NewsWire

Consumers Paying More to File Bankruptcies
As a result of federal reforms passed in 2005, consumers are paying steep increases in bankruptcy fees and related expenses. Those findings, the first to quantify the effect of changes that tightened bankruptcy eligibility standards, come from a new study by Lois R. Lupica of the New York office of Thompson & Knight. “While initially we saw a reduction in the number of consumer bankruptcies, now those numbers are rising and even exceeding pre-2005 levels,” says Lupica. “Consumers filing for protection have a number of financial obligations designed to help them avoid future defaults, increasing their costs by more than 50 percent as well as driving up costs for attorneys and trustees, while unsecured creditors receive proportionally smaller settlements.” The pilot study was funded by the American Bankruptcy Institute, which will publish the complete results next year. For more information, contact Barry Pound at 800-559-4534 or barry@androvett.com.

Stopping Corporate Pickpockets
With overburdened state and federal criminal justice systems providing little relief to businesses victimized by employee theft, the old adage that “crime doesn’t pay” may now be wrong. “In most circumstances, embezzlement of less than $100,000 will not be prosecuted and even theft of larger amounts must be thoroughly investigated and documented before authorities will react,” says Houston employment attorney Rachel Steely of Gardere Wynne Sewell LLP. “A company’s initial actions after discovering embezzlement are critical if the company wants to press criminal charges or recover any of the funds,” she says. Although instinct tells employers to fire the employee immediately, the first move should not be to fire or confront the employee. “There are significant benefits in not letting them know you are on to them until you have completed an investigation and are in a position to recover the stolen funds.” For more information, contact Rhonda Reddick at 800-559-4534 or rhonda@androvett.com.

Prosecutors Still Brandishing ‘Honest Services’ Weapon
The July U.S. Supreme Court decision redefining the “honest services” law used against corporate executives Jeff Skilling and Conrad Black has not triggered the predicted abandonment of white-collar cases tied to the statute. Instead, expect future indictments to be more targeted and specific, says criminal defense attorney Jimmy Ardoin of Houston’s Cogdell & Ardoin. “Executives shouldn’t be fooled when they hear about prosecutors dismissing a couple of cases. This law is still very much alive,” Ardoin says. “In August, an Apple Inc. employee was charged under the ‘honest services’ umbrella. The high court may have trimmed at the edges of these cases where employees are accused of denying honest services to employers, but the law is still in the active prosecutorial arsenal.” For more information, contact Mary Flood at 800-559-4534 or mary@androvett.com.

Corporations May Face More Board Member Battles
New SEC rules are expected to increase the efforts by large shareholders to elect their own nominees as board members of public companies, setting up the possibility of more independent or “dissident” corporate directors. The so-called “proxy access” rules, designed to create greater accountability among public company boards, are part of the financial industry reform package approved by Congress earlier this summer. “This change likely creates the need for some companies to improve their approach to investor relations and enhance corporate communications efforts, and to carefully examine their bylaws and governing documentation to conform to the new regulations,” says Kenn Webb of Thompson & Knight. “Companies without a history and practice of actively engaging their investors may experience more electoral challenges and increased demands on their board’s and management’s time.” For more information, contact Barry Pound at 800-559-4534 or barry@androvett.com.

Resolve Pay Disparity Or Offer Flex-Time? Why Not Do Both?
If the legal profession is serious about resolving the pay disparity between men and women lawyers, it should commit to offering flex-time, writes Dallas lawyer Kathleen Wu in this week’s Texas Lawyer. While allowing lawyers to work fewer hours and therefore making less money may sound contradictory, Wu says that offering flex-time is crucial to keeping women in the profession. “In a recent study by the Project for Attorney Retention, one of the reasons cited for the pay disparity is the lack of women on compensation committees,” she says. “Only by keeping women in the profession -- even if it’s not at 100 percent -- will they be around long enough to earn a spot on those committees.” For more information, contact Amy Hunt at 800-559-4534 or amy@androvett.com.

Cowboys Collapse Cases Settle For Combined $34 Million
Dallas attorney Frank L. Branson has settled lawsuits on behalf of two men who were severely injured in the May 2009 collapse of the Dallas Cowboys practice facility in Irving, Texas. Scouting Assistant Rich Behm was paralyzed and Special Teams Coach Joe DeCamillis suffered a severe compression fracture when the Cowboys’ practice facility collapsed in a thunderstorm. The combined settlement involved entities associated with Dallas Cowboys owner Jerry Jones, as well as the building’s manufacturer. “We want to thank Jerry Jones, Stephen Jones and the rest of the Jones family and the Dallas Cowboys football organization for all of the support they provided them throughout this ordeal,” Branson says. “They truly treated these men as their own.” For more information, contact Robert Tharp at 800-559-4534 or robert@androvett.com.

Failed Hedge Fund Investors Suing Ernst & Young In Houston
Ernst & Young auditors may face more than the handful of investors who recently sued in Houston over $17 million in losses stemming from a hedge fund the auditors endorsed as “conservative.” A Houston man and four Phoenix investors, including a charitable foundation, have been told by a Delaware appeals court that they can get the names of other investors who might wish to join the Houston suit against Plano, Texas-based Parkcentral Global funds, says Demetrios Anaipakos of Houston’s Ahmad, Zavitsanos & Anaipakos. “Our clients were promised that an investment in Parkcentral was designed to preserve capital. Instead, they lost every penny in record time. E&Y’s audited financial statements never once warned Parkcentral’s investors of their impending doom,” says Anaipakos. For more information, contact Mary Flood at 800-559-4534 or mary@androvett.com.

Hip Replacement Recall Too Little, Too Late For Many
Johnson & Johnson’s recall of two hip replacement implants last week follows a recent study showing that one in eight patients required surgery to repair their problem implants. The metal-on-metal contact in the ASR Hip Resurfacing System and the ASR XL Acetabular System has been criticized by surgeons based on the likelihood of metal shavings causing problems in surrounding tissue, says Los Angeles attorney Dana Taschner of The Lanier Law Firm, who’s handled hip implant cases for more than a decade. “The real tragedy is that patients now face a second surgery that will be more painful, more expensive and more debilitating than the original procedure,” says Taschner. More than 93,000 patients purchased the two implants before the company stopped production last year. The Lanier Law Firm provides up-to-date information for patients at www.recalledhip.com. For more information, contact Alan Bentrup at 800-559-4534 or alan@androvett.com.