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BANKRUPTCY $3.6M settlement in suit against airline’s CEO Honolulu (AP)-A $3.6 million settlement in a lawsuit against Hawaiian Airlines’ former Chairman and Chief Executive John Adams may help with the airline’s bankruptcy reorganization. After legal fees, the settlement will net more than $1 million for Hawaiian and will have saved the company more than $1 million by avoiding a trial. The lawsuit had sought to recover $28 million paid to Adams and other shareholders and insiders. The figure included a tender offer in 2002 in which companies Adams controlled would sell nearly 6 million Hawaiian Airlines shares back to the carrier for $25 million. Under the agreement, Adams and the companies he controlled will pay Hawaiian Airlines $3.6 million once the U.S. bankruptcy court approves the settlement and the carrier emerges from bankruptcy reorganization. CIVIL RIGHTS Ford pays $10M to settle race discrimination suit Cincinnati (AP)-Ford Motor Co. could pay more than $10 million if a federal judge approves settlement of a lawsuit that charges that the auto manufacturer’s method for selecting apprentices discriminates against black employees. The complaint filed against Ford and United Auto Workers (UAW) by the Equal Employment Opportunity Commission and attorneys for at least 11 Ford employees charges that since at least Jan. 1, 1997, Ford has engaged in unlawful employment practices at its Ohio facilities. The UAW represents employees and participated in a joint apprenticeship committee with Ford. The complaint seeking class action status alleges that Ford selected black employees at a much lower rate than it did white employees for its apprenticeship training program. The complaint and the motion requesting preliminary court approval of the settlement agreement were filed with U.S. District Judge Susan J. Dlott. Under the proposed agreement, Ford would immediately stop using its procedure for selecting apprentices at Ford facilities in the United States and all parties would agree on an industrial psychologist to serve as an expert in devising a new selection system. Ford also would set aside 279 apprenticeship eligibility positions for class members, and $2,400 would be paid to class members allegedly harmed by the apprenticeship-selection procedure. The employees who brought the complaint would each receive $30,000 instead of $2,400. CONSUMER PROTECTION Wal-Mart to pay $14.5M over gun sales violations Sacramento, Calif. (AP)-Wal-Mart Stores Inc. agreed to pay $14.5 million in fines and other costs to settle a state lawsuit over thousands of gun sales violations at California stores between 2000 and 2003. California Attorney General Bill Lockyer said that the Arkansas retailer will pay $5 million in fines, $4 million for state compliance checks with gun laws and millions more to assure its stores meet state and federal firearms laws. Wal-Mart agreed in April 2003 to suspend gun sales at its sporting goods counters in 114 California stores after the state documented hundreds of violations at two stores in Sacramento and four other stores in Turlock, Merced, Los Banos and Madera. A subsequent investigation by California Department of Justice officials uncovered 2,891 more violations between 2000 and 2003 at stores in Fresno, Folsom, Turlock, Ukiah and Simi Valley. State agents said that the stores sold guns to 23 people who weren’t allowed to possess them and delivered 36 more to customers who bought them for people not allowed to own guns. Other offenses included gun sales without background checks and failures to identify buyers through thumbprints and drivers license scans. Stores also failed to document whether firearm safety devices, such as trigger locks, were delivered with each purchase. The settlement doesn’t bar Wal-Mart from resuming sales, but requires it to submit to court-ordered compliance with gun laws. The chain agreed to pay Lockyer’s office $800,000 to recoup its investigative costs, and $1.2 million to monitor Wal-Mart’s compliance with state firearms laws during the next five years. CORPORATE FRAUD WorldCom directors to pay $18M in settlement New York (AP)-Ten former WorldCom Inc. board members have agreed to pay $18 million from their own pockets as part of a $54 million settlement with investors who lost billions of dollars in a historic accounting fraud at the telecommunications company. But one of the insurance companies that would pay the balance of the $54 million has balked at some terms, holding up a final agreement. The personal payments from the board members, which represents about one-fifth of their personal net worth, meets a key stipulation sought by New York state Comptroller Alan Hevesi, the lead plaintiff in the class action. Any settlement would have to be approved by U.S. District Judge Denise Cote, who is overseeing civil suits related to the massive accounting fraud of WorldCom, now known as MCI Inc. ENVIRONMENTAL LAW $159M for Goodyear in settlement with insurers Akron, Ohio (AP)-Goodyear Tire & Rubber Co. said it will receive $159 million in a legal settlement with insurers the company alleged had a duty to defend it against certain environmental claims. The company said the settlement amount will be paid by “certain insurers” over the next 15 months, but declined to provide further details on which firms will be making the payments. Goodyear filed a lawsuit in 1993 seeking to have insurers honor their policies to pay the company’s liability and defense costs in regard to certain environmental claims. In 1993, Goodyear filed a lawsuit against a number of insurers seeking a declaration that they had a duty to defend it against environmental cleanup actions filed under the Comprehensive Environmental Response, Compensation and Liability Act. The litigation involved more than 30 insurance companies and 200 policies linked to the litigation. The dispute centered on coverage for pollution cleanup costs at two waste-disposal sites used by a Goodyear subsidiary. HAZARDOUS ACTIVITY City settles with family of man killed by police Albany, N.Y. (AP)-The city of Albany has agreed to pay $1.3 million to the family of a bystander accidentally shot to death by police trying to stop a drunken driver. David Scaringe, 24, was struck and killed by a stray bullet fired as officers chased a suspect in a busy Albany neighborhood on New Year’s Eve 2003. During the chase, officers William Bonanni and Joseph Gerace fired into a crowded intersection at a car driven by Daniel Reed, who had sped away after being stopped for a traffic violation. A stray bullet struck Scaringe in the chest and killed him as he walked near his apartment. The grand jury that charged Reed ultimately declined to indict the officers in Scaringe’s death. NEGLIGENCE $1M settlement over law school shooting rampage Roanoke, Va. (AP)-Appalachian School of Law agreed to pay $1 million to settle lawsuits that accused the school of ignoring repeated warnings before one of its students opened fire on campus in 2002 and killed three people. Peter Odighizuwa has pleaded guilty and is serving six life sentences for killing the school’s dean, a professor and a student and wounding three other students in the shooting rampage. The plaintiffs, including the family of the slain student and the three who were wounded, had sought nearly $23 million. They alleged that the school should have known that Odighizuwa—who has been diagnosed with paranoid schizophrenia—was dangerous, based on a history of threats and disruptive behavior. The settlement was the most available under the school’s insurance policy. Odighizuwa, who had flunked out of the school just before the rampage, said the shooting was a culmination of frustration and anger that bottled up inside him as he struggled to become a lawyer. RECORDS INSPECTION Alleged corporate fraud results in $30M award An arbitrator has awarded just above $30 million to a Pennsylvania company that claimed the lenders and shareholders of a Texas company it purchased in 2000 misrepresented its financial situation, according to James T. Smith, a Blank Rome partner who represented the Pennsylvania concern. The action involved Hummelstown, Pa.-based TransCore Holdings Inc.’s purchase of Viastar Holdings Inc. According to an award memorandum from JAMS arbitrator Curtis E. von Kann, named as respondents in the matter were investors Rocky Mountain, Hanifen Imhoff Mezzanine Fund, Moramerica Capital Corp. and NDSBIC; and stockholder W. Trent Ates. TransCore makes and maintains electronic toll-collection systems. Smith, who represented TransCore in the case, said that under the terms of the 2000 stock-purchase agreement, TransCore needed to prove only that one of the sellers had engaged in misrepresentation in order for all of the sellers named to be found jointly and severally liable. That agreement called for any resulting disputes to be submitted to arbitration. According to von Kann, TransCore had claimed that “but for [the] misrepresentations, it would not have purchased Viastar, nor made further investments in it.” Von Kann awarded TransCore a net total of $30 million on its indemnification claim, to be recovered from the named respondents “jointly and severally.” Of that amount, just below $7 million was for attorney fees and expenses. -ALM TRUSTS Pritzker lawsuit close to $1 billion settlement Chicago (AP)-Members of the Pritzker family are close to a $1 billion settlement with two young heirs that would end a two-year legal battle over the family’s estimated $15 billion empire. Liesel and Matthew Pritzker allege that their father and other family members emptied nearly all the assets from their trust funds in the mid-1990s to benefit their cousins and the family foundation, and left them out of a secret plan to divide up the family fortune. The family’s holdings include the Hyatt Corp. hotel chain, and analysts have speculated that a settlement of the family’s legal woes would allow the Pritzkers to take Hyatt public. Under the agreement, the cash settlement of around $500 million each would come equally from the trust funds of 11 of Liesel and Matthew Pritzker’s cousins. In return, the two would drop all litigation and end efforts to be included in a plan to divide the business empire among cousins and half-siblings. WRONGFUL DEATH $12.5M award to family of woman killed in car West Palm Beach, Fla. (AP)-A jury has awarded $12.5 million to the family of a woman killed when her car was hit by a tractor-trailer truck carrying sod. Julia Kraus, a 39-year-old pharmaceutical saleswoman and mother of two young boys, died in June 2001 after being hit by Junior Shirley’s truck. The investigation showed that Shirley apparently did not notice that traffic on Florida’s Turnpike had stopped because of road debris, possibly because he had fallen asleep.

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