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.
NEW YORK - A federal judge in New York on Nov. 13 declined to grant a motion to withdraw the bankruptcy reference filed by the brother-in-law of convicted Ponzi scheme mastermind Bernard L. Madoff, ruling that the liquidation trustee for Bernard L. Madoff Investment Securities LLC (BLMIS) has Article III standing to bring claims seeking recovery of fraudulent transfers (Securities Investor Protection Corp. v. Bernard L. Madoff Investment Securities LLC, No. 12 MC 115 [JSR], [In re: Madoff Securities (Irving H. Picard v. Robert Roman), No. 12-2318], S.D. N.Y.). View related prior history, 2010 U.S. Dist. LEXIS 3037.
CHICAGO - An Illinois federal judge on Nov. 15 granted in part and denied in part the Federal Deposit Insurance Corp.'s motion to strike affirmative defenses in a suit it filed against the former officers of the failed Wheatland Bank alleging, among other claims, breach of fiduciary duty, fraud and gross mismanagement (Federal Deposit Insurance Corp. v. Lewis Mark Spangler, et al., No. 10-04288, N.D. Ill.; 2012 U.S. Dist. LEXIS 163027).
AUSTIN, Texas - A federal judge in Texas on Nov. 13 ruled that the Securities and Exchange Commission may seek reimbursement of executive compensation against certain executives of a company under Section 304(a) of the Sarbanes-Oxley Act of 2002 even though they are not directly involved with a particular fraudulent action because the defendants held their executive officer positions within the company and signed SEC quarterly and annual financial statements that were subject to restatements as a result of the alleged fraud (Securities and Exchange Commission v. Michael A. Baker, et al., No. 12-285, W.D. Texas; 2012 U.S. Dist. LEXIS 161784).
WILMINGTON, Del. - Former employees of bankrupt AFA Investment Inc., the maker of the so-called pink slime additive used in some ground beef, on Nov. 13 filed a brief in the U.S. Bankruptcy Court for the District of Delaware arguing that the company should not be permitted to extend the exclusivity period related to filing a Chapter 11 plan (In Re: AFA Investment Inc., No. 12-11127, Chapter 11, D. Del. Bkcy.).
SALT LAKE CITY - A federal judge in Utah on Nov. 13 adopted a federal magistrate judge's recommendation to deny a motion to dismiss a Ponzi scheme recoupment suit brought by a receiver, concurring with the magistrate judge that the receiver alleged sufficient facts to state his claims for relief (R. Wayne Klein v. Lewis S. Scogin, et al., No. 12-00121, D. Utah; 2012 U.S. Dist. LEXIS 162224).
SHERMAN, Texas - A federal judge in Texas on Nov. 13 adopted a report and recommendation granting in part and denying in part a debt collector's motion for judgment on the pleading, rejecting the debt collector's request to dismiss a state debt collection law claim filed against it (Thomas E. Whatley III v. AHF Financial Services LLC, et al., No. 11-488, E.D. Texas; 2012 U.S. Dist. LEXIS 161780).
ST. LOUIS - A Missouri federal judge on Nov. 13 granted the Federal Deposit Insurance Corp.'s motion to dismiss, finding that the federal court lacks subject matter jurisdiction because a consumer did not exhaust the FDIC's administrative claims process pursuant to the The Financial Institutions Reform, Recovery, and Enforcement Act (FIRREA), 12 U.S.C.S. § 1821, before filing suit (Frank C. Bick v. Federal Deposit Insurance Corp., No. 11-01844, E.D. Mo.; 2012 U.S. Dist. LEXIS 161889).
PHILADELPHIA - Bankrupt Hostess Brands Inc. on Nov. 12 filed a complaint in Pennsylvania state court seeking compensatory damages and injunctive relief related to mass picketing by unionized workers at Hostess' facilities in Philadelphia (Hostess Brands Inc. v. Bakery, Confectionary, Tobacco and Grain Millers International AFL-CIO, et al., No. n/a, Pa. Comm. Pls., Philadelphia Co.). Subscribers may view the complaint available within the full article.
FRESNO, Calif. - Five former officers of the failed County Bank of Merced, Calif., have settled claims brought by the Federal Deposit Insurance Corp., as the bank's receiver, in connection with 12 loans the bank made that the FDIC says caused the bank losses in excess of $42 million, according to a stipulation filed Nov. 13 in a California federal court (Federal Deposit Insurance Corp. v. Thomas T. Hawker, et al., No. 12-00127, E.D. Calif.). View related prior history, 2012 U.S. Dist. LEXIS 79320.
WASHINGTON, D.C. - A subcommittee of the U.S. House of Representatives Committee on Financial Services on Nov. 15 issued a report saying that the collapse of MF Global Holdings (MFGH) was caused by CEO and former U.S. Sen. Jon Corzine. Subscribers may view the report available within the full article.
IRVING, Texas - Bankrupt Hostess Brands Inc. on Nov. 14 announced that it would move in the U.S. Bankruptcy Court for the Southern District of New York to liquidate the company if striking workers did not return to work by 5 p.m. Eastern Standard Time Nov. 15.
NEW YORK - Four Bernard L. Madoff Investment Securities LLC feeder funds and several of their current and former owners and officers have agreed to pay nearly $220 million to settle claims that they breached their fiduciary duties under the Employee Retirement Income Security Act (ERISA), 29 U.S.C.S. § 1001 et seq., by "recommending, making and maintaining investments with" BLMIS and losing hundreds of millions of dollars of investor monies in the process, according to a press release issued by the U.S. Department of Labor on Nov. 13 (In re: Beacon Associates Litigation, No. 09-0777, S.D. N.Y.).
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NEW YORK - A federal judge in New York on Nov. 12 denied the dismissal of two Federal Housing Finance Agency (FHFA) suits alleging that Goldman Sachs & Co. and Deutsche Bank AG misrepresented billions of dollars in residential mortgage-backed securities (RMBS), ruling that the FHFA properly backed its allegations in both actions (Federal Housing Finance Agency v. Goldman Sachs & Co., et al., No. 11-06198, Federal Housing Finance Agency v. Deutsche Bank AG, et al., No. 11-06192; S.D. N.Y.).
SEATTLE - Antitrust laws do not preempt and a cigarette tax collection agreement between a Native American tribe and the State of Washington does not waive the tribe's sovereign immunity, the Ninth Circuit U.S. Court of Appeals held Nov. 13, affirming a lower federal court and two native courts (Daniel T. Miller, et al. V. Chad Wright, et al., No. 11-35850, 9th Cir.).
WASHINGTON, D.C. - Watson Pharmaceuticals Inc. agrees in its Nov. 13 response to the Federal Trade Commission's petition for a writ of certiorari that the U.S. Supreme Court should consider whether reverse-payment settlements of patent litigation between the holder of a drug patent and generic manufacturers of the drug violate federal antitrust law (Federal Trade Commission v. Watson Pharmaceuticals, Inc., et al., No. 12-416, U.S. Sup.). View related prior history, 2012 U.S. App. LEXIS 8377.
FORT LAUDERDALE, Fla. - In a suit in which a debtor alleged that a debt collection agency violated the Fair Debt Collection Practices Act (FDCPA), 15 U.S.C.S. §§1692 et seq., a federal magistrate judge in Florida on Nov. 9 granted in part the agency's motion for sanctions against the debtor, finding that the debtor's presence at a mediation session that he did not attend was "expressly required" (Eddie Dunning v. Portfolio Recovery Associates LLC, No. 11-62080, S.D. Fla.; 2012 U.S. Dist. LEXIS 162093).
WILMINGTON, Del. - Bankrupt Delta Petroleum Corp. on Nov. 13 filed a brief in the U.S. Bankruptcy Court for the District of Delaware objecting to the application for $1.04 million in compensation sought by a law firm that briefly represented the Official Committee of Unsecured Creditors (In Re: Delta Petroleum Corporation, No. 11-14006, Chapter 11, D. Del. Bkcy.). Subscribers may view the brief available within the full article.
NEW YORK - The Official Committee of Unsecured Creditors in the Chapter 11 bankruptcy of Dewey & LeBoeuf on Nov. 12 moved in the U.S. Bankruptcy Court for the Southern District of New York for authority to prosecute claims against the law firm's former management team for alleged breaches of fiduciary duty (In Re: Dewey & LeBoeuf, No. 12-12321, Chapter 11, S.D. N.Y. Bkcy.). Subscribers may view the motion available within the full article.
NEW YORK - A residential mortgage company on Nov. 9 sued GMAC Mortgage LLC, an affiliate of bankrupt Residential Capital (ResCap) LLC, in the U.S. Bankruptcy Court for the Southern District of New York, contending that GMAC breached its servicing agreement (In Re: Residential Capital LLC, No. 12-12020, Chapter 11, S.D. N.Y. Bkcy.). Subscribers may view the complaint available within the full article.
WASHINGTON, D.C. - The Little Tucker Act doesn't waive the U.S. government's sovereign immunity when it comes to damages actions filed under the Fair Credit Reporting Act, 15 U.S.C.S. § 1681 (FCRA), a unanimous U.S. Supreme Court ruled Nov. 13 (United States of America v. James X. Bormes, No. 11-192, U.S. Sup.; 2012 U.S. LEXIS 8705).
HOUSTON - Although a federal judge in Texas did not err in determining that an award of actual damages in a Fair Dept Collection Practices Act (FDCPA) 15 U.S.C.S. § 1692e , lawsuit was excessive, the judge erred in determining that a reasonable jury would not have proper evidentiary basis to find proof of actual damages under the FDCPA, a Fifth Circuit U.S. Court of Appeals panel ruled in an opinion made available Nov. 12 (Candy Guajardo v. GC Services LP., No. 11-20269, 5th Cir.; 2012 U.S. App. LEXIS 22891).
SAN FRANCISCO - A man who claims that he purchased higher-priced chocolate based on misleading representations about its antioxidant content satisfies the standing requirements of both Article III and the California unfair competition law (UCL) Cal. Bus. & Prof. Code § 17200, a federal judge held Nov. 9 (Leon Khasin, et al. v. The Hershey Co., No. 12-1862, N.D. Calif.; 2012 U.S. Dist. LEXIS 161300).