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GM to ask bankruptcy court for lawsuit protection
Topics in Legal News |
2014/04/17 15:11
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General Motors revealed in court filings late Tuesday that it will soon ask a federal bankruptcy judge to shield the company from legal claims for conduct that occurred before its 2009 bankruptcy.
The automaker's strategy is in a motion filed in a Corpus Christi, Texas, federal court case, and in other cases across the nation that involve the defective ignition switches that have led GM to recall 2.6 million small cars.
The motion asks U.S. District Judge Nelva Gonzales Ramos to delay action on the lawsuit until the bankruptcy court rules and other federal courts decide if the case should be combined with other lawsuits. But GM says it's not asking to halt action on a motion to force GM to tell customers not to drive their cars that are being recalled.
GM has said at least 13 deaths have been linked to the switch problem. The switch can unexpectedly slip out of the "run" position, shutting down the engine, knocking out power-assisted steering and power brakes, and disabling the air bags. GM admits knowing about the problem for at least a decade, but it didn't start recalling the cars, including Chevrolet Cobalts and Saturn Ions, until February.
The company's motion says GM will ask the bankruptcy court in New York to enforce an order made during the 2009 bankruptcy case that split GM into a new company and an old company. Claims from before the bankruptcy would go to "Old GM," called Motors Liquidation Co., while claims after the bankruptcy would go to the new General Motors Co. |
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Lawmaker Yee due back in court for arraignment
Topics in Legal News |
2014/04/08 12:26
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Suspended state Sen. Leland Yee is due back in federal court for his alleged role in a San Francisco political corruption and organized crime case.
Yee could enter pleas Tuesday to one count of conspiracy to traffic in firearms without a license and to illegally import firearms, and to six counts of engaging in a scheme to defraud citizens of honest services.
The San Francisco Democrat is accused of conspiring to connect an undercover FBI agent with a Philippine arms dealer in exchange for campaign contributions, and of trading political influence for cash.
Yee and 19 others were formally indicted last week after being arrested on March 26.
Other defendants, including Raymond "Shrimp Boy" Chow, whose charges include money laundering and trafficking, are scheduled for arraignment Tuesday. |
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The Supreme Court struck down limits Wednesday in federal law on the overall campaign contributions the biggest individual donors may make to candidates, political parties and political action committees. The justices said in a 5-4 vote that Americans ..
Topics in Legal News |
2014/04/03 16:34
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The Supreme Court struck down limits Wednesday in federal law on the overall campaign contributions the biggest individual donors may make to candidates, political parties and political action committees.
The justices said in a 5-4 vote that Americans have a right to give the legal maximum to candidates for Congress and president, as well as to parties and PACs, without worrying that they will violate the law when they bump up against a limit on all contributions, set at $123,200 for 2013 and 2014. That includes a separate $48,600 cap on contributions to candidates.
But their decision does not undermine limits on individual contributions to candidates for president or Congress, now $2,600 an election.
Chief Justice John Roberts announced the decision, which split the court's liberal and conservative justices. Roberts said the aggregate limits do not act to prevent corruption, the rationale the court has upheld as justifying contribution limits.
The overall limits "intrude without justification on a citizen's ability to exercise 'the most fundamental First Amendment activities,'" Roberts said, quoting from the court's seminal 1976 campaign finance ruling in Buckley v. Valeo.
Justice Clarence Thomas agreed with the outcome of the case, but wrote separately to say that he would have gone further and wiped away all contribution limits. |
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Court: Broad protection for whistleblowers
Topics in Legal News |
2014/03/05 15:07
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The Supreme Court says whistleblower protections in a federal law passed in response to the Enron financial scandal apply broadly to employees of publicly traded companies and contractors hired by the companies.
The justices ruled 6-3 Tuesday in favor of two former employees of companies that administer the Fidelity family of mutual funds. The workers claimed they faced retaliation after they reported allegations of fraud affecting Fidelity funds.
The case involved the reach of a provision of the Sarbanes-Oxley Act, passed in 2002 in response to the Enron scandal, that protects whistleblower activity. The measure was intended to protect people who expose the kind of corporate misdeeds that arose at Enron. |
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Court weighs securities fraud class-action cases
Topics in Legal News |
2014/03/05 15:07
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The Supreme Court is considering whether to abandon a quarter-century of precedent and make it tougher for investors to band together to sue corporations for securities fraud.
The justices hear arguments Wednesday in an appeal by Halliburton Co. that seeks to block a class-action lawsuit claiming the energy services company inflated its stock price.
A group of investors says it lost money when Halliburton's stock price dropped after revelations the company misrepresented revenues, understated its liability in asbestos litigation and overstated the benefits of a merger.
Justices threw out the company's first attempt to block the lawsuit in 2011. But Halliburton is now urging the court to overturn a 25-year-old decision that sparked a tidal wave of securities-related, class-action lawsuits against publicly traded companies and has led to billions in settlements.
The court's 1988 decision in Basic v. Levinson says shareholders who claim they were defrauded by false statements in securities filings don't have to prove they actually relied on the statements. Rather, the court reasoned that any misrepresentation would be reflected in the current stock price. Even if investors are not aware of the misstatements, they are presumed to be aware of them because they affect the stock price.
This presumption, known as the "fraud-on-the-market theory," has become the driving force for modern class-action securities cases. But some economists have questioned whether this theory makes sense anymore, saying it doesn't account for the sometimes random and arbitrary nature of stock trading. |
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