WILMINGTON, Del. - A federal judge in Delaware on Nov. 19 adopted a federal magistrate judge's recommendation to dismiss an investors' class action challenging Wells Fargo entities' $7 billion settlement arising from the auction-rate securities (ARS) market's collapse because the investors' claims are preempted by the Securities Litigation Uniform Standards Act (SLUSA), 15 U.S.C.S. § 77p. (Diane E. Wilson, et al., v. Wells Fargo Advisors LLC, et al., No. 11-511, D. Del.). A complimentary copy of the order is available in the pdf attached below.
NEW YORK - A federal judge in New York on Nov. 19 ruled that she will not reinstate a federal securities law claim against a former Goldman Sachs & Co. officer accused of violating the law in connection with misstatements made in the structuring and marketing of a subprime securities-backed synthetic collateralized debt obligation (CDO) because "no U.S.-based transfer of title 'in connection with'" certain note purchases was made to sustain the claim (Securities and Exchange Commission v. Goldman Sachs & Co., et al., No. 10 Civ. 3229, S.D. N.Y.). Subscribers may view the opinion available within the full article.
NEW YORK - The federal judge in New York overseeing 16 lawsuits filed by the Federal Housing Finance Agency (FHFA), as conservator of government-sponsored entities (GSEs) Fannie Mae and Freddie Mac, against a number of financial institutions for their allegedly fraudulent sale of residential mortgage-backed securities (RMBS) to the GSEs on Nov. 19 dismissed state law claims brought against Barclays Bank PLC and others, ruling that the FHFA failed to show that the defendants can be held liable under the Virginia Securities Act (Federal Housing Finance Agency v. Barclays Bank PLC, et al., No. 11-6190, S.D. N.Y.). Subscribers may view the opinion available within the full article.
NEW YORK - Citibank N.A., Citigroup Inc. and several of their affiliates (collectively, Citibank) have reached a $435 million agreement with the liquidation trustee for Lehman Brothers Holdings Inc. (LBHI) subsidiary Lehman Brothers Inc. (LBI) regarding more than $1 billion in collateral posted by LBI before its bankruptcy, according to a document filed Nov. 16 in a New York federal bankruptcy court (Securities Investor Protection Corp. v. Lehman Brothers Inc., No. 08-1420, [In re Lehman Brothers Inc. (Lehman Brothers Inc. v. Citibank, N.A., et al.), No. 11-1681], S.D. N.Y. Bkcy.). Subscribers may view the motion available within the full article.
NEW YORK - A federal judge in New York on Nov. 16 dismissed a consumer's complaint against a debt collector for violations of state and federal debt collection laws, ruling that the consumer had failed to state a claim (Zakari Musah v. Houslanger & Associates PLLC, No. 12-3207, S.D. N.Y.; 2012 U.S. Dist. LEXIS 164292).
NEW YORK - A New York federal judge on Nov. 16 approved the Securities and Exchange Commission's request to dismiss a suit against a GSC Group Inc. executive accused of permitting a hedge fund to choose securities for a collateralized debt obligation that led to JP Morgan Chase & Co.'s (Chase) $154 million settlement with the SEC (Securities and Exchange Commission v. Edward S. Steffelin, No. 11-4204, S.D. N.Y.). Subscribers may view the stipulation of dismissal available within the full article.
DENVER - A 10th Circuit U.S. Court of Appeals panel on Nov. 19 affirmed a summary judgment award to Bank of New York Mellon (BNY Mellon) after finding that it was in possession of a couple's promissory note prior to initiating foreclosure proceedings on their property (Jimmie H. Patrick, et al. v . Bank of New York Mellon, et al., No. 12-1108, 10th Cir.; 2012 U.S. App. LEXIS 12706).
WASHINGTON, D.C. - Acting on interlocutory appeal, the Federal Circuit U.S. Court of Appeals on Nov. 20 found that an antitrust action against a patent owner can proceed, even though plaintiff Ritz Camera & Image LLC faces no threat of an action for patent infringement and has no other basis to seek a declaratory judgment of patent invalidity (Ritz Camera & Image LLC v. SanDisk Corporation, No. 12-1183, Fed. Cir.). View related prior history, 2012 U.S. App. LEXIS 15847.
MUSKOGEE, Okla. - A federal judge in Oklahoma on Nov. 19 found that the Federal Deposit Insurance Corp., as the receiver for a failed bank, is entitled to a more than $4.6 million judgment from borrowers who defaulted because there are no disputes that the FDIC is the holder of the promissory notes in question and that the promissory notes are in default (Federal Deposit Insurance Corp. v. Victor E. Garrett III, et al., No. 12-00052, E.D. Okla.; 2012 U.S. Dist. LEXIS 164810).
WEST PALM BEACH, Fla. - A federal judge in Florida on Nov. 16 denied a debt collector's motion for summary judgment in a Fair Credit Reporting Act, 15 U.S.C.S. § 1681, action, ruling that the collector failed to show that it had a reasonable basis for pulling a consumer's credit report ( John Pinson v. Monarch Recovery Management Inc., a/k/a Academy Collection Service Inc., No. 12-80480, S.D. Fla.; 2012 U.S. Dist. LEXIS 164063).
SACRAMENTO, Calif. - The federal bankruptcy judge presiding over the Chapter 9 bankruptcy of the Town of Mammoth Lakes, Calif., on Nov. 16 dismissed the case after the town and a real estate developer resolved a dispute that had led to a $43 million court judgment against the town and was the cause of the bankruptcy in the first place (In Re: Town of Mammoth Lakes, Calif., No.12-32463, Chapter 9, E.D. Calif. Bkcy.). Subscribers may view the order available within the full article.
NEW YORK - The U.S. trustee in the Chapter 11 bankruptcy of Hostess Brands Inc. on Nov. 19 filed a brief in the U.S. Bankruptcy Court for the Southern District of New York objecting to the company's motion seeking to wind down its business, contending that it is not a proper conversion to Chapter 7 bankruptcy (In Re: Hostess Brands Inc., No. 12-22052, Chapter 11, S.D. N.Y. Bkcy.). Subscribers may view the brief available within the full article.
NASHVILLE, Tenn. - A federal judge in Tennessee on Nov. 16 granted a motion for summary judgment by a company's directors and officers, finding that the plaintiff did not establish that his alleged loss exceeded the requisite threshold for the amount in controversy to show that the court holds jurisdiction over the dispute (Frank Rossello v. Kelly J. Gill, et al., No. 12-cv-00493, M.D. Tenn.).
BUTTE, Mont. - A federal judge in Montana on Nov. 16 ruled that the federal bankruptcy judge presiding over the Chapter 11 proceeding of the Yellowstone Mountain Club (YMC) who refused to recuse himself from the case acted properly (Timothy L. Blixseth v. Yellowstone Mountain Club [In Re: Yellowstone Mountain Club], Adv. No. 11-73, D. Mont.).
NEW ORLEANS - The Fifth Circuit U.S. Court of Appeals on Nov. 15 affirmed the dismissal of a mortgage broker's claims arising from its terminated access to its clients' credit reports (Active Mortgage LLC v. Trans Union LLC, et al., No. 12-30327, 5th Cir.; 2012 U.S. App. LEXIS 23479).
DETROIT - A federal judge in Michigan on Nov. 15 dismissed a majority of a couple's lawsuit against their mortgage lender, loan servicer and an insurance company but held that they could pursue claims of illegal foreclosure under Michigan law because the notice did not contain the correct amount owed by the plaintiffs (Brock Galliard, et al. v. USAA Federal Savings Bank, et al., No. 12-cv-11459, E.D. Mich.; 2012 U.S. Dist. LEXIS 163211).
CHICAGO - A federal judge in Illinois dismissed a shareholder derivative lawsuit against directors and officers of Abbott Laboratories on Nov. 15, finding that the plaintiffs failed to show that presuit demand would have been futile (In re Abbott Depakote Shareholder Derivative Litigation, No. 11-cv-8114, N.D. Ill.; 2012 U.S. Dist. LEXIS 163480).
NEW YORK - A federal bankruptcy judge on Nov. 16 granted bankrupt pharmaceutical company K-V Discovery Solutions Inc. until Feb. 4 to file its plan of reorganization (In Re: K-V Discovery Solutions Inc., No. 12-13346, Chapter 11, S.D. N.Y. Bkcy.). Subscribers may view the order available within the full article.
CHICAGO - Bankrupt Tribune Co. on Nov. 16 issued a statement in which it said that based on the approval it has gained from the Federal Communications Commission for broadcast licenses, the company will be able to emerge from Chapter 11 bankruptcy (In Re: Tribune Company, No. 08-13141, Chapter 11, D. Del. Bkcy.). Subscriber may view the statement available within the full article.
NEW YORK - A group of pilots with US Airways Group Inc. on Nov. 16 moved in the U.S. Bankruptcy Court for the Southern District of New York for authorization to conduct discovery related to a proposed merger between US Airways and bankrupt AMR Corp., the parent company of American Airlines Inc. (In Re: AMR Corporation, No. 11-15463, Chapter 11, S.D. N.Y. Bkcy.). Subscribers may view the motion available within the full article.
NEW YORK - Twinkie maker Hostess Brands Inc., which had been proceeding with a bankruptcy reorganization plan, on Nov. 16 moved in the U.S. Bankruptcy Court for the Southern District of New York for authorization to convert its proceeding to Chapter 7, which would result in liquidation of the company (In Re: Hostess Brands Inc., No. 12-22052, Chapter 11, S. D. N.Y. Bkcy.).
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BUFFALO, N.Y. - A New York federal judge on Nov. 15 refused to dismiss an Electronic Fund Transfer Act (EFTA), 15 U.S.C.S. § 1601, complaint, ruling that two consumers have stated a claim that the fee notice at a credit union's ATM did not disclose the fee in the statutorily required "readily understandable language" (Sarah Archbold, et al. v. Solutions Federal Credit Union, et al., No. 12-00364, W.D. N.Y.; 2012 U.S. Dist. LEXIS 163490).
PHILADELPHIA - A pharmacy benefit manager (PBM) waived its right to arbitrate antitrust claims against it by litigating the merits for 10 months, including its motion to dismiss, before filing a motion to compel arbitration, the Third Circuit U.S. Court of Appeals ruled Nov. 15, reversing a trial court order compelling arbitration (In re: Pharmacy Benefit Managers Antitrust Litigation [Bellevue Drug Co., et al. v. CaremarksPCS, et al.] MDL No. 1782, No. 12-1430, 3rd Cir.; 2012 U.S. App. LEXIS 23432).
SAN FRANCISCO - The U.S. trustee in the Chapter 11 bankruptcy of get-rich-quick scheme operator John N. Beck II on Nov. 14 filed a brief in the U.S. Bankruptcy Court for the Northern District of California arguing that the proceeding should be dismissed or converted to a Chapter 7 bankruptcy (In Re: John N. Beck II, No. 12-47882, Chapter 11, N.D. Calif. Bkcy.). Subscribers may view the brief available within the full article.
WILMINGTON, Del. - The U.S. government on Nov. 15 filed a designation of issues on appeal in the Chapter 11 bankruptcy proceeding of Solyndra LLC in the U.S. Bankruptcy Court for the District of Delaware, contending that the Bankruptcy Court's approval of Solyndra's Chapter 11 plan violated the Bankruptcy Code (In Re: Solyndra LLC, No. 11-12799, Chapter 11, D. Del. Bkcy.). Subscribers may view the designation of issues available within the full article.