Gingrich rejects divorce challenge


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Editor’s note: Alan Duke began covering Newt Gingrich during Gingrich’s first campaigns for public office.

(CNN) — Newt Gingrich refused Tuesday to discuss in detail the court documents obtained by CNN that appear to contradict his assertion that his first wife sought their divorce in 1980.

In an interview with CNN’s Wolf Blitzer, Gingrich referred any questions to an online column written by his daughter that stated his ex-wife Jackie Gingrich sought the divorce.

The Republican presidential candidate, now in his third marriage, has been peppered with attacks and questions about his divorce from Jackie Gingrich for the past three decades.

Questions about his past — and what that past tells voters about his personal behavior — have re-emerged as he has returned to the political scene 13 years after he resigned as speaker of the House.

Court files cast doubt on Gingrich’s version of first divorce

A new defense that has arisen as Gingrich entered the presidential race this year is the insistence that she, not he, wanted the divorce.


Differing versions of Gingrich divorce


Gingrich first wife didn’t want divorce


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On the “Answering the attacks” page of his campaign website, Newt.org, which “(Sets) the Record Straight: Newt’s Positions on the Issues and His Record,” the campaign discusses Gingrich’s first divorce.

“It was (Jackie Gingrich) that requested the divorce, not Newt,” the campaign website said, referring readers to an online column written by Gingrich’s youngest daughter, Jackie Gingrich Cushman, last May.

Cushman, 13 when her parents separated in 1980, was rebutting persistent rumors that her father served divorce papers on her mother the day after cancer surgery. In the column, Cushman writes that papers were never served in the hospital, and that her mother did not actually have cancer.

“My mother and father were already in the process of getting a divorce, which she requested,” Cushman wrote.

Gingrich court documents: Original divorce complaint

Gingrich court documents: Motion for contempt

Gingrich court documents: Petition for modification of alimony

In the CNN interview Tuesday, Gingrich said his daughter’s article “captures it and that’s the most I’ll say.”

Pressed by Blitzer about the court documents, Gingrich added that “there are a lot of things that are said in divorces that turn out not to be true, and lawyers write lots of things in the middle of fights.”

Last week, CNN obtained the folder containing the filings from the 1980 divorce, after initially being told that the divorce documents were sealed. The folder had been stashed away for years in a Carroll County, Georgia, court clerk’s drawer.

Retired clerk Kenneth Skinner told CNN his deputy took Gingrich’s file out of the public records room around 1994, “when he (Gingrich) became the center of attention,” because Skinner feared tampering and theft.

“During these years, you had to make sure those papers were there,” Skinner said. “People could go in those files and get things out. We didn’t have enough security to control it.”

Current Carroll County Clerk of Court Alan Lee said he called the retired deputy clerk, who told him where to find the papers, after CNN began looking for them last week.

The documents, and interviews with people close to the couple at the time, contradict the Gingrich claim about who wanted the divorce.

Newt Gingrich filed a divorce complaint on July 14, 1980, in Carroll County, saying that “the marriage of the parties is irretriebably (sic) broken.”

Jackie Battley Gingrich, the congressman’s wife and the mother of Jackie Gingrich Cushman, responded by asking the judge to reject her husband’s filing.

“Defendant shows that she has adequate and ample grounds for divorce, but that she does not desire one at this time,” her petition said.


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CNN Red Chair Interview: Newt Gingrich

“Although defendant does not admit that this marriage is irretrievably broken, defendant has been hopeful that an arrangement for temporary support of defendant and the two minor daughters of the parties could be mutually agreed upon without the intervention of this court,” her petition said. “All efforts to date have been unsuccessful.”

When CNN presented the information found in the divorce file to the Gingrich campaign, its spokesman stood by the contention that it was Gingrich’s ex-wife who asked for the divorce in 1980.

“Carroll County Georgia court documents accurately show Newt Gingrich filed for a divorce from his wife Jackie Battley, but it was Jackie Battley who requested the divorce,” spokesman R.C. Hammond said in an e-mail to CNN Saturday. “Gingrich, her husband, obtained legal counsel and filed the divorce papers initiating the legal proceedings.”

“It was the same legal proceedings that determined and set the amounts of payments Gingrich would provide to support his two daughters,” Hammond said.

Atlanta divorce lawyer Jim Peterson, who was not involved in the Gingrich proceedings, said the wife’s divorce filings make it “pretty plain” that she did not want the divorce.

“She obviously didn’t want the divorce, on the face of the pleadings,” Peterson said.

One reason a defendant in a divorce would deny it was irretrievably broken would be “to make you stay in the marriage and put the screws to you to make it as difficult as they possibly can,” Peterson added.

Jackie Gingrich, who has rarely spoken to the media about the divorce, declined CNN’s request for an interview. A friend said that Jackie Gingrich did not want to comment out of concern for her daughters and grandchildren.

In a brief interview in 1985, she told the Washington Post: “He can say that we had been talking about it for 10 years, but the truth is that it came as a complete surprise.”

Wives take lead in candidates’ ads

Leonard H. “Kip” Carter, a former close Gingrich friend, backed the contention that it was Newt Gingrich who wanted the divorce.

“He (Gingrich) said, ‘You know and I know that she’s not young enough or pretty enough to be the wife of a president,’ ” Carter, who now lives in South Carolina, told CNN recently, relating the conversation he had with Gingrich the day Gingrich revealed he was filing for divorce. Carter served as treasurer of Gingrich’s first congressional campaigns.

Carter, who was a fellow history professor when Gingrich taught at West Georgia College in Carrollton, said he broke off his friendship with Newt Gingrich because of the congressman’s treatment of his wife during the divorce.

Asked in an e-mail whether that conversation in 1980 occurred the way that Carter recounted, Gingrich spokesman Hammond did not respond.

Gerald Johnson, a Georgia state legislator at the time who also was in Gingrich’s Sunday school class, said it was his memory that Jackie Gingrich did not want a divorce. Johnson laughed when told the presidential campaign is now saying she requested the divorce, calling that “surprising.”

When Gingrich filed for divorce, he was already seeing a 28-year-old congressional aide, whom he married six months after his divorce was final in 1981. The second wife, Marianne Ginther Gingrich, told Esquire magazine last year that Gingrich even introduced her to his parents in the summer of 1980, the same time he filed for divorce.

“They were thrilled because they hadn’t wanted Newt to marry (Jackie Battley),” she told Esquire.

Gingrich divorced Marianne Gingrich 19 years later, after an affair with a younger congressional aide whom he married soon after his divorce. The third wife, Callista Bisek Gingrich, is now a major figure in his presidential campaign.

Gingrich: I wouldn’t vote for Ron Paul

Jackie Gingrich Cushman wrote in May that she and her older sister, Kathy Gingrich Lubbers, “will not answer additional questions or make additional comments regarding this meaningless incident.” Both sisters are actively involved in Gingrich’s campaign for the Republican nomination.

The court documents obtained by CNN also shed light on the issue of the first-term congressman’s record of offering support for Jackie Gingrich and the two girls during the separation and after the divorce.

The same court filing in which Jackie Gingrich told the judge she did not want the divorce also accused Gingrich of failing to provide enough money for her and her two then-teenaged daughters to live on during their separation. Kathy was 17 at the time.

“Despite repeated notice to plaintiff and requests by defendant, plaintiff has failed and refused to voluntarily provide reasonable support sufficient to include payment of usual and normal living expenses, including drugs, water, sewage, garbage, gas, electric and telephone service for defendant and the minor children,” she said in court documents. “As a result, many of such accounts are two or three months past due with notices of intent to cut off service and gas and electricity.”

When Jackie Gingrich and her daughters moved from their other home in Fairfax, Virginia, back to their house in Carrollton, Georgia, there were “no lights, no heat, no water, no food in the home,” former Gingrich friend and academic colleague Carter said.

Carter, who helped collect donations for the family, said Gingrich “wouldn’t give them a dime” in the first months of the separation.

“We had a food drive at First Baptist Church,” Carter said. “The deacons went down and stocked her pantry.”

Johnson, the former state legislator who was in Gingrich’s Sunday school class, said when the church’s minister asked him to donate money, he gave $100 to the fund.

A judge ordered Gingrich to appear in court a week after his wife filed her complaint. The result was a ruling that he bring the utility bills up to date and begin paying his wife $700 a month in temporary support until the case was settled.

Both sides reached an agreement three months later, avoiding the jury trial that Jackie Gingrich was demanding.

Newt Gingrich on CNN Election Center

In 1994, Gingrich agreed to increase his alimony payments by $350 to $1,650 a month. In exchange, Jackie Gingrich waived her right to ask for future increases if her ex-husband’s income increased. Gingrich is still paying alimony.

“When asked, Gingrich has admitted he has not led a perfect life and has at times had to go to God for forgiveness,” Hammond said. “Over 30 years later, the family has long put these matters behind them.”

Johnson, who later challenged Gingrich in the 1984 congressional race, said the divorce and controversy over the support payments caused a lot of negative feelings against Gingrich in his home county.

“I think the thing that bothered people most was everybody in Carrollton knew how much Jackie sacrificed to get Newt elected,” Johnson said.

CNN asked Gingrich spokesman Hammond in an e-mail about the allegation made by Jackie Gingrich in her October 1980 court filing that Gingrich was not supporting his family during this period, but the statement the campaign released did not directly address that question.

Still, Johnson said there should be forgiveness and he would like to see Gingrich win the White House.

“Newt is the smartest candidate in the field this year and he would bring an intelligence to the White House that hasn’t been there in quite a while,” Johnson said.






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The Florida Bar – Daily News Summary

An electronic digest of media coverage of interest to members of The Florida Bar compiled each workday by the Public Information and Bar Services Department. Electronic links are only active in today’s edition. For information on previous articles, please contact the publishing newspaper directly.

Dec. 27, 2011

–Legislature–

2012 SESSION OUTLOOK: JUSTICE AND THE COURTSThe Florida Current, http://www.thefloridacurrent.com, Dec. 26, 2011.
As in previous years, lawmakers are coming into the 2012 session with a host of measures aimed at limiting civil lawsuits. Some of the most high-profile battles are likely to come on the insurance front, as lawmakers gear up for an overhaul of the state’s no-fault auto insurance system, which could include new limits on attorney fees tied to personal injury protection. Lawmakers are also preparing to revisit issues from last session, such as new limits on “bad faith” litigation. Like a range of other issues this session, both the criminal and civil justice debates are being driven by fiscal pressures. The judicial system, faced with repeated shortfalls due to uneven revenue from the foreclosure filings and other sources, has recommended an overhaul of its funding system. Justice appropriations committees have begun studying the issue, but have not yet finalized at a specific proposal for overhauling court funding.

RICK SCOTT’S FIRST YEAR A HARSH LESSON ON DEALING WITH THE COURTSNaples Daily News, column, http://www.naplesdailynews.com, Dec. 25, 2011.
The guest column by Michael Peltier states: “In many ways, 2011 was a year of hard knocks for Gov. Rick Scott, who was repeatedly reminded that a Florida governor often has far less power than a CEO of a major corporation. . . . Unlike private business, government work — by design — has a series of checks, balances and traditions that, in many instances, purposely slow things down, a system that for better or worse sacrifices efficiency for accountability. The courts, arguably, have been Scott’s biggest nemesis. Scott isn’t the first governor to be vexed by the courts and he won’t be the last. But the sheer number of challenges is testament to the governor’s ambitious and controversial first year.”

LEGISLATORS TO CONSIDER CAYLEE’S LAWThe Bradenton Herald, http://www.bradenton.com, Dec. 27, 2011.
The article is by The Associated Press. When the Florida Legislature begins its 2012 session next month it will do so just six months after a jury acquitted Casey Anthony of killing her 2-year-old daughter in one of the state’s most high-profile murder trials. That verdict has some legislators pushing a law that would make it a felony if a parent or guardian doesn’t tell authorities a child is missing or dead within a certain period. Some legal experts and law enforcement officials say the law as written reaches too far. Florida House Bill 49 and Senate bills 84, 86 and 146 are among similar “Caylee’s Law” legislation that have sprung up in more than a dozen states since the controversial July verdict and are among several new crime laws legislators will consider beginning Jan. 10.

END TALLAHASSEE’S DENIALThe Palm Beach Post, editorial, http://www.palmbeachpost.com, Dec. 27, 2011.
The editorial states: “A Palm Beach County judge faced a tough task last week: reducing the life sentences of two men who savagely raped a teenage girl when they were teens themselves. This unenviable job — re-parsing a decades-old punishment for a horrific act — was mandated by a U.S. Supreme Court decision. But it would not be necessary if the Legislature reinstituted a prisoner parole system.”

BAIL BOND BOONDOGGLEThe Tampa Tribune, editorial, http://www.tbo.com, Dec. 26, 2011.
The editorial states: “The bail bond industry is at it again, pushing legislation that would curtail local pretrial release programs that save tax dollars and aid law enforcement. Florida lawmakers should once again reject the ploy. At issue are the pretrial release programs that allow counties to release defendants without bail if they fulfill certain requirements. . . . This approach has been effective in saving tax dollars by reducing the number of jail inmates while ensuring oversight.”

–Civil Justice Issues–

HISTORY TEACHERS RAISE AWARENESS OF CIVIL RIGHTS PIONEERSFlorida Today, http://www.floridatoday.com, Dec. 23, 2011.
On the day before Brevard schools closed for Christmas break, fourth-graders in Wendy Shelden’s class at Ralph M. Williams Jr. Elementary were discussing an unconventional Christmas story: the story of Harry and Harriette Moore. The Moores died of injuries suffered in a Christmas night bombing at their Mims home 60 years ago and their murders were never solved. The story of their lives — and their deaths — is not widely known, in part, because it’s not widely taught in the schools. The Moores were educators who, from the 1930s until their deaths, registered black voters, fought for equal pay for teachers regardless of race and established National Association for the Advancement of Colored People branches across Florida. Shelden and other Brevard Public Schools educators are trying to change that with the introduction of a lesson on the Moores in local fourth-grade and high school history classes. Florida’s Sunshine State Standards for teaching high school American history, revised in December 2008, now lists Harry Moore as one of 12 suggested topics of discussion to learn about “key events and key people in Florida history as they relate to United States history.” That may likely encourage high school history teachers to address the couple’s story.

WINN-DIXIE SHAREHOLDERS SUE OVER SALEThe Florida Times-Union, http://www.jacksonville.com, Dec. 23, 2011.
Some Winn-Dixie shareholders filed suit Thursday [Dec. 22] over the price being paid for the company’s stock in a sale to another grocery store chain. News broke Monday [Dec. 19] that the Jacksonville-based grocery chain would be sold to Bi-Lo, a chain based in Greenville, S.C. The $560 million deal calls for shareholders to receive $9.50 per share. Jacksonville attorney Charles Jimerson, representing the shareholders, said that’s not enough, based on stock reporting from earlier this year. Jimerson is filing the lawsuit as a class-action suit. Officials said Monday the sale would take 60 to 120 days to close. That would include a vote by Winn-Dixie shareholders.

JUSTICE ORDERS AUDIT OF BP SPILL CLAIMS PROCESSFlorida Keys Keynoter, http://www.keysnet.com, Dec. 24, 2011.
Auditors newly hired by the U.S. Department of Justice will look into the claims process for people affected by the summer 2010 BP Deepwater Horizon oil spill. In Florida, Monroe County has been one of the top recipients of claims settlements approved by the Gulf Coast Claims Facility, set up to administer a $20 billion trust fund. As of Thursday [Dec. 22], Florida Keys residents or businesses had received more than $170 million on 10,575 claims, the facility reports. No oil from the estimated 200 million gallons that flowed into the northern Gulf of Mexico over four months apparently ever reached the Keys. However, the summer tourist season was profoundly affected, as potential visitors worried the spill had already harmed the Keys or was close at hand.

–Criminal Justice Issues–

JUROR BAILS ON ‘GUILTY’ VERDICTFlorida Today, http://www.floridatoday.com, Dec. 23, 2011.
Prosecutors will weigh whether to retry former Cocoa Deputy Police Chief Bobby Jones for battery after a guilty verdict read in court Thursday [Dec. 22] was thrown out when a lone juror changed her mind. “No,” the woman said twice when asked by Brevard County Judge A.B. Majeed if she agreed with the guilty verdict that only minutes before she signed off on with five other jurors. It was an unexpected and dramatic twist. Jones was charged with misdemeanor battery after his then-girlfriend, Cara Allain, 22, reported being punched and dragged by the off-duty deputy chief outside of a Melbourne pub Dec. 18, 2010. Majeed declared a mistrial after jurors were polled individually in open court following the verdict’s reading.

MIAMI WOMAN CONVICTED IN NOTORIOUS MURDER-FOR-HIRE PLOT GETS NEW HEARINGThe Miami Herald, http://www.miamiherald.com, Dec. 26, 2011.
A Miami woman convicted 10 years ago for her role in a notorious murder-for-hire scheme has won another round in her fight to have her life sentence reduced because she received poor legal advice from her trial lawyers. The 11th U.S. Circuit Court of Appeals on Friday [Dec. 23] ordered a new hearing to determine if Yuby Ramirez rejected two plea offers from prosecutors before her 2001 trial because her lawyers gave her misleading advice. At issue: how much prison time she faced if convicted for aiding a plot to kill a government witness against an infamous South Florida cocaine ring. Before her trial, Ramirez received two offers to plead guilty in exchange for a reduced sentence of five to 10 years in prison. But Ramirez rejected both offers on the advice of her trial lawyers, who believed that Ramirez could face no more than a 10-year sentence because of errors in her indictment. However, the lawyers were wrong, and Ramirez was sentenced to life.

Attorney General Bondi’s Office Reaches $538.5 Million Multi-State and Class Action Settlement with Manufacturers of TFT-LCD Panels

Print Version

TALLAHASSEE, Fla.–Attorney General Pam Bondi today announced that her office and seven other state attorneys general as well as lead counsel for the class of indirect purchasers have reached a $538.5 million settlement with manufacturers and sellers of the thin film transistor (TFT) liquid crystal display (LCD) panels. The complaint alleged the defendants conspired to prevent competition and to increase prices for TFT-LCD panels, the most common form of LCD panels used in popular electronic devices such as desktop monitors, laptop screens, and flat panel televisions. Florida will also receive its proportionate share of $14.7 million in civil penalties.

“Price-fixing is detrimental to Florida’s consumers, governmental agencies, and the economy,” stated Attorney General Pam Bondi. “I am pleased that we will be able to return funds to those who were harmed by this illegal and deceptive behavior.”

The complaint alleged that the defendants organized the conspiracy at the highest levels of their organizations in various secret meetings and telephone conversations. A number of the defendants and their employees have pled guilty to federal charges in the same federal court. The litigation will continue against other non-settling defendants, including well-known manufacturers of electronic goods, LG, Toshiba, and AU Optronics.

Because the litigation will continue against the remaining defendants, the settlement fund will not be distributed until the litigation is concluded to allow for a single distribution. Attorney General Bondi’s suit against the remaining defendants is scheduled for trial in November 2012. Following court approval of the settlements, the funds will be distributed to Florida businesses and consumers who made a qualifying purchase. Upon completion of the litigation, a claims process will be announced, and information regarding how to file a claim will be provided on the Attorney General Bondi’s website.

Defendants include manufacturers of electronic goods, including the following: AU Optronics Corporation, AU Optronics Corporation America, Chimei Innolux Corp., CMO Japan Co., Ltd., Chi Mei Optoelectronics USA, Inc., HannStar Display Corporation, Hitachi Ltd., Hitachi Displays, Ltd., Hitachi Electronic Devices (USA), Inc., LG Display Co., Ltd., LG Display America Inc., Samsung Electronics Co., Ltd., Samsung Electronics America, Inc., Samsung Semiconductor, Inc., Sharp Corporation, Sharp Electronics Corporation, Toshiba Corporation, Toshiba Mobile Display Technology Co., Ltd., Toshiba America Information Systems, Inc., and Toshiba America Electronics Components, Inc.

All settling defendants must promise to fully cooperate with Florida against the remaining defendants. The settlements also require the settling defendants to establish antitrust reporting and compliance programs.

The other state attorneys general involved are as follows: New York, Michigan, Missouri, Arkansas, West Virginia, California, and Wisconsin.

A copy of the LCD complaint is available online at:
http://myfloridalegal.com/webfiles.nsf/WF/MMFD-8PCKYS/$file/12811LCDCOMPLAINT.pdf

BP, GE, Delphi Financial, Kynikos, Barclays in Court News

(Adds BP in Top section, Commerce Bancshares in Verdicts and Kynikos in Lawsuits. Updates Rothstein in Lawsuits section.)

Dec. 27 (Bloomberg) — Cameron International Corp. lost its appeal to derail the February nonjury trial over which companies should be blamed for the 2010 BP Plc oil spill in the Gulf of Mexico.

A panel of the U.S. Court of Appeals for the Fifth Circuit rejected Cameron’s claim that U.S. District Judge Carl Barbier wrongly cited maritime law to allow him to conduct a nonjury trial over liability for the incident. Cameron contended that claims against the company fall under the federal Outer Continental Shelf Lands Act, which allows for a jury trial.

“The district court did not clearly err in concluding that the limitation proceeding is within the court’s admiralty jurisdiction,” the three-judge panel said in a one-paragraph decision yesterday. The court rejected review of other issues raised by Cameron.

Cameron asked the appeals court to throw out the existing trial plan and rule that the company has a right to a trial before a jury. Yesterday’s ruling removes a possible obstacle to the nonjury trial before Barbier that is scheduled to begin Feb. 27 in New Orleans to determine liability and apportion fault.

Barbier plans two subsequent nonjury phases on the size of the spill and efforts to contain it. Test jury trials on damages would follow, the judge said. Cameron, which settled damage claims with BP this month, said the trial plan violates its constitutional rights.

“There is not a claim against Cameron that does not implicate our right to a jury trial under the Seventh Amendment,” Russell Post, a Cameron attorney, told the judges at the hearing Dec. 22 in federal court in Dallas. That amendment to the U.S. Constitution guarantees citizens’ and companies’ rights to jury trials in civil disputes.

David Beck, Cameron lawyer, didn’t respond to an e-mail seeking comment on the decision yesterday.

The April 2010 Macondo well blowout and explosion killed 11 workers and caused the worst offshore oil spill in U.S. history. The accident spawned hundreds of lawsuits against BP and its partners, including Cameron, Transocean Ltd., the Switzerland- based owner and operator of the Deepwater Horizon drilling rig that exploded, and Halliburton Co., which provided cementing services.

The appeals case is In re Cameron International, 11-30987, U.S. Court of Appeals for the Fifth Circuit. The lawsuits are combined in In re Oil Spill by the Oil Rig Deepwater Horizon in the Gulf of Mexico on April 20, 2010, MDL-2179, U.S. District Court, Eastern District of Louisiana (New Orleans).

Verdicts/Settlements

Commerce Bancshares Unit Agrees to Settle Overdraft Suits

Commerce Bancshares Inc. said a unit of the company agreed to pay $18.3 million to settle consumer lawsuits accusing the Colorado bank of illegally charging excessive overdraft fees.

Officials of the unit, Denver-based Commerce Bank, agreed to resolve customers’ claims that the bank “improperly charged overdraft fees on certain debit card transactions,” according to a company filing Dec. 23 with the U.S. Securities and Exchange Commission.

“The bank, while admitting no wrongdoing, agreed to the settlement in order to resolve the litigation and avoid further expense,” officials said in the filing.

Commerce Bancshares, based in Kansas City, Missouri, is among more than a dozen banks across the U.S. that settled suits targeting overdraft policies which customers contend were engineered to generate fees unfairly.

Consumers said banks including Bank of America Corp., JPMorgan Chase Co. and Wells Fargo Co. had policies that allowed them to debit account holders’ funds in a way that made it more likely customers would incur overdraft fees.

The Federal Reserve last year prohibited lenders from automatically charging fees when consumers have insufficient funds for electronic or debit-card transactions.

The case is Wolfgeher v. Commerce Bank, 1:10-cv-22017, U.S. District Court, Southern District of Florida (Miami). The consolidated case is In re Checking Account Overdraft Litigation, 09-02036, U.S. District Court, Southern District of Florida (Miami).

GE Settles U.S. Investigation Into Muni-Bond Bid Rigging

General Electric Co. agreed to pay $70.4 million to resolve a criminal investigation and civil claims for conspiring to rig bids on U.S. municipal-bond deals, overcharging state and local governments on investments.

GE Funding Capital Market Services, a former unit, is the fifth company to settle in a federal probe of more than five- years. The accord will settle cases with the Justice Department, Securities and Exchange Commission, Internal Revenue Service and 25 states, the Justice Department said Dec. 23 in a statement.

“GE Funding’s former traders entered into illegal agreements to manipulate the bidding process on municipal investment contracts,” said Sharis A. Pozen, acting assistant attorney general in charge of the department’s antitrust division. “This anticompetitive conduct harmed municipalities as well as taxpayers.”

The settlement will bring to $743 million the amount that banks have paid to end the investigation. Some of which is being returned to localities that were overcharged, the SEC said in a news release. Bank of America Corp., JPMorgan Chase Co., UBS AG and Wells Fargo Co. previously settled similar cases.

GE’s settlement stems from an investigation that centered on three now-former employees at a unit the finance division discontinued in April 2010, the Fairfield, Connecticut-based company said in a statement Dec. 23. The conduct took place between 1999 and 2004, GE said.

The settlement won’t have a “material impact” on earnings, according to GE, the world’s biggest maker of jet engines and power-generation equipment. It takes about $100 million in profit to yield 1 cent in per-share earnings at GE, whose operations span energy, aviation, health care, transportation and financial services.

The Justice Department said it agreed not to prosecute GE Funding because it admitted its illegal conduct, cooperated with the investigation and took steps to address anticompetitive conduct. The department also cited GE Funding’s commitment to make restitution.

For more, click here.

Murchison to Pay A$25 Million to Settle Chameleon Court Dispute

Murchison Metals Ltd., an Australian iron ore producer for the Chinese market, agreed to pay A$25 million ($25.3 million) to Chameleon Mining NL to settle a dispute over the ownership of an iron ore project.

The settlement doesn’t cover litigation involving Chameleon, Murchison and Murchison’s former director, Phillip Grimaldi, Murchison said in a statement to the Australian Stock Exchange Dec. 23.

Murchison is building a A$4 billion iron ore rail and port project with Mitsubishi Corp. The companies are partners in Crosslands Resources Ltd., which is developing the Jack Hills project in Western Australia.

Chameleon, a gold explorer, said Murchison used its money to help a company called Winterfall make a A$350,000 payment to buy the western Australian property and as a result it was entitled to a stake in the project. Murchison, which had said the transfer was a loan, later bought Winterfall to obtain the mining property.

Federal Court Judge Peter Jacobson ruled in October 2010 that Chameleon is entitled to a portion of the profit from the project, not a stake in it nor in Murchison’s shares in Crosslands. Chameleon appealed the ruling.

For the latest verdict and settlement news, click here.

New Suits

Delphi Financial Sued by Pension Over Tokio Marine’s Buyout

Tokio Marine Holdings Inc.’s $2.7 billion buyout of insurer Delphi Financial Group Inc. shortchanges Delphi investors while unfairly enriching the company’s top executive, a shareholder said in a lawsuit.

Tokio Marine, Japan’s second-largest casualty insurer, agreed on Dec. 21 to pay $2.7 billion in cash for Delphi, a U.S.-based insurer that sells workers’ compensation and group- life coverage. The deal is structured to discourage other bidders and provides $55 million to Delphi Chief Executive Officer Robert Rosenkranz, who didn’t shop for the highest offer for the insurer, a Michigan-based pension said in the suit.

Rosenkranz, Delphi’s founder, is using his position “to benefit personally at the direct expense of Delphi’s public shareholders,” lawyers for the Pontiac General Employees Retirement System said in the suit filed in Delaware Chancery Court in Wilmington.

Tokio Marine’s offer comes as Japanese insurers are looking overseas and grappling with an aging society and declines in returns on securities holdings in the aftermath of the nation’s record earthquake and tsunami in March. The acquisition will boost Tokio Marine’s overseas profit contribution to 46 percent of earnings from 37 percent, company officials said earlier this week.

Bernard Kilkelly, a Delphi spokesman, didn’t return a call Dec. 23 for comment on the suit over the Tokio Marine buyout.

The case is Pontiac General Employees Retirement System v. Brine, CA No. 7144, Delaware Chancery Court (Wilmington).

For more, click here.

For the latest new suits news, click here. For copies of recent civil complaints, click here.

Lawsuits/Pretrial

Kynikos, Third Point Are Dismissed From $8 Billion Fairfax Suit

James Chanos’s Kynikos Associates LP and Daniel Loeb’s Third Point LLC won dismissal from an $8 billion lawsuit accusing the two hedge funds of spreading negative information to drive down Fairfax Financial Holdings Ltd.’s stock price.

New Jersey Superior Court Judge Stephan C. Hansbury in Morristown granted their requests Dec. 23, saying they couldn’t be sued in New Jersey. Hansbury also dismissed Institutional Credit Partners LLC. All three firms are based in New York. In addition to Chanos and Loeb, also dropped from the suit were Jeffrey Perry, an analyst at Third Point, and William Gahan, who was an analyst at ICP.

In September, Hansbury dismissed billionaire Steven A. Cohen and his Stamford, Connecticut-based SAC Capital Advisors LP from the case.

“One must establish that the defendants purposely availed themselves of the State of New Jersey and that the alleged improper conduct was expected or intended to be felt within the State of New Jersey,” Hansbury wrote. He said Fairfax didn’t do that.

Fairfax, a Toronto-based insurer, sued the hedge funds in 2006, alleging they acted to harm the company because they were betting its stock price would decline. The hedge funds named in the suit have denied Fairfax’s accusations.

“We thought Fairfax was engaged in some pretty blatant forum shopping and it took a while but the judge saw through it,” Bill Carmody, a lawyer for Third Point at Susman Godfrey LLP in New York, said in a phone interview.

“We are gratified by the court’s decision, but otherwise have no comment,” Chanos said in an e-mail.

Michael Bowe, a lawyer for Fairfax, said in an e-mail that the dismissal of its claims against the funds was “entirely incorrect.” He said the evidence shows that “these parties engaged in a vicious and unrelenting attack” on Fairfax.

Fairfax plans to appeal the judge’s decision, said Bowe, who is a partner at Kasowitz Benson Torres Friedman LLP in New York.

Fairfax said the funds coaxed John Gwynn, a former insurance analyst at Morgan Keegan Co. in Memphis, Tennessee, into giving them his negative Fairfax reports before they were published. It also said they hired an outside analyst, Spyro Contogouris, to spread false Fairfax information.

The case is Fairfax Financial Holdings Ltd. v. SAC Capital Management LLC, L-2032-06, Superior Court of New Jersey, Morris County (Morristown).

SEC Backs Lehman Brokerage in $3 Billion Barclays Dispute

The U.S. Securities and Exchange Commission sided with the Lehman Brothers Holdings Inc. brokerage in a $3 billion dispute over assets with Barclays Plc, saying a judge ruled correctly that the U.K. bank’s claim to securities in customer reserve accounts was conditional.

If the SEC prevails, Barclays may lose its claim to as much as $1.3 billion reserved for customers, according to a Dec. 22 SEC court filing.

Michael O’Looney, a Barclays spokesman, declined to comment on the SEC filing.

Barclays and Lehman Brothers Inc. both appealed U.S. Bankruptcy Judge James Peck’s ruling that told Barclays to return $2 billion in margin assets to the bankrupt brokerage, and said it had “only a conditional right” to $769 million in the customer reserve account. Brokerage trustee James Giddens is fighting Peck’s order to give the bank at least $1.1 billion, and possibly the $769 million, if it leaves enough in the reserve account to satisfy remaining customer claims.

As much as $1.3 billion in reserve assets can’t go to Barclays if customers suffer as a result, and Giddens has said he needs the assets to satisfy claims, the SEC said in the filing. In addition to the $769 million, a second pool of funds, $507 million in margin for customer transactions at the Options Clearing Corp., raises similar issues, the SEC said.

SEC staff members told both parties in 2008 when Barclays bought Lehman’s North American business that they might violate a customer protection rule if Barclays took the assets, according to the filing.

The dueling between London-based Barclays and trustee Giddens follows a bankruptcy court trial held in 2010 before Peck in Manhattan.

The district court case is Giddens v. Barclays Capital Inc., 11-cv-06052, U.S. District Court, Southern District of New York (Manhattan).

For more, click here.

Rothstein Says TD Bank Played ‘Critical’ Role in Ponzi Scheme

Scott Rothstein, the Florida lawyer convicted in a $1.2 billion investment fraud, said Toronto-Dominion Bank played a “critical” role in his Ponzi scheme, according to a transcript of a sworn deposition made public Dec. 22.

Rothstein, sentenced to 50 years in prison, said that on a scale from one to 10, the assistance he got from Canada’s second-biggest bank rated a 10.

“They were assisting me in putting fake balance statements into the hands of my investors,” he said, according to a transcript of the deposition taken this month at the federal courthouse in Miami as part of Rothstein’s former law firm’s bankruptcy case. A copy of the transcript was provided by the law firm Conrad Scherer, which represents investors seeking to recover money.

Rothstein, formerly of Rothstein Rosenfeldt Adler PA in Fort Lauderdale, Florida, pleaded guilty in January 2010 to five counts of racketeering, money laundering and wire fraud after admitting he sold investors interests in bogus settlements of sexual-harassment and whistle-blower lawsuits.

“We fundamentally disagree with many of the characterizations contained in Mr. Rothstein’s deposition and will continue to vigorously defend the bank against claims related to Rothstein’s acts,” Maria Leung, a spokeswoman for Toronto-based TD Bank, said in an e-mail. “Beyond that, we cannot comment on pending litigation.”

TD Bank was “critical in providing real letters to go on top of the fake balance statements,” Rothstein said, according to the transcript. “They were critical in the fact that they had TD Bank employees actually handing me those phony statements in front of the investors.”

Rothstein also said George Levin, then-chief executive officer of hedge fund Banyon Investments, knew of the fraud, according to deposition transcripts.

Nicole Vinson and William Merlin, lawyers for Levin, didn’t immediately respond to e-mails and a telephone call seeking comment on Rothstein’s testimony. Levin has previously denied claims that he knew of the Ponzi scheme. The fund manager really was a whistle-blower, contacting the U.S. Attorney’s office in November 2009 to report “irregularities” after Rothstein failed to make a payment, Jesse Derris, a spokesman, said in 2009.

In his guilty plea, Rothstein said he used the law firm to run a scheme that financed his lavish lifestyle and let him buy political influence.

The bankruptcy case is In re Rothstein Rosenfeldt Adler PA, 09-34791, and the trustee’s case is Stettin v. TD Bank NA, 11- ap-2368, U.S. Bankruptcy Court, District of Southern Florida (Fort Lauderdale).

For more, click here and here.

Nomura’s Mamadou Loses Bid to Strike Out Deutsche Bank Suit

Daniel Mamadou, the head of Nomura Holdings Inc.’s Asia corporate solutions and financing group outside Japan, lost a bid to strike out a lawsuit against him by his former employer Deutsche Bank AG.

The court has jurisdiction because the claim is substantially about breach of confidence regarding the remuneration packages of Deutsche Bank colleagues, Deputy High Court Judge David Lok ruled Dec. 23 in Hong Kong.

Deutsche Bank alleges Mamadou disclosed employee information to Nomura to assist in recruiting them, according to the Dec. 23 decision.

Lok gave the Frankfurt-based bank 21 days to amend its claim against Mamadou, its former Asia capital markets and treasury solutions co-head, to include the breach of confidence claim. Mamadou had argued the case should be heard by the city’s Labour Tribunal.

Lok said in the ruling that Deutsche Bank needs to expressly plead its allegation that Mamadou passed confidential information, and its claim is defective without that. The bank was ordered to pay the costs of the amendments.

Tokyo-based Nomura, Japan’s largest brokerage, hired nine other Deutsche Bank employees for Mamadou’s team in August.

Deutsche Bank’s Singapore-based spokesman Mark Bennewith declined to comment on the case when contacted by phone Dec. 23. Mamadou didn’t respond to an e-mail and a call to his mobile and to his direct office line.

“These allegations are baseless and I will vigorously contest them,” he said before the ruling.

The case is Deutsche Bank AG (Hong Kong Branch) and Daniel Mamadou-Blanco, HCA1514/2011 , Court of First Instance (Hong Kong).

For the latest lawsuits news, click here.

Trials/Appeals

Ethical Coffee Pursues Nespresso Case After Losing Swiss Appeal

Ethical Coffee Co. said it will appeal a ruling by a court in the Swiss canton of Vaud upholding a nationwide injunction against sales of the company’s capsules that that fit in Nespresso machines.

The decision earlier this month barring sales of Ethical Coffee capsule by Metro AG’s Media Markt stores doesn’t match a ruling in a St. Gallen cantonal court that overturned a similar prohibition against another retailer, the Fribourg, Switzerland- based manufacturer said Dec. 23 in a statement.

“We are very surprised by the court decision,” Chief Executive Officer Jean-Paul Gaillard said in the statement. The cases against the two retailers are, on a factual and legal basis, “totally similar, and we do not see any reason for upholding a decision which was not upheld in St. Gallen.”

Nespresso’s owner, Vevey, Switzerland-based Nestle SA, has pursued legal action against Ethical Coffee and the U.S. foodmaker Sara Lee Corp. since they began last year offering coffee-filled capsules compatible with its machines. The St. Gallen dispute centered on Swiss supermarket chain Denner, which was allowed to resume selling Nespresso-compatible capsules made by another supplier, Alice Allison SA, after a temporary halt was ordered in July.

Nestle is pleased with the decision in the Media Markt case, the company said in a statement. “This ruling, which is subject to the final decision of the court, supports the Nespresso arguments.”

For the latest trial and appeals news, click here.

Litigation Departments

News Corp. Said to Be in Talks on Zweifach as General Counsel

News Corp. is in talks to hire Gerson Zweifach, a partner with the Washington law firm of Williams Connolly LLP, as general counsel, a person with knowledge of the situation said.

The discussions are at an advanced stage, according to the person, who declined to speak publicly because the talks are private. In more than 29 years at Williams Connolly, Zweifach has tried antitrust, securities, libel and commercial cases, according to the firm’s website.

As top legal officer, a new general counsel may become point person for News Corp.’s handling of the phone-hacking scandal that led to the closing of the company’s News of the World tabloid in the U.K. and at least 21 arrests. Joel Klein, a board member and former federal prosecutor, is overseeing the company’s internal probe of its newspaper journalists’ actions.

Zweifach would replace Lawrence Jacobs, who left in June. Janet Nova, a board member of the company’s News International publishing unit, has served as interim general counsel. The Wall Street Journal, owned by News Corp., reported the talks with Zweifach Dec. 22.

Jack Horner, a spokesman for New York-based News Corp., declined to comment. Officials with Williams Connolly couldn’t be reached for comment by telephone after normal business hours. Zweifach didn’t respond to an e-mail seeking comment.

For the latest litigation department news, click here.

–With assistance from Linda Sandler, Edmund Lee, Felice Maranz, David Glovin and Martin Z. Braun in New York; Ronald Grover in Los Angeles; Dermot Doherty in Geneva; Jef Feeley in Wilmington, Delaware; Joe Schneider in Sydney; Debra Mao and Wendy Mock in Hong Kong; Tanya Angerer in Singapore; Susannah Nesmith in Miami; Thom Weidlich in Brooklyn, New York; and Margaret Cronin Fisk in Southfield, Michigan. Editor: Charles Carter

NBA notebook: Wizards fans express their views on Humphries’ divorce

Apparently, Washington Wizards fans are keeping up with the Kardashians. Otherwise, why would they have booed Kris Humphries so vociferously?

Nets forward Humphries — whose short-lived marriage to Kim Kardashian was chronicled on reality TV — heard the loudest jeers during the introductions of the starting lineups for New Jersey’s season-opening game at the Wizards on Monday night.

Once the game began, Humphries also heard it from the crowd whenever he touched the ball. The booing reached a crescendo when he was about to attempt a free throw in the first quarter, then turned to cheers when his shot clanged off the front of the rim.

Humphries and Kardashian split up 72 days after their wedding, which was shown on television.

Free tickets

Forward Zach Randolph (Marion) is spreading some holiday cheer for hundreds of Memphis Grizzlies fans.

Randolph purchased 500 tickets for the team’s home opener Wednesday against the Oklahoma City Thunder in a rematch of last season’s Western Conference semifinals.

He’ll give away the tickets this afternoon in the FedExForum grand lobby, according to The (Memphis) Commercial Appeal.

Dalembert signed

The Houston Rockets signed free-agent center Samuel Dalembert.

The 6-11 Dalembert agreed to a multiyear contract last week. The team officially announced his signing Monday.

Dalembert averaged 8.1 points and 8.2 rebounds for Sacramento last season. The Rockets needed to add a big man after NBA Commissioner David Stern halted a deal that would have brought Pau Gasol to the team.

Good TV ratings

NBA fans seem more excited about basketball’s return than bitter about the lockout based on television ratings for the league’s delayed openers.

The five Christmas games Sunday attracted large audiences, with the Bulls-Lakers matchup drawing the third-highest preliminary rating for a regular-season game on ABC. The 6.5 overnight rating trailed only a 7.3 for last year’s highly anticipated Heat-Lakers showdown and a 7.9 for another meeting between Miami and L.A. in 2004.

Etc.

Toronto backup C Aaron Gray was kept out as a precaution because of a rapid heart rate. Gray, who signed as a free agent when camp opened, may visit a specialist at the Cleveland Clinic. . . . The Grizzlies remained winless on opening night since the franchise left Vancouver in 2001. . . . Dallas is 0-2 for the first time since 2006-07, also the last time the Mavs were coming off a trip to the NBA Finals. That team actually went 0-4, yet wound up winning 67 games.

Divorce no protection from ex’s bankruptcy

Justin Harelikq_v2.gifDear Bankruptcy Adviser,
Under the terms of our divorce, my ex-husband is allowed to stay in the house we shared — as long as he makes the payments. The house is for sale, but we are both on the title and both liable for the mortgage. My ex has had a drop in income and now wants to default on the mortgage, but remain in the home. He will file bankruptcy if the lender threatens foreclosure, in order to extend his living there.

I would like to know if the property can be put into bankruptcy against my will, since he doesn’t own the entire house. Could a bankruptcy trustee do anything with his half of the house without my cooperation? Can bankruptcy protect him from his joint debt without my cooperation? Can I attempt to get a court-ordered quitclaim deed from my ex, since he’s in contempt of the divorce decree and causing harm to my credit while waiting for a sale in a distressed market?
– Mary

a_v2.gifDear Mary,
There is nothing worse than getting more bad news. At the very least, while you are not going to like what I have to say, you will get a straight answer.

Question No. 1: Can my ex-husband file bankruptcy without my consent?

You have absolutely no control over your ex-husband’s pending bankruptcy filing. He can legally file for bankruptcy protection and delay the sale of the house, and there is absolutely nothing you can do about it.

Question No. 2: Can the trustee do anything with half of a house?

When a bankruptcy case is filed, a trustee is assigned to review the paperwork and recommend whether the filer has a right to seek protection. The trustee is looking for assets he or she can sell and give to creditors. Unless there is equity in the house, the trustee will have no interest in the property. So the trustee will be of no help to you.

The more distressing news comes when there is equity in a house. The trustee could force the sale of the property, without your consent, in order to pay creditors. You might have some rights to the equity in the house, but you would have no rights to stop the trustee from selling the property in the event equity exists. Meaning, if you are entitled to half of the equity, you would receive your equitable interest upon the sale. But you could not stop the trustee from selling the property.

Obviously, this option could be a disaster if you were hoping to sell the property in the future when the market improves and the equity increases. Since you state correctly that the housing market is distressed, the trustee might not receive much from the sale.

Question No. 3: Can ex-husband be protected from the secured debt without your consent?

Not only can your ex-husband be protected, but you might now face additional exposure. Depending on the state where you live, the lender might sell the house in a foreclosure sale and have a right to come after you for any deficiency balance. The deficiency balance is the amount owed after the sale. For example, the house is sold for $200,000, but the loan against the house is $250,000. That means a balance of approximately $50,000 will remain after the sale. Depending on your state laws regarding post-foreclosure deficiency balance, you could be liable to pay the deficiency. And yes, your ex-husband could be free of this debt because he filed bankruptcy.

There is a huge exemption to this horrible fate, and that would be a question for your divorce attorney or for the family law court where you filed for the divorce. Basically, if your husband agreed to pay on the mortgage in the divorce decree, and then the house is sold in foreclosure and a deficiency balance remains, he could still be liable to pay even after filing bankruptcy. I am not a family law attorney, and there always may be exceptions that I don’t know about.

Question No. 4: Can you sign off your interest in the property?

Yes, you could probably have your name taken off the title to the property before he files for bankruptcy protection, but that will not help you at all. Your name is still on the loan. And unless you can somehow get your name off the loan, you could still be liable. I cannot think of any way, short of refinancing a property, to get your name off the loan. And if there is little or no equity in the house, refinancing would likely be impossible.

As I said, I will tell you the truth — even if it isn’t good news. At this point, you might need to consult with your divorce attorney, if you hired one. Or you may need to go back to the family law court to confirm his or your future liability.

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More From Bankrate.com

GE, Delphi Financial, Barclays, TD, News Corp. in Court News

General Electric Co. (GE) agreed to pay
$70.4 million to resolve a criminal investigation and civil
claims for conspiring to rig bids on U.S. municipal-bond deals,
overcharging state and local governments on investments.

GE Funding Capital Market Services, a former unit, is the
fifth company to settle in a federal probe of more than five-
years. The accord will settle cases with the Justice Department,
Securities and Exchange Commission, Internal Revenue Service and
25 states, the Justice Department said Dec. 23 in a statement.

“GE Funding’s former traders entered into illegal
agreements to manipulate the bidding process on municipal
investment contracts,” said Sharis A. Pozen, acting assistant
attorney general in charge of the department’s antitrust
division. “This anticompetitive conduct harmed municipalities
as well as taxpayers.”

The settlement will bring to $743 million the amount that
banks have paid to end the investigation. Some of which is being
returned to localities that were overcharged, the SEC said in a
news release. Bank of America Corp., (BAC) JPMorgan Chase Co. (JPM), UBS
AG (UBSN)
and Wells Fargo Co. (WFC) previously settled similar cases.

GE’s settlement stems from an investigation that centered
on three now-former employees at a unit the finance division
discontinued in April 2010, the Fairfield, Connecticut-based
company said in a statement Dec. 23. The conduct took place
between 1999 and 2004, GE said.

The settlement won’t have a “material impact” on
earnings, according to GE, the world’s biggest maker of jet
engines and power-generation equipment. It takes about $100
million in profit to yield 1 cent in per-share earnings at GE,
whose operations span energy, aviation, health care,
transportation and financial services.

The Justice Department said it agreed not to prosecute GE
Funding because it admitted its illegal conduct, cooperated with
the investigation and took steps to address anticompetitive
conduct. The department also cited GE Funding’s commitment to
make restitution.

For more, click here.

Murchison to Pay A$25 Million to Settle Chameleon Court Dispute

Murchison Metals Ltd. (MMX), an Australian iron ore producer for
the Chinese market, agreed to pay A$25 million ($25.3 million)
to Chameleon Mining NL (CHM) to settle a dispute over the ownership of
an iron ore project.

The settlement doesn’t cover litigation involving
Chameleon, Murchison and Murchison’s former director, Phillip
Grimaldi, Murchison said in a statement to the Australian Stock
Exchange Dec. 23.

Murchison is building a A$4 billion iron ore rail and port
project with Mitsubishi Corp. The companies are partners in
Crosslands Resources Ltd., which is developing the Jack Hills
project in Western Australia.

Chameleon, a gold explorer, said Murchison used its money
to help a company called Winterfall make a A$350,000 payment to
buy the western Australian property and as a result it was
entitled to a stake in the project. Murchison, which had said
the transfer was a loan, later bought Winterfall to obtain the
mining property.

Federal Court Judge Peter Jacobson ruled in October 2010
that Chameleon is entitled to a portion of the profit from the
project, not a stake in it nor in Murchison’s shares in
Crosslands. Chameleon appealed the ruling.

For the latest verdict and settlement news, click here.

New Suits

Delphi Financial Sued by Pension Over Tokio Marine’s Buyout

Tokio Marine Holdings Inc. (8766)’s $2.7 billion buyout of insurer
Delphi Financial Group Inc. (DFG) shortchanges Delphi investors while
unfairly enriching the company’s top executive, a shareholder
said in a lawsuit.

Tokio Marine, Japan’s second-largest casualty insurer,
agreed on Dec. 21 to pay $2.7 billion in cash for Delphi, a
U.S.-based insurer that sells workers’ compensation and group-
life coverage. The deal is structured to discourage other
bidders and provides $55 million to Delphi Chief Executive
Officer Robert Rosenkranz, who didn’t shop for the highest offer
for the insurer, a Michigan-based pension said in the suit.

Rosenkranz, Delphi’s founder, is using his position “to
benefit personally at the direct expense of Delphi’s public
shareholders,” lawyers for the Pontiac General Employees
Retirement System
said in the suit filed in Delaware Chancery
Court in Wilmington.

Tokio Marine’s offer comes as Japanese insurers are looking
overseas and grappling with an aging society and declines in
returns on securities holdings in the aftermath of the nation’s
record earthquake and tsunami in March. The acquisition will
boost Tokio Marine’s overseas profit contribution to 46 percent
of earnings from 37 percent, company officials said earlier this
week.

Bernard Kilkelly, a Delphi spokesman, didn’t return a call
Dec. 23 for comment on the suit over the Tokio Marine buyout.

The case is Pontiac General Employees Retirement System v.
Brine, CA No. 7144, Delaware Chancery Court (Wilmington).

For more, click here.

For the latest new suits news, click here. For copies of recent
civil complaints, click here.

Lawsuits/Pretrial

SEC Backs Lehman Brokerage in $3 Billion Barclays Dispute

The U.S. Securities and Exchange Commission sided with the
Lehman Brothers Holdings Inc. (LEHMQ) brokerage in a $3 billion dispute
over assets with Barclays Plc (BARC), saying a judge ruled correctly
that the U.K. bank’s claim to securities in customer reserve
accounts was conditional.

If the SEC prevails, Barclays may lose its claim to as much
as $1.3 billion reserved for customers, according to a Dec. 22
SEC court filing.

Michael O’Looney, a Barclays spokesman, declined to comment
on the SEC filing.

Barclays and Lehman Brothers Inc. both appealed U.S.
Bankruptcy Judge James Peck’s ruling that told Barclays to
return $2 billion in margin assets to the bankrupt brokerage,
and said it had “only a conditional right” to $769 million in
the customer reserve account. Brokerage trustee James Giddens is
fighting Peck’s order to give the bank at least $1.1 billion,
and possibly the $769 million, if it leaves enough in the
reserve account to satisfy remaining customer claims.

As much as $1.3 billion in reserve assets can’t go to
Barclays if customers suffer as a result, and Giddens has said
he needs the assets to satisfy claims, the SEC said in the
filing. In addition to the $769 million, a second pool of funds,
$507 million in margin for customer transactions at the Options
Clearing Corp., raises similar issues, the SEC said.

SEC staff members told both parties in 2008 when Barclays
bought Lehman’s North American business that they might violate
a customer protection rule if Barclays took the assets,
according to the filing.

The dueling between London-based Barclays and trustee
Giddens follows a bankruptcy court trial held in 2010 before
Peck in Manhattan.

The district court case is Giddens v. Barclays Capital
Inc., 11-cv-06052, U.S. District Court, Southern District of New
York
(Manhattan).

Rothstein Says TD Bank Played ‘Critical’ Role in Ponzi Scheme

Scott Rothstein, the Florida lawyer convicted in a $1.2
billion investment fraud, said Toronto-Dominion Bank (TD) played a
“critical” role in his Ponzi scheme, according to a transcript
of a sworn deposition made public Dec. 22.

Rothstein, sentenced to 50 years in prison, said that on a
scale from one to 10, the assistance he got from Canada’s
second-biggest bank rated a 10.

“They were assisting me in putting fake balance statements
into the hands of my investors,” he said, according to a
transcript of the deposition taken this month at the federal
courthouse in Miami as part of Rothstein’s former law firm’s
bankruptcy case. A copy of the transcript was provided by the
law firm Conrad Scherer, which represents investors seeking to
recover money.

Rothstein, formerly of Rothstein Rosenfeldt Adler PA in
Fort Lauderdale, Florida, pleaded guilty in January 2010 to five
counts of racketeering, money laundering and wire fraud after
admitting he sold investors interests in bogus settlements of
sexual-harassment and whistle-blower lawsuits.

“We fundamentally disagree with many of the
characterizations contained in Mr. Rothstein’s deposition and
will continue to vigorously defend the bank against claims
related to Rothstein’s acts,” Maria Leung, a spokeswoman for
Toronto-based TD Bank, said in an e-mail. “Beyond that, we
cannot comment on pending litigation.”

TD Bank was “critical in providing real letters to go on
top of the fake balance statements,” Rothstein said, according
to the transcript. “They were critical in the fact that they
had TD Bank employees actually handing me those phony statements
in front of the investors.”

Rothstein also said that the size of TD Bank was important
to the scheme because some investors worried about the solvency
of a smaller bank he had been using.

In his guilty plea, Rothstein said he used the law firm to
run a scheme that financed his lavish lifestyle and let him buy
political influence.

The bankruptcy case is In re Rothstein Rosenfeldt Adler PA,
09-34791, and the trustee’s case is Stettin v. TD Bank NA, 11-
ap-2368, U.S. Bankruptcy Court, District of Southern Florida
(Fort Lauderdale).

For more, click here.

Nomura’s Mamadou Loses Bid to Strike Out Deutsche Bank Suit

Daniel Mamadou, the head of Nomura Holdings Inc.’s Asia
corporate solutions and financing group outside Japan, lost a
bid to strike out a lawsuit against him by his former employer
Deutsche Bank AG. (DBK)

The court has jurisdiction because the claim is
substantially about breach of confidence regarding the
remuneration packages of Deutsche Bank colleagues, Deputy High
Court Judge David Lok ruled Dec. 23 in Hong Kong.

Deutsche Bank alleges Mamadou disclosed employee
information to Nomura to assist in recruiting them, according to
the Dec. 23 decision.

Lok gave the Frankfurt-based bank 21 days to amend its
claim against Mamadou, its former Asia capital markets and
treasury solutions co-head, to include the breach of confidence
claim. Mamadou had argued the case should be heard by the city’s
Labour Tribunal.

Lok said in the ruling that Deutsche Bank needs to
expressly plead its allegation that Mamadou passed confidential
information, and its claim is defective without that. The bank
was ordered to pay the costs of the amendments.

Tokyo-based Nomura, Japan’s largest brokerage, hired nine
other Deutsche Bank employees for Mamadou’s team in August.

Deutsche Bank’s Singapore-based spokesman Mark Bennewith
declined to comment on the case when contacted by phone Dec. 23.
Mamadou didn’t respond to an e-mail and a call to his mobile and
to his direct office line.

“These allegations are baseless and I will vigorously
contest them,” he said before the ruling.

The case is Deutsche Bank AG (Hong Kong Branch) and Daniel
Mamadou-Blanco, HCA1514/2011 , Court of First Instance (Hong
Kong).

For the latest lawsuits news, click here.

Trials/Appeals

Ethical Coffee Pursues Nespresso Case After Losing Swiss Appeal

Ethical Coffee Co. said it will appeal a ruling by a court
in the Swiss canton of Vaud upholding a nationwide injunction
against sales of the company’s capsules that that fit in
Nespresso machines.

The decision earlier this month barring sales of Ethical
Coffee capsule by Metro AG’s Media Markt stores doesn’t match a
ruling in a St. Gallen cantonal court that overturned a similar
prohibition against another retailer, the Fribourg, Switzerland-
based manufacturer said Dec. 23 in a statement.

“We are very surprised by the court decision,” Chief
Executive Officer Jean-Paul Gaillard said in the statement. The
cases against the two retailers are, on a factual and legal
basis, “totally similar, and we do not see any reason for
upholding a decision which was not upheld in St. Gallen.”

Nespresso’s owner, Vevey, Switzerland-based Nestle SA (NESN), has
pursued legal action against Ethical Coffee and the U.S.
foodmaker Sara Lee Corp. (SLE) since they began last year offering
coffee-filled capsules compatible with its machines. The St.
Gallen dispute centered on Swiss supermarket chain Denner, which
was allowed to resume selling Nespresso-compatible capsules made
by another supplier, Alice Allison SA, after a temporary halt
was ordered in July.

Nestle is pleased with the decision in the Media Markt
case, the company said in a statement. “This ruling, which is
subject to the final decision of the court, supports the
Nespresso arguments.”

For the latest trial and appeals news, click here.

Litigation Departments

News Corp. (NWSA) Said to Be in Talks on Zweifach as General Counsel

News Corp. is in talks to hire Gerson Zweifach, a partner
with the Washington law firm of Williams Connolly LLP, as
general counsel, a person with knowledge of the situation said.

The discussions are at an advanced stage, according to the
person, who declined to speak publicly because the talks are
private. In more than 29 years at Williams Connolly, Zweifach
has tried antitrust, securities, libel and commercial cases,
according to the firm’s website.

As top legal officer, a new general counsel may become
point person for News Corp.’s handling of the phone-hacking
scandal that led to the closing of the company’s News of the
World tabloid in the U.K. and at least 21 arrests. Joel Klein, a
board member and former federal prosecutor, is overseeing the
company’s internal probe of its newspaper journalists’ actions.

Zweifach would replace Lawrence Jacobs, who left in June.
Janet Nova, a board member of the company’s News International
publishing unit, has served as interim general counsel. The Wall
Street Journal, owned by News Corp., reported the talks with
Zweifach Dec. 22.

Jack Horner, a spokesman for New York-based News Corp.,
declined to comment. Officials with Williams Connolly couldn’t
be reached for comment by telephone after normal business hours.
Zweifach didn’t respond to an e-mail seeking comment.

For the latest litigation department news, click here.

To contact the reporter on this story:
Elizabeth Amon in Brooklyn, New York,
at eamon2@bloomberg.net.

To contact the editor responsible for this story:
Michael Hytha at mhytha@bloomberg.net.

<!—->

Kim Kardashian Twitter: Talks About Lamar Odom Mavs Game & Family Christmas Gift

Keeping up with Kim Kardashian and family, it looks like Christmas, for the most part, was spent having fun. Kim got on Twitter on Christmas day to talk about the family’s humorous gifts this year, and also about watching sister Khloe’s husband play basketball as the NBA season opened.

On December 25th, the Kardashians celebrated the Christmas holiday as a family, minus one ex-husband (Kris Humphries), and one current husband who had to work (for the NBA). It’s been an up and down year for the family, with Kim’s marriage followed by divorce, as well as Khloe and Lamar Odom having to move to Dallas from Los Angeles. Lamar is now part of the Mavericks, who raised their championship banners for their first game of the season against the Heat on Christmas Day.

Kim tweeted about the family gathering round to watch Odom play, saying:

Watching this @dallasMAVS game with the whole fam! Let’s go @RealLamarOdom!!!!

Unfortunately, Kim and company weren’t cheerleading enough because the Miami Heat spoiled Christmas Day for Lamar and the Mavs, en route to a rout early in the first half. However, it appears the Kardashians still are enjoying the idea of giving gifts and being a family. Kim tweeted jokingly:

I wanna tweet a pic of @RobKardashian in his holiday pajama’s! But he won’t let me!Our fam pj’s this year are so cute!We all look like santa

That could be the basis for next year’s Kardashian Christmas card! For now, readers will have to imagine the picture of Kim Kardashian as a sexy “Santa’s helper,” and the rest of the family as cute elves. All in all, it sounds like the Kardashians will continue to have fun through the holidays as they look forward to a big year in 2012!

(Image source: Wikimedia)