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Vonage Gets Another Black Eye
Business | 2007/09/26 09:00

For Vonage, things have gone from bad to worse. On Sept. 25, a jury found that Vonage infringed on Sprint Nextel's patents. It asked Vonage to pay $69.5 million in damages and a 5% royalty rate for future use of the patented technology. Sprint may also seek an injunction against Vonage; Vonage say it will appeal. So, what does this mean for Vonage? Basically, Vonage will need to find its way to break even faster now, as its cash has taken a major hit, and it can't afford to lose money for much longer.

Here're some back-of-the-envelope calculations. Vonage will have to pay some $69.5 billion in damages to Sprint. In addition, since spring, it's placed into escrow or issued a bond for some $90 million related to a patent-infringement case it lost to Verizon (a decision on an appeal is expected any day now). That adds up to $159.5 million. Plus, Vonage is obviously paying lots of legal fees. And Vonage is still losing money: It lost $34 million in the second quarter alone.

So, let's look at Vonage's cash. At the end of the second quarter, the company's cash and equivalents totaled $344 million, which included $66 million of restricted cash used as collateral for the Verizon bond. If we subtract from that the various royalty payments and jury awards/restructed cash, Vonage has about $184.5 million in cash and equivalents to work with.

Assuming Vonage continues to lose money at the current rate of $34 million per quarter, the company can last for a little over five more quarters.

This is a very rough estimate, of course: Vonage's expenses will rise as it starts making royalty payments to Sprint. The outcome of the Verizon case can tip the scales one way or another. Thanks to recent staff cuts, overall expenses may fall. But one thing is clear: Vonage will have less financial flexibility now, after the Sprint loss.



Court to hear Craig guilty plea appeal
Court Watch | 2007/09/26 08:01
A Minnesota judge will be hearing Sen. Larry Craig's petition to overturn his guilty plea on a disorderly conduct charge in Minneapolis on Wednesday. The Idaho Republican was arrested June 11 during a police sting in an airport men's room for allegedly making sexual overtures to an undercover male police officer. He entered a written guilty plea to the disorderly conduct charge in August. Craig has said he would resign from the Senate if he cannot get the guilty plea overturned by September 30.

Craig on Tuesday said he won't resign until "legal determinations" are made. A political source involved in discussions about the case said Craig has made it clear he wants to find a way to stay in office.

A court ruling on Craig's appeal could take longer than the four days before September 30.

In his petition to vacate the plea, Craig's attorney maintained the senator's "panic" over the possibility that the allegations would be made public drove him to accept a guilty plea without seeking legal advice and that he had been assured by the arresting officer that the matter would remain private.

The petition also claims that because Craig submitted his guilty plea by mail, he did not have the benefit of a judge explaining the exact consequences of the plea before accepting it.



GM Strikes Deal, Union Ends Strike
Labor & Employment | 2007/09/26 06:58

General Motors workers return to work today after the auto maker agreed to a new labor contract with the United Auto Workers union. The deal ends a two-day strike but questions remain just how much the deal will save GM.

Shares of GM rose $2.76, or 8.0%, to $37.18, after the company agreed to a tentative contract with the UAW. The UAW represents approximately 74,000 GM employees. The contract ends a national strike that began Monday and crippled GM's production.

The deal sets up a health care trust to pay for retiree healthcare benefits. GM will front the money for the trust while the UAW will run it. GM hopes the trust will help it close a $25-per-hour labor gap with foreign auto makers.

"This agreement helps us close the fundamental competitive gaps that exist in our business," said GM Chief Executive Rick Wagoner. "The projected competitive improvements in this agreement will allow us to maintain a strong manufacturing presence in the United States along with significant future investments."

But former Forbes senior editor Jerry Flint says that the health care trust won't reduce any costs. He explains the health care bill remains the same whether the UAW or GM is in charge. "A health care trust, if it happens, may look good today, but one day it will come back to haunt GM," says Flint.

The deal must now be approved by the rank-and-file union membership. The Securities and Exchange Commission must also review the contract.



SEC to decide on mandatory financial report coding
Securities | 2007/09/26 02:08
U.S. regulators will decide next year if companies should be required to file financial reports in a machine-readable computer code to make data more easily comparable, Securities and Exchange Commission Chairman Christopher Cox said on Tuesday. Cox has been encouraging companies to report financial data using extensible business reporting language tags that allow investors to more easily analyze the information in spreadsheet programs.

But many companies have hesitated amid concerns about XBRL's maturity and implementation costs.

Cox said the U.S. XBRL group has completed all its work on developing data tags for U.S. Generally Accepted Accounting Principles, which represented "the removal of the last major obstacle that stood behind the world and interactive data."

At a news conference, Mark Bolgiano, president of XBRL US Inc, handed Cox a tiny data card with the code for thousands of tags for volumes of U.S. accounting classifications.

While the data tags are being reviewed by major accounting firms and the Financial Accounting Standards Board, Cox said the SEC and XBRL groups would work on promoting the format.



Class Action Lawsuit Against LCA-Vision Inc.
Class Action | 2007/09/26 01:09

Law offices of Brodsky & Smith, LLC announces that a securities class action lawsuit has been filed on behalf of shareholders who purchased the common stock of LCA-Vision Inc. ("LCA" or the "Company") (NASDAQ: LCAV) between February 12, 2007 and July 30, 2007 (the "Class Period"). The class action lawsuit was filed in the United States District Court for the Southern District of Ohio. The Complaint alleges that defendants violated federal securities laws by issuing a series of material misrepresentations to the market, thereby artificially inflating the price of LCA.

No class has yet been certified in the above action. Until a class is certified, you are not represented by counsel unless you retain one. If you purchased this stock during the above referenced class period you have certain rights. To be a member of the class you need not take any action at this time, and you may retain counsel of your choice.



Fla.: Property tax amendment rejected
Tax | 2007/09/25 22:54

A tax-slashing amendment is off the Jan. 29 presidential primary ballot -- at least temporarily -- after a judge Monday ruled an accompanying explanation for voters is unconstitutionally misleading and inaccurate. The ballot summary says the amendment would preserve existing property tax breaks although it actually would phase them out, wrote Circuit Judge Charles A. Francis of Tallahassee.

Francis, though, upheld a separate law the Legislature passed as a part of a two-pronged effort to cut property taxes.

The law, which does not need voter approval, requires cities and counties, but not school districts, to roll back and cap taxes for all types of property.

The proposed amendment was touted as offering even greater tax reductions -- almost entirely to homeowners -- through a "super exemption," and would have affected all local governments including school districts.

Gov. Charlie Crist and legislative leaders issued statements saying their efforts to cut taxes are not over. No decision, though, yet has been made on whether the ruling will be appealed, said Jill Chamberlin, spokeswoman for House Speaker Marco Rubio.

Besides appealing, the options include rewriting the ballot summary to meet the judge's objections or deferring the issue to the constitutional Taxation and Budget Reform Commission.

A suburban South Florida mayor who challenged both measures said he hoped lawmakers will leave it to the commission, which can make recommendations to the Legislature and put amendments directly on the November 2008 ballot.

"I'm hoping that they will look at this as an opportunity to fix something," said Weston Mayor Eric Hersh. "Hopefully that's the tactic they will take instead of looking at this as a defeat."

Hersh said he has not yet decided whether to appeal the tax rollback decision. He said he would be more inclined to do so, though, if the state appeals the amendment ruling.

"Not only was it misleading, but it was terrible legislation," Hersh said.

The Republican-controlled Legislature approved both tax-cutting measures during as special session in June. The law passed with bipartisan support, but Democrats opposed the amendment.

That proposal is designed to eventually get rid of the existing Save Our Homes Amendment, which limits assessment increases on primary homes, known as homesteads, to no more than 3 percent a year.

While it protected existing homesteaders, it shifted tax burden to new buyers and owners of other properties including second homes and businesses. Rapidly rising real estate values in recent years made the discrepancy even greater leading to an outcry for tax cuts.

The amendment would have offered homesteaders the one-time choice of keeping their existing benefits or accepting the super exemption -- 75 percent off first $200,000 of a home's value and 15 percent off the next $300,000.

Save Our Homes benefits, though, cannot be transferred to new owners, so they eventually would disappear as those properties change hands.

The ballot summary, though, refers to "preserving application of Save Our Homes provision."

"The summary is just not correct," Francis wrote. Nowhere in the ballot summary is the voter alerted to the elimination of these constitutional protections on homestead assessments. They are simply led to believe that they are preserved or revised."



Vonage infringed Sprint patents, jury finds
Patent Law | 2007/09/25 22:48

A U.S. jury found that Vonage Holdings Corp had infringed patents owned by Sprint Nextel Corp and ordered the Internet phone company to pay $69.5 million in damages, triggering a 34 percent fall in its shares. Vonage said it would appeal the case, which was the second major patent lawsuit that the company has lost, after it was also found to have infringed patents belonging to Verizon Communications Inc earlier this year.

"We are disappointed that the jury did not recognize that our technology differs from that of Sprint's patents," Sharon O'Leary, chief legal officer for Vonage, said in a statement.

The loss-making Internet phone company said it believed any damages awarded were inappropriate, but said it would try to develop technology to work around Sprint's patents.

Sprint sued Vonage in 2005, making 61 claims of violations of seven patents related to telecommunications technology. The U.S. District Court in Kansas had rejected Vonage's motion to dismiss the case last month.

Sprint spokesman Matt Sullivan said the jury, in addition to the $69.5 million award in damages for past infringements, ordered a 5 percent royalty rate on future revenue.

Vonage shares closed down 66 cents at $1.30 on the New York Stock Exchange.

The legal setbacks are only part of the problems facing Vonage, which has posted heavy losses since going public in May 2006. 



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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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