November 21, 2024

You are here: Home / Archives for trustee

BBC Severance Dispute Goes to Parliamentary Panel

September 9, 2013 by

Mr. Thompson, who left the BBC in 2012 and is now the president and chief executive officer of The New York Times Co., has challenged July testimony by Mr. Patten about how much the trust was told about a series of large severance payments to executives who left the corporation in an effort to reduce costs.

While the details of the dispute are complicated and arcane, and personalities aside, the questions of how the BBC uses its money and whether its executives get sufficient oversight from the trust are the real meat of the issue.

In recent submissions to Parliament, Mr. Thompson has accused the trust, which represents the interests of ordinary Britons who pay a television tax that goes to the BBC, of misleading the committee and the National Audit Office. In July, Mr. Patten had expressed surprise at the details of key severance payments, which were larger than contractually mandated, according to the auditors, while Mr. Thompson insists that the trust was fully informed and raised no objections. In particular, Mr. Thompson’s deputy, Mark Byford, was given a full year’s salary in lieu of notice despite having worked another eight months when the deputy’s job was eliminated.

One of the documents Mr. Thompson has presented is a briefing memo prepared for Mr. Patten explaining the payments, which were approved before Mr. Patten became chairman of the trust. He said that Mr. Patten’s testimony in July was “fundamentally misleading about the extent of trust knowledge and involvement.”

In a statement, the trust called Mr. Thompson’s submission “a bizarre document,” saying “we completely disagree with Mark Thompson’s analysis” and that Mr. Patten and trustee Anthony Fry had not misled Parliament. Mr. Patten, it said, had not had “a full and formal briefing on the exact terms of Mark Byford’s departure.”

Mr. Patten has come under considerable criticism for the large severance payment given to Mr. Thompson’s successor, George Entwistle, who lasted only 54 days in the job before resigning last November over a reporting scandal but was given a full year’s salary in addition to a severance payment, totaling some 475,000 pounds. The furor over that payment has made the earlier payments more politically sensitive.

The auditors found that of 150 senior executives who left in the three years ending December 2012, which cost the corporation 25 million pounds, the BBC paid more salary in lieu of notice than contractually mandated in 22 cases, for an extra cost of 1.4 million pounds. In addition, the auditors said, the BBC agreed to other discretionary payments, including car services and fees, to 22 managers at a cost of another 510,000 pounds, which the corporation said were the result of negotiations with those who were being laid off.

Article source: http://www.nytimes.com/2013/09/10/world/europe/bbc-severance-dispute-goes-to-parliamentary-panel.html?partner=rss&emc=rss

Filed Under: Global Business Tagged With: , ,

The Media Equation: When Truth Survives Free Speech

December 12, 2011 by Leave a Comment

I went to work on a blog post, filled with filial umbrage, saddened that the Man once again had used a boot heel to crush truth and free speech. But after doing a little reporting, I began to think that what scanned as an example of a rich businessman using the power of the courts to silence his critic was actually something else: a case of a blogger using the Web in unaccountable ways to decimate the reputation of someone who didn’t seem to have it coming.

The ruling on whether she was a journalist in the eyes of the law turned out to be a MacGuffin, a detail that was very much beside the point. She didn’t so much report stories as use blogging, invective and search engine optimization to create an alternative reality. Journalists who initially came to her defense started to back away when they realized they weren’t really in the same business.

On the surface, it seemed that the blogger, Crystal Cox, was doing the people’s work. A blogger and real estate agent in Montana who spent a lot of time fighting with the National Association of Realtors, Ms. Cox took an interest a few years ago in the bankruptcy of Summit Accommodators, an intermediary company in Bend, Ore., that held cash to complete property exchanges. The company went belly up and a federal grand jury indicted three senior executives — a fourth pleaded guilty — charging them with conspiring to defraud clients of millions.

Kevin D. Padrick, a lawyer in Oregon, was appointed as trustee in the case after the company entered bankruptcy. Prompted by the postings of someone whom Mr. Padrick was going after to recover assets — the daughter of one of the men who was indicted — Ms. Cox began suggesting in her blog posts that Mr. Padrick had used inside information and illegal measures to take control of the remaining assets and enrich himself.

In a long-running series of hyperbolic posts, she wrote that Mr. Padrick and his company, the Obsidian Finance Group, had engaged in bribery, tax fraud, money laundering, payoffs and theft, among other things. Her one-woman barrage did not alter the resolution of the Summit affair, but it was effective in ruining Mr. Padrick.

In a phone interview, he told me his business as a financial adviser had dropped by half since Ms. Cox started in on him, and any search of his name or his company turned up page after page on Google detailing his supposed skullduggery, showing up under a variety of sites, including Bend Oregon News, Bankruptcy Corruption, and Northwest Tribune.

As it turned out, all of the allegations and almost all of the coverage in the case were coming from Ms. Cox, who churned URL’s and cut-and-pasted documents to portray Mr. Padrick as a “thug,” and a “thief” who “committed tax fraud” and who may have “hired a hit man” to kill her while engaging in “illegal and fraudulent activity.”

Here’s the problem. None of that was ever proved, nor was it picked up by other mainstream media outlets.

Even a broken clock is right twice a day, but there is nothing in Mr. Padrick’s professional history or the public record that I found to suggest he is any of those things. He was appointed as a trustee by the court, he was subjected to an F.B.I. background check, and there have been no criminal investigations into his conduct. About 85 percent of the funds have been returned to the creditors, which seems to be a good result.

Annie Buell, the chairwoman of the Official Unsecured Creditors Committee who was appointed by the United States Trustee’s Office, said in an interview by phone that there was no basis in fact for Ms. Cox’s scabrous postings about Mr. Padrick.

E-mail: carr@nytimes.com;

Twitter.com/carr2n

Article source: http://feeds.nytimes.com/click.phdo?i=56978f25c1d6d5fc032be05f206535e8

Filed Under: Business News Tagged With: , ,

Mets Ruling May Reduce Payout to Madoff Victims

September 29, 2011 by Leave a Comment

A ruling this week in a case the trustee for victims of Bernard L. Madoff’s Ponzi scheme had filed against the owners of the New York Mets could wind up cutting the amount available to pay all victim claims by up to $11 billion, a lawyer for the trustee said on Wednesday.

The lawyer, David J. Sheehan, said the ruling in the Mets case also would require the trustee, Irving H. Picard, to delay an initial cash payment to eligible victims, scheduled for later this week, until he can determine the ruling’s impact on the amounts owed to other victims of the epic fraud.

Mr. Sheehan’s warnings underscored how potentially damaging the Mets ruling could be for the trustee’s broader effort to recover cash from all of the so-called net winners in the case — those, like the Mets owners, who took more cash from their Madoff accounts than they put in. Those recoveries are the primary source of cash available to the trustee to compensate the net losers, those who took less from their Madoff accounts than they put in.

On Tuesday, United States District Judge Jed S. Rakoff threw out all but two of the 11 claims filed by the trustee and ruled that he could seek no more than $386 million in fictitious profits that Mr. Madoff paid out to the Mets owners, Fred Wilpon and Saul Katz. That figure was based on the sum the men invested in the two years before the fraud was discovered in December 2008, the recovery window set by federal bankruptcy law. The trustee had been seeking $1 billion in fictitious profits and principal paid out in the last six years of the fraud, as permitted under New York State law.

But if Mr. Picard is limited to the two-year federal window in all of the nearly 1,000 lawsuits he has filed against other net winners, his potential recovery would be cut by a total of $5.9 billion, according to Mr. Sheehan. Another element of the ruling could erase another $5.5 billion he is seeking in court, he said.

The enormous scam took in thousands of investors and generated paper losses of almost $65 billion and cash losses of about $18 billion. To date, the trustee has raised about $10.6 billion to cover the cash losses, primarily through out-of-court settlements.

Tuesday’s ruling, consequently, could significantly reduce the amount of money the trustee could seek through lawsuits to compensate the net losers in the fraud.

“This does have real ramifications,” Mr. Sheehan said.

The elimination of the six-year recovery window in the Mets case was cheered by lawyers for other net winners who have been sued, most of whom said their clients would owe far less under the two-year standard.

“This is the first victory for the Madoff net winners,” said Barry Lax, a lawyer for a number of net winners. “Nine of the 11 claims were dismissed and since the Wilpons and Katzes were net winners, other net winners will benefit from the ruling.”

A second element of the ruling is less clear-cut but potentially just as damaging to the trustee. Among the claims thrown out by Judge Rakoff was an attempt by the trustee to recover cash the Mets owners had withdrawn from their Madoff accounts in the final 90 days of the fraud, so-called preference claims.

For the Mets owners, that figure added up to $14.2 million. But if all the 90-day preference claims asserted in all the lawsuits filed by Mr. Picard were eliminated, it would reduce his potential recovery by another $5.5 billion, according to Mr. Sheehan.

Because of the ruling’s broad impact, Mr. Sheehan in a hearing Wednesday asked Judge Rakoff to allow the trustee to seek an expedited appellate review of the decision. “I want clarity from the courts,” Mr. Sheehan said.

Judge Rakoff has set March 19 as the trial date for the two claims remaining in the trustee’s case against the Mets owners, and the trustee has already indicated he will seek a jury trial in the case.

Mr. Sheehan said he would continue to prepare for trial even as he sought an expedited appeal, adding: “If he gets reversed, the whole trial will be different,”

Article source: http://feeds.nytimes.com/click.phdo?i=0890dabcfd75cb64c9d98cba9cbeb521

Filed Under: Business News Tagged With: , ,

Mortgage Settlement Challenged

August 5, 2011 by Leave a Comment

The New York attorney general is moving to block a proposed $8.5 billion settlement struck in June by Bank of New York Mellon and Bank of America over troubled loan pools issued by Countrywide. A lawsuit filed late Thursday accuses Bank of New York of fraud in its role as trustee overseeing the pools for investors.

In papers filed in New York State Supreme Court, lawyers for Eric T. Schneiderman, the attorney general, contended that Bank of New York misled investors about its conduct as overseer of the securities. The bank also breached its duties to investors by agreeing to the deal with Bank of America, according to the complaint, because the trustee is conflicted and “stands to receive direct financial benefits” as a result of the agreement.

Questioning the fairness of the deal, the attorney general’s lawsuit said that it could “compromise investors’ claims in exchange for a payment representing a fraction of the losses” that have been suffered by investors.

When the terms of the deal emerged, they appeared to be quite favorable to Bank of America. On June 29, when the deal was announced, Bank of America’s shares closed with a gain of almost 3 percent.

A spokesman for Mr. Schneiderman declined to comment. Jeep Bryant, a spokesman for Bank of New York Mellon, disputed the attorney general’s allegations, calling them “outrageous, baseless, unsupported by fact and law” and saying that the bank would fight them in court. “We are confident that we have fulfilled in all respects our responsibilities as trustee,” he said, adding that Mr. Schneiderman’s action fails to understand the “benefit the settlement would provide to investors.” 

Bank of America purchased Countrywide in a distress sale in early 2008.

A judge overseeing the settlement will ultimately decide whether it should be approved. A court hearing on the proposed settlement was scheduled to take place Friday. Mr. Schneiderman’s lawsuit is likely to change the nature of those discussions.  

As announced by Bank of New York, which is overseeing 530 mortgage pools issued by Countrywide, the deal would require Bank of America to pay $8.5 billion to investors holding the securities. The unpaid principal amount of the mortgages remaining in the pools totaled $174 billion. Lawyers representing 22 institutional investors, including the Federal Reserve Bank of New York, BlackRock and Pimco, contended the deal was favorable.

But other investors in the Countrywide pools who were not part of the settlement negotiations between Bank of New York and Bank of America complained that the terms were inadequate. Among the criticisms made by a group of investors known as Walnut Place were that the negotiations were conducted in secret and that Bank of New York was conflicted as a negotiator because Bank of America agreed to cover all its costs and liabilities relating to the deal.

Mr. Schneiderman’s contention that Bank of New York breached its duties to investors is significant because a trustee that agrees to oversee loan pools like those issued by Countrywide must abide by the rules governing the securities. Such rules require that lenders deliver to the trust complete and original mortgage documents for each loan in a pool, for example, and require that the trustee notify investors when such loan documents are missing.

Bank of New York led investors in the Countrywide pools to believe that the lender had in fact delivered complete and adequate mortgage files for each loan as was required, the lawsuit said. The bank also misled investors by confirming that loan files relating to hundreds of thousands of mortgages were complete.

But the bank failed in these duties, the attorney general’s complaint said. After conducting a review of court records in the Bronx and Westchester County, Mr. Schneiderman’s investigators have determined that Bank of New York did not ensure that notes underlying properties were delivered properly to some trusts, according to the lawsuit. If loan documents were not delivered as required to the trustee, investors could recover the money they invested in the mortgages.

“Investors in the trusts were misled by Bank of New York Mellon into believing that Bank of New York Mellon would review the loan files for the mortgages securing their investment, and that any deficiencies would be cured,” the lawsuit said.

Article source: http://feeds.nytimes.com/click.phdo?i=93b205e8ab4c46c11e3d50c9a268f90c

Filed Under: Business News Tagged With: , ,

DealBook: HSBC Settles Madoff Claims for $62.5 Million

June 7, 2011 by Leave a Comment

HSBC agreed on Tuesday to pay $62.5 million to settle class action claims by investors in a fund that had invested with Bernard L. Madoff, who was jailed for fraud.

HSBC, which was named as a defendant in several lawsuits, serviced several funds outside the United States, including the Thema International Fund in Ireland, which invested assets with Mr. Madoff’s firm. HSBC had acted as a custodian and provided administration and other services, the banks said in a statement.

The settlement with the Thema fund investors is “without any admission of wrongdoing or liability,” said HSBC, one of Europe’s largest banks.

In 2009, Mr. Madoff was found guilty of running a huge Ponzi scheme. He is now serving a sentence of 150 years.

HSBC estimates that Thema investors lost about $312 million by investing with Mr. Madoff. Assets across all such funds totaled about $4.3 billion, the bank said.

The bank said the settlement covered the Thema fund. In regard to other Madoff-related claims, HSBC said it “has good defenses,” and it “will continue to defend the other Madoff-related proceedings vigorously.”

Irving H. Picard, the trustee for the victims of Mr. Madoff’s scheme, sued HSBC and some funds that invested with Mr. Madoff for $9 billion in December.

Article source: http://feeds.nytimes.com/click.phdo?i=aaf252c49a723b781b432a6d40488041

Filed Under: Business News Tagged With: , ,