BUSINESS LAW

CHALLENGE TO FED’S AIG BAILOUT IS REJECTED

NEW YORK — A federal judge in Manhattan has dismissed a $25 billion lawsuit filed by Starr International, an insurance company run by former American Inter-national Group chief executive officer Maurice “Hank” Greenberg, against the Federal Reserve Bank of New York over its 2008 bailout of AIG. Southern District Judge Paul Engelmayer rejected Starr’s arguments that the bailout was an illegal takeover of multinational insurance company AIG and a “backdoor bailout” for other financial firms that did business with it.

The lawsuit was filed last November on behalf of AIG’s shareholders. Starr, which owned about 12 percent of AIG, alleged the Federal Reserve effectively took control of AIG and then breached its fiduciary duty to shareholders under Delaware law by taking a two-thirds stake in residual profits from AIG’s credit default swaps and forcing AIG to pay its counterparties in full even when they offered concessions, among other conditions.

CITI AGREES TO PAY $360M TO END LEHMAN TRUSTEE SUIT

NEW YORK — On November 16, Lehman Brothers liquidation trustee James Giddens, in a motion filed in U.S. bankruptcy court in Manhattan, said that Citigroup Inc. had agreed to a $435 million deal to resolve claims that Citi unlawfully seized Lehman deposits as Lehman was imploding in September 2008. The proposed settlement requires Citi to pay $360 million to the Lehman estate and to forfeit its claim to a $75 million contingency payment made at the start of the liquidation process. U.S. Bankruptcy Judge James Peck must approve the deal.

CRIMINAL LAW

EX-MAYER BROWN PARTNER CONVICTED OF FRAUD AT RETRIAL

NEW YORK — Former Mayer Brown partner Joseph Collins was convicted on November 16 of helping top executives at Refco conceal a $2.4 billion fraud from investors and purchasers of the financial services firm. In the fifth day of deliberations, a jury in Southern District of New York Judge Loretta Preska’s courtroom emerged to find the veteran lawyer guilty of conspiracy, two counts of securities fraud, two counts of false filings with the U.S. Securities and Exchange Commission and two counts of wire fraud.

Collins was acquitted of two counts of wire fraud and a single count of bank fraud. It was a crushing disappointment for Collins, 62, who had been found guilty three years ago in a verdict that was vacated in January by the U.S. Court of Appeals for the Second Circuit.

EX-COZEN LAWYER SENTENCED TO 70 MONTHS IN PRISON

PHILADELPHIA — A former Cozen O’Connor real estate attorney was sentenced to 70 months in federal prison after he was convicted on charges related to diverting fees from the law firm and not declaring that as income on his tax returns.

The sentence issued for Charles Naselsky by U.S. District Judge Paul S. Diamond of the Eastern District of Pennsylvania fell within the sentencing guidelines of 57 to 71 months, said Naselsky’s attorney, Robert Welsh of Welsh & Recker. “.

Maria M. Carrillo, of the Department of Justice’s Tax Division, said the judge increased the sentencing guidelines range on November 20 after hearing evidence from the prosecution of additional alleged illegal conduct that occurred around the same time as the conduct that resulted in the charges against Naselsky.

MAN FOUND GUILTY IN SOUTH AFRICA HONEYMOON SLAYING

CAPE TOWN, SOUTH AFRICA (AP) — A South African accused of being the triggerman in the 2010 honeymoon slaying of a Swedish bride was found guilty Monday, ending his long-delayed trial as the woman’s husband continues to fight extradition over the killing.

Judge Robert Henney gave the verdict on November 19 in the trial of Xolile Mngeni, charged with killing 28-year-old Anni Dewani. Prosecutors say that Mngeni was hired by Dewani’s British husband to carry out the November 2010 killing, which was made to look like a carjacking.

Henney described the case against Mngeni as “overwhelming” and said an “avalanche of evidence” came crashing down on his claims of innocence.

EMPLOYMENT LAW

W.VA. JURY RULES FOR LESBIAN OVER LOST JOB OFFER

CHARLESTON, W.Va. (AP) — A jury in Kanawha County has concluded that members of a Charleston afterschool program rescinded a job offer to a woman after they discovered she is a lesbian.

The jurors reached their verdict on the night of November 16 after a two-week trial, according to media reports. They concluded three members of the Bob Burdette Center withdrew the center’s executive director’s job to Jessica Hudson, 34, after a staffer found out through social media she was in a relationship with a woman.

While the jury found that the three board members discriminated against Hudson, it did not award any money.

STEAKHOUSE SETTLES OVER MALE-ON-MALE HARASSMENT

An upscale New York City steakhouse has agreed to pay $600,000 to settle charges by the U.S. Equal Employment Opportunity Commission that managers sexually harassed 22 male waiters over an almost eight-year period.

The EEOC’s case against Sparks Steak House highlights a growing EEOC trend — going after instances of male-on-male sexual harassment.

According to the EEOC complaint against Sparks, which was filed in U.S. District Court for the Southern District of New York in 2009, misconduct by managers included “regularly grabbing or pinching male employees’ buttocks and/or pushing their penises against employees’ buttocks and attempting to grab the genital areas of male employees.”

According to the EEOC, many of the waiters complained, but the behavior did not stop.

TORTS

JUDGE APPROVES $123M SETTLEMENT IN ABUSE CASE

WILMINGTON, Del. — Delaware Superior Court Judge Joseph Slights III has approved a $123.15 million settlement between Beebe Medical Center and victims of serial sexual abuser and former pediatrician Earl Bradley.

In an opinion issued November 19, Slights approved an agreement announced in mid-October. The decision releases the hospital from negligence claims by Bradley’s victims and will enable both sides to avoid costly litigation. Bradley’s child victims have until December 14 to join the class. Under the settlement, the victims will be divided into five categories based on the nature of the harm the child has suffered and his or her need for treatment.

Former Philadelphia Court of Common Pleas Judge Thomas Rutter will administer the trust under the supervision of the Delaware Court of Chancery.

Slights also awarded attorney fees of roughly $28 million, or roughly 22.5 percent of the total settlement, to the lawyers who represented Bradley’s victims, according to his opinion.

JUDGE TOSSES SUIT BY FORMER HOMESTEAD, FLA., OFFICIAL

MIAMI — A judge who said he had no sympathy for perjurers has dismissed a lawsuit filed against Homestead, Fla., by its former deputy city manager.

“The court is well aware that justice is ordinarily served by letting a jury decide issues of a case. However, where a party ignores her sacred oath to tell the truth and changes her testimony to suit her changing legal position and moreover acknowledges in deposition a willingness to do so, she forfeits her right to use these proceedings to seek relief from the court,” Miami-Dade Circuit Judge Jorge Cueto ruled in a final judgment striking the pleadings.

Johanna Faddis sued the city, six members of its council and a city-hired investigator in September 2011, alleging invasion of privacy and negligence after cellphone text messages between her and City Manager Mike Shehadeh were made public.

KROGER MUST PAY $487K FOR WOMAN’S FALL IN STORE

ATLANTA — A Cobb County, Ga., jury returned a $750,000 verdict this month this month against The Kroger Co. for a woman who slipped on pineapple ice cream topping near the freezer section of a Mableton grocery store, but reduced the award by 35 percent due to the negligence of the unnamed customer who dropped the jar.

The net judgment for plaintiff Mary Stanfield is $487,500. She’s a grandmother and a widow in her late 60s whose back injury from the fall required fusion surgery with incisions in front and in back of the destroyed discs and $180,000 in medical bills, according to her lawyer.