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Media Giants Forcing Smaller Guys Out
Headline Legal News |
2009/02/10 17:54
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A magazine wholesaler claims industry giants - including The News Group and Time Inc. - are colluding to drive it out of business, and already have destroyed "the only other non-colluding wholesaler in the market," which went out of business last week. In its federal antitrust complaint, Source Interlink Cos. claims 10 monopolist conspirators have cut it off from People, Sports Illustrated, Time, Entertainment Weekly and other major mags, threatening Source's 8,000 employees.
Source sued these defendants: American Media, Bauer Publishing Co., Curtis Circulation Co., Distribution Services Inc., Hachette Filipacchi Media US, Hudson News Co., Kable Distribution Services, The News Group, Time Inc., and Time/Warner Retail Sales & Marketing.
"if defendants' schemes are not stopped, Source's entire business, including its good will, reputation, 8,000-employee work force and customer base, will be destroyed," the complaint states. "Indeed, defendants already have succeeded in destroying Anderson, the only other non-colluding wholesaler in the market, by also recently cutting it off from all supplies of the publishers' magazines. Anderson announced on Feb. 7, 2009, that it had no recourse but to cease normal business activities immediately."
Source demands a restraining order and injunction "to enjoin defendants from continuing their collusive anti-competitive scheme - in clear violation of Section 1 of the Sherman Act, 15 U.S.C. § 1, and common law - to attack, disparage and destroy Source's business. Emergency relief is necessary to prevent the imminent irreparable harm - the destruction of Source's business and the monopolization of the United States wholesale magazine distribution market - that the misconduct of defendants, major magazine publishers, their distributors, and two of the only four major wholesalers in the United States, will, if not restrained, doubtless cause."
Source claims the defendants have "cut Source off from People, Sports Illustrated, Entertainment Weekly, Time and other major magazines; spread disparaging rumors about Source and its financial condition to its customers, employees and others in the industry; encouraged Source's customers to cease doing with it through, among other things, such false rumors; sought to coerce Source into selling its distribution facilities to defendants at fire sale prices; and raided Source's employees and sought to steal the intellectual property that those employees used to run its business. ...
"Defendants' indisputable goal is to destroy Source's business so that defendants - through Hudson and News Group, the two remaining wholesalers - will monopolize the wholesale market and use that monopoly power to shift to retailers and consumers - and away from publishers - the entire financial burden resulting from worsening market conditions and publisher-induced inefficiencies in the distribution system."
Source is represented by Marc Kasowitz with Kasowitz, Benson & Torres. |
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McDermott Will & Emery Lay of 60 Attorneys, 89 Staff
Legal Topics |
2009/02/06 19:18
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McDermott Will & Emery LLP has laid off 60 attorneys and 89 staff members, becoming the latest Chicago law firm to retrench amid a sharp decline in business.
In an internal memo sent to employees Tuesday, Chairman Harvey Freishtat said the firm performed well last year and remains strong as it moves into 2009.
"However, we are not immune to the continued deterioration in market conditions," Freishtat said. "The business of our clients has slowed, and this has affected our own levels of activity, particularly in the transactional area."
The cut represents about 5 percent of the firm's 1,100 lawyers in 15 offices. It was not known how many lawyers received pink slips in the Chicago office. The firm declined to comment beyond the memo.
The blog "Above the Law" first reported McDermott's layoffs. |
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David Perecman Fights for Worksite Safety
Court Watch |
2009/02/05 18:31
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David Perecman, leading attorney for the personal injury accident group The Perecman Firm PLLC, is on the forefront fighting for construction worksite safety. He is pleading for engineers to review their construction site safety plans and complete their construction inspections for maximum safety. This comes after several years of worksite accidents at the former Deutsche Bank tower, with the latest being when a construction worker fractured his leg in an accident in the basement.
New York City's Buildings Department cited the contractor for not providing enough shoring or netting for fall protection.
The tower's sloppy deconstruction is a tragic reminder of the importance of construction safety inspections and regulations. When governments and contractors don't hew to these rules, people get hurt, said David Perecman, founder of The Perecman Firm, PLLC.
According to Newsday.com, "New York City's Buildings Department cited the contractor for not providing enough shoring or netting for fall protection." This same building is where two firefighters lost their lives in a blaze in 2007. Since then, John Galt Corp. and three construction officials have been charged with manslaughter for that incident.
"The tower's sloppy deconstruction is a tragic reminder of the importance of construction safety inspections and regulations. When governments and contractors don't hew to these rules, people get hurt, said David Perecman, founder of The Perecman Firm, PLLC. "Thankfully, the building's deconstruction is nearly complete. For the sake of those who work there, let it finish quickly and, most of all, safely. Moving forward people need to review their construction site safety plans to prevent as many accidents as have happened at this one building."
About David Perecman and The Perecman Firm, PLLC:
For the past 25 years, the New York personal injury, auto accident and medical malpractice attorneys at The Perecman Firm, PLLC have championed all types of cases for personal injury arising from a host of circumstances including construction accidents in New York State. The founder of The Perecman Firm, David Perecman, is also the current Secretary of the New York State Trial Lawyers Association (NYSTLA) and a chair of its Labor Law (Construction Accident Law) Committee. Mr. Perecman's achievements have brought him recognition as an Honoree in the National Law Journal's 2008 Hall of Fame, in New York Magazine's 2007 and 2008 publication of "The Best Lawyers in America" and has earned him the votes by his peers as among the top lawyers in New York and its surrounding region as published in both of the past two issues of The New York Times Magazine "New York Super Lawyers, Metro Edition."
He has recovered millions of dollars for his clients over the course of his career. Among his more recent victories, Mr. Perecman won a $15 million verdict* for an injured NYC construction worker who fractured his arm and injured his knee, a $5.35 million dollar verdict** for a woman who seriously injured her heel in an automobile accident, and a $40 million dollar structured settlement for a baby born with brain damage as a result of medical malpractice. Mr. Perecman has spent much of his career advocating for injured victims' rights and addressing safety issues in the workplace. He has also spoken out on the need to update wrongful death laws to create fairness for the unfortunate death of infants, housewives and other low earners in a family. The New York City personal injury, vehicle accident lawyers and medical malpractice lawyers at The Perecman Firm, PLLC have a depth of expertise and breadth of knowledge well recognized in NYC, while their record and reputation speaks for itself.
*later settled while on appeal for $7.940 million
** later settled for $3.5 million
"Attorney Advertising"
"Prior results do not guarantee a similar outcome." |
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SEC Charges Merrill Lynch with Securities Violations
Legal Topics |
2009/02/02 17:56
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The Securities and Exchange Commission today charged Merrill Lynch, Pierce, Fenner & Smith, Inc. and two of its former investment adviser representatives with securities laws violations for misleading pension consulting clients about its money manager identification process and failing to disclose conflicts of interest when recommending them to use two of the firm’s affiliated services. Merrill Lynch has agreed to settle the SEC’s charges and pay a $1 million penalty.
“There has been tremendous growth in the pension consulting business in recent years. This case is an important reminder to firms and their investment adviser representatives that, whenever they sit across the table from their advisory clients, they need to make sure that all material conflicts of interest are disclosed,” said Scott W. Friestad, Deputy Director of the SEC’s Division of Enforcement.
According to the SEC’s order, Merrill Lynch failed to disclose its conflicts of interest when recommending that clients use directed brokerage to pay hard dollar fees, whereby the clients directed their money managers to execute trades through Merrill Lynch. These clients received credit for a portion of the commissions generated by these trades against the hard dollar fee owed for the advisory services provided by Merrill Lynch Consulting Services. Consequently, Merrill Lynch and its investment adviser representatives could and often did receive significantly higher revenue if clients chose to use Merrill Lynch directed brokerage services. The SEC’s order finds that Merrill Lynch also failed to disclose a similar conflict of interest in recommending that clients use Merrill Lynch’s transition management desk. In addition, the SEC finds that Merrill Lynch made misleading statements to the clients served by its Ponte Vedra South, Fla. office regarding the process used to identify new money managers to present to its clients.
The SEC also charged Michael Callaway and Jeffrey Swanson, who were formerly employed in Merrill Lynch’s Ponte Vedra South office.
In a settled enforcement action against Swanson, the SEC finds that he made misleading statements to some of the firm’s pension consulting clients regarding the process by which Merrill Lynch assisted them in identifying new managers. As a result, the SEC charged Swanson with aiding and abetting and causing Merrill Lynch’s violation of the Investment Advisers Act of 1940. Without admitting or denying the SEC’s allegations, Swanson has agreed to a censure, and to cease and desist from committing or causing violations of Section 206(2) of the Advisers Act.
In the contested enforcement action against Callaway, the SEC’s Division of Enforcement alleges that Callaway breached his fiduciary duty in making misrepresentations about the manager identification process used by the Ponte Vedra South office and his compensation in connection with transition management services. The Division of Enforcement further alleges that Callaway was a cause of Merrill Lynch’s violation of the Advisers Act because he failed to ensure that Merrill Lynch disclosed to clients the conflicts of interest in recommending that clients enter into a directed brokerage relationship with Merrill Lynch and in recommending that they use Merrill Lynch for transition management services. The Division of Enforcement charges that, by this conduct, Callaway willfully aided and abetted and caused Merrill Lynch’s violations of Section 206(2) of the Advisers Act.
The SEC charged Merrill Lynch with violations of an anti-fraud provision of the Advisers Act, which does not require a showing of scienter. The SEC also charged Merrill Lynch with failing to maintain certain records and failing to supervise its investment adviser representatives in the Ponte Vedra South office. Without admitting or denying the SEC’s allegations, Merrill Lynch has agreed to a censure, to cease and desist from committing or causing violations of Sections 204 and 206(2) of the Advisers Act, and to pay a $1 million penalty. |
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Texas Supreme Court Justice Sues over Ruling
Areas of Focus |
2009/01/29 18:30
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Texas Supreme Court Justice Nathan Hecht sued the Texas Ethics Commission over its ruling that reduced legal fees constitute a political donation. Hecht says the Jackson Walker law firm represented him in a 2006 proceeding "that affected the free speech rights of all Texas judges" - Hecht's public endorsement of Harriet Miers' nomination to the U.S. Supreme Court. He says Jackson Walker charged reduced fees because of its dedication to public interest work, which is ethical and permissible.
Judge Hecht, the longest-serving justice on the Texas Supreme Court, says the Preamble to the Texas Rules of Professional Conduct states that lawyers should do public interest work. Rule 1.04 spells out appropriate procedures on which to base legal fees.
Hecht says Jackson Walker charged him "a reasonable fee" that was less than it could have billed for its hourly rate, but that the reduced rate is ethical under the Rules.
A complaint was filed against Hecht in July 2007, claiming that the reduced rate was a de facto political contribution. The Commission ruled on Dec. 11, 2008 that that was the case. Hecht claims that the Commission's ruling actually would require attorneys "to ignore their Rules of Professional Conduct and charge judges differently than any other client."
The Texas Ethics Commission fined Hecht $29,000 in the case, the Dallas Morning News reported. "The commission ruled that it was a contribution to his campaign, that it exceeded legal limits on what judges can accept and that he failed to disclose the donation on his state reports," the Morning News reported on Dec. 5, 2008.
(The Morning News quoted Hecht after he emerged from what it called a 4-hour hearing. The discrepancy between the date of the Morning News report and the Commission's "final ruling" on Dec. 11 apparently results from the time needed to prepare the ruling for publication.)
The original case stemmed from Hecht's public endorsement of Harriet Miers' nomination to the U.S. Supreme Court, the Morning News reported.
The newspaper reported that the Texas Commission on Judicial Conduct admonished Hecht for endorsing Miers in May 2006, and that Hecht's "one-year legal fight resulted in a $476,000 legal fee, of which he paid $308,000. Justice Hecht said that he negotiated a lower price, a common practice with lawyer fees, and paid the discounted amount with campaign contributions."
Texas Watch filed the complaint against Hecht, saying he failed to disclose the discount. Texas law limits judicial campaign contributions to $5,000 for individuals and $30,000 for a law firm.
Hecht is represented in Travis County Court by Steve McConnico with Scott, Douglas & McConnico. |
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Wyeth Shareholders Reluctant to Pfizer Sale
Legal Topics |
2009/01/28 17:22
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Wyeth shareholders say the company is selling itself too cheaply to Pfizer - for $68 billion, or $33 for each Wyeth share, plus 0.985 of a Pfizer share. The federal class action claims that in the deal, announced Monday, Pfizer is taking advantage of a weak stock market to buy Wyeth on the cheap.
Wyeth shareholders claim the deal is "grossly inadequate," though it offers about a 15% premium over Wyeth's market price. They estimate that the deal works out to about $50.19 per Wyeth share, based on the $33 cash and Pfizer's closing price of $17.19 on Friday, Jan. 23.
Wyeth reported $22.4 billion income in 2007, up from $20.6 billion in 2006, and the company continued to do well since then, reporting $11.7 billion in revenue for the first half of 2008, according to the complaint.
Plaintiffs claim: "On September 25, 2008, Credit Suisse's Equity Research department published a research note noting that Wyeth shares represented an opportunity for the Value Investor, as its shares were trading at just above their 4-year low at $37.76. According to the note: 'Our sum of the Parts Analysis implies a price of $52, roughly 38% upside to Wyeth's $37.76 closing price today. In fact, assuming the biologics business alone (led by Enbrel and Prevnar) is worth $44, the value of just the biologics business is 117% of the current share price.'"
Shareholders cite a Sunday story in The New York Times: "On January 25, 2009, The New York Times reported that 'Pfizer appears to be taking advantage of the bad market for credit to buy Wyeth at a lower price than it might fetch if competing bids emerged, which analysts do not expect.' The article, citing Barbara Ryan, an analyst at Deutsche Bank stated: 'They have a unique opportunity now because not everybody can get that capital. They're probably one of the few companies in the world that can get that capital. These are going to be among the best companies in the U.S. to extend credit to.'
"On January 26, 2008, Forbes reported that the Proposed Transaction 'will give Pfizer a much larger presence in areas where it has been viewed as weaker than the competition, namely biotech drugs and vaccines. Wyeth, which makes the top-selling vaccine for children, Prevnar, would help fill this void. Wyeth also co-markets Amgen's Enbrel biotech drug for rheumatoid arthritis. That is exactly what Pfizer needs as it looks to fill the void that will be left by Lipitor when it loses patent protection in 2010.'"
The complaint adds: "The terms of the Proposed Transaction also present Wyeth shareholders with considerable risk. The onerous terms insisted upon by Pfizer's lenders reflect how disastrous the current market is for sellers and calls into question the Individual Defendants' judgment in deciding to sell the Company at this time. The lenders can abandon their financing commitment if Pfizer's credit rating drops below certain thresholds. ...
"By agreeing to the Proposed Transaction on these terms and placing the fate of all its shareholders in the unreliable hands of the rating agencies the Board has created a huge risk for Wyeth shareholders that cannot possibly be compensated for by a larger than usual reverse termination fee.
"In their pursuit of the Proposed Transaction the Defendants have breached their duty of loyalty to Wyeth's stockholders by using their control of Wyeth to deprive the Company's public shareholders of maximum value to which they are entitled. The
Defendants have also breached the duties of loyalty, good faith and due care by not taking adequate measures to ensure that the interests of Wyeth's public shareholders are properly considered in rejecting the Proposed Acquisition.
"The Individual Defendants are in a position of control and power over Wyeth's public stockholders, and have access to internal financial information about Wyeth to which plaintiff and the Class members are not privy. Defendants are using their positions of power and control to undervalue Wyeth, to the detriment of Wyeth's shareholders."
Plaintiffs want the deal rescinded and enjoined until they get a better offer. Their lead counsel is Joseph DePalma with Lite DePalma Greenberg. |
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Missing Fla. hedge fund manager turns himself in
Legal Topics |
2009/01/27 22:35
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| A Florida hedge fund manager who disappeared this month just as he was due to pay investors $50 million turned himself in to authorities Tuesday to face federal securities and wire fraud charges. Arthur Nadel, accompanied by two attorneys, surrendered in Tampa, about an hour north of his home in Sarasota, the FBI said. He was chained at the waist and wrists when he appeared in court later Tuesday. Attorney Barry Cohen said Nadel is not violent and asked that he be released on his own recognizance. He said Nadel has emotional problems and does not pose a flight risk, but a federal judge ordered him held at least until Friday. Asked outside court where his client had been for two weeks, Cohen said, "He went away for a while just to be alone." He declined to say where exactly Nadel was, and the FBI did not provide details. Federal regulators last week sued Nadel for fraud, saying he misled investors and overstated the value of investments in six funds by about $300 million. The Securities and Exchange Commission also won a court order freezing his assets. A criminal complaint unsealed Tuesday in federal court in Manhattan alleges Nadel has been defrauding investors since 2004. Nadel, 76, disappeared Jan. 14 after telling his wife in a note that he felt guilty. He also threatened to kill himself, according to the Sarasota County Sheriff's Office. Police found his green Subaru the next day in an airport parking lot. In a lawsuit filed in federal court in Tampa, the SEC said Nadel recently transferred at least $1.25 million from two funds to secret bank accounts that he controlled. |
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Headline Legal News for You to Reach America's Best Legal Professionals. The latest legal news and information - Law Firm, Lawyer and Legal Professional news in the Media. |
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