James Hardie Industries, the biggest seller of home siding in the U.S., lost a dispute with the Australian Tax Office over claims it owes A$459 million ($412 million) in back taxes, interest and penalties.
Federal Court of Australia Judge Margaret Stone yesterday upheld the tax office’s ruling that Dublin-based James Hardie’s RCI unit owed back taxes for gains earned from reorganizing a unit in 1999. In a 40-page ruling, Stone wrote that RCI didn’t “establish by way of relevant and otherwise admissible evidence” that the commissioner’s valuation” was incorrect and must be rejected.
James Hardie paid half the amount claimed as it appealed and expects to record a charge of about A$387.7 million to comply with yesterday’s ruling, Sean O’Sullivan, a company spokesman, said in a phone interview before the ruling.
James Hardie will remain in compliance with its debt covenants, the company said in a statement yesterday.
The company has 21 days to appeal the ruling to the full Federal Court and is considering whether to do so.
The case is RCI Pty Ltd. v. Commissioner of Taxation of the Commonwealth of Australia, NSD1336/2007, Federal Court of Australia (Sydney).
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Swatch Group Sues UBS Over Losses on Investments
Swatch Group AG, Switzerland’s largest watchmaker, said it sued UBS AG over investment losses as Chief Executive Officer Nick Hayek intensified his late father’s disputes with the country’s banking industry.
Swatch Group filed a lawsuit against UBS regarding “absolute return” investments made in 2009 that weren’t supposed to lose value, said Beatrice Howald, a spokeswoman for the Biel-based owner of the Omega and Longines brands. Tatiana Togni, a UBS spokeswoman, declined to comment beyond verifying that the bank had been sued.
The watchmaker is suing Zurich-based UBS, Switzerland’s largest bank, to recover 30 million Swiss francs ($30 million) in investments that weren’t supposed to lose value, Tages- Anzeiger reported today, citing Hayek. Howald declined to confirm the figure or specify which court is handling the case.
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Drilling Moratorium Challenge Is Kept Alive by Judge
A federal judge refused to throw out an industry lawsuit challenging the Obama administration’s temporary moratorium on deep-water oil and gas drilling in the Gulf of Mexico.
Offshore oil services companies claim the six-month moratorium on drilling in waters deeper than 500 feet, announced in May, would cause irreparable economic harm to the industry and region. U.S. District Judge Martin Feldman in New Orleans yesterday denied a government request to dismiss the case.
The same judge disallowed the ban in June, finding it overly broad. The government claimed the suit and Feldman’s June order in favor of the industry were rendered irrelevant by later drilling suspension rules announced in July. The defendant’s “voluntary action” doesn’t “moot” the case because the new suspension “arguably fashions no substantial changes from the first moratorium,” Feldman wrote in a 20-page opinion.
President Barack Obama announced the first ban on May 27 in reaction to the BP Plc oil spill, the worst in U.S. history. After Feldman scrapped the first moratorium, Secretary of the Interior Kenneth Salazar imposed the second ban.
Carl Rosenblum, a lawyer for Hornbeck Offshore Services Inc., and Charles Miller, a Justice Department spokesman, didn’t immediately respond to calls seeking comment.
The case is Hornbeck Offshore Services LLC v. Salazar, 2:10-cv-01663, U.S. District Court, Eastern District of Louisiana (New Orleans). The appeal is 10-30585, 5th U.S. Circuit Court of Appeals (New Orleans).
HarperCollins Unmasks Top Gear’s ‘Stig’ After BBC Loses Ruling
News Corp.’s HarperCollins revealed the identity of the “Stig,” a test driver who appears on the television show “Top Gear,” after the British Broadcasting Corp. lost a ruling to keep his identity secret.
The publisher said racing driver Ben Collins is the masked man who tests the performance of cars on one of the U.K.’s most popular television shows. The announcement came after High Court Judge Paul Morgan in London refused a request from the BBC to keep the character’s identity secret. HarperCollins plans to publish the driver’s autobiography on Sept. 16.
HarperCollins said in an e-mailed statement that the ruling is a “victory for freedom of speech.”
In “Top Gear,” Stig wears white overalls and a white helmet with a black visor that he always keeps down, obscuring his face.
The BBC sued over the planned autobiography.
Andy Wilman, Top Gear’s producer, said after the hearing that he was disappointed by the ruling.
The case is British Broadcasting Corp. v. HarperCollins & ors, HC10C02684, High Court of Justice Chancery Division.
Kaplan Sees Jamie McCourt Winning a Stake in Dodgers
Mark Vincent Kaplan, an attorney with Kaplan & Simon LLP, discussed the divorce trial of Jamie and Frank McCourt, each of whom claim ownership of the Los Angeles Dodgers baseball team, during a Bloomberg Television interview yesterday.
Judge Scott M. Gordon will determine whether a 2004 post- nuptial agreement, which Frank McCourt says makes him the sole owner of the Major League Baseball team, can be enforced. Jamie McCourt has argued that the agreement is invalid and that she should be co-owner of the team. Kaplan talked with Betty Liu on Bloomberg Television’s “In the Loop.”
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Dodgers Owner Says He Sought Nothing From Postnuptial
Los Angeles Dodgers owner Frank McCourt said he sought nothing in return for a 2004 post-nuptial agreement that shielded his wife’s assets from debt he was taking on in order to buy the team, an agreement she now says is invalid.
McCourt resumed his testimony yesterday at a non-jury trial in Los Angeles Superior Court. Judge Scott M. Gordon will determine whether the agreement, which McCourt says makes him the sole owner of the Major League Baseball team, can be enforced. Jamie McCourt has argued that the agreement is invalid and that she co-owns the team.
Under questioning from David Boies, one of Jamie McCourt’s lawyers, Frank McCourt yesterday said that the couple had a long-standing practice in Boston, before they moved to California, to keep the businesses in his name and the residences in her name to protect those from his business creditors.
Separate versions of the agreement were signed by Jamie McCourt in Massachusetts and by Frank McCourt in California. The version signed by Frank McCourt in California had an attachment that excluded the Dodgers as his separate property. Frank McCourt’s lawyers have argued that the exclusion in the attachment was a “scrivener’s error.” McCourt testified yesterday that he did not review the attachment before signing the agreement.
Jamie McCourt, 56, filed for divorce Oct. 27, six days after her husband fired her as the Dodgers’ chief executive officer. McCourt, 57, accused her of insubordination and inappropriate behavior. The couple had been married for 30 years.
The case is McCourt v. McCourt, BD514309, Los Angeles County Superior Court (Los Angeles.)
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Rosetta Stone Appeals Loss in Google Trademark Case
Rosetta Stone asked the 4th U.S. Circuit Court of Appeals to review the April summary judgment ruling by U.S. District Judge Gerald Bruce Lee, according to a filing Aug. 31 in federal court in Alexandria, Virginia.
Lee found that Mountain View, California-based Google, operator of the world’s biggest online search engine, didn’t infringe Rosetta Stone’s trademarks. On Aug. 3, Lee said in a written opinion that Google’s sale of Rosetta Stone’s trademarks to other companies wouldn’t confuse consumers.
Rosetta Stone, based in Arlington, Virginia, claimed that people looking for language products on Google were being directed to rivals and to counterfeiters of its software. Rosetta Stone’s lawyers didn’t say in the filing what would be the basis of their appeal.
The case is Rosetta Stone v. Google Inc., 09-00736, U.S. District Court, Eastern District of Virginia (Alexandria).
KPMG Engaged in Malpractice, New Jersey Appeals Court Says
KPMG LLP engaged in accounting malpractice in connection with a giftware maker’s merger, a New Jersey appeals court ruled Aug. 26 on a jury trial that ended in 2008. In the same decision, the court ordered a new trial on damages, saying a jury improperly found the firm should pay $31.8 million.
The jury had found KPMG negligent in its work as auditor for Papel Giftware Inc., a Cranbury, New Jersey, company that merged in 2000 with Cast Art Industries of Corona, California.
KPMG breached its duty under the Accountant Liability Act after detecting what Cast Art said were fraudulent financial practices at Papel, the jury said. Cast Art claimed the fraud, uncovered after the merger, caused its failure in 2003.
The company presented “sufficient evidence to establish all the elements of a cause of action for accounting malpractice,” a three-judge panel of the New Jersey Appellate Division in Trenton ruled. The panel concluded that the evidence didn’t provide “an adequate foundation” for the jury’s damages award and a new trial on damages would be necessary. It didn’t say whether the damages were too high or too low.
The Superior Court trial judge in Middlesex County was correct in dismissing a fraud claim against New York-based KPMG, one of the Big Four U.S. accounting firms, the appeals court said.
A KPMG spokesman, Daniel Ginsburg, said in an e-mail that the firm is “considering our available options” after the ruling, and was pleased the court dismissed the fraud claim and reversed the verdict on damages.
The case is Cast Art Industries v. KPMG LLP, MID-L-3295-03, Superior Court of New Jersey, Middlesex County.
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Deutsche Post Wins $1.5 Billion Fight at Top EU Court
Deutsche Post AG won’t have to repay German state aid and interest totaling more than 1.15 billion euros ($1.5 billion) after it defeated a regulator’s challenge to the subsidy at the European Union’s highest court.
Deutsche Post can keep the money which the EU’s executive agency said was granted unlawfully, the European Court of Justice ruled today. The court in Luxembourg dismissed the European Commission’s appeal and confirmed a lower court’s decision that the regulator had used a “defective” method in its 2002 finding that Deutsche Post had misused the subsidy.
The dispute goes back to 1994, when United Parcel Service Inc. complained that Bonn, Germany-based Deutsche Post’s anti- competitive practices.
Deutsche Post lawyer Alexander Kirschall said in an interview after the ruling that the original amount of 572 million euros in state aid had increased to 1.15 billion euros by 2008 with the addition of interest.
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SEC Sues, Settles With Manager Over MedImmune Insider Trading
A former hedge-fund manager reaped $14 million illegally trading on confidential information about the pending takeover of MedImmune Inc. in 2007, the U.S. Securities and Exchange Commission claimed in a lawsuit yesterday.
Stephen R. Goldfield of Odessa, Florida learned about the potential acquisition of MedImmune from James W. Self Jr., an executive at another drug company in New Jersey, the SEC said in a complaint filed in U.S. District Court in Pennsylvania. The regulator also sued Self, accusing him of leaking confidential information about MedImmune before it was bought by AstraZeneca Plc.
Goldfield, 46, and Self, 45, agreed to settle the case, the SEC said in a press release. Goldfield, who lost the profits he made on the MedImmune takeover within a month after it was announced, will pay $600,000 to settle, according to the agency. Self agreed to pay $50,000. The SEC said the penalty amounts reflected the financial condition of the two men. Neither admitted or denied wrongdoing.
The case is U.S. Securities and Exchange Commission v. Self, 10-04430, U.S. District Court, Eastern District of Pennsylvania (Philadelphia).
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London Lawyers Approved for Kissel’s Hong Kong Murder Retrial
Two London-based lawyers can appear for Nancy Kissel and prosecutors in her retrial for the murder of her Merrill Lynch & Co. banker husband, Hong Kong Judge Robert Tang said, rejecting the opposition of the local bar.
Tang granted applications for David Perry to represent the prosecution and for Edward Fitzgerald to appear for Kissel in her retrial scheduled for January. The 46-year-old mother of three was tried and convicted in 2005 for murdering her husband. Hong Kong’s highest court found in February that prosecutors had introduced prejudicial evidence and quashed her conviction.
Nicholas Cooney, appearing for the Hong Kong Bar Association, told the court yesterday that a lawyer from outside of the city wasn’t required.
In her 2005 trial, Kissel admitted killing her husband Robert Kissel, then the head of Merrill’s distressed assets business in Asia, on Nov. 2, 2003. Prosecutors alleged she first drugged him with a sedative-laced milkshake before bludgeoning him in their bedroom with an eight-pound statuette.
HealthSouth’s Scrushy Loses Bid for Early Release
Richard Scrushy, the HealthSouth Corp. founder sent to prison in 2007 for bribery and mail fraud, lost a bid to be released on bond pending a federal appeals court review of his conviction, according to the case docket posted on the website of the 11th U.S. Circuit Court of Appeals, according to the case docket posted on the Atlanta court’s website.
Scrushy’s lawyer Arthur Leach didn’t return a call for comment yesterday.
The case is U.S. v. Siegelman, 07-13163-B, 11th U.S. Circuit Court of Appeals (Atlanta). The lower-court case is U.S. v. Scrushy, 05-cr-119, U.S. District Court, Middle District of Alabama (Montgomery).