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SAN FRANCISCO A federal judge has found that computer parts-maker Ma Laboratories Inc. cannot enforce an employee arbitration agreement that he declared to be unconscionable.
U.S. District Judge William Alsup on May 15 struck down the agreement, which the lead plaintiff was required to sign on the day she was fired to receive her final paycheck.
Alsup wrote that the company had slipped arbitration language into a termination certification, which looked like other employee agreements that the plaintiff had signed but that had called for disputes to be solved out of court.
The last of the five publishers sued for conspiring with Apple Inc. to fix the prices of electronic books has agreed to pay $75 million to settle cases brought by consumers and attorneys general in 33 states.
Penguin Group (USA) Inc., based in New York, reached the settlement on May 22 to resolve allegations it artificially raised the prices of e-books in violation of U.S. antitrust laws.
The agreement, which must be approved by U.S. District Judge Denise Cote in New York, would resolve a consolidated class action brought by consumers in 2011. Last year, the plaintiffs, along with the 33 attorneys general and the U.S. Justice Department, reached a $69 million settlement with three other publishers: Hachette Book Group (USA), HarperCollins Publishers LLC and Simon & Schuster Inc.
NEW YORK A federal judge on May 17 ruled that he lacked jurisdiction to hear a case brought by Dexia S.A. against JPMorgan Chase & Co.
Dexia alleged that JPMorgan duped it into overpaying by $774 million for securities backed by faulty mortgages. Last month, U.S. District Judge Jed Rakoff determined that potential damages were limited to $5.7 million.
On May 17, however, the judge vacated his earlier decision, ruling that he never had jurisdiction to hear the case in the first place. He relied on a decision by the U.S. Court of Appeals for the Second Circuit issued in April, which held that because a handful of the mortgages at issue in the case between American International Group Inc. and Bank of America Co. were secured to overseas properties, the case belonged in state court.
NEW YORK The auto lender Ally Financial Inc. (formerly General Motors Assurance Corp.) announced on May 23 that it would pay $2.1 billion to disentangle itself from a bankruptcy proceeding over its mortgage subsidiary Residential Capital LLC. The agreement, which still requires judicial approval, would resolve claims that Ally is responsible for Residential Capital's debts because it allegedly moved assets to and from the subsidiary for its own benefit.
Before the financial crisis, Residential Capital issued subprime mortgages and bundled them into mortgage-backed securities. It declared bankruptcy in 2012. Residential Capital faced $25 billion in claims from a range of creditors, including noteholders, investors like Berkshire Hathaway Inc. and bond insurers like MBIA Inc.
The creditors alleged that Ally should be liable for Residential Capital's debts on the ground that it controlled its subsidiary, stripping it of valuable assets and then turning it into a dumping ground for mortgage-related liabilities.
WILMINGTON, Del. (AP) A Delaware bankruptcy judge has given final approval to the reorganization plan for failed battery maker A123 Systems Inc., the recipient of a $249 million U.S. Department of Energy grant.
U.S. Bankruptcy Judge Kevin Carey on May 20 resolved minor outstanding issues following the sale of most of A123's assets to the U.S. arm of Chinese conglomerate Wanxiang Group Corp., one of China's largest manufacturers of auto parts, for nearly $257 million.
One issue was approval of a settlement involving A123, now known as B456 Systems, its official creditors committee, and auto-parts maker Johnson Controls Inc. The committee had suggested that Johnson Controls improperly lobbied to kill the sale to Wanxiang after losing out on the bidding. Johnson Controls has agreed to pay $200,000 to the bankruptcy estate, and the committee will drop any claims against it.
WASHINGTON (AP) A prominent institutional investment adviser firm has agreed to pay $300,000 to settle federal civil charges that it failed to protect clients' confidential voting information.
Institutional Shareholder Services (ISS) agreed to the penalty in a settlement announced on May 23 with the U.S. Securities and Exchange Commission. The company advises investors on voting for members of boards of directors. Its clients include are institutional investors such as large mutual funds and pension funds. The firm, based in Rockville, Md., didn't admit or deny the SEC's allegations.
The SEC alleged that a former ISS employee no longer with the company gave a vote-gathering firm, hired by corporations, some information showing how more than 100 ISS clients planned to vote on ballots for directors. The vote-gather company then gave the former ISS employee tickets to concerts and sporting events as well as meals and an airline ticket, the SEC alleged.
WILMINGTON, Del. The Delaware Court of Chancery has ordered Wal-Mart Stores Inc. to release internal documents detailing its directors' knowledge of allegations that the company's Mexican affiliate, Walmex, bribed government officials in order to obtain permits to build stores in specific locations.
Chancellor Leo Strine Jr. issued the bench ruling on May 20. It was first reported by Bloomberg News. He ordered the company to provide the documents to plaintiffs counsel in a derivative suit filed against the company. A group of lawsuits, which were consolidated last year in Indiana, allege that Wal-Mart's board breached its fiduciary duties by failing to adequately investigate the bribery charges.
Strine said that Wal-Mart "can't sanitize its response" to the shareholders' document requests, according to the Bloomberg News report.
Aereo Inc. reached a settlement on May 20 with the founder of rival TV streaming company FilmOn PLC. The deal brought an end to Alki David's fight with Aereo and its top financial backer, Barry Diller.
As part of a deal to settle three separate lawsuits pending before U.S. District Judge Audrey Collins in Los Angeles, David agreed to permanent injunctions barring him from using "Aereokiller" or "Barry Driller as website monikers in connection with any business activity. The agreement also settled David's trademark infringement rights over the "Aero" name.
Diller, Aereo, David and FilmOn.com settled on "mutually acceptable terms," according to a joint statement from the parties. The two companies are defending lawsuits filed by television networks and their broadcast affiliates, which are pursuing copyright litigation on both coasts.
SAN FRANCISCO Silicon Valley rivals Brocade Communications Systems Inc. and A10 Networks Inc. reached a settlement on May 20 in their long-running intellectual property dispute. Brocade previously won a $112 million jury verdict.
The settlement resolved pending matters in the U.S. Court of Appeals for the Federal Circuit, as well as the issues set for retrial in a lawsuit brought by Brocade against A10, according to sources familiar with the agreement. A10's appeal of the order imposing a permanent injunction had been scheduled for argument before the Federal Circuit on June 4.
Brocade and A10 make networking hardware that helps websites control Internet traffic. A10 CEO Lee Chen sold his previous company, Foundry Networks, to Brocade in 2008 for roughly $3 billion. Two years later, Brocade sued A10 and Chen for stealing trade secrets, poaching key staff and copying software code.