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BREACH OF CONTRACT Natural gas affiliate wins termination of sale suit HOUSTON (AP)-Natural gas distributor Southern Union Co. has said that one of its affiliates, Citrus Corp., will receive a $100 million payment from Spectra Energy LNG Sales Inc. to resolve a contract dispute. Citrus Trading Corp., which is owned by natural gas pipeline operator Citrus Corp., received the payment. Southern Union owns a 50% stake in Citrus Corp. Southern Union said it is contractually obligated to share a portion of its proceeds with the Enron bankruptcy estate. The payment is the result of litigation in a Texas federal court between Citrus Trading and Spectra Energy Corp., formerly known as Duke Energy. The dispute dates back to Spectra’s termination in 2003 of natural gas purchase and sale arrangements with Citrus Trading. CLASS ACTION S.C. diocese to pay $12M to settle sex abuse claims CHARLESTON, S.C. (AP)-The Roman Catholic Diocese of Charleston announced it has agreed to settle child sex abuse claims, designating as much as $12 million for damages. The class action settlement between the diocese and attorneys representing possible victims has been given initial approval by a judge. It is not clear how many victims there are. In 2004, diocese officials said there had been 45 credible abuse allegations in the state between 1950 and 2002 against 21 priests, one deacon and one deacon candidate. FRAUD Defrauded teachers’ pension fund gets $47M SACRAMENTO, CALIF. (AP)-California’s teacher pension fund, the California State Teachers’ Retirement System, has reached a nearly $47 million settlement with Qwest Communications International Inc. over a lawsuit claiming that the Denver-based telephone company had defrauded the fund of $150 million. The settlement calls for Qwest, its accountants and banks to pay the pension fund $45 million. Former Chief Executive Officer Joseph Nacchio must pay $1.5 million. The deal was reached in December but had been under seal in a California state court. The California teachers’ retirement system took the losses when Qwest’s stock collapsed in 2002 amid allegations of accounting fraud. The pension fund’s lawsuit also named Qwest’s former top executives and several financial services companies. Nacchio is scheduled to go on trial in March on charges that he sold $101 million worth of Qwest stock based on inside knowledge that the company would not meet revenue targets. NEGLIGENCE Filter maker wins $10M in stock-purchase suit PITTSBURGH (AP)-Air and water filter maker Calgon Carbon Corp. was awarded $10 million in a lawsuit against three investment firms over the company’s purchase of stock in Advanced Separation Technologies Inc. Calgon Carbon claimed in the 1998 lawsuit that Progress Capital Holdings Inc., Florida Progress Corp. and Potomac Capital Investment Corp. negligently represented the financial and operational condition of Advanced Separation Technologies. The Pittsburgh-based company, which purchased Advanced Separation Technologies’ common stock on Dec. 31, 1996, is seeking an additional $5.5 million in interest. PATENTS Biotech companies settle infringement dispute MADISON, WIS. (AP)-Biotech companies Third Wave Technologies Inc. and Stratagene Corp. have said that they have settled their patent infringement dispute out of court, with Stratagene agreeing to pay Third Wave $10.8 million in cash. The companies, makers of molecular diagnostic tools, said they agreed not to pursue any further litigation for the next nine months and will seek a dismissal without prejudice or an extension of the trial date in Stratagene’s pending federal case in Delaware. A Wisconsin federal jury had ruled in September 2005 that certain embodiments of Stratagene’s FullVelocity test kit infringed two patents owned by Third Wave. The jury awarded Third Wave $5.3 million in damages. Third Wave sought additional damages, and in December 2005, a federal judge increased the award to $15.9 million. SECURITIES FRAUD Municipal bond insurer fined $75M for sham deal WASHINGTON (AP)-MBIA Inc., a large insurer of municipal bonds, has agreed to pay $75 million to settle civil securities fraud charges by federal and New York state authorities over an alleged sham $170 million transaction in 1998. The regulators accused MBIA of using secret side agreements with two reinsurance companies to eliminate the risk to the companies in the transaction. They said MBIA used the deal to avoid having to book a $170 million loss in 1998. The loss stemmed from a July 1998 default on municipal bonds that MBIA had guaranteed for a Pennsylvania hospital chain, the Allegheny Health, Education and Research Foundation. To conceal the loss, MBIA’s senior management devised the scheme to obtain reinsurance to cover the value of it and thereby convert a loss into a reported gain.

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