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, Apr 21 1992 Date: Tue, 21 Apr 92 05:41:43 EDT Message-ID: 04-21 0000 DECISIONLINE: Business Law USA TODAY Update April 21, 1992 Source: USA TODAY:Gannett National Information Network SUITS OVER FLOODING BEGIN: With the flood waters receding, the lawsuits are starting to pour in over damage claims from last week's flooding in Chicago. By Monday, at least three suits had been filed. The latest estimate of the cost: $1.5 billion - $500 million in lost revenues to business and $1 billion in property damage, says to the University of Illinois and the Federal Reserve Bank. (For more, see special Flood package below.) COLLEGE BOUND TRADING SUSPENDED: Trading in stock of College Bound was suspended for 10 days Monday by the Securities and Exchange Commission. The SEC said the test-preparation firm may have filed false financial statements and asked a federal court to order it to comply with a subpoena. An SEC probe centers on whether company officials lied about the company's financial condition in connection with a recent stock offering. LAPSED TICKETS IN QUESTION: Economist William Gibson will stand trial in early June on 24 counts of fraud in connection with his use of American Airlines tickets. American claims Gibson was engaged in a ticket fraud scheme that cost it more than $200,000 over 20 months. Gibson, a member of American's frequent-flier program, admits to using lapsed tickets, but says the airline's agents blessed his actions. AFFIRMATIVE ACTION PLAN UPHELD: A San Francisco affirmative action program designed to funnel more public works contracts to companies run by minorities and women was left intact Monday by the Supreme Court. The court, without comment, rejected arguments that the program discriminates unlawfully against businesses run by white men. LIBEL SUIT STANDS: The Supreme Court Monday refused to kill a libel lawsuit filed in Wyoming by attorney Gerry Spence against Hustler magazine and publisher Larry Flynt. The justices, without comment, let stand a Wyoming Supreme Court ruling that cleared the way for a jury trial. Spence contends he was libeled by a 1985 Hustler column. FUND SET UP FOR DREXEL CLAIMS: A $50 million fund has been set aside for individuals and businesses that lost money on investments with Drexel Burnham Lambert but couldn't afford to bring their claims to court. Notices will be published in 196 newspapers in the USA and abroad Wednesday seeking eligible claimants. CAT WORKERS WELCOMED BACK: Caterpillar, Inc. Monday welcomed back United Auto Workers members who were on strike for five months, with open arms, coffee and doughnuts. About 9,000 of 12,600 workers who were on strike from plants in Illinois returned, with the remainder scheduled to begin work again over the next two weeks. The strike ended without a contract settlement. No new negotiations have been set. FIRMS AGREE TO SETTLE: Santa Fe Energy Resources and Adobe Resources Corp. announced Monday that they have entered into an agreement to settle a lawsuit brought by two holders of the preferred shares of Adobe Resources relating to the proposed merger of the firms. As part of the settlement, Santa Fe Energy and Adobe have agreed to resolicit their shareholders over the merger agreement. MORTGAGE SCAMS UNCOVERED: The Mortgage Bankers Association of America and the Florida comptroller's office are warning homeowners about mortgage scams. Recently, scam artists have been calling homeowners or writing them saying their mortgage servicing contract has been transferred, and they must send mortgage payments to a new company and address. The scam artists collect the money and leave town. SPECIAL PACKAGE ON FLOOD: CENTRAL QUESTION IS BLAME: Damage awards resulting from a break in a retaining wall that sent 250 million gallons of water into tunnels below Chicago last week, hinge on blame. State law says businesses shut down by the flood cannot sue for lost profits if the disaster is seen as the result of negligence, Chicago lawyer Phil Corboy says. But damages could be awarded if the flood is ruled a willful or wanton act. FIRING COULD FIX BLAME: Chicago Mayor Richard Daley's firing of a department head deemed responsible the day after the flood could determine liability. "If the City of Chicago knew this problem existed, then it may be a willful or wanton act," Chicago lawyer Phil Corboy says. Named in suits: The Great Lakes Dredge and Dock Co.; the Metropolitan Water Reclamation District and a "John Doe" who might be responsible. NOT ENOUGH MONEY FOR CLAIMS: Regardless of who is to blame for the flooding in Chicago, there's "not enough money to satisfy the judgments," says DePaul University Law School's Bruce Ottley. The city, which is self-insured, has $19.8 million in a fund to settle claims that could hit $1 billion. "There's no way to pay off all the damages," says Ralph Brill, a law professor at the Chicago-Kent College of Law. (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. This article is copyright 1992 Gannett News Service. Redistribution to other sites is not permitted except by arrangement with American Cybercasting Corporation. For more information, send-email to usa@AmeriCast.COM