A BIG week—in all the wrong ways…
Top Class Actions
Crude-ites Not On the Menu? Just as the toxic oil begins to roll in along the northern coastlines of the Gulf of Mexico—so, too, do the lawsuits against BP, Haliburton, Transocean, and Cameron International, among others.
At least two class actions were filed this week, one in Alabama, and the other in Florida, over potentially different but related outcomes from what may turn out to be the environmental death of the northern Gulf.
In Alabama, the owner of Tacky Jack’s restaurant filed a class action on behalf of all restaurant owners along the Alabama Gulf Coast for losses resulting from the massive oil spill. The suit alleges negligence and wanton misconduct. Defendants named in the suit are BP, Haliburton, and Cameron International. The restaurant owners are deeply worried that they will have lost their livelihoods as a result of this oil disaster. And unfortunately this baby’s gonna take more than a few Shout wipes to clean up.
According to a press release about the lawsuit, travel in Alabama’s Gulf Coast Region accounted for 35 percent of the state’s tourism revenue, as well as 36 percent of the state’s travel-related employment in 2009. Travel related expenditures in Alabama’s Gulf Coast region in 2009 totaled $3,222,382,869. That’s not insignificant.
It seems that this is restaurant owners as good corporate citizens week—as a second suit was filed by a Florida restaurateur together with a homeowners’ association. They filed a class action against BP Oil, Haliburton Energy, TransOcean, and a number of other defendants seeking either the funding or the implementation or both of ‘protective barriers’ for the waterfront areas that are threatened by the oil slick.
Specifically, Destin City Councilman Dewey Destin, who owns two seafood restaurants in Destin, and the Edgewater Beach Owners Association are seeking an immediate injunction to force BP PLC and the other companies involved with the oil spill to fund the protection of the East Pass, Santa Rosa Sound, Choctawhatchee Bay and the beaches in Okaloosa and Walton counties immediately. Protective booms designed to trap the oil are in Escambia and Bay counties, but have not reached Okaloosa, Walton or Santa Rosa counties.
Additionally, the lawsuit asks that the defendants be held liable for gross negligence and willful misconduct. You think? At a minimum, I would have said.
What Do You Mean It’s Not Accredited? On a completely separate note…consumer fraud remains alive and well. This week it made its potential presence known in the form of a class action brought against Trump University. The allegations are that the school, and I use that term loosely, made materially false and misleading statements in its advertising and in its real estate seminars, in violation of federal and state law.
Specifically, the suit alleges that Trump University misrepresented its real estate investing classes in that they constituted a “complete real estate education,” a “one year apprenticeship,” and a one-on-one mentorship. Instead, each seminar was merely an “infomercial” to up-sell the student to purchase an additional Trump Seminar at a cost of up to $35,000. The lead plaintiff has no shortage of examples of less than scrupulous conduct by the folks at the ‘University.’
I attended one of these seminars once—an introductory freebee—and by the time all the blah blah blah was finished I couldn’t help feeling that the only entity who stood to make money on this was Trump University. Needless to say I decided to make my millions writing…
Auditor Comes In With The Assist…So Countrywide has decided to try and settle a securities class action brought by the New York State Common Retirement Fund and the five New York City public pension funds. Good idea. If the settlement is approved it’s going to cost the financial corporation—are you ready—$624 million. Sufferin’ secretaries —that’s alota dough. In fact, it could be one of the largest securities fraud settlements in U.S. history.
Under the proposed settlement, Countrywide—which is now a part of Bank of America—would separately pay plaintiffs $600 million and the accounting firm, KPMG—Countrywide’s auditor—would pay $24 million, making the combined recovery one of the largest securities fraud settlements in U.S. history.
Perhaps KPMG had one too many auditors overlooking those balls popping up the NY lottery pick-4 numbers every night. Just a thought.
FYI—the New York City Pension Funds, consisting of the New York City Employees’ Retirement System, New York City Teachers’ Retirement System, New York City Police Pension Fund, New York City Fire Department Pension Fund, and New York City Board of Education Retirement System, serve more than 700,000 active and retired New York City employees. With approximately $105 billion in assets, the City’s funds are cumulatively one of the largest public pension funds in the United States.
You know, I don’t even want to pass comment on this one.
That’s it for this week. See you at the bar! (Oh yes. That bar).