Good Luck
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SEC Charges Goldman Sachs With Fraud in Structuring and Marketing of CDO Tied to Subprime Mortgages
The SEC recently charged Goldman, Sachs & Co. with deceiving clients by selling them mortgage securities secretly designed by a hedge-fund firm run by John Paulson, who made a killing betting on the housing market’s collapse. The SEC’s complaint alleges that one of Goldman Sachs’ star traders, Fabrice Tourre, was principally responsible for piecing together the bonds and touting them to investors. According to the SEC, Mr. Tourre wrote in an email shortly before the bonds were sold that “the whole building is about to collapse anytime now” and described himself as the “[o]nly potential survivor, the fabulous Fab … standing in the middle of all these complex, highly leveraged, exotic trades he created without necessarily understanding all of the implications of those monstrosities!!!” Further, the SEC alleges that Mr. Tourre’s deals were signed off by senior Goldman Sachs executives.
Robbins Geller Rudman & Dowd LLP is the court-appointed lead counsel for lead plaintiff in NECA-IBEW Health & Welfare Fund v. Goldman, Sachs & Co., No. 1:08-cv-10783 (S.D.N.Y.). Robbins Geller Rudman & Dowd LLP is continuing its investigation on behalf of Goldman Sachs investors.
If you have materials of interest you would like us to consider in connection with this case, please contact Ron Gosling.
Robbins Geller Rudman & Dowd LLP, a 180-lawyer firm based in San Diego, California, was recently identified by RiskMetrics as the Top Firm for Total Settlement Value and Number of Settlements in 2009 and also made Law360’s list of top securities firms of 2009 on the strength of its near $1 billion settlement with UnitedHealth Group Inc. over stock options backdating. Lawyers with Robbins Geller Rudman & Dowd LLP achieved the largest securities class action recovery ever in the Enron case as well as the largest opt-out recoveries in WorldCom and AOL Time Warner.
Let us say for example a company called Fairway (hypothetical name) owns CDS and was able to recover 95% of the total face value of insurance, that will give that company's total recovery at about 143% for their bonds (assuming 48% recovery as per Plan). This is completely unfair and sooner or later will be challenged in the Court.
CDS holders (mostly Prem Watsa and company) got rich here and Judge helped them violate Absolute Priority Rule.
good one..
Abitibi CEO given nearly $4-
million golden handshake
Friday, 17 December 2010 - 2:31pm
THE CANADIAN PRESS
MONTREAL—AbitibiBowater’s departing chief executive will receive a golden
handshake likely worth almost $4 million (U.S.) by the time he leaves the forest
products company next summer, according to a U.S. regulatory filing.
David Paterson has been given a severance package worth more than $1.3 million
(U.S.), an additional $765,000 for his restructuring work, a $382,500 bonus if the
company meets its profit target for the first six months of 2010, $430,000 in lieu of
stock awards, and up to $35,000 in legal fees to negotiate the deal.
The 56-year-old Georgia native also will be paid $150,000 (U.S.) a month, or an
additional $900,000, as a consultant for the six months after he formally leaves his
position on Jan. 31.
In addition to Paterson, four other AbitibiBowater senior executives are splitting nearly
$4 million (U.S.) in cash and stock for their efforts in helping the forest products
company restructure its operations and exit 20 months of creditor protection.
Chief financial officer William Harvey and human resources vice-president Alain
Grandmont each receive $993,438 (U.S.), including $451.563 in stock awards.
Pierre Rougeau, executive vice-president of paper operations and sales, earns $1.05
million (U.S.), including $478,125 worth of stock awards.
Chief legal officer Jacques Vachon received $794,750 (U.S.), including $361,250 in
stock.
Altogether, the five senior executives will receive $2.16 million (U.S.) in restructuring
awards and $1.08 million (U.S.) in profit bonuses, as well as the stock awards.
The figures did not include undisclosed restructuring awards to be provided to 35 other
executives.
AbitibiBowater also awarded each non-employee director stock options valued at
$100,000 (U.S.)
Chairman Richard Evans also was granted a $150,000 (U.S.) cash award.
Meanwhile, Paterson’s replacement, Richard Garneau, 63, will receive a base salary of
$765,000 (U.S.), a profit bonus estimated at$765,000, stock options worth $1.72
million, a club membership, five weeks’ vacation, and a $16,000 allowance.
Kevin J Carey makes $150,000/year and Paterson makes that in a month? Who is important to the society?
If you come across any of them, I would like to talk to them and see if we can initiate a class action....
God grant me the courage not to give up what I think is right even though I think it is hopeless. ~Chester W. Nimitz
while Paul Weiss Rifkind Wharton & Garrison LLP has reportedly awarded bonuses of up to $42,500 to its most senior associates.
http://www.law360.com/bankruptcy/articles/216974
Packaging
Packaging Grades – Our Latest Innovative Offering
The recent conversion of a newsprint machine at our Coosa Pines, Alabama, mill to produce packaging grades reflects the Company's strategy to become increasingly diversified and establish a presence in a market segment with attractive long-term growth and value-creation potential.
This line consists of recycled linerboard and corrugating medium as well as other kraft converting and bag grades aimed at the global packaging market. AbiBow’s new eco-responsible packaging products are characterized by their smooth surfaces and outstanding cleanliness.
Coosa Pines is among a limited number of North American containerboard mills capable of making these grades in extra-lightweight and super-lightweight basis weights, further enhancing our customers’ ability to improve their own environmental scorecards.
From new website of AbiBow
Mr. Carey took easy way out
First day of trading new ABH
Why first month is safe?
I am going to let the motion and appeal stand on its own merits!
Miscellaneous. Mr. Paterson will be eligible for indemnification to the extent permitted under the Company’s certificate of incorporation, its by-laws,
applicable law and pursuant to an indemnification agreement between the Company and Mr. Paterson entered into on December 9, 2010, and will receive
director and officer liability insurance coverage with full post-termination/post-board service tail coverage, as provided for in such governing documents
and indemnification agreement.
Consulting arrangements. Mr. Paterson will serve as a consultant for six months after termination of his employment. The consulting arrangement may be
terminated at any time and for any reason, except that if termination occurs or is initiated before the end of the consulting period by the Company other than
for cause, by Mr. Paterson for good reason or upon his death or disability, he will receive the full compensation set forth in the next sentence. Mr. Paterson
will be paid consulting fees of $150,000 per month; he will not be entitled to any benefits or other amounts from the Company during the consulting term
(except as otherwise provided above).
Restrictive covenants. Pursuant to the separation agreement, Mr. Paterson will be subject to non-compete, non-solicitation and confidentiality covenants for
a period of one year following the termination of the consulting arrangement.
Outline of terms for Mr. Garneau
We have come to terms with Mr. Garneau on the principal terms of his compensation arrangements, which will be reflected in an employment agreement
and which are summarized below.
Annual compensation. Mr. Garneau’s annual base salary will be $765,000 and he will be eligible to participate in the Company’s 2011 Short-Term
Incentive Plan, if and when adopted by the board of directors, pursuant to which he would be eligible to receive a discretionary incentive award ranging
between 50% and 150% of his annual base salary, based on performance targets to be established by the board of directors. In 2011, it is expected that the
target level for Mr. Garneau will be 100% of his annual base salary.
Pension. Mr. Garneau will be eligible to participate in the Company’s defined contribution pension program pursuant to which the Company will contribute
22.5% of his aggregate compensation (defined as the sum of his annual base salary and incentive awards paid under an annual incentive plan) for his 5%
contribution. He will also be eligible to participate in the 2010 AbitibiBowater Inc. Equity Incentive Plan, or the “2010 LTIP”, as determined in the board of
directors’ discretion from time to time. In 2011, it is expected that Mr. Garneau will be awarded an initial grant equivalent to 225% of his annual base
salary.
Severance. In the event of involuntary termination other than for “cause” (to be defined in the employment agreement), Mr. Garneau will be eligible to
receive a lump sum payment equal to six weeks of eligible pay (defined as the sum of annual base salary and the average of the two last incentive awards
paid under an annual incentive plan, with a maximum of 125% of target) for each year of continuous service with the Company, with a minimum of 52
weeks and a maximum of 104 weeks.
Change in control. The Company and Mr. Garneau will also enter into a change in control agreement. The change in control agreement is expected to
provide that in the event of involuntary termination (other than for “cause”) or departure for “good reason” within two years of a “change in control”,
Mr. Garneau will be entitled to receive three times his eligible pay (defined as the sum of his annual base salary and the average of the two last incentive
awards paid under an annual incentive plan, up to 125% of target), as well as other benefits to be provided for in the agreement. “Cause,” “good reason” and
“change in control” are to be defined in the agreement.
Miscellaneous. Mr. Garneau will receive a perquisite allowance of $16,000 per year, will be entitled to a club membership, will be reimbursed for expenses
under the Company’s expense reimbursement policy and will be entitled to five weeks vacation per year. Mr. Garneau will continue to be indemnified
pursuant to an indemnification agreement between the Company and Mr. Garneau entered into on December 9, 2010, the Company’s charter, by-laws and
director and officer liability insurance policies maintained by the Company.
Madoff recovery exceeds approved claims....LOL
It's not like hired gun Robert S. Miller needed another $8.3 million in cash after he spent more than two years steering Delphi through the nation’s largest-ever industrial bankruptcy.
It's just as well. U.S. bankruptcy judge Robert Drain put the kibosh on Miller's parting gift and wouldn’t okay the company's reorganization unless it dramatically slashed an $87 million grab bag for more than 500 executives at the teetering auto-parts giant.
Miller—whose annual salary was $750,000, a deal he gave up in 2007 in exchange for a buck a year—will get a prorated payday along with other Delphi executives, but the company's "emergence" compensation pool shrunk to $16.5 million. This is bankruptcy, after all.
For executives at the helms of sinking ships and others seeing their firms beset by a stumbling economy, it's a lesson that they can't dish out the thank-yous like caviar when they should be scooping Spam.
"The big payoff at the end of the case was always viewed as contingent. What’s changed now is, one judge said 'No,'"David W. Dykhouse, an attorney with Patterson Belknap Webb & Tyler, noted.
This context is not lost on the Chapter 11 Club—the lawyers, accountants, and army of consultants known as "the restructuring community."
Drain is a high-profile jurist in the world of big business who presided over the Refco bankruptcy. In the Delphi case, he's carved out a reputation of looking out for shareholders, creditors, and tens of thousands of hourly workers, most of whom were bought out for comparative chump change. Attorneys representing these interests will be citing Drain's words for years to come."The problem until this case has been judicial timidity," another source said. "Judges didn't want to stand up to debtors or powerful law firms, and he did. It's not so much required for other judges to follow him. He put it out there as a model to emulate if you decide to be bold yourself."
Delphi's emergence-equity awards—C.E.O. Rodney O’Neal's is $10.5 million—were not subject to Drain's revision. The company's 10Ks rich in details about compensation, from retirement and death benefits to incentive plans that were approved by the court. But the cash-emergence ruling stands apart.
Following a directive from the judge, Delphi's compensation committee cut O’Neal's piece of the cash pie to $1 million, from the $5.3 million he was expecting. All told, Delphi's top five executives—the only ones for whom the Securities and Exchange Commission requires disclosure—will pocket $2.1 million combined.
The 2005 changes in the bankruptcy code put limits on rewards such as key-employee-retention programs, or KERPs. But Drain’s opinion is much broader, a source familiar with Delphi pointed out.
It's applicable to any stage at any point in the proceedings—"beyond the normal course of business." That Drain discussed the opinion in Delta Airlines’ bankruptcy, filed after the new law went into effect, supports this view, the source added.
"A company has to establish if it’s going to put in an out-of-the-normal-course-of-business bonus, and they have to support it with evidence that it's within the market's norms," he explained. "KERPs have acquired an inappropriate aura to them. The idea of giving money to every executive—Delphi's requests were really quite audacious."
So how do they do it, these compensation gurus? Delphi’s expert witnesses were, in truth, Delphi employees, from the compensation committee chief to consultants on the payroll. The model, one of these experts admitted, was Enron, not another auto-parts maker or even a company within the automotive world. Indeed, after 20 hours of testimony—including some sharp grilling by Drain—the featured consultant admitted his model was significantly flawed.
Granted, it's a dark place in which the U.S. auto-parts industry resides. Delphi may be the biggest, but it's not alone. Its compadres have all tasted the bankruptcy soup: Federated Mogul (five years and counting), Dana Corp. (completed), Collins & Aikman (liquidated), Tower Automotive (just passed GO thanks to private equity).
Sagging economies are fertile breeding grounds for bankruptcies, and the professionals agree that there will be plenty of business for the restructuring pros, even with sources of financing as elusive as the Mega Ball. Don't expect the restructuring community to change its basic strategies.
And Miller? He’ll survive; his book The Turnaround Kid: What I Learned Rescuing America's Most Troubled Companies is due out in April.
"For him, the money has a nonmonetary value. I don’t think he’s working for the money. He's working for the trophy," one expert said. "It's more the restructuring community thinking, 'How are we going to keep guys like this hungry?'"
CORRECTION: Portfolio.com originally reported that bankruptcy proceedings for Dana Corp. were still in progress, when in fact they were completed February 1. Emerging from Chapter 11, the company is now Dana Holding Corp. The company's new board of directors tapped John Devine as executive chairman and acting chief executive, a news release said.
Mr. Carey should see this.....
--------------------------------------------------------------------------------
Read more: http://www.portfolio.com/news-markets/national-news/portfolio/2008/02/21/Delphi-Bankruptcy-and-Judge-Drain/#ixzz188wie5AN
AbitibiBowater Inc. (ABH)
Exchange: Toronto Stock Exchange
$21.950 Dec 14, 2010, 2:05 PM EST Change: -0.050 (-0.23%)Volume: 1,460
Day Low
21.730 Day High
22.010 52 Week Low
21.800 52 Week High
22.870
http://tmx.quotemedia.com/quote.php?qm_symbol=ABH&locale=EN
No. they will play smart and not show assets for a few quarters. Question is, in First day motion they mentioned 9.6 Billion in assets and 8.8 Billion debts. Mr. Carey (I refuse to call him judge anymore) used his magic wand and let 8.8 billion debts disappear, as it should be in BK. BUT THEN HE WITH HIS MAGIC WAND MADE 6 BILLION DOLLARS OF ASSETS DISAPPEAR....WHAT A TRAGEDY
It is important to note here that 1/3 of the new company (about 743 mill-BCFC) was kicked out of BK to confirm the Plan. Judge wanted to confirm and move forward before 18 months at any cost. He sure did and didn't care or even considered any stakeholder unless they were represented by high paid lawyers.
Most of the past 18 months, Judge did nothing except listen to arguments of BCFC Vs.the Debtor. Mr.Carey did one thing right..he made his lawyer friends rich...
Is common trading?
Where were you a week, a month, a year ago?
Check end of docket 4007
Revocation of the confirmation order is an undoing or cancellation of the confirmation of a plan. A request for revocation of confirmation, if made at all, must be made by a party in interest within 180 days of confirmation. The court, after notice and hearing, may revoke a confirmation order "if and only if the [confirmation] order was procured by fraud." 11 U.S.C. § 1144.
We should consider it.....
ABH Quote (Toronto exchange)Time of last trade 10/12/2010 3:49 PM EST - quote delayed 15 min.
Financial data in Canadian dollars
Previous Close 22.87 5 days1 mth1 yr3 yr5 yr10 yr
Open 22.87 Day's High 22.87
Day's Low 21.80
Volume 19,826 52-Week High 22.87
52-Week Low 21.80
Bid 21.68 EPS NA
Bid Size 400 P/E NA
Ask 22.30 Dividend NA
Ask Size 200 Dividend Yield % NA
Symbol ABH
good one!
Liz,
Thank you for all the work! I don't mind losing money and I don't hate management as much (as they were in BK and trustee and JUSTICE SYSTEM SHOULD BE guarding us).
What bothers me most is Carey manipulated us very well and didn't give us a fair chance..staring from our first letters to him in April 2010
It is nice knowing you and hope to meet you sometime.
P
A company spokesman denied that Paterson was fired.
He was fired but little late....Next will be Harvey
As far as value...they both had TEV of 3.67 Billion..They both had Young Conway representing themmm.How ironic is that?
They have dvd in Washington Mutual...I am not sure here
AbitibiBowater and Smurfit Stone are like two brothers,Dad gave one a decent recovery and other the door...
We could. If we have a tape/video of the Court room and watch it...I watched that for hours....
You know now who was shorting the stock....
I don't so masterful, I mean manipulative for his benefit...
He is the master manipulater of the system that he is suppose to Guard!
Thank you also!
Garneau, is from Catalyst. In 2007 to save merger Abi/Bow sold flagship mill in Arizona to Garneau and now is will be handling the whole company...
Judge knew about this. He hid it and moved on to his cozy chair and hefty retirement! Why would he care about this document or any other...he took very easy way out of this and that is why justice sucks! And Carey...I even don't want to say that here
Forget SEC. Judge even didn't want to hear about short sale or CDS...We were not financed well and we lost. JUstice is for Rich!
AbitibiBowater Announces Leadership Succession Plan - Richard Garneau to Succeed David J. Paterson as President and CEO
MONTREAL, Dec. 10 /CNW Telbec/ - Richard B. Evans, Chair of AbitibiBowater, today announced that David J. Paterson will step down as President and Chief Executive Officer on January 1, 2011, having successfully led the Company through the most far-reaching restructuring in its history. He will be succeeded by Richard Garneau, currently a member of the Board of Directors and the former President and Chief Executive Officer of Catalyst Paper Corporation.
It is. But I have no energy left to pursue this further...also the way everything has happened, I see fault of Carey more then anyone else..He is the Chief Judge.