From M-16s to the F.R.C.P. : The 11th Circuit's USERRA Blunder

by Collin Delaney October 26 2006, 16:12
I: Introduction

On June 19, 1879, General William Sherman famously declared that war is hell. [1]. It is undeniable that war demands great sacrifices from those who serve. In 1994, Congress sought to mitigate the depth of such sacrifices through the enactment of the Uniformed Services Employment and Reemployment Rights Act (“USERRA”). The USERRA’s purpose is two fold: prevent employment discrimination against those who have served in the military and secure the reemployment of military servicepersons. [2].

The 11th Circuit erred in its interpretation of the USERRA in deciding the matter of Coffman v. Chugach. [3]. The ultimate holding was correct in light of the recognition of the plaintiff’s failure to establish a prima facie case. Despite this, the court’s method of arriving at its conclusion failed to establish an acceptable standard for future courts to follow. [More]



Banks Cheating Workers Out of Overtime Pay Are In Trouble

by Tara Cunningham October 26 2006, 15:08

There is a common practice among banks to classify their brokers in such a way that makes them ineligible to receive overtime pay, and now their brokers are fighting back to receive the pay that they feel is rightfully theirs. Morgan Stanley, Citibank, Wachovia, and Bear Steams have all been sued for failing to pay overtime to eligible employees. The U.S. Department of Labor is now chiming in to say which employees must be paid overtime, and it is not looking good for the banks. [More]

Power Auction: Rates in Illinois to Rise

by Patrick Clyder October 24 2006, 09:06
The cost of "running" your business, not to mention heating your home, in Illinois may change after the Illinois Commerce Department’s recent power auction. [1] Currently, power rates have been frozen since 1997, but the freeze will expire in 2007. [2] It is then that some people, including state legislators, feel power rates will increase and the results of the power auction will be felt. [3] The current statute governing power rates in Illinois is known as the Electric Service Customer Choice and Rate Relief Law of 1997. [4] In the next paragraphs this article will attempt to synthesize some of the information surrounding this topic by explaining the power auction, the extent of potential rate increases, and the potential for a continuation of the Rate Relief Act of 1997. [More]


China's New M&A Regulations

by David Lee October 18 2006, 02:50
I. Introduction

The first piece in this series (A Warning to Foreign Companies Entering "Sensitive" U.S. Markets, in the September 6th, 2006 edition of this publication) discussed the attempts of foreign companies to enter "sensitive" areas of the US economy, focusing on how the US government derailed the purchase of US companies by foreign entities. [1] This piece will discuss the Chinese government's new regulations covering M&A transactions involving foreign investors purchases of Chinese companies will affect the M&A market and possible motivations behind the new legislation. [More]

Bank of America Settles Money Laundering Suit for $7.5 Million

by Mark Cassidy October 16 2006, 23:49
The Bank of America recently settled a money laundering suit brought by Manhattan District Attorney, Robert M. Morgenthau for $7.5 million, $6 million in penalties and $1.5 million in costs, ending an almost three year investigation conducted in coordination with foreign authorities. [1] District Attorney Morgenthau said that a series of transfers, totaling more than $3 billion, prompted the investigation because they possessed some of the ear-marks of terrorist financing, much of which comes from South America. [2] The transfers originated in offshore shell companies owned by illegal Brazilian money services and were routed through the Bank of America account of a Uruguayan money remitter. [3] Although officials do not know the identity of many of the recipients, District Attorney Morgenthau believes that some of the transferred funds went to Mideast terrorist organizations. [4] Under the terms of the settlement, Bank of America admitted that it failed to adequately asses the risk of some of its customers, agreed to cooperate with ongoing investigations, and to improve its anti-money laundering program. [5] Even so, Bank of America admitted no wrong, stating that it takes money-laundering seriously and that it never has knowingly done business with parties engaged in illegal activities. [6] The Bank of America investigation was part of an on-going anti-money laundering program that has traced almost $19 billion in illegally transferred funds, and recovered $19.5 million for the city and state. [7] District Attorney Morgenthau also announced that thirty four individuals and sixteen British Virgin Island companies, all of whom were involved with illegal transmissions of money from Brazil, had been indicted for violation of New York’s banking laws. [8] As Brazilian authorities are criminally prosecuting the defendants, in it is unlikely that District Attorney Morgenthau will prosecute them in the United States. [9] However, the indictments were necessary to freeze their illegally transmitted assets, which total $17.4 million. [10] [1] David Enrich & Chad Bray, Bank of America Settles NYC Probe, Business Week online, Sept. 27, 2006, [2], Bank of America Will Pay Millions To Settle Money Laundering Probe, Sept. 28, 2006, [3] Enrich & Bray, supra note 1. [4], supra note 2. [5] Id. [6] Enrich & Bray, supra note 1. [7], supra note 2. [8] Enrich & Bray, supra note 1. [9] Enrich & Bray, supra note 1. [10] Enrich & Bray, supra note 1.

Merck owes the IRS big bucks - for taking advantage of the international tax market?

by Lucy Kalnes October 14 2006, 02:01
I. Introduction

There are two things in life that are certain: death and taxes. Corporations have successfully cheated the former by achieving perpetual life. And, from their births, it seems like corporations have also been doing their darndest to avoid the latter. Offshore affiliates have become a popular corporate technique for avoiding income tax.[1] Recently, Merck has been investigated for putting its own unique spin on the traditional offshore affiliate. [More]



Real Estate Auctions: Is a Bidder Legally Bound?

by Alicia Filter October 11 2006, 15:52
Real estate auctions exist in many forms and are becoming increasing popular over the internet. Ebay alone boasts that 55,000 property have already been sold through eBay Real Estate. [1] There are significant benefits to using the internet to purchase property, since one can shop for real estate around the globe, pick a suitable property, and bid online from the comfort of one's home. [2] Traditional real estate auctions still exist, most commonly as government auction of seized property [3] or as bank auctions of foreclosed property. With the current estimate that one in three properties will be sold by auction by the year 2010, [4] one might wonder which, if any, of these auctions legally bind the bidder to purchase the property. [More]


Real Estate

A Salty Flavor to Your (Formerly) Land-Based Contracts: Norfolk Southern v. Kirby Two Years Later

by Christopher Minelli October 10 2006, 16:21
In 2004 the Supreme Court of the United States handed down a decision that changed the jurisdictional requirements of adjudicating a contract in admiralty. [1] This was a major development in an area of the law that is remarkably resistant to change because of the nature of shipping evolves little compared to other technology. These changes should have had a larger effect in legal circles, because now certain “mixed contracts” that fell in the grey area between admiralty and non-admiralty law were considered to be within admiralty jurisdiction entirely. [2] Now certain contracts for the carriage of goods that arrange for transportation over both land and water in a single contract can be adjudicated in certain instances that were impossible before. [3] Currently, a shipping container undergoing some catastrophic event in Nevada could be litigated in admiralty as long as the majority of its journey was made on navigable waterways or the high seas. This counter-intuitive principle deserves a closer look by business attorneys working in the transportation field because now more than ever it is possible that they will brush up against an ancient (and somewhat mystifying) area of law that most lawyers working away from the coastline would never before had encountered. It is a useful exercise for any lawyer in the field to examine exactly how the jurisdictional requirements for maritime contracts changed, what decisions have been made since, and exactly what it means to their legal practice. [More]

Going "Stealth": Executive Compensation in Chapter 11 After Dana

by Jillian McClelland October 10 2006, 00:13
A rose by any other name may still smell as sweet, but execs at Dana Corp. recently discovered that calling executive compensation by another name did not pass the smell test in court. S.D.N.Y. Bankruptcy Judge Burton Lifland recently denied Dana's proposed executive compensation package as contrary to the provisions of the Bankruptcy Code. [1] Nearly one year after BAPCPA, has the Dana case finally ushered in a new approach to evaluating executive compensation plans, as envisioned by Congress? [More]



Ford-GM Merger/Alliance Talks: Bigger is Not Necessarily Better

by Jennifer Kolton October 6 2006, 15:35
Automotive News recently reported that General Motors Corp. and Ford Motor Co. have discussed a possible merger or alliance.[1]  Neither company will comment on the talks [2], leading some followers to believe the reports are mere "speculation" and reflect "[n]ostalgia for the glory days of the American automobile industry."[3]  Nostalgia and speculation aside, the merger/alliance rumors are enough to incite the interests of industry followers and American car buyers as to the possible benefits of such a relationship.A merger would combine "two of the world's most recognized brands."[4]  The combined company would account for "an astounding 41 percent of the U.S. auto market."[5]  An alliance could force innovative thought and encourage novel business decisions, as it seems to some that "[t]he old school way of doing things at Ford and GM isn't working."[6]  If nothing else, a merger would combine name recognition and product lines.  However, the merger process would not be an easy ride for Ford and GM.The two auto giants would have to overcome significant hurdles to join forces.  For one, Ford and GM tout different management styles.[7]  Second, Ford and GM would have to lay aside their differences as competitors [8] and assume new roles as partners.  Third, assuming that Ford and GM can consolidate their competing products under one roof, they may face problems of brand loyalty [9] and may find themselves having to convince consumers who self-identify as a "Ford" or "GM" person that their former foe is now their friend.  Fourth, there would be little advantage to GM in the merger as the stronger company.[10]  Finally, the merged entity would face the task of defining which product lines and particular vehicles are worth saving and which do not benefit continuing operations.[11]While the possibility of a merger is intriguing in the sense that it could create an ultra-American automotive entity, the costs of such merger may outweigh the benefits.  Increased size would not necessarily bring success for Ford and GM, both of whom struggle with expensive non-operational plants, "thousands of union workers they have to pay even when they do not need them," and associated pension and salary costs.[12]  Additionally, a merger may not solve a key challenge facing both auto giants: building vehicles that consumers want to buy.[13]Rather than combine total operations to form the American automotive giant that is rumored to be, Ford and GM would be better off implementing an alliance in the form of partnerships [14] in smaller focused areas.  Such partnerships could improve vehicle design and production and benefit consumers in the market for an improved version of an American namesake.  One way Ford and GM could accomplish this objective is to co-develop "components that are not customer-centric, like car batteries."[15]  Although it would take significant time and testing to make work, Ford and GM could partner to create component parts that can be used in many if not all vehicles manufactured individually by the two companies.  While the average consumer may prefer his or her Ford F-150 pickup over GM’s Chevrolet Silverado, or vice-versa, the average consumer may not prefer either Ford or GM’s particular brand of batteries, brakes, spark plugs, shocks, springs, steering systems or vehicle frames.  Moreover, if Ford and GM were to combine component product operations, they could limit expenses by having less plants and workers than if the companies conducted base operations separately.  In essence, partnering to make component parts would solve at least part of the plant and employee expenses burdening each company while enabling both Ford and GM to continue manufacturing individual vehicle lines. Ford and GM could also research and develop jointly fuel-saving technologies.[16]  The companies could use their combined power to improve hybrid drive transmissions, fuel cell technology, flexible fuel vehicles, and clean diesel.[17]  This would be a win-win situation for both the American auto giants and consumers.  Given the increased costs commuting to work and shuttling kids to soccer practice, consumers want more fuel efficient vehicles.  If both Ford and GM developed fuel saving technologies, the companies could incorporate that technology into their respective product lines, build more attractive products, and capitalize on consumer interest, thereby increasing demand for such vehicles.  Again, by partnering on core aspects of vehicle operation and design, Ford and GM could derive mutual benefit yet still retain their unique product lines and customer brand loyalties. While a complete merger sounds provocative, at this point the talks cannot be referred to as more than unconfirmed speculation.  Even if Ford and GM confirm these rumors, a complete merger would not solve the present state of the respective companies’ problems.  Rather than combine underperforming product lines and enormous expenses, Ford and GM would be better off leaving their cars in separate parking lots rather than moving everything into one giant mess of a parking garage.  If Ford and GM combine forces in an alliance, that partnership should be aimed at promoting research and developing component parts that can be used in each company’s vehicles.  At the very least, consumers would benefit from having more advanced vehicles boasting improvements such as better fuel economy.  If Ford and GM collaborate on base components and technologies, each company could then incorporate the innovations into new models that would attract consumer interest and reinvigorate American automotive competition.     [1] Ford, GM Discussed Merger, Alliance - Report, ASSOCIATED PRESS, available at[2] Id.[3] Sean Lengell, Speculation, Mostly Idle, of a Ford-GM Merger, WASH. TIMES, Sept. 19, 2006 available at[4] Dan Arnall, Indecent Proposal?  What a Ford/GM Merger Could Mean, ABC NEWS, at[5] Id.[6] Roland Jones, Ford, GM Could Score Gains by Collaborating, MSNBC.COM, at[7] Lengell, supra note 3.[8] Id.[9] Id.[10] Id.[11] Arnall, supra note 4.[12] Id.[13] John W. Schoen, Ford, GM Race to Get Smaller, MSNBC.COM, at[14] See Revised Uniform Partnership Act §202(a) (defining “partnership” as an “association of two or more persons to carry on as co-owners a business for profit”).[15] Jones, supra note 6.[16] Id.[17] Id.

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