DALLAS - A federal judge in Texas on July 3 partially lifted a stay in five class action lawsuits against two law firms and others accused of assisting convicted Ponzi scheme mastermind R. Allen Stanford in his fraud (Michael Gale, et al. v. Proskauer Rose LLP, et al., No. 12-1803; Consuelo Ibarra, et al. v. Proskauer Rose LLP, et al., No. 12-1805; Pam Reed, et al. v. Proskauer Rose LLP, et al., No. 12-1806; Miguel Green, et al. v. Proskauer Rose LLP, et al., No. 12-1808; Juan F. Martin, et al. v. Proskauer Rose LLP, et al., No. 12-1809, N.D. Texas). Subscribers may view the order available within the full article.
ATLANTA - A panel of the 11th Circuit U.S. Court of Appeals on July 3 ruled that a lender failed to show that it relied on a debtor's misrepresentations when approving a loan and, therefore, the claim against the bankruptcy estate was properly discharged by the bankruptcy court (AAFCOR LLC v. Frank Spires (In Re: Timothy D. Shelton), No. 11-12075, Chapter 13, 11th Cir.; 2012 U.S. App. LEXIS 13524).
NEW YORK - Bankrupt law firm Dewey & Leboeuf on July 3 moved in the U.S. Bankruptcy Court for the Southern District of New York for authorization to give bonuses of up to $450,000 to remaining employees as part of a retention plan (In Re: Dewey & Leboeuf LLP, No. 12-12321, S.D. N.Y. Bkcy.). Subscribers may view the motion available within the full article.
NEW YORK - Energy company Dynegy Inc. filed for Chapter 11 bankruptcy on July 6 in the U.S. Bankruptcy Court for the Southern District of New York, citing liabilities greater than $5.13 billion and seeking joint administration of its bankruptcy proceeding with its wholly owned subsidiary Dynegy Holdings LLC, which filed for bankruptcy in 2011 (In Re: Dynegy Inc., No. 12-36728, Chapter 11, S.D. N.Y. Bkcy.). Subscribers may view the petition available within the full article.
WASHINGTON, D.C. - In an issue of first impression, a federal judge in Washington on July 3 refused to grant an application by the Securities and Exchange Commission to compel the Securities Investor Protection Corp. (SIPC) to file an application for a protective decree compelling the SIPC to commence liquidation proceedings on behalf of victims of R. Allen Stanford's massive Ponzi scheme, ruling that the SEC's interpretation of the Securities Investor Protection Act (SIPA) 15 U.S.C.S. § 78aaa , is too broad (Securities and Exchange Commission v. Securities Investor Protection Corp., No. 11-678, D.C. Dist.).
DENVER - Plaintiffs seeking quiet title to a property and asserting claims under the Colorado Consumer Protection Act have raised a sufficient immediate question regarding the true holder of the note to defeat a motion to dismiss, a Colorado federal judge ruled July 3 (George Trujillo, et ux., v. Bank of America, et al., No. 11-cv-02205-WJM-MEH, D. Colo.; 2012 U.S. Dist. LEXIS 91961).
SAN FRANCISCO - Constitutional standing requirements, not the statutory requirements found in the California unfair competition law (UCL) Cal. Bus. & Prof. Code § 17200, apply to federal actions, and the lack of likely future injury bars consumers' actions against a service process company, a federal judge in California held July 3 (Ruby Nell Freeman v. ABC Legal Services Inc., et al., No. 11-3007 related to Nos. 11-3542, 11-3805, 11-3824, 11-5152, 12-0624, 12-0642, 12-0644, 12-0678, 12-1693, 12-1696, 12-1904, 12-1911, 12-1914, N.D. Calif.; 2012 U.S. Dist. LEXIS 92404).
SAN FRANCISCO - A federal jury in California on July 3 awarded $87 million in damages to direct purchasers of film transistor-liquid crystal displays (TFT-LCD), finding that Toshiba Corp. engaged in a conspiracy with other manufacturers to raise and fix the price of TFT-LCD panels and certain products containing those panels imported into the United States for more than 10 years, resulting in overcharges to the purchasers, in violation of the Sherman Act 15 U.S.C.S. § 1 et seq..(In re: TFT-LCD (Flat Panel) Antitrust Litigation (All Direct Purchaser Actions), MDL No. 3:07-md-1827 SI, N.D. Calif.).
TAMPA, Fla. - A federal judge in Florida on July 3 denied a couple's motion to strike a bank's affirmative defenses in a suit in which they seek an order declaring their mortgage invalid (Amadou Wane, et al. v. The Loan Corporation, et al., No. 11-2126, M.D. Fla.; 2012 U.S. Dist. LEXIS 91842).
SAN FRANCISCO - A federal judge on July 2 found that a defendant's lengthy illness warrants the vacating of a student loan default judgment entered against him (United States Of America v. Alieu M. Iscandari, No. 11-0797, N.D. Calif.; 2012 U.S. Dist. LEXIS 91532).
NEW ORLEANS - A federal judge in Louisiana dismissed a shareholder's derivative lawsuit on July 2, finding that the shareholder failed to plead with particularity why presuit demand on the company's board of directors would have been futile (Jonathan Strong, derivatively on behalf of Tidewater Inc. v. Dean E. Taylor, et al., No. 11-cv-00392, E.D. La.; 2012 U.S. Dist. LEXIS 91097).
TACOMA, Wash. - A federal judge in Washington on July 3 denied a motion to dismiss and found that a Washington corporation can bring a derivative shareholder suit against a Spanish company and its directors and officers (Enterprises International, Inc. v. Pasaban, S.A., et al., No. 11-cv-05919, W.D. Wash.; 2012 U.S. Dist. LEXIS 92205). Subscribers may view the decision available within the full article.
BOSTON - Defendants in a securities class action lawsuit agreed June 29 to a $25 million settlement of claims that they concealed an investment fund's exposure to the subprime mortgage lending crisis (In re Evergreen Ultra Short Opportunities Fund Securities Litigation, No. 08-11064, D. Mass.). Subscribers may view the stipulation of settlement available within the full update.
WILMINGTON, Del. - The federal bankruptcy judge presiding over the Chapter 11 proceeding of Solyndra LLC on July 3 issued an order authorizing Solyndra to conduct a second sale of its core assets following an auction free and clear of all encumbrances pursuant to 11 U.S. Code Sections 105(A) and 363 (In Re: Solyndra LLC, No. 11-12799, Chapter 11, D. Del. Bkcy.). Subscribers may view the order available within the full article.
NEW YORK - Bankrupt financial company Residential Capital LLC (ResCap) filed a brief in the U.S. Bankruptcy Court for the Southern District of New York on July 3, arguing that the automatic stay should not be lifted to permit lawsuits against the company because the bankruptcy was filed in good faith (In Re: Residential Capital LLC, No. 12-12020, Chapter 11, S.D. N.Y. Bkcy.). Subscribers may view the brief available within the full article.
SAN FRANCISCO - A woman's "high-level statements" in her amended complaint against a bank fail to satisfy the pleading standard of the state's unfair competition law (UCL), a California judge held July 2 (Maria G. Sosa v. Bank of New York Mellon Trust, No. 12-00144, N.D Calif.). Subscribers may view the opinion available within the full article.
WILMINGTON, Del. - The Official Committee of Unsecured Creditors in the Chapter 11 bankruptcy of Tribune Co. on July 3 filed a brief in the U.S. Bankruptcy Court for the District of Delaware, arguing that former officers of the company should not be paid their bonuses from 2010 because they do not qualify as administrative expenses (In Re: Tribune Company, No. 08-13141, Chapter 11, D. Del. Bkcy.). Subscribers may view the brief available within the full article.
WILMINGTON, Del. - Bankrupt WP Steel Venture LLC on July 3 filed a brief in the U.S. Bankruptcy Court for the District of Delaware arguing that a motion filed by various environmental groups and individuals seeking modification of the automatic stay should be denied (In Re: WP Steel Venture LLC, No. 12-11661, Chapter 11, D. Del. Bkcy.). Subscribers may view the brief available within the full artile.
NEW YORK - The brother of convicted Ponzi scheme mastermind Bernard L. Madoff pleaded guilty to aiding in Madoff's massive Ponzi scheme, according to a press release issued June 29 by U.S. Attorney for the Southern District of New York Preet Bharara (USA v. Peter Madoff, No. 10-cr-0228, S.D. N.Y.).
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PHILADELPHIA - The Pennsylvania federal judge supervising consumer fraud litigation against the manufacturer and distributor of a generic version of the antidepressant Wellbutrin XL approved a settlement on July 2 that incorporates only injunctive relief and awarded $3.2 million in attorney fees (In re: Budeprion XL Marketing and Sales Practices Litigation, MDL 2107, No. 2:09-md-2107, E.D. Pa.; 2012 U.S. Dist. LEXIS 91176).
BOSTON - GlaxoSmithKline LLC (GSK) on July 2 agreed to plead guilty and to pay $3 billion to resolve broad-ranging criminal and civil allegations in Massachusetts federal court regarding the promotion of several prescription drugs, failure to report safety data and alleged false-price reporting practices (United States ex rel. Greg Thorpe, et al. v. GlaxoSmithKline PLC, No. 11-10398-RWZ; United States of America v. GlaxoSmithKline LLC, No. 1:12-cr-10206-RWZ, D. Mass.).
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WILMINGTON, Del. - The trustee in the Chapter 11 bankruptcy of Filene's Basement LLC on July 2 filed a brief in the U.S. Bankruptcy Court for the District of Delaware, objecting to Filene's disclosure statement pertaining to its reorganization plan on grounds that there is no way to determine if the plan is feasible pursuant to 11 U.S. Code Section 1129 (In Re: Filene's Basement LLC, No. 11-13511, Chapter 11, D. Del. Bkcy.). Subscribers may view the brief available within the full update.
NEW YORK - Bankrupt aircraft maker Hawker Beechcraft Inc. on June 30 filed a proposed Chapter 11 reorganization plan in the U.S. Bankruptcy Court for the Southern District of New York that would turn all debt into equity in the reorganized company (In Re: Hawker Beechcraft Inc., No. 12-11873, Chapter 11, S.D. N.Y. Bkcy.).Subscribers may view the reorganization plan available within the full article.
OMAHA, Neb. - A federal judge in Nebraska on July 2 found that a plaintiff who says a credit union violated the Electronic Fund Transfer Act (EFTA) by not posting an ATM fees notice has not alleged an injury in fact and ordered the parties to show cause why the suit should not be dismissed for lack of standing (Jarek Charvat v. Mutual First Federal Credit Union, No. 12-0011, D. Neb.; 2012 U.S. Dist. LEXIS 91093).
MONTGOMERY, Ala. - In a class action in which a credit union is alleged to have violated the Electronic Fund Transfer Act (EFTA) by not posting an ATM fees notice, a federal judge in Alabama on June 29 granted final approval of a class settlement and awarded an incentive and attorney fees to the plaintiff (Patrick Andrew Hart v. Guardian Credit Union, No. 10-0855, M.D. Ala.; 2012 U.S. Dist. LEXIS 90231).