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Federal regulator urges foreclosure halt
U.S. Legal News | 2009/02/11 19:19
A federal regulator on Wednesday urged more than 800 thrift institutions to suspend all foreclosures while the Obama administration develops plans to keep borrowers in their homes.


John Reich, director of the Office of Thrift Supervision, said that by doing so, thrifts "would be supporting the national imperative to combat the economic crisis." But cooperation with the request is voluntary.

The Obama administration plans to spend $50 billion to combat foreclosures of owner-occupied middle-class homes, but is divulging few details. An announcement of the administration's housing plans is expected in the coming weeks.

"We're urging them to do it, but we're not going to try to force anyone to comply," said William Ruberry, a spokesman for the thrift agency. "We thought it was reasonable -- because the details (of the government's plans) are expected to be imminent."

Thrifts differ from banks in that, by law, they must have at least 65 percent of their lending in mortgages and other consumer loans -- making them particularly vulnerable to the housing downturn.

Some of the largest thrifts have collapsed over the past year. The failure of Seattle-based Washington Mutual Inc. in September was the largest bank collapse in U.S. history. IndyMac Bank, a Pasadena, Calif.-based thrift, failed last July in a prelude to the broader financial crisis that erupted in September.

The institutions regulated by the Office of Thrift Supervision range in size from small community banks to big institutions like ING Bank, part of Dutch financial giant ING Groep NV.

Thrifts are being closely examined by federal inspectors for signs of heavy exposure to declining markets, or troubled areas such as construction and real estate loans.

Twenty-five U.S. banks failed last year, far more than the previous five years combined, and nine banks have failed so far this year. It's expected that many more banks won't survive this year amid the pressures of tumbling home prices, rising mortgage foreclosures and tighter credit. Some may have to merge with other institutions.



Calif. inmate release prompts public safety debate
Lawyer Blog News | 2009/02/11 16:54
Without a U.S. Supreme Court reprieve, California will have to free roughly a third of its prison inmates in a few years, and how that can be done safely is still hotly debated.


Corrections officials said Tuesday they are struggling with their response to a tentative federal court ruling this week that the state must remove as many as 57,000 inmates over the next two or three years.

The state's 33 adult prisons now hold about 158,000 inmates. But the judges said overcrowding is so severe it unconstitutionally compromises medical care of inmates, and releasing prisoners is the only solution.

"We are just now beginning to have discussions (about) who these types of inmates would be. Then, how do we get to that number?" said Matthew Cate, secretary of the state Department of Corrections and Rehabilitation.

The department has no contingency plan, he said, other than appealing to the U.S. Supreme Court once the ruling becomes final.

The judges said their ruling does not amount to throwing open the cell doors.



Mass. court: Juveniles can't be held extra 3 years
Court Feed News | 2009/02/11 16:54
Massachusetts cannot hold juvenile offenders for three years past their 18th birthday because the law is vague on how a youth's potential danger to the public is decided, the state's highest court ruled Tuesday.


Most juvenile offenders are released when they turn 18, but the extended commitment law allowed the Department of Youth Services to retain custody up to age 21 if a youth posed physical danger.

In unanimously striking down the law, the Supreme Judicial Court said it was unconstitutional because the law "contains no indication of the nature and degree of dangerousness that would justify continued commitment."

The court noted that the Legislature in 1990 had removed language that the danger a youth posed be due to a mental condition.

"The court said we don't lock people up based on an allegation of dangerousness when we don't know what that means," said attorney Barbara Kaban, deputy director of the Children's Law Center of Massachusetts.

She represented the three youths who challenged the law. Kaban said the three had been charged with crimes that included larceny and assault and battery with a dangerous weapon.

All were turned over to the department's custody when they were 16. Each was initially placed on probation, then sent back to a juvenile detention facility after violating the terms of probation at least once. The department filed applications for extended commitment orders for all three shortly before they turned 18.

Jennifer Kritz, a spokeswoman for the Department of Youth Services, said the department is reviewing the court's ruling and expects to be ordered to release about 12 youths being held under the law.



Computer virus shuts down Houston's municipal courts
Headline News | 2009/02/11 16:54
A virus is playing havoc with the municipal court operations in Houston.

The court system had to close down Friday afternoon after a computer virus affected access to data on court cases. Courtroom operations aren't expected to be back in business before Thursday morning.

People can pay fines and conduct other court business, but judges will not call dockets. Those with court dates for misdemeanor cases will be notified by mail of their new dates.

The virus hit 475 of the city's 16,000 computers and infected part of Microsoft Windows that handles the login process.

Gwendolyn Goins, spokeswoman for the court system, says she does not know how many cases have been affected. She said there's no evidence the virus was released deliberately.



Circuit City seeks incentives for wind-down
Business Law Info | 2009/02/10 17:25
Circuit City Stores Inc. is asking a U.S. Bankruptcy Court judge to allow it to give incentives to executives and other workers to stay with the company during the wind-down process, according to court filings.


The company said the bonuses are needed to dissuade the 154 employees from leaving before what was the nation's second-largest consumer electronics retailer closes for good.

Employee turnover threatens the wind-down plan and the company's ability to "maximize value for their estates and stakeholders," Richmond-based Circuit City said in the filing.

Circuit City has already had some key employees leave, including former chief financial officer Bruce H. Besanko, who will start in a similar role at OfficeMax Inc. on Feb. 16.

The company filed for Chapter 11 bankruptcy protection in November as it faced pressure from vendors, heightened competition and waning consumer spending. Last month Circuit City announced it would liquidate its 567 U.S. stores, cutting more than 34,000 jobs.

Going-out-of-business sales should last through March, after which the stores will be closed. A small staff will keep working at the corporate office through the process.

Under the company's proposal, 16 executives would split up to $2.3 million if they achieve specific target tasks such as staying within the wind-down budget and obtaining the sale of Circuit City's Canadian and Internet assets. The remaining non-managerial workers would share no more than $1.62 million.



Feds make last plea to keep Bonds' steroids tests
Legal Career News | 2009/02/10 17:25
Federal prosecutors are again asking a judge to let them show a jury three drug test results they say show Barry Bonds used steroids.


The judge said last week she was inclined to throw out those results unless someone could directly testify to collecting the slugger's urine samples. The likeliest candidate to be able to do so is Bonds' former trainer, Greg Anderson. A lawyer for Anderson has said his client won't testify at Bonds' upcoming trial.

In a court filing Monday, prosecutors included snippets of Bonds' grand jury testimony saying Anderson collected the samples. It also included testimony from a former BALCO executive saying Anderson dropped off urine samples labeled with Bonds' name.

Bonds is charged with lying to a grand jury about alleged steroid use.



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