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Bush Budget Sets Stage For Battle on Tax Cuts
Tax |
2008/02/05 06:28
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President Bush's tax-and-spending blueprint calls for making 2001 and 2003 tax cuts permanent but assumes that tens of millions of taxpayers eventually will be paying higher alternative minimum tax rates. Those two assumptions could affect some $1 trillion in revenues over the next five years. The budget outline presented Monday envisions the loss of $635 billion in revenues over the next five years if Congress makes permanent those tax cuts involving capital gains, the repeal of the estate tax, breaks for married couples and those with children and individual income tax rates. Over 10 years the tax cuts — many set to expire in 2010 if Congress does not act — will cost $2 trillion. The Congressional Budget Office estimates another $444 billion in interest payments to service that debt over 10 years. The Democrats who now control Congress show no inclination to extend the tax cuts, arguing that they disproportionately help the rich and the money can be better spent to improve health care or reduce the federal deficit. The president's proposals to cut out wasteful spending "are dwarfed by the more than $700 billion that would be added to the deficit over the next five years from extending his tax cuts that largely benefit the wealthiest Americans," said House Majority Leader Steny Hoyer, D-Md. Republicans say that failure to extend the tax cuts would result in 116 million taxpayers seeing an average tax increase of $1,800. "We recognize that in order for this economy to grow, it's important to make the tax relief permanent," Bush said. The budget proposal also records some $70 billion in lost revenue this year and next under the assumption that Congress will take steps to block the alternative minimum tax from hitting more middle-class taxpayers. The AMT was enacted 40 years ago to ensure that a small number of very wealthy people can't avoid paying taxes. But the tax was never adjusted for inflation, and Congress has been forced to take stopgap measures every year to shield middle-income-level people from the tax. Legislation passed by Congress in late December kept those affected by the AMT from growing from 4 million in 2006 to 25 million in the 2007 tax year. House Ways and Means Committee Chairman Charles Rangel, D-N.Y., has estimated that it will cost $800 billion to repeal the AMT. Without that politically difficult action, Congress will have to continue to enact yearly fixes, at a cost of $313 billion over the next five years, the Congressional Budget Office says. The budget proposal also sees revenue losses of nearly $100 billion over five years from health insurance tax incentives promoted by the White House but opposed by Democrats seeing them as threats to employer-based insurance plans. |
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Chrysler, Plastech may have interim deal
Bankruptcy |
2008/02/05 05:04
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Negotiators for Chrysler LLC and a troubled parts supplier were trying to end a dispute that shut down or canceled a shift at five Chrysler plants and threatened to idle all 14 of the automaker's assembly facilities. Plastech Engineered Products Inc., which supplies Chrysler with about 500 plastic interior, exterior and powertrain components for nearly all of its vehicles, filed for Chapter 11 bankruptcy protection on Friday after the automaker told the supplier it was seeking other sources for the parts. The dispute cut the flow of parts from the Dearborn-based Plastech to Chrysler, and the company on Monday was forced to shut down four factories and cut a shift at a fifth. Chrysler sued Plastech in U.S. Bankruptcy Court in Detroit, and the both sides were in court Monday but were unable to resolve the matter, a person briefed on the negotiations said. Talks went into the evening and recessed until Tuesday morning, when further court action was scheduled, said the person, who requested anonymity because the talks are confidential. Chrysler is seeking an immediate resumption of parts production as well as the tools to make the parts, which it owns. Without the tools, Chrysler said in its lawsuit that it eventually will have to cease production of vehicles systemwide. The automaker terminated its contracts with Plastech on Friday. Plastech's contracts with the automaker were worth about $200 million, Plastech spokesman Kelvin Scott said. Plastech does about $1.3 billion in total business. "We are continuing to supply parts to our other customers, including Ford and GM," he said. One industry analyst said the production slowdown may be short because Chrysler should have little trouble finding new companies to replace Plastech. Faced with stiff competition and a shrinking market, many suppliers are willing to take on work if it means getting contracts, said Craig Fitzgerald, a partner in Plante & Moran's Strategy and Global Services Group. In its lawsuit filed Friday, Chrysler claimed Plastech no longer can meet its production demands. On Monday Chrysler temporarily closed the four assembly plants and shut down one shift at another, affecting about 10,500 workers. Plants closed are in Sterling Heights, Mich.; Newark, Del.; Toledo, Ohio; and Belvidere, Ill., while the second shift at Toledo Supplier Park in Toledo was dismissed, the company said. Of the vehicles made at the affected factories, the Dodge Durango sport utility vehicle had the lowest supply in January, at 46 days, according to Wards AutoInfoBank. The largest supply is the Jeep Wrangler, at 117 days. Although Chrysler has an inventory of vehicles made by the plants, it will not benefit from any plant closures, said Aaron Bragman, an auto industry analyst for the consulting company Global Insight. "When a plant is idle, you're not making any money. You've got people standing around, so it's just a cost," he said. Auto companies want enough inventory to have a buffer and don't want it to become depleted, Bragman said. Chrysler has reduced its inventory substantially since it became bloated last year, he said. Even if Chrysler lays off workers, they would still get most of their pay under their contract with the United Auto Workers. Overall, the company had 413,874 vehicles in its inventory last month, a 75-day supply, according to Ward's. The shutdowns are having a ripple effect as auto parts maker Dana Corp. canceled Monday night's second-shift at its modules plant in Toledo. About 150 people work at the plant, which supplies drivetrain parts for Chrysler's Toledo Jeep plant. Employees at the Sterling Heights stamping plant were sent home early Friday night and after four hours of work Monday, union steward Russell Phillips said. "We have no extra stock," said Phillips, who adds that Chrysler works on a "just-in-time" policy for parts delivery. "Most of (the workers) are saying 'this is what they get for not wanting to keep stock in the house,'" Phillips said. Chrysler employees will be notified of return-to-work schedules from plant officials or through local media, the automaker said. Plastech has 36 facilities and 7,600 employees in the United States and Canada. Engine covers, grill panels, moldings, metal stampings, door panels, floor consoles and safety restraint system components are some of the parts Plastech supplies to Chrysler, Ford Motor Co., General Motors Corp. and Toyota Motor Corp., according to the company's Web site. Ford was still getting parts from Plastech and was unaffected by the dispute, Ford President of the Americas Mark Fields told reporters Monday night. Chrysler's work shutdown should last no more than a week or two, Fitzgerald said. "I think they will not have any problems filling the void," he said. "There is a lot of excess capacity. Chrysler would do everything it can to get up and running." |
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Kan. Court Blocks Abortion Grand Jury
Law Center |
2008/02/05 03:07
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The Kansas Supreme Court on Tuesday temporarily blocked a grand jury from obtaining patient records from a physician who is one of the nation's few late-term abortion providers. The grand jury is investigating whether Dr. George Tiller has broken Kansas laws restricting abortion, as many abortion opponents allege. The grand jury subpoenaed the medical files of about 2,000 women, including some who decided against having abortions. Abortion opponents forced Sedgwick County to convene the grand jury by submitting petitions, the second such citizen investigation since 2006 of Tiller, who has long been at the center of the nation's abortion battle. His clinic was bombed in 1985, and eight years later a woman shot him in both arms. Tiller's attorneys asked the Supreme Court to quash the grand jury's subpoenas, and the court agreed to block their enforcement until it considers the issue. Chief Justice Kay McFarland said Tiller's challenge raised "significant issues" about patients' privacy and a grand jury's power to subpoena records. The Sedgwick County prosecutor presenting evidence to the grand jury had objected to the attempts to block the subpoenas, noting that the grand jury's term is limited, but McFarland said the grand jury's term can be extended. The court set a Feb. 11 deadline for legal arguments in favor of allowing the subpoenas. Tiller's attorneys then have until Feb. 25 to respond. Mary Kay Culp, executive director of Kansans for Life, the state's largest anti-abortion group, called the high court's decision "extremely disappointing." "There is no way to determine if the reasons for these late abortions were done within the narrow legal criteria without looking at the records themselves," she said. "His lawyers say they are worried about women's privacy. They are worried about protecting Dr. Tiller." Tiller's attorneys, Dan Monnat and Lee Thompson, did not immediately return calls seeking comment Tuesday. The grand jury is seeking records of all women who visited Tiller's clinic between July 2003 and last month and were at least 22 weeks pregnant at the time. The grand jury also subpoenaed information about current and former employees and referring physicians. The edited patient records would not have the women's names, but they would have patient identification numbers. Tiller's attorneys claimed in court last week that in an earlier investigation, former Attorney General Phill Kline was able to track down patients' names using the identifying numbers on patients' files. A spokesman for Kline, who is now Johnson County district attorney, denied that any patients had ever been identified. Kline eventually filed 30 misdemeanor charges against Tiller before leaving office last year, only to see the case dismissed for jurisdictional reasons. |
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SEC to review its Qwest lawsuit
Securities |
2008/02/05 02:13
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Federal regulators agreed Monday to review and perhaps streamline their civil fraud lawsuit against former Qwest executives so the allegations would not involve the company's secret business dealings with clandestine government agencies. During a federal court hearing, Securities and Exchange Commission attorney Polly Atkinson said the bulk of the charges against former Chief Executive Officer Joe Nacchio and four others rely on historical data, not prospective government contracts. However, she agreed to review the lawsuit at U.S. Magistrate Craig Shaffer's request. Shaffer gave the SEC 30 days for the review. The judge's comments came as he considered a request from the Justice Department to prohibit the release of material related to secret Qwest negotiations, arguing that it would jeopardize national security. The SEC has said the defendants' actions allowed Denver-based Qwest Communications International Inc. to improperly report approximately $3 billion in revenue that helped clear the way for its 2000 acquisition of the regional phone company U S West. The revenue was later restated. The classified government material at issue is based on Nacchio's claims that Qwest would be in line for lucrative business contracts that gave him hope for the telecom's financial future. Federal law restricts the public release of classified information. Nacchio's attorneys never brought up the classified information during his criminal trial last year when he was convicted of insider trading. Nacchio was convicted of 19 counts of insider trading relating to $52 million worth of stock sales in 2001. He was sentenced in July to six years in prison but remains free on appeal. The SEC case mirrors many of the issues that arose during Nacchio's criminal trial, charging the five men with concealing the amount of money from one-time sales of network capacity that was used to meet revenue targets. Besides Nacchio, the defendants are former finance chief Robert Woodruff, former President Afshin Mohebbi and former accountants James Kozlowski and Frank T. Noyes. |
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Jailhouse Lawyer Gets a Hearing
Court Watch |
2008/02/05 02:09
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While other prisoners are lifting weights or playing basketball, Michael Ray is working 40 hours a week, his head buried in legal texts and journals. Over the years, the jailhouse lawyer has helped dozens of fellow inmates file appeals, sometimes with success. But recently Ray secured an achievement rarely seen by even the most experienced of attorneys on the outside: The U.S. Supreme Court agreed to hear arguments in one of his cases. Legal experts estimate the high court accepts less than 1 percent of the thousands of cases it receives each year. The court's action was even more extraordinary in this instance, because the appeal was drawn up by a prisoner who earns 29 cents an hour and does not even have a college degree, much less a law school education. "This is basically a once-in-a-lifetime for a good criminal defense attorney, so you can imagine I'm on cloud nine, with my background," the 42-year-old Ray said with a laugh during a recent phone interview from a federal prison in Estill, about 100 miles south of Columbia. He will not argue the case himself when it comes up in March. Only those admitted to the bar of the U.S. Supreme Court can do that. He will not even be allowed out of prison to attend the hearing. Ray has been behind bars for much of his adult life for various fraud schemes. A former paralegal on the outside, he is nearing the end of a six-year sentence handed down after he pleaded guilty to various offenses, including passing a bad check for about $285,000 as part of a real estate scheme in Myrtle Beach. "I just have a real problem with financial institutions, and I'm a self-proclaimed addicted gambler," he said. As a prison law clerk, Ray files petitions and draws up motions for inmates who ask for his help. He keeps current on legal issues by reading professional journals and has joined several legal associations, including the American Bar Association. "They're probably not super proud to have me as a member, but I do pay my dues every year," said Ray, who is also trying to complete his undergraduate degree through a correspondence course. |
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Sallie Mae slapped with class-action suit
Class Action |
2008/02/05 01:10
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Sallie Mae, which a week ago obtained new financing and ended its court battle over a failed $25 billion buyout of the student lender, is now the subject of a class-action suit. Law firm Coughlin Stoia Geller Rudman & Robbins LLP said it filed a suit against Reston, Va.-based Sallie Mae in the U.S. District Court for the Southern District of New York on behalf of purchasers of Sallie Mae common stock between Jan. 18, 2007, and Jan. 3, 2008. The firm said the complaint charges Sallie Mae and certain officers and directors with violations of the Securities Exchange Act of 1934. The complaint alleges that the defendants issued materially false and misleading statements regarding Sallie Mae's business and financial results. We believe the complaint is meritless," said Tom Joyce, a spokesman for Sallie Mae, formally known as SLM Corp.Sallie Mae said on Jan. 28 that the lawsuit it filed in October against four proposed acquirers of the company would be dismissed, as would all counterclaims, and the merger agreement was terminated. In conjunction with that action, Sallie Mae would receive commitments for $31 billion of 364-day financing from a group of banks led by Charlotte, N.C.-based Bank of America Corp. (NYSE: BAC), New York-based JPMorgan Chase & Co.and others. Last year the investors backed away from the merger, pointing to the credit crunch that has made it more difficult to land money to finance large deals and a new federal law that slashes subsidies to student lenders. Sallie Mae recently cut 3 percent of its work force and warned that more layoffs are likely to occur as it tries to cut costs.
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Class Action Filed Against American Dental Partners, Inc.
Class Action |
2008/02/05 01:09
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The following statement was issued today by the law firm of Schiffrin Barroway Topaz & Kessler, LLP: Notice is hereby given that a class action lawsuit was filed in the United States District Court for the District of Massachusetts on behalf of all purchasers of securities of American Dental Partners, Inc. ("ADPI" or the "Company") between August 10 2005 through December 13, 2007, inclusive (the "Class Period"). If you wish to discuss this action or have any questions concerning this notice or your rights or interests with respect to these matters, please contact Schiffrin Barroway Topaz & Kessler, LLP (Darren J. Check, Esq. or Richard A. Maniskas, Esq.) toll free at 1-888-299-7706 or 1-610-667-7706, or via e-mail at info@sbtklaw.com. The Complaint charges ADPI and certain of its officers and directors with violations of the Securities Exchange Act of 1934. ADPI is a business partner and provider of services to dental group practices. More specifically, the Complaint alleges that the Company failed to disclose and misrepresented the following material adverse facts which were known to defendants or recklessly disregarded by them: (1) that the Company engaged in tortious and unlawful conduct towards Park Dental Group ("PDG"); (2) that as a result of this conduct, the Company booked a large portion of earnings and revenue which materially inflated financial figures; (3) that the Company's financial statements were not prepared in accordance with Generally Accepted Accounting Principles; (4) that the Company lacked adequate internal and financial controls; and (5) that, as a result of the foregoing, the Company's financial statements were materially false and misleading at all relevant times. Beginning on January 1, 1999, ADPI subsidiary PDHC, Ltd. ("PDHC") entered into a Service Agreement (the "Service Agreement") with PDG. The Service Agreement was amended January 1, 2001 and again on August 10, 2005. According to the Company's financial statements, the relationship with PDG accounted for approximately 30% of the Company's consolidated net revenue between 2004 and 2006. No other customer of ADPI accounted for more than 10% of the Company's consolidated net revenue. On December 12, 2007, investors were shocked to learn that a judgment had been awarded in favor of PDG, against PDHC and ADPI. The jury in the case awarded PDG $88,290,647 in damages, broken down as follows: $9,413,397 in compensatory damages for breach of the Service Agreement; $11,500,000 for breach of implied covenants of good faith and fair dealing; $200,000 for breach of fiduciary duty; $67,000,000 for tortious interference with contract or prospective advantage; and $177,250 for defamation. Upon the release of this news, the Company's shares declined $5.36 per share, or 27.21 percent, to close on December 12, 2007 at $14.34 per share, on unusually heavy trading volume. The following day, as the public continued to learn of the December 12, 2007 judgment against ADPI, investors were further shocked and appalled to learn that due to ADPI's egregious conduct and actions, the jury had awarded PDG $42,250,000 in punitive damages. Upon the release of this news, the Company's shares declined $9.72 per share, or 67.78 percent, to close on December 13, 2007 at $4.62 per share, on unusually heavy trading volume. Plaintiff seeks to recover damages on behalf of class members and is represented by the law firm of Schiffrin Barroway Topaz & Kessler which prosecutes class actions in both state and federal courts throughout the country. Schiffrin Barroway Topaz & Kessler is a driving force behind corporate governance reform, and has recovered billions of dollars on behalf of institutional and individual investors from the United States and around the world. For more information about Schiffrin Barroway Topaz & Kessler or to sign up to participate in this action online, please visit www.sbtklaw.com If you are a member of the class described above, you may, not later than March 31, 2008, move the Court to serve as lead plaintiff of the class, if you so choose. A lead plaintiff is a representative party that acts on behalf of other class members in directing the litigation. In order to be appointed lead plaintiff, the Court must determine that the class member's claim is typical of the claims of other class members, and that the class member will adequately represent the class. Your ability to share in any recovery is not, however, affected by the decision whether or not to serve as a lead plaintiff. Any member of the purported class may move the court to serve as lead plaintiff through counsel of their choice, or may choose to do nothing and remain an absent class member. |
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Class action or a representative action is a form of lawsuit in which a large group of people collectively bring a claim to court and/or in which a class of defendants is being sued. This form of collective lawsuit originated in the United States and is still predominantly a U.S. phenomenon, at least the U.S. variant of it. In the United States federal courts, class actions are governed by Federal Rules of Civil Procedure Rule. Since 1938, many states have adopted rules similar to the FRCP. However, some states like California have civil procedure systems which deviate significantly from the federal rules; the California Codes provide for four separate types of class actions. As a result, there are two separate treatises devoted solely to the complex topic of California class actions. Some states, such as Virginia, do not provide for any class actions, while others, such as New York, limit the types of claims that may be brought as class actions. They can construct your law firm a brand new website, lawyer website templates and help you redesign your existing law firm site to secure your place in the internet. |
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