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Legal news from Wednesday, April 20, 2005 |
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BREAKING NEWS ~ President Bush signs bankruptcy legislation
Jeannie Shawl on April 20, 2005 2:51 PM ET

[JURIST] AP is reporting that President Bush has signed the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 [PDF text, as reported in House], legislation that will make it harder for those in debt to wipe out their obligations.
3:53 PM ET - A transcript of the President's remarks on signing the bill is now available. President Bush said: Under the new law, Americans who have the ability to pay will be required to pay back at least a portion of their debts. Those who fall behind their state's median income will not be required to pay back their debts. This practical reform will help ensure that debtors make a good-faith effort to repay as much as they can afford. This new law will help make credit more affordable, because when bankruptcy is less common, credit can be extended to more people at better rates.
The new law will also require credit card companies to let card holders know up front what they are expected to pay, and what the penalties they will face if they are late on a payment. When people get a credit card, they should not be trapped by a provision in the fine print.
To make the system more fair, the new law will also make it more difficult for serial filers to abuse the most generous bankruptcy protections. Debtors seeking to erase all debts will now have to wait eight years from their last bankruptcy before they can file again. The law will also allow us to clamp down on bankruptcy mills that make their money by advising abusers on how to game the system.
America is a nation of personal responsibility where people are expected to meet their obligations. We're also a nation of fairness and compassion where those who need it most are afforded a fresh start. The act of Congress I sign today will protect those who legitimately need help, stop those who try to commit fraud, and bring greater stability and fairness to our financial system. AP has more.


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Corporations and securities brief ~ KPMG settles with SEC over Xerox charges
Amit Patel on April 20, 2005 12:41 PM ET

[JURIST] Leading Wednesday's corporations and securities law news, KPMG LLP [corporate website], the US unit of accounting firm KPMG International [corporate website], has agreed to pay $22.5 million to settle with the SEC [official website] over charges that it allowed Xerox Corp. [corporate website] to manipulate its accounting practices to close a $3 billion gap between actual operating results and the results reported to the investing public. The settlement resolves the civil suit brought by the agency which implicated KPMG and certain partners in the accounting fraud. KPMG will pay a $10 million civil fine, $9.8 million in restitution, and $2.6 million in interest. KPMG will neither admit nor deny wrongdoing but will make a series of reforms to prevent future violations of securities laws. Read the KPMG LLP press release [PDF]. Read the SEC press release, litigation release, and administrative proceeding [PDF]. AP has more.
In other news... - Doral Financial Corp. [corporate website] announced the SEC has started an informal investigation into the company's planned financial restatements and other issues concerning its valuation of interest-only securities. Doral will cooperate fully with the inquiry. Read the Doral press release. The announcement comes a day after Doral said it would reduce past earnings by $435 million to account for the overvaluation of certain interest-only securities. Read the Doral press release. AP has more.
- Agrochemical company Monsanto Co. [corporate website] announced it has received a subpoena from the Illinois Attorney General for information related to its pricing and licensing of genetically modified seeds. Monsanto said the inquiry is similar to requests made in the past. Read the Monsanto press release. AP has more.
- Enron [corporate website; JURIST Hot Topic news archive] chief executive Stephen Cooper will reopen negotiations to sell Portland General Electric (PGE) [corporate website] in talks with Oregon Governor Ted Kulongoski [official website], Portland Mayor Tom Potter [official website] and representatives of Oregon Mutual Utility Development Inc [advocacy website]. The new negotiations are result of Enron's failed attempts to sell the utility to the Texas Pacific Group after Oregon's utility regulators, Oregon Public Utility Commission [official website], quashed the deal [Oregon Public Utility Commission documents]. The city of Portland is attempting to step directly into the deal with a $2.35 billion offer, matching the offer made by Texas Pacific Group. However, Cooper has indicated the company is looking for more money this time around and may only be interested in selling stock, not assets. If negotiations fail, Enron may give its creditors stock in PGE and let financial markets decide what the company is worth. The Oregonian has more.
- US Airways Group Inc. [corporate website] announced it is in advanced negotiations with America West [corporate website] to merge thereby creating a national low-cost airline that could compete with discount rivals and also complement each other geographically. US Airways is planning to emerge from bankruptcy court protection later this year. AP has more.
- The CEO's of mortgage giants Fannie Mae [official website] and Freddie Mac told the Senate Banking Committee [official website] today that overregulation combined with a severe reduction of their multibillion-dollar portfolio holdings will hurt the US housing market. The moves could cut off billions of dollars from investors who help make housing more affordable for moderate-income Americans. Read the prepared testimony of Fannie Mae CEO Daniel Mudd. AP has more.
- The Delaware Supreme Court [official website] has upheld a a Chancery Court ruling against media magnate Conrad Black. The Chancery Court ruling blocked Black's plan to sell his control of his publisher Hollinger Inc. [corporate website] to the Barclay Brothers, and found that Black violated his duties at Hollinger. The Canadian Press has more.
- The SEC announced a settlement with four people over insider trading charges. The charges stem from a Florida woman's tips to her husband who later told two others about upcoming corporate acquisitions that she learned about while working at Deloitte & Touche and another public auditing firm more than five years ago. The four will pay a total of $1.27 million to settle the charges. Read the SEC litigation release and complaint [PDF]. Dow Jones has more.
Click for previous corporations and securities law news.


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Legal agenda and live webcasts ~ Wednesday, April 20
Chris Buell on April 20, 2005 12:01 AM ET

[JURIST] Here's a run-down of law-related events, expected developments and live webcasts on JURIST's docket for Wednesday, April 20.
The US Supreme Court [official website] hears oral arguments in two cases beginning at 10 AM ET today. In the first, Merck KGaA v. Integra Lifesciences I, Ltd. [Duke Law School case backgrounder], 03-1237, the Court will consider whether patent law exceptions for pharmaceutical development cover animal studies related to new drug development. The ABA has merit briefs in the case. In the second, Graham County Water District v. US [Duke Law School case backgrounder], 04-169, the Court will consider whether the six-year statute of limitations under the False Claims Act [text] applies to retaliatory discharge claims under the Act. The ABA has merit briefs in the case.
The US Senate [official website] convenes at 9:30 AM ET today, when it will consider H.R. 1268 [bill summary], the Iraq/Afghanistan Supplemental Appropriations bill. Watch a live webcast of the session. The Senate Judiciary Committee [official website] Terrorism, Technology and Homeland Security Subcommittee is holding a hearing at 2:30 PM ET today to review the Material Support to the Terrorism Prohibition Improvements Act. Watch a live webcast of the hearing.
The US House [official website] convenes at 10 AM ET today. Watch a live webcast of the session. The House Judiciary Committee [official website] will mark up H.R. 1279 [bill summary], the Gang Deterrence and Community Protection Act, at 10 AM ET today. Watch a live webcast of the session. The Committee is also holding a hearing at 2 PM ET today to consider competition in the telecommunications industry following the Telecommunications Act of 1996. Watch a live webcast of the hearing. The Courts, Internet and Intellectual Property Subcommittee is holding an oversight hearing at 4:30 PM ET today on the committee print regarding patent quality improvement. Watch a live webcast of the hearing. The House International Relations Committee [official website] Middle East and Central Asia Subcommittee is holding a hearing at 1:30 PM ET today on the Middle East and the UN. Watch a live webcast of the hearing.
The Eleventh UN Congress on Crime Prevention and Criminal Justice [official website] continues today in Bangkok, Thailand. View the agenda for the session.
At the International Criminal Tribunal for the Former Yugoslavia, the trial of Slobodan Milosevic [ICTY case backgrounder] continues at 9:30 AM local time [3:30 AM ET] today. Also today, the trial of Enver Hadzihasanovic and Amir Kubura [ICTY case backgrounder] continues at 2:45 PM local time [8:45 AM ET]. Watch a webcast of proceedings.


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