodak Company, No. 12-10202, Chapter 11, S.D. N.Y. Bkcy.). Subscribers may view the motion available within the full article.
FORT LAUDERDALE, Fla. - A company's directors and officers argued in a Florida federal court on Oct. 31 that shareholders have failed to show that the directors and officers have made any public statements that are violations of their fiduciary duty to shareholders (Todd Deehl, Derivatively on Behalf of Mako Surgical Corporation, v. Maurice R. Ferre, et al., No. 12-cv-61238, S.D. Fla.). Subscribers may view the brief available within the full article.
WILMINGTON, Del. - The federal bankruptcy judge in Delaware presiding over the Chapter 11 proceeding of Vertis Holdings Inc. on Nov. 1 approved $150 million in post-petition financing that may pave the way for the company to continue operating and search for a stalking horse bidder (In Re: Vertis Holdings Inc., No. 12-12821, Chapter 11, D. Del. Bkcy.). Subscribers may view the order available within the full article.
NEW YORK - Bankrupt commercial real estate company Grubb & Ellis Co. on Oct. 31 filed a brief in the U.S. Bankruptcy Court for the Southern District of New York arguing that a former agent with the company is not entitled to file a claim for a commission he earned after the company filed its bankruptcy petition (In Re: Grubb & Ellis Company, No. 12-10685, Chapter 11, S.D. N.Y. Bkcy.). Subscribers may view the brief available within the full article.
PROVIDENCE, R.I. - The Rhode Island Economic Development Corp. (RIEDC) on Nov. 1 sued former Major League Baseball pitcher Curt Schilling and a group of companies in Rhode Island state court in relation to Schilling's failed business venture, which filed for Chapter 7 bankruptcy (Rhode Island Economic Development Corporation v. Wells Fargo Securities, et al., No. N/A, R.I. Super., Providence Co.). Subscribers may view the complaint available within the full article.
HOUSTON - Staying discovery in a securities lawsuit filed by the Federal Deposit Insurance Corp. against Morgan Stanley & Co. LLC is proper because no motion to dismiss is pending, a federal judge in Texas ruled Oct. 30 (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). View related prior history, 2012 U.S. Dist. LEXIS 15759.
CINCINNATI - A panel of the Sixth Circuit U.S. Court of Appeals on Oct. 30 reversed a ruling by a district court and held that a debtor's lawsuit related to a traffic accident that occurred prior to his filing for bankruptcy was not barred by judicial estoppel because his failure to include the action in his list of assets was inadvertent (Michael Stephenson v. Matthew Malloy, No. 11-1671, Chapter 7, 6th Cir.; 2012 U.S. App. LEXIS 22349).
NEW ORLEANS - A panel of the Fifth Circuit U.S. Court of Appeals on Oct. 29 ruled that a bankruptcy court properly confirmed a Chapter 13 bankruptcy plan and that it was not an indication of bad faith on the debtors' part that they did not use their monthly Social Security income to pay their creditors (S.J. Beaulieu Jr. v. Benjamin Ragos, et al. [In the Matter of: Benjamin Ragos], No. 11-31046, Chapter 13, 5th Cir.; 2012 U.S. App. LEXIS 22334).
CLEVELAND - A federal judge in Ohio on Oct. 30 granted Deutsche Bank National Trust Co.'s motion to dismiss a suit in which a borrower sought to nullify a mortgage that was assigned to Deutsche Bank after the failure of the bank that originally issued the loan, ruling that the borrower does not have standing to challenge the assignment of the mortgage (Paul Popov v. Deutsche Bank National Trust Co., et al., No. 12-00170, N.D. Ohio; 2012 U.S. Dist. LEXIS 155498).
SAN DIEGO - After finding that numerous claims asserted by a time-share owner who alleged that resort properties contained mold and water damage failed, a California federal judge on Oct. 30 granted summary judgment in favor of a group of companies that own the resorts on all of the claims asserted against them (Hermengildo ["Jay"] Martinez, on his own behalf and on behalf of all others similarly situated v. The Welk Group, et al., No. 09-2883, S.D. Calif.; 2012 U.S. Dist. LEXIS 155550).
PRESCOTT, Ariz. - The Federal Deposit Insurance Corp. has not met its burden regarding the amount of a deficiency owed by borrowers, a federal judge in Arizona ruled Oct. 31, denying the motion for summary judgment by the FDIC, which, as the receiver for a failed bank, sued to recover more than $18 million from the borrowers pursuant to their defaulted loans (Federal Deposit Insurance Corp. v. Albert Wiseman, et al., No. 11-08157, D. Ariz.; 2012 U.S. Dist. LEXIS 155986).
WASHINGTON, D.C. - A Second Circuit U.S. Court of Appeals' ruling that a pension fund has standing to assert claims for relief on behalf of mortgage-backed securities purchasers even though the pension fund lacks standing to assert the claims on its own behalf directly conflicts with U.S. Supreme Court and First Circuit U.S. Court of Appeals precedent, Goldman Sachs & Co. and two of its subsidiaries argue in an Oct. 26 petition for writ of certiorari (Goldman, Sachs & Co., et al. v. NECA-IBEW Health & Welfare Fund, No. n/a, U.S. Sup.). A complimentary copy of the writ of certiorari is available in the pdf attached below.
NEW ORLEANS - The Fifth Circuit U.S. Court of Appeals on Oct. 29 affirmed financial advisory firm Mutual Concepts Inc.'s $1 million judgment against First National Bank of Omaha (FNB) but reversed an award of attorney fees in a suit over a credit card marketing contract, finding that Nebraska law, not Texas law, controls the dispute (Mutual Concepts Inc. v. First National Bank of Omaha, No. 11-20908, 5th Cir.; 2012 U.S. App. LEXIS 22337).
CHICAGO - Shareholders have properly shown that an operator of for-profit professional schools and colleges and certain of its executive officers violated federal securities laws by misrepresenting the company's business and financial condition, a federal judge in Illinois ruled Oct. 30 (Thurman Ross v. Career Education Corp., et al., No. 12-276, N.D. Ill.; 2012 U.S. Dist. LEXIS 155037).
SAN FRANCISCO - An apartment complex fails to allege actionable conduct by its lender under the California unfair competition law (UCL),Cal. Bus. & Prof. Code § 17200, but a loan document purporting to exclude liability goes too far and cannot bar the claims, a federal judge held Oct. 26 in dismissing the claims with leave to amend (Three Crown Apartments v. PNC Bank, No. 12-3579, N.D. Calif.; 2012 U.S. Dist. LEXIS 154879).
SAN JOSE, Calif. - A federal judge in California on Oct. 29 refused to allow a woman's request to dismiss without prejudice her lawsuit against Wells Fargo Bank N.A. and a title company and instead granted the defendants' motion to dismiss the action, saying the plaintiff's causes of action are preempted by the Home Owner's Loan Act (HOLA) (Arcelia G. Gonzalez v. Wells Fargo Bank, et al., No. 12-cv-03842 EJD, N.D. Calif.; 2012 U.S. Dist. LEXIS 154851).
SAN FRANCISCO - A woman whose tablet computer underwent repairs and was given an extended warranty lacks sufficient injury to pursue California unfair competition law (UCL) Cal. Bus. & Prof. Code § 17200 claims, a federal judge held Oct. 26 (Tina Baba, Ray Ritz and Jon Taylor, et al. v. Hewlett Packard Co., No. 09-5946, N.D. Calif.; 2012 U.S. Dist. LEXIS 154326).
NEW YORK - Bankrupt law firm Dewey & LeBoeuf on Oct. 30 filed a brief in the U.S. Bankruptcy Court for the Southern District of New York, arguing that the bankruptcy judge presiding over the case should direct the U.S. trustee to disband the Official Committee of Former Partners (In Re: Dewey & LeBoeuf, No. 12-12321, Chapter 11, S.D. N.Y. Bkcy.). Subscribers may view the brief available within the full article.
WILMINGTON, Del. - Bankrupt New Page Corp. on Oct. 29 moved in the U.S. Bankruptcy Court for the District of Delaware for $850 million in financing to help it exit Chapter 11 bankruptcy (In Re: New Page Corporation, No. 11-12804, Chapter 11, D. Del. Bkcy.). Subscribers may view the motion available within the full article.
WILMINGTON, Del. - A company's directors and officers claimed in a Delaware court on Oct. 26 that a shareholder did not state with particularity why presuit demand upon the company's board of directors would have been futile (In Re China Agritech, Inc. Shareholder Derivative Litigation, No. 7163-VCL, Del. Chanc.). Subscribers may view the brief available within the full article.
NEW YORK - Bankrupt aircraft company Hawker Beechcraft Inc. on Oct. 29 filed an amended plan of reorganization in the U.S. Bankruptcy Court for the Southern District of New York that would convert all prepetition debt obligations to equity in a reorganized version of the company and seeks $530 million in exit financing (In Re: Hawker Beechcraft Inc., No. 12-11873, Chapter 11, S.D. N.Y. Bkcy.). Subscribers may view the plan available within the full article.
NEW YORK - The Allied Pilots Association (APA) Negotiating Committee, which is locked in negotiations with bankrupt AMR Corp., the parent company of American Airlines Inc., on Oct. 30 issued an official statement on the APA's blog stating that "there is potential for an agreement" with the airline but that it "all comes down to a number of moves management will need to make on key deal points" to bring the pilots "into the realm of industry standard" (In Re: AMR Corporation, No.11-15463, Chapter 11, S.D. N.Y. Bkcy.).
NEWARK, N.J. - The federal judge in New Jersey overseeing the multidistrict litigation against pharmaceutical giant Merck & Co. Inc. and several of its current and former officers and directors over their alleged misrepresentations made associated with Merck's sale and marketing of Vioxx on Oct. 26 refused to reconsider a portion of his August ruling that significantly trimmed shareholders' state and federal securities law claims (In re Merck & Co. Inc. Securities, Derivative & ERISA Litigation, MDL No. 1658, Nos. 05-1151 and 05-2367, [Stichting Pensioenfonds ABP v. Merck & Co. Inc., et al., No. 05-5060], D. N.J.). Subscribers may view the opinion available within the full article.