A Collaboration with the University of Pittsburgh

Corporations and securities brief ~ Former Healthsouth president indicted

[JURIST] Leading Thursday's corporations and securities law news, prosecutors have announced that former HealthSouth Corp. [corporate website] president and director James P. Bennett has been indicted on charges of fraud, conspiracy, insider trading, money laundering and lying to the FBI in connection with a scheme to sell company stock worth $17.4 million. The charges come during former HealthSouth CEO Richard Scrushy's fraud trial [indictment, PDF]. Testimony during Scrushy's trial indicates Bennett knew of the massive fraud at the rehabilitation giant. AP has more.

In other news...

  • MCI Inc. [corporate website], which has received a $6.3 billion takeover bid from Qwest Communications International Inc. [corporate website], has now held talks with Verizon Communications Inc. [corporate website] about buying the company. MCI has been looking for a buyer since emerging from bankruptcy last year. Interest in the company has intensified now that SBC Communications Inc. [corporate website] has acquired AT&T Corp. [corporate website] for $16 billion. Reuters has more.

  • The US House Financial Services subcommittee on Capital Markets, Insurance and Government Sponsored Enterprises [official website] will hold a hearing on accounting problems at mortgage funder Fannie Mae [corporate website] next week. The subcommittee is expected to hear testimony from the SEC's chief accountant regarding Fannie Mae's massive accounting errors. Read the subcommittee's press release. Reuters has more.

  • The Royal Dutch/Shell Group [corporate website] announced Thursday that it is cutting oil reserves for the fifth time in just over a year. The company is reducing its proven energy reserves by 1.4 billion barrels for 2003. The Shell press release includes key financial data and a video interview with Chief Executive Jeroen van der Veer. AP has more.

  • Italian auto workers' unions have called a nationwide strike over concerns at
    the automotive division at Fiat [corporate website]. This comes one day after Fiat failed to settle with GM over an option to buy Fiat Auto. AP has more.

  • The SEC has asked Kinross Gold Corp. [corporate website], Canada's third-largest gold producer, to seek an independent valuation of acquisitions it made in 2003. Kinross announced the request may reduce assets by $918 million. Read the Kinross press release [PDF]. Bloomberg has more.

  • As previously reported on JURIST's Paper Chase, US District Court Judge Denise Cotes has thrown out a part of the $54 million settlement by 10 former WorldCom directors to compensate investors who lost billions of dollars. According to the order [PDF], Judge Cotes indicated the settlement, which had the directors contributing $18 million of their own money, would harm future efforts to collect payments from other defendants. Read a website detailing WorldCom litigation still pending in court. USAToday has more.

  • The California Supreme Court [official website] have agreed on Wednesday to review a 2nd District Court of Appeal decision in which Genentech Inc. [corporate website] lost a $500 million judgment, including $200 million in punitive damages, for a failure to pay licensing fees to a Southern California medical research center. Read the entire California Supreme Court order list [PDF]. The case is City of Hope National Medical Center v. Genentech Inc. The San Francisco Chronicle has more.

  • Nortel Networks [corporate website] is suing former CEO Frank Dunn, former chief financial officer Douglas Beatty and former controller Michael Gollogly, to get back almost $13 million worth of bonuses. CBC News has more.

  • The SEC [official website] announced that it will allow companies to submit their reports in a new electronic format that makes it easier to compare data. Read the SEC press release. AP has more.

  • Hollywood Entertainment Corp. [corporate website] founder Mark Wattles has resigned as its chief executive and chairman a day after Blockbuster Inc. [corporate website] announced a hostile bid of nearly $1 billion its movie rental rival. Hollywood agreed to be acquired [Hollywood press release] by Movie Gallery Inc. before Blockbuster's announcement. Analysts indicate Blockbuster will have difficulty winning approval for the takeover because of antitrust concerns. Read the Hollywood Entertainment press release announcing the resignation. Read more about the Blockbuster offer. AP has more.

  • Massachusetts secretary of state William Galvin [official website] is awaiting information from Gillette [corporate website] on payments chief executive Jim Kilts and other top executives will receive under the merger deal with Procter & Gamble [corporate website]. Read more about Procter & Gamble's acquisition of Gillette. The Financial Times has more.
Click for previous corporations and securities law news.

About Paper Chase

Paper Chase is JURIST's real-time legal news service, powered by a team of 30 law student reporters and editors led by law professor Bernard Hibbitts at the University of Pittsburgh School of Law. As an educational service, Paper Chase is dedicated to presenting important legal news and materials rapidly, objectively and intelligibly in an accessible format.

© Copyright JURIST Legal News and Research Services, Inc., 2013.