Credit Suisse to Pay $400 Million to Settle U.S. Bond Lawsuits

March 15, 2013Email ThisPrintNewslettersTweetArticleCommentsCredit Suisse Group AG has agreed to pay at least $400 million to settle lawsuits by investors over the Swiss bank’s role in raising money for a healthcare financing company that collapsed in a $2.9 billion fraud more than a decade ago.

The settlement averts a trial in Manhattan federal court that had been scheduled to begin in two weeks. It stems from the activities of National Century Financial Enterprises Inc., which filed for bankruptcy protection in November of 2002.

Investors accused Credit Suisse of selling National Century notes and defending their creditworthiness despite knowing that the company misused investor funds, and while missing red flags that National Century co-founder and Chief Executive Lance Poulsen masterminded the fraud.

“This agreement represents a full and final settlement in respect of this noteholder litigation against Credit Suisse,” Credit Suisse said in a statement on Thursday.

Credit Suisse will pay $400 million to a group of plaintiffs that includes the state of Arizona, AllianceBernstein Holding LP and Allianz SE’s Pimco unit, the plaintiffs’ lawyer, Kathy Patrick of Gibbs & Bruns, said in a phone interview.

Investors who brought the lawsuits had bought National Century notes from 1998 to 2002.

In addition to the $400 million accord with Gibbs & Bruns’ clients, Credit Suisse has also agreed to separate settlements with Lloyds TSB Bank Plc and MetLife Inc.

Lloyds TSB spokesman Ed Petter confirmed the settlement but said its terms were confidential. MetLife spokesman Christopher Breslin said his company reached an “amicable resolution” to the case, addling it was glad “to put this issue to rest.”

Credit Suisse said the settlement will reduce its previously reported fourth-quarter net profit by 134 million Swiss francs ($141 million), to 263 million Swiss francs from 397 million.

National Century had helped finance clinics and hospitals, and bought accounts receivable with money it got through the sale of notes, including notes that Credit Suisse helped sell.

But the U.S. Department of Justice said the Dublin, Ohio-based company misused investor money, funneled corporate funds to top executives, and lied to investors to hide its fraud.

Poulsen is serving a 30-year prison term following his 2008 conviction for fraud, conspiracy and money laundering. Several other former National Century executives were also convicted of crimes.

Jury selection in the investor suit had been scheduled to begin on March 28.

Credit Suisse in January lost its bid to be tried separately from Poulsen, who is considered insolvent.

Noteholders had previously reached other settlements over the collapse, including a 2006 accord with JPMorgan Chase & Co .

“We have recovered $1 billion of losses for our clients, when prior settlements are taken into account,” Patrick said. “This represents nearly 80 cents on the dollar.”

The cases, all in the U.S. District Court, Southern District of New York, are Crown Cork & Seal Co et al v. Credit Suisse First Boston Corp et al, No. 12-05803; Arizona v. Credit Suisse First Boston Corp et al, No. 12-05804; City of Chandler et al v. Bank One NA et al, No. 12-05805; Lloyds TSB Bank Plc v. Bank One NA et al, No. 12-07263; and Metropolitan Life Insurance Co et al v. Bank One et al, No. 12-07264.

 

Copyright 2013 Reuters. Click for restrictions.Email ThisPrintNewslettersTweetCategories: International NewsTopics: Credit Suisse, investor lawsuit against Credi Suisse, National Century Financial EnterprisesHave a hot lead? Email us at newsdesk

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Transocean to Pay $1.4 Billion to Settle Charges from BP Oil Spill

January 4, 2013Email ThisPrintNewslettersTweetArticleCommentsTransocean Ltd agreed to pay $1.4 billion to settle U.S. government charges over BP Plc’s massive Gulf of Mexico oil spill in 2010 and the rig contractor admitted that its crew on the Deepwater Horizon was partly responsible.

Transocean, which employed nine of the 11 workers killed in the accident, had set aside $1.5 billion for the U.S. Department of Justice out of a $1.95 billion Macondo loss provision. The settlement, unveiled on Thursday by the DoJ, includes $1 billion in civil penalties and $400 million in criminal penalties.

Still looming is a settlement with the plaintiffs committee that represents more than 100,000 individuals and business owners claiming economic and medical damages. So the ultimate cost of Macondo to Transocean could end up being more than $4 billion, UBS analyst Angie Sedita said. Last year, BP reached a $7.8 billion plaintiffs liability settlement.

The shares of Switzerland-based Transocean rose 6.4 percent to close at $49.21 in New York on the lower-than-expected DoJ payout, with Barclays having expected a settlement of $2.5 billion. The cost of insuring Transocean debt fell sharply.

“The bottom line to me is they now can put away the big black cloud that has been hanging over them,” said Phil Weiss, an oil analyst at Argus Research.

BP and its contractors have sought to push blame on to each other since the 2010 well explosion caused the largest-ever U.S. offshore oil spill. Lawyers and analysts see the federal settlements with BP, and now Transocean, as a solid legal framework to start putting the disaster behind them.

Halliburton Co, which performed cementing work on the Macondo well, remains the only one not to have settled. Daniel Becnel, a Louisiana lawyer representing spill-related claimants, believes that settlement is merely a matter of time because none of the three really wants to fight it out in court.

The BP-contracted Deepwater Horizon was drilling the mile-deep well on April 20, 2010, when a surge of methane gas caused a blowout. The accident led to a months-long U.S. deep water ban and intense scrutiny of the offshore drilling industry, which is now booming worldwide despite lingering public concerns.

Of the $400 million in Transocean criminal fines, $150 million will help protect the Gulf of Mexico, while another $150 million will fund spill prevention and response efforts there, the DoJ said. Transocean must also implement court-enforceable measures to improve safety and emergency response on U.S. rigs.

“From what I have read, they (Transocean) played a part, but BP is the lion’s share and ought to pay $15 billion dollars.” said Tony Kennon, mayor of Orange Beach, Alabama.

The U.S. Chemical Safety Board found that BP and Transocean both had “safety management system deficiencies that contributed to the Macondo incident,” and neither had adequate safety rules.

The DoJ said that in agreeing to plead guilty to violating the Clean Water Act, Transocean admitted that members of its crew, acting at BP’s direction, were negligent in failing fully to investigate indications that the Macondo well was not secure.

“Unfortunately, Halliburton continues to deny its significant role in the accident, including its failure to adequately cement and monitor the well,” BP said in a statement.

Halliburton said it had substantial legal arguments against any liability, including an indemnity in its contract with BP. Halliburton shares closed 1.7 percent higher at $36.31.

BP agreed in November to a DoJ settlement of its own worth $4.5 billion, including the largest criminal fine ever at $1.256 billion. The London-based oil company also agreed to plead guilty to obstruction of Congress, a felony.

New York-traded shares of BP closed 2 percent higher on Thursday.

Attention now turns to any possible settlements ahead of a Macondo-related trial due to start on Feb. 25 in New Orleans, including for Clean Water Act (CWA) violations that may cost BP $21 billion if it is found grossly negligent.

“That’s where fairness will be found – or lost,” National Audubon Society CEO David Yarnold said of BP’s CWA case, since most of the fines would go toward restoring the Gulf of Mexico.

Copyright 2013 Reuters. Click for restrictions.Email ThisPrintNewslettersTweetCategories: International NewsTopics: BP oil spill, environmental damage payments, Gulf of Mexico, Transocean liability settlementHave a hot lead? Email us at newsdesk

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Dakota Ranchers, Businessman Settle Wayward Bison Lawsuit

December 14, 2012Email ThisPrintNewslettersTweetArticleComments

Three Dakotas ranchers and a Florida millionaire businessman have settled a lawsuit over damage allegedly caused by wayward bison, attorneys said.

Bachmeier Farms and ranchers Nick Vollmuth and Gary Sandland claimed bison from Maurice Wilder’s ranch on the North Dakota-South Dakota border trespassed on their land for years, damaging pasture, crops, hay and fences.

A trial had been scheduled for this week, but the matter was settled out of court, the Bismarck Tribune reported.

Neither Ben Pulkrabek, who represented the ranchers, all from Sioux County, N.D., nor David Bliss, who represented Wilder, would comment on the details of the settlement.

Wilder’s ranch encompasses about 35,000 acres, sprawling from Selfridge, N.D., to McLaughlin, S.D. It was the subject of complaints for years about bison running loose and causing problems for neighbors.

In February 2011, thousands of bison were rounded up in South Dakota after authorities received reports of animals starving on the ranch. A smaller number of animals reportedly were running loose on the North Dakota side of the ranch around the same time.

Wilder, of Clearwater, Fla., paid $57,000 for feed and expenses after the impoundment ended, and in March 2001, he took about 850 bison to auction in Mobridge, S.D.

Wilder sold a 12,000-acre cattle ranch located east of the bison ranch at auction in September. He still owns the bison ranch.

 

Copyright 2012 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.Email ThisPrintNewslettersTweetCategories: Midwest NewsTopics: damages, lawsuit, North Dakota, South Dakota, wayward bisonHave a hot lead? Email us at newsdesk

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Transocean to Pay $1.4B to Settle Over BP Oil Spill

January 4, 2013Email ThisPrintNewslettersTweetArticle1 CommentsTransocean Ltd. agreed to pay $1.4 billion to settle U.S. government charges over BP Plc’s massive Gulf of Mexico oil spill in 2010 and the rig contractor admitted that its crew on the Deepwater Horizon was partly responsible.

Transocean, which employed nine of the 11 workers killed in the accident, had set aside $1.5 billion for the U.S. Department of Justice out of a $1.95 billion Macondo loss provision. The settlement, unveiled on Thursday by the DoJ, includes $1 billion in civil penalties and $400 million in criminal penalties.

Still looming is a settlement with the plaintiffs committee that represents more than 100,000 individuals and business owners claiming economic and medical damages. So the ultimate cost of Macondo to Transocean could end up being more than $4 billion, UBS analyst Angie Sedita said. Last year, BP reached a $7.8 billion plaintiffs liability settlement.

The shares of Switzerland-based Transocean rose 6.4 percent to close at $49.21 in New York on the lower-than-expected DoJ payout, with Barclays having expected a settlement of $2.5 billion. The cost of insuring Transocean debt fell sharply.

“The bottom line to me is they now can put away the big black cloud that has been hanging over them,” said Phil Weiss, an oil analyst at Argus Research.

BP and its contractors have sought to push blame on to each other since the 2010 well explosion caused the largest-ever U.S. offshore oil spill. Lawyers and analysts see the federal settlements with BP, and now Transocean, as a solid legal framework to start putting the disaster behind them.

Halliburton Co., which performed cementing work on the Macondo well, remains the only one not to have settled. Daniel Becnel, a Louisiana lawyer representing spill-related claimants, believes that settlement is merely a matter of time because none of the three really wants to fight it out in court.

The BP-contracted Deepwater Horizon was drilling the mile-deep well on April 20, 2010, when a surge of methane gas caused a blowout. The accident led to a months-long U.S. deepwater ban and intense scrutiny of the offshore drilling industry, which is now booming worldwide despite lingering public concerns.

Of the $400 million in Transocean criminal fines, $150 million will help protect the Gulf of Mexico, while another $150 million will fund spill prevention and response efforts there, the DoJ said. Transocean must also implement court-enforceable measures to improve safety and emergency response on U.S. rigs.

“From what I have read, they (Transocean) played a part, but BP is the lion’s share and ought to pay $15 billion,” said Tony Kennon, mayor of Orange Beach, Alabama.

The U.S. Chemical Safety Board found that BP and Transocean both had “safety management system deficiencies that contributed to the Macondo incident,” and neither had adequate safety rules.

The DoJ said that in agreeing to plead guilty to violating the Clean Water Act, Transocean admitted that members of its crew, acting at BP’s direction, were negligent in failing fully to investigate indications that the Macondo well was not secure.

“Unfortunately, Halliburton continues to deny its significant role in the accident, including its failure to adequately cement and monitor the well,” BP said in a statement.

Halliburton said it had substantial legal arguments against any liability, including an indemnity in its contract with BP. Halliburton shares closed 1.7 percent higher at $36.31.

BP agreed in November to a DoJ settlement of its own worth $4.5 billion, including the largest criminal fine ever at $1.256 billion. The London-based oil company also agreed to plead guilty to obstruction of Congress, a felony.

New York-traded shares of BP closed 2 percent higher on Thursday.

Attention now turns to any possible settlements ahead of a Macondo-related trial due to start on Feb. 25 in New Orleans, including for Clean Water Act (CWA) violations that may cost BP $21 billion if it is found grossly negligent.

“That’s where fairness will be found – or lost,” National Audubon Society CEO David Yarnold said of BP’s CWA case, since most of the fines would go toward restoring the Gulf of Mexico.

 

 

Copyright 2013 Reuters. Click for restrictions.Email ThisPrintNewslettersTweetCategories: National NewsTopics: Deepwater Horizon, Department of Justice BP Oil Spill, Gulf oil spill settlement, Halliburton Gulf oil spill, Transocean BP oil spill, Transocean liability settlementHave a hot lead? Email us at newsdesk

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Nationwide to Settle Harleysville Policyholder Class Action for $26M

October 12, 2012Email ThisPrintNewslettersTweetArticle1 Comments

Nationwide has agreed to settle litigation related to the merger with Harleysville Insurance.

The $26 million settlement relates to In re Harleysville Mutual, a consolidated class action and derivative suit related to the merger of Nationwide Mutual and Harleysville Mutual that has been brought on behalf of former Harleysville Mutual policyholders.

The $834 million merger was completed last May, and Harleysville Insurance is now part of the Nationwide family of companies.

Financial terms of the deal had come under attack by some Harleysville Mutual policyholders as well as by some other third-party observers such as David Schiff, editor of Schiff’s Insurance Observer and an advocate of mutual policyholders. Critics argued that Nationwide offered a significant premium for common stock of Harleysville Group, a publicly traded subsidiary of Harleysville Mutual — which critics contend enriched stockholders including top executives at Harleysville Mutual.

But, the critics also noted, the merger didn’t provide for any consideration to the mutual policyholders of Harleysville Mutual beyond the fact that they would become members of Nationwide.

The suit and settlement were filed in the Court of Common Pleas of Philadelphia, First Judicial District of Pennsylvania, Civil Trial Division.

Nationwide said it believes that settling this lawsuit was in the best interest of all Nationwide and Harleysville stakeholders, given the potential cost and burden of continued litigation.

Nationwide said it is “pleased to resolve this matter and put the Harleysville class action and derivative litigation behind it.”

The company pointed out that the settlement is not an admission of wrongdoing or liability by Nationwide or Harleysville. The court has not ruled on the merits of the suit, and is not expected to do so in the course of the settlement-related proceedings. The settlement will not be final until it is approved by the court and any appeals from the court’s ruling are resolved.

As part of the settlement process, the parties involved have requested that the court certify a class for the purposes of settlement only. Before the court can approve the settlement, class members must be given notice of the terms of the settlement and their rights with respect to it, and the court must hold a hearing to determine the fairness of the settlement.

The court must still determine a timeline for when class members will receive written notice of the settlement, their deadline for objecting to or opting out of the settlement, and the date of the fairness hearing on the settlement.

 

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WSU To Pay $650K To Settle Discrimination Lawsuit

June 7, 2012Email ThisPrintNewslettersTweetArticleComments

Washington State University has agreed to pay $650,000 to settle a racial discrimination lawsuit brought by two former employees of Chinese descent.

The settlement will pay $325,000 each to Dr. Ying Li and her husband, Lizhong Yang. It also calls on the Pullman, Wash., school to enact policies to prevent future discrimination.

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