Kodak employee sues company directors over stock

ROCHESTER, N.Y. – An Eastman Kodak employee filed a civil lawsuit against Kodak’s board members and other fiduciaries of the photography companies’ retirement plans, saying they breached their duties as the company was spiraling toward bankruptcy.

Mark Gedek, who continues to work at Kodak, said in the suit that he is a participant in the Kodak Employees Savings and Investment Plan as well as the Kodak Employee Stock Ownership Plan. The board members and directors of those plans continued to sell shares to employees and invest in them ahead of the bankruptcy, he said.

Kodak filed for bankruptcy in mid-January, saying it would use the bankruptcy court process to try to sell patents and shed other assets to bring costs and revenue in line. Typically in bankruptcy, shareholders’ equity is worth nothing.

Kodak shares, which trade for 34 cents on the pink sheets, were trading at 55 cents on January 18 before the company filed for bankruptcy.

BP sues Halliburton over $42 billion gulf oil spill bill

HOUSTON ― BP has called on contractor Halliburton to pay all costs and expenses it incurred to clean up the 2010 Gulf of Mexico oil spill, which the oil major previously put at around $42 billion.

Halliburton cemented the failed well that caused the United State’s biggest offshore oil spill.

In a U.S. court filing, BP said it was suing to recover costs and expenses from cleaning up the oil spill, lost profits, and “all other costs and damages incurred by BP related to the Deepwater Horizon incident and resulting oil spill.”

It did not specify an amount and it was not clear how the latest suit differed from a previous one brought last year. A BP spokesman declined to put a figure on the costs sought in the latest filing, but said the “documents speak for themselves.”

In April 2011, BP asked a court to award it damages “equal to, or in the alternative proportional to Halliburton’s fault,” to cover clean up costs and government fines BP might faces.

The company previously said it expected the costs of sealing the blown-out well, cleaning up the damage, compensating those affected and government fines to reach $42 billion.

BP has spent $14 billion in the Gulf Coast region in its response to the spill and set aside $20 billion for economic claims and natural resource restoration, according to its website.

Halliburton officials were not immediately available for comment.

The explosion on the Deepwater Horizon rig in April 2010, which killed 11 workers and spewed more than 4 million barrels of oil into the Gulf, has sparked a slew of lawsuits and federal citations against the companies involved.

BP has already cut deals with its two partners in the doomed Macondo well, Anadarko and Mitsui, which at first refuted their responsibility to contribute to oil spill bill, citing BP’s negligence.

Last month, Cameron International Corp. agreed a $250 million settlement with BP to help pay for costs associated with the Gulf of Mexico oil spill, raising hopes that deals between the British oil firm and two other contractors could follow.

Yet settlement agreements with two remaining parties, Halliburton and Transocean, have to date proved elusive.

Transocean, the owner and operator of the Deepwater Horizon rig, and Halliburton, which supplied cement to cap the well, are both being sued by BP to share the cost of the spill and cleanup, while the two have launched lawsuits of their own.

U.S. investors sue Lloyds chiefs over deal with fellow lender HBOS

NEW YORK ― American shareholders are suing Britain’s Lloyds Banking Group and the bank’s former executives, saying they were misled over its rescue of fellow lender HBOS in the depths of the financial crisis in 2008.

Victor Blank, who stepped down as chairman the following year, former chief executive Eric Daniels and the bank itself have been named in a class action filed in New York, which claims they had a “reckless disregard for the truth.”

The bank’s board is accused of making misleading statements about the government-engineered takeover, which at the time Daniels called a “fantastic opportunity to create the UK’s leading financial services group and create great value for both sets of shareholders.”

Weeks later, however, Lloyds had to turn to the state for a bailout, surrendering a 43 percent stake in return for a $26.4 billion injection of taxpayers’ money.

Lawyers said shareholders were not told about a deterioration in HBOS’s finances, and the extent of the problem only became known when the bank posted a worse-than-expected 10 billion pound loss in February 2009.

They said HBOS was technically insolvent within weeks of the deal being announced and was relying on funding from the Bank of England and the United States Federal Reserve Bank to stay afloat, but this information was withheld from investors.Shares in Lloyds have fallen from about 165 pence just before the announcement of talks with HBOS to close at 25.5 pence on Friday.

The action over violations of the Exchange Act is being fronted by shareholder Albert Ross of Louisiana.

Lloyds declined to comment.

Lawyers, firms line up as MF Global brokerage crumbles

NEW YORK ― Just days after the collapse of MF Global, a healthcare plaintiffs’ lawyer registered the domain mfglobal-lawsuit.com — a sign of the legal business the brokerage’s failure is expected to generate.

Timothy Butler of Darien, Conn., said he is hoping for a slew of new clients in the wake of the October 31 bankruptcy of the futures brokerage that was run by former New Jersey Governor Jon Corzine, and he has good reason to be optimistic.

“There’s going to be a tremendous amount of litigation spawned by this case,” said Butler, a partner at Tibbetts, Keating & Butler, which has offices in New York and Connecticut. Since registering the domain name, he said, “my email box is full and my phone is ringing off the hook.”

The financial firm’s bankruptcy is the eighth largest in U.S. history, and is already starting to generate serious work for lawyers. With $600 million still missing from customer accounts, it is not just bankruptcy lawyers who are mobilizing, but white-collar defense and securities class-action too.

Among the earliest entrants are several heavy hitters, including Dewey & LeBoeuf partner Martin Bienenstock, who on Wednesday won the contest involving at least three other top firms vying to represent the unsecured creditors committee.

The bankruptcy assignment “will be the biggest golden egg” in the litigation, said John Pottow, a professor at University of Michigan Law School and former attorney at Weil, Gotshal & Manges. Law firm Skadden, Arps, Slate, Meagher & Flom, which represented the brokerage Refco during its 2005 bankruptcy, billed about $42 million in two years on that case, Pottow said.

MF Global Holdings quickly chose Skadden partner Ken Ziman as its counsel in bankruptcy, meaning he should get a hefty chunk of Chapter 11 fees, though Pottow noted that the bankruptcy court must approve any fees paid by the MF Global estate to its attorneys and to the creditors committee.

Ziman did not respond immediately to a request for comment.

Bienenstock, at Dewey & LeBoeuf, will also take in plenty as the attorney for the unsecured creditors committee. For comparison, Milbank Tweed Hadley & McCloy, which served as counsel for the unsecured creditors committee in the Lehman Brothers bankruptcy, billed $2.5 million last July alone in that case.

But individual creditors — including those on, and not on, the creditors committee — will likely hire their own attorneys, as will the secured creditors. And if the trustee for MF Global seeks to claw back money previously paid to creditors, as is also likely, even more lawyers will climb on board.

When it is all over, legal bills related to the bankruptcy action alone could approach $120 million, according to a fee calculator developed by two law professors at the University of California Los Angeles School of Law. The LoPucki-Doherty Professional Fees Calculator estimates legal fees in bankruptcy cases based on the debtor’s total assets, liabilities, location of court, date of filing and other factors — but does not account for a rapid liquidation, for example, if MF Global is unable to obtain debtor-in-possession financing, also known as a DIP loan.

Experts have said the company may not get a DIP loan, a scenario which would increase the likelihood of a quick fire sale of the company’s assets rather than a prolonged liquidation.

BNY Mellon in settlement talks over currency lawsuit: report

NEW YORK ― Bank of New York Mellon Corp. is in talks with federal prosecutors to resolve a civil lawsuit accusing the bank of overcharging clients in trading currencies, the Wall Street Journal said, citing people familiar with the matter.

A possible deal would involve BNY Mellon agreeing to pay a penalty and to undertake remedial steps, including improved disclosures to currency-trading clients, the Journal said.

The bank would not admit to wrongdoing under any agreement, the people told the paper.

Bank of New York Mellon was sued by two U.S. states in August over allegations that the company overcharged pension funds on foreign exchange transactions.

The moves by Florida and Virginia escalated a legal battle over claims that custodial banks routinely overcharged their clients. California sued State Street Corp.  in 2009 over similar allegations.

The bank has strongly denied the allegations in suits related to its currency trading service and has said it will defend itself.

Representatives for the Manhattan U.S. Attorney and BNY Mellon declined to comment on the talks to the Journal. They also could not be reached for comment by Reuters outside regular U.S. business hours.

AIG loses bid to move $10 billion fraud case vs Bank of America

NEW YORK ―  A federal judge rejected American International Group Inc’s request to move its $10 billion mortgage fraud lawsuit against Bank of America Corp. back to a New York state court, where AIG believed the case belonged.

U.S. District Judge Barbara Jones in Manhattan accepted Bank of America’s argument that some home loans underlying the 349 residential mortgage-backed securities that AIG said it bought allowed a federal court to assert jurisdiction. The bank had cited a 1919 federal law governing international banking.

AIG had argued that its fraud and other claims under state law predominated, and that the complexity of the case warranted having a New York state court apply New York law.

In its Aug. 8 lawsuit, AIG had accused Bank of America of engineering a “massive” fraud. It said the bank and its Countrywide and Merrill Lynch units misrepresented the quality of more than $28 billion of securities it bought, and lied to credit rating agencies about the underlying loans.

Bank of America hopes to combine the AIG case with Countrywide litigation before U.S. District Judge Mariana Pfaelzer in Los Angeles, who has issued favorable rulings for the Charlotte, North Carolina-based bank.

Jones has not decided whether to give the AIG case to Pfaelzer, or on Bank of America’s request to oust AIG’s law firm because one partner who worked on the case previously defended Merrill against similar charges.

Bank of America spokesman Lawrence Grayson and AIG spokesman Mark Herr declined to comment. Based in New York, AIG is an insurer that has received $182.3 billion of federal bailouts and remains largely owned by taxpayers.

The lawsuit is separate from Bank of America’s proposed $8.5 billion settlement with investors such as BlackRock Inc and Allianz SE’s Pimco covering Countrywide mortgage pools with $174 billion of unpaid principal balances.

Jones’ colleague William Pauley said on Wednesday that this accord should be considered in federal court, as some investors unhappy with the terms had wanted, rather than state court, where it could have won approval as soon as next month.

That accord was intended to resolve much litigation over the bank’s disastrous 2008 purchase of Countrywide, and Pauley’s decision adds uncertainty over the timing and scope of any resolution.

Bank of America stock has lost about half its value this year.

T-Mobile lines up against Apple in Samsung lawsuit on selling Galaxy products

BELLEVUE, Wash. ― T-Mobile USA has become the latest mobile provider opposing Apple’s (AAPL.O) bid to stop Samsung Electronics Co. from selling some Galaxy products in the United States, according to a court filing.

The move by T-Mobile on Wednesday follows a similar position taken last week by Verizon Wireless. T-Mobile, which cited 2011 holiday sales as one of its primary concerns, is the fourth largest U.S. mobile service, while Verizon is the biggest.

The legal battle between Apple and Samsung has been building since April, when Apple sued Samsung in a California federal court for infringing its intellectual property rights.

Samsung is the leading user of the Google Android platform. Apple claims the South Korean firm’s Galaxy line of mobile phones and tablets “slavishly” copies the iPhone and iPad.

Apple has asked a judge to issue an injunction that would prevent Samsung from selling some Galaxy products. A hearing on the injunction request is scheduled for Oct. 13.

An order against Samsung would “unnecessarily harm” T-Mobile and its customers, T-Mobile said in a court filing on Wednesday.

“At this late date, T-Mobile could not find comparable replacement products for the 2011 holiday season,” the company argued.

T-Mobile’s marketing campaigns “prominently feature” the Galaxy S 4G phone and Galaxy Tab 10.1, and the company has also ordered holiday inventory, it said in the filing.

“These investments cannot be recouped easily,” the company said.

Apple spokeswoman Kristin Huguet on Wednesday referred to earlier statements, saying that Apple needed to protect its intellectual property when companies steal its ideas.

Other carriers such as AT&T Inc. and Sprint Nextel have not yet weighed in on the debate. Representatives for the companies had no immediate comment.

In a statement, T-Mobile said it respects intellectual property rights but that an injunction “is a drastic and extraordinary measure.”

Earlier this week, Verizon said that disputes involving intellectual property should not interfere with the free flow of the newest 4G devices.

Samsung unveiled an agreement with Microsoft on Wednesday for the development and marketing of Windows phones, as well as a wide patent cross-licensing deal. Microsoft will get royalties for Samsung devices that run the Android platform.

T-Mobile is owned by Deutsche Telekom.

EBay and PayPal sue Google over mobile payment trade secrets

NEW YORK ― EBay and its online payment unit, PayPal, Thursday sued Google Inc. and two executives for stealing trade secrets related to mobile payment systems.

The two executives, Osama Bedier and Stephanie Tilenius, were formerly with PayPal and led the launch Thursday of Google’s own mobile payment system in partnership with MasterCard, Citigroup and phone company Sprint.

The suit highlights the growing battle by a wide range of companies from traditional finance to Silicon Valley trying to take a major stake in what has been described as a $1 trillion opportunity in mobile payments. The mobile phone is seen as the digital personal wallet of the future.

The eBay suit said Bedier worked for nine years at PayPal, most recently serving as vice president of platform, mobile and new ventures. He joined Google on Jan. 24 this year.

Tilenius was at eBay from 2001 to October 2009 and served as a consultant to the company until March 2010. The suit says Tilenius joined Google in February 2010 as vice president of e-commerce.

Bedier is accused in the suit of having “misappropriated PayPal trade secrets by disclosing them within Google and to major retailers.”

The suit accused Tilenius of recruiting Bedier, thereby breaking a contractual agreement with eBay. It also claims Bedier attempted to recruit former colleagues still at PayPal.

Ebay said PayPal and Google worked closely together for three years until this year on developing a commercial deal where PayPal would serve as a payment option for mobile application purchases on Google’s Android phones.

It said Bedier was the senior PayPal executive leading and finalizing negotiations with Google on Android during this period.

It also claimed Bedier transferred up-to-date versions of documents outlining PayPal’s mobile payment strategies to his non-PayPal computer just days before leaving PayPal for Google.

“By hiring Bedier, with his trade secret knowledge of PayPal’s plans and understanding of Google’s weaknesses as viewed by the industry leader (PayPal), Google bought the most comprehensive and sophisticated critique of its own problems available,” the suit said.

Google spokesman Aaron Zamost said the company had not yet received a copy of the complaint would not be able to comment until it has had a chance to review it.