ERISA Class Action Demands Zell's Ouster From Tribune

Headline Legal News 2008/09/17 07:43   Bookmark and Share
A federal class action accuses Sam Zell of conspiring with directors of the Tribune Company to use employees' retirement money to fund his takeover of the Tribune, an $8.2 billion acquisition in which Zell used only $315 million of his own money. "Zell conspired with insiders and aided and abetted the breach of fiduciary duties," according to the complaint. Zell did this, in part, by claiming that the Tribune's pension plans were "overfunded by more than $200 million."
    "Sam Zell's plan could not be clearer," the complaint states. "He took the Tribune Company private with the intention of breaking up and selling the assets because he saw a collection of assets worth billions of dollars that he could purchase at a bargain price with a minimal outlay of his own money.
    "To accomplish his plan, Zell enticed the members of the Tribune board and aided and abetted Dennis J. FitzSimmons, among others, in breaching their fiduciary duties by paying them millions of dollars. Indeed, the Tribune Company's SEC filing of Dec. 28, 2007 indicated that Zell and the Company created a $25 million pool for a management equity incentive plan to provide money for Tribune executives to complete the going-private transaction and retain them over a transition period. FitzSimmons received about $3 million this pool and a total of approximately $17.7 million in several and other payouts.

"Now, Zell and his accessories threaten to destroy the Tribune Company and its assets, which include some of the nation's oldest and best daily newspaper, including the Los Angeles Times, the Chicago Tribune, and the Baltimore Sun, along with several other great daily newspaper. They are doing so illegally, without consideration for the employee-owners, without respect for the institution, and with a focus on liquidating company assets to line their own pockets."
Zell's so-called employee stock ownership plan (ESOP) increased Tribune's debt from $4 billion to nearly $13 billion "overnight," the complaint states.

It adds: "The Tribune Company has cut more than 1,100 employees since the ESOP acquisition and, after declaring that the employees' pension fund is 'overvalued' by $400 million, has improperly funded their severance and buyout packages with money taken from the supposedly 'overvalued' portion of employees' pension fund."

The 67-page page includes 56 pages of attachments and exhibits.

Plaintiffs want the new Tribune board removed, an accounting of the "supposedly overfunded pension plan," and declaratory judgment that the defendants violated ERISA, among other things.

Plaintiffs are represented by Joseph Cotchett with Cotchett, Pitre & McCarthy.
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Court OKs Suit in Death of Drunk Teen Left in Pickup

Headline Legal News 2008/09/16 07:07   Bookmark and Share
The Tennessee Supreme Court has revived a wrongful-death case against four men whose intoxicated friend died after they left him in the open bed of a pickup truck for fear he would vomit on them.

The mother of Cody Downs is entitled to a jury trial, the court said, on either of two theories of liability –- that his friends “owed him a duty to exercise reasonable care to refrain from conduct that creates an unreasonable risk of harm” or voluntarily “assumed a duty by taking charge of [him] because he was helpless.”

Downs, 18, was struck by two oncoming vehicles as he was trying to run across an interstate freeway. If the defendants put him in the bed of the truck, the duty to exercise reasonable care would apply since, the opinion said, “it is common knowledge that riding unrestrained in a vehicle can result in preventable injuries and deaths.”

An appeals court had summarily dismissed the case against Downs' roommate Ryan Britt, the pickup's owner Scott Hurdle, driver Jerry Eller, and passenger Mark Bush, citing the lack of any “prohibition against an adult riding in the open bed of a pickup truck.”

Downs and his friends initially rode in the pickup's cab as they headed home on Interstate 65 from a party in Cool Springs, Tenn., to his apartment in Nashville. After he became nauseous, they stopped alongside the freeway so he could throw up.

Someone then suggested that Downs travel the rest of the way in the bed of the pickup so he would not vomit on anybody. Several miles later, his friends realized he was no longer there but they continued on to his apartment without looking for him.

Writing for the Supreme Court, Chief Justice William M. Barker noted that “the record is unclear whether the defendants assisted Mr. Downs into the bed of the truck, physically put him there, or whether he voluntarily agreed to ride there.” The resolution of that factual issue, he said, would determine “the nature of the duty the defendants owed Mr. Downs.”

If Downs got into the bed of the truck voluntarily, the duty would be that owed under the Restatement of Torts by “One who ... takes charge of another who is helpless adequately to aid or protect himself.”

“[T]here are genuine issues of material fact with respect to whether Mr. Downs was 'helpless' and whether the defendants 'took charge of' him,” Barker said.

In a concurring opinion, Justice Janice M. Holder concluded that the defendants owed Downs a duty to exercise reasonable care and the jury should only have to decide “whether the defendants breached that duty and caused the decedent's death.”

On the causation issue, the appeals court found it was not foreseeable that “a young man who, upon all accounts was happy and showed no signs of the intention to harm himself, would run into the interstate as the result of being 'put' or 'assisted' into the bed of the pickup truck.'”
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Reputation Battle Tied to 4th Circuit Nominee

Court News 2008/09/15 07:18   Bookmark and Share
American International Group conspired with its law firm, McGuireWoods, to defame a Richmond attorney to try to avoid public embarrassment while a McGuireWoods lawyer sought a seat on the Fourth Circuit Court of Appeals, attorney Christopher Spencer claims in Federal Court.

Spencer claims the defendants conspired to defame him and abused the legal process. He says they did this by falsely blaming him for mishandling a major personal injury appeal while McGuireWoods was facing $90 million in malpractice claims.

"This case is about two men who used some of the largest insurance companies in America and abused the process of the court to trash the good name of (a) reputable lawyer," Spencer states in his federal lawsuit. "James Maddiona, a top official with one of the largest insurance groups in the world, AIG, and Patrick Regan, a Washington attorney, conspired to help AIG's longtime law firm avoid public embarrassment and to promote one of that firm's lawyer's to a seat on the Fourth Circuit Court of Appeals - all at Spencer's expense.

"AIG had hired McGuireWoods LLP ('McGuireWoods') and Earle Duncan Getchell Jr. to handle post-trial motions and to prosecute an appeal in a major personal injury case. Getchell and McGuireWoods certified that all the trial transcripts had been filed. The Virginia Supreme Court later found that certification was false. The appeal was dismissed as a result.

"AIG knew who was to blame. After all, the only reason Getchell and were (sic) in the case was so that they could handle the post-trial motions and the appeal. In fact, John S. Barr, inside 'general counsel' of McGuireWoods, actually admitted that Getchell and McGuireWoods were responsible. But McGuireWoods and Getchell needed a favor. As of 2005, they were looking at a total of Ninety Million Dollars ($90,000,000) in claims for malpractice against the firm's vaunted appellate team and Getchell. The law firm did not want this publicized. Getchell did not want these matters to interfere with his desire for a lifetime appointment as a federal judge.

"Maddiona and Regan joined with Barr, Getchell, McGuireWoods and others in a scheme that would make McGuireWoods and Getchell look good by making Spencer look bad. They decided to make Spencer the fall guy for Getchell's and McGuireWoods' mistake and falsely claim that the dismissal was Spencer's fault and his alone.

"They participated in a public relations campaign based entirely upon false statements. They abused the process of the courts. They did these things to help McGuireWoods and Getchell, to gratify their own feelings and to hurt Spencer."

The alleged defamation came during the appeal of an $8.3 million personal injury award to Jessica Grigg, who was injured at Wintergreen Resort, a ski area, the complaint states.
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O.J. Will Face All-White Jury

Headline Legal News 2008/09/12 07:14   Bookmark and Share
Nine women and three men, none of them black, have been seated as the jury in the O.J. Simpson robbery and kidnapping trial. Trial is expected to begin Monday. Clark County District Court Judge Jackie Glass said jurors will not be sequestered.

The fourth day of juror questioning moved at a fast clip Thursday, and by mid-afternoon the top 40 finalists were chosen. The 12 jurors and six alternates were picked just before 8 p.m.

Simpson and co-defendant Clarence "C.J." Stewart have pleaded not guilty to kidnapping, armed robbery and other charges after an alleged sports memorabilia hold-up last year at the Palace Station Casino.

One of Stewart's attorneys has his own legal problems. Former Louisiana Sen. Charles Jones is charged in Louisiana with filing false federal tax returns in 2001 and 2003 and trying to duck taxes on more than $750,000 in legal fees from July 1995 to December 2003.

Jones pleaded not guilty in February. Trial is set for March 2009 in Monroe, La.

On Thursday, prospective jurors were peppered with questions ranging from topics such as religion and one juror's alcoholism to Simpson's previous criminal and civil cases.

Many said they disagreed with the 1995 verdict that acquitted Simpson of the 1994 slayings of his ex-wife Nicole Brown Simpson and her friend, Ronald Goldman. But they said they could be fair in this case.

More than one admitted to not wanting to be there.

"I don't really want to be here, due to babysitting problems," said one potential juror, a nurse's assistant. "Being a single mom, and being here ... I don't know if I'll get paid for doing this."

A former police officer turned salesman acknowledged he answered a questionnaire with fiery language to get himself removed from the case.

"I wanted to scare you so that I wouldn't have to be here," he said. "I was hoping (you) would think, 'This guy is crazy.'"

He changed course somewhat during questioning.

"I'm a firm believer in the system, and (Simpson) won. He is a free man until he comes here."

Judge Glass prodded him to "look deep inside yourself and say ... 'Yes, I understand how the system works and I can put it aside and give both sides a fair evaluation in this case - or I can't.'"

The answer: "Unfortunately, I can."

One juror was excused for his remark, "If someone got away with something like that ... you would keep yourself clean, you wouldn't come back up here and pretty much commit another crime."

Also Thursday, Glass denied a motion from the media to release the filled-out questionnaires jurors were given. Glass said she would release the unanswered questions after the jury is seated.
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'We're Not Cougars,' Women Say In Suit

Court News 2008/09/11 07:11   Bookmark and Share
Three women say their girls' night out ended with a cable TV station setting them up to look like they were trolling for younger men, and then broadcasting the action as "The Great Cougar Hunt."

Christine Torres and Charnette Hildreth say they were celebrating Tammi Tary's birthday at the Chapter Eight dance club when an employee of defendant G4 Media asked if he could videotape them. The women say they refused.

Later, they say, two young men sat down at their table and began talking with them. The women say the men turned out to be paid props whom G4 used to portray them falsely as "cougars," or "sexually cunning 35+ females on the hunt for a much younger energetic male."

At the end of the evening, the women say, G4 employees approached them again, asking them to sign a release consenting to G4's use of their voices and likenesses. The women say they refused.

Eight months later, the women say, they discovered "The Great Cougar Hunt" on G4's cable station. The video portrayed their birthday party as a group of "older women" looking for younger men at a "world famous cougar hot spot."

According to the complaint, the video describes "cougars" as the "easiest, most ravenous" prey for younger men.

The women say they were "not attempting to meet or 'hunt' younger men." They say they do not even date younger men.

The plaintiffs say the defendants have lined their own pockets with a video that has exposed them to "contempt and ridicule and has caused others to shun or avoid (them)."

G4 originally was devoted to gaming programming, but now bills its content as "general male-interest programming."

The women demand punitive damages of at least $1 million. They are represented by Neville Johnson in Superior Court.
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Firm Can't Sue Enron Again, 5th Circuit Says

Headline Legal News 2008/09/10 07:16   Bookmark and Share
A Houston law firm cannot file 34 more lawsuits against Enron after the high-flying company's financial collapse, the 5th Circuit ruled.

Fleming & Associates has represented hundreds of plaintiffs against the failed energy company, but Judge Prado agreed with the district court that the statute of limitations on the latest group of cases had expired.

The lawsuits would have covered 1,200 clients and would have alleged state law claims of fraud, negligence and civil conspiracy. Prado ruled that the district court did not violate "any notions of federalism" by determining that the state court would dismiss the claims as untimely.

"The district court is intimately involved in the many facets of litigation surrounding the Enron collapse," Prado wrote. "Further, federal courts often consider issues involving a state statute of limitations."
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