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January 25, 2005
Class Action Reintroduced, As Backers Vow To Fight Changes
Supporters of last year’s stalled Senate class-action bill
welcomed its reintroduction yesterday, and vowed to fight any efforts to
modify it during a likely Senate Judiciary Committee markup,
CongressDaily reported. Senate Majority Leader Bill
Frist(R–Tenn.) said it will be the first bill to move to the floor
after the Senate completes action on President Bush’s Cabinet
nominations. Based on “initial discussions” with Democratic
leaders, Frist told reporters he had agreed to move the class-action
bill through the Judiciary Committee, rather than moving it directly to
the floor.
The bill, introduced yesterday, would move many class-action lawsuits
from state courts to federal courts, where more strict rules would
govern the cases. The measure is identical to last year’s Senate
compromise bill, which had the support of more than 60 members. But last
year’s bill stalled after GOP and Democratic leaders fought over
unrelated amendments.
Separately, a National Law Journal article examines the
core issues in the bill still being debated by manufacturers and
insurers. Read the full article at
href='http://www.law.com/jsp/article.jsp?id=1106573716134'>www.law.com/jsp/article.jsp?id=1106573716134.
Court Rules Against Pension Bonus
A federal court struck down special pension benefits awarded to
hundreds of employees of Fruehauf Trailer Corp. just before the company
filed for bankruptcy protection eight years ago, the Wall Street
Journal reported.
The decision by the U.S. Bankruptcy Court in Wilmington, Del.,
reinforces efforts by the Bush administration and Congress to overhaul
the federal pension-insurance program. Congress, at the urging of the
administration, plans legislation that would outlaw special benefits for
management of troubled companies when those for workers are being cut.
Read the full article at www.wsj.com
(subscription required).
Brobeck Trustee Sues Ex-Chairman Snow
Former Brobeck, Phleger & Harrison Chairman Tower Snow Jr. has
been sued for $2.7 million by the trustee of the bankrupt Brobeck
estate, the Recorder reported. The suits demand that
Brobeck partners pay back distributions they received in 2001 and 2002,
when Greenspan says Brobeck was insolvent, as well as 2002 bonuses,
capital that had been returned to them, and, in some cases, recourse
debt. Read the full article at
href='http://www.law.com/'>www.law.com.
US Airways Must Win Over Wary Customers
US Airways cleared some important financial hurdles last week,
culminating with the approval Friday of its last remaining renegotiated
labor agreement, the Washington Post reported. Now it has
to clear another critical hurdle: winning back a customer base wary of
the struggling airline’s future. Over the weekend, the carrier
launched a marketing campaign seeking to assure customers that it had
made great strides to guarantee its survival. It sent e-mails to 3.2
million customers and published full-page newspaper advertisements
saying that the worst of its troubles had passed. Read the article at
href='http://www.washingtonpost.com/wp-dyn/articles/A34044-2005Jan24.html'>www.washingtonpost.com/wp-dyn/articles/A34044-2005Jan24.html.
Cost-Cutting Airlines Grapple With Issue of Executive Pay
An article in the Wall Street Journal addresses the
issue of executive pay and management retention at distressed airlines
that typically put their survival hopes on huge savings from worker
concessions. Read the full article at
href='http://www.wsj.com/'>www.wsj.com (subscription required).
Shopping Mall Vacancy Rates Decline to 5.3 Percent
The nation’s retailers added space in the fourth quarter,
pushing down vacancy rates in malls and strip malls while driving rents
almost 1 percent higher, according to a new survey, the Wall
Street Journal reported. Bolstered by continued-strong consumer
spending, the vacancy rate in shopping malls hit its lowest level in
three-and-a-half years, falling to 5.3 percent in the fourth quarter
from 5.5 percent in the previous one, according to the survey of the top
62 U.S. markets by Reis Inc., a New York-based commercial real-estate
research firm, the online newspaper reported.
US Charges Former Penthouse Publishers with Fraud
Penthouse International Inc. defrauded investors in a 2003 quarterly
financial report by improperly booking $1 million in revenues, U.S.
regulators charged on Monday, Reuters reported. The former publishers of
Penthouse adult magazine also put the electronic signature of former
ex-CEO Robert Guccione on the report, even though he had neither seen
nor approved it, regulators said. The Securities and Exchange Commission
brought accounting fraud charges against Penthouse, former Penthouse
officer Charles Samel and Penthouse shareholder Jason Galanis in a legal
action filed in U.S. District Court in New York, the newswire
reported.
Judge Quizzes Potential Jurors in WorldCom Case
The judge presiding over the trial of former WorldCom Inc. CEO
Bernard Ebbers on Monday quizzed potential jurors on their feelings
about Wall Street and their knowledge of the $11 billion fraud case,
Reuters reported. The judge’s question-and-answer session marked
the second step in jury selection, after potential jurors were asked
last week to complete a short questionnaire. A jury is expected to be in
place this week.
Enron Documentary Tells of Debacle’s Human Toll
A documentary, “Enron: The Smartest Guys in the Room,”
debuted over the weekend at the Sundance Film Festival to packed houses,
leaving audiences wondering how the Enron debacle could have happened,
Reuters reported.