Kohlberg Capital Corp., the investment company taken public in 2006 by leveraged-buyout pioneer Jerome Kohlberg, was sued by an investor who says the company lied about the value of its investments.
Dennis J. Angeleri of Muskegon, Michigan, sued in federal court in New York on Dec. 31. He seeks class-action, or group, status on behalf of other investors.
Angeleri said that in March, Kohlberg Capital issued a false press release and annual report with the U.S. Securities and Exchange Commission. Kohlberg Capital put out a release in November saying it would delay its third-quarter results because its auditor raised questions about its portfolio valuations, according to the complaint.
“The press release was materially false because it misstated the fair value of the company’s investment portfolio,” Angeleri said of another statement the company released in May.
Denise Rodriguez, a spokeswoman for Kohlberg Capital, didn’t return a call for comment.
The case is Angeleri v. Pearson, 09-10609, U.S. District Court, Southern District of New York (Manhattan).
Credit Suisse Sued for $24 Billion by Investors in Ski Resorts
Credit Suisse Group AG was sued in federal court in Idaho by property owners at ski resorts in Montana and Idaho who claim the bank made loans based on inflated appraisals so it could take over the resorts when the debts couldn’t be repaid.
L.J. Gibson and Beau Blixseth are seeking $24 billion in damages. Three Credit Suisse units and Cushman & Wakefield Inc. are named as defendants in the complaint filed Jan. 3 in federal court in Boise, Idaho.
Blixseth is suing for losses from his property at the Yellowstone Club in Montana, developed by his father Tim. That resort borrowed $375 million from Credit Suisse in September 2005 and sought bankruptcy protection in November 2008. The Zurich-based bank retained the right to collect on the loan after the resort’s purchase by CrossHarbor Capital Partners LLC was approved in June, according to court files.
Spokesmen for Credit Suisse and Cushman Wakefield didn’t immediately comment on the suit.
The case is L.J. Gibson v Credit Suisse, 10-00001, U.S. District Court, District of Idaho (Boise)
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Chrysler Sues State Officials Over Dealer Law Changes
Chrysler LLC sued the Oregon Attorney General and officials in Maine, North Carolina and Illinois, saying recent changes to those states’ dealer’s laws violate the bankruptcy code and the U.S. Constitution.
In the lawsuit filed in Manhattan bankruptcy court, Chrysler says the new laws interfere with the car company’s rejection of 789 dealers as part of its sale to Italy’s Fiat SpA. Chrysler seeks a court order declaring the laws unconstitutional and in conflict with a bankruptcy judge’s orders.
Chrysler has also faced at least four lawsuits in state courts related to the rejections.
The case is In re Old CarCo LLC f/k/a Chrysler LLC, 09-50002, U.S. Bankruptcy Court, Southern District of New York (Manhattan).
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Well Fargo Sued by Memphis, Accused of Discriminating, NYT Says
Well Fargo & Co. was sued Dec. 30 by the city of Memphis, Tennessee, and county officials who say the bank singled out black homeowners for subprime mortgages which carried high interest rates, the New York Times reported.
The lawsuit was filed in federal court in Tennessee, the newspaper said. Wells Fargo spokesman Kevin Waetke told the Times in an e-mail the company hadn’t had a chance to see the suit and that references in other stories to the bank’s lending practices are “baseless and inaccurate.”
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Peru Upholds 25-Year Sentence Against Fujimori
Peru’s Supreme Court rejected an appeal by former President Alberto Fujimori against a 25-year prison sentence for violations of human rights by government-linked death squads.
The court’s five judges confirmed an earlier verdict by a Peruvian court that found Fujimori, 71, guilty on charges involving orders for two massacres of 25 people while he was president from 1990 to 2000, Peru’s penal court said in an e-mailed statement.
Fujimori, the country’s first leader to be extradited and tried, pleaded not guilty to all the counts in the original 16-month trial. He was also convicted in April of kidnapping a journalist and a corporate executive.
His lawyer said he will appeal the decision.
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Montana Legalizes Doctor-Assisted Suicide For Ill Patients
Physician-assisted suicide is legal in Montana, and doctors who help terminally ill patients die are shielded from prosecution, the state Supreme Court ruled.
Montana is the third state, after Oregon and Washington, to allow physicians to help such patients end their lives, and the Dec. 31 decision is the first from a U.S. state high court to protect the choice, said Steve Hopcraft, a spokesman for Compassion and Choices, a group that advocates the practice
A representative of Nightingale Alliance, a Wisconsin-based group that opposes assisted suicide, and the Montana Attorney General didn’t immediately respond to requests for comment.
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Pfizer Must Face Menopause-Drug Award, Court Finds
A Pfizer Inc. unit must face a $1.5 million damage award over one of its menopause drugs, a Pennsylvania appeals court ruled.
A Philadelphia trial judge erred in throwing out the jury verdict against Pfizer’s Pharmacia & Upjohn unit, the Pennsylvania Superior Court ruled Dec. 31. The appellate court reinstated the compensatory damage award to Merle Simon, who contends Upjohn’s hormone-replacement drug Provera helped cause her breast cancer.
“This ruling is a big win for plaintiffs because it potentially puts more than 1,000 cases over menopause drugs back on the trial docket,” Jim Morris, one of Simon’s lawyers, said in an interview Dec. 31.
More than 6 million women have taken hormone-replacement medicines to treat menopause symptoms such as hot flashes, night sweats and mood swings. Until 1995, many patients combined Premarin, an estrogen-based drug made by Wyeth, with progestin-laden Provera, made by Upjohn.
Wyeth later combined the two hormones in Prempro. The drugs are still on the market. New York-based Pfizer completed its $68 billion purchase of Wyeth on Oct. 15.
“While we have great sympathy for what Mrs. Simon and her family have been through, we believe Pharmacia & Upjohn acted responsibly with respect to Provera,” Chris Loder, a Pfizer spokesman, said in an e-mailed statement.
Jurors in Simon’s case rejected her claims that Wyeth’s menopause medicine helped cause her breast cancer and only returned a verdict against Upjohn.
The case is Simon v. Wyeth, 040604229, Court of Common Pleas (Philadelphia).
South Korea Refiners Ordered to Pay $168 Million for Collusion
South Korean oil refiners were ordered to pay 196 billion won ($168 million) to the nation’s military for price collusion.
Seoul High Court ruled Dec. 31 that the refiners, including SK Energy Co., GS Caltex Corp., S-Oil Corp. and Hyundai Oilbank Co., should pay for the damages caused between 1998 and 2000, Judge Hwang Jin Ku, speaking on behalf of the court, said by phone Dec. 31.
In 2000, the nation’s Fair Trade Commission said the refiners had colluded in fixing prices since 1998, supplying a total of 712.8 billion won worth of fuels including gasoline, diesel and jet fuel, to the military. The companies were fined on Dec. 2 for similar illegal actions in the sale of liquefied petroleum gas.
The companies declined to comment, saying they had yet to receive and study the ruling from the court.
“We’re satisfied with the ruling, which will stop collusion of refiners,” said Kim Young San, a spokesman for the nation’s Defense Acquisition Program Administration.
Ringling Bros. Wins Suit Over Elephant Abuse Claims
Ringling Bros. and Barnum & Bailey Circus defeated a lawsuit by a U.S. animal-rights group accusing the “Greatest Show on Earth” of handling elephants with hooks and chains in violation of the Endangered Species Act.
A ruling in favor of Ringling’s owner, Vienna, Virginia- based Feld Entertainment Inc., was signed Dec. 30 by U.S. District Judge Emmet Sullivan in Washington. The nine-year-old suit by the American Society for the Prevention of Cruelty to Animals culminated in a six-week trial that ended March 18.
The group’s star witness, Tom Rider, cared for Ringling elephants in one of the circus’s traveling units from 1997 to 1999. Sullivan said Rider lied about payments he received from various animal-rights groups beginning in 2000 and that he exaggerated his personal attachment to the animals.
“Mr. Rider was repeatedly impeached, and indeed was pulverized on cross-examination,” Sullivan said in the ruling. “The court finds that Mr. Rider is essentially a paid plaintiff and fact witness who is not credible.”
Rider accused Ringling of causing physical, psychological, and behavioral injuries to the elephants by using rods with metal hooks and points to control their movement and chains to keep them in place on hard surfaces for extended periods.
The ruling is “a win for the U.S. Constitution because it reinforces that the federal court is no place to entertain a philosophical debate about whether elephants should be in the circus,” Michelle Pardo, Feld’s lawyer with Fulbright & Jaworski LLP in Washington, said Dec. 30 in a statement.
A call to the animal-rights group’s headquarters in Sacramento, California, wasn’t immediately returned.
The case is American Society for the Prevention of Cruelty to Animals v. Ringling Brothers and Barnum & Bailey Circus, 03-02006, U.S. District Court, District of Columbia (Washington).
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Blackwater Guards’ Civilian Death Charges Dismissed
Five former Blackwater Worldwide security guards won dismissal of manslaughter and weapons charges in the 2007 deaths of 14 Iraqi civilians in a hail of gunfire and explosives at a busy Baghdad intersection.
U.S. District Judge Ricardo Urbina in Washington said in the Dec. 31 ruling that the government’s case was based on statements the men made to State Department investigators while they were under the threat of job loss and therefore the statements could not be used against them.
The government is reviewing the decision, according to a Justice Department spokesman.
The case is U.S. v. Slough, 08-cr-360, U.S. District Court, District of Columbia (Washington).
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On The Docket
Shell Faces Dutch Court Hearing Jan. 13 Over Nigeria Oil Spills
Royal Dutch Shell Plc, Europe’s largest oil producer, and its Nigerian unit will face a Dutch court hearing over oil spills in the African nation this month.
“The court has decided that it is competent, so we will be handling the case,” Janne Tuijnman, a press officer at the court in The Hague, said Dec. 31 by telephone. “The facts are connected and, because of efficiency, the cases against Royal Dutch Shell and Shell Nigeria will be handled jointly.”
Environmental group Friends of the Earth Netherlands and four Nigerians are seeking to sue Shell and Lagos-based Shell Petroleum Development Co. on charges related to oil spills. Shell had requested a ruling on whether the Dutch court had jurisdiction over its operations in Nigeria. The court will hear the case Jan. 13.
“For years, these people have been trying to get Shell to clean up its mess,” Geert Ritsema, a spokesman for Friends of the Earth, said in a statement on the group’s Web site. “The court decision is an initial victory for all Nigerians that have been fighting for years for a cleaner habitat and justice.”
Shell has said the oil spills were caused by sabotage.
“We learned with disappointment of the district court ruling,” Rainer Winzenried, a Shell spokesman based in The Hague, said Dec. 31 in a telephone interview. “There are good arguments on the basis of which the district court could have concluded that it lacks jurisdiction in respect of Shell Nigeria, as these are purely Nigerian matters.”
Citadel Broadcasting Bankruptcy Most Popular Docket on Bloomberg
Citadel Broadcasting Corp., the owner of radio stations in cities including New York and Chicago, which filed for U.S. bankruptcy protection in Manhattan on Dec. 21, had the most-read litigation docket on the Bloomberg Law system last week.
The company, which syndicates Don Imus’s morning talk show through its U.S. radio network, listed assets of $1.4 billion and debt of $2.5 billion in its Chapter 11 filing in U.S. Bankruptcy Court.
Citadel sought bankruptcy to implement a pre-negotiated plan under which it has the support of 60 percent of its secured lenders, the company said in statement. The plan will convert a $2.1 billion loan into a new $762.5 million term loan, giving senior lenders a pro rata stake, and 90 percent of the shares in the reorganized company.
The case is In re Citadel Broadcasting Corp., 09-17442, U.S. Bankruptcy Court, Southern District of New York (Manhattan).
Latham & Watkins Opens Beijing Office to Tap China Market
Latham & Watkins LLP, the U.S. law firm that hired seven partners from Allen & Overy LLP last year to boost its China practice, said it opened its fifth Asian office with a new presence in Beijing.
The firm, which has 2,000 attorneys in 28 offices worldwide, joins Chicago-based Winston & Strawn LLP and London- based Slaughter and May in opening offices in China in the past year. That follows a 19 percent increase in foreign law firms in the country since September 2006, according to the latest official Chinese statistics.
The Beijing office is the firm’s third in China.