Path: bloom-picayune.mit.edu!snorkelwacker.mit.edu!news.media.mit.edu!americast.com!usa-post Newsgroups: usa-today.law From: usa-post@AmeriCast.Com Organization: American Cybercasting Approved: usa-post@AmeriCast.com Subject: law Tue, Mar 3 1992 Date: Tue, 3 Mar 92 06:00:08 EST Message-ID: 03-03 0000 DECISIONLINE: Business Law USA TODAY Update March 3, 1992 Source: USA TODAY:Gannett National Information Network OTS WANTS $275M FROM LAW FIRM: The Office of Thrift Supervision Monday accused law firm Kaye, Scholer, Fierman, Hays & Handler of deliberately misleading federal regulators and demanded $275 million from the firm. The OTS charges that the firm deliberately misled regulators about wrongdoing and financial problems at Charles Keating's failed Lincoln Savings and Loan in Irvine, California. (For more, see special Lincoln package below.) COURT TO HEAR AIRLINE AD CASE: The Supreme Court Tuesday hears a case involving the power of states to enforce their own consumer protection laws against airlines for deceptive advertising. Since deregulation in 1978, the federal Department of Transportation has had authority over the nation's airlines. After thousands of complaints about deceptive ads, several states began their own regulating five years ago. REGULATIONS CALLED INTRUSION: In a case to be heard Tuesday by the Supreme Court, the nation's airlines, joined by the Bush administration, say efforts by states to regulate airline advertising are a costly intrusion on federal regulatory ground. But Cornelius Hitchcock of the Aviation Consumer Action Project, says the DOT has been lax in regulating airlines and state intervention is needed to keep the airlines in check. HONDA TO APPEAL RULING: Honda says it will appeal a U.S. Customs Service ruling that about 90,000 1989-90 Canadian-made Civics do not qualify for duty free status and should be subjected to a 2.5% duty. Customs says the cars do not have enough North American parts to qualify. According to the U.S.-Canada free trade agreement, imports must be made of at least 50% Canadian or U.S. parts to be duty free. NO WORD FROM FDIC BOARD: The Federal Deposit Insurance Corp. board of directors met late into the evening Monday but made no announcement on the proposed $500 million settlement of lawsuits for fallen financier Michael Milken. Friday, the FDIC delayed approving the settlement after some officials questioned whether the penalty is big enough for Milken, who would still be left with $125 million. COURT RESCINDS TRANSACTION: The bankruptcy court presiding over Cascade International, Inc.'s bankruptcy proceedings has rescinded a stock transaction between Conston Corp. and Cascade. In the transaction, $7.5 million of debt of Conston to Cascade was exchanged for 10 million shares of Conston stock. The Bank of Scotland, which claimed that its rights were infringed by the exchange, asked for the action. SETTLEMENT IN SOFTWARE CASE: The Software Publishers Association announced Monday that settlement has been reached in a software copyright infringement dispute filed against Ernest W. Hahn Inc., by Lotus Development Corp., and WordPerfect Corp. Hahn has agreed to remove all unlicensed software, warn employees about violating copyright law and contribute to the SPA Copyright Protection fund. WOLVERINE ANNOUNCES SETTLEMENT: Wolverine World Wide, Inc. Monday announced it has reached a settlement with Southwest Hide Co. and First Security Bank of Utah, N.A., plaintiffs in civil suits related to Wolverine's former pigskin procurement partnership in Texas. The settlement will result in a $7.5 million pre-tax charge against operations for the fourth quarter ended Dec. 28, 1991. BUSH VETOES CHINA BILL: As promised, President Bush Monday vetoed a bill restricting trade benefits for China. "There is no doubt in my mind that if we present China's leaders with an ultimatum," Bush said, "the result will be weakened ties to the West and further repression." The Senate's passage of the bill last week was eight votes short of the two-thirds needed to override a veto. SPECIAL PACKAGE ON LINCOLN: LARGEST AMOUNT DEMANDED: The Office of Thrift Supervision, in seeking $275 million Monday from law firm Kaye, Scholer, Fierman, Hays & Handler, is demanding the largest amount ever from a law firm involved in the Savings and Loan scandal. The firm worked for Charles Keating's infamous Lincoln Savings and Loan. OTS also froze the assets of Kaye Scholer and three of its partners. FIRM DENIES WRONGDOING: Kaye Scholer, the USA's 33rd-largest law firm, denies wrongdoing, saying it represented Lincoln honestly. "The OTS is looking for a scapegoat," says Gary Lynch, the firm's outside counsel and ex-enforcement chief at the Securities and Exchange Commission. The OTS says the firm can keep operating under scrutiny and it is not trying to push Kaye Scholer out of business. OTS DETAILS CHARGES: The OTS claims that Kaye Scholer: "Recklessly" told Lincoln some risky real-estate investments were legal - though it knew Lincoln's board had OK'd the investments after they were barred by a change in government rules; "Knowingly" neglected to tell regulators that accountants Arthur Andersen & Co. dropped Lincoln's account in 1986 over worries about the S&L's financial health. (End of package.) Business Law Editor: Jason P. Smith. (919-855-3491) Making copies of USA TODAY Update (Copyright, 1992) for further distribution violates federal law. 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