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Winston & Strawn Settles Claim with GE Rainmaker
Law Firm News | 2007/11/21 17:15
Winston & Strawn has settled on the eve of trial a lawsuit brought against it by a New York partner who claimed the firm broke a deal to exempt him from "decompression," a policy sharply reducing partners' pay after age 65, writes the New York Law Journal.

Throughout the 1990s, Anthony LoFrisco, 74, was one of the law firm's highest-paid partners, based largely on his close relationship with former General Electric (GE) chairman John "Jack" Welch. According to a 1994 agreement with Chicago-based Winston, LoFrisco was to be paid an amount equal to at least 13% of the firm's GE billings.

That arrangement expired in 2001 but LoFrisco claimed in his 2003 lawsuit that the firm agreed that year to extend the deal and exempt him from decompression. He accused the firm of reneging the following year, with decompression reducing his pay from $2.3m (£1.1m) in 2002 to $350,000 (£170,000) in 2004.

Trial in the matter was scheduled to begin Monday before Manhattan Supreme Court Justice Helen Freedman. But the parties said in a joint statement yesterday (20 November) that they reached an “amicable settlement” of the dispute on 10 November. The terms of the settlement are confidential.

As a result of the settlement, the parties stated: "LoFrisco's lawsuit will be dismissed and he will resign from the firm on 26 November, 2007."

Both Winston's lawyer, Philip Forlenza of Patterson Belknap Webb & Tyler, and LoFrisco's lawyer, Elkan Abramowitz of Morvillo Abramowitz Grand Iason Anello & Bohrer, declined to comment further.

The settlement ends an unusual suit that had drawn much attention to the issue of how firms handle aging rainmakers, many more of whom are now challenging firm policies that envision retirement at age 65 or earlier. In recent years, many firms have shown greater willingness to waive decompression, mandatory retirement or similar policies for older partners still responsible for large amounts of business.

The sensitive issue of how to manage aging partnerships was thrust into the spotlight last month after Sidley Austin agree to pay $27.5m (£13.1m) to settle an age discrimination claim with 32-former partners who were forced to give up equity partner status in 1999.


CPDC President Pleads Guilty to Obstruction of Audit
Court Feed News | 2007/11/19 19:43
The president of the Los Angeles-based Community Partnership Development Corporation (CPDC) pleaded guilty this morning to charges of obstructing an audit conducted by the United States Department of Housing and Urban Development, which was looking into the expenditure of nearly $3.2 million of federal money on "engineering and construction management supervision fees."

Frank DeSantis, 49, of Santa Clarita, pleaded guilty to the felony obstruction charge before United States District Judge John F. Walter. DeSantis pleaded guilty to a one-count indictment that was returned by a federal grand jury in June and accused him of overstating work hours in relation to grant money that HUD had provided to the CPDC.

HUD provides funding, through the Low-Income Housing Preservation and Resident Homeownership Act of 1991 -- commonly called the Preservation Program -- to support the development and operation of privately owned rental properties for low-income families. The Preservation Program provides financial assistance in the form of grants to private owners for the purchase and rehabilitation of properties. In 1996 and 1997, DeSantis received Preservation Program grants, which he used to purchase three properties -- the New Brittany Housing Foundation Development, the L.A. Garden Community Association Development, and the Casa Community Association Development. In June 2002, HUD’s Office of Inspector General conducted an audit of the grant fund expenditures for the three developments. In order to explain the expenditure of $3,198,245, DeSantis submitted time sheets for CPDC employees. However, the time sheets proved to be false for three reasons: they were created long after the purported work took place, they showed more hours than the employees actually worked on the Preservation Program grant, and the time sheets failed to disclose that a significant number of hours were spent working on non-Preservation Program projects.

“Financial crimes aimed at multifamily housing undermine the economic viability of what is home to dozens and sometimes hundreds of families,” said Kenneth M Donohue, Inspector General for the U.S. Department of Housing and Urban Development. “To the extent that we can stop these destructive practices, the HUD Office of Inspector General will be a deterrent to these pernicious activities and a defender of the notion that people should be able to enjoy a safe and affordable home.”

DeSantis is scheduled to be sentenced by Judge Walter on February 4. At that time, DeSantis faces a statutory maximum penalty of five years in federal prison. As part of his plea agreement, DeSantis has agreed to pay $400,000 to reimburse HUD for some of the money provided in Preservation Program grants.

This case is the result of an investigation by HUD's Office of Inspector General.


United Rentals Takes Cerberus to Court
Court Feed News | 2007/11/19 18:08
United Rentals filed a lawsuit against Cerberus Capital Management seeking to force the private-equity firm to follow through with its buyout of the rental-equipment company.

The suit comes after Cerberus said last week that it wanted to pay a $100 million break-up fee to end the deal, partly because of volatility in the credit markets. United Rentals has contended that there are no financing obstacles to the $7 billion buyout, nor any significant changes in its business.

United Rentals said Monday that RAM Holdings and RAM Acquisition, two acquisition vehicles formed by Cerberus, are violating the merger agreement and do not have the right to simply pay the break-fee and walk away from the deal.

The company called Cerberus' action a "naked ploy" to extract a lower price for the buyout. Cerberus said last week it was willing to negotiate a revised deal.

Through the lawsuit, filed in the Delaware Court of Chancery, United Rentals is seeking to consummate the merger agreement in accordance with its original terms.

With the suit, United Rentals joins Sallie Mae in launching a legal battle with its potential acquirers to force a buyout. Other companies, such as Harman and Acxiom, have seen their deals fall apart as turmoil in the credit markets affects private-equity firms' ability to raise financing.

Shares of United Rentals recently were down 37 cents, or 1.6%, to $23. The buyout had called for Cerberus to pay $34.50 a share for the company.


Maryland Police/Sheriff Investigate Taser Death
Lawyer Blog News | 2007/11/19 17:43
Frederick law enforcement agencies are conducting dual investigations into the death of a 20-year-old man who died Sunday after a Frederick County Sheriff’s deputy used a Taser to subdue him.

According Cpl. Jennifer Bailey, spokeswoman for the Sheriff’s Office, a deputy responded to the 7000 block of Gresham Court East, Frederick, at 4:54 a.m. Sunday for the report of a fight in progress.

The deputy — whose identity has not been released — found four people fighting, and deployed a Taser, striking Jarrel Gray of Frederick.

Gray fell to the ground, and he received medical attention. He was transported to Frederick Memorial Hospital, where he was later pronounced dead.

The deputy who fired the Taser has been placed on administrative leave with pay during the investigation, which is normal procedure.

On WFMD Monday morning, Sheriff Chuck Jenkins (R) said two investigations are under way: The Frederick Police Department is investigating Gray’s death, while the Sheriff’s Office is investigating the use of the Taser by one of its deputies.

According to Frederick County Circuit Court records, Gray was serving two years and six months of supervised probation stemming from charges of second-degree assault and resisting arrest in November 2006.

This incident comes almost two weeks after a Frederick County Sheriff’s deputy used a Taser in his role as a school resource officer at Tuscarora High School.

In that incident, an 18-year-old student was not injured as he resisted a deputy’s command to step away as he broke up a fight at the school.


Texas Judge Issues Injunction Against Tribe
Lawyer Blog News | 2007/11/19 17:40
 A Texas judge grants a permanent injunction against the Wichita-based Kaweah Indian Nation and its self-proclaimed chief, Malcomb Webber.

The unrecognized tribe is accused of defrauding illegal immigrants by falsely claiming they could get Social Security numbers if they bought tribal memberships.

The Texas attorney general's office had filed a lawsuit accusing Webber and his group of violating the Texas Deceptive Trade Practices Act.

The lawsuit is still pending against two other defendants. And a spokesman for the Texas attorney general's office said a ruling on any penalties and restitution will be made after the entire case is settled.

A court-appointed attorney for Webber has said Webber was a victim of renegade underlings.


U.N. Chief Seeks More Climate Change Leadership
Legal World News | 2007/11/18 17:16

Secretary General Ban Ki-moon, describing climate change as “the defining challenge of our age,” released the final report of a United Nations panel on climate change here on Saturday and called on the United States and China to play “a more constructive role.” His challenge to the world’s two greatest greenhouse gas emitters came just two weeks before the world’s energy ministers meet in Bali, Indonesia, to begin talks on creating a global climate treaty to replace the Kyoto Protocol, which expires in 2012.

The United States and China are signatories to Kyoto, but Washington has not ratified the treaty, and China, along with other developing countries, is not bound by its mandatory emissions caps.

“Today the world’s scientists have spoken, clearly and in one voice,” Mr. Ban said of the report, the Synthesis Report of the United Nations Intergovernmental Panel on Climate Change. “In Bali, I expect the world’s policymakers to do the same.”

He added, “The breakthrough needed in Bali is for a comprehensive climate change deal that all nations can embrace.”

Although Mr. Ban has no power to enforce members of the United Nations to act, his statements on Saturday increased the pressure on the United States and China, participants here said.

Members of the panel said their review of the data led them to conclude as a group and individually that reductions in greenhouse gases had to start immediately to avert a global climate disaster, which could leave island nations submerged and abandoned, reduce African crop yields by 50 percent, and cause a 5 percent decrease in global gross domestic product.

The panel’s fourth and final report summarized and integrated the most significant findings of three sections of a climate-science review that were released between January and April. Because the data had not previously been reviewed as a whole, scientists said the synthesized report was more explicit, creating new emphasis and alarm.

The first section of the review had covered climate trends; the second, the world’s ability to adapt to a warming planet; the third, strategies for reducing carbon emissions. With their mission concluded, the hundreds of IPCC scientists spoke more freely than they had previously.

“The sense of urgency when you put these pieces together is new and striking,” said Martin Parry, a British climate expert who was co-chairman of the delegation that wrote the second report. “I’ve come out of this process more pessimistic about the possibilities than I thought I would.”

The panel, which was awarded the Nobel Peace Prize last month, said the world would have to reverse the growth of greenhouse gas emissions by 2015 to prevent serious climate disruptions.

“If there’s no action before 2012, that’s too late,” said Rajendra Pachauri, a scientist and economist who heads the IPCC. “What we do in the next two to three years will determine our future. This is the defining moment.”

He said that since the IPCC began its work five years ago, scientists had recorded “much stronger trends in climate change,” like a recent melting of Arctic ice that had not been predicted. “That means you better start with intervention much earlier.”

Saturday’s synthesis report was reviewed and approved by delegates from 130 nations gathered here this week. But unlike the earlier reviews, in which governments had insisted on changes that diluted the reports’ impact, this time scientists and environmental groups said there had been no major dilution of the data.

For example, this report’s summary was the first to acknowledge that the melting of the Greenland ice sheet from rising temperatures could result in a substantive sea-level rise over centuries rather than millennia.

“Many of my colleagues would consider that kind of melt a catastrophe” so rapid that mankind would not be able to adapt, said Michael Oppenheimer, a climate scientist at Princeton University who contributed to the IPCC.

“It’s extremely clear and is very explicit that the cost of inaction will be huge compared to the cost of action,” said Jeffrey D. Sachs, director of Columbia University’s Earth Institute. “We can’t afford to wait for some perfect accord to replace Kyoto, for some grand agreement. We can’t afford to spend years bickering about it. We need to start acting now.”

He said that delegates in Bali should take action immediately where they agree, for example, on public financing for new technologies like capturing emissions of the main greenhouse gas, carbon dioxide, and pumping it underground. He said energy ministers should start a global fund to help poor countries avoid deforestation, which releases greenhouse gases and reduces the uptake of carbon dioxide through photosynthesis.

United Nations officials pointed out that strong policies were needed, like increasing the energy efficiency of cars and setting up carbon markets, a system that essentially forces companies and countries to pay for the cost of the greenhouse gases they emit.

The European Union already has such a carbon trading system in place for many industries, and is fighting to bring airlines into the plan.

“Stabilization of emissions can be achieved by deployment of a portfolio of technologies that exist or are already under development,” said Achim Steiner, head of the United Nations Environment Program.

But he noted that developed countries would have to help poorer ones adapt to climate shifts and adopt cleaner energy choices, which are often expensive.

Mr. Steiner emphasized that the report sent a message to individuals as well as world leaders: “What we need is a new ethic in which every person changes lifestyle, attitude and behavior.”

Meanwhile, the Bush administration’s reaction to the report was muted. At a news conference Friday night after the report was approved, James L. Connaughton, the chairman of the president’s Council on Environmental Quality, said President Bush had agreed with leaders of the other major industrialized nations that “the issue warrants urgent action, and we need to bring forward in a more accelerated way the technologies that will make a lasting solution possible.”

He declined to say how much warming the administration considered acceptable, saying, “We don’t have a view on that.”

Mr. Connaughton acknowledged that the United States, like other nations, had tried to make some changes to the draft. Dr. Sharon L. Hays, the leader of the American delegation here, said the goal was not political but “to make sure the final report matches the science.” She noted that the United States had invested $12 billion in climate research since 2001.

Stephanie Tunmore, a member of Greenpeace International who had observer status as the countries debated the text, questioned that explanation.

She said, for example, that the United States had tried to remove a section of the report titled “Reasons for Concern,” which listed consequences of climate change that are either likely or possible. One was the melting of ice sheets, which the panel said could take place more rapidly than previously thought.

The Americans argued that there was no reason to include the section, because all of it was contained somewhere in the previous IPCC technical documents, she said. But the section remained in the report.



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