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Facebook appraisal pegs company's value at $3.7B
Venture Business News | 2009/02/12 08:44
Facebook Inc. quickly concluded it wasn't worth anywhere near the $15 billion market value implied in a 2007 investment made by Microsoft Corp., according to confidential information obtained Wednesday from court documents.


In a transcript of a June court hearing that was closed to the public, lawyers arguing over a legal settlement revealed Facebook's own appraisal had priced its privately held stock at $8.88 per share, giving it a market value of about $3.7 billion.

The Palo Alto-based company relied on the appraisal to value employee stock options fairly and avert possible tax problems.

Facebook, which runs the Internet's largest social network, made the assessment after striking an October 2007 deal with Redmond, Wash.-based Microsoft. As part of a broader advertising partnership with Microsoft, Facebook agreed to sell a 1.6 percent stake to the software maker for $240 million.

The Microsoft investment implied Facebook's stock was worth $35.90 per share — a figure that was relied upon in the settlement of a lawsuit that accused the company's founder, Mark Zuckerberg, of stealing the idea for his online hangout from three former classmates who started another social network called ConnectU.

Facebook spokesman Barry Schnitt declined to comment on any of the figures obtained from the court documents. Microsoft had no immediate comment.

In last June's court hearing, Facebook's lawyers argued the company's appraisal of its common stock couldn't be held up as an apples-to-apples comparison with the Microsoft investment because the software maker bought Series D preferred stock. Microsoft also had an incentive to pay a premium for Facebook's stock because it wanted to deepen its ties to the company's popular Web site, whose worldwide audience of 150 million people could eventually attract billions of dollars in advertising.

Analysts believe Facebook generated somewhere between $250 million and $300 million in revenue last year.

Lawyers opposing Facebook said the company cited the $35.90 per share figure in the settlement negotiations.



Court says measles vaccine not to blame for autism
Court Watch | 2009/02/12 08:43
A special vaccine court ruled against parents with autistic children Thursday, saying that vaccines are not to blame for their children's neurological disorder.


The judges in the cases said the evidence was overwhelmingly contrary to the parents' claims — and backed years of science that found no risk.

"It was abundantly clear that petitioners' theories of causation were speculative and unpersuasive," the court concluded in one of a trio of cases ruled on Thursday.

The ruling, which was anxiously awaited by health authorities, was a blow to families who have filed more than 5,000 claims for compensation through the government's Vaccine Injury Compensation Program. The claims are reviewed by special masters serving on the U.S. Court of Claims.

To win, the families' attorneys had to show that it was more likely than not that the autism symptoms in the children were directly related to a combination of the measles-mumps-rubella shots and other shots that at the time carried a mercury-containing preservative called thimerosal.

But the court concluded that "the weight of scientific research and authority" was "simply more persuasive on nearly every point in contention."

The court still has to rule on separate claims from other families who contend that rather than a specific vaccine combination, the lone culprit could be thimserosal, a preservative that is no longer in most routine children's vaccines. But in Thursday's rulings, the court may have sent a signal on those cases, too:

"The petitioners have failed to demonstrate that thimerosal-containing vaccines can contribute to causing immune dysfunction," a judge wrote about one theory that the families proposed to explain how autism might be linked.



Fla. executes man for killing Tampa teen in 1983
Criminal Law | 2009/02/12 04:44
A Florida rapist convicted of murdering his girlfriend's teenage daughter more than 25 years ago has been executed.


Wayne Tompkins was pronounced dead at 6:32 p.m. Wednesday after he failed to get courts to listen to his claims of innocence. He was put to death by lethal injection for the murder of 15-year-old Lisa DeCarr, who disappeared from the Tampa home she shared with Tompkins and her mother on March 24, 1983.

Her mom and others thought she had run away, but her body was found a year later under the home's porch. She had been strangled with the belt of her pink bathrobe.

Despite a flurry of last-minute court appeals, Tompkins' attorneys were unable to get a court to issue a stay so they could perform more DNA testing.



Lawyer fatally shot outside suburban Phila. office
Breaking Legal News | 2009/02/12 02:45
A personal injury lawyer walking through a shopping center parking lot to his storefront office was shot in the back of the head Wednesday by an unknown assailant who fled in a minivan, police said.


The shot that killed the lawyer was fired at point-blank range shortly after 9 a.m. Wednesday, Northampton Township Police Chief Barry Pilla said.

The victim worked at Terry D. Goldberg & Associates. Police did not immediately release his name because not all of his family had been notified. He died at St. Mary Medical Center in Langhorne.

No arrests had been made as of early Wednesday evening and no motive was known. Police are seeking the public's help, Pilla said.

"We're specifically interested in anyone that may have been traveling north or south on Buck Road in the vicinity of the scene between 8 o'clock, 7 o'clock in the morning until 9, 9:15," Pilla said.

Police plan to stop motorists in the area Thursday morning in hopes of finding someone with information, Pilla said.

Police stopped someone driving a vehicle similar to the one the gunman fled in and questioned him, but determined later Wednesday that that person was not the gunman.



Federal regulator urges foreclosure halt
Political and Legal | 2009/02/11 11:19
A federal regulator on Wednesday urged more than 800 thrift institutions to suspend all foreclosures while the Obama administration develops plans to keep borrowers in their homes.


John Reich, director of the Office of Thrift Supervision, said that by doing so, thrifts "would be supporting the national imperative to combat the economic crisis." But cooperation with the request is voluntary.

The Obama administration plans to spend $50 billion to combat foreclosures of owner-occupied middle-class homes, but is divulging few details. An announcement of the administration's housing plans is expected in the coming weeks.

"We're urging them to do it, but we're not going to try to force anyone to comply," said William Ruberry, a spokesman for the thrift agency. "We thought it was reasonable -- because the details (of the government's plans) are expected to be imminent."

Thrifts differ from banks in that, by law, they must have at least 65 percent of their lending in mortgages and other consumer loans -- making them particularly vulnerable to the housing downturn.

Some of the largest thrifts have collapsed over the past year. The failure of Seattle-based Washington Mutual Inc. in September was the largest bank collapse in U.S. history. IndyMac Bank, a Pasadena, Calif.-based thrift, failed last July in a prelude to the broader financial crisis that erupted in September.

The institutions regulated by the Office of Thrift Supervision range in size from small community banks to big institutions like ING Bank, part of Dutch financial giant ING Groep NV.

Thrifts are being closely examined by federal inspectors for signs of heavy exposure to declining markets, or troubled areas such as construction and real estate loans.

Twenty-five U.S. banks failed last year, far more than the previous five years combined, and nine banks have failed so far this year. It's expected that many more banks won't survive this year amid the pressures of tumbling home prices, rising mortgage foreclosures and tighter credit. Some may have to merge with other institutions.



Judge weighs motion in Dow litigation
Litigation | 2009/02/11 11:18
Attorneys for Dow Chemical have asked a Delaware judge to disqualify an opposing law firm in a dispute over whether Dow should be forced to complete a proposed $15 billion buyout of specialty chemical maker Rohm & Haas.

Dow attorney David Bernick argued Wednesday that the law firm of Wachtell, Lipton, Rosen and Katz has an ethical conflict in representing Rohm & Haas because it has advised Dow in the past on key strategic issues and has a continuing relationship with the Michigan-based chemical giant.

But Wachtell attorney Marc Wolinsky said Dow cannot prove a continuing relationship with his law firm, and that any confidential information it might have received from Dow in the past would not give Philadelphia-based Rohm & Haas a material advantage in the current litigation.

Wolinsky also said Dow has known since June 2008 that Wachtell Lipton was representing Rohm & Haas, and that Dow has waited too long to object.

Chancellor William Chandler III told attorneys that we would rule on the motion for disqualification by the close of business Wednesday.

Dow has said that it cannot complete the buyout as planned because of global economic conditions and the decision by a state-owned Kuwaiti petrochemical firm to pull out of a joint venture that would have provided Dow with several billion dollars, some of which would have been used to acquire Rohm & Haas.

A trial to determine whether Dow should be forced to complete the acquisition using a bridge loan or other financing scheme is set to begin March 9.



Calif. inmate release prompts public safety debate
Breaking Legal News | 2009/02/11 08:54
Without a U.S. Supreme Court reprieve, California will have to free roughly a third of its prison inmates in a few years, and how that can be done safely is still hotly debated.


Corrections officials said Tuesday they are struggling with their response to a tentative federal court ruling this week that the state must remove as many as 57,000 inmates over the next two or three years.

The state's 33 adult prisons now hold about 158,000 inmates. But the judges said overcrowding is so severe it unconstitutionally compromises medical care of inmates, and releasing prisoners is the only solution.

"We are just now beginning to have discussions (about) who these types of inmates would be. Then, how do we get to that number?" said Matthew Cate, secretary of the state Department of Corrections and Rehabilitation.

The department has no contingency plan, he said, other than appealing to the U.S. Supreme Court once the ruling becomes final.

The judges said their ruling does not amount to throwing open the cell doors.



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