Macy’s and Martha Stewart Living Reach Settlement

NEW YORK — Macy's and Martha Stewart Living Omnimedia say they have settled a breach-of-contract lawsuit involving J.C. Penney.

But Macy's said the settlement does not impact its lawsuit against J.C. Penney Co., which is still ongoing.

Macy's Inc. and Martha Stewart Living Omnimedia Inc. said Thursday that their settlement terms are confidential and not material to their businesses. Both companies said that they look forward to "a continued, successful partnership together."

Macy's has had an exclusive merchandising contract with Martha Stewart since 2006, including items like bedding and bath products.

Stewart's company and Penney signed a merchandising deal in December 2011 to develop mini Martha Stewart shops. That prompted Macy's to sue both companies for violating its exclusive agreement with Martha Stewart.

Martha Stewart Living Omnimedia and J.C. Penney have already scaled back their partnership. In October the department store chain said it would no longer sell a broad range of home and bath products designed by Martha Stewart Living Omnimedia but would continue to sell a smaller batch of Martha Stewart items, including window treatments, rugs and party supplies.

Martha Stewart is looking to boost merchandising sales as it continues to grapple with a weak publishing business amid sluggish advertising sales. In October it said its quarterly net loss narrowed, though revenue fell 22 percent to $33.8 million, hurt by weakness in its broadcasting and publishing divisions.

Macy's, meanwhile, has been seeing strong sales. In November it said quarterly net income rose 22 percent will revenue rose 3 percent to $6.28 billion.

J.C. Penney spokeswoman Daphne Avila said the company had no comment on the Macy's settlement with Martha Stewart Living Omnimedia.

In morning trading Thursday, Macy's shares rose 40 cents to $53.80, Martha Stewart Living Omnimedia rose 19 cents to $4.39 and J.C. Penney slipped 11 cents to $9.04.

DealBook: JPMorgan Nears Settlement on ‘London Whale’ Case

DealBook: UBS Reaches Settlement on Mortgage Securities

Fabrice Coffrini/Agence France-Presse — Getty ImagesA branch of UBS in Lausanne, Switzerland.

UBS, the Swiss banking giant, said on Monday that it had reached an agreement in principle with a United States regulator to settle claims related to mortgage-backed securities issued between 2004 and 2007.

The Federal Housing Finance Agency sued UBS and 17 other big banks in 2011, accusing them of misrepresenting the quality of mortgage securities they assembled and sold at the height of the housing bubble, and seeking billions of dollars in compensation. UBS was the first, and the agency said it owned $4.5 billion worth of mortgages, with losses totaling $900 million.

While the company did not disclose the amount of the proposed settlement, UBS said in a statement that it was booking about 865 million Swiss francs ($919 million) of pretax charges related to the settlement and a tax agreement between Switzerland and Britain.

UBS is booking about 700 million francs in charges at the business that focuses on its portfolio of noncore and legacy assets, and about 100 million Swiss francs in its wealth management division related to the tax agreement, which requires banks to collect taxes on accounts of British citizens.

The full cost of the settlement will be covered by previous provisions and those taken in the second quarter, UBS said.

The announcement of the proposed settlement came at the same time UBS reported preliminary results for its second quarter. The bank reported that profit rose to about 690 million francs from 425 million francs in the period a year earlier. The company is to report full results on July 30.

Insurers May Be Off Hook for $80 Mil. Settlement

In a case of first impression, the state Superior Court has ruled that when an insurer agrees to defend an insured subject to a reservation of rights, the insured may either accept the insurer's defense and remain bound by a consent-to-settlement clause while allowing the insurer to control the litigation, or furnish its own defense and retain control of the litigation, the costs of which may or may not be covered by the insurer depending on whether those costs are deemed fair, reasonable and non-collusive.

Penguin to Pay $75 Million in E-Book Settlement With States

That’s the thing with a tornado — even when you know it’s coming, you’re helpless, because you don’t know precisely where it will hit.

Room for Debate asks whether the White House crackdown is a defense of national security or an attack on the First Amendment.

Settlement Talks Begin in Duck-Boat Accident Trial

Testimony stopped in order to hold a settlement discussion on the second day of the civil trial related to the double fatality on a duck-boat tour two years ago.

Business Briefing | Legal/regulatory: Judge Approves Bank of America Settlement

Bee colonies have been dying in increasing numbers, and the latest suspect is a pesticide used to protect agricultural seeds.

It appears that cable TV may be in the early stages of a transition.

Gulf Coast States Jockey Over Settlement on Deepwater Horizon Oil Spill

A lawyer briefed on those talks said that the Justice Department and the five states — Alabama, Florida, Louisiana, Mississippi and Texas — had reportedly prepared an offer to resolve the two biggest issues central to a series of trials against BP, the first of which starts Monday.

One of those issues is the fines that the company would pay for violations of the Clean Water Act related to the four million gallons of oil spilled after the explosion of the Deepwater Horizon rig, which BP had leased from Transocean. The other point of dispute is how much the company will have to pay in penalties under a different environmental statute for damage caused by the oil to the area: beaches, marshes, wildlife and fisheries.

The Wall Street Journal reported late Friday that federal and state officials were preparing a $16 billion settlement offer that would cover both the Clean Water Act fines and environmental penalties related to the spill. “The ball is on BP’s side of the table,” said the lawyer, who spoke on the condition of anonymity because he was not authorized to speak publicly on the matter.

Justice Department officials and state officials could not be reached Saturday to comment on any possible offer. A spokesman for BP, Geoff Morrell, said, “BP doesn’t talk about possible offers or negotiations, but I can tell you we are ready for trial and looking forward to the opportunity to present our case starting Monday.”

The lawyer briefed on the talks said that one problem with the current proposal was that it did not cover economic damages claimed by the states related to the spill. Such claims could still leave BP on the hook for billions more, in addition to the environmental damages.

The late negotiations among federal and state officials to find common ground represents progress, even if limited, in the search for a settlement. The five states have had sharp disagreements over how much BP should pay and how billions of dollars in potential settlement funds should be divided.

For example, only Louisiana and Alabama, are participating in the trial starting on Monday, though Florida, Mississippi and Texas could be part of any settlement. Officials in Louisiana believe their state deserves the bulk of any settlement since its coastal waters, fisheries and businesses suffered the most. Florida and other states that escaped serious coastal damage instead want money for economic losses that they sustained.

“There are a lot of moving parts,” said Luther Strange, the attorney general of Alabama. “Personalities aside, the issues are so complex.” Another lawyer briefed on the talks said he believed any proposal involving Louisiana would be significant because its participation would be critical to any settlement.

Also, billions of dollars could be assessed against BP in several ways, either through fines, or through penalties to redress environmental damage and payments to cover economic losses. And each of those methods represents a different set of stakes and consequences for each of the states and for BP.

For instance, BP would prefer to limit the fines and make more payments through environmental damage penalties, because those penalties can be written off as tax deductions while fines cannot. But the states have more flexibility in spending money derived from fines.

To date, BP has agreed to pay an estimated $30 billion in fines, settlement payments and cleanup costs related to the Deepwater Horizon explosion, which killed 11 workers aboard the rig. And so far, company officials have said they have no intention of acceding to demands from the states for huge economic damages.

Still, the stakes for BP in the trial are high. If the company is found in this first phase of the trial to have acted with gross negligence, it could face up to $17.5 billion in penalties, much of that in fines that would hit the bottom line hardest because they do not qualify as tax deductions.

The lack of a unified strategy to date among the states has also posed another problem for BP; companies are less likely to settle a major lawsuit if they know yet another one is waiting.

This article has been revised to reflect the following correction:

Correction: February 23, 2013

An earlier version of this article misinterpreted a statement by Geoff Morrell, a BP spokesman, about the state of settlement talks between BP and government officials. He said that the chances of a settlement before the trial begins on Monday were far-fetched; he was not referring to a possible $16 billion offer by government officials as reported by The Wall Street Journal.

Pa. Gets Cut of $181 Mil. Risperdal Settlement With Janssen

While Pennsylvania has been unsuccessful so far in bringing state court claims that it was defrauded by off-label marketing by Janssen Pharmaceuticals of its antipsychotic drug Risperdal, the state will now share in a $181 million settlement with the company over similar claims.

Settlement Expected With Banks Over Home Loans

Under the settlement, a significant amount of the money, $3.75 billion, would go to people who have already lost their homes, making it potentially more generous to former homeowners than a broad-reaching pact in February between state attorneys general and five large banks. That set aside $1.5 billion in cash relief for Americans.

Most of the relief in both agreements is meant for people who are struggling to stay in their homes and need the banks to reduce their payments or lower the amount of principal they owe.

The $10 billion pact would be the latest in a series of settlements that regulators and law enforcement officials have reached with banks to hold them accountable for their role in the 2008 financial crisis that sent the housing market into the deepest slump since the Great Depression. As of early 2012, four million Americans had been foreclosed upon since the beginning of 2007, and a huge amount of abandoned homes swamped many states, including California, Florida and Arizona.

Federal agencies like the Securities and Exchange Commission and the Justice Department are continuing to pursue the banks for their packaging and sale of troubled mortgage securities that imploded during the financial crisis.

Housing advocates were largely unaware of the latest rounds of secret talks, which have been occurring for roughly a month. But some have criticized the government for not dealing more harshly with bankers in light of their lax standards for making loans and packaging them as investments, as well as their problems with modifying troubled loans and processing foreclosures.

A deal could be reached by the end of the week between the 14 banks and the nation’s top banking regulators, led by the Office of the Comptroller of the Currency, four people with knowledge of the negotiations said. It was unclear how many current and former homeowners would receive money or when it would be distributed.

Told on Sunday night of the imminent settlement, Lynn Drysdale, a lawyer at Jacksonville Area Legal Aid and a former co-chairwoman of the National Association of Consumer Advocates, said: “It’s certainly a victory for consumers and could help entire neighborhoods. But the devil, as they say, is in the details, and for those people who have had to totally uproot their lives because of eviction it may still not be enough.”

In recent weeks within the upper echelons of the comptroller’s office, pressure was mounting to negotiate a banner settlement with the banks, according to people with knowledge of the matter. The reason was that some within the agency had started to realize that a mandatory review of millions of bank loans was not yielding meaningful examples of the banks’ wrongfully evicting homeowners who were current on their payments or making partial payments, according to the people.

Representative of banking regulators did not return calls for comment on Sunday.

The biggest action against the banks for foreclosure-related abuses has been the $26 billion settlement between the five largest mortgage servicers and the state attorneys general, Justice Department and the Department of Housing and Urban Development after allegations arose in 2010 that bank employees were churning daily through hundreds of documents used in foreclosure proceedings without properly reviewing them for accuracy.

The same banks in that settlement — JPMorgan Chase, Bank of America, Wells Fargo, Citigroup and Ally Financial — are included in the current negotiations.

Under the terms of the settlement being negotiated, $6 billion would come from banks to be used for relief for homeowners, including reducing their principal, helping them refinance and donating abandoned homes, the people said.

The proposed settlement would also halt a separate sweeping review of more than four million loan files that the comptroller’s office and the Federal Reserve required the banks undertake as part of a consent order in April 2011.

Under the terms of the order, the 14 banks had to hire independent consultants to pore through the loan records to determine whether the banks illegally charged fees, forced homeowners to take out costly insurance or miscalculated loan payment amounts. Consultants initially estimated that each loan would take about eight hours, at a cost of up to $250 an hour, to go through.

The costs of the reviews have ballooned, though, according to people with knowledge of the reviews, in part because each loan file is taking up to 20 hours to review. Since its inception, the reviews have cost the banks about $1.5 billion, according to those people.

Pressure to reach a settlement with the banks has been building, particularly within the Office of the Comptroller of the Currency, amid widespread frustration that the banks’ mandatory review of loan files was arduous and expensive, and would not yield promised relief to homeowners, according to five former and current banking regulators.

In private meetings with top bank executives, these people said, regulators have admitted that the reviews had gone awry. At one point this month, an official from the comptroller’s office said the agency had “miscalculated” the scope and requirements of the reviews, according to the people with knowledge of the negotiations.

When the settlement discussions heated up this month, some banking executives said they felt they would be vindicated by the regulators. These executives said that they had raised objections to the reviews early on, but those concerns were largely dismissed by regulatory officials, according to the people with knowledge of the negotiations.

Instead, officials from the comptroller’s office, these people said, have used the loan reviews as a negotiating tool, telling banks that they can either sign on to a large settlement or be forced to pay billions over several more years until the consultants finish the reviews.

When regulators approached the banks to broach a settlement this month, they met first with Wells Fargo and proposed that the banks pay $15 billion, according to the people familiar with the discussions. After negotiations, though, the regulators agreed to $10 billion.

All of the 14 banks are expected to sign on.

DealBook: Judge Takes Aim at Another S.E.C. Settlement

Associated PressThe headquarters of the Securities and Exchange Commission in Washington, D.C.

An obscure settlement announced in March 2011 has triggered questions from a federal judge about how much accountability the Securities and Exchange Commission should demand when it resolves a case.

Following a path started by Jed S. Rakoff, a Federal District Court judge in Manhattan, Judge Richard J. Leon of the Federal District Court in Washington, D.C., has held up the settlement for nearly two years because of his demands for greater disclosure to ensure the public’s interest is protected.

The case involves violations of the Foreign Corrupt Practices Act by International Business Machines from 1999 to 2008 for payments made to foreign government officials. The amounts involved were not significant, about $207,000 paid in Korea and a slush fund of undisclosed size to pay for overseas trips by Chinese officials.

The settlement called for the company to pay $10 million. That included a civil penalty of $2 million, an amount that is small compared with some other recent overseas bribery cases. For example, Eli Lilly agreed last week to pay more than $29 million to settle with the S.E.C., with $8.7 million designated as a civil penalty.

Unlike the recent reporting by The New York Times about widespread bribery paid by Wal-Mart to officials in Mexico, the I.B.M. case created hardly a ripple when the S.E.C. announced it. It looked like a routine matter in which the company promised not to violate the law again and paid its fine in much the same way that you would pay a parking ticket.

That is, until Judge Leon took a hard look at the terms of the settlement. In a hearing last Thursday, Bloomberg reported, the judge raised questions about the deal, saying, “I’m not just going to roll over like the S.E.C. has.”

The proposed settlement involved the “books and records” provisions of the overseas bribery law that requires companies to properly report their transactions and maintain adequate internal controls. To ensure it does not violate the law again, Judge Leon has demanded that I.B.M. provide annual reports on its compliance with the Foreign Corrupt Practices Act and any possible accounting violations in the company.

The S.E.C. and I.B.M. defended the settlement and said that the additional reporting requirements would be too difficult for the company to comply. Judge Leon expressed some skepticism, asking “why, for one of the largest companies in the world, this is too burdensome.”

The judge is no stranger to Foreign Corrupt Practices Act cases. Last year, he acquitted two defendants in the “Africa sting” case. The Justice Department accused 22 defendants of violations, relying on an undercover operative to record the defendants discussing payments to obtain fictitious contracts from an African government. Federal prosecutors eventually dropped the entire case after Judge Leon questioned the fairness of the prosecution.

Judge Leon’s unwillingness to approve the settlement with I.B.M. raises the issue of the proper role the courts should play in overseeing how a government agency decides to resolve a case before trial.

Last year, Judge Rakoff rejected a settlement between the S.E.C. and Citigroup over the bank’s marketing of a collateralized debt obligation tied to subprime mortgages. The settlement imposed a $285 million penalty, but it did not include an admission of any wrongdoing. The judge found that without some basis to find the bank had violated the law, the proposed consent judgment was “neither fair, nor reasonable, nor adequate, nor in the public interest.”

Whether Judge Rakoff’s tough stand survives is questionable. The United States Court of Appeals for the Second Circuit is considering an appeal of his rejection of the settlement, having indicated in a preliminary decision that the S.E.C. was likely to succeed in compelling the court to approve it.

Unlike Judge Rakoff’s broad demand for accountability, Judge Leon is taking a much narrower approach. He wants I.B.M. to report on its continuing compliance with the law and disclose other potential violations it discovers. Such a mandate does not require the company to admit to anything improper but only how it is meeting the requirements of the settlement.

This case was not the first time I.B.M. had run afoul of the Foreign Corrupt Practices Act. In December 2000, the company settled a S.E.C. case by agreeing to not commit future violations of the same “books and records” provisions and paid a $300,000 penalty.

So, Judge Leon may have good grounds for seeking information about I.B.M.’s continuing compliance with the law because it is a prior offender of the overseas bribery law.

How this case will be resolved remains to be seen, as Judge Leon appears to be taking tough stance. Bloomberg reported that the judge told an S.E.C. lawyer at one point during the hearing, “I guess you want that $10 million judgment on your list of achievements this year. Well, it’s not going to happen.”
It looks like the settlement will continue to languish until the S.E.C. can come up with some type of continuing disclosure requirement that is palatable to both I.B.M. and Judge Leon.

The S.E.C. and I.B.M. could try to go over Judge Leon’s head by seeking a writ of mandamus from the United States Court of Appeals for the District of Columbia Circuit directing him to approve the settlement. But appellate courts are reluctant to issue such orders. A number of overseas bribery cases are filed in the Federal District Court in Washington, D.C., so trying to bypass Judge Leon could cause the S.E.C. problems in other cases.

Whatever the resolution, the tussle is another signal that federal judges will not just rubber-stamp settlements by the S.E.C.

Pa. Gets Cut of $181 Mil. Risperdal Settlement With Janssen

While Pennsylvania has been unsuccessful so far in bringing state court claims that it was defrauded by off-label marketing by Janssen Pharmaceuticals of its antipsychotic drug Risperdal, the state will now share in a $181 million settlement with the company over similar claims.

Settlement Talks Begin in Duck-Boat Accident Trial

Testimony stopped in order to hold a settlement discussion on the second day of the civil trial related to the double fatality on a duck-boat tour two years ago.

Pa. Gets Cut of $181 Mil. Risperdal Settlement With Janssen

While Pennsylvania has been unsuccessful so far in bringing state court claims that it was defrauded by off-label marketing by Janssen Pharmaceuticals of its antipsychotic drug Risperdal, the state will now share in a $181 million settlement with the company over similar claims.

Plaintiff Can't Sue Lawyer After Alleged Inadequate Settlement

Plaintiffs unhappy with their settlement in a silicosis case can't sue their lawyers for malpractice, a Philadelphia judge has ruled.

Settlement Talks Begin in Duck-Boat Accident Trial

Testimony stopped in order to hold a settlement discussion on the second day of the civil trial related to the double fatality on a duck-boat tour two years ago.

First Risperdal Trial Ends With Settlement

The first trial in which evidence was taken in the mass tort litigation over Risperdal, the antipsychotic drug that plaintiffs have claimed causes males to grow breasts, was settled as part of a group of five cases that resolved this week for undisclosed amounts, according to the plaintiffs' lawyers and a statement from the drugmakers.

Settlement Talks Begin in Duck-Boat Accident Trial

Testimony stopped in order to hold a settlement discussion on the second day of the civil trial related to the double fatality on a duck-boat tour two years ago.