/raid1/www/Hosts/bankrupt/CAR_Public/130709.mbx
C L A S S A C T I O N R E P O R T E R
Tuesday, July 9, 2013, Vol. 15, No. 133
Headlines
CAPITAL ONE: Awaits Ruling on Certification Bid in "Watson" Suit
CAPITAL ONE: Awaits 9th Cir. Ruling in Appeal Over Suit Dismissal
CAPITAL ONE: Wins Final OK for Calif. Accord in "Rubio" Suit
CAPITAL ONE: Discovery in Overdraft Fees Suit to Close by Q3
COMMODITY ADVISORS: Supreme Court Appeal in "Holmes" Suit Pending
COMMODITY ADVISORS: No Appeal Filed in Dismissal of "Disher" Suit
COMMODITY ADVISORS: Citigroup Has Yet to Reply in GX-Related Suit
COMMODITY ADVISORS: Ruling in Salomon Analyst Suit Under Appeal
COMMODITY ADVISORS: Interlocutory Suit Filed in IFM SA Suit
COMMODITY ADVISORS: AIG Securities Suit Faces Dismissal Bid
COMMODITY ADVISORS: Appeal Against Ambac Suit Accord Dismissed
COMMONWEALTH REIT: Wants Massachusetts Securities Suit Dismissed
DAVITA HEALTHCARE: Calif. Labor Suit Remanded to Trial Court
DEAN FOODS: No Argument Date Yet for Appeal in Retailer Suit
DEAN FOODS: Moves to Junk 2013 Indirect Purchaser Antitrust Suit
DENTSPLY INTERNATIONAL: Cavitron Suit Proceeds Under New Name
FALCONSTOR SOFTWARE: Has MOU to Settle N.Y. Securities Suit
FALCONSTOR SOFTWARE: Books $6.8MM Total Costs for Lawsuits
HORIZON BLUE: Third Circuit Affirms $2.3MM Fee in Class Action
HUDSON CITY BANCORP: Inks Accord in Del. and N.J. Merger Suits
IMH FINANCIAL: Deal Reached in Suit Over Conversion Transactions
LEUCADIA NATIONAL: Books $20MM Litigation Reserve for "Sykes"
LEUCADIA NATIONAL: New York Suit Over Jefferies Merger Stayed
MEMC ELECTRONIC: Awaits Oral Arguments in ERISA Class Suit
MUNICIPAL MORTGAGE: Appeal From Dismissal of Suit Claims Pending
OMNICEL INC: Plaintiff in "Polanco" Suit Ordered to Show Cause
ORION FUTURES: July 23 Fairness Hearing in "Citigroup Bond" Suit
ORION FUTURES: 2nd Cir. Won't Review Certification Ruling
ORION FUTURES: Appeals Court Affirms Dismissal of Antitrust Suits
ORION FUTURES: Suit Over Cheyne Finance Securities Dismissed
PEPSICO INC: Judge Allows Fraud MDL Over Tropicana Juice
PFIZER INC: Alabama High Court Reconsiders Generic Drug Ruling
POPULAR INC: Payment Made in Overdraft Fee Suit v. Banco Popular
POPULAR INC: Court Junks "Garcia Lamadrid" Bank-as-Trustee Suit
POPULAR INC: Plaintiffs in "Valle" Want Lawsuit Remanded
QWEST COMMS: Still Awaits OK of Settlement in Rights-of-Way Suits
RAYMOND JAMES: Court Approves $62MM Accord in Regions Stock Suit
REPUBLIC BANCORP: Kentucky Court Stays "Webb" Overdraft Fees Suit
SCBT FINANCIAL: Inks Settlement in Suit Over Peoples Merger
SCBT FINANCIAL: Reaches MOU to Settle Suit Over Savannah Merger
SCBT FINANCIAL: Complaint Over First Financial Merger Amended
SCBT FINANCIAL: Sued in New York Over First Financial Merger
SIMPSON MANUFACTURING: Amendment in Ocean Pointe Suit Allowed
SIMPSON MANUFACTURING: Still Faces "Nishimura" Suit in Hawaii
SKECHERS USA: "Angell" Suit Parties Negotiate Settlement Terms
SKECHERS USA: "Chavez" Wage and Hour Class Suit Remains Pending
SKECHERS USA: Consumer Accord Resolving "Hochberg" Suit Approved
SKECHERS USA: Consumer Deal Resolving "Scovil" Suit Approved
SKECHERS USA: Consumer Deal Resolving "Tomlinson" Suit Approved
SKECHERS USA: Consumer Settlement Resolving "Loss" Suit Approved
SKECHERS USA: Continues to Defend "Davies" Class Suit in Alberta
SKECHERS USA: Has Final Approval of "Grabowski" Suit Settlement
SKECHERS USA: Wins Final OK of Deal in Kentucky Toning Shoes Suit
SKECHERS USA: No Trial Date Has Been Set in "Lovston" Suit
SKECHERS USA: Parties in "Dedato" Suit Negotiate Settlement Terms
SKECHERS USA: Parties in "Niras" Suit Negotiate Settlement Terms
SKECHERS USA: Wins Final Approval of "Morga" Suit Settlement
SKECHERS USA: Received Final OK of "Stalker" Suit Settlement
SKECHERS USA: "Sayles" Wage & Hour Suit Still Pending in Calif.
SKECHERS USA: Settlement Resolving "Boatright" Suit Approved
UNITED BANKSHARES: Accrues $3.3MM for Overdraft Fees Suit Accord
WATTS WATER: Still Facing Suit Over "Defective" Toilet Connectors
WESTPORT FUTURES: 2nd Cir. Won't Review N.J. Carpenters Suit
WESTPORT FUTURES: Dismissal of Antitrust Class Suits Affirmed
WESTPORT FUTURES: Hearing on $730MM Bond Suit Deal on July 23
WILHELMINA INT'L: Defends Class Suit Filed by Models vs. Units
* Fla. Supreme Court Accepts Procedural Changes in Tobacco Case
*********
CAPITAL ONE: Awaits Ruling on Certification Bid in "Watson" Suit
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Parties in a suit filed by a furniture store owner named Mary
Watson in the Supreme Court of British Columbia against Capital
One Financial Corporation are awaiting a ruling on plaintiffs'
motion for class certification, according to the company's May 9,
2013, Form 10-Q filing with the U.S. Securities and Exchange
Commission for the quarter ended March 31, 2013.
The proposed Watson class action was filed in March 2011 against
Visa, MasterCard, and several banks, including Capital One. The
lawsuit asserts, among other things, that the defendants conspired
to fix the merchant discount fees that merchants pay on credit
card transactions in violation of Section 45 of the Competition
Act and seeks unspecified damages and injunctive relief.
In addition, Capital One has been named as a defendant in similar
proposed class action claims filed in other jurisdictions in
Canada.
The Court heard oral argument on plaintiffs' motion for class
certification in the Watson Litigation in April, 2013, and the
parties await a ruling.
In 2005, a number of entities, each purporting to represent a
class of retail merchants, filed antitrust lawsuits (the
"Interchange Lawsuits") against MasterCard and Visa and several
member banks, including Capital One and its subsidiaries, alleging
among other things, that the defendants conspired to fix the level
of interchange fees. The complaints seek injunctive relief and
civil monetary damages, which could be trebled. Separately, a
number of large merchants have asserted similar claims against
Visa and MasterCard only.
In October 2005, the class and merchant Interchange Lawsuits were
consolidated before the U.S. District Court for the Eastern
District of New York for certain purposes, including discovery.
On July 13, 2012, the parties executed and filed with the court a
Memorandum of Understanding agreeing to resolve the litigation on
certain terms set forth in a settlement agreement attached to the
Memorandum. This agreement is contingent on final court approval
of the class settlement.
In November 2012, the court granted preliminary approval of the
class settlement. The court is scheduled to consider final
approval of the class settlement in September 2013.
The class settlement provides for, among other things, (i)
payments by defendants to the class and individual plaintiffs
totaling approximately $6.6 billion; (ii) a distribution to the
class merchants of an amount equal to 10 basis points of certain
interchange transactions for a period of eight months; and (iii)
modifications to certain Visa and MasterCard rules regarding point
of sale practices.
As members of Visa, Capital One's subsidiary banks have
indemnification obligations to Visa with respect to final
judgments and settlements, including the Interchange Lawsuits. In
the first quarter of 2008, Visa completed an IPO of its stock.
With IPO proceeds, Visa established an escrow account for the
benefit of member banks to fund certain litigation settlements and
claims, including the Interchange Lawsuits. As a result, in the
first quarter of 2008, the company reduced the company's Visa-
related indemnification liabilities of $91 million recorded in
other liabilities with a corresponding reduction of other non-
interest expense. The company made an election in accordance with
the accounting guidance for fair value option for financial assets
and liabilities on the indemnification guarantee to Visa, and the
fair value of the guarantee at December 31, 2011 and December 31,
2012 was zero.
Separately, in January 2011, the company entered into a MasterCard
Settlement and Judgment Sharing Agreement, along with other
defendant banks, which apportions between MasterCard and its
member banks the costs and liabilities of any judgment or
settlement arising from the Interchange Lawsuits.
CAPITAL ONE: Awaits 9th Cir. Ruling in Appeal Over Suit Dismissal
-----------------------------------------------------------------
The Ninth Circuit Court of Appeals will hear an appeal against the
dismissal of a suit against Capital One Financial Corporation,
over allegations the company fixed the level of late fees and
over-limit fees charged to cardholders, according to the company's
May 9, 2013, Form 10-Q filing with the U.S. Securities and
Exchange Commission for the quarter ended March 31, 2013.
In 2007, a number of individual plaintiffs, each purporting to
represent a class of cardholders, filed antitrust lawsuits in the
U.S. District Court for the Northern District of California
against several issuing banks, including Capital One. These
lawsuits allege, among other things, that the defendants conspired
to fix the level of late fees and over-limit fees charged to
cardholders, and that these fees are excessive.
In May 2007, the cases were consolidated for all purposes, and a
consolidated amended complaint was filed alleging violations of
federal statutes and state law. The amended complaint requests
civil monetary damages, which could be trebled, and injunctive
relief. In November 2007, the court dismissed the amended
complaint.
Plaintiffs appealed that order to the Ninth Circuit Court of
Appeals. The plaintiffs' appeal challenges the dismissal of their
claims under the National Bank Act, the Depository Institutions
Deregulation Act of 1980 and the California Unfair Competition Law
(the "UCL"), but not their antitrust conspiracy claims.
In June 2009, the Ninth Circuit Court of Appeals stayed the matter
pending the bankruptcy proceedings of one of the defendant
financial institutions. After numerous stays since 2009, the Ninth
Circuit entered an order lifting the stay on August 29, 2012, and
will now hear the appeal. The Ninth Circuit held oral argument on
February 11, 2013, and the parties await the court's decision.
CAPITAL ONE: Wins Final OK for Calif. Accord in "Rubio" Suit
------------------------------------------------------------
The U.S. District Court for the Central District of California
granted final approval to a California-only settlement in the suit
Rubio v. Capital One Bank, according to Capital One Financial
Corporation's May 9, 2013, Form 10-Q filing with the U.S.
Securities and Exchange Commission for the quarter ended March 31,
2013.
In July 2010, the U.S. Court of Appeals for the Ninth Circuit
reversed a dismissal order entered in favor of Capital One Bank
(USA), National Association (COBNA) in Rubio v. Capital One Bank,
which was filed in the U.S. District Court for the Central
District of California in 2007. The plaintiff in Rubio alleges in
a putative class action that COBNA breached its contractual
obligations and violated the Truth In Lending Act (the "TILA") and
the California Unfair Competition Law ("UCL") when it raised
interest rates on certain credit card accounts.
In May 2012, the parties agreed to a California-only settlement
for a non-material amount, and the Court stayed the case for all
purposes except for approval of the settlement. On April 1, 2013,
the court granted final approval of the class settlement, and
Capital One will begin making payments required under the class
settlement agreement.
Capital One also disclosed that as a result of the settlement in
Rubio v. Capital One Bank, the California-based UCL and TILA
claims are extinguished in the Capital One Bank Credit Card
Interest Rate Multi-district Litigation matter.
The Capital One Bank Credit Card Interest Rate Multi-district
Litigation matter was created as a result of a June 2010 transfer
order issued by the United States Judicial Panel on Multi-district
Litigation ("MDL"), which consolidated for pretrial proceedings in
the U.S. District Court for the Northern District of Georgia two
pending putative class actions against COBNA -- Nancy Mancuso, et
al. v. Capital One Bank (USA), N.A., et al., (E.D. Virginia); and
Kevin S. Barker, et al. v. Capital One Bank (USA), N.A., (N.D.
Georgia), A third action, Jennifer L. Kolkowski v. Capital One
Bank (USA), N.A., (C.D. California) was subsequently transferred
into the MDL. On August 2, 2010, the plaintiffs in the MDL filed a
Consolidated Amended Complaint.
The Consolidated Amended Complaint alleges in a putative class
action that COBNA breached its contractual obligations, and
violated the TILA, the California Consumers Legal Remedies Act,
the UCL, the California False Advertising Act, the New Jersey
Consumer Fraud Act, and the Kansas Consumer Protection Act when it
raised interest rates on certain credit card accounts. The MDL
plaintiffs seek statutory damages, restitution, attorney's fees
and an injunction against future rate increases. Fact discovery is
now closed. On August 8, 2011, Capital One filed a motion for
summary judgment, which remains pending with the court.
CAPITAL ONE: Discovery in Overdraft Fees Suit to Close by Q3
------------------------------------------------------------
Discovery in the suit against Capital One Financial Corporation
that became part of the In re Checking Account Overdraft
Litigation is expected to be concluded in the third quarter 2013,
according to the company's May 9, 2013, Form 10-Q filing with the
U.S. Securities and Exchange Commission for the quarter ended
March 31, 2013.
In May 2010, Capital One Financial Corporation and Capital One
Bank (USA), National Association (COBNA), were named as defendants
in a putative class action named Steen v. Capital One Financial
Corporation, et al., filed in the U.S. District Court for the
Eastern District of Louisiana.
Plaintiff challenges the company's practices relating to fees for
overdraft and non-sufficient funds fees on consumer checking
accounts. Plaintiff alleges that the company's methodology for
posting transactions to customer accounts is designed to maximize
the generation of overdraft fees, supporting claims for breach of
contract, breach of the covenant of good faith and fair dealing,
unconscionability, conversion, unjust enrichment and violations of
state unfair trade practices laws.
Plaintiff seeks a range of remedies, including restitution,
disgorgement, injunctive relief, punitive damages and attorneys'
fees. In May 2010, the case was transferred to the Southern
District of Florida for coordinated pre-trial proceedings as part
of a multi-district litigation (MDL) involving numerous defendant
banks, In re Checking Account Overdraft Litigation.
In January 2011, plaintiffs filed a second amended complaint
against CONA in the MDL court.
In February 2011, CONA filed a motion to dismiss the second
amended complaint.
On March 21, 2011, the MDL court granted CONA's motion to dismiss
claims of breach of the covenant of good faith and fair dealing
under Texas law, but denied the motion to dismiss in all other
respects. The parties have been engaged in discovery since May
2011.
On June 21, 2012, the MDL court granted plaintiff's motion for
class certification. The modified scheduling order entered by the
MDL court on April 1, 2013, contemplates the conclusion of
discovery in the third quarter 2013 and the company anticipates a
remand to the Eastern District of Louisiana in the first quarter
2014.
COMMODITY ADVISORS: Supreme Court Appeal in "Holmes" Suit Pending
-----------------------------------------------------------------
Commodity Advisors Fund L.P. disclosed on its 10/A filing
(Amendment No. 3 to Form 10 Filed on June 29, 2012, as amended on
November 7, 2012 and April 24, 2013) with the U.S. Securities and
Exchange Commission:
Beginning in 2002, Citigroup Inc., Citigroup Global Markets Inc.
(CGM) and certain executive officers and current and former
employees were named as defendants -- along with 22 other
investment banks, certain current and former WorldCom officers and
directors, and WorldCom's former auditors -- in a consolidated
class action (IN RE WORLDCOM, INC. SECURITIES LITIGATION) brought
on behalf of individuals and entities who purchased or acquired
publicly traded securities of WorldCom between April 29, 1999 and
June 25, 2002. The class settlement became final in March 2006.
Following the resolution of all other individual actions by
settlements and other resolutions, one individual action remains
pending on appeal in the Second Circuit, HOLMES, et al. v.
GRUBMAN, et al., which was brought by an individual and entities
who opted out of the WorldCom securities class action settlement.
On October 13, 2006, this action was dismissed with prejudice by
the District Court for the Southern District of New York.
On June 3, 2009, the Second Circuit certified certain state law
questions to be resolved by the Georgia Supreme Court, which has
issued an opinion answering those questions. The Second Circuit
has not yet decided the appeal. On June 23, 2010, the Second
Circuit affirmed the dismissal of the remaining claims in HOLMES
v. GRUBMAN.
Petitioners-plaintiffs submitted a petition for certiorari to the
United States Supreme Court seeking review of the decision of the
Second Circuit, affirming dismissal of the action.
COMMODITY ADVISORS: No Appeal Filed in Dismissal of "Disher" Suit
-----------------------------------------------------------------
No appeal was filed against the dismissal of Disher v. Citigroup
Global Markets Inc., according to Commodity Advisors Fund L.P.'s
form 10/A filing (Amendment No. 3 to Form 10 Filed on June 29,
2012, as amended on November 7, 2012 and April 24, 2013) with the
U.S. Securities and Exchange Commission.
In March 2004, an alleged research-related customer class action
alleging various state law claims on behalf of Smith Barney
customers arising out of the issuance of allegedly misleading
research analyst reports, DISHER v. CITIGROUP GLOBAL MARKETS INC.,
was filed in Illinois state court.
Citigroup removed this action to federal court, and in August 2005
the United States Court of Appeals for the Seventh Circuit
reversed the District Court's August 2004 order remanding the case
to state court, and directed the District Court to dismiss
plaintiffs' claims as preempted. On June 26, 2006, the United
States Supreme Court granted plaintiffs' petition for a writ of
certiorari, vacated the Seventh Circuit's opinion and remanded the
case to the Seventh Circuit for further proceedings in light of
the Supreme Court's decision in Kircher v. Putnam Funds Trust.
On January 22, 2007, the Seventh Circuit dismissed Citigroup's
appeal from the District Court's removal order for lack of
appellate jurisdiction. On February 1, 2007, plaintiffs secured an
order reopening this case in Illinois state court, and on February
16, Citigroup removed the reopened action to federal court. On
March 2, 2007, the District Court vacated its 2005 order
dismissing the case and remanded the action to Illinois state
court.
On May 3, 2007, the District Court remanded the action to Illinois
state court, and on June 13, 2007, Citigroup moved in state court
to dismiss the action. On October 13, 2011, the court entered an
order dismissing with prejudice all class action claims asserted
in DISHER v. CITIGROUP GLOBAL MARKETS INC., holding that the
claims were precluded under the Securities Litigation Uniform
Standards Act of 1998. The court granted leave for lead plaintiff
to file an amended complaint asserting only his individual state-
law claims within 21 days.
An amended complaint was not filed within the 21-day period. The
alleged representative plaintiff has filed a notice of appeal from
the court's October 13, 2011 order.
On February 3, 2012, the Illinois Appellate Court dismissed
plaintiff's appeal in DISHER v. CITIGROUP GLOBAL MARKETS INC. for
lack of a final, appealable judgment, and the Circuit Court
entered a final judgment dismissing the action on February 14,
2012. No appeal from that judgment has been filed.
COMMODITY ADVISORS: Citigroup Has Yet to Reply in GX-Related Suit
-----------------------------------------------------------------
Commodity Advisors Fund L.P. disclosed in its Form 10/A filing
(Amendment No. 3 to Form 10 Filed on June 29, 2012, as amended on
November 7, 2012 and April 24, 2013) with the U.S. Securities and
Exchange Commission that:
On or about January 28, 2003, lead plaintiff in a consolidated
alleged class action in the United States District Court for the
Southern District of New York (IN RE GLOBAL CROSSING, LTD.
SECURITIES LITIGATION) filed a consolidated complaint on behalf of
purchasers of the securities of Global Crossing and its
subsidiaries, which named as defendants, among others, Citigroup
Inc., Citigroup Global Markets Inc. (CGM) and certain executive
officers and current and former employees, asserting claims under
the federal securities laws for allegedly issuing research reports
without a reasonable basis in fact and for allegedly failing to
disclose conflicts of interest with Global Crossing in connection
with published investment research.
On March 22, 2004, lead plaintiff amended its consolidated
complaint to add claims on behalf of purchasers of the securities
of Asia Global Crossing. The added claims asserted causes of
action under the federal securities laws and common law in
connection with CGM's research reports about Global Crossing and
Asia Global Crossing and for CGM's roles as an investment banker
for Global Crossing and as an underwriter in the Global Crossing
and Asia Global Crossing offerings.
The Citigroup-Related Defendants moved to dismiss all of the
claims against them on July 2, 2004. The plaintiffs and the
Citigroup-Related Defendants entered into a settlement agreement
that was preliminarily approved by the Court on March 8, 2005, and
was finally approved on June 30, 2005. The amount to be paid in
settlement is covered by existing litigation reserves.
In addition, on or about January 27, 2004, the Global Crossing
Estate Representative filed in the United States Bankruptcy Court
for the Southern District of New York an adversary proceeding
against Citigroup and several other financial institutions seeking
to rescind the payment of a $1 billion loan made to a subsidiary
of Global Crossing. The Citigroup-Related Defendants moved to
dismiss the latter action on May 28, 2004, which motion remains
pending. In addition, actions asserting claims against Citigroup
and certain of its affiliates relating to CGM Global Crossing
research reports are pending in numerous arbitrations around the
country. On August 20, 2008, Plaintiff filed an amended complaint
that narrowed the pending claims. Citigroup has yet to respond to
the amended complaint.
COMMODITY ADVISORS: Ruling in Salomon Analyst Suit Under Appeal
---------------------------------------------------------------
The class certification decision of the United States District
Court for the Southern District of New York in In re Salomon
Analyst Metromedia Litigation is on appeal in the United States
Court of Appeals for the Second Circuit, according to Commodity
Advisors Fund L.P.'s 10/A filing (Amendment No. 3 to Form 10 Filed
on June 29, 2012, as amended on November 7, 2012 and April 24,
2013) with the U.S. Securities and Exchange Commission.
Beginning in May 2002, Citigroup Inc., Citigroup Global Markets
Inc. (CGM) and certain executive officers and current and former
employees were named as defendants in a series of alleged class
action lawsuits and arbitration demands by purchasers of various
securities, alleging violations of the federal securities laws,
including Sections 10 and 20 of the Securities Exchange Act of
1934 for allegedly issuing research reports without a reasonable
basis in fact and for allegedly failing to disclose conflicts of
interest with companies in connection with published investment
research.
The Citigroup research analyst reports concerned seven issuers:
AT&T Corp. ("AT&T"), Winstar Communications, Inc. ("Winstar"),
Level 3 Communications, Inc. ("Level 3"), Metromedia Fiber
Network, Inc. ("MFN"), XO Communications, Inc. ("XO"), Williams
Communications Group Inc. ("Williams"), and Focal Communications,
Inc. ("Focal"). These alleged class actions were assigned to a
single judge in the United States District Court for the Southern
District of New York for coordinated proceedings. The court
consolidated these actions into seven separate proceedings
corresponding to the seven issuers of securities involved.
On January 6, 2005, the District Court granted in part and denied
in part Citigroup's motion to dismiss the claims against it in the
MFN action, In re SALOMON ANALYST METROMEDIA LITIGATION. On June
20, 2006, the District Court certified the plaintiff class in the
MFN action. The District Court's class certification decision is
on appeal in the United States Court of Appeals for the Second
Circuit, and oral argument was held in January 2008.
On September 30, 2008, the District Court's class certification
decision was vacated on appeal by the United States Court of
Appeals for the Second Circuit. On October 1, 2008, the parties
reached a settlement pursuant to which Citigroup will pay $35
million to members of the settlement class that purchased or
otherwise acquired MFN securities during the class period; the
settlement was preliminarily approved by the District Court on
November 19, 2008. On February 27, 2009, the District Court
approved the class action settlement, and entered a final judgment
dismissing the action with prejudice.
COMMODITY ADVISORS: Interlocutory Suit Filed in IFM SA Suit
-----------------------------------------------------------
Commodity Advisors Fund L.P. disclosed in its form 10/A filing
(Amendment No. 3 to Form 10 Filed on June 29, 2012, as amended on
November 7, 2012 and April 24, 2013) with the U.S. Securities and
Exchange Commission, that:
On September 30 and October 28, 2008, Citigroup Inc., certain
Citigroup entities, certain current and former directors and
officers of Citigroup and Citigroup Funding, Inc., and certain
underwriters of Citigroup notes (including CGM) were named as
defendants in two alleged class actions filed in New York state
court but since removed to the United States District Court for
the Southern District of New York.
These actions allege violations of Sections 11, 12, and 15 of the
Securities Act of 1933, as amended, arising out of 48 corporate
debt securities, preferred stock, and interests in preferred stock
issued by Citigroup and related issuers over a two-year period
from 2006 to 2008. On December 10, 2008, these two actions were
consolidated under the caption IN RE CITIGROUP INC. BOND
LITIGATION, and lead plaintiff and counsel were appointed. On
January 15, 2009, plaintiffs filed a consolidated class action
complaint.
On March 13, 2009, defendants filed a motion to dismiss the
complaint. On July 12, 2010, the court issued an opinion and order
dismissing plaintiffs' claims under Section 12 of the Securities
Act of 1933, as amended, as amended, but denying defendants'
motion to dismiss certain claims under Section 11.
On September 30, 2010, the district court entered a scheduling
order in IN RE CITIGROUP INC. BOND LITIGATION. Fact discovery
began in November 2010, and plaintiffs' motion to certify a class
is pending. Plaintiffs have not yet quantified the alleged class'
alleged damages. Because of the preliminary stage of the
proceedings, Citigroup cannot at this time estimate the possible
loss or range of loss, if any, for this action or predict the
timing of its eventual resolution.
On March 13 and 16, 2009, two cases were filed in the United
States District Court for the Southern District of New York
alleging violations of the Securities Act of 1933, as amended --
BUCKINGHAM v. CITIGROUP INC., ET AL. and CHEN v. CITIGROUP INC.,
ET AL. and were later designated as related to IN RE CITIGROUP
INC. BOND LITIGATION. On May 7, 2009, BUCKINGHAM and CHEN were
consolidated with IN RE CITIGROUP INC. BOND LITIGATION.
On April 9, 2009, another case asserting violations of the
Securities Act of 1933, as amended -- PELLEGRINI v. CITIGROUP
INC., ET AL. -- was filed in the United Stated District Court for
the Southern District of New York and the parties have jointly
requested that the PELLEGRIN I action be designated as related to
IN RE CITIGROUP INC. SECURITIES LITIGATION and IN RE CITIGROUP
INC. BOND LITIGATION.
On May 11, 2009, an alleged class action ASHER, ET AL. v.
CITIGROUP INC., ET AL. was filed in the United States District
Court for the Southern District of New York alleging violations of
the Securities Act of 1933, as amended in connection with
plaintiffs' investments in certain offerings of preferred stock
issued by Citigroup. On May 15, 2009, plaintiffs in IN RE
CITIGROUP INC. BOND LITIGATION requested that ASH ER and
PELLEGRINI be consolidated with IN RE CITIGROU P INC. BOND
LITIGATION. On August 31, 2009, ASH ER and PELLEGRINI were
consolidated with IN RE CITIGROUP INC. BOND LITIGATION.
On March 23, 2009, a case was filed in the United States District
Court for the Southern District of California alleging violations
of both the Securities Act of 1933, as amended and the Securities
Exchange Act of 1934 -- BRECHER v. CITIGROUP INC., ET AL. On April
16, 2009, Citigroup filed a motion before the Judicial Panel on
Multidistrict Litigation for transfer of the BRECHER action to the
Southern District of New York for coordinated pre-trial
proceedings with IN RE CITIGROUP INC. SECURITIES LITIGATION and IN
RE CITIGROUP INC. BOND LITIGATION.
On August 7, 2009, the Judicial Panel on Multidistrict Litigation
transferred BRECHER, ET AL. v. CITIGROUP INC., ET AL. to the
Southern District of New York for coordination with IN RE
CITIGROUP INC. SECURITIES LITIGATION.
On April 17, 2009, an alleged class action BRECHER, ET AL. v. CGM,
ET AL. was filed in California state court asserting claims
against Citigroup, CGM, and certain of the Citigroup's current and
former directors under California's Business and Professions Code
and Labor Code, as well as under California common law, relating
to, among other things, losses incurred on common stock awarded to
Smith Barney financial advisors in connection with the execution
of their employment contracts.
On May 19, 2009, an amended complaint was filed. On July 9, 2009,
the Judicial Panel on Multidistrict Litigation was notified that
BRECHER, ET AL. v. CGM, ET AL. is a potential tag-along action to
IN RE CITIGROUP, INC. SECURITIES LITIGATION. On July 15, 2009,
after having removed the case to the United States District Court
for the Southern District of California, defendants filed motions
to dismiss the complaint and to stay all further proceedings
pending resolution of the tag-along petition.
On July 22, 2009, plaintiffs in BRECHER, ET AL. v. CGM, ET AL.
voluntarily dismissed the claims against the individual defendants
and moved to remand the remaining action against Citigroup, CGM,
and the Personnel and Compensation Committee to state court. On
September 8, 2009, the United States District Court for the
Southern District of California ordered that defendants show cause
as to why there was federal jurisdiction over the case. On
September 17, 2009, defendants responded to the district court's
order.
On August 19, 2009, KOCH, ET AL. v. CITIGROUP INC., ET AL., an
alleged class action, was filed in the United States District
Court for the Southern District of California on behalf of
participants in Citigroup's Voluntary FA Capital Accumulation
Program ("FA CAP Program") against various defendants, including
Citigroup and CGM, asserting claims under the Securities Act of
1933, as amended, the Securities Exchange Act of 1934, and
Minnesota state law in connection with plaintiffs' acquisition of
certain securities through the FA CAP Program.
On September 30, 2009, the Judicial Panel on Multidistrict
Litigation conditionally transferred KOCH to the United States
District Court for the Southern District of New York as a
potential tag-along to IN RE CITIGROUP INC. SECURITIES LITIGATION.
On October 8, 2009, a consolidated amended complaint was filed in
BRECHER, ET AL. v. CITIGROUP INC., ET AL. in the United States
District Court for the Southern District of New York, asserting
claims under the federal securities laws and Minnesota and
California state law. The complaint purports to consolidate the
similar claims asserted in KOCH.
In the consolidated action, lead plaintiffs assert claims on
behalf of an alleged class of participants in Citigroup's
Voluntary Financial Advisor Capital Accumulation Plan from
November 2006 through January 2009. On June 7, 2011, the district
court granted defendants' motion to dismiss the complaint and
subsequently entered judgment. On November 14, 2011, the district
court granted in part plaintiffs' motion to alter or amend the
judgment and granted plaintiffs leave to amend the complaint.
On November 23, 2011, plaintiffs filed an amended complaint
alleging violations of Section 12 of the Securities Act of 1933,
as amended and Section 10(b) of the Securities Exchange Act of
1934. Defendants filed a motion to dismiss certain of plaintiffs'
claims on December 21, 2011.
Several institutions and sophisticated investors that purchased
debt and equity securities issued by Citigroup and related issuers
have also filed actions on their own behalf against Citigroup and
certain of its subsidiaries in the Southern District of New York
and the Court of Common Pleas for Philadelphia County.
These actions assert claims similar to those asserted in the IN RE
CITIGROUP INC. SECURITIES LITIGATION and IN RE CITIGROUP INC. BOND
LITIGATION actions. Collectively, these investors seek damages
exceeding $1 billion. On June 8, 2012, defendants filed an
interlocutory appeal in the United States Court of Appeals for the
Second Circuit from the district court's decision in INTERNATIONAL
FUND MANAGEMENT S.A., ET AL. v. CITIGROUP INC., ET AL., holding
that the tolling doctrine set forth in American Pipe &
Construction Co. v. Utah, 414 U.S. 538 (1974), applies to the
statute of repose in the Securities Act of 1933, as amended.
COMMODITY ADVISORS: AIG Securities Suit Faces Dismissal Bid
-----------------------------------------------------------
The underwriter defendants in In Re American International Group,
Inc. 2008 Securities Litigation have moved to dismiss a
consolidated amended complaint, according to Commodity Advisors
Fund L.P.'s form 10/A filing (Amendment No. 3 to Form 10 Filed on
June 29, 2012, as amended on November 7, 2012 and April 24, 2013)
with the U.S. Securities and Exchange Commission.
Beginning in October 2008, four alleged class actions were filed
in the United States District Court for the Southern District of
New York by American International Group, Inc. ("AIG") investors
and shareholders.
These actions allege violations of Sections 11, 12, and 15 of the
Securities Act of 1933, as amended arising out of allegedly false
and misleading statements contained in the registration statements
and prospectuses issued in connection with offerings of AIG debt
securities and common stock, some of which were underwritten by
Global Markets Inc. (CGM).
On March 20, 2009, the four alleged class actions were
consolidated by the United States District Court for the Southern
District of New York under the caption In Re American
International Group, Inc. 2008 Securities Litigation. Plaintiffs
filed a consolidated amended complaint on May 19, 2009, which
includes two Citigroup affiliates among the underwriter
defendants. On August 5, 2009, the underwriter defendants,
including CGM and CGML, moved to dismiss the consolidated amended
complaint.
COMMODITY ADVISORS: Appeal Against Ambac Suit Accord Dismissed
--------------------------------------------------------------
The United States Court of Appeals for the Second Circuit granted
the underwriters' motion to dismiss an appeal seeking to challenge
the district court's approval of the underwriters, settlement of
In Re Ambac Financial Group, Inc. Securities Litigation, according
to Commodity Advisors Fund L.P.'s Form 10/A filing (Amendment No.
3 to Form 10 Filed on June 29, 2012, as amended on November 7,
2012 and April 24, 2013) with the U.S. Securities and Exchange
Commission.
On May 9, 2008, four alleged class actions brought by shareholders
of Ambac Financial Group, Inc., pending in the United States
District Court for the Southern District of New York, were
consolidated under the caption In Re Ambac Financial Group, Inc.
Securities Litigation.
On August 22, 2008, plaintiffs filed a consolidated amended class
action complaint alleging violations of Sections 11 and 12 of the
Securities Act of 1933, as amended arising out of allegedly false
and misleading statements contained in the registration statements
and prospectuses issued in connection with offerings of Ambac
securities, some of which were underwritten by CGM. Defendants
filed a motion to dismiss the complaint on October 21, 2008.
On December 3, 2010, plaintiffs and the underwriter defendants,
including Citigroup, entered into a memorandum of understanding
settling all claims against Citigroup subject to the entry of a
final stipulation of settlement and court approval. On May 6,
2011, plaintiffs and the underwriter defendants, including
Citigroup, in IN RE AMBAC FINANCIAL GROUP, INC. SECURITIES
LITIGATION signed formal stipulations of settlement, which were
submitted to the court for preliminary approval.
On June 14, 2011, the court entered an order preliminarily
approving the proposed settlement. On September 28, 2011, the
district court approved the settlement between plaintiffs and
defendants, including Citigroup, in IN RE AMBAC FINANCIAL GROUP
INC. SECURITIES LITIGATION and judgment was entered. A member of
the settlement class has appealed the judgment to the United
States Court of Appeals for the Second Circuit.
On December 22, 2011, the underwriter defendants moved to dismiss
the appeal. On March 21, 2012, the United States Court of Appeals
for the Second Circuit granted the underwriters' motion to dismiss
an appeal seeking to challenge the district court's approval of
the underwriters, settlement of IN RE AMBAC FINANCIAL GROUP, INC.
SECURITIES LITIGATION.
COMMONWEALTH REIT: Wants Massachusetts Securities Suit Dismissed
----------------------------------------------------------------
Commonwealth REIT moved to dismiss the securities suit Young v.
Commonwealth REIT, et al., Case No. 1:12-cv-12405-DJC, and the
parties jointly moved the Massachusetts District Court for a
scheduling order, according to the company's May 9, 2013, Form 10-
Q filing with the U.S. Securities and Exchange Commission for the
quarter ended March 31, 2013.
On December 27, 2012, David Young filed a putative federal
securities class action in the United States District Court for
the District of Massachusetts, or the Massachusetts District
Court, titled Young v. Commonwealth REIT, et al., Case No. 1:12-
cv-12405-DJC, or the Young Action.
The Young Action is brought on behalf of purchasers of the
company's common shares between January 10, 2012 and August 8,
2012, and alleges securities fraud claims against the Company and
certain of its officers under Sections 10(b) and 20(a) of the
Exchange Act and Rule 10b-5 promulgated thereunder. The complaint
alleges generally that the Company violated the federal securities
laws by making false and misleading representations about its
business, operations and management. The plaintiff seeks
compensatory damages plus counsel fees and expenses.
Accordingly, on January 22, 2013, the Company moved to dismiss the
Young Action on the grounds that the claims asserted (1) are
subject to binding arbitration under the Company's bylaws, and (2)
fail to state a claim for relief under Sections 10(b) and 20(a) of
the Exchange Act, and Rule 10b-5. The Company has also filed a
demand for arbitration with the American Arbitration Association,
or AAA.
The parties jointly have moved the Massachusetts District Court
for a scheduling order pursuant to which the Company will have no
obligation to file an opening brief in support of its motion to
dismiss until such time as a lead plaintiff has been appointed by
the Massachusetts District Court, lead counsel has been selected,
and either a consolidated complaint has been filed or Mr. Young's
original complaint has been designated as the operative complaint,
all in accordance with customary procedures for purported class
action litigation.
The Company believes that the Young Action is without merit, and
intends to defend against all claims asserted.
DAVITA HEALTHCARE: Calif. Labor Suit Remanded to Trial Court
------------------------------------------------------------
A Court of Appeals remanded a wage and hour case against Davita
Healthcare Partners Inc. to the Superior Court of California,
according to the company's May 9, 2013, Form 10-Q filing with the
U.S. Securities and Exchange Commission for the quarter ended
March 31, 2013.
A wage and hour claim, which has been styled as a class action, is
pending against the Company in the Superior Court of California.
The Company was served with the complaint in this lawsuit in April
2008, and it has been amended since that time.
The lawsuit, as amended, alleges that the Company failed to
provide meal periods, failed to pay compensation in lieu of
providing rest or meal periods, failed to pay overtime, and failed
to comply with certain other California Labor Code requirements.
In September 2011, the court denied the plaintiffs' motion for
class certification. Plaintiffs appealed that decision.
In January 2013, the Court of Appeals affirmed the trial court's
decision on some claims, but remanded the case to the trial court
for clarification of its decision on one of the claims. The
Company intends to continue to vigorously defend against these
claims. Any potential settlement of these claims is not
anticipated to be material to the Company's consolidated financial
statements, according to the Company.
DEAN FOODS: No Argument Date Yet for Appeal in Retailer Suit
------------------------------------------------------------
The Appeals Court has not set a date for oral argument in the
appeal of plaintiffs against a grant of summary judgment in favor
of defendants in an antitrust suit against Dean Foods Company,
according to the company's May 9, 2013, Form 10-Q filing with the
U.S. Securities and Exchange Commission for the quarter ended
March 31, 2013.
A putative class action antitrust complaint (the "retailer
action") was filed on August 9, 2007, in the United States
District Court for the Eastern District of Tennessee. Plaintiffs
allege generally that the company either acting alone or in
conjunction with others in the milk industry who are also
defendants in the retailer action, lessened competition in the
Southeastern United States for the sale of processed fluid Grade A
milk to retail outlets and other customers, and that the
defendants' conduct also artificially inflated wholesale prices
for direct milk purchasers.
Defendants' motion for summary judgment in the retailer action was
granted in part and denied in part in August 2010. Defendants
filed a motion for reconsideration on September 10, 2010, and
filed a supplemental motion for summary judgment as to the
remaining claims on September 27, 2010.
On March 27, 2012, the Court granted summary judgment in favor of
defendants as to all remaining counts and entered judgment in
favor of all defendants, including the Company. Plaintiffs filed a
notice of appeal on April 25, 2012. On May 30, 2012, the Company
participated in a scheduling conference and mediation conducted by
the appeals court. The mediation did not result in a settlement
agreement. Briefing on the appeal was completed on April 5, 2013.
The appeals court has not set a date for oral argument at this
time.
DEAN FOODS: Moves to Junk 2013 Indirect Purchaser Antitrust Suit
----------------------------------------------------------------
Dean Foods Company filed a motion to dismiss the "2013 indirect
purchaser action" pending in the Eastern District of Tennessee,
Greeneville Division, according to the company's May 9, 2013, Form
10-Q filing with the U.S. Securities and Exchange Commission for
the quarter ended March 31, 2013.
On June 29, 2009, a putative class action lawsuit was filed in the
Eastern District of Tennessee, Greeneville Division, on behalf of
indirect purchasers of processed fluid Grade A milk (the "indirect
purchaser action"). The allegations in this complaint are similar
to those in the retailer action (antitrust complaint over the sale
of processed fluid Grade A milk to retail outlets), but primarily
involve state law claims.
Because the allegations in the indirect purchaser action
substantially overlap with the allegations in the retailer action,
the Court granted the parties' joint motion to stay all
proceedings in the indirect purchaser action pending the outcome
of the summary judgment motions in the retailer action.
On August 16, 2012, the indirect purchaser plaintiffs voluntarily
dismissed their lawsuit. On January 17, 2013, these same
plaintiffs filed a new lawsuit in the Eastern District of
Tennessee, Greeneville Division, on behalf of a putative class of
indirect purchasers of processed fluid Grade A milk (the "2013
indirect purchaser action"). The allegations are similar to those
in the voluntarily dismissed indirect purchaser action, but
involve only claims arising under Tennessee law. The Company filed
a motion to dismiss on April 30, 2013.
DENTSPLY INTERNATIONAL: Cavitron Suit Proceeds Under New Name
-------------------------------------------------------------
A lawsuit filed against DENTSPLY International Inc. over its
Cavitron ultrasonic scalers will now proceed under the name
"Center City Periodontists" after the Company's motion to dismiss
a new complaint was denied, according to the company's May 9,
2013, Form 10-Q filing with the U.S. Securities and Exchange
Commission for the quarter ended March 31, 2013.
On June 18, 2004, Marvin Weinstat, DDS and Richard Nathan, DDS
filed a class action suit in San Francisco County, California
alleging that the Company misrepresented that its Cavitron
ultrasonic scalers are suitable for use in oral surgical
procedures.
The Complaint seeks a recall of the product and refund of its
purchase price to dentists who have purchased it for use in oral
surgery. The Court certified the case as a class action in June
2006 with respect to the breach of warranty and unfair business
practices claims. The class that was certified is defined as
California dental professionals who, at any time during the period
beginning June 18, 2000 through September 14, 2012, purchased and
used one or more Cavitron ultrasonic scalers for the performance
of oral surgical procedures on their patients, which Cavitrons
were accompanied at sale by Directions for Use that "Indicated"
Cavitron use for "periodontal debridement for all types of
periodontal disease." The case is pending in the San Francisco
County Court. A Class Notice was mailed beginning September 14,
2012.
On December 12, 2006, a Complaint was filed by Carole Hildebrand,
DDS and Robert Jaffin, DDS in the Eastern District of Pennsylvania
(the Plaintiffs subsequently added Dr. Mitchell Goldman as a named
class representative). The case was filed by the same law firm
that filed the Weinstat case in California. The Complaint asserts
putative class action claims on behalf of dentists located in New
Jersey and Pennsylvania. The Complaint seeks damages and asserts
that the Company's Cavitron ultrasonic scaler was negligently
designed and sold in breach of contract and warranty arising from
misrepresentations about the potential uses of the product because
it cannot assure the delivery of potable or sterile water.
Following dismissal of the case for lack of jurisdiction, the
plaintiffs filed a second complaint under the name of Dr.
Hildebrand's corporate practice. The Company's motion to dismiss
this new complaint was denied and the case will now proceed under
the name "Center City Periodontists."
The Company does not believe a loss is probable related to the
litigation. Further a reasonable estimate of a possible range of
loss cannot be made. In the event that one or more of these
matters is unfavorably resolved, it is possible the Company's
results from operations could be materially impacted.
FALCONSTOR SOFTWARE: Has MOU to Settle N.Y. Securities Suit
-----------------------------------------------------------
Falconstor Software, Inc. reached an agreement in principle to
settle a securities suit for $5.0 million, according to the
company's May 9, 2013, Form 10-Q filing with the U.S. Securities
and Exchange Commission for the quarter ended March 31, 2013.
The Company is a defendant in a class action lawsuit brought in
United Stated District Court for the Eastern District of New York,
by Company shareholders (the "Class Action"). The other
defendants are James Weber, the company's former CFO and Vice
President for Operations, and the estate of ReiJane Huai. Mr. Huai
was the Company's former Chairman, President and CEO.
The Class Action complaint alleges that the defendants defrauded
shareholders by falsely certifying in the Company's SEC filings
that they had disclosed any fraud, whether or not material, that
involved management or other employees who had a significant role
in the registrant's internal control over financial reporting.
The Class Action complaint alleges that the defendants were in
fact aware of fraud.
In January 2013, the parties to the Class Action reached an
agreement in principle to settle the Class Action. Pursuant to a
Memorandum of Understanding signed by counsel for the class
plaintiffs and by counsel for all defendants, the Company will pay
$5.0 million to settle the Class Action. This amount includes
damages, plaintiffs' attorneys' fees, and costs of administration
of the settlement. The Company expects to pay this settlement with
a combination of cash on hand and insurance proceeds.
In accordance with the Memorandum of Understanding, a stipulation
of settlement and a joint motion for preliminary approval of the
settlement will be submitted to the court for its approval. Final
settlement of the Class Action is subject to certain conditions
and to approval by the court. The company cannot predict if or
when the court might approve the settlement. Certain of the
defendants may be entitled to indemnification by the Company under
the laws of Delaware and/or the company's by-laws.
While the Company has insurance policies that it believes will
cover it for the allegations of the Class Action, the Company has
already reached an agreement with one insurance carrier that gave
it less than the face amount of the insurance. There can be no
assurance that the recovery the Company makes on the remainder of
its insurance will be adequate to cover the costs of its defense
or settlement of the Class Action, or any damages that might
ultimately be awarded against the Company or anyone to whom the
Company might owe indemnification if the settlement is not
approved by the court. The Company's insurers may deny coverage
under the policies. If the Company's insurance recovery is not
adequate to cover the costs of defense, settlement, damages and/or
indemnification, or its insurers deny coverage, the amounts to be
paid by the Company could have a significant negative impact on
its financial results, its cash flows and its cash balances.
The Company's Directors and Officers ("D&O") Insurance, is
composed of more than one layer, each layer written by a different
insurance company. After the close of the third quarter, in
connection with the Class Action, and in connection with the
Derivative Action, the Company entered into an agreement with the
carrier of the first $5.0 million layer of the Company's D&O
insurance. Pursuant to this agreement, the Company accepted a
payment of $3.9 million from the first layer insurance carrier in
satisfaction of the carrier's obligations to the Company under the
first layer D&O insurance policy.
The combined costs of (i) defense of the Class Action and the
Derivative Action, and (ii) the proposed $5.0 million settlement
of the Class Action exceeds $3.9 million, and the Company is
responsible for paying the next $1.1 million of costs, settlement
amounts or liability up to $5.0 million, before the next layer of
the Company's D&O insurance might cover the Company. This $5.0
million settlement payment, when and if made, will negatively
impact its cash flows and its cash reserves when paid. In
addition, as part of the October 2012 agreement with the carrier,
the Company agreed to indemnify the carrier of the first layer of
D&O insurance against potential claims by certain named insured
persons under the first layer D&O insurance policy. The Company
cannot predict the likelihood or the outcome of any such claims by
the named insureds.
There can be no assurance that the amount of remaining D&O
insurance will be adequate to cover the costs of the Company's
defense of the Class Action or any damages that might be awarded
against the Company or any defendant(s) to whom the company owes
indemnification. The Company's remaining insurers may deny
coverage under the policies. If the plaintiffs are awarded damages
and the Company's insurance is not adequate to cover the amounts,
or its insurers deny coverage, the amounts to be paid by the
Company could have a significant negative impact on the company's
financial results, the company's cash flow and our cash reserves.
FALCONSTOR SOFTWARE: Books $6.8MM Total Costs for Lawsuits
----------------------------------------------------------
Falconstar Software recorded $6.8 million of total costs
associated with a securities Class Action and Derivative Actions,
according to the company's May 9, 2013, Form 10-Q filing with the
U.S. Securities and Exchange Commission for the quarter ended
March 31, 2013.
To date, the Company has recorded $6.8 million of total costs
associated with the Class Action and the Derivative Actions. The
Company has recorded a liability in the amount of $5.3 million in
"accrued expenses" in the condensed consolidated balance sheets as
of March 31, 2013 which includes estimated costs of resolutions
and legal fees for both the Class Action and the Derivative Action
to date.
As a result of the agreement reached with the Company's D&O
insurance carrier in the prior year, the Company has recorded an
insurance recovery in 2012 of approximately $3.9 million of legal
expenses previously incurred related to the class action and
derivative lawsuits as well as the potential settlement of the
class action lawsuit. The $3.9 million insurance recovery was
reimbursed by the Company's insurance carrier during 2012. In
connection with discussions with the insurer of the Company's
next layer of D&O insurance regarding that insurer's obligations
to the Company, the Company has recorded a $1.2 million receivable
in "prepaid expenses and other current assets" in the condensed
consolidated balance sheet as of March 31, 2013.
On March 5, 2013, the Suffolk County Division of the Supreme Court
of the State of New York granted a motion made by all of the
defendants in the Derivative Action, except Mr. Lin, and dismissed
the Derivative Action as to all defendants other than Mr. Lin. The
stockholders have filed a notice of appeal of the dismissal of the
Derivative Action.
During the three months ended March 31, 2013, the company's total
investigation, litigation, and settlement related costs consisted
of $0.1 million of net legal expenses related to the class action
and derivative lawsuits that are not or may not be recoverable
through insurance.
HORIZON BLUE: Third Circuit Affirms $2.3MM Fee in Class Action
--------------------------------------------------------------
Mary Pat Gallagher, writing for New Jersey Law Journal, reports
that a $2.3 million fight between two ex-law partners over fees in
a class action against Horizon Blue Cross Blue Shield of New
Jersey ends with one of them winning it all.
HUDSON CITY BANCORP: Inks Accord in Del. and N.J. Merger Suits
--------------------------------------------------------------
Hudson City Bancorp Inc. and M&T Bank Corporation entered into a
memorandum of understanding with plaintiffs regarding the
settlement of the so-called Delaware Consolidated Actions and the
New Jersey Consolidated Actions, according to the company's May 9,
2013, Form 10-Q filing with the U.S. Securities and Exchange
Commission for the quarter ended March 31, 2013.
Eighteen putative class action complaints have been filed in the
Court of Chancery, Delaware against Hudson City Bancorp, its
directors, and M&T challenging the Merger with Wilmington Trust
Corporation, a wholly owned subsidiary of M&T.
On November 20, 2012, the Delaware Court of Chancery (the "Court")
ordered that all 18 pending actions be consolidated for all
purposes (the "Delaware Consolidated Actions") under the caption
"In re Hudson City Bancorp Shareholder Litigation," designated
Case No. 7850 as the operative docket number, and designated the
corrected amended verified class action complaint in that case as
the operative complaint (the "Delaware Operative Complaint").
The Court also designated the pending motion to expedite discovery
in that action as operative, deemed any pending discovery requests
in Case No. 7832 as operative, and deemed a Subpoena to Evercore
Group, L.L.C. in Case No. 7823 as operative. Evercore Group,
L.L.C. acted as an advisor to M&T in the Merger.
The Delaware Operative Complaint names Hudson City Bancorp, all of
the current members of Hudson City Bancorp's board of directors,
M&T, and WTC as defendants. Certain of the Delaware complaints
also named Hudson City Savings Bank as a defendant.
The Delaware Operative Complaint alleges that the Hudson City
Bancorp directors breached their fiduciary duties to Hudson City
Bancorp's public stockholders by approving the Merger at an unfair
price.
It also alleges that the Merger was the product of a flawed sales
process because the Hudson City Bancorp board did not actively
shop Hudson City Bancorp before entering into a merger agreement
with M&T and that it was tainted by a number of material conflicts
of interest, including that one M&T director previously worked for
a law firm that rendered substantial services to Hudson City
Bancorp over a number of years, the board's financial advisor
stands to collect the majority of its $19 million advisory fee
upon the consummation of the proposed transaction and is a wholly-
owned subsidiary of one of the largest institutional shareholders
of M&T, and Hudson City Bancorp directors will receive certain
benefits from the Merger not shared in by other Hudson City
Bancorp stockholders, including certain paid positions with M&T
following the consummation of the proposed transaction.
The Delaware Operative Complaint further alleges that the Hudson
City Bancorp directors approved provisions in the Merger Agreement
that constitute impermissible deal protection devices, including a
"no solicitation" provision that allegedly prevents the Hudson
City Bancorp board from actively soliciting potential other merger
partners and apprise M&T of its receipt of any unsolicited
inquiries from potential other merger partners, a provision that
allegedly prevents the board from terminating the proposed
transaction in the event it receives a superior proposal from
another bidder, a "matching rights" provision that allegedly
requires the Hudson City Bancorp board to afford M&T three
business days to match any superior proposal from another bidder,
an "information rights" provision that allegedly requires the
Hudson City Bancorp board to provide full information about any
competing proposals to M&T, and a "termination fee" provision that
allegedly requires Hudson City Bancorp to pay M&T $125 million if
the Hudson City Bancorp board determines to pursue a superior
proposal or withdraw its recommendation in favor of the proposed
transaction.
The Delaware Operative Complaint further alleges that M&T and WTC
aided and abetted the alleged breaches of fiduciary duties. The
Delaware Operative Complaint also alleges that Hudson City Bancorp
and M&T have filed a misleading and incomplete Form S-4 with the
SEC in connection with the proposed transaction.
Six putative class actions challenging the Merger have also been
filed in the Superior Court for Bergen County, Chancery Division,
of New Jersey (the "New Jersey Court"). On October 12, 2012, the
New Jersey Court ordered that the actions be consolidated for all
purposes (the "New Jersey Consolidated Actions") under the caption
"In re Hudson City Bancorp, Inc. Shareholder Litigation,"
designated Case No. 259-12 as the operative docket number, and
designated the class action complaint filed in Case No. C-266-12
as the operative complaint. On November 9, 2012, the plaintiffs in
the New Jersey Consolidated Actions filed a consolidated and
amended class action complaint (the "New Jersey Consolidated
Complaint").
These complaints, including the New Jersey Consolidated Complaint,
allege that the Hudson City Bancorp directors breached their
fiduciary duties to Hudson City Bancorp's public stockholders by
approving the Merger at an unfair price.
They also variously allege that the Hudson City Bancorp board
approved the Merger through a flawed sales process, including
because the Hudson City Bancorp board approved the Merger in the
absence of a competitive sales process and that the process was
tainted by certain alleged conflicts of interest on the part of
the Hudson City Bancorp directors regarding certain personal and
financial benefits they will receive upon consummation of the
proposed transaction that public stockholders of Hudson City
Bancorp will not receive.
The New Jersey complaints, including the New Jersey Consolidated
Complaint, also allege that the Hudson City Bancorp board breached
their fiduciary duties because they agreed to a merger agreement
with allegedly impermissible deal protection devices, including a
"no solicitation" provision that allegedly prevents Hudson City
Bancorp from shopping itself to other potential bidders, an
"information rights" provision that allegedly requires the Hudson
City Bancorp board to provide full information about any competing
proposals to M&T, and a "termination fee" provision that allegedly
requires Hudson City Bancorp to pay M&T $125 million in the event
Hudson City Bancorp pursues a superior bid.
The New Jersey Consolidated Complaint further alleges that Hudson
City Bancorp and M&T filed a materially false and misleading Form
S-4 in connection with the proposed transaction. The complaints,
including the New Jersey Consolidated Complaint, further allege
that M&T aided and abetted the alleged breaches of fiduciary
duties. Certain of the complaints also allege that Hudson City
Bancorp and WTC aided and abetted the alleged breaches of
fiduciary duties.
All 24 lawsuits seek, among other things, to enjoin completion of
the Merger and an award of costs and attorneys' fees. Certain of
the actions also seek an accounting of damages sustained as a
result of the alleged breaches of fiduciary duty and punitive
damages.
On April 12, 2013, Hudson City Bancorp and M&T entered into a
memorandum of understanding (the "MOU") with the plaintiffs
regarding the settlement of the Delaware Consolidated Actions and
the New Jersey Consolidated Actions (collectively, the "Actions").
Under the terms of the MOU, Hudson City Bancorp, M&T, the other
named defendants, and all the plaintiffs have reached an agreement
in principle to settle the Actions and release the defendants from
all claims relating to the Merger, subject to approval of the New
Jersey Court.
Pursuant to the MOU, Hudson City Bancorp and M&T agreed to make
available additional information to Hudson City Bancorp
stockholders. The additional information was contained in a
Supplement to the Joint Proxy Statement filed with the SEC as an
exhibit to a Current Report on Form 8-K dated April 12, 2013.
In addition, under the terms of the MOU, plaintiffs' counsel also
has reserved the right to seek an award of attorneys' fees and
expenses. If the New Jersey Court approves the settlement
contemplated by the MOU, the Actions will be dismissed with
prejudice. The settlement will not affect the Merger consideration
to be paid to Hudson City Bancorp's stockholders in connection
with the proposed Merger. Hudson City Bancorp will be responsible
for the payment of any award of attorneys' fees and expenses
granted by the New Jersey Court, regardless of whether and when
the Merger is completed.
Hudson City Bancorp, M&T, and the other defendants deny all of the
allegations in the Actions and believe the disclosures in the
Joint Proxy Statement are adequate under the law. Nevertheless,
Hudson City Bancorp, M&T, and the other defendants have agreed to
settle the Actions in order to avoid the costs, disruption, and
distraction of further litigation.
IMH FINANCIAL: Deal Reached in Suit Over Conversion Transactions
----------------------------------------------------------------
IMH Financial Corporation disclosed the key elements in a
Stipulation and Agreement of Compromise, Settlement and Release in
relation to a lawsuit over its conversion from the predecessor
entity IMH Secured Loan Fund, according to the company's May 20,
2013, Form 10-Q filing with the U.S. Securities and Exchange
Commission for the quarter ended March 31, 2013.
Various disputes have arisen relating to the consent
solicitation/prospectus used in connection with seeking member
approval of the Conversion Transactions. The transactions include
(i) the conversion of the company's predecessor entity, IMH
Secured Loan Fund (the "Fund"), from a Delaware limited liability
company into a newly-formed Delaware corporation named IMH
Financial Corporation, and (ii) internalization of the Fund
manager, Investor's Mortgage Holdings, Inc. (the "Manager"),
through an acquisition by the Company of all of the outstanding
shares of the Manager, and all of the outstanding membership
interests of IMH Holdings, LLC.
Three proposed class action lawsuits were subsequently filed in
the Delaware Court of Chancery (on May 26, 2010, June 15, 2010 and
June 17, 2010) against the company and certain affiliated
individuals and entities.
The May 26 and June 15, 2010 lawsuits contain similar allegations,
claiming, in general, that fiduciary duties owed to Fund members
and to the Fund were breached because, among other things, the
Conversion Transactions were unfair to Fund members, constituted
self-dealing and because the information provided about the
Conversion Transactions and related disclosures was false and
misleading.
The June 17, 2010 lawsuit focuses on whether the Conversion
Transactions constitute a "roll up" transaction under the Fund's
operating agreement, and seeks damages for breach of the operating
agreement. The company and the company's affiliated co-defendants
dispute these claims and have vigorously defended ourselves in
these actions.
The parties in the actions were ordered to consolidate the actions
for all purposes into a putative class action lawsuit captioned In
Re IMH Secured Loan Fund Unitholders Litigation pending in the
Court of Chancery in the State of Delaware ("Litigation").
The Court also ordered that a consolidated complaint be filed, to
be followed by consolidated discovery, and designated the
plaintiffs' counsel from the May 25, 2010 and June 17, 2010
lawsuits as co-lead plaintiffs' counsel. The consolidated class
action complaint was filed on December 17, 2010. After defendants
filed a motion to dismiss that complaint, the Chancery Court
ordered plaintiffs to file an amended complaint.
On July 15, 2011, plaintiffs filed a new amended complaint
entitled "Amended and Supplemental Consolidated Class Action
Complaint" ("ACC"). On August 29, 2011, defendants filed a Motion
to Dismiss in Part the ACC. Plaintiffs filed their brief in
opposition on September 28, 2011 and defendants filed their reply
brief on November 2, 2011. Oral argument on the company's motion
to dismiss was scheduled to take place on February 13, 2012. The
company and the company's affiliated co-defendants dispute the
claims in this lawsuit and have vigorously defended ourselves in
that litigation.
On January 31, 2012, the company reached a tentative settlement in
principle to resolve all claims asserted by the plaintiffs in the
Litigation, other than the claims of one plaintiff. The tentative
settlement in principle, memorialized in a Memorandum of
Understanding ("MOU") previously filed with the company's 8-K
dated February 6, 2012, was subject to certain class certification
conditions, confirmatory discovery and final court approval
(including a fairness hearing). The MOU contemplates a full
release and settlement of all claims against the company and the
other defendants in connection with the claims made in the
Litigation.
Following the entry of the MOU, the parties completed the
confirmatory discovery and on March 19, 2013, filed a Stipulation
and Agreement of Compromise, Settlement and Release
("Stipulation"), along with all of the related agreements, with
the Court. The following are some of the key elements of the
proposed settlement:
(a) the company will offer $20.0 million of 4% five-year
subordinated notes to members of the Class in exchange for
2,493,765 shares of IMH common stock at an exchange rate of one
share per $8.02 in subordinated notes ("Exchange Offering");
(b) the company will offer to Class members that are
accredited investors $10.0 million of convertible notes with the
same financial terms as the convertible notes previously issued to
NW Capital ("Rights Offering");
(c) the company will deposit $1.57 million in cash into a
settlement escrow account (less $225,000 to be held in a reserve
escrow account that is available for use by the company to fund
the company's defense costs for other unresolved litigation) which
will be distributed (after payment of notice and administration
costs and any amounts awarded by the Court for attorneys' fees and
expense) to Class members in proportion to the number of the
company's shares held by them as of June 23, 2010;
(d) the company will enact certain agreed upon corporate
governance enhancements, including the appointment of two
independent directors to the company's board of directors upon
satisfaction of certain conditions and the establishment of a
five-person investor advisory committee (which may not be
dissolved until such time as the company has established a seven-
member board of directors with at least a majority of independent
directors); and
(e) provides additional restrictions on the future sale or
redemption of the company's common stock held by certain of the
company's executive officers.
The Court scheduled a hearing for June 20, 2013 to hear, among
other things, argument as to the fairness of the settlement. The
company vigorously denied, and continue to vigorously deny, that
the company committed any violation of law or engaged in any of
the wrongful acts that were alleged in the Litigation, but the
company believes it is in the company's best interests and the
interests of the company's stockholders to eliminate the burden
and expense of further litigation and to put the claims that were
or could have been asserted to rest.
As of December 31, 2012 and 2011, the company accrued the payment
required of $1.57 million, as well as the offsetting related
anticipated insurance proceeds, which have been deposited into
settlement escrow accounts.
In addition, due to the significance of the anticipated settlement
and related costs, the company separately identified such costs in
the accompanying consolidated statement of operations.
Such amounts consist primarily of legal, accounting and other
professional fees incurred in connection with the settlement
proposal, including costs surrounding the proposed Rights Offering
and Exchange Offering.
During the three months ended March 31, 2013 and 2012, the company
recorded settlement related costs of $0.3 million and $0.3
million, respectively. However, the company not included any other
adjustments relating to the potential repurchase of stock in
exchange for the issuance of convertible notes because the
consummation of these repurchases and offerings are subject to a
number of conditions, including the receipt of certain "no-action"
relief from the SEC and approval of the court, and because of the
uncertainty of timing and of the GAAP based "fair value"
determination of such securities as of the date of settlement. At
the time that these amounts are reasonably estimable, the company
will record the appropriate amounts resulting from the resolution
of this matter.
While the company is working expeditiously to resolve the
Litigation, there can be no assurance that the court will approve
the proposed settlement in principle. Further, the judicial
process to ultimately approve the proposed settlement, including
appeal time, may take up to another twelve months. If not
approved, the proposed settlement as outlined in the Stipulation
may be terminated and the company will continue to vigorously
defend this action.
LEUCADIA NATIONAL: Books $20MM Litigation Reserve for "Sykes"
-------------------------------------------------------------
Leucadia National Corporation recorded a litigation reserve of
$20,000,000 related to the company's being named as defendants in
a consumer class action captioned Sykes v. Mel Harris &
Associates, LLC, et al., 09 Civ. 8486 (DC), in the United States
District Court for the Southern District of New York, according to
the company's May 9, 2013, Form 10-Q filing with the U.S.
Securities and Exchange Commission for the quarter ended March 31,
2013.
The action arises out of another party's obtaining default
judgments against approximately 124,000 individuals in New York
City Civil Court with respect to consumer debt purchased by the
company's subsidiaries. Determinations of both the probability and
the estimated amount of loss or potential loss are judgments made
in the context of developments in the litigation. The company
reviews these developments regularly with outside counsel.
LEUCADIA NATIONAL: New York Suit Over Jefferies Merger Stayed
-------------------------------------------------------------
A New York court stayed actions against Leucadia National
Corporation over its merger with Jefferies Group, Inc., now known
as Jefferies Group LLC, in deference to similar Delaware actions,
according to the company's May 9, 2013, Form 10-Q filing with the
U.S. Securities and Exchange Commission for the quarter ended
March 31, 2013.
Seven putative class action lawsuits have been filed in New York
and Delaware concerning the merger transactions whereby Jefferies
became a wholly owned subsidiary of Leucadia. The class actions,
filed on behalf of Jefferies shareholders prior to the merger
transactions, name as defendants Jefferies, the members of the
board of directors of Jefferies, Leucadia and, in certain of the
actions, certain merger-related subsidiaries.
The actions allege that the Jefferies directors breached their
fiduciary duties in connection with the merger transactions by
engaging in a flawed process and agreeing to sell Jefferies for
inadequate consideration pursuant to an agreement that contains
improper deal protection terms. The actions allege that Jefferies
and Leucadia aided and abetted the directors' breach of fiduciary
duties. Certain of the actions also allege that the defendants
failed to fully disclose to Jefferies stockholders all material
information necessary to make an informed decision regarding the
proposed transactions.
On April 16, 2013, the New York court stayed, through pre-trial
proceedings, the New York actions in deference to the Delaware
actions. The parties are in the process of negotiating a proposed
schedule to govern the proceedings in the Delaware action. The
company is unable to predict the outcome of this litigation.
MEMC ELECTRONIC: Awaits Oral Arguments in ERISA Class Suit
----------------------------------------------------------
The U.S. District Court for the Eastern District of Missouri has
yet to rule on a motion for oral argument on a pending motion by
MEMC Electronic Materials, Inc. to dismiss a suit filed against it
by Jerry Jones, according to the company's May 9, 2013, Form 10-Q
filing with the U.S. Securities and Exchange Commission for the
quarter ended March 31, 2013.
On December 26, 2008, a putative class action lawsuit was filed in
the U.S. District Court for the Eastern District of Missouri by
plaintiff, Jerry Jones, purportedly on behalf of all participants
in and beneficiaries of MEMC's 401(k) Savings Plan (the "Plan")
between September 4, 2007 and December 26, 2008, inclusive. The
complaint asserted claims against MEMC and certain of its
directors, employees and/or other unnamed fiduciaries of the Plan.
The complaint alleges that the defendants breached certain
fiduciary duties owed under the Employee Retirement Income
Security Act, generally asserting that the defendants failed to
make full disclosure to the Plan's participants of the risks of
investing in MEMC's stock and that the company's stock should not
have been made available as an investment alternative in the Plan.
The complaint also alleges that MEMC failed to disclose certain
material facts regarding MEMC's operations and performance, which
had the effect of artificially inflating MEMC's stock price.
On June 1, 2009, an amended class action complaint was filed by
Mr. Jones and another purported participant of the Plan, Manuel
Acosta, which raises substantially the same claims and is based on
substantially the same allegations as the original complaint.
However, the amended complaint changes the period of time covered
by the action, purporting to be brought on behalf of beneficiaries
of and/or participants in the Plan from June 13, 2008 through the
present, inclusive. The amended complaint seeks unspecified
monetary damages, including losses the participants and
beneficiaries of the Plan allegedly experienced due to their
investment through the Plan in MEMC's stock, equitable relief and
an award of attorney's fees. No class has been certified and
discovery has not begun.
The company and the named directors and employees filed a motion
to dismiss the complaint, which was fully briefed by the parties
as of October 9, 2009. The parties each subsequently filed notices
of supplemental authority and corresponding responses. On March
17, 2010, the court denied the motion to dismiss. The MEMC
defendants filed a motion for reconsideration or, in the
alternative, certification for interlocutory appeal, which was
fully briefed by the parties as of June 16, 2010.
The parties each subsequently filed notices of supplemental
authority and corresponding responses. On October 18, 2010, the
court granted the MEMC defendants' motion for reconsideration,
vacated its order denying the MEMC defendants' motion to dismiss,
and stated that it will revisit the issues raised in the motion to
dismiss after the parties supplement their arguments relating
thereto. Both parties filed briefs supplementing their arguments
on November 1, 2010.
On June 28, 2011, plaintiff Jerry Jones filed a notice of
voluntary withdrawal from the action. On June 29, 2011, the Court
entered an order withdrawing Jones as one of the plaintiffs in
this action. The parties each have continued to file additional
notices of supplemental authority and responses thereto.
On September 27, 2012, the MEMC defendants moved for oral argument
on their pending motion to dismiss; plaintiff Manuel Acosta joined
in the MEMC defendants' motion for oral argument on October 9,
2012. The Court has not ruled on this motion for oral argument.
MUNICIPAL MORTGAGE: Appeal From Dismissal of Suit Claims Pending
----------------------------------------------------------------
An appeal from the dismissal of certain claims in a class action
lawsuit against Municipal Mortgage & Equity, LLC remains pending,
according to the Company's May 15, 2013, Form 10-Q filing with the
U.S. Securities and Exchange Commission for the quarter ended
March 31, 2013.
The Company is a defendant in a purported class action lawsuit and
two derivative lawsuits originally filed in 2008. The plaintiffs
in the class action lawsuit claim to represent a class of
investors in the Company's shares who allegedly were injured by
misstatements in press releases and SEC filings between May 3,
2004, and January 28, 2008. The plaintiffs seek unspecified
damages for themselves and the shareholders of the class they
purport to represent. In the derivative lawsuits, the plaintiffs
claim, among other things, that the Company was injured because
its directors and certain named officers did not fulfill duties
regarding the accuracy of its financial disclosures. Both the
class action and the derivative cases are pending in the United
States District Court for the District of Maryland. The Company
filed a motion to dismiss the class action and in June 2012, the
Court issued a ruling dismissing all of the counts alleging any
knowing or intentional wrongdoing by the Company or its
affiliates, directors and officers. The only remaining counts
relate to the Company's dividend reinvestment plan. The
Plaintiffs have appealed the Court's ruling.
As of March 31, 2013, based on the Company's exposure under the
remaining counts, the Company believes it is probable that it will
settle this case for $0.5 million or less and as such the Company
has a contingent obligation for $0.5 million (reported through
"Other liabilities"). If the plaintiffs are successful on appeal,
then it is possible that the Company could incur additional
losses, which could be significant; however, these losses cannot
be estimated at this time. The Company expects any settlement and
any other future losses related to this case (including the $0.5
million) to be covered by insurance proceeds.
The primary business of Municipal Mortgage & Equity, LLC --
http://munimae.investorroom.com/-- is its investments in tax-
exempt and taxable bonds secured predominantly by affordable
multifamily housing properties. The Company is based in
Baltimore, Maryland.
OMNICEL INC: Plaintiff in "Polanco" Suit Ordered to Show Cause
--------------------------------------------------------------
The United States District Court for the District of New Jersey
entered an order to show cause as to why the case filed by Bobbi
Polanco relating to the theft of an Omnicell, Inc. electronic
device containing medication dispensing cabinet log files should
not be dismissed for lack of subject matter jurisdiction,
according to the company's May 9, 2013, Form 10-Q filing with the
U.S. Securities and Exchange Commission for the quarter ended
March 31, 2013.
On March 8, 2013, Bobbi Polanco ("Polanco") filed a putative class
action complaint in the United States District Court for the
District of New Jersey against Omnicell and certain of the
company's customers (Case No. 1:13-cv-01417-NLH-KLM) alleging
breach of state security notification laws, violations of state
consumer fraud laws, fraud, negligence and conspiracy relating to
the theft of an Omnicell electronic device containing medication
dispensing cabinet log files, including certain patient health
information, and subsequent notification of this unauthorized
disclosure of personal health information.
Polanco is seeking an injunction against the defendants to prevent
each of them from committing the acts complained of in the future
and monetary damages, costs and expenses.
On May 2, 2013, the United States District Court for the District
of New Jersey entered an order to show cause which provided, in
relevant part, that Polanco is required to show cause as to why
the case should not be dismissed for lack of subject matter
jurisdiction. Omnicell is currently evaluating a response to this
complaint and intends to defend the matter vigorously.
ORION FUTURES: July 23 Fairness Hearing in "Citigroup Bond" Suit
----------------------------------------------------------------
A July 23, 2013 fairness hearing is scheduled in the $730 million
settlement of Re Citigroup Inc. Bond Litigation, according to
Orion Futures Fund L.P.'s May 20, 2013, Form 10-Q filing with the
U.S. Securities and Exchange Commission for the quarter ended
March 31, 2013.
On March 13, 2009, defendants filed a motion to dismiss securities
complaint. On July 12, 2010, the court issued an opinion and order
dismissing plaintiffs' claims under Section 12 of the Securities
Act of 1933, as amended, but denying defendants motion to dismiss
certain claims under Section 11.
On September 30, 2010, the district court entered a scheduling
order in IN RE CITIGROUP INC. BOND LITIGATION. Fact discovery
began in November 2010, and plaintiffs' motion to certify a class
was fully briefed.
On March 25, 2013, the United States District Court for the
Southern District of New York entered an order preliminarily
approving the parties proposed settlement of IN RE CITIGROUP INC.
BOND LITIGATION, pursuant to which Citigroup and certain of its
subsidiaries will pay $730 million in exchange for a release of
all claims asserted on behalf of the settlement class. A fairness
hearing is scheduled for July 23, 2013.
ORION FUTURES: 2nd Cir. Won't Review Certification Ruling
---------------------------------------------------------
On March 26, 2013, the United States Court of Appeals for the
Second Circuit denied defendants' petition for review of the
district court's October 15, 2012 order granting lead plaintiffs'
amended motion for class certification in New Jersey Carpenters
Health Fund v. Residential Capital LLC, et al., according to Orion
Futures Fund L.P.'s May 20, 2013, Form 10-Q filing with the U.S.
Securities and Exchange Commission for the quarter ended March 31,
2013.
Plaintiffs allege federal securities law claims on behalf of a
putative class of purchasers of MBSs issued by Residential
Accredited Loans, Inc. Citigroup Global Markets Inc. is named as
an underwriter defendant.
ORION FUTURES: Appeals Court Affirms Dismissal of Antitrust Suits
-----------------------------------------------------------------
Orion Futures Fund L.P. disclosed in its May 20, 2013, Form 10-Q
filing with the U.S. Securities and Exchange Commission for the
quarter ended March 31, 2013, that on March 5, the United States
Court of Appeals for the Second Circuit affirmed the district
court's dismissal of two putative class actions brought on behalf
of purchasers and issuers of auction rate securities for alleged
violations of Section 1 of the Sherman Antitrust Act.
ORION FUTURES: Suit Over Cheyne Finance Securities Dismissed
------------------------------------------------------------
The suit Abu Dhabi Commercial Bank, et al. v. Morgan Stanley & Co.
Inc., et al. was dismissed with prejudice after parties reached an
agreement to settle the case, according to Orion Futures Fund
L.P.'s May 20, 2013, Form 10-Q filing with the U.S. Securities and
Exchange Commission for the quarter ended March 31, 2013.
On August 25, 2008, the Company and two ratings agencies were
named as defendants in a purported class action related to
securities issued by a structured investment vehicle called Cheyne
Finance PLC and Cheyne Finance LLC (together, the "Cheyne SIV").
The case was styled Abu Dhabi Commercial Bank, et al. v. Morgan
Stanley & Co. Inc., et al. The complaint alleged, among other
things, that the ratings assigned to the securities issued by the
Cheyne SIV were false and misleading, including because the
ratings did not accurately reflect the risks associated with the
subprime residential mortgage backed securities held by the Cheyne
SIV.
The plaintiffs asserted allegations of aiding and abetting fraud
and negligent misrepresentation relating to approximately $852
million of securities issued by the Cheyne SIV. On April 24, 2013,
the parties reached an agreement to settle the case, and on April
26, 2013, the court dismissed the action with prejudice. The
settlement does not cover certain claims that were previously
dismissed.
PEPSICO INC: Judge Allows Fraud MDL Over Tropicana Juice
--------------------------------------------------------
David Gialanella, writing for New Jersey Law Journal, reports that
a federal judge on June 12 allowed multidistrict consumer-fraud
litigation to go forward against Tropicana over allegedly false
claims about the naturalness of its orange juice.
U.S. District Judge Dennis Cavanaugh in Newark declined to dismiss
most of the counts in In re: Tropicana Orange Juice Marketing and
Sales Practices Litigation, MDL No. 2353, consolidated in New
Jersey.
The plaintiffs allege that Tropicana's product, though labeled
"100 percent pure and natural," is not. "It is instead a product
that is scientifically engineered in laboratories . . . which
explains its shelf life of more than two months," according to
Dennis Lynch of Oakland, N.J., the first plaintiff to sue.
The plaintiffs, who seek to assert claims on behalf of all
Tropicana purchasers, claim the juice is processed and contains
coloring and flavoring.
The plaintiffs contend that the juice is not all natural because
it undergoes "deaeration," or removal of naturally occurring air;
deactivation of natural enzymes and microbes through
pasteurization; and long-term storage. Most important, according
to the plaintiffs, "flavor packs" containing oils and peels from
imported oranges are added to restore flavor and aroma lost during
processing. They assert charges under common law, the New Jersey
Consumer Fraud Act and other statutes.
A year ago, the U.S. Judicial Panel on Multidistrict Litigation in
Washington, D.C., centralized the suits in New Jersey, where
several were filed.
Tropicana's parent company, Purchase, N.Y.-based PepsiCo. Inc.,
also is named.
In September, Tropicana moved to dismiss the consolidated amended
complaint, contending that the claims are deficient and pre-empted
by federal law governing food labeling requirements.
On June 12, Judge Cavanaugh upheld most of the counts.
"Because Plaintiffs' claims involve an alleged failure to meet the
requirements of federal law, and not a standard that deviated from
or adds to such requirements, these claims are not preempted," he
wrote.
Tropicana fell short of overcoming a presumption that federal law
is not intended to supplant state law, and the plaintiffs aren't
trying to impose labeling requirements beyond what is contained in
federal regulations, Cavanaugh said.
Judge Cavanaugh also dispensed with Tropicana's contention that,
because its manufacturing and labeling processes are approved by
the Food and Drug Administration, the safe harbor doctrine bars
the claims. He noted that the plaintiffs allege that Tropicana
failed to follow FDA regulations.
Tropicana also argued that the plaintiffs did not sufficiently
plead that their reasonable expectations in purchasing the product
weren't met.
Because the containers are marked "pasteurized," it's unreasonable
for a consumer to expect that "100 percent pure and natural" juice
is the same as fresh-squeezed orange juice, the company said.
But that labeling "does not inherently 'provide a shield for
liability for the deception' that this product has no added
flavoring or is 100 percent pure and natural orange juice," Judge
Cavanaugh wrote. He added that there's no evidence that consumers
understand "the intricacies relating to the shelf life and
processing of the orange juice."
The judge also said, contrary to Tropicana's contentions, that the
plaintiffs satisfied the heightened pleading standard for fraud by
providing the specifics of what product was purchased, when and
where. In addition, the plaintiffs specifically pleaded an
ascertainable loss under the CFA and its New York counterpart,
Cavanaugh said, noting that payment of a premium price and
demonstration of a misleading advertisement by themselves may be
sufficient. The judge also upheld common-law claims of breach of
express warranty and unjust enrichment.
Judge Cavanaugh struck one plaintiff's claims -- seeking punitive
damages under a Wisconsin consumer fraud statute -- and one count
that asserted "various" unspecified state consumer protection
statutes.
Caroline Bartlett, Esq., of Carella, Byrne, Cecchi, Olstein, Brody
& Agnello in Roseland, the plaintiff lead counsel, says there have
been no settlement discussions yet.
"I think the judge got everything right," Ms. Bartlett adds. "As
we move forward to discovery, we look forward to presenting the
case."
Liza Walsh, Esq. -- lwalsh@connellfoley.com -- of Connell Foley in
Roseland, Tropicana's counsel, declines comment through an
assistant.
The company issued a statement saying, "Tropicana Pure Premium
remains committed to offering great-tasting 100 percent Florida
orange juice with no added sugar, water or preservatives. We take
the faith that consumers place in our products seriously and are
committed to full compliance with labeling laws and regulations."
PFIZER INC: Alabama High Court Reconsiders Generic Drug Ruling
--------------------------------------------------------------
Greg Ryan, writing for Law360, reports that The Alabama Supreme
Court agreed on June 13 to reconsider its January ruling that
makers of brand-name drugs can be held liable for injuries caused
by their generic counterparts, after Pfizer Inc. and another
company called the decision an "extreme outlier position."
The high court issued an order saying it would hold oral argument
in the case in September. Pfizer, its subsidiary Wyeth Ltd. and
Schwarz Pharma Inc. requested oral argument in a brief in
February, arguing that the court had misunderstood the U.S.
Supreme Court's Mensing decision. According to Pfizer, the court
did not hold oral argument before issuing the ruling.
"The order provides the company with its first opportunity to
present oral argument before the Supreme Court of Alabama and
reinforce the well-established legal principle that a business
should not be held liable for a product it did not manufacture or
market," Pfizer official Michael Parini said in a statement.
The order said the exact date of the oral argument would be
determined later. Attorneys for Weeks and Schwarz could not be
immediately reached for comment on the decision.
A majority of the court ruled on Jan. 11 that under Alabama law,
consumers allegedly injured by a generic drug can bring suit
against the corresponding brand-name manufacturer for fraud or
misrepresentation based on statements it made about the brand-name
drug, such as those on a warning label.
When faced with similar claims against brand-name manufacturers,
nearly all courts nationwide -- including the Eighth Circuit, on
June 14 -- have dismissed the allegations. Besides the Alabama
Supreme Court, the two other notable exceptions have been a
California state appeals court in 2008 and a Vermont federal court
in 2010.
The Supreme Court tackled the issue in response to a question
certified to it by an Alabama federal court in a lawsuit brought
by Danny Weeks, who allegedly developed the involuntary movement
disorder tardive dyskinesia as a result of taking generic versions
of the heartburn medication Reglan.
Pfizer and Schwarz argued in their brief that the majority
misapprehended Mensing, a 2011 decision that holds state-law
failure-to-warns claims against generics manufacturers are
preempted by federal law. In turning aside previous decisions in
Alabama rejecting so-called innovator liability, the majority
pointed out that the rulings had come before Mensing.
Since Mensing, each of 16 courts other than the Alabama Supreme
Court to consider innovator liability has rejected the theory,
including three federal appeals courts, the drugmakers said at the
time.
Weeks and his wife are represented by Christopher Hood, W. Lewis
Garrison Jr. -- wlgarrison@hgdlawfirm.com -- and William Bross --
wlbross@hgdlawfirm.com -- of Heninger Garrison Davis LLC.
Pfizer and Wyeth are represented by Kevin Newsom --
knewsom@babc.com -- Lindsey Boney -- lboney@babc.com -- Philip
Butler -- pbutler@babc.com -- and George Parker --
gparker@babc.com -- of Bradley Arant Boult Cummings LLP.
Schwarz is represented by Henninger Bullock --
hbullock@mayerbrown.com -- and Andrew Calica --
acalica@mayerbrown.com -- of Mayer Brown LLP, J. Gorman Houston
Jr. -- ghouston@lightfootlaw.com -- of Lightfoot Franklin White
LLC, and Frederick Helmsing -- fhelmsing@mcdowellknight.com -- of
McDowell Knight Roedder & Sledge LLC.
The case is Wyeth Inc. et al. v. Weeks et al., case number
1101397, in the Alabama Supreme Court.
POPULAR INC: Payment Made in Overdraft Fee Suit v. Banco Popular
----------------------------------------------------------------
A $430,000 payment was made in the settlement of the suit Almeyda-
Santiago v. Banco Popular de Puerto Rico pending in the Puerto
Rico Court of First Instance, according to Popular Inc.'s May 9,
2013, Form 10-Q filing with the U.S. Securities and Exchange
Commission for the quarter ended March 31, 2013.
On October 7, 2010, a putative class action for breach of contract
and damages captioned Almeyda-Santiago v. Banco Popular de Puerto
Rico, was filed in the Puerto Rico Court of First Instance against
Banco Popular. The complaint essentially asserts that plaintiff
and others similarly situated who plaintiff purports to represent
have suffered damages because of Banco Popular's allegedly
fraudulent overdraft fee practices in connection with debit card
transactions.
Such practices allegedly consist of: (a) the reorganization of
electronic debit transactions in high-to-low order so as to
multiply the number of overdraft fees assessed on its customers;
(b) the assessment of overdraft fees even when clients have not
overdrawn their accounts; (c) the failure to disclose, or to
adequately disclose, its overdraft policy to its customers; and
(d) the provision of false and fraudulent information regarding
its clients' account balances at point of sale transactions and on
its website.
Plaintiff seeks damages, restitution and provisional remedies
against Banco Popular for breach of contract, abuse of trust,
illegal conversion and unjust enrichment. On January 13, 2011,
Banco Popular submitted a motion to dismiss the complaint.
In January 2012, the parties to the Almeyda action entered into a
memorandum of understanding. Under the terms of this memorandum of
understanding, subject to certain customary conditions, including
court approval of a final settlement agreement, and in
consideration for the full and final settlement and release of all
defendants, the parties agreed that the amount of $0.4 million
will be paid by defendants, which amount, net of attorneys' fees,
shall be donated to one or more non-profit consumer financial
counseling services organizations based in Puerto Rico.
A settlement stipulation and a joint motion for preliminary
approval of such settlement were filed on July 3, 2012 and
approved by the Court on September 6, 2012.
On January 16, 2013, a reasonableness hearing was held in the
matter of reference. Counsel for both parties appeared, as well as
representatives from the three non-profit organizations that were
proposed as potential recipients of the settlement funds.
The Court was informed that all class-members had been notified of
the proposed settlement. The Court then approved the designation
of all non-profit organizations (a fourth non-profit organization
was approved for inclusion shortly after the hearing). The parties
agreed to file a proposed Final Order and Judgment. The Court
requested that a public notice be published upon entry of final
judgment to inform class-members of their right to seek consumer
counseling services from these organizations.
In March 2013, a settlement payment amounting to $430 thousand was
made to the order of, inter alia, the four separate Court-approved
non-profit organizations and the nominal plaintiff.
POPULAR INC: Court Junks "Garcia Lamadrid" Bank-as-Trustee Suit
---------------------------------------------------------------
The Puerto Rico Court of First Instance issued a final and
unappealable ruling granting motions to dismiss Garcia Lamadrid,
et al. v. Banco Popular de Puerto Rico, et al., according to
Popular Inc.'s May 9, 2013, Form 10-Q filing with the U.S.
Securities and Exchange Commission for the quarter ended March 31,
2013.
On December 13, 2010, Popular was served with a class action
complaint captioned Garcia Lamadrid, et al. v. Banco Popular de
Puerto Rico, et al., filed in the Puerto Rico Court of First
Instance. The complaint generally seeks damages against Banco
Popular de Puerto Rico, other defendants and their respective
insurance companies for their alleged breach of certain fiduciary
duties, breach of contract, and alleged violations of local tort
law. Plaintiffs seek in excess of $600 million in damages, plus
costs and attorneys fees.
More specifically, plaintiffs -- Guillermo Garcia Lamadrid and
Benito del Cueto Figueras -- are suing Defendant BPPR for the
losses they (and others) experienced through their investment in
the RG Financial Corporation-backed Conservation Trust Fund
securities. Plaintiffs essentially claim that Banco Popular
allegedly breached its purported fiduciary duty to keep all
relevant parties informed of any developments that could affect
the Conservation Trust notes or that could become an event of
default under the relevant trust agreements; and that in so doing,
it acted imprudently, unreasonably and with gross negligence.
Popular and the other defendants submitted separate motions to
dismiss on or about February 28, 2011. Plaintiffs submitted a
consolidated opposition thereto on April 15, 2011. The parties
were allowed to submit replies and surreplies to such motions and
the motions have now been deemed submitted by the Court and are
pending resolution. An argumentative hearing on this motion was
held on July 3, 2012. At the hearing, the Court requested
supplemental briefs on the matters at issue. Such motions were
submitted on August 8, 2012.
On March 27, 2013, judgment was entered by the Court granting
defendants' motions to dismiss in their entirety. This judgment is
now final and unappealable.
POPULAR INC: Plaintiffs in "Valle" Want Lawsuit Remanded
--------------------------------------------------------
Banco Popular North America is awaiting the court's ruling on a
motion of plaintiffs in Valle v. Popular Community Bank to remand
the case to state court, according to Popular Inc.'s May 9, 2013,
Form 10-Q filing with the U.S. Securities and Exchange Commission
for the quarter ended March 31, 2013.
On November 21, 2012, BPNA was served with a class action
complaint captioned Valle v. Popular Community Bank filed in the
New York State Supreme Court (New York County), whereby plaintiffs
(existing BPNA customers) allege, among other things, that BPNA
engages in unfair and deceptive acts and trade practices relative
to the assessment of overdraft fees and payment processing on
consumer deposit accounts.
The complaint further alleges that BPNA improperly disclosed its
consumer overdraft policies and, additionally, that the overdraft
rates and fees assessed by BPNA violate New York's usury laws. The
complaint seeks unspecified damages, including punitive damages,
interest, disbursements, and attorneys' fees and costs.
BPNA removed the case to federal court (S.D.N.Y.), and plaintiffs
subsequently filed a motion to remand the action to state court.
BPNA is awaiting the court's ruling on remand to determine
procedural posture and next steps.
QWEST COMMS: Still Awaits OK of Settlement in Rights-of-Way Suits
-----------------------------------------------------------------
Qwest Communications International Inc. is still awaiting
preliminary approval of its settlements of class action lawsuits
related to the installation of fiber-optic cable in certain
rights-of-way in four states -- Arizona, Massachusetts, New Mexico
and Texas, according to the Company's May 15, 2013, Form 10-Q
filing with the U.S. Securities and Exchange Commission for the
quarter ended March 31, 2013.
Several putative class actions relating to the installation of
fiber optic cable in certain rights-of-way were filed against
Qwest on behalf of landowners on various dates and in courts
located in 34 states in which Qwest has such cable (Alabama,
Arizona, California, Colorado, Delaware, Florida, Georgia,
Illinois, Indiana, Iowa, Kansas, Kentucky, Maryland,
Massachusetts, Michigan, Minnesota, Mississippi, Missouri,
Nebraska, Nevada, New Jersey, New Mexico, New York, North
Carolina, Ohio, Oklahoma, Oregon, Pennsylvania, South Carolina,
Tennessee, Texas, Utah, Virginia, and Wisconsin.) For the most
part, the complaints challenge the Company's right to install its
fiber optic cable in railroad rights-of-way. The complaints
allege that the railroads own the right-of-way as an easement that
did not include the right to permit the Company to install its
cable in the right-of-way without the Plaintiffs' consent. Most
of the currently pending actions purport to be brought on behalf
of state-wide classes in the named Plaintiffs' respective states,
although one action pending before the Illinois Court of Appeals
purports to be brought on behalf of landowners in Illinois, Iowa,
Kentucky, Michigan, Minnesota, Nebraska, Ohio and Wisconsin. In
general, the complaints seek damages on theories of trespass and
unjust enrichment, as well as punitive damages.
After previous attempts to enter into a single nationwide
settlement in a single court proved unsuccessful, the parties
proceeded to seek court approval of settlements on a state-by-
state basis. To date, the parties have received final approval of
such settlements in 22 states (Alabama, Colorado, Delaware,
Florida, Georgia, Illinois, Indiana, Iowa, Kansas, Maryland,
Michigan, Minnesota, Mississippi, Missouri, Nebraska, New Jersey,
New York, North Carolina, Oklahoma, Tennessee, Virginia and
Wisconsin), have received preliminary approval of the settlements
in eight states (California, Kentucky, Nevada, Ohio, Oregon,
Pennsylvania, South Carolina and Utah), and have not yet received
either preliminary or final approval in four states (Arizona,
Massachusetts, New Mexico and Texas).
The Company says it has accrued an amount that the Company
believes is probable for these matters; however, the amount is not
material to its consolidated financial statements
Headquartered in Monroe, Louisiana, Qwest Communications
International Inc. -- http://www.centurylink.com/-- is an
integrated communications company engaged primarily in providing
an array of communications services to the Company's residential,
business, governmental and wholesale customers. The Company's
communications services include local and long-distance, network
access, private line, broadband, data, managed hosting, wireless
and video services. The Company was incorporated in Delaware and
a subsidiary of CenturyLink, Inc.
RAYMOND JAMES: Court Approves $62MM Accord in Regions Stock Suit
----------------------------------------------------------------
The United States District Court for the Western District of
Tennessee preliminarily approved a $62 million settlement of a
purported class action filed on behalf of purchasers of certain
mutual funds in the Regions Morgan Keegan Fund complex, according
to Raymond James Financial, Inc.'s May 9, 2013, Form 10-Q filing
with the U.S. Securities and Exchange Commission for the quarter
ended March 31, 2013.
Certain of the Morgan Keegan entities, along with Regions, have
been named in class-action lawsuits filed in federal and state
courts on behalf of shareholders of Regions and investors who
purchased shares of certain mutual funds in the Regions Morgan
Keegan Fund complex (the "Regions Funds").
The Regions Funds were formerly managed by Morgan Asset Management
("MAM"), an entity which was at one time a subsidiary of one of
the Morgan Keegan affiliates, but an entity which was not part of
the company's Morgan Keegan acquisition. The complaints contain
various allegations, including claims that the Regions Funds and
the defendants misrepresented or failed to disclose material facts
relating to the activities of the Funds.
In January 2013, the United States District Court for the Western
District of Tennessee preliminarily approved the settlement of the
class action and the derivative action regarding the closed end
funds for $62 million and $6 million, respectively. No other class
has been certified. Certain of the shareholders in the Funds and
other interested parties have entered into arbitration proceedings
and individual civil claims, in lieu of participating in the class
action lawsuits.
REPUBLIC BANCORP: Kentucky Court Stays "Webb" Overdraft Fees Suit
-----------------------------------------------------------------
The U.S. District Court for the Western District of Kentucky
declined to rule whether the plaintiff in Brenda Webb vs. Republic
Bank & Trust Company is allowed to amend a complaint at this time
and ordered the case stayed pending a decision by the U.S. Court
of Appeals for the Sixth Circuit in a case on appeal with the same
standing issue, according to Republic Bancorp, Inc.'s May 9, 2013,
Form 10-Q filing with the U.S. Securities and Exchange Commission
for the quarter ended March 31, 2013.
On August 1, 2011, a lawsuit was filed in the U.S. District Court
for the Western District of Kentucky styled Brenda Webb vs.
Republic Bank & Trust Company d/b/a Republic Bank, Civil Action
No. 3:11-CV-00423-TBR. The Complaint was brought as a putative
class action and seeks monetary damages, restitution and
declaratory relief allegedly arising from the manner in which RB&T
assessed overdraft fees.
In the Complaint, the Plaintiff pleads six claims against RB&T
alleging: breach of contract and breach of the covenant of good
faith and fair dealing (Count I), unconscionability (Count II),
conversion (Count III), unjust enrichment (Count IV), violation of
the Electronic Funds Transfer Act and Regulation E (Count V), and
violations of the Kentucky Consumer Protection Act, KRS Section
367, et seq. (Count VI). RB&T filed a Motion to Dismiss the case
on January 12, 2012.
In response, Plaintiff filed its Motion to Amend the Complaint on
February 23, 2012. In Plaintiff's proposed Amended Complaint,
Plaintiff acknowledges disclosure of the Overdraft Honor Policy
and does not seek to add any claims to the Amended Complaint.
However, Plaintiff divided the breach of contract and breach of
the covenant of good faith and fair dealing claims into two counts
(Counts One and Two). In the original Complaint, those claims were
combined in Count One. RB&T filed its objection to Plaintiff's
Motion to Amend. On June 16, 2012, the District Court denied the
Plaintiff's Motion to Amend concluding that she lacked the ability
to automatically amend the complaint as of right.
However, the Court held that she could be permitted to amend if
she could first demonstrate that her amendment would not be futile
and that she had standing to sue despite RB&T's offer of judgment.
The Court declined to rule on that issue at this time and ordered
the case stayed pending a decision by the U.S. Court of Appeals
for the Sixth Circuit in a case on appeal with the same standing
issue. The Sixth Circuit is expected to consider a recent ruling
of the U.S. Supreme Court in yet another case with a similar
standing issue. RB&T intends to vigorously defend its case.
Management continues to closely monitor this case, but is unable
to estimate, at this time, the possible loss or range of possible
loss, if any, that may result from this lawsuit.
SCBT FINANCIAL: Inks Settlement in Suit Over Peoples Merger
-----------------------------------------------------------
SCBT Financial Corporation entered into a memorandum of
understanding regarding the settlement of F. Davis Arnette and
Mary F. Arnette v. Peoples Bancorporation, Inc., Case No. 2012-CP-
39-0064, according to SCBT Financial's May 9, 2013, Form 10-Q
filing with the U.S. Securities and Exchange Commission for the
quarter ended March 31, 2013.
On January 18, 2012, two purported shareholders of Peoples filed a
class action lawsuit in the Court of Common Pleas for the
Thirteenth Judicial District, State of South Carolina, County of
Pickens, captioned F. Davis Arnette and Mary F. Arnette v. Peoples
Bancorporation, Inc., Case No. 2012-CP-39-0064 (the "Arnette
Lawsuit").
The Complaint names as defendants Peoples, the members of Peoples'
board of directors immediately prior to the completion of the
merger between SCBT and Peoples Bancorporation, Inc. (the
"Director Defendants") and SCBT. The Complaint is brought on
behalf of a putative class of shareholders of Peoples common stock
and seeks a declaration that it is properly maintainable as a
class action.
The Complaint alleges that Peoples' directors breached their
fiduciary duties by failing to maximize shareholder value in
connection with the merger between SCBT and Peoples, and also
alleges that SCBT aided and abetted those breaches of fiduciary
duty.
The Complaint seeks declaratory and injunctive relief to prevent
the completion of the merger, an accounting to determine damages
sustained by the putative class, and costs including plaintiffs'
attorneys' and experts' fees. SCBT believes that the claims
asserted in the Complaint are without merit and that the
proceeding will not have any material adverse effect on the
financial condition or operations of SCBT.
On April 17, 2012, SCBT entered into a memorandum of understanding
(the "Peoples MOU") with plaintiffs and other named defendants
regarding the settlement of the Complaint. Under the terms of the
Peoples MOU, SCBT, Peoples, the Director Defendants and the
plaintiffs have agreed to settle the Arnette Lawsuit and release
the defendants from all claims relating to the Peoples merger,
subject to approval by the Court.
If the Court approves the settlement contemplated by the Peoples
MOU, the Arnette Lawsuit will be dismissed with prejudice.
Pursuant to the terms of the Peoples MOU, SCBT and Peoples have
made available additional information to Peoples shareholders in
the Current Report on Form 8-K filed April 18, 2012. In return,
the plaintiffs have agreed to the dismissal of the Arnette Lawsuit
with prejudice and to withdraw all motions filed in connection
with the Arnette Lawsuit.
If the Peoples MOU is finally approved by the Court, it is
anticipated that the Peoples MOU will resolve and release all
claims in all actions that were or could have been brought
challenging any aspect of the Peoples merger, the Peoples merger
agreement and any disclosures made in connection therewith. There
can be no assurance that the parties will ultimately enter into a
stipulation of settlement or that the Court will approve the
settlement, even if the parties were to enter into such
stipulation. In such event, the proposed settlement as
contemplated by the Peoples MOU may be terminated.
SCBT FINANCIAL: Reaches MOU to Settle Suit Over Savannah Merger
---------------------------------------------------------------
SCBT Financial Corporation and The Savannah Bancorp, Inc. entered
into a memorandum of understanding to settle the suit Rational
Strategies Fund v. Robert H. Demere, Jr. et al., No. 653566/2012,
according to SCBT Financial's May 9, 2013, Form 10-Q filing with
the U.S. Securities and Exchange Commission for the quarter ended
March 31, 2013.
On October 11, 2012, a purported shareholder of Savannah filed a
lawsuit in the Supreme Court of the State of New York captioned
Rational Strategies Fund v. Robert H. Demere, Jr. et al., No.
653566/2012 (the "Rational Lawsuit"), naming Savannah, members of
Savannah's board of directors and SCBT as defendants. This lawsuit
is purportedly brought on behalf of a putative class of Savannah's
common shareholders and seeks a declaration that it is properly
maintainable as a class action with the Plaintiff as the proper
class representative.
The Rational Lawsuit alleges that Savannah, Savannah's directors
and SCBT breached duties and/or aided and abetted such breaches by
failing to disclose certain material information about the
proposed merger between Savannah and SCBT. Among other relief, the
Complaint seeks to enjoin the merger. SCBT believes that the
claims asserted in the Complaint are without merit and that the
proceeding will not have any material adverse effect on the
financial condition or operations of SCBT.
On November 23, 2012, SCBT, Savannah and the other named
defendants entered into a memorandum of understanding (the
"Rational MOU") with the Plaintiff regarding a settlement of the
Rational Lawsuit. Pursuant to the Rational MOU, Savannah made
available additional information concerning the Savannah merger to
Savannah shareholders in a Current Report on Form 8-K.
The Rational MOU provides that the parties will enter into a
stipulation of settlement, which will be subject to customary
conditions, including court approval following notice to
Savannah's shareholders. If the settlement is finally approved by
the Court, it is anticipated that the settlement will resolve and
release all claims in the action that were or could have been
brought challenging any aspect of the Savannah merger, the
Savannah merger agreement, and any disclosure made in connection
therewith, and that the action will be dismissed with prejudice.
There can be no assurance that the parties will ultimately enter
into a stipulation of settlement or that the court will approve
the settlement even if the parties were to enter into such
stipulation. In such event, the proposed settlement as
contemplated by the Rational MOU may be terminated.
SCBT FINANCIAL: Complaint Over First Financial Merger Amended
-------------------------------------------------------------
Plaintiffs in the suit In re First Financial Holdings, Inc.
Shareholder Litigation, No. 8386-VCN filed a consolidated amended
complaint, according to SCBT Financial Corporation's May 9, 2013,
Form 10-Q filing with the U.S. Securities and Exchange Commission
for the quarter ended March 31, 2013.
On March 5, 2013, a purported shareholder of First Financial filed
a lawsuit in the Court of Chancery of the State of Delaware
captioned Arthur Walter v. R. Wayne Hall et al., No. 8386-VCN.
On March 25, 2013, another purported shareholder of First
Financial filed a lawsuit in the same court captioned Emmy Moore
v. R. Wayne Hall et al., No. 8434-VCN. On April 18, 2013, the
Court of Chancery issued an order consolidating the two lawsuits
into one action captioned In re First Financial Holdings, Inc.
Shareholder Litigation, No. 8386-VCN.
On May 7, 2013, the plaintiffs filed a consolidated amended
complaint on behalf of a putative class of First Financial's
common shareholders. The amended complaint alleges that First
Financial, its directors and SCBT breached their fiduciary duties
and/or aided and abetted such breaches of fiduciary duty by
failing to disclose certain material information about the
proposed merger between First Financial and SCBT.
The amended complaint further alleges that First Financial's board
of directors breached their fiduciary duties by attempting to sell
First Financial to SCBT by means of an unfair process and for an
unfair price and that SCBT aided and abetted these alleged
breaches of fiduciary duty. Among other relief, the amended
complaint seeks declaratory and injunctive relief to prevent the
proposed merger between First Financial and SCBT. SCBT believes
that the claims asserted in the amended complaint are without
merit and that this litigation will not have any material adverse
effect on the financial condition or operations of SCBT.
SCBT FINANCIAL: Sued in New York Over First Financial Merger
------------------------------------------------------------
SCBT Financial Corporation faces a lawsuit in the Supreme Court of
the State of New York in the County of New York captioned Rational
Strategies Fund v. Robert R. Hill Jr. et al., No. 651625/2013,
according to SCBT Financial Corporation's May 9, 2013, Form 10-Q
filing with the U.S. Securities and Exchange Commission for the
quarter ended March 31, 2013.
On May 3, 2013, a purported shareholder of SCBT filed a lawsuit in
the Supreme Court of the State of New York in the County of New
York captioned Rational Strategies Fund v. Robert R. Hill Jr. et
al., No. 651625/2013, naming SCBT and members of its board of
directors as defendants.
This lawsuit is purportedly brought on behalf of a putative class
of SCBT's common shareholders and seeks a declaration that it is
properly maintainable as a class action with the Plaintiff as the
proper class representative. The lawsuit alleges that SCBT and
members of its board of directors breached duties by failing to
disclose certain material information about the proposed merger
between First Financial Holdings, Inc. and SCBT.
Among other relief, the Complaint seeks to enjoin the merger. SCBT
believes that the claims asserted in the Complaint are without
merit and that the proceeding will not have any material adverse
effect on the financial condition or operations of SCBT.
SIMPSON MANUFACTURING: Amendment in Ocean Pointe Suit Allowed
-------------------------------------------------------------
The Hawaii First Circuit Court granted a motion by certain
plaintiffs in a suit against Simpson Manufacturing Co., Inc. for
leave to amend their cross-claims to allege a claim for negligent
misrepresentation in relation to its strap tie holdown products,
according to the company's May 9, 2013, Form 10-Q filing with the
U.S. Securities and Exchange Commission for the quarter ended
March 31, 2013.
Four lawsuits have been filed against the Company in the Hawaii
First Circuit Court: Alvarez v. Haseko Homes, Inc. and Simpson
Manufacturing, Inc., Civil No. 09-1-2697-11 ("Case 1"); Ke Noho
Kai Development, LLC v. Simpson Strong-Tie Company, Inc., and
Honolulu Wood Treating Co., LTD., Case No. 09-1-1491-06 SSM ("Case
2"); North American Specialty Ins. Co. v. Simpson Strong-Tie
Company, Inc. and K.C. Metal Products, Inc., Case No. 09-1-1490-06
VSM ("Case 3"); and Charles et al. v. Haseko Homes, Inc. et al.
and Third Party Plaintiffs Haseko Homes, Inc. et al. v. Simpson
Strong-Tie Company, Inc., et al., Civil No. 09-1-1932-08 ("Case
4"). Case 1 was filed on November 18, 2009. Cases 2 and 3 were
originally filed on June 30, 2009. Case 4 was filed on August 19,
2009.
The Cases all relate to alleged premature corrosion of the
Company's strap tie holdown products installed in buildings in a
housing development known as Ocean Pointe in Honolulu, Hawaii,
allegedly causing property damage.
Case 1 is a putative class action brought by the owners of
allegedly affected Ocean Pointe houses. Case 1 was originally
filed as Kai et al. v. Haseko Homes, Inc., Haseko Construction,
Inc. and Simpson Manufacturing, Inc., Case No. 09-1-1476, but was
voluntarily dismissed and then re-filed with a new representative
plaintiff.
Case 2 is an action by the builders and developers of Ocean Pointe
against the Company, claiming that either the Company's strap tie
holdowns are defective in design or manufacture or the Company
failed to provide adequate warnings regarding the products'
susceptibility to corrosion in certain environments.
Case 3 is a subrogation action brought by the insurance company
for the builders and developers against the Company claiming the
insurance company expended funds to correct problems allegedly
caused by the Company's products.
Case 4 is a putative class action brought, like Case 1, by owners
of allegedly affected Ocean Pointe homes. In Case 4, Haseko
Homes, Inc. ("Haseko"), the developer of the Ocean Pointe
development, brought a third party complaint against the Company
alleging that any damages for which Haseko may be liable are
actually the fault of the Company. Similarly, Haseko's sub-
contractors on the Ocean Pointe development brought cross-claims
against the Company seeking indemnity and contribution for any
amounts for which they may ultimately be found liable.
None of the Cases alleges a specific amount of damages sought,
although each of the Cases seeks compensatory damages, and Case 1
seeks punitive damages. Cases 1 and 4 have been consolidated. In
December 2012, the Court granted the Company summary judgment on
the claims asserted by the plaintiff homeowners in Cases 1
and 4, and on the third party complaint and cross-claims asserted
by Haseko and the sub-contractors, respectively, in Case 4.
In April 2013, the Court granted Haseko and the sub-contractors'
motion for leave to amend their cross-claims to allege a claim for
negligent misrepresentation. The Company continues to investigate
the facts underlying the claims asserted in the Cases, including,
among other things, the cause of the alleged corrosion; the
severity of any problems shown to exist; the buildings affected;
the responsibility of the general contractor, various
subcontractors and other construction professionals for the
alleged damages; the amount, if any, of damages suffered; and the
costs of repair, if needed. At this time, the likelihood that the
Company will be found liable under any legal theory and the extent
of such liability, if any, are unknown. Management believes the
Cases may not be resolved for an extended period. The Company
intends to defend itself vigorously in connection with the Cases.
SIMPSON MANUFACTURING: Still Faces "Nishimura" Suit in Hawaii
-------------------------------------------------------------
Simpson Manufacturing Co., Inc. is facing remaining claims in the
suit Nishimura v. Gentry Homes, Ltd; Simpson Manufacturing Co.,
Inc.; and Simpson Strong-Tie Company, Inc., Civil no. 11-1-1522-
07, according to the company's May 9, 2013, Form 10-Q filing with
the U.S. Securities and Exchange Commission for the quarter ended
March 31, 2013.
Nishimura v. Gentry Homes, Ltd; Simpson Manufacturing Co., Inc.;
and Simpson Strong-Tie Company, Inc., Civil no. 11-1-1522-07, was
filed in the Circuit Court of the First Circuit of Hawaii on July
20, 2011. The Nishimura case alleges premature corrosion of the
Company's strap tie holdown products in a housing development at
Ewa Beach in Honolulu, Hawaii.
The case is a putative class action brought by owners of allegedly
affected homes. The Complaint alleges that the Company's strap
products and mudsill anchors are insufficiently corrosion
resistant and/or fail to comply with Honolulu's building code.
In February 2012, the Court dismissed three of the five claims the
plaintiffs had asserted against the Company. The Company is
currently investigating the allegations of the complaint,
including, among other things: the existence and extent of the
alleged corrosion, if any; the building code provisions alleged to
be applicable and, if applicable, whether the products complied;
the buildings affected; the responsibility of the general
contractor, various subcontractors and other construction
professionals for the alleged damages; the amount, if any, of
damages suffered; and the costs of repair, if any are needed. At
this time, the likelihood that the Company will be found liable
for any damage allegedly suffered and the extent of such
liability, if any, are unknown. The Company denies any liability
of any kind and intends to defend itself vigorously in this case.
SKECHERS USA: "Angell" Suit Parties Negotiate Settlement Terms
--------------------------------------------------------------
Skechers U.S.A., Inc., disclosed in its May 15, 2013, Form 10-Q
filing with the U.S. Securities and Exchange Commission for the
quarter ended March 31, 2013, that the parties in the class action
lawsuit brought by Jason Angell are currently negotiating the
terms of their settlement agreement.
On April 12, 2012, Jason Angell filed a motion to authorize the
bringing of a class action entitled Jason Angell v. Skechers
U.S.A., Inc., Skechers U.S.A., Inc. II and Skechers U.S.A. Canada,
Inc. in the Superior Court of Quebec, District of Montreal.
Petitioner Angell seeks to bring a class action on behalf of all
residents of Canada (or in the alternative, all residents of
Quebec) who purchased Skechers Shape-ups footwear. Petitioner's
motion alleges that the Company has marketed Shape-ups through the
use of false and misleading advertisements and representations
about the products' ability to provide health benefits to users.
The motion requests the Court's authorization to institute a class
action seeking damages (including damages for bodily injury),
punitive damages, and injunctive relief. Petitioner's motion was
formally presented to the Court on June 29, 2012. At a mediation
held on February 28, 2013, the parties reached an agreement in
principle to settle the Angell action (as well as the Niras and
Dedato actions) through authorization by the Quebec Superior Court
of a nationwide settlement class. The parties are currently
negotiating the terms of the settlement agreement.
If the motion for approval of the class action settlement is
denied or approval is reversed on appeal, the Company says it
cannot predict the outcome of the Angell action or a reasonable
range of potential losses or whether the outcome of the Angell
action would have a material adverse impact on its results of
operations or financial position in excess of the settlement.
SKECHERS USA, Inc. -- http://www.skechers.com/-- based in
Manhattan Beach, California, designs, develops and markets a
diverse range of footwear for men, women and children under the
SKECHERS name. SKECHERS footwear is available in the United
States via department and specialty stores, Company-owned SKECHERS
retail stores and its e-commerce Web site, and over 100 countries
and territories through the Company's global network of
distributors and subsidiaries in Canada, Brazil, Chile, Japan and
across Europe, as well as through joint ventures in Asia.
SKECHERS USA: "Chavez" Wage and Hour Class Suit Remains Pending
---------------------------------------------------------------
The wage and hour class action lawsuit styled Esteban Chavez v.
Skechers U.S.A., Inc., remains pending in California, according to
the Company's May 15, 2013, Form 10-Q filing with the U.S.
Securities and Exchange Commission for the quarter ended March 31,
2013.
On September 18, 2012, Esteban Chavez filed a class action lawsuit
against the Company in the Superior Court of the State of
California for the County of Los Angeles, Case No. BC492357,
alleging violations of the California Labor Code, including unpaid
overtime, unpaid minimum wages, non-compliant wage statements, and
wages not timely paid upon termination. The complaint seeks
actual, consequential and incidental losses and damages; general
and special damages; civil, statutory and waiting time penalties;
restitution of unpaid wages; injunctive relief; attorneys' fees
and costs; pre-judgment interest on unpaid compensation; and
appointment of a receiver. On September 25, 2012, the Court
issued an order staying the action until an initial status
conference that was held on December 19, 2012. While it is too
early to predict the outcome of the litigation or a reasonable
range of potential losses and whether an adverse result would have
a material adverse impact on its results of operations or
financial position, the Company believes it has meritorious
defenses, vehemently deny the allegations, and intend to defend
the case vigorously.
SKECHERS USA, Inc. -- http://www.skechers.com/-- based in
Manhattan Beach, California, designs, develops and markets a
diverse range of footwear for men, women and children under the
SKECHERS name. SKECHERS footwear is available in the United
States via department and specialty stores, Company-owned SKECHERS
retail stores and its e-commerce Web site, and over 100 countries
and territories through the Company's global network of
distributors and subsidiaries in Canada, Brazil, Chile, Japan and
across Europe, as well as through joint ventures in Asia.
SKECHERS USA: Consumer Accord Resolving "Hochberg" Suit Approved
----------------------------------------------------------------
The nationwide consumer class action settlement, which will also
resolve the issues in the class action lawsuit captioned Wendie
Hochberg and Brenda Baum v. Skechers U.S.A., Inc., was approved in
May 2013, according to the Company's May 15, 2013, Form 10-Q
filing with the U.S. Securities and Exchange Commission for the
quarter ended March 31, 2013.
On November 23, 2011, Wendie Hochberg and Brenda Baum filed a
lawsuit against the Company in the United States District Court
for the Eastern District of New York, Case No. CV11-5751. The
complaint alleges, on their behalf and on behalf of all others
similarly situated, that the Company's advertising for Shape-ups
violates the New York Consumer Protection Act, and is resulting in
unjust enrichment. The complaint seeks certification of a
statewide class, damages, restitution, disgorgement, injunctive
relief, and attorneys' fees and costs. On May 16, 2012, this
action was ordered transferred to the multidistrict litigation
proceeding pending in the United States District Court for the
Western District of Kentucky, entitled In re Skechers Toning Shoe
Products Liability Litigation, MDL No. 2308. On August 13, 2012,
the United States District Court for the Western District of
Kentucky granted preliminary approval of the consumer class action
settlement agreement in the Grabowski/Morga actions, and issued a
preliminary injunction enjoining the continued prosecution of this
action.
On May 13, 2013, the Court entered an order finally approving the
nationwide consumer class action settlement. The settlement in
the Grabowski/Morga class actions, if affirmed on appeal in the
event an appeal is taken, is expected entirely to resolve the
class claims brought by the plaintiff in Hochberg. If the final
approval order is reversed on appeal, the Company says it cannot
predict the outcome of the Hochberg action or a reasonable range
of potential losses or whether the outcome of the Hochberg action
would have a material adverse impact on the Company's results of
operations or financial position in excess of the existing $50
million settlement.
SKECHERS USA, Inc. -- http://www.skechers.com/-- based in
Manhattan Beach, California, designs, develops and markets a
diverse range of footwear for men, women and children under the
SKECHERS name. SKECHERS footwear is available in the United
States via department and specialty stores, Company-owned SKECHERS
retail stores and its e-commerce Web site, and over 100 countries
and territories through the Company's global network of
distributors and subsidiaries in Canada, Brazil, Chile, Japan and
across Europe, as well as through joint ventures in Asia.
SKECHERS USA: Consumer Deal Resolving "Scovil" Suit Approved
------------------------------------------------------------
The settlement that is expected to resolve the claims in the class
action lawsuit titled Michele Scovil v. Skechers U.S.A., Inc. was
approved in May 2013, according to the Company's May 15, 2013,
Form 10-Q filing with the U.S. Securities and Exchange Commission
for the quarter ended March 31, 2013.
On April 25, 2012, Michele Scovil filed a lawsuit against the
Company in the District Court for Clark County, Nevada, Case No.
A-12660756-C. The Plaintiff alleges that she suffered physical
injuries that she attributes to the allegedly defective design of
Shape-ups, and plaintiff asserts, in her individual capacity,
claims for negligence, products liability, strict liability, and
breach of warranty. In addition, the plaintiff also purports to
bring a class action on behalf of all persons in Nevada who
purchased Shape-ups shoes at retail, and seeks class certification
on her claims for alleged violations of the Nevada Unfair and
Deceptive Trade Practices Act. The Plaintiff's complaint seeks
damages, restitution, punitive damages, and attorneys' fees and
costs. On July 12, 2012, this action was transferred to the
multidistrict litigation proceeding pending in the United States
District Court for the Western District of Kentucky, entitled In
re Skechers Toning Shoe Products Liability Litigation, MDL No.
2308. On August 13, 2012, the United States District Court for
the Western District of Kentucky granted preliminary approval of
the consumer class action settlement agreement in the
Grabowski/Morga actions, and issued a preliminary injunction that
enjoins the continued prosecution of this action.
On May 13, 2013, the Court entered an order finally approving the
nationwide consumer class action settlement. The settlement in
the Grabowski/Morga class actions, if affirmed on appeal in the
event an appeal is taken, is expected entirely to resolve the
class claims brought by the plaintiff in Scovil. While it is too
early to predict the outcome of the remaining claims asserted in
this litigation or a reasonable range of potential losses and
whether an adverse result would have a material adverse impact on
its results of operations or financial position, the Company
believes it has meritorious defenses, vehemently deny the
allegations, believe that class certification is not warranted and
intend to defend the case vigorously. If the final approval order
in the Grabowski/Morga class actions is reversed on appeal, the
Company cannot predict the outcome of the Scovil action or a
reasonable range of potential losses or whether the outcome of the
Scovil action would have a material adverse impact on its results
of operations or financial position in excess of the existing $50
million settlement.
SKECHERS USA, Inc. -- http://www.skechers.com/-- based in
Manhattan Beach, California, designs, develops and markets a
diverse range of footwear for men, women and children under the
SKECHERS name. SKECHERS footwear is available in the United
States via department and specialty stores, Company-owned SKECHERS
retail stores and its e-commerce Web site, and over 100 countries
and territories through the Company's global network of
distributors and subsidiaries in Canada, Brazil, Chile, Japan and
across Europe, as well as through joint ventures in Asia.
SKECHERS USA: Consumer Deal Resolving "Tomlinson" Suit Approved
---------------------------------------------------------------
The nationwide consumer class action settlement, which will also
resolve the issues in the class action lawsuit styled Patty
Tomlinson v. Skechers U.S.A., Inc., was approved in May 2013,
according to the Company's May 15, 2013, Form 10-Q filing with the
U.S. Securities and Exchange Commission for the quarter ended
March 31, 2013.
On January 13, 2011, Patty Tomlinson filed a lawsuit against the
Company in Circuit Court in Washington County, Arkansas, Case No.
CV11-121-7. The complaint alleges, on her behalf and on behalf of
all others similarly situated, that the Company's advertising for
Shape-ups violates Arkansas' Deceptive Trade Practices Act,
constitutes a breach of certain express and implied warranties,
and is resulting in unjust enrichment (the "Tomlinson action").
The complaint seeks certification of a statewide class,
compensatory damages, prejudgment interest, and attorneys' fees
and costs. On February 18, 2011, the Company removed the case to
the United States District Court for the Western District of
Arkansas, where it was pending as Patty Tomlinson v. Skechers
U.S.A., Inc., CV 11-05042 JLH. On March 21, 2011, Ms. Tomlinson
moved to remand the action back to Arkansas state court, which
motion the Company opposed. On May 25, 2011, the Court ordered
the case remanded to Arkansas state court and denied the Company's
motion to dismiss or transfer as moot, but stayed the remand
pending completion of appellate review. On September 11, 2012,
the District Court lifted its stay and remanded this case to the
Circuit Court of Washington County, Arkansas. On October 11,
2012, by stipulation of the parties, the state Circuit Court
issued an order staying the case. The settlement in the
Grabowski/Morga class actions, if affirmed on appeal in the event
an appeal is taken, is expected entirely to resolve the class
claims brought by the plaintiff in Tomlinson. On August 13, 2012,
the United States District Court for the Western District of
Kentucky granted preliminary approval of the consumer class action
settlement agreement in the Grabowski/Morga actions, and issued a
preliminary injunction enjoining the continued prosecution of this
action.
On May 13, 2013, the Court entered an order finally approving the
nationwide consumer class action settlement. If the final
approval order in the Grabowski/Morga class actions is reversed on
appeal, the Company says it cannot predict the outcome of the
Tomlinson action or a reasonable range of potential losses or
whether the outcome of the Tomlinson action would have a material
adverse impact on the Company's results of operations or financial
position in excess of the existing $50 million settlement.
SKECHERS USA, Inc. -- http://www.skechers.com/-- based in
Manhattan Beach, California, designs, develops and markets a
diverse range of footwear for men, women and children under the
SKECHERS name. SKECHERS footwear is available in the United
States via department and specialty stores, Company-owned SKECHERS
retail stores and its e-commerce Web site, and over 100 countries
and territories through the Company's global network of
distributors and subsidiaries in Canada, Brazil, Chile, Japan and
across Europe, as well as through joint ventures in Asia.
SKECHERS USA: Consumer Settlement Resolving "Loss" Suit Approved
----------------------------------------------------------------
The nationwide consumer class action settlement, which will also
resolve the issues in the class action lawsuit filed by Shannon
Loss, et al., was approved in May 2013, according to Skechers
U.S.A., Inc.'s May 15, 2013, Form 10-Q filing with the U.S.
Securities and Exchange Commission for the quarter ended March 31,
2013.
On February 12, 2012, Shannon Loss, Kayla Hedges and Donald Horner
filed a lawsuit against the Company in the United States District
Court for the Western District of Kentucky, Case No. 3:12-cv-78-H.
The complaint, captioned Shannon Loss, Kayla Hedges and Donald
Horner v. Skechers U.S.A., Inc., Skechers U.S.A., Inc. II and
Skechers Fitness Group, alleges, on behalf of the named plaintiffs
and all others similarly situated, that the Company's advertising
for Shape-ups is false and misleading, thereby constituting a
breach of contract, breach of implied and express warranties, and
resulting in unjust enrichment. The complaint seeks certification
of a nationwide class, compensatory damages, and attorneys' fees
and costs. On March 9, 2012, the named plaintiffs filed a motion
to consolidate this action with In re Skechers Toning Shoe
Products Liability Litigation, case no. 11-md-02308-TBR. On
August 13, 2012, the United States District Court for the Western
District of Kentucky granted preliminary approval of the consumer
class action settlement agreement in the Grabowski/Morga actions,
and issued a preliminary injunction enjoining the continued
prosecution of this action.
On May 13, 2013, the Court entered an order finally approving the
nationwide consumer class action settlement. The settlement in
the Grabowski/Morga class actions, if affirmed on appeal in the
event an appeal is taken, is expected entirely to resolve the
class claims brought by the plaintiff in Loss. If the final
approval order is reversed on appeal, the Company cannot predict
the outcome of the Loss action or a reasonable range of potential
losses or whether the outcome of the Loss action would have a
material adverse impact on its results of operations or financial
position in excess of the existing $50 million settlement.
SKECHERS USA, Inc. -- http://www.skechers.com/-- based in
Manhattan Beach, California, designs, develops and markets a
diverse range of footwear for men, women and children under the
SKECHERS name. SKECHERS footwear is available in the United
States via department and specialty stores, Company-owned SKECHERS
retail stores and its e-commerce Web site, and over 100 countries
and territories through the Company's global network of
distributors and subsidiaries in Canada, Brazil, Chile, Japan and
across Europe, as well as through joint ventures in Asia.
SKECHERS USA: Continues to Defend "Davies" Class Suit in Alberta
----------------------------------------------------------------
Skechers U.S.A., Inc., continues to defend itself and its
subsidiaries against a class action lawsuit commenced by Brenda
Davies, according to the Company's May 15, 2013, Form 10-Q filing
with the U.S. Securities and Exchange Commission for the quarter
ended March 31, 2013.
On September 5, 2012, Brenda Davies filed a Statement of Claim in
the Court of Queen's Bench in Edmonton, Alberta, on behalf of all
residents of Canada who purchased Skechers Shape-ups footwear.
The case is captioned Brenda Davies v. Skechers U.S.A, Inc.,
Skechers U.S.A., Inc. II, and Skechers U.S.A. Canada Inc. The
Statement of Claim alleges that Skechers marketed Shape-ups
through the use of false and misleading advertisements and
representations about the products' ability to provide fitness
benefits to users. The Statement of Claim seeks damages
(including damages for bodily injury), restitution, punitive
damages, and injunctive relief. Skechers has not yet responded to
the Statement of Claim. The settlement in the Angell, Nira, and
Dedato class actions, if finally approved by the Court and
affirmed on appeal in the event an appeal is taken, is expected
entirely to resolve the class claims brought by the plaintiff in
Davies. If the motion for approval of the class action settlement
is denied or approval is reversed on appeal, the Company says it
cannot predict the outcome of the Davies action or a reasonable
range of potential losses or whether the outcome of the Davies
action would have a material adverse impact on its results of
operations or financial position in excess of the settlement.
SKECHERS USA, Inc. -- http://www.skechers.com/-- based in
Manhattan Beach, California, designs, develops and markets a
diverse range of footwear for men, women and children under the
SKECHERS name. SKECHERS footwear is available in the United
States via department and specialty stores, Company-owned SKECHERS
retail stores and its e-commerce Web site, and over 100 countries
and territories through the Company's global network of
distributors and subsidiaries in Canada, Brazil, Chile, Japan and
across Europe, as well as through joint ventures in Asia.
SKECHERS USA: Has Final Approval of "Grabowski" Suit Settlement
---------------------------------------------------------------
Skechers U.S.A., Inc., received in May 2013 final approval of its
settlement of a class action lawsuit initiated by Tamara
Grabowski, according to the Company's May 15, 2013, Form 10-Q
filing with the U.S. Securities and Exchange Commission for the
quarter ended March 31, 2013.
On June 18, 2010, Tamara Grabowski filed an action, captioned
Tamara Grabowski v. Skechers U.S.A., Inc., against the Company in
the United States District Court for the Southern District of
California, Case No. 10 CV 1300 JM (MDD), on her behalf and on
behalf of all others similarly situated. The complaint, as
subsequently amended, alleges that the Company's advertising for
Shape-ups violates California's Unfair Competition Law and the
California Consumers Legal Remedies Act, and constitutes a breach
of express warranty (the "Grabowski action"). The complaint seeks
certification of a nationwide class, damages, restitution and
disgorgement of profits, declaratory and injunctive relief,
corrective advertising, and attorneys' fees and costs. On
March 7, 2011, the Court stayed the action on the ground that the
outcomes in pending appeals in two unrelated actions will
significantly affect whether a class should be certified. On
April 16, 2012, this action was transferred to the multidistrict
litigation proceeding pending in the United States District Court
for the Western District of Kentucky, entitled In re Skechers
Toning Shoe Products Liability Litigation, MDL No. 2308.
On May 13, 2013, the Court entered an order finally approving the
nationwide consumer class action settlement. If the Court's
decision is affirmed in the event of an appeal, the settlement
will resolve all domestic civil claims concerning the Company's
advertising of its toning shoes that were or could have been
brought by the class of consumers, as defined in the settlement
agreement, including the class claims asserted in the Stalker,
Morga, Tomlinson, Hochberg, Loss, Boatright and Scovil actions.
If the final approval order is reversed on appeal, the Company
says it cannot predict the outcome of the remaining advertising
class actions or a reasonable range of potential losses or whether
the outcome of the remaining advertising class actions would have
a material adverse impact on its results of operations or
financial position in excess of the existing $50 million
settlement.
SKECHERS USA, Inc. -- http://www.skechers.com/-- based in
Manhattan Beach, California, designs, develops and markets a
diverse range of footwear for men, women and children under the
SKECHERS name. SKECHERS footwear is available in the United
States via department and specialty stores, Company-owned SKECHERS
retail stores and its e-commerce Web site, and over 100 countries
and territories through the Company's global network of
distributors and subsidiaries in Canada, Brazil, Chile, Japan and
across Europe, as well as through joint ventures in Asia.
SKECHERS USA: Wins Final OK of Deal in Kentucky Toning Shoes Suit
-----------------------------------------------------------------
Skechers U.S.A., Inc., Inc. received in May 2013 final approval of
its settlement of a nationwide consumer class action lawsuit
relating to toning shoes in Kentucky, according to the Company's
May 15, 2013, Form 10-Q filing with the U.S. Securities and
Exchange Commission for the quarter ended March 31, 2013.
The Company's claims and advertising for its toning products
including for its Shape-ups are subject to the requirements of,
and routinely come under review by regulators including the U.S.
Federal Trade Commission ("FTC"), states' Attorneys General and
government and quasi-government regulators in foreign countries.
The Company is currently responding to requests for information
regarding its claims and advertising from regulatory and quasi-
regulatory agencies in several countries and is fully cooperating
with those requests. While the Company believes that its claims
and advertising with respect to the Company's core toning products
are supported by scientific tests, expert opinions and other
relevant data, and while the Company has been successful in
defending its claims and advertising in several different
countries, the Company has discontinued using certain test results
and the Company periodically reviews and updates its claims and
advertising. The regulatory inquiries may conclude in a variety
of outcomes, including the closing of the inquiry with no further
regulatory action, settlement of any issues through changes in its
claims and advertising, settlement of any issues through payment
to the regulatory entity, or litigation.
As previously disclosed, the FTC and Attorneys General for 44
states and the District of Columbia ("SAGs") had been reviewing
the claims and advertising for Shape-ups and the Company's other
toning shoe products. The Company also disclosed that it has been
named as a defendant in multiple consumer class actions
challenging its claims and advertising for its toning shoe
products, including Shape-ups. The Company recorded a charge of
$50 million during the fourth quarter ended December 31, 2011, to
reserve for costs and potential other exposures relating to the
existing litigation and regulatory matters.
On May 16, 2012, the Company announced that it had settled all
domestic legal proceedings relating to advertising claims made in
connection with the marketing of its toning shoe products. Under
the terms of the global settlement -- without admitting any fault
or liability, with no findings being made that the Company had
violated any law, and with no fines or penalties being imposed --
the Company made payments in the aggregate amount of $45 million
and expect to pay up to $5 million in class action attorneys' fees
to settle the domestic advertising class lawsuits and related
claims brought by the FTC and the SAGs. The FTC Stipulated Final
Judgment was approved by the United States District Court for the
Northern District of Ohio on July 12, 2012. Consent judgments in
the 45 SAG actions have been approved and entered by courts in
those jurisdictions. On May 13, 2013, the United States District
Court for the Western District of Kentucky entered an order
finally approving the nationwide consumer class action settlement.
On November 8, 2012, the Company was served with a Grand Jury
Subpoena ("Subpoena") for documents and information relating to
its past advertising claims for its toning footwear, including
Shape-ups and Resistance Runners. The Subpoena was issued by a
Grand Jury of the United States District Court for the Northern
District of Ohio, in Cleveland, Ohio. The Subpoena seeks
documents and information related to outside studies conducted on
the Company's toning footwear. This Subpoena appears to grow out
of the FTC's inquiry into the Company's claims and advertising for
Shape-ups and its other toning shoe products, which the Company
settled with the FTC, State Attorneys' General and consumer class
as part of a global settlement. The Grand Jury investigation is
in its early stages and the Company is fully cooperating and in
the process of producing documents and other information requested
in the Subpoena. The Assistant United States Attorney has
informed the Company that neither the Company nor its employees
are targets at the present time. Although the Company does not
believe this matter will have a material adverse impact on its
results of operations or financial position, it is too early to
predict the timing and outcome of this matter or reasonably
estimate a range of potential losses, if any.
The toning footwear category, including the Company's Shape-ups
products, has also been the subject of some media attention
arising from a number of consumer complaints and lawsuits alleging
injury while wearing Shape-ups. The Company believes its products
are safe and is defending itself from these media stories and
injury lawsuits. It is too early to predict the outcome of any
case or inquiry, whether there will be future personal injury
cases filed, whether adverse results in any single case or in the
aggregate would have a material adverse impact on the Company's
results of operations or financial position, and whether insurance
coverage will be adequate to cover any losses.
SKECHERS USA, Inc. -- http://www.skechers.com/-- based in
Manhattan Beach, California, designs, develops and markets a
diverse range of footwear for men, women and children under the
SKECHERS name. SKECHERS footwear is available in the United
States via department and specialty stores, Company-owned SKECHERS
retail stores and its e-commerce Web site, and over 100 countries
and territories through the Company's global network of
distributors and subsidiaries in Canada, Brazil, Chile, Japan and
across Europe, as well as through joint ventures in Asia.
SKECHERS USA: No Trial Date Has Been Set in "Lovston" Suit
----------------------------------------------------------
No trial date has been set in the class action lawsuit captioned
Terena Lovston v. Skechers U.S.A., Inc., according to the
Company's May 15, 2013, Form 10-Q filing with the U.S. Securities
and Exchange Commission for the quarter ended March 31, 2013.
On May 13, 2011, Terena Lovston filed a lawsuit against the
Company in Circuit Court in Lonoke County, Arkansas, Case No. CV-
11-321. The complaint alleges, on her behalf and on behalf of all
others similarly situated, that the Company's advertising for its
toning footwear products violates Arkansas' Deceptive Trade
Practices Act, and is resulting in unjust enrichment. The
complaint seeks certification of a statewide class and
compensatory damages. On June 3, 2011, the Company removed the
case to the United States District Court for the Eastern District
of Arkansas, where it was pending as Terena Lovston v. Skechers
U.S.A., Inc., 4:11-cv-0460. On August 5, 2011, the District Court
issued an order staying the case pending completion of the
appellate process in the Tomlinson action. On July 12, 2012, the
district court ordered the Lovston case remanded to Arkansas state
court, and on or about July 26, 2012, the plaintiff filed a
renewed motion in the State Circuit Court for certification of a
class of Arkansas residents who purchased the Company's toning
footwear products. On August 10, 2012, the Circuit Court issued
an order staying the Lovston case in light of the class action
settlement in the Grabowski/Moraga actions. On November 8, 2012,
as allowed under the Circuit Court's stay order, the plaintiff
gave notice that she intended to lift the stay and to proceed with
the action by an amended complaint. On November 27, 2012, an
amended complaint was filed in which Ms. Lovston abandoned her
class action allegations, asserted a new personal injury claim,
and added eight new plaintiffs with personal injury claims. On
December 20, 2012, the Company filed a motion to dismiss the new
plaintiffs' claims for improper venue, to strike the amended
complaint, or to sever and transfer the new plaintiffs' claims to
their home counties in Arkansas.
On February 11, 2013, the state Circuit Court took that motion and
several discovery motions under submission and ordered the parties
to mediation. No trial date has been set. While it is too early
to predict the outcome of the litigation or a reasonable range of
potential losses and whether an adverse result would have a
material adverse impact on its results of operations or financial
position, the Company believes it has meritorious defenses,
vehemently deny the allegations, and intend to defend the case
vigorously.
SKECHERS USA, Inc. -- http://www.skechers.com/-- based in
Manhattan Beach, California, designs, develops and markets a
diverse range of footwear for men, women and children under the
SKECHERS name. SKECHERS footwear is available in the United
States via department and specialty stores, Company-owned SKECHERS
retail stores and its e-commerce Web site, and over 100 countries
and territories through the Company's global network of
distributors and subsidiaries in Canada, Brazil, Chile, Japan and
across Europe, as well as through joint ventures in Asia.
SKECHERS USA: Parties in "Dedato" Suit Negotiate Settlement Terms
-----------------------------------------------------------------
The parties in the class action lawsuit brought by Frank Dedato
are currently negotiating the terms of their settlement agreement,
according to Skechers U.S.A., Inc.'s May 15, 2013, Form 10-Q
filing with the U.S. Securities and Exchange Commission for the
quarter ended March 31, 2013.
On or about November 5, 2012, Frank Dedato filed a Statement of
Claim, entitled Frank Dedato v. Skechers U.S.A., Inc. and Skechers
U.S.A. Canada, Inc., in Ontario Superior Court of Justice on
behalf of all residents of Canada who purchased Shape-ups, Tone-
ups or Resistance Runner footwear. The Statement of Claim alleges
that Skechers has allegedly made misleading statements about its
footwear products' ability to provide fitness benefits to users.
The Statement of Claim seeks damages, restitution, punitive
damages, and injunctive relief. Skechers has not yet responded to
the Statement of Claim. At a mediation held on February 28, 2013,
the parties reached an agreement in principle to settle the Dedato
action (as well as the Angell and Niras actions) through
authorization by the Quebec Superior Court of a nationwide
settlement class. The parties are currently negotiating the terms
of the settlement agreement. It is anticipated that the agreement
will provide for the voluntary discontinuance (dismissal) of the
Dedato action upon approval of the settlement by the Quebec
Superior Court. If the motion for approval of the class action
settlement is denied or approval is reversed on appeal, the
Company says it cannot predict the outcome of the Dedato action or
a reasonable range of potential losses or whether the outcome of
the Dedato action would have a material adverse impact on its
results of operations or financial position in excess of the
settlement.
SKECHERS USA, Inc. -- http://www.skechers.com/-- based in
Manhattan Beach, California, designs, develops and markets a
diverse range of footwear for men, women and children under the
SKECHERS name. SKECHERS footwear is available in the United
States via department and specialty stores, Company-owned SKECHERS
retail stores and its e-commerce Web site, and over 100 countries
and territories through the Company's global network of
distributors and subsidiaries in Canada, Brazil, Chile, Japan and
across Europe, as well as through joint ventures in Asia.
SKECHERS USA: Parties in "Niras" Suit Negotiate Settlement Terms
----------------------------------------------------------------
Skechers U.S.A., Inc., said in its May 15, 2013, Form 10-Q filing
with the U.S. Securities and Exchange Commission for the quarter
ended March 31, 2013, that the parties in the class action lawsuit
filed by George Niras are currently negotiating the terms of their
settlement agreement.
On September 21, 2012, George Niras filed a Statement of Claim,
titled George Niras v. Skechers U.S.A., Inc., Skechers U.S.A.,
Inc. II, and Skechers U.S.A. Canada Inc., in the Ontario Superior
Court of Justice on behalf of all residents of Canada who
purchased Shape-ups, Resistance Runner, Shape-ups Toners/Trainers,
or Tone-ups. The Statement of Claim alleges that Skechers
marketed these toning shoes through the use of false and
misleading advertisements and representations about the products'
ability to provide health benefits to users. The Statement seeks
damages, restitution, punitive damages, and injunctive relief.
Skechers has not yet responded to the Statement. At a mediation
held on February 28, 2013, the parties reached an agreement in
principle to settle the Niras action (as well as the Angell action
and the Dedato action) through authorization by the Quebec
Superior Court of a nationwide settlement class. The parties are
currently negotiating the terms of the settlement agreement. It
is anticipated that the agreement will provide for the voluntary
discontinuance (dismissal) of the Niras action upon approval of
the settlement by the Quebec Superior Court. If the motion for
approval of the class action settlement is denied or approval is
reversed on appeal, the Company says it cannot predict the outcome
of the Niras action or a reasonable range of potential losses or
whether the outcome of the Niras action would have a material
adverse impact on its results of operations or financial position
in excess of the settlement.
SKECHERS USA, Inc. -- http://www.skechers.com/-- based in
Manhattan Beach, California, designs, develops and markets a
diverse range of footwear for men, women and children under the
SKECHERS name. SKECHERS footwear is available in the United
States via department and specialty stores, Company-owned SKECHERS
retail stores and its e-commerce Web site, and over 100 countries
and territories through the Company's global network of
distributors and subsidiaries in Canada, Brazil, Chile, Japan and
across Europe, as well as through joint ventures in Asia.
SKECHERS USA: Wins Final Approval of "Morga" Suit Settlement
------------------------------------------------------------
Skechers U.S.A., Inc., received in May 2013 final approval of its
settlement of the class action lawsuit titled Venus Morga v.
Skechers U.S.A., Inc., according to the Company's May 15, 2013,
Form 10-Q filing with the U.S. Securities and Exchange Commission
for the quarter ended March 31, 2013.
On August 25, 2010, Venus Morga filed an action against the
Company in the United States District Court for the Southern
District of California, Case No. 10 CV 1780 JM (MDD), on her
behalf and on behalf of all others similarly situated. The
complaint, as subsequently amended, alleges that the Company's
advertising for Shape-ups violates California's Unfair Competition
Law and the California Consumer Legal Remedies Act, and
constitutes a breach of express warranty. The complaint seeks
certification of a nationwide class, damages, restitution and
disgorgement of profits, declaratory and injunctive relief,
corrective advertising, and attorneys' fees and costs. On
March 7, 2011, the Court stayed the action on the ground that the
outcomes in pending appeals in two unrelated actions will
significantly affect whether a class should be certified. On
April 16, 2012, this action was transferred to the multidistrict
litigation proceeding pending in the Western District of Kentucky,
entitled In re Skechers Toning Shoe Products Liability Litigation,
MDL No. 2308.
On May 13, 2013, the Court entered an order finally approving the
nationwide consumer class action settlement. If the Court's
decision is affirmed in the event of an appeal, the settlement
will resolve all domestic civil claims concerning the Company's
advertising of its toning shoes that were or could have been
brought by the class of consumers, as defined in the settlement
agreement, including the class claims asserted in the Grabowski,
Stalker, Tomlinson, Hochberg, Loss, Boatright and Scovil actions.
If the final approval order is reversed on appeal, the Company
says it cannot predict the outcome of the remaining advertising
class actions or a reasonable range of potential losses or whether
the outcome of the remaining advertising class actions would have
a material adverse impact on the Company's results of operations
or financial position in excess of the existing $50 million
settlement.
SKECHERS USA, Inc. -- http://www.skechers.com/-- based in
Manhattan Beach, California, designs, develops and markets a
diverse range of footwear for men, women and children under the
SKECHERS name. SKECHERS footwear is available in the United
States via department and specialty stores, Company-owned SKECHERS
retail stores and its e-commerce Web site, and over 100 countries
and territories through the Company's global network of
distributors and subsidiaries in Canada, Brazil, Chile, Japan and
across Europe, as well as through joint ventures in Asia.
SKECHERS USA: Received Final OK of "Stalker" Suit Settlement
------------------------------------------------------------
Skechers U.S.A., Inc., received in May 2013 final approval of its
settlement of the class action lawsuit styled Sonia Stalker v.
Skechers U.S.A., Inc., according to the Company's May 15, 2013,
Form 10-Q filing with the U.S. Securities and Exchange Commission
for the quarter ended March 31, 2013.
On July 2, 2010, Sonia Stalker filed an action against the Company
in the Superior Court of the State of California for the County of
Los Angeles, on her behalf and on behalf of all others similarly
situated, alleging that the Company's advertising for Shape-ups
violates California's Unfair Competition Law and the California
Consumer Legal Remedies Act. The complaint seeks certification of
a nationwide class, actual and punitive damages, restitution,
declaratory and injunctive relief, corrective advertising, and
attorneys' fees and costs. On July 23, 2010, the Company removed
the case to the United States District Court for the Central
District of California, and it is now pending as Sonia Stalker v.
Skechers USA, Inc., CV 10-5460 JAK (JEM). On January 21, 2011,
the District Court stayed this case pending resolution of the
Grabowski action. On May 16, 2012, this action was ordered
transferred to the multidistrict litigation proceeding pending in
the United States District Court for the Western District of
Kentucky, entitled In re Skechers Toning Shoe Products Liability
Litigation, MDL No. 2308. On August 13, 2012, the Court granted
preliminary approval of the consumer class action settlement
agreement in the Grabowski/Morga actions, and issued a preliminary
injunction further enjoining prosecution of this action.
On May 13, 2013, the Court entered an order finally approving the
nationwide consumer class action settlement. The settlement in
the Grabowski/Morga class actions, if affirmed on appeal in the
event an appeal is taken, is expected entirely to resolve the
class claims brought by the plaintiff in Stalker. If the final
approval order is reversed on appeal, the Company says it cannot
predict the outcome of the Stalker action or a reasonable range of
potential losses or whether the outcome of the Stalker action
would have a material adverse impact on its results of operations
or financial position in excess of the existing $50 million
settlement.
SKECHERS USA, Inc. -- http://www.skechers.com/-- based in
Manhattan Beach, California, designs, develops and markets a
diverse range of footwear for men, women and children under the
SKECHERS name. SKECHERS footwear is available in the United
States via department and specialty stores, Company-owned SKECHERS
retail stores and its e-commerce Web site, and over 100 countries
and territories through the Company's global network of
distributors and subsidiaries in Canada, Brazil, Chile, Japan and
across Europe, as well as through joint ventures in Asia.
SKECHERS USA: "Sayles" Wage & Hour Suit Still Pending in Calif.
---------------------------------------------------------------
The wage and hour class action lawsuit titled Roneshia Sayles v.
Skechers U.S.A., Inc., remains pending in California, according to
the Company's May 15, 2013, Form 10-Q filing with the U.S.
Securities and Exchange Commission for the quarter ended March 31,
2013.
On October 2, 2012, Roneshia Sayles filed a class action lawsuit
against the Company in the Superior Court of the State of
California for the County of Los Angeles, Case No. BC473067. The
complaint involves a wage and hour claim, alleging violations of
the California Labor Code, including unpaid time for certain
breaks and when retail employees' bags are checked upon leaving
the store at the ends of their shifts. The complaint seeks
actual, consequential and incidental losses and damages; general
and special damages; civil, statutory and waiting time penalties;
restitution of unpaid wages; injunctive relief; attorneys' fees
and costs; pre-judgment interest on unpaid compensation. On
September 25, 2012, the Court issued an order staying the action
until an initial status conference that was held on December 19,
2012. While it is too early to predict the outcome of the
litigation or a reasonable range of potential losses and whether
an adverse result would have a material adverse impact on its
results of operations or financial position, the Company believes
it has meritorious defenses, vehemently deny the allegations, and
intend to defend the case vigorously.
SKECHERS USA, Inc. -- http://www.skechers.com/-- based in
Manhattan Beach, California, designs, develops and markets a
diverse range of footwear for men, women and children under the
SKECHERS name. SKECHERS footwear is available in the United
States via department and specialty stores, Company-owned SKECHERS
retail stores and its e-commerce Web site, and over 100 countries
and territories through the Company's global network of
distributors and subsidiaries in Canada, Brazil, Chile, Japan and
across Europe, as well as through joint ventures in Asia.
SKECHERS USA: Settlement Resolving "Boatright" Suit Approved
------------------------------------------------------------
The settlement that is expected to resolve the claims in the class
action lawsuit initiated by Elma Boatright and Sharon White was
approved in May 2013, according to Skechers U.S.A., Inc.'s May 15,
2013, Form 10-Q filing with the U.S. Securities and Exchange
Commission for the quarter ended March 31, 2013.
On February 15, 2012, Elma Boatright and Sharon White filed a
lawsuit against the Company, captioned Elma Boatright and Sharon
White v. Skechers U.S.A., Inc., Skechers U.S.A., Inc. II and
Skechers Fitness Group, in the United States District Court for
the Western District of Kentucky, Case No. 3:12-cv-87-S. The
complaint alleges, on behalf of the named plaintiffs and all
others similarly situated, that the Company's advertising for
Shape-ups is false and misleading, thereby constituting a breach
of contract, breach of implied and express warranties, fraud, and
resulting in unjust enrichment. The complaint seeks certification
of a nationwide class, compensatory damages, and attorneys' fees
and costs. On March 6, 2012, the named plaintiffs filed a motion
to consolidate this action with In re Skechers Toning Shoe
Products Liability Litigation, case no. 11-md-02308-TBR. On
August 13, 2012, the United States District Court for the Western
District of Kentucky granted preliminary approval of the consumer
class action settlement agreement in the Grabowski/Morga actions,
and issued a preliminary injunction enjoining the continued
prosecution of this action.
On May 13, 2013, the Court entered an order finally approving the
nationwide consumer class action settlement. The settlement in
the Grabowski/Morga class actions, if affirmed on appeal in the
event an appeal is taken, is expected entirely to resolve the
class claims brought by the plaintiff in Boatright. If the final
approval order is reversed on appeal, the Company says it cannot
predict the outcome of the Boatright action or a reasonable range
of potential losses or whether the outcome of the Boatright action
would have a material adverse impact on the Company's results of
operations or financial position in excess of the existing $50
million settlement.
SKECHERS USA, Inc. -- http://www.skechers.com/-- based in
Manhattan Beach, California, designs, develops and markets a
diverse range of footwear for men, women and children under the
SKECHERS name. SKECHERS footwear is available in the United
States via department and specialty stores, Company-owned SKECHERS
retail stores and its e-commerce Web site, and over 100 countries
and territories through the Company's global network of
distributors and subsidiaries in Canada, Brazil, Chile, Japan and
across Europe, as well as through joint ventures in Asia.
UNITED BANKSHARES: Accrues $3.3MM for Overdraft Fees Suit Accord
----------------------------------------------------------------
The $3.3 million settlement of In re Checking Account Overdraft
Litigation, and a second case pending in the Circuit Court of
Jackson County, West Virginia, against United Bankshares, Inc. was
fully accrued by the Company as of March 31, 2013, according
United Bankshares' May 9, 2013, Form 10-Q filing with the U.S.
Securities and Exchange Commission for the quarter ended March 31,
2013.
On October 24, 2012, United Bankshares and its wholly owned
subsidiary, United Bank, Inc. of West Virginia, agreed to settle
two class actions. The class actions alleged that United Bank
improperly posted, processed, and paid consumer checking account
debit card transactions, which allegedly resulted in the
assessment of improper overdraft fees. These cases are virtually
identical to cases filed against more than 70 other United States
banks over the last three years.
The first case has been consolidated, with similar cases against a
myriad of other banks, into a federal multidistrict litigation
pending in the United States District Court for the Southern
District of Florida that is known as In re Checking Account
Overdraft Litigation, Case No. 1:09-md-02036-JLK. The second case
is pending in the Circuit Court of Jackson County, West Virginia.
Without admitting liability or any wrongdoing and to avoid further
litigation expense, United Bankshares, Inc. and United Bank, Inc.
of West Virginia agreed to settle these cases in exchange for a
payment of $3.3 million and an agreement to pay certain
settlement-related expenses. The settlement is subject to court
approval. As of March 31, 2013, the $3.3 million settlement amount
was fully accrued by the Company.
In addition, United and its subsidiaries are currently involved in
various legal proceedings in the normal course of business.
Management is vigorously pursuing all its legal and factual
defenses and, after consultation with legal counsel, believes that
all such litigation will be resolved with no material effect on
United's financial position.
WATTS WATER: Still Facing Suit Over "Defective" Toilet Connectors
-----------------------------------------------------------------
Watts Water Technologies, Inc. continues to face a complaint filed
in the U.S. District Court for the Northern District of California
over allegedly defective toilet connectors, according to the
company's May 9, 2013, Form 10-Q filing with the U.S. Securities
and Exchange Commission for the quarter ended March 31, 2013.
On March 8, 2012, Watts Water Technologies, Inc., Watts Regulator
Co., and Watts Plumbing Technologies (Taizho) Co., Ltd., among
other companies, were named as defendants in a putative nationwide
class action complaint filed in the U.S. District Court for the
Northern District of California seeking to recover damages and
other relief based on the alleged failure of toilet connectors.
The complaint seeks among other items, damages in an unspecified
amount, replacement costs, injunctive relief, and attorneys' fees
and costs.
The Company is unable to estimate a range of reasonably possible
loss for this matter in which damages have not been specified
because: (i) the proceedings are in the early stages; (ii) there
is uncertainty as to the likelihood of a class being certified or
the ultimate size of the class; (iii) there are significant
factual issues to be resolved; and (iv) there are novel legal
issues presented. However, based on information currently known
to the Company, it does not believe that these proceedings will
have a material effect on its financial position, results of
operations, cash flows or liquidity.
WESTPORT FUTURES: 2nd Cir. Won't Review N.J. Carpenters Suit
------------------------------------------------------------
The U.S. Court of Appeals for the Second Circuit denied a petition
for review of an order granting class certification in the
coordinated lawsuit titled New Jersey Carpenters Health Fund V.
Residential Capital LLC, et al., according to Westport Futures
Fund L.P.'s May 15, 2013, Form 10-Q filing with the U.S.
Securities and Exchange Commission for the quarter ended March 31,
2013.
Beginning in July 2010, Citigroup Inc (the ultimate parent of
Westport's general partner) and certain of its subsidiaries have
been named as defendants in complaints filed by purchasers of
mortgage-backed security ("MBS") and collateralized debt
obligation ("CDO") sold or underwritten by Citigroup and certain
of its subsidiaries. The MBS-related complaints generally assert
that the defendants made material misrepresentations and omissions
about the credit quality of the mortgage loans underlying the
securities, such as the underwriting standards to which the loans
conformed, the loan-to-value ratio of the loans, and the extent to
which the mortgaged properties were owner-occupied, and typically
assert claims under Section 11 of the Securities Act of 1933,
state blue sky laws, and/or common-law misrepresentation-based
causes of action. The CDO-related complaints further allege that
the defendants adversely selected or permitted the adverse
selection of CDO collateral without full disclosure to investors.
The plaintiffs in these actions generally seek rescission of their
investments, recovery of their investment losses, or other
damages. Other purchasers of MBS and CDOs sold or underwritten by
Citigroup and certain of its subsidiaries have threatened to file
additional lawsuits, for some of which Citigroup and certain of
its subsidiaries has agreed to toll (extend) the statute of
limitations.
The filed actions generally are in the early stages of
proceedings, and certain of the actions or threatened actions have
been resolved through settlement or otherwise. The aggregate
original purchase amount of the purchases at issue in the filed
lawsuits is approximately $12 billion, and the aggregate original
purchase amount of the purchases covered by tolling agreements
with investors threatening litigation is approximately $6 billion.
The largest MBS investor claim against Citigroup and certain of
its subsidiaries, as measured by the face value of purchases at
issue, has been asserted by the Federal Housing Finance Agency, as
conservator for Fannie Mae and Freddie Mac. This lawsuit was
filed on September 2, 2011, and has been coordinated in the United
States District Court for the Southern District of New York with
fifteen other related lawsuits brought by the same plaintiff
against various other financial institutions. Motions to dismiss
in the coordinated lawsuits have been denied in large part, and
discovery is proceeding. An interlocutory appeal currently is
pending in the United States Court of Appeals for the Second
Circuit on issues common to all of the coordinated lawsuits.
On October 15, 2012, the United States District Court for the
Southern District of New York granted lead plaintiffs' amended
motion for class certification in NEW JERSEY CARPENTERS HEALTH
FUND V. RESIDENTIAL CAPITAL LLC, ET AL., having previously denied
the lead plaintiffs' motion for class certification on January 18,
2011. The Plaintiffs in this action allege violations of Sections
11, 12, and 15 of the Securities Act of 1933, as amended and
assert disclosure claims on behalf of an alleged class of
purchasers of mortgage-backed securities issued by Residential
Accredited Loans, Inc. pursuant or traceable to prospectus
materials filed on March 3, 2006, and April 3, 2007. Citigroup
Global Markets Inc. ("CGM") is one of the underwriter defendants.
On March 26, 2013, the United States Court of Appeals for the
Second Circuit denied defendants' petition for review of the
district court's October 15, 2012 order granting lead plaintiffs'
amended motion for class certification in NEW JERSEY CARPENTERS
HEALTH FUND V. RESIDENTIAL CAPITAL LLC, ET AL. The Plaintiffs
allege federal securities law claims on behalf of a putative class
of purchasers of MBSs issued by Residential Accredited Loans, Inc.
New York-based Westport Futures Fund L.P., formerly known as
Westport JWH Futures Fund L.P., is a limited partnership organized
in 1997 under the partnership laws of New York to engage in the
speculative trading of a diversified portfolio of commodity
interests including futures, commodity options, forward contracts
and any other rights or interests, including interest in commodity
pools. Ceres Managed Futures LLC, a Delaware limited liability
company, acts as the general partner and commodity pool operator
of the Partnership. The General Partner is wholly owned by Morgan
Stanley Smith Barney Holdings LLC, which is owned by Morgan
Stanley. Citigroup Inc. indirectly owns a minority equity
interest in MSSB Holdings and also indirectly owns Citigroup
Global Markets Inc., the commodity broker and a selling agent for
the Partnership and JWH Master Fund LLC and/or Rabar Master Fund
L.P.
WESTPORT FUTURES: Dismissal of Antitrust Class Suits Affirmed
-------------------------------------------------------------
The dismissal of two antitrust class action lawsuits was affirmed
in March 2013, according to Westport Futures Fund L.P.'s May 15,
2013, Form 10-Q filing with the U.S. Securities and Exchange
Commission for the quarter ended March 31, 2013.
Beginning in March 2008, Citigroup Inc. (the ultimate parent of
Westport's general partner) and certain of its subsidiaries have
been named as defendants in numerous actions and proceedings
brought by Citigroup shareholders and purchasers or issuers of
auction rate securities ("ARS"), asserting claims under the
federal securities laws, Section 1 of the Sherman Antitrust Act
(the "Sherman Act"), and state law arising from the collapse of
the ARS market in early 2008, which plaintiffs contend Citigroup
and other ARS underwriters foresaw or should have foreseen but
failed adequately to disclose. Most of these matters have been
dismissed or settled.
Mayor & City Council of Baltimore, Maryland V. Citigroup Inc., et
al. and Russell Mayfield, et al. v. Citigroup Inc., et al., are
lawsuits filed in the Southern District of New York on behalf of a
purported class of ARS issuers and investors, respectively,
against Citigroup, Citigroup Global Markets Inc. ("CGM") and
various other financial institutions. In these actions, the
plaintiffs allege violations of Section 1 of the Sherman Act
arising out of defendants' alleged conspiracy to artificially
restrain trade in the ARS market. On January 15, 2009, the
defendants filed motions to dismiss the complaints in these
actions. On January 26, 2010, both actions were dismissed.
On March 5, 2013, the United States Court of Appeals for the
Second Circuit affirmed the district court's dismissal of two
putative class actions brought on behalf of purchasers and issuers
of auction rate securities for alleged violations of Section 1 of
the Sherman Antitrust Act.
New York-based Westport Futures Fund L.P., formerly known as
Westport JWH Futures Fund L.P., is a limited partnership organized
in 1997 under the partnership laws of New York to engage in the
speculative trading of a diversified portfolio of commodity
interests including futures, commodity options, forward contracts
and any other rights or interests, including interest in commodity
pools. Ceres Managed Futures LLC, a Delaware limited liability
company, acts as the general partner and commodity pool operator
of the Partnership. The General Partner is wholly owned by Morgan
Stanley Smith Barney Holdings LLC, which is owned by Morgan
Stanley. Citigroup Inc. indirectly owns a minority equity
interest in MSSB Holdings and also indirectly owns Citigroup
Global Markets Inc., the commodity broker and a selling agent for
the Partnership and JWH Master Fund LLC and/or Rabar Master Fund
L.P.
WESTPORT FUTURES: Hearing on $730MM Bond Suit Deal on July 23
-------------------------------------------------------------
A fairness hearing for the approval of a $730 million settlement
in the consolidated case styled In Re Citigroup Inc. Bond
Litigation is scheduled for July 23, 2013, according to Westport
Futures Fund L.P.'s May 15, 2013, Form 10-Q filing with the U.S.
Securities and Exchange Commission for the quarter ended March 31,
2013.
On September 30 and October 28, 2008, Citigroup Inc., certain
Citigroup entities, certain current and former directors and
officers of Citigroup and Citigroup Funding, Inc., and certain
underwriters of Citigroup notes (including Citigroup Global
Markets Inc. ("CGM")) were named as defendants in two alleged
class actions filed in New York state court but since removed to
the United States District Court for the Southern District of New
York. Citigroup is the ultimate parent of Westport's general
partner. These actions allege violations of Sections 11, 12, and
15 of the Securities Act of 1933, as amended, arising out of
forty-eight corporate debt securities, preferred stock, and
interests in preferred stock issued by Citigroup and related
issuers over a two-year period from 2006 to 2008. On December 10,
2008, these two actions were consolidated under the caption IN RE
CITIGROUP INC. BOND LITIGATION, and lead plaintiff and counsel
were appointed. On January 15, 2009, the plaintiffs filed a
consolidated class action complaint.
On March 13, 2009, the defendants filed a motion to dismiss the
complaint. On July 12, 2010, the court issued an opinion and
order dismissing plaintiffs' claims under Section 12 of the
Securities Act of 1933, as amended, but denying the defendants'
motion to dismiss certain claims under Section 11. On
September 30, 2010, the district court entered a scheduling order
in IN RE CITIGROUP INC. BOND LITIGATION. Fact discovery began in
November 2010, and the plaintiffs' motion to certify a class was
fully briefed.
On March 25, 2013, the United States District Court for the
Southern District of New York entered an order preliminarily
approving the parties proposed settlement of IN RE CITIGROUP INC.
BOND LITIGATION, pursuant to which Citigroup and certain of its
subsidiaries will pay $730 million in exchange for a release of
all claims asserted on behalf of the settlement class. A fairness
hearing is scheduled for July 23, 2013.
New York-based Westport Futures Fund L.P., formerly known as
Westport JWH Futures Fund L.P., is a limited partnership organized
in 1997 under the partnership laws of New York to engage in the
speculative trading of a diversified portfolio of commodity
interests including futures, commodity options, forward contracts
and any other rights or interests, including interest in commodity
pools. Ceres Managed Futures LLC, a Delaware limited liability
company, acts as the general partner and commodity pool operator
of the Partnership. The General Partner is wholly owned by Morgan
Stanley Smith Barney Holdings LLC, which is owned by Morgan
Stanley. Citigroup Inc. indirectly owns a minority equity
interest in MSSB Holdings and also indirectly owns Citigroup
Global Markets Inc., the commodity broker and a selling agent for
the Partnership and JWH Master Fund LLC and/or Rabar Master Fund
L.P.
WILHELMINA INT'L: Defends Class Suit Filed by Models vs. Units
--------------------------------------------------------------
Wilhelmina International, Inc., is defending its subsidiaries from
a class action lawsuit brought on behalf of models, according to
the Company's May 15, 2013, Form 10-Q filing with the U.S.
Securities and Exchange Commission for the quarter ended March 31,
2013.
In October 2012, two subsidiaries of the Company received a
Summons with Notice in connection with a purported class action
lawsuit. According to the Notice accompanying the Summons, the
purported claims arise out of, among other things, the handling
and reporting of funds on behalf of models and the use of model
images. Two of the Company's subsidiaries, along with a number of
other model management companies, advertising firms and others,
are named as defendants. The Company believes these claims are
without merit and intends to vigorously defend itself.
Wilhelmina International, Inc.'s primary business is fashion model
management, which is headquartered in New York City. The
Company's executive offices are located in Dallas, Texas. The
Company's predecessor was founded in 1967 by Wilhelmina Cooper, a
renowned fashion model, and is one of the oldest and largest
fashion model management companies in the world. The Company
provides traditional, full-service fashion model and talent
management services, specializing in the representation and
management of models, entertainers, artists, athletes and other
talent to various customers and clients, including retailers,
designers, advertising agencies and catalog companies.
* Fla. Supreme Court Accepts Procedural Changes in Tobacco Case
---------------------------------------------------------------
Adolfo Pesquera, writing for Daily Business Review, reports that
the Florida Supreme Court accepted a procedural change sought in
tobacco cases after the smoker dies. A personal representative is
allowed to amend the existing complaint to add the widow/widower
and a wrongful death claim rather than starting a lawsuit from
scratch.
*********
S U B S C R I P T I O N I N F O R M A T I O N
Class Action Reporter is a daily newsletter, co-published by
Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania,
USA, and Beard Group, Inc., Washington, D.C., USA. Noemi Irene
A. Adala, Joy A. Agravante, Valerie Udtuhan, Julie Anne L. Toledo,
Christopher Patalinghug, Frauline Abangan and Peter A. Chapman,
Editors.
Copyright 2013. All rights reserved. ISSN 1525-2272.
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